Noble Corporation

Hello everyone. Thank you for joining us and welcome to the Noble Corp Second Quarter 2026 Earnings Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Ian MacPherson, Vice President of Investor Relations. Ian, please go ahead.

Thank you, operator, and welcome everyone to Noble Corporation's second quarter 2026 earnings conference call. You can find a copy of our earnings report along with the supporting statements and schedules on our website at noblecorp.com. We will reference an earnings presentation that's posted on the investor relations page of our website. Today's call will feature prepared remarks from our President and CEO, Robert Eifler, as well as our CFO, Richard Barker. We also have with us Blake Denton, Senior Vice President of Marketing and Contracts, as well as Joey Kawaja, Senior Vice President of Operations. During the course of this call, we may make certain forward-looking statements regarding various matters related to our business and companies that are not historical facts. such statements are based upon current expectations and assumptions of management and are therefore subject to certain risks and uncertainties. Many factors could cause actual results to differ materially from these forward-looking statements and Noble does not assume any obligation to update these statements. Also note we're referencing non-GAAP financial measures on the call today. You can find the required supplemental disclosure for these measures including the most directly comparable GAAP measure and an associated reconciliation in our earnings report issued yesterday and filed with the SEC. Now, I'd like to turn the call over to Robert Eifler, President and CEO of Noble.

Thanks, Ian. Welcome, everyone, and thank you for joining us. On today's call, I will first briefly recap the second quarter results and then cover our recent contract awards and market outlook, including our semiannual assessment of global deepwater rig demand. Next, Richard will provide a financial overview and then I'll wrap up with closing remarks before we go to Q&A. Starting with the second quarter, we reported adjusted EBITDA of $212 million. We have maintained our robust return of capital program, returning an additional $80 million to shareholders through our 50 cent per share quarterly dividend in Q2. And yesterday, Our board declared a 50 cent per share dividend to be paid in September. Pew 2 was adversely impacted by $43 million due to an operational suspension that impacted both of our rigs in Brazil. Richard will provide additional detail on how we have factored this into our revised guidance for the year. Apart from this discreet headwind, operational and financial performance across the balance of the fleet was strong. and was complimented by a successful debt refinancing in June. On the commercial side, we have secured two new contracts over the past three months. First, the Noble Viking has been awarded a six-well contract in the Asia-Pac region, expected to span most of 2028 with options into 2029. And additionally, the recently renamed Noble Klaus Bachmann, originally the Ocean Great White, has been awarded a three-well contract with BP in the UK North Sea with an estimated duration of 150 to 210 days at $320,000 per day, plus mobilization fees. This program is slated to commence in March 2027, directly preceding the RIG's three-year contract with Ocker BP in Norway. This renaming recognizes the years of service and leadership from Klaus Bachmann, are VP of operations in Europe. Having recently celebrated our 105th birthday as a company, we're proud to carry on the valued tradition of periodically naming rigs in honor of long tenured employees who have made a lasting impact here. Klaus, thank you and congratulations. On a combined basis, we have booked approximately $200 million of new backlog across these awards, with our backlog, as of the fleet status report published yesterday, now standing at $6.8 billion. I would also add that we anticipate signing several additional contracts fairly soon, which would further augment our backlog, so stay tuned. Now onto the market outlook. While the Iran conflict continues to exert preternatural volatility on oil prices, underlying demand for our business has been more stable by comparison. and continues to trend in a positive direction overall. For starters, 77 rig years of UDW backlog contracted during the first half of this year was, by a comfortable margin, the highest level seen in well over a decade. And on the back end of this historically large surge of fixtures and despite the withdrawal of most of the ONGC rig tenders that surfaced earlier this year, open floater demand of over 95 rig years still remains at a notably high level, especially considering that all of this open demand pertains to markets outside Brazil. Put differently, open floater demand in the rest of the world, excluding Brazil, is actually about 20% higher compared to the recent high water mark of two years ago. Global UDW floater utilization remains firm with 104 rigs contracted now or in the future. which is down one rig quarter on quarter but represents 95% contracted utilization of the marketed fleet and 87 UDW units currently under contract, equating to 79% current utilization. We continue to expect the latter statistic to trend upward over the next few quarters as long-term programs ramp up, including several of our own. As the market continues to firm up, Day rates have recently begun to move higher with recent fixtures in the mid $400,000 per day. Current bidding and recent fixtures have generally been characterized by higher rates for longer term programs out into the future versus lower rates for near term gap filler work. At a high level geographically, recent developments essentially distill into a tale of two halves, i.e. a slightly reduced demand picture in the western hemisphere, driven by software activity in the U.S. Gulf and Brazil, which has been more than offset by eastern hemisphere strength keyed by Africa and Asia Pacific. On a combined basis, global UDW demand looks as strong today as we have seen at any time in the past several years. Starting first in South America, UDW demand is currently 41 units, down from 44 compared to six months ago. Brazil comprises 32 of these 41 rigs and is down from 34 at the beginning of the year. Petrobras' activity reduction has been the primary downward driver in the region. And upon conclusion of the Noble Fay Cozacs contract, Brazil is expected to decline by one additional unit. The rest of the region appears poised to grow moderately, keyed by baseload demand of seven to nine units throughout the Guyana Suriname Basin. where Noble has drilled approximately 75% of the wells to date, plus an expanding array of opportunities of longer and shorter duration spanning Colombia, Peru, Uruguay, and potentially Venezuela. In total, we expect the South American region to absorb about two to three incremental units over the next year or so. The U.S. Gulf has softened recently, dropping to 19 units currently versus 21 as of six months ago. While current customer indications support higher levels next year, there remains a limited amount of near-term activity to bring the rig count above the high teens over the balance of this year. Commonly a more economically sensitive basin, the recent volatility with crude prices hasn't necessarily been helpful, although current oil prices, if maintained, should certainly support a stabilized market of 20 rigs over time. Meanwhile, likely departure of two to three units for international opportunities is expected to keep drill ship capacity in the Gulf fully utilized. Next, in West Africa, contracted UDW demand stands at 14 rigs, down one versus six months ago, with a strong pipeline of open demand throughout the region, comprising 22 rig years across public tenders and pre-tenders throughout the West Africa plus Mozambique region. This includes seven long-term programs with average duration of 2.5 years spanning Namibia, Nigeria, Ghana, Mozambique, and Cote d'Ivoire, supplemented by a variety of smaller scale requirements throughout Angola, Mauritania, Congo, and Equatorial Guinea. The African market appears poised for further growth into the high teens by the second half of 2027. The Mediterranean Black Sea region has grown as expected to an all-time high of 12 UDW rigs, up one unit compared to six months ago. There are currently two open tenders in the MED as well as two contracts expiring during the second half of this year. We continue to assess this as a structural 10 to 12 rig market going forward, underpinned by Turkey's upsized fleet of six owned drill ships. The Asia Pacific plus India region continues to be perhaps the most dynamic growth market for deep water, with a recent range of 10 to 11 contracted UDW rigs, up from eight rigs six months ago and representing a multi-year high since pre-COVID times. Meanwhile, the open demand pipeline is increasingly promising. Even despite the withdrawal of four of ONGC's five long-term rig tenders, Open demand in the region still currently stands at 42 rig years. This equates to 45% of total open demand globally compared to a current rig count share of only 10% of the global total. While some of these requirements are expected to be satisfied by existing capacity in the region, Asia Pac could expand into the low teens by late 2027 with optional upside on a longer term basis related to India. Recent indications are that India's multi-rig exploration campaign is likely delayed by about a year due to planning and funding lead times rather than canceled outright. Rounding out the global picture, the harsh environment North Sea and Norway market currently represents 24 units of total floater demand, nine of which are satisfied by UDW semis, both of which are up two units compared to six months ago. Norway comprises about 80% of the floater rig count in the region, including all nine of the UW units. Despite persisting regulatory and fiscal headwinds, open demand in the region indicates the potential for increased activity. However, with 100% contracted utilization in the region currently, any potential rig additions, whether for Norway west of Shetlands or incremental P&A scopes in the UK sector, would require harsh semi-capacity to migrate back from other international locations. Rolling all of these regional outlooks together, it's realistic to see a path to today's marketed fleet becoming essentially fully contracted by late next year. This is very similar to the industry status and outlook that we beheld in mid 2023. prior to the demand downturn that tracked with Brent prices melting from $90 per barrel down to $60 by the end of 2025. However, with global oil inventories and sideline rig capacity both significantly tighter now versus a few years ago, plus the increasing premium on energy security worldwide, we are optimistic about the direction of the deepwater market from here. Before passing the call over to Richard, I'd like to also touch on the CJ70 jack-up market which is gaining traction as well with 100% contracted utilization across all 11 units in Norway and the UK. We are looking forward to the Noble Interceptors reactivation later this summer for a five to eight month accommodation program and are bidding the rig toward promising opportunities for subsequent drilling activity in 2027. In the UK, we have transferred most of the Noble Innovators remaining backlog with BP to the Noble Intrepid which has removed some revenue from the second half of this year while availing the intrepid for incremental opportunities in 2027. Overall, day rates for the CJ70s are generally flat and we are optimistic about securing improved utilization in 2027 compared to 2026. With that, I'll pause here and pass the call to Richard.