Noble plc(NE) - 2021 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Contract drilling services revenue for Q4 2021 totaled $192 million, down from $231 million in Q3 2021, primarily due to the sale of four jack-ups in Saudi Arabia and other operational impacts [29] - Adjusted EBITDA for Q4 2021 was $12 million, down from $47 million in Q3 2021, with full-year adjusted EBITDA at $97 million, towards the low end of the previously guided range [31][33] - At year-end, net debt stood at $22 million, with cash of $194 million and debt of $216 million in second lien notes [34][35] Business Line Data and Key Metrics Changes - The decrease in contract drilling services revenue was partially offset by the start of the Noble Lloyd Noble contract in Norway [29] - Capital expenditures for full year 2021 were $170 million, slightly below previous guidance due to project delays [33] Market Data and Key Metrics Changes - The ultra-deepwater market rates grew by over 50% in the last three quarters of 2021, driven by fixtures in the U.S. Gulf of Mexico [12] - Customers' drilling budgets are generally up by double digits in 2022 compared to 2021, indicating a positive outlook for offshore rig demand [13] Company Strategy and Development Direction - The company completed a transformative year in 2021, emerging from restructuring and closing the acquisition of Pacific Drilling, with plans to combine with Maersk Drilling in mid-2022 [10][11] - The combination with Maersk Drilling is expected to create a world-class offshore driller with significant synergies and a robust balance sheet [11][48] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of the offshore rig market, expecting continued demand improvement across all segments [27] - Inflationary pressures are a concern, particularly in North and South America, but the company is focused on controlling costs and making disciplined capital decisions [42][43] Other Important Information - The company announced the scrapping of the Noble Clyde Boudreaux due to challenging economics and low utilization prospects in Southeast Asia [42] - The revenue backlog at the end of the year stood at $41.2 billion, excluding the conditional award of 7.4 years of contract term with ExxonMobil in Guyana [35][67] Q&A Session Summary Question: Insights on rig pricing in Guyana and future revenue drivers - Management noted that specific rates cannot be disclosed but emphasized that rates are set several months in advance and reflect market conditions at that time [54][56] Question: Future of the Globetrotter I in the Gulf of Mexico - The rig is expected to enter the spot market, with ongoing bids in various locations, indicating confidence in securing continued work [59] Question: Shareholder returns post-Maersk merger - Management indicated that returning capital to shareholders will be a high priority after the merger, with a focus on dividends or share buybacks [70]