Noble (NE) Q2 FY26 earnings call: guidance and Q&A

Could you elaborate on demand trends in the Eastern vs. Western Hemisphere and how this informs Noble's future strategy for rig moves, especially given your current leverage to the U.S. Gulf and Guyana?

Management noted the positive upside in Asia-Pacific, potentially driven by heightened energy security issues, and sees potential for an additional unit there. West Africa is also a strong growth story with significant FID-ed work, and Noble could expand its presence there as well. The Western Hemisphere has softened slightly.

“I could easily see an additional unit moving over there, but it's a little too early to say definitively on that right now.”

asked by Arun Jayaram · answered by Robert Eifler

You mentioned optimism about near-term contract news. Is this for idle floaters or adding to backlog for existing rigs?

Most work is weighted towards H2 2027, but there are opportunities that could start this year and in Q1/Q2 next year. The company is hopeful for news in the coming quarter.

“But I would also say that we do have -- at least we have an opportunity that would potentially start this year. And then we have a couple of others that would start in, kind of, first quarter, second quarter of next year.”

asked by Arun Jayaram · answered by Robert Eifler

Can you discuss the resequencing and outlook for the Noble Developer?

The D-class rigs, including the Developer, are in high demand in regions like CARICOM and Australia due to their technical fit. The resequencing is positive, and there's more work than available rigs in CARICOM, with a pipeline of potential work.

“And the resequencing there is something that we're extremely supportive of and we think will ultimately be better not only for Noble, but also for the various different customers that need rigs down there in the near term.”

asked by Jeffrey LeBlanc · answered by Robert Eifler

Given UDW rates are ticking up into the mid-$400,000s, do you think you can achieve these rates for a 1-year job in 2027, or is it primarily for multi-year jobs extending into 2028?

Gap filler work will likely be priced at a discount, while longer-term work will be priced at a slight premium, consistent with historical norms. The mid-$400,000s range is for the general market. The company sees a path to full utilization for the floating drillship fleet by 2027.

“I actually think the market will track just like the norm. And we've seen some deviations from the norm over the past 5 years, but I think it will track generally with the norm where gap filler type work is going to be priced at a discount, which is natural and longer-term work is going to be priced at a slight discount, which is also very natural.”

asked by Scott Gruber · answered by Robert Eifler

Can you provide more detail on the administrative solutions being negotiated with Petrobras regarding the Brazil rigs, such as day rate reductions or early termination?

The operational suspension in May/June resulted from an ANP audit and is an ongoing matter. Both rigs are currently operating, and the revised guidance reflects a range of potential outcomes. The company cannot provide specific details due to the sensitivity of the ongoing negotiations.

“That was a result of an ANP audit, which is a regulator down there. And that is an ongoing matter that -- unfortunately, I would have a very incomplete answer for you today because we cannot say much about it.”

asked by Doug Becker · answered by Robert Eifler

What are the opportunities in the U.S. Gulf for rigs like BlackHawk and BlackRhino, and what would it take to move rigs out of that region?

Opportunities exist in the U.S. Gulf, West Africa, Asia-Pacific, and Central/Northern South America, with many yet to be contracted. It's anticipated that one or two Noble rigs could move regions, which would be a positive development in the long run.

“I think you could anticipate 1 or 2 of our rigs moving regions. And I think that's a good thing in the long run. And so we're working through all of that right now.”

asked by Benjamin Sommers · answered by Robert Eifler

Following the Ocean Apex scrapping, what is the outlook for the Globetrotter 1 (GT1)? Do you think disposal is likely, and will more older, lower-spec assets be scrapped?

The GT1 is being bid for intervention work and specific drilling wells uniquely suited to its design. Scrapping decisions for older rigs (35-40+ years) are always judgment calls based on SPS costs and market outlook. While the incentive for extreme discipline in fleet management has lessened, some older rigs will still be evaluated for scrapping on an SPS-by-SPS basis if market conditions don't align.

“So SPS costs go up and every drilling company ever looks at costs, which cover you for effectively another 5 years and trying to make a determination based on the outlook of whether it's worth putting the capital back into the rigs.”

asked by Keith Beckmann · answered by Robert Eifler

Regarding the rotation from Permian to deepwater, are customers who operate in both onshore and offshore still convinced about core exhaustion in onshore, motivating the shift offshore?

Management clarified they don't comment on onshore viability but noted that deepwater screens well within the mix of global oil reserve replacement strategies. Deepwater has large denominators and good carbon footprints, likely gaining market share into the 2030s. Exploration in deepwater is a big unknown but anticipated to increase, serving as an early indicator.

“I just feel confident and particularly backed by conversations with our customers that within all of that mix, deepwater screens well. It has huge denominators and good carbon footprints, which still matters in a lot of instances and is likely to gain market share going into the 2030s.”

asked by Noel Parks · answered by Robert Eifler