Noble Corp plc
For the period ended Jun 30, 2024. Filed Aug 1, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 1, 2024
NE$40.87+2.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-07.
0001628280-24-020917
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-01.
0001628280-24-033932
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 90 previous paragraphs and 120 current paragraphs.
47 unchanged; 37 reworded; 23 added; 6 removed; 0 previous and 13 current paragraphs rearranged.
Tables are not compared: 4 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (23)
Current report
Recent Events
Current report
Diamond Transaction. On June 9, 2024, Noble entered into an agreement and plan of merger (the “Diamond Merger Agreement”) with Diamond Offshore Drilling, Inc. (“Diamond”), Dolphin Merger Sub 1, Inc., and Dolphin Merger Sub 2, Inc., under which Noble will acquire Diamond in a stock plus cash transaction (the “Diamond Transaction”). Pursuant to the terms and conditions set forth in the Diamond Merger Agreement, Diamond shareholders will receive 0.2316 shares of Noble, plus cash consideration of $5.65 per share for each share of Diamond stock, representing a premium of 11.4% to Diamond’s closing share price on June 7, 2024. Upon closing of the Diamond Transaction, Diamond shareholders are expected to own approximately 14.5% of Noble’s outstanding shares. Noble intends to fund the cash portion of the Diamond Transaction through new debt financing, which Noble has secured through a $600.0 million committed bridge financing facility.
Current report
The Diamond Transaction has been unanimously approved by the board of directors of each company. The Diamond Merger Agreement contains certain termination rights, including, but not limited to, each party’s right to terminate the Diamond Merger Agreement in the event that the Diamond Transaction has not been consummated on or before June 9, 2025 (the “End Date”); except that the End Date will automatically be successively extended to December 9, 2025, and June 9, 2026, if all required applicable regulatory approvals have not been obtained by what would otherwise be the End Date but all other conditions to closing have been satisfied. At 11:59 ET on July 24, 2024, the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 expired in connection with the pending merger. Completion of the Diamond Transaction is subject to the satisfaction of the remaining customary closing conditions, including approval by Diamond's stockholders and the receipt of informal clearance by the Australian Competition & Consumer Commission. A special meeting of Diamond stockholders to vote on the transaction is currently scheduled for 8:30 a.m. CDT on August 27, 2024.
Current report
Also, on June 10, 2024, Noble’s Board of Directors approved an interim quarterly cash dividend on our Ordinary Shares of $0.50 per share for the third quarter of 2024. This dividend is in addition to the $0.40 per share dividend previously announced which was paid on June 27, 2024, to shareholders of record at close of business on June 6, 2024. The $0.50 dividend is expected to be paid on September 26, 2024, to shareholders of record at close of business on September 12, 2024. The Company intends to continue to pay dividends on a quarterly basis, and the third quarter dividend represents $2.00 per share on an annualized basis.
Current report
Voluntary Delisting. On July 18, 2024, Noble announced its intention to voluntarily delist from NASDAQ Copenhagen ("NASDAQ"). Noble will remain traded on the New York Stock Exchange ("NYSE"), as Noble's primary listing exchange. Noble anticipates such delisting will be effective in late 2024 or early 2025. Noble has not filed, and has not yet determined when it will file, a formal delisting request with NASDAQ.
Current report
Jackups. During the second quarter of 2024, jackups generated revenue of $143.0 million, as compared to $112.2 million in the second quarter of 2023. The increase in revenue was mainly attributable to $27.8 million from an increase in average dayrates in the current period and $11.5 million from rigs with net changes in operating days in the current period.
Current report
General and administrative. General and administrative expenses totaled $39.7 million and $32.4 million during the second quarter of 2024 and 2023, respectively. The increase was primarily related to individually insignificant items within certain corporate charges such as professional fees, corporate leases, and employee related costs.
Current report
Merger and integration costs. Noble incurred $10.6 million and $22.5 million of merger and integration costs during the second quarter of 2024 and 2023, respectively. Costs incurred prior to the second quarter of 2024 related to the Business Combination with Maersk Drilling in October 2022. In the second quarter 2024, $6.2 million and $4.4 million of costs related to the Diamond Transaction and the Business Combination with Maersk Drilling, respectively. The costs directly attributable to the Diamond Transaction related to professional services fees for pre-merger preparation and the costs directly attributable to the Business Combination with Maersk Drilling primarily related to severance plans, professional fees, and certain other integration-related activities.
Current report
During the second quarter of 2024, our tax provision included tax benefits of $63.1 million mainly related to releases of valuation allowance for deferred tax benefits in Luxembourg. Such tax benefits are offset by tax expenses related to recurring quarterly accruals of $57.8 million mostly in Guyana, Luxembourg, Switzerland, and Nigeria.
Current report
Results for the Six Months Ended June 30, 2024 and 2023
Current report
Net income for the six months ended June 30, 2024, was $290.5 million, or $1.99 per diluted share, on operating revenues of $1.3 billion compared to compared to net income for the six months ended June 30, 2023, of $173.9 million, or $1.19 per diluted share, on operating revenues of $1.2 billion.
Current report
Key Operating Metrics
Current report
Contract Drilling Services
Current report
Contract Drilling Services Revenues
Current report
Floaters. During the six months ended June 30, 2024, floaters generated revenue of $1.0 billion, as compared to $970.2 million in the six months ended June 30, 2023. The increase in revenue was mainly attributable to $183.9 million from an increase in average dayrates in the current period and was partly offset by $119.9 million from rigs with net changes in operating days in the current period. Additionally, floater revenue from net non-cash amortization related to off-market customer contract assets and liabilities decreased $22.0 million in the current period.
Current report
Operating Costs and Expenses
Current report
Floaters. During the six months ended June 30, 2024, total contract drilling services costs related to floaters was $535.6 million, as compared to $549.4 million in the six months ended June 30, 2023. The primary drivers of this decrease were $30.2 million in mobilization and $12.8 million in non-labor crew costs and operations support costs across the fleet. These decreases were offset by increases of $12.7 million in labor, $6.5 million in transportation and storage, $5.7 million in fuel, and $4.3 million in repairs and maintenance.
Current report
Jackups. During the six months ended June 30, 2024, total contract drilling services cost related to jackups was $187.1 million, as compared to $174.9 million in the six months ended June 30, 2023. The primary drivers of an aggregate increase of $35.9 million related to labor costs, repairs and maintenance, operations support, and other costs across the fleet. These increases were partially offset by decreases in mobilization, fuel, and other costs across the fleet. Further, there was a decrease of $23.8 million after the completion of disposal activities regarding certain rigs.
Current report
General and administrative. General and administrative expenses totaled $65.6 million and $62.4 million during the six months ended June 30, 2024 and 2023, respectively. The increase was primarily related to individually insignificant items within certain corporate charges such as professional fees, corporate leases, and employee related costs.
Current report
Other Income and Expenses
Current report
During the six months ended June 30, 2024, our tax provision included tax benefits of $81.6 million related to releases and adjustments of valuation allowance for deferred tax benefits in Nigeria, Switzerland, and Luxembourg. Such tax benefits are offset by tax expenses related to a net increase in uncertain tax positions of $6.9 million and recurring quarterly accruals of $59.3 million mostly in Guyana, Luxembourg, Switzerland, and Nigeria.
Current report
During the six months ended June 30, 2023, our tax provision included tax benefits of $95.8 million related to releases of valuation allowance for deferred tax benefits in Guyana, Norway, and Switzerland and a tax benefit of $6.8 million related to a Ghana uncertain tax position release. Such tax benefits are offset by tax expenses related to a Mexico uncertain tax position of $9.8 million, contract fair value amortization of $8.9 million, and various recurring quarterly accruals of $67.4 million primarily in Guyana, Australia, and Luxembourg.
Current report
•$132.7 million for sustaining capital;
Removed paragraphs (6)
Previous report
Strategy
Previous report
Our business strategy is centered around efficient, reliable, and safe offshore drilling to provide the best services for our customers. The Business Combination with Maersk Drilling created one of the youngest and highest specification fleets of global scale in the industry, with diversification across asset classes, geographic regions, and customers. The combined company has a track record of high utilization coupled with an unwavering commitment to safety and customer satisfaction. We strive to be a leader in industry innovation and sustainability.
Previous report
See Item 1 in our Annual Report on Form 10-K for the year ended December 31, 2023, for additional information on our business and strategy.
Previous report
General and administrative. General and administrative expenses totaled $26.0 million and $30.0 million during the first quarter of 2024 and 2023, respectively. The decrease was primarily related to the completion of certain integration activities after the Business Combination with Maersk Drilling in October 2022 resulting in decreases across several categories, including employee related costs.
Previous report
During the first quarter of 2023, our tax provision included a Luxembourg valuation allowance increase of $4.5 million, deferred tax expense related to contract fair value amortization of $4.2 million, and current and deferred tax expense related to various recurring quarterly accruals of $25.6 million primarily in Guyana, Luxembourg, and Switzerland. Such tax expenses were offset by a deferred tax benefit of $50.1 million related to a release of a valuation allowance in Guyana and Switzerland.
Previous report
•$51.2 million for sustaining capital;
Reworded paragraphs (37)
Previous wording
The following discussion is intended to assist you in understanding our financial position at March 31, 2024, and our results of operations for the three months ended March 31, 2024 and 2023. The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and related notes contained in this Quarterly Report on Form 10-Q, the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed by Noble Corporation plc, a public limited company incorporated under the laws of England and Wales (“Noble”) and our other filings with the US Securities and Exchange Commission (“SEC”). References in this Quarterly Report on Form 10-Q to “Noble,” the “Company,” “we,” “us,” “our” and words of similar meaning refer collectively to Noble and its consolidated subsidiaries.
Current wording
The following discussion is intended to assist you in understanding our financial position at June 30, 2024, and our results of operations for the three and six months ended June 30, 2024 and 2023. The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and related notes contained in this Quarterly Report on Form 10-Q, the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “Form 10-K”), filed by Noble Corporation plc, a public limited company incorporated under the laws of England and Wales (“Noble”) and our other filings with the US Securities and Exchange Commission (“SEC”). References in this Quarterly Report on Form 10-Q to “Noble,” the “Company,” “we,” “us,” “our” and words of similar meaning refer collectively to Noble and its consolidated subsidiaries.
Previous wording
This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act, as amended. All statements other than statements of historical facts included in this report or in the documents incorporated by reference, are forward looking statements, including those regarding expected financial performance, revenues, expected utilization, and fleet status, stacking of rigs, effects of new rigs on the market revenues, operating expenses, cash flows, contract status, tenders, terms and duration, dayrates, termination and extensions, contract backlog, the availability, delivery, mobilization, stacking or reactivation, contract commencement, relocation or other movement of rigs and the timing thereof, contract claims, capital expenditures, insurance maintenance and renewals, access to financing, rig demand, peak oil, the offshore drilling market, oil prices, production levels among members of the Organization of Petroleum Exporting Countries (“OPEC”) and other oil and gas producing nations (together with OPEC, “OPEC+”), and any expectations we may have with respect thereto, our future financial position, business strategy, impairments, repayment of debt, credit ratings, liquidity, borrowings under any credit facilities or other instruments, sources of funds, cost inflation, planned acquisitions or divestitures of assets, governmental regulations and permitting, taxes and tax rates, indebtedness covenant compliance, dividends and distributable reserves, share repurchases, progress, plans and goals related to environmental, social, and governance matters; the outcome of tax disputes; assessments and settlements; and expense management, the outcome of any dispute, litigation, audit or investigation, plans, foreign currency requirements, results of joint ventures, general economic, market, including inflation and recessions, trends and outlook; general political conditions, including political tensions, conflicts and war, timing, benefits or results of acquisitions or dispositions (including the Business Combination (as defined herein), and our plans, objectives, expectations, and intentions related to the Business Combination), and timing for compliance with any new regulations. Forward-looking statements involve risks, uncertainties, and assumptions, and actual results may differ materially from any future results expressed or implied by such forward-looking statements. When used in this report or in the documents incorporated by reference, the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “on track,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would,” “shall,” “target,” “will,” and similar expressions are intended to be among the terms that identify forward-looking statements. Although we believe that the expectations reflected in such forward-look…
Excerpt shortened here; the source contains the full paragraph.
Current wording
This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act, as amended. All statements other than statements of historical facts included in this report or in the documents incorporated by reference, are forward looking statements, including those regarding expected financial performance, revenues, expected utilization, and fleet status, stacking of rigs, effects of new rigs on the market revenues, operating expenses, cash flows, contract status, tenders, terms and duration, dayrates, termination and extensions, contract backlog, the availability, delivery, mobilization, stacking or reactivation, contract commencement, relocation or other movement of rigs and the timing thereof, contract claims, capital expenditures, insurance maintenance and renewals, access to financing, rig demand, peak oil, the offshore drilling market, oil prices, production levels among members of the Organization of Petroleum Exporting Countries (“OPEC”) and other oil and gas producing nations (together with OPEC, “OPEC+”), and any expectations we may have with respect thereto, our future financial position, business strategy, impairments, repayment of debt, credit ratings, liquidity, borrowings under any credit facilities or other instruments, sources of funds, cost inflation, planned acquisitions or divestitures of assets, governmental regulations and permitting, taxes and tax rates, indebtedness covenant compliance, dividends and distributable reserves, share repurchases, progress, plans and goals related to environmental, social, and governance matters; the outcome of tax disputes; assessments and settlements; and expense management, the outcome of any dispute, litigation, audit or investigation, plans, foreign currency requirements, results of joint ventures, general economic, market, including inflation and recessions, trends and outlook; general political conditions, including political tensions, conflicts and war, timing for compliance with any new regulations the benefits or results of acquisitions or dispositions (including the Business Combination (as defined herein) and the Diamond Transaction (as defined herein), our plans, objectives, expectations, and intentions related to the Business Combination and Diamond Transaction). Forward-looking statements involve risks, uncertainties, and assumptions, and actual results may differ materially from any future results expressed or implied by such forward-looking statements. When used in this report or in the documents incorporated by reference, the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “on track,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would,” “shall,” “target,” “will,” and similar expressions are intended to be among the terms that identify forward-looking statements. Although we b…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available free of charge at our website. The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov.
Current wording
Our Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available free of charge at our website. The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov.
Previous wording
While the length of contract terms has started to moderately increase, the overall market remains characterized by generally shorter-term contracts. This leads to an increased number of rig contract start-ups, both with different customers and among different regions. These rig contract start-ups and other shipyard projects may result in incremental resources and costs and, in certain cases, may delay delivery of the applicable rig which may trigger applicable late delivery clauses. Additionally, shorter-term contracts have resulted in, and are likely to continue to result in, lower overall utilization for our fleet driven by more idle time between contracts.
Current wording
Returning to the broader offshore drilling market, while the length of contract terms has started to moderately increase, the overall market remains characterized by generally shorter-term contracts. This leads to an increased number of rig contract start-ups, both with different customers and among different regions. These rig contract start-ups and other shipyard projects may result in incremental resources and costs and, in certain cases, may delay delivery of the applicable rig which may trigger applicable late delivery clauses. Additionally, shorter-term contracts have resulted in, and are likely to continue to result in, lower overall utilization for our fleet driven by more idle time between contracts.
Previous wording
We maintain a backlog of commitments for contract drilling services. Our contract drilling services backlog reflects estimated future revenues attributable to signed drilling contracts. While backlog did not include any letters of intent as of March 31, 2024, in the past we have included in backlog certain letters of intent that we expect to result in binding drilling contracts. As of March 31, 2024, contract drilling services backlog totaled approximately $4.5 billion, which includes a commitment of approximately 60% of available days for the remainder of 2024.
Current wording
We maintain a backlog of commitments for contract drilling services. Our contract drilling services backlog reflects estimated future revenues attributable to signed drilling contracts. While backlog did not include any letters of intent as of June 30, 2024, in the past we have included in backlog certain letters of intent that we expect to result in binding drilling contracts. As of June 30, 2024, contract drilling services backlog totaled approximately $4.2 billion, which includes a commitment of approximately 69% of available days for the remainder of 2024.
Previous wording
(1)Represents a nine-month period beginning April 1, 2024.
Current wording
(1)Represents a six-month period beginning July 1, 2024.
Previous wording
(2)Noble entered into a multi-year Commercial Enabling Agreement (the “CEA”) with ExxonMobil in February 2020. Under the CEA, dayrates earned by each rig will be updated twice per year to the projected market rate at the time the new rate goes into effect, subject to a scale-based discount and a performance bonus that appropriately aligns the interests of Noble and ExxonMobil. Under the CEA, the table above includes awarded and remaining term of three years and two months related to each of the four following rigs: the Noble Tom Madden, Noble Bob Douglas, Noble Don Taylor, and Noble Sam Croft. Under the CEA, ExxonMobil may reassign terms among rigs.
Current wording
(2)Noble entered into a multi-year Commercial Enabling Agreement (the “CEA”) with ExxonMobil in February 2020. Under the CEA, dayrates for the rigs are repriced on March 1 and September 1 each year to the projected market rate at the time the new rate goes into effect, subject to a scale-based discount and a performance bonus that appropriately aligns the interests of Noble and ExxonMobil. Under the CEA, the table above includes awarded and remaining current contract term to June 5, 2027 related to each of the four following rigs: the Noble Tom Madden, Noble Bob Douglas, Noble Don Taylor, and Noble Sam Croft. Under the CEA, ExxonMobil may reassign remaining contract term among rigs, subject to maintaining certain minimum contract term on the rig from which term is removed.
Previous wording
(3)In 2022, Noble renewed its five-year Framework Agreement with Aker BP for the provision of ultra-harsh environment jackup rigs, the Noble Integrator and Noble Invincible, for activities offshore Norway. Under the Framework Agreement, different rate structures apply reflecting different operating modes, agreed incentive schemes, and adjustments for operating expenses. Rate structures are adjusted annually to reflect market conditions.
Current wording
(3)In 2022, Noble renewed its five-year Framework Agreement with Aker BP (the “Framework Agreement”) for the provision of ultra-harsh environment jackup rigs, the Noble Integrator and Noble Invincible, for activities offshore Norway. Under the Framework Agreement, different rate structures apply reflecting different operating modes, agreed incentive schemes, and adjustments for operating expenses. Rate structures are adjusted annually to reflect market conditions.
Previous wording
The amount of actual revenues earned and the actual periods during which revenues are earned may be materially different than the backlog amounts and backlog periods presented in the table above due to various factors, including, but not limited to, shipyard and maintenance projects, unplanned downtime, the operation of market benchmarks for dayrate resets, achievement of bonuses, weather conditions, reduced standby or mobilization rates, and other factors that result in applicable dayrates lower than the full contractual operating dayrate. In addition, amounts included in the backlog may change because drilling contracts may be varied or modified by mutual consent or customers may exercise early termination rights contained in some of our drilling contracts or decline to enter into a drilling contract after executing a letter of intent. As a result, our backlog as of any particular date may not be indicative of our actual operating results for the periods for which the backlog is calculated. See Part I, Item 1A, “Risk Factors – Risks Related to Our Business and Operations – Our current backlog of contract drilling revenue may not be ultimately realized” in our Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
The amount of actual revenues earned and the actual periods during which revenues are earned may be materially different than the backlog amounts and backlog periods presented in the table above due to various factors, including, but not limited to, shipyard and maintenance projects, unplanned downtime, the operation of market benchmarks for dayrate resets, achievement of bonuses, weather conditions, reduced standby or mobilization rates, and other factors that result in applicable dayrates lower than the full contractual operating dayrate. In addition, amounts included in the backlog may change because drilling contracts may be varied or modified according to their terms or by mutual consent, or customers may exercise early termination rights contained in some of our drilling contracts or decline to enter into a drilling contract after executing a letter of intent. As a result, our backlog as of any particular date may not be indicative of our actual operating results for the periods for which the backlog is calculated. See Part I, Item 1A, “Risk Factors – Risks Related to Our Business and Operations – Our current backlog of contract drilling revenue may not be ultimately realized” in our Form 10-K.
Previous wording
As of March 31, 2024, ExxonMobil, Aker BP, and Petrobras represented approximately 42.4%, 16.2%, and 13.9% of our backlog, respectively.
Current wording
As of June 30, 2024, ExxonMobil, Aker BP, and Petrobras represented approximately 41.4%, 16.0%, and 14.5% of our backlog, respectively.
Previous wording
Net income for the three months ended March 31, 2024 (the “current quarter”), was $95.5 million, or $0.66 per diluted share, on operating revenues of $637.1 million compared to net income for the three months ended March 31, 2023, of $108.1 million, or $0.74 per diluted share, on operating revenues of $610.1 million.
Current wording
Net income for the three months ended June 30, 2024 (the “current quarter”), was $195.0 million, or $1.34 per diluted share, on operating revenues of $692.8 million compared to net income for the three months ended June 30, 2023, of $65.8 million, or $0.45 per diluted share, on operating revenues of $638.5 million.
Previous wording
Floaters. During the first quarter of 2024, floaters generated revenue of $494.4 million, as compared to $476.2 million in the first quarter of 2023. The increase in revenue was mainly attributable to $136.0 million from an increase in average dayrates in the current period and was partly offset by $94.2 million from rigs with net changes in operating days in the current period. Additionally, floater revenue from net non-cash amortization related to off-market customer contract assets and liabilities decreased $23.6 million in the current quarter.
Current wording
Floaters. During the second quarter of 2024, floaters generated revenue of $517.8 million, as compared to $494.0 million in the second quarter of 2023. The increase in revenue was mainly attributable to $76.2 million from an increase in average dayrates in the current period and was partly offset by $54.1 million from rigs with net changes in operating days in the current period. Additionally, floater revenue from net non-cash amortization related to off-market customer contract assets and liabilities increased $1.6 million in the current period.
Previous wording
Floaters. During the first quarter of 2024, total contract drilling services costs related to floaters was $291.1 million, as compared to $270.9 million in the first quarter 2023. The primary drivers of this increase were $6.9 million in labor, $2.0 million in transportation and storage, $2.9 million in fuel, $2.6 million in insurance, and $5.8 million in increased non-labor crew costs and operations support costs across the remainder of the fleet.
Current wording
Floaters. During the second quarter of 2024, total contract drilling services costs related to floaters was $246.0 million, as compared to $278.4 million in the second quarter 2023. The primary drivers of this decrease were $31.4 million in mobilization, $4.7 million in insurance, and $13.4 million in non-labor crew costs and operations support costs across the fleet. These decreases were partially offset by increases of $5.8 million in labor, $4.5 million in transportation and storage, and $6.8 million in repairs and maintenance.
Previous wording
Jackups. During the first quarter of 2024, total contract drilling services cost related to jackups was $98.8 million, as compared to $90.9 million in the first quarter 2023. The primary drivers of the increase were $7.9 million in increased non-labor crew costs, repairs and maintenance, and operations support costs across the fleet.
Current wording
Jackups. During the second quarter of 2024, total contract drilling services cost related to jackups was $86.8 million, as compared to $84.1 million in the second quarter 2023. The primary drivers of an aggregate increase of $16.0 million related to labor costs, repairs and maintenance, operations support, and other costs across the fleet. These increases were partially offset by decreases in mobilization, insurance, fuel, and other costs across the fleet. Further, there was a decrease of $13.4 million after the completion of disposal activities regarding certain rigs.
Previous wording
Depreciation and amortization. Depreciation and amortization totaled $86.7 million and $69.9 million during the first quarter of 2024 and 2023, respectively. Depreciation and amortization increased by $16.8 million in the current quarter primarily due to the timing of capital additions that were placed in service as compared to retirements among the periods.
Current wording
Depreciation and amortization. Depreciation and amortization totaled $90.8 million and $71.3 million during the second quarter of 2024 and 2023, respectively. Depreciation and amortization increased by $19.4 million in the current quarter primarily due to the timing of capital additions that were placed in service as compared to retirements among the periods.
Previous wording
Hurricane losses and (recoveries), net. During the first quarter of 2024, costs incurred in connection with the Hurricane Ida incident were offset by accrued recoveries. For additional information about the Hurricane Ida incident, see “Note 9 — Commitments and Contingencies” to our unaudited condensed consolidated financial statements.
Current wording
Hurricane losses and (recoveries), net. During the second quarter of 2024, costs incurred in connection with the Hurricane Ida incident were offset by accrued recoveries. For additional information about the Hurricane Ida incident, see “Note 10 — Commitments and Contingencies” to our unaudited condensed consolidated financial statements.
Previous wording
Interest income and other, net. Noble recognized other losses of $4.7 million and interest income of $2.0 million during the first quarter of 2024 and 2023, respectively.
Current wording
Interest income and other, net. Noble recognized other losses of $8.2 million and of $2.9 million during the second quarter of 2024 and 2023, respectively.
Previous wording
Income tax benefit (provision). Noble recorded an income tax benefit of $10.2 million and $15.8 million during the first quarter of 2024 and 2023, respectively.
Current wording
Income tax benefit (provision). Noble recorded an income tax benefit of $5.2 million and $0.7 million during the second quarter of 2024 and 2023, respectively.
Previous wording
During the first quarter of 2024, our tax provision included tax benefits of $18.5 million related to releases and adjustments of valuation allowance for deferred tax benefits in Guyana, Nigeria, Switzerland, and Luxembourg and a tax benefit of $3.2 million related to a release of an uncertain tax position. Such tax benefits are offset by tax expenses related to new uncertain tax positions of $10.1 million and recurring quarterly accruals of $1.4 million in various countries.
Current wording
During the second quarter of 2023, our tax provision included tax benefits of $50.7 million related to releases and adjustments of valuation allowance for deferred tax benefits in Guyana, Norway, Switzerland and Luxembourg and a tax benefit of $6.8 million related to a Ghana uncertain tax position release. Such tax benefits are offset by tax expenses related to a Mexico uncertain tax position of $9.8 million, contract fair value amortization of $4.7 million, and various recurring quarterly accruals of $42.2 million primarily in Guyana, Australia, and Luxembourg.
Previous wording
Jackups. During the first quarter of 2024, jackups generated revenue of $118.0 million, as compared to $99.1 million in the first quarter of 2023. The increase in revenue was primarily attributable to $45.0 million from an increase in average dayrates in the current period. The increase was offset by $15.4 million from rigs with net changes in operating days in the current period. Additionally, jackup revenue from net non-cash amortization related to off-market customer contract assets and liabilities decreased $9.7 million in the current quarter.
Current wording
Jackups. During the six months ended June 30, 2024, jackups generated revenue of $260.9 million, as compared to $211.3 million in the six months ended June 30, 2023. The increase in revenue was mainly attributable to $55.6 million from an increase in average dayrates in the current period and $13.3 million from rigs with net changes in operating days in the current period. Additionally, jackup revenue from net non-cash amortization related to off-market customer contract assets and liabilities decreased $19.9 million in the current period.
Previous wording
Merger and integration costs. Noble incurred $9.3 million and $11.6 million of merger and integration costs during the first quarter of 2024 and 2023, respectively, primarily as a result of the Business Combination with Maersk Drilling in October 2022. Costs primarily related to severance plans, transaction-related acquisition costs, professional fees, and certain integration-related activities that were directly attributable to the Business Combination.
Current wording
Merger and integration costs. Noble incurred $19.9 million and $34.1 million of merger and integration costs during the six months ended June 30, 2024 and 2023, respectively, primarily as a result of the Diamond Transaction and the Business Combination with Maersk Drilling in October 2022. During the current period, $6.2 million of pre-merger preparation costs related to professional services fees directly attributable to the Diamond Transaction while the remaining costs were directly attributable to the Business Combination with Maersk Drilling and primarily related to severance plans, professional fees, and certain other integration-related activities.
Previous wording
Interest expense, net of amounts capitalized. Interest expense totaled $17.5 million and $16.9 million during the first quarter of 2024 and 2023, respectively. Interest expense primarily relates to our 8.000% Senior Notes issued in April 2023, which refinanced prior debt assumed in the Business Combination with Maersk Drilling in October 2022. In the first quarter of 2024, $5 million of interest expense related to non-income taxes substantially offset decreases in interest on debt. For additional information, see “Note 5 — Debt” to our unaudited condensed consolidated financial statements.
Current wording
Interest expense, net of amounts capitalized. Interest expense totaled $29.5 million and $31.5 million during the six months ended June 30, 2024 and 2023, respectively. Interest expense primarily relates to our 8.000% Senior Notes issued in April 2023, which refinanced prior debt assumed in the Business Combination with Maersk Drilling in October 2022. In the six months ended June 30, 2024, $2.8 million of interest expense related to non-income taxes partially offset decreases in interest on debt. For additional information, see “Note 6 — Debt” to our unaudited condensed consolidated financial statements.
Previous wording
As of March 31, 2024, we had no loans outstanding and $23.2 million of letters of credit issued under the 2023 Revolving Credit Facility. For additional information about our 2023 Revolving Credit Facility as of March 31, 2024, see “Note 5 — Debt” to our unaudited condensed consolidated financial statements.
Current wording
As of June 30, 2024, we had $35.0 million of borrowings outstanding and $23.2 million of letters of credit issued under the 2023 Revolving Credit Facility. For additional information about our 2023 Revolving Credit Facility as of June 30, 2024, see “Note 6 — Debt” to our unaudited condensed consolidated financial statements.
Previous wording
Our principal sources of capital in the current period were cash generated from operating activities. Cash on hand during the current period was primarily used for the following:
Current wording
Our principal sources of capital in the current period were cash generated from operating activities and funding from the Revolving Credit Facility. Cash on hand during the current period was primarily used for the following:
Previous wording
Our anticipated cash flow needs, both in the short term and long term, may also include the above as well as repurchases, redemptions, or repayments of debt and interest and share repurchases.
Current wording
Our anticipated cash flow needs, both in the short term and long term, may also include repurchases, redemptions, or repayments of debt and interest and share repurchases.
Previous wording
We currently expect to fund our cash flow needs with cash generated by our operations, cash on hand, proceeds from sales of assets, or borrowings under the 2023 Revolving Credit Facility and we believe this will provide us with sufficient liquidity to fund our cash flow needs over the next 12 months. Subject to market conditions and other factors, we may also issue equity or long-term debt securities to fund our cash flow needs and for other purposes. In 2023 and during the first quarter of 2024, we incurred additional expenses and capital costs related to the damage and repair of two jackup rigs. Regarding one rig, these incurred costs exceeded our deductible amount. As such, we received partial insurance recoveries in 2023 and we continue to seek insurance recoveries for the remainder of the incurred and anticipated costs.
Current wording
We currently expect to fund our cash flow needs with cash generated by our operations, cash on hand, proceeds from sales of assets, or borrowings under the 2023 Revolving Credit Facility and we believe this will provide us with sufficient liquidity to fund our cash flow needs over the next 12 months. Subject to market conditions and other factors, we may also issue equity or long-term debt securities to fund our cash flow needs and for other purposes. Regarding the Diamond Transaction, Noble intends to fund the cash portion of the transaction through new debt financing, which Noble has secured through a $600.0 million committed bridge financing facility. In 2023 and during the first half of 2024, we incurred additional expenses and capital costs related to the damage and repair of two jackup rigs. These incurred costs exceeded our deductible amount. As such, we have received partial insurance recoveries and we continue to seek insurance recoveries for the remainder of the incurred and anticipated costs.
Previous wording
Net cash provided by operating activities was $128.7 million and net cash used in operating activities was $63.1 million for the three months ended March 31, 2024 and 2023, respectively. The increase in net cash provided by operating activities for the three months ended March 31, 2024 was primarily attributable to improvements in cash flows from operating assets and liabilities, with key drivers being an increase in payments from customers offset by a reduction in payments to vendors. We had working capital of $367.7 million at March 31, 2024, and $420.1 million at December 31, 2023.
Current wording
Net cash provided by operating activities was $235.5 million and $148.1 million for the six months ended June 30, 2024 and 2023, respectively. The increase in net cash provided by operating activities for the six months ended June 30, 2024 was primarily attributable to improvements in cash flows from operating assets and liabilities, with key drivers being an increase in payments from customers offset by a reduction in payments to vendors. We had working capital of $349.9 million at June 30, 2024, and $420.1 million at December 31, 2023.
Previous wording
Net cash used in investing activities was $166.6 million and $62.7 million for the three months ended March 31, 2024 and 2023, respectively, and primarily consisted of capital expenditures on routine projects associated with overhauls and upgrades on various rigs.
Current wording
Net cash used in investing activities was $299.8 million and $169.5 million for the six months ended June 30, 2024 and 2023, respectively, and primarily consisted of capital expenditures on routine projects associated with overhauls and upgrades on various rigs.
Previous wording
Net cash used in financing activities was $112.8 million and $170.5 million for the three months ended March 31, 2024 and 2023, respectively. The three months ended March 31, 2024, included dividend payments to our shareholders of $59.4 million as well as $53.4 million in taxes withheld on vested employee share-based compensation. The three months ended March 31, 2023, included repayment of the DSF Credit Facility in full, using cash on hand of $152.2 million and share repurchases of $10.0 million.
Current wording
Net cash used in financing activities was $134.9 million and $202.3 million for the six months ended June 30, 2024 and 2023, respectively. The six months ended June 30, 2024, included dividend payments to our shareholders of $116.6 million as well as $53.6 million in taxes withheld on vested employee share-based compensation awards, partly offset by borrowing of $35.0 million under the 2023 Revolving Credit Facility. The six months ended June 30, 2023, included the repayment of the DSF Credit Facility in full, redemption of Second Lien Notes, repayment of the New DNB Credit Facility, totaling $673.4 million, and the $600.0 million issuance of 2030 Notes. We also repurchased 1.8 million of our Ordinary Shares for total of $70.0 million.
Previous wording
At March 31, 2024, we had a total contract drilling services backlog of approximately $4.5 billion, which includes a commitment of 60% of available days for the remainder of 2024. For additional information regarding our backlog, see “Contract Drilling Services Backlog.”
Current wording
At June 30, 2024, we had a total contract drilling services backlog of approximately $4.2 billion, which includes a commitment of 69% of available days for the remainder of 2024. For additional information regarding our backlog, see “Contract Drilling Services Backlog.”
Previous wording
Capital additions totaled $114.9 million for the three months ended March 31, 2024, and consisted of the following:
Current wording
Capital additions totaled $266.6 million for the six months ended June 30, 2024, and consisted of the following:
Previous wording
•$58.5 million in major projects, including subsea and other related projects; and
Current wording
•$118.8 million in major projects, including subsea and other related projects; and
Previous wording
•$5.2 million for rebillable capital and contract modifications.
Current wording
•$15.1 million for rebillable capital and contract modifications.
Previous wording
Our most recent quarterly dividend, totaling approximately $59.4 million (or $0.40 per share), was declared on February 22, 2024, and paid on March 21, 2024, to shareholders of record at close of business on March 08, 2024.
Current wording
Our most recent quarterly dividend, totaling approximately $57.2 million (or $0.40 per share), was declared on May 6, 2024, and paid on June 27, 2024, to shareholders of record at close of business on June 6, 2024.
Previous wording
On May 06, 2024, Noble announced that its Board of Directors approved a declaration of a quarterly cash dividend on our Ordinary Shares of $0.40 per share. This dividend is to be payable on June 27, 2024, to shareholders of record at close of business on June 06, 2024.
Current wording
On June 10, 2024, Noble’s Board of Directors declared an interim quarterly cash dividend on our Ordinary Shares of $0.50 per share for the third quarter of 2024. The $0.50 dividend is expected to be paid on September 26, 2024, to shareholders of record at close of business on September 12, 2024.
Previous wording
We prepare our unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States, which require us to make estimates that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures of contingent assets and liabilities. We disclose our significant accounting policies in “Note 1— Organization and Significant Accounting Policies” to our audited consolidated financial statements included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
We prepare our unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States, which require us to make estimates that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures of contingent assets and liabilities. We disclose our significant accounting policies in “Note 1— Organization and Significant Accounting Policies” to our audited consolidated financial statements included in Part II, Item 8 of our Form 10-K.
Previous wording
For information about our critical accounting policies and estimates, see Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2023. As of March 31, 2024, there have been no material changes to the judgments, assumptions, and estimates upon which our critical accounting policies and estimates are based.
Current wording
For information about our critical accounting policies and estimates, see Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” in our Form 10-K. As of June 30, 2024, there have been no material changes to the judgments, assumptions, and estimates upon which our critical accounting policies and estimates are based.
Rearranged current paragraphs (13)
Current report — wording carried from elsewhere
Additionally, jackup revenue from net non-cash amortization related to off-market customer contract assets and liabilities decreased $10.1 million in the current period.
Current report — wording carried from elsewhere
Interest expense, net of amounts capitalized. Interest expense totaled $12.0 million and $14.7 million during the second quarter of 2024 and 2023, respectively. Interest expense primarily relates to our 8.000% Senior Notes issued in April 2023, which refinanced prior debt assumed in the Business Combination with Maersk Drilling in October 2022. For additional information, see “Note 6 — Debt” to our unaudited condensed consolidated financial statements.
Current report — wording carried from elsewhere
Operating results for our contract drilling services segment are dependent on three primary metrics: operating days, dayrates, and operating costs. We also track rig utilization, which is a function of operating days and the number of rigs in our fleet. For more information on operating costs, see “Contract Drilling Services” below.
Current report — wording carried from elsewhere
The following table presents the average rig utilization, operating days and average dayrates for our rig fleet for the periods indicated:
Current report — wording carried from elsewhere
(1)We define utilization for a specific period as the total number of days our rigs are operating under contract divided by the product of the total number of our rigs, including cold stacked rigs, and the number of calendar days in such period. Information reflects our policy of reporting on the basis of the number of available rigs in our fleet.
Current report — wording carried from elsewhere
(2)An operating day is defined as a calendar day during which a rig operated under a drilling contract. We define average dayrates as revenue from contract drilling services earned per operating day. Average dayrates exclude the effect of non-cash amortization related to favorable and unfavorable off-market customer contract assets and liabilities.
Current report — wording carried from elsewhere
The following table presents the operating results for our contract drilling services segment for the periods indicated (dollars in thousands):
Current report — wording carried from elsewhere
(1)We record reimbursements from customers for out-of-pocket expenses as operating revenues and the related direct costs as operating expenses. Changes in the amount of these reimbursables generally do not have a material effect on our financial position, results of operations, or cash flows.
Current report — wording carried from elsewhere
The following table provides information about contract drilling revenue and costs by rig types (dollars in millions except average dayrates):
Current report — wording carried from elsewhere
Depreciation and amortization. Depreciation and amortization totaled $177.5 million and $141.3 million during the six months ended June 30, 2024 and 2023, respectively. Depreciation and amortization increased by $36.2 million in the current period primarily due to the timing of capital additions that were placed in service as compared to retirements among the periods.
Current report — wording carried from elsewhere
Hurricane losses and (recoveries). During the six months ended June 30, 2024, costs incurred in connection with the Hurricane Ida incident were offset by accrued recoveries. For additional information about the Hurricane Ida incident, see “Note 10 — Commitments and Contingencies” to our unaudited condensed consolidated financial statements.
Current report — wording carried from elsewhere
Interest income and other, net. Noble recognized other losses of $12.9 million and $0.9 million during the six months ended June 30, 2024 and 2023, respectively.
Current report — wording carried from elsewhere
Income tax benefit (provision). Noble recorded an income tax benefit of $15.4 million and $16.5 million during the six months ended June 30, 2024 and 2023, respectively.