Noble plc(US:NE)2025-10-28 14:02Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $254 million for Q3 2025, with a free cash flow of $139 million and a cash balance of $478 million, up $140 million from the previous quarter [4][14][15] - Contract drilling services revenue for Q3 totaled $798 million, with an adjusted EBITDA margin of 32% [14] - The total backlog as of October 27 stands at $7 billion, with approximately $2.4 billion and $1.9 billion scheduled for revenue conversion in 2026 and 2027, respectively [15][16] Business Line Data and Key Metrics Changes - The company achieved operational uptime and HSE performance, with significant achievements in well construction and completion activities in Guyana and the U.S. Gulf [5][6] - The backlog increased to $7 billion, supported by key contract awards, including extensions for the Noble Black Lion and Noble Black Hornet rigs [7][10] Market Data and Key Metrics Changes - The committed UDW rig count is approximately 100 rigs, with marketed utilization slightly up to low 90% [10] - Deepwater contracting momentum is on an uptrend, with an average of 18 UDW rig years per quarter fixed in Q2 and Q3, up 10% compared to the preceding two years [10] Company Strategy and Development Direction - The company is focused on maintaining a robust return of capital program and a prudent balance sheet position, with expectations for a healthy EBITDA and cash flow inflection late next year [19] - The management emphasized the importance of deepwater in the global upstream supply stack, indicating a strategic long-term focus on deepwater exploration [22][67] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the tightening of the deepwater market, with expectations for increased activity in late 2026 and 2027 [21][43] - The company is closely monitoring customer budget announcements, which have been less inspiring, but noted the resiliency of rig contracting activity despite macroeconomic challenges [22][66] Other Important Information - The company plans to provide 2026 guidance in the next quarter's earnings call [16] - The management is focused on cost management and optimizing cash flow, with ongoing discussions around contract opportunities for available rigs [12][76] Q&A Session Summary Question: Thoughts on improving utilization for high-spec floater fleet - Management indicated that discussions are ongoing for rigs like the Noble Viking, Jerry DeSouza, and Black Rhino, with a target of achieving 90 to 100% utilization by the second half of 2026 [25][31] Question: Details on Diamond Offshore BOP leases - Management explained the termination of the service agreement and the lease agreement, with a total cash outlay of up to $135 million expected, offset by annual savings of approximately $45 million [26][27] Question: Expectations for first half of 2026 - Management noted that there is limited work expected in the first half of 2026, with a more favorable outlook for the second half of the year [40][41] Question: Confidence in deepwater utilization recovery - Management expressed cautious optimism based on existing contracts and market tightening, indicating that day rates may have bottomed [43] Question: Demand in West Africa and macroeconomic sentiment - Management acknowledged that West Africa is a long-cycle region and noted a mix of firm and delayed project timelines, with overall demand expected to improve in late 2026 and 2027 [71][72]