(Noble, 27.Feb.2023) — Noble Corporation plc (NYSE: NE, CSE: NOBLE) reported fourth quarter and full year 2022 results.
Highlights:
- Integration of Maersk Drilling well underway, with over $50mn of synergies realized to date
- Noble establishes offshore drilling industry leadership in returning capital to shareholders, with, $96 million in share repurchases to date, including the Maersk Drilling squeeze-out
- Q4 Cash Flow from Operations of $171mn and Free Cash Flow of $106mn
SUGAR LAND, Texas, Feb. 27, 2023 /PRNewswire/ —
| Successor | |||||
| (stated in millions, except per share amounts) | Three Months Ended 31 Dec 2022 | Three Months Ended 30 Sep 2022 | Three Months Ended 31 Dec 2021 | ||
| Total Revenue | $623 | $306 | $208 | ||
| Contract Drilling Services Revenue | 586 | 289 | 192 | ||
| Net Income | 135 | 34 | 123 | ||
| Adjusted EBITDA* | 157 | 97 | 12 | ||
| Adjusted Net Income (Loss)* | 61 | 41 | (26) | ||
| Basic Earnings Per Share | 1.02 | 0.48 | 1.85 | ||
| Diluted Earnings Per Share | 0.92 | 0.41 | 1.70 | ||
| Adjusted Diluted Earnings (Loss) Per Share* | 0.41 | 0.50 | (0.35) | ||
| * A Non-GAAP supporting schedule is included with the statements and schedules attached to this press release and can be found at www.noblecorp.com. |
“Since the closing of the merger, our team has come together impressively. As a newly combined company, we generated strong free cash flow, implemented a return of capital program, and are well on track to achieving our synergy target of $125mn, with $50mn realized as of the end of 2022. I would like to thank all of our employees for their tremendous effort and commitment throughout the critical first few months of our integration. I’d also like to thank our customers for their continued trust and support as we pursue our quest of creating the leading offshore drilling company.”
Robert W. Eifler, President and Chief Executive Officer of Noble Corporation plc
Fourth Quarter Results
Contract drilling services revenue for the fourth quarter of 2022 totaled $586mn compared to $289mn in the third quarter, with the increase primarily attributable to the business combination. Marketed fleet utilization was 88% in the three months ended 31 December 2022 compared to 89% in the previous quarter. Contract drilling services costs for the fourth quarter were $366mn, up from $186mn in the third quarter of 2022. Adjusted EBITDA for the three months ended 31 December 2022 was $157mn compared to $97mn in the third quarter of 2022. Capital expenditures totaled $77mn in the fourth quarter and $194mn for the full year ending December 31, 2022. Net cash provided by operating activities for the fourth quarter was $171mn and free cash flow was $106mn. Our business combination with Maersk Drilling closed on 3 October 2022. Results for the fourth quarter reflect the combined company for 90 out of 92 days of the period.
Balance Sheet and Capital Allocation
The Company’s balance sheet as of 31 December 2022 reflected total debt of $673mn and cash (and cash equivalents) of $476mn. Subsequent to the end of the fourth quarter, we elected to pay off the $150mn Danish Ship Finance term loan with excess cash on the balance sheet. During the fourth quarter, Noble executed on $86mn of share repurchases (including the compulsory purchase of legacy Maersk Drilling shareholders in November and open market share repurchases conducted during December pursuant to Noble’s previously announced share repurchase program), with additional share repurchases in January totaling $10mn.
Operating Highlights and Backlog
Noble’s marketed fleet of sixteen floaters was 91% contracted through the fourth quarter, compared with 96% utilization on nine floaters in the prior quarter. This sequential change reflects the addition of seven UDW rigs added from the legacy Maersk Drilling fleet. Tier 1 drillships remain at or above 95% marketed utilization, with leading edge dayrate fixtures steadily increasing, presently in the low to mid $400,000s per day range. Since the prior Fleet Status Report in early November, Noble has secured 24 months of additional backlog across four 6G and 7G drillships at an average dayrate above $420,000. Our sixteen marketed UDW rigs are currently 75% contracted throughout 2023 with visibility toward securing additional utilization for a portion of the remaining availability for this year, although some contract gaps and SPS time will remain uncontracted. Additionally, the Noble Globetrotter I remains off contract since October, pending permit approvals in Mexico. The average dayrate across our $2.7bn floater backlog is approximately $400,000, and with over half of our 2024 floater days uncommitted, an upward trajectory for repricing the fleet is visible based on current market dynamics.
Utilization of Noble’s thirteen marketed jackups was 85% in the fourth quarter, compared with 82% utilization on eight marketed jackups during the third quarter. The sequential change in fleet composition reflects the addition of ten jackups from the legacy Maersk Drilling fleet and the sale of five legacy Noble jackups to a subsidiary of Shelf Drilling, Ltd. as part of the business combination with Maersk Drilling. During the fourth quarter, the Noble Innovator was awarded a one year contract with BP in the UK North Sea at $135,000 per day, with a one year option at a higher dayrate. As recently reported, the Noble Regina Allen is currently off contract and expected to be unavailable for a substantial portion of 2023 as leg and jacking system repairs are made. Currently nine of our thirteen jackups are contracted, and 55% of total available jackup days across our fleet are contracted throughout 2023. Our $1bn jackup backlog is heavily weighted to the Noble Integrator and Noble Invincible commitments under the Aker BP alliance. While jackup demand in Norway remains subdued in 2023, we continue to see improving demand indicators in Norway and globally for our jackup fleet moving forward. We expect a limited contribution from jackups to our total EBITDA in 2023.
Noble’s backlog at 31 December 2022 stood at $3.9bn.
Outlook
For the full year 2023, Noble today announces a guidance range for total revenue of $2.35bn to $2.55bn, Adjusted EBITDA in the range of $725mn to $825mn and capital expenditures (net of reimbursable capex) between $325mn and $365mn.
Commenting on Noble’s outlook, Mr. Eifler stated, “We continue to see a very promising fundamental setup for the offshore drilling business, governed by increasingly tight industry utilization, robust customer economics and demand growth visibility and, not least, rational capital allocation in our industry. As the market improves, we remain focused on execution across all facets of our business, and are committed to returning capital to shareholders.”
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.
Conference Call
Noble will host a conference call related to its fourth quarter 2022 results on Monday, 27 February 2023, at 9:00 a.m. U.S. Central Time. Interested parties may dial +1 929-203-0901 and refer to conference ID 31391 approximately 15 minutes prior to the scheduled start time. Additionally, a live webcast link will be available on the Investor Relations section of the Company’s website. A webcast replay will be accessible for a limited time following the scheduled call.
For additional information, visit www.noblecorp.com or email investors@noblecorp.com
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