• Refinancing achieved with successful placement of $600 million of 8.0% senior unsecured notes due 2030, and amended and restated revolving credit facility with commitments of $550 million and maturity in 2028.
• Q1 Net Income of $108 million, Diluted Earnings Per Share of $0.74, and Adjusted EBITDA of $138 million.
• Total backlog expands to $4.6 billion with new contracts totaling $1.1 billion secured over the past three months.

Noble Corporation this week reported first quarter 2023 results.

Robert W. Eifler, President and Chief Executive Officer of Noble Corporation plc, stated:
"Our first quarter results reflect a strong start to the year from an operational, financial, and commercial perspective. The steady tightening of offshore drilling fundamentals is affording attractive opportunities to place our fleet into improving contracts. We are particularly excited to be awarded a significant additional backlog commitment from ExxonMobil Guyana under the CEA, and also to participate in the reemergence of Colombia as an active exploration basin with two of our deepwater rigs. Integration of our business combination continues to progress smoothly thanks to the outstanding and tireless efforts of our fantastic offshore crews and global shore-based team. With our refinancing successfully completed, Noble has a streamlined and efficient capital structure that will further enhance our ability to focus on our priorities, including returning capital to shareholders."

First Quarter Results

Contract drilling services revenue for the first quarter of 2023 totaled $575 million compared to $586 million in the fourth quarter of 2022, with the decrease attributable to lower utilization. Marketed fleet utilization was 80% in the three months ended March 31, 2023 compared to 88% in the previous quarter. Contract drilling services costs for the first quarter were $362 million, down from $366 million in the fourth quarter of 2022. Adjusted EBITDA for the three months ended March 31, 2023 was $138 million compared to $157 million in the fourth quarter of 2022. Net cash used by operating activities for the first quarter was $63 million, capital expenditures were $63 million, and resulting free cash flow (non-GAAP) was ($126) million. Cash flow was adversely impacted by a significant expansion of net working capital in the first quarter, which we expect to be largely reversed in the second quarter.

Balance Sheet and Capital Allocation

The Company's balance sheet as of March 31, 2023 reflected total debt of $521 million and cash (and cash equivalents) of $186 million. Subsequent to the end of the first quarter, Noble completed a refinancing, redeeming all existing debt and issuing $600 million in aggregate principal amount of new 8.0% senior unsecured notes due 2030 and securing an amended and restated senior secured revolving credit agreement which provides for commitments of $550 million and maturity in April 2028. With this streamlined capital structure now in place, Noble intends to focus its capital allocation framework on returning capital to shareholders.

Operating Highlights and Backlog

Noble's marketed fleet of sixteen floaters was 91% contracted through the first quarter, compared with 91% in the prior quarter. First quarter floater utilization was adversely impacted by the Noble Gerry de Souza's mobilization from the U.S. Gulf of Mexico to Nigeria early in the quarter, as well as an extended permitting delay for the Noble Globetrotter I which is now resolved with the rig expected to commence its contract in Mexico in mid-May. Industry-wide, tier 1 drillships remain at or above 95% marketed utilization, with leading edge dayrate fixtures steadily increasing. Recent new contracts and commitments across Noble's floater fleet, with total backlog value of over $1.0 billion, include the following:

ExxonMobil Guyana has awarded an additional 6.3 years of backlog under the Commercial Enabling Agreement (CEA), intended to extend the contract duration for each of our four drillships operating under the CEA from Q4 2025 to Q2 2027.

Noble Discoverer has recently been awarded a one well contract with Ecopetrol in Colombia, expected to commence in Q4 2023.
Noble Valiant has been awarded a contract for one well in the Gulf of Mexico with an undisclosed customer at a dayrate of $450,000, expected to commence in Q4 2023.

Utilization of Noble's thirteen marketed jackups was 67% in the first quarter, compared with 85% utilization during the fourth quarter. The sequential decrease in average jackup utilization was driven primarily by the Noble Regina Allen, Noble Tom Prosser and Noble Invincible, all of which were highly utilized during the fourth quarter and off contract for the majority of the first quarter.

The Noble Tom Prosser has recently been awarded contracts with two undisclosed customers in Malaysia for a combined term of 650 days. The first of these contracts is expected to commence early in the third quarter of this year. As previously disclosed, the Noble Regina Allen is undergoing repairs for its damaged leg and jacking system, with estimated marketability expected for early 2024. Within the ultra-harsh jackup fleet, the Noble Integrator's current work scope with Aker BP has been extended from July to September 2023 -- this rig, as well as the Noble Interceptor and Noble Intrepid, remains exposed to soft spot market conditions over the balance of this year, with improving demand expected to start materializing later in 2024. We continue to expect a limited contribution from jackups to our total EBITDA in 2023.

Noble's backlog as of May 3, 2023 stands at $4.6 billion.

Outlook

For the full year 2023, Noble maintains the previously communicated guidance for total revenue in the range of $2.35 to $2.55 billion, Adjusted EBITDA of $725 to $825 million, and capital expenditures (net of reimbursable capex) between $325 and $365 million.

Commenting on Noble's outlook, Mr. Eifler stated, "Deepwater fundamentals continue to tighten, with marketed utilization for all UDW units now approaching the mid 90%s while incremental rig reactivations are governed by significant lead-time and capital requirements. Accordingly, the trend of steadily rising dayrates and expanding contract duration for UDW units is expected to continue. We believe Noble's floater fleet remains well positioned to benefit from positive re-contracting opportunities over the near term, with longer contract durations representing a crucial driver for maximizing utilization. With improving harsh jackup demand expected in 2024 and beyond, we remain very constructive on the outlook for our business."

KeyFacts Energy Industry Directory: Nobel Corporation