Noble plc(US:NE)2021-08-04 18:22Financial Data and Key Metrics Changes - Contract drilling services revenue for Q2 2021 totaled $200 million, an increase from $159 million in the combined first quarter [33] - Adjusted EBITDA for Q2 2021 was $10 million, down from $28 million in the combined first quarter [40] - Total liquidity at June 30 was $636 million, including $161 million in cash and $475 million available under the credit facility [44] Business Line Data and Key Metrics Changes - The acquisition of Pacific Drilling contributed to increased revenue, with the Pacific Santa Ana and Pacific Sharav earning revenue during the quarter [34] - The company secured three new contracts for its ultra-deepwater rigs, adding approximately 180 operating days and a cumulative contract value of over $55 million [10][12] Market Data and Key Metrics Changes - The U.S. Gulf of Mexico ultra-deepwater market saw a five-fold increase in contract fixtures in the first half of 2021, with rig utilization rising sharply [13] - In West Africa, drillship utilization increased from 56% in Q1 to 73% in Q2, indicating a recovery in the market [18] - Global demand for ultra-deepwater rigs is expected to exceed 2020 levels by over 25% in 2022 [22] Company Strategy and Development Direction - The company is focused on integrating the Pacific Drilling acquisition and achieving $30 million in annual synergies by the end of Q3 2021 [41] - Noble is pursuing strategies to reduce fuel consumption and emissions, including power plant optimization and installation of Selective Catalytic Reduction systems [53] - The company aims to maintain cost discipline and make responsible investment decisions to enhance its value proposition [30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of the ultra-deepwater market and the potential for increased dayrates and contract durations [23] - The company expects to generate positive free cash flow by early 2022, supported by new contracts and improving market conditions [49] - Management acknowledged ongoing challenges in the industry but emphasized the importance of oil and gas in the global energy mix [52] Other Important Information - The company completed the disposal of two rigs, generating approximately $30 million in cash and eliminating $10 million in annual stacking costs [41] - Capital expenditures for Q2 2021 were $55 million, reflecting contract-specific projects and preparations for upcoming contracts [40] Q&A Session Summary Question: Insights on the jackup market and its recovery - Management noted that typically the jackup market leads the recovery, but recent volatility has caused a topsy-turvy situation, with the floater market currently showing more activity [61][64] Question: Technical aspects of drilling and customer demand for managed pressure drilling (MPD) - Management confirmed that MPD is gaining momentum but is not yet standard; it is a useful tool for certain wells and customers are willing to pay for it [66][68] Question: M&A strategy and potential acquisitions - Management stated that they are focused on high-spec floaters and jackups, emphasizing the importance of fleet quality and potential synergies in any future M&A activities [75][76]