Noble Corp announces fourth quarter and full year 2023 results

• Full Year 2023 Net Income of $482 million, Adjusted EBITDA of $810 million, cash provided by operating activities of $574 million, and Free Cash Flow of $184 million.
• Fourth Quarter Net Income of $150 million, Adjusted EBITDA of $201 million, cash provided by operating activities of $287 million, and Free Cash Flow of $165 million.
• Maersk Drilling synergy target increased from $125 million to $150 million; integration process nearing a highly successful conclusion.
• Over $500 million in new contract awards since November, with total backlog at $4.6 billion.
• Full Year 2024 Guidance provided as follows: Total Revenue $2,550 to $2,700 million, Adjusted EBITDA $925 to $1,025 million, Capital Additions (net of reimbursements) $400 to $440 million.

Noble Corporation has reported fourth quarter and full year 2023 results.

Robert W. Eifler, President and Chief Executive Officer of Noble Corporation plc, stated, 'Our fourth quarter results brought full year 2023 revenue and Adjusted EBITDA toward the upper end of our guidance range and capped a year of strong operational performance and Free Cash Flow generation. The Maersk Drilling integration, which is now substantially complete, has been extremely successful, and I would like to congratulate and thank our employees for this exceptional team performance during 2023 which demonstrated the value and the exciting potential of the new Noble.'

Fourth Quarter Results

Contract drilling services revenue for the fourth quarter of 2023 totaled $609 million compared to $671 million in the third quarter, with the sequential decrease driven by lower utilization. Marketed fleet utilization was 68% in the three months ended December 31, 2023, compared to 78% in the previous quarter. Contract drilling services costs for the fourth quarter were $374 million, a slight increase versus $354 million the third quarter. Net income decreased to $150 million in the fourth quarter, down from $158 million in the third quarter, and Adjusted EBITDA decreased to $201 million in the fourth quarter, down from $283 million in the third quarter. Net cash provided by operating activities in the fourth quarter was $287 million, net capital expenditures were $123 million, and free cash flow (non-GAAP) was $165 million.

Balance Sheet and Capital Allocation

The Company's balance sheet as of December 31, 2023, reflected total debt principal value of $600 million and cash (and cash equivalents) of $361 million. Share repurchases totaled $15 million during the fourth quarter, bringing 2023 year-to-date share repurchases to $95 million. Total capital returned to shareholders between share repurchases (including the Maersk Drilling squeeze-out) and dividends from the fourth quarter of 2022 through the fourth quarter of 2023 equaled $283 million.

Today, Noble's Board of Directors declared a quarterly interim dividend of $0.40 per share for the first quarter of 2024. This dividend is expected to be paid on March 21, 2024, to shareholders of record at close of business on March 08, 2024. Future quarterly dividends and other shareholder returns will be subject to, amongst other things, approval by the Board of Directors, and may be modified as market conditions dictate.

Operating Highlights and Backlog

Noble's marketed fleet of sixteen floaters was 75% contracted through the fourth quarter, compared with 92% in the prior quarter due to downtime between contracts. Recent backlog additions have substantially reduced the percentage of uncommitted days across our marketed floater fleet in 2024 to approximately 20%, with most of Noble's remaining availability for this year attributable to the Noble Globetrotter I, Noble Globetrotter II, and Noble Developer. With similarly limited industry capacity available in 2024, leading edge floater dayrates have held firm in the mid-to-high $400,000s range for tier-1 drillships and low-to-mid $400,000s range for sixth generation units. The bidding pipeline for 2025 contract commencements appears supportive of a continuing upward trend in leading edge rates for high spec rigs.

Utilization of Noble's thirteen marketed jackups was 61% in the fourth quarter, consistent with 61% utilization during the third quarter - jackup utilization is expected to improve progressively through 2024 with contracts scheduled to commence this summer for the Noble Regina Allen and Noble Resolute following shipyard stays, while the near-term visibility for the warm stacked jackups Noble Interceptor and Noble Highlander remains limited at this time.

Subsequent to last quarter's earnings press release, new contracts for Noble's fleet with total contract value of approx. $530 million (including mobilization payments) include the following:

• Noble Discoverer was awarded a 400-day contract with Petrobras in Colombia, expected to commence in early June 2024. The contract includes an option to extend the duration by 390 days.
• Noble Voyager was awarded a one well contract (plus one option well) with Petronas in Suriname which commenced in February 2024 with an estimated firm duration of 130 days excluding option.
• Noble Valiant was awarded a six-month contract extension with LLOG in the U.S. Gulf of Mexico, expected to commence in July 2024 in direct continuation of the rig's current contract. The dayrate for this contract is $470,000, excluding additional fees for the use of managed pressure drilling.
• Noble Gerry de Souza received a 9-month extension with TotalEnergies in Nigeria, continuing the program out to November 2024.
• Noble Intrepid had an option exercised by Harbour Energy for a well intervention program in the U.K. North Sea which commenced in January 2024 at a dayrate of $120,000.
• Noble Innovator received a one well extension (estimated 90-day duration) from BP at a dayrate of $140,000 scheduled to commence in September 2024. 
• Noble Resolute received a 60-day extension (from March 2025) with Petrogas in the Dutch North Sea.

Noble's backlog as of February 22, 2024, stands at $4.6 billion.

Outlook

For the full year 2024, today Noble announces a guidance range for Total Revenue of $2,550 to $2,700 million, Adjusted EBITDA in the range of $925 to $1,025 million, and Capital Additions (net of reimbursements) between $400 to $440 million.

Commenting on Noble's outlook, Mr. Eifler stated, 'We expect to realize improving financial results in 2024 compared to 2023, with mid-year contract start-ups for several floaters and jackups expected to drive stronger financial performance in the second half of the year. Meanwhile, commercial visibility for 2025 and 2026 is highly encouraging based on recent months' step-change increase in open demand, which is a positive indicator for future backlog development. Against this favorable backdrop, we look forward to growing our return of capital to shareholders as free cash flow improves over the course of the cycle.'

Due to the forward-looking nature of Adjusted EBITDA, management cannot reliably predict certain of the necessary components of the most directly comparable forward-looking GAAP measure. Accordingly, the Company is unable to present a quantitative reconciliation of such forward-looking non-GAAP financial measure to the most directly comparable forward-looking GAAP financial measure without unreasonable effort. The unavailable information could have a significant effect on Noble's full year 2024 GAAP financial results.

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Source: Noble Corp