EX-99.1 2 c88176exv99w1.htm EXHIBIT 99.1 Exhibit 99.1
Exhibit 99.1

Noble Corporation
Dorfstrasse 19a
Baar
Switzerland 6340
(LOGO)


PRESS RELEASE
Noble Corporation Reports Second Quarter Earnings of $1.49 per Share
ZUG, Switzerland and SUGAR LAND, Texas, July 22, 2009 — Noble Corporation (NYSE: NE) today reported second quarter 2009 earnings of $392 million, or $1.49 per diluted share, versus earnings of $376 million, or $1.39 per diluted share, for the second quarter of last year. The results for the second quarter 2009 include a net after-tax charge of $0.05 per share related to expenses associated with the Noble David Tinsley, which was damaged as a result of the previously disclosed “punch-through” event that occurred as the unit was being positioned on location offshore Qatar.
Contract drilling services revenues for the second quarter 2009 were $868 million, up 10.8 percent from the second quarter 2008. Contract drilling margins for the second quarter 2009 were approximately 71 percent, generating $451 million in net cash provided by operating activities. Noble invested $275 million in capital projects during the quarter. Debt as a percentage of total capitalization declined slightly to 11.0 percent at June 30, 2009, from approximately 11.7 percent at March 31, 2009.
“Despite continued turbulence in global markets, Noble’s focus on operational excellence enabled us to deliver another outstanding quarter,” said David W. Williams, Chairman, President and Chief Executive Officer. “Costs are under control, our safety performance has been excellent, and despite having a number of jackup units available in the Middle East and West Africa, our contract drilling margins remain strong.”
Highlights
Three of the Company’s deepwater drilling units moved to higher dayrates during the quarter. In the U.S. Gulf of Mexico, the Noble Clyde Boudreaux’s dayrate increased to $605,000 from $244,000. In the Mediterranean Sea, the Noble Homer Ferrington began its three-year contract in Libya with ExxonMobil at a dayrate of $537,000, an increase from its previous contracted dayrate of $434,000. In Brazil, the Noble Muravlenko commenced its six-year contract with Petrobras at a dayrate of $290,000, exclusive of a potential 15 percent performance bonus. The previous dayrate for this unit was $120,000, also exclusive of a 15 percent performance bonus.
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NOBLE CORPORATION SECOND QUARTER EARNINGS ANNOUNCED   PAGE 2
Also in Brazil, the Company reached an agreement with Petrobras regarding late delivery penalties on the 10,000 foot dynamically positioned deepwater semisubmersible Noble Dave Beard. Under the terms of the agreement, Noble will provide additional capital equipment on the unit for Petrobras’ use. In exchange, the delivery date for the unit has been reset to October 2009. Since the unit is expected to begin work under the contract at the end of 2009, the Company may still incur a penalty. The penalty amount would be reflected as a reduction in dayrate over the five-year contract and we expect the impact on the contracted dayrate of $220,000 to be immaterial.
During the quarter, the last of the Company’s three newbuild jackups, the Noble Scott Marks, commenced mobilization from the shipyard in Dalian, China to the North Sea. The unit is expected to begin its two-year contract with Venture Production at a dayrate of $210,000 during the third quarter 2009.
Finally, in Nigeria, the Company signed a contract extension on the Noble Ed Noble, a 250 foot independent leg cantilever jackup, with ExxonMobil at a dayrate of $115,000. The 213-day contract is subject to a 30-day notice of cancellation by either party.
“Looking ahead, we do not expect the near-term contracting environment to change significantly despite the gradual recovery we are seeing in crude prices,” said Williams. “However, every day that crude prices stay at a reasonable level or continue to improve builds confidence in our future. Our backlog is at a very healthy level and we continue to exercise discipline on the cost side. At the same time, we are making investments to improve the reliability and performance of our fleet. Our strong balance sheet and customer base allow us to add capacity when attractive opportunities come along that meet our disciplined investment process. Investors can count on us to act prudently as we confront this difficult climate and remain focused on increasing value now and when the economy improves.”
About Noble
Noble is a leading offshore drilling contractor for the oil and gas industry. Noble performs, through its subsidiaries, contract drilling services with a fleet of 62 offshore drilling units (including four rigs currently under construction) located worldwide, including in the Middle East, India, the U.S. Gulf of Mexico, Mexico, the North Sea, Brazil, and West Africa. Noble’s shares are traded on the New York Stock Exchange under the symbol “NE”.
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NOBLE CORPORATION SECOND QUARTER EARNINGS ANNOUNCED   PAGE 3
Statements regarding costs, safety performance, margins, rig demand, fleet performance, acquisitions, contract commitments, dayrates, contract commencements, penalties, newbuilds, industry fundamentals, global economic conditions, financial strength, contract backlog, customer base, future performance, growth opportunities, market outlook, as well as any other statements that are not historical facts in this release, are forward-looking statements that involve certain risks, uncertainties and assumptions. These include but are not limited to operating hazards and delays, risks associated with operations outside of the U.S., actions by customers and other third parties, factors affecting the level of activity in the oil and gas industry, supply and demand of drilling rigs, factors affecting the duration of contracts, the actual amount of downtime, factors that reduce applicable dayrates, violations of anti-corruption laws, hurricanes and other weather conditions, the future price of oil and gas and other factors detailed in the Company’s most recent Form 10-K, Form 10-Q and other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated.
Conference Call
Noble will host a conference call and web cast related to its second-quarter 2009 results on Thursday, July 23, 2009, at 1:00 p.m. Central Time. Interested parties are invited to listen to the call by dialing (866) 461-7129, or internationally (706) 679-3084, using access code: 72480778 or by asking for the Noble Corporaiton conference call. A replay of the conference call will be available on Thursday, July 23, 2009, beginning at 5:00 p.m., Central Time, through Friday, July 31, 2009, ending at 5:00 p.m., Central Time. The phone number for the conference call replay is (800) 642-1687 or, for calls from outside of the U.S., 1-706-645-9291, using access code: 72480778. The conference call may include non-GAAP financial measures. Noble will post a reconciliation of any such measures to the most directly comparable GAAP measures in the “Investor Relations” section of the Company’s Web site under the heading “Regulation G Reconciliations.” All individuals listening to the conference call or the replay are reminded that all conference call material is copyrighted by the Company and cannot be recorded or rebroadcast without the Company’s express written consent.
7/22/2009
For additional information, contact:
     
For Investors:
  Lee M. Ahlstrom, Vice President — Investor Relations and Planning,
 
  Noble Drilling Services Inc., 281-276-6440
 
    
For Media:
  John S. Breed, Director of Corporate Communications,
 
  Noble Drilling Services Inc., 281-276-6729

 

 

 

NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2009     2008     2009     2008  
Operating revenues
                                
Contract drilling services
   $ 868,205     $ 783,280     $ 1,740,602     $ 1,581,114  
Reimbursables
     22,834       20,964       39,512       53,422  
Labor contract drilling services
     7,419       8,218       14,353       39,149  
Other
     414       479       556       681  
 
                        
 
     898,872       812,941       1,795,023       1,674,366  
 
                        
Operating costs and expenses
                                
Contract drilling services
     251,054       256,436       491,910       492,388  
Reimbursables
     19,281       17,831       33,364       47,292  
Labor contract drilling services
     4,881       6,547       9,257       31,884  
Depreciation and amortization
     99,417       87,836       192,401       170,735  
Selling, general and administrative
     21,484       19,667       39,201       40,940  
(Gain)/impairment loss on asset disposals, net
     16,943       (35,521 )     28,977       (35,521 )
 
                        
 
     413,060       352,796       795,110       747,718  
 
                        
 
                                
Operating income
     485,812       460,145       999,913       926,648  
 
                                
Other income (expense)
                                
Interest expense, net of amount capitalized
     (361 )     (721 )     (882 )     (1,831 )
Interest income and other, net
     1,318       1,580       2,390       4,709  
 
                        
Income before income taxes
     486,769       461,004       1,001,421       929,526  
Income tax provision
     (94,920 )     (85,286 )     (195,277 )     (169,620 )
 
                        
Net income
   $ 391,849     $ 375,718     $ 806,144     $ 759,906  
 
                        
 
                                
Net income per share
                                
Basic
   $ 1.50     $ 1.40     $ 3.08     $ 2.83  
Diluted
   $ 1.49     $ 1.39     $ 3.08     $ 2.81  

 

4

 

NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
                 
    June 30,     December 31,  
    2009     2008  
ASSETS
                
Current assets
                
Cash and cash equivalents
   $ 671,420     $ 513,311  
Accounts receivable
     654,435       644,840  
Insurance receivables
     39,214       13,516  
Prepaid expenses
     43,582       21,207  
Other current assets
     45,326       47,467  
 
            
Total current assets
     1,453,977       1,240,341  
 
            
 
                
Property and equipment
                
Drilling equipment and facilities
     7,854,412       7,427,908  
Other
     113,395       105,340  
 
            
 
     7,967,807       7,533,248  
Accumulated depreciation
     (2,015,731 )     (1,886,231 )
 
            
 
     5,952,076       5,647,017  
 
            
 
                
Other assets
     276,069       219,441  
 
            
Total assets
   $ 7,682,122     $ 7,106,799  
 
            
 
                
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
Current liabilities
                
Current maturities of long-term debt
   $ —     $ 172,698  
Accounts payable
     204,914       259,107  
Accrued payroll and related costs
     75,270       75,449  
Taxes payable
     69,253       107,211  
Interest payable
     11,252       11,325  
Other current liabilities
     62,155       53,203  
 
            
Total current liabilities
     422,844       678,993  
 
            
 
                
Long-term debt
     750,866       750,789  
Deferred income taxes
     275,396       265,018  
Other liabilities
     170,721       121,284  
 
            
Total liabilities
     1,619,827       1,816,084  
 
            
 
                
Commitments and contingencies
                
 
                
Shareholders’ equity
                
Shares — par value 5.00 Swiss francs per share; 414,399 shares authorized, 138,133 additional shares conditionally authorized, 276,266 shares issued and 261,404 shares outstanding as of June 30, 2009;
     1,163,035       —  
Ordinary shares — par value $.10 per share; 400,000 shares authorized; 261,899 shares issued and outstanding at December 31, 2008
     —       26,190  
Capital in excess of par value
     —       402,115  
Retained earnings
     4,950,702       4,919,667  
Accumulated other comprehensive loss
     (51,442 )     (57,257 )
 
            
Total shareholders’ equity
     6,062,295       5,290,715  
 
            
Total liabilities and shareholders’ equity
   $ 7,682,122     $ 7,106,799  
 
            

5

 

NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
                 
    Six Months Ended  
    June 30,  
    2009     2008  
Cash flows from operating activities
                
Net income
   $ 806,144     $ 759,906  
Adjustments to reconcile net income to net cash from operating activities:
                
Depreciation and amortization
     192,401       170,735  
(Gain)/impairment loss on asset disposals, net
     28,977       (35,521 )
Deferred income tax provision
     6,431       13,900  
Share-based compensation expense
     17,294       18,471  
Pension contributions
     (1,432 )     (17,445 )
Other changes in current assets and liabilities:
                
Accounts receivable
     (25,691 )     52,192  
Other current assets
     (42,037 )     (25,313 )
Other assets
     (17,282 )     3,236  
Accounts payable
     23,333       (7,994 )
Other current liabilities
     (29,083 )     (1,179 )
Other liabilities
     39,384       4,525  
 
            
Net cash from operating activities
     998,439       935,513  
 
            
 
                
Cash flows from investing activities
                
New construction
     (275,153 )     (310,770 )
Other capital expenditures
     (192,657 )     (161,546 )
Major maintenance expenditures
     (57,750 )     (52,577 )
Accrued capital expenditures
     (68,134 )     (17,596 )
Hurricane insurance receivables
     —       21,747  
Proceeds from disposal of assets
     —       39,134  
 
            
Net cash from investing activities
     (593,694 )     (481,608 )
 
            
 
                
Cash flows from financing activities
                
Payments on bank credit facilities
     —       (50,000 )
Payments of other long-term debt
     (172,700 )     (5,076 )
Net proceeds from employee stock transactions
     (2,599 )     10,558  
Dividends paid
     (10,470 )     (222,910 )
Repurchases of ordinary shares
     (60,867 )     (26,571 )
 
            
Net cash from financing activities
     (246,636 )     (293,999 )
 
            
Net increase in cash and cash equivalents
     158,109       159,906  
Cash and cash equivalents, beginning of period
     513,311       161,058  
 
            
Cash and cash equivalents, end of period
   $ 671,420     $ 320,964  
 
            

 

6

 

NOBLE CORPORATION AND SUBSIDIARIES
FINANCIAL AND OPERATIONAL INFORMATION BY SEGMENT
(In thousands, except utilization amounts, operating days and average dayrates)
(Unaudited)
                                                                         
    Three Months Ended June 30,     Three Months Ended March 31,  
    2009     2008     2009  
    Contract                     Contract                     Contract              
    Drilling                     Drilling                     Drilling              
    Services     Other     Total     Services     Other     Total     Services     Other     Total  
Operating revenues
                                                                        
Contract drilling services
   $ 868,205     $ —     $ 868,205     $ 783,280     $ —     $ 783,280     $ 872,397     $ —     $ 872,397  
Reimbursables
     22,295       539       22,834       19,646       1,318       20,964       16,156       522       16,678  
Labor contract drilling services
     —       7,419       7,419       —       8,218       8,218       —       6,934       6,934  
Other
     414       —       414       464       15       479       127       15       142  
 
                                                      
 
   $ 890,914     $ 7,958     $ 898,872     $ 803,390     $ 9,551     $ 812,941     $ 888,680     $ 7,471     $ 896,151  
 
                                                      
 
                                                                        
Operating costs and expenses
                                                                        
Contract drilling services
   $ 251,054     $ —     $ 251,054     $ 256,436     $ —     $ 256,436     $ 240,856     $ —     $ 240,856  
Reimbursables
     18,754       527       19,281       16,565       1,266       17,831       13,589       494       14,083  
Labor contract drilling services
     —       4,881       4,881       —       6,547       6,547       —       4,376       4,376  
Depreciation and amortization
     96,952       2,465       99,417       86,636       1,200       87,836       90,898       2,086       92,984  
Selling, general and administrative
     21,411       73       21,484       19,526       141       19,667       17,667       50       17,717  
(Gain)/loss on disposal and planned disposal of assets, net
     16,943       —       16,943       —       (35,521 )     (35,521 )     12,034       —       12,034  
 
                                                      
 
   $ 405,114     $ 7,946     $ 413,060     $ 379,163     $ (26,367 )   $ 352,796     $ 375,044     $ 7,006     $ 382,050  
 
                                                      
 
                                                                        
Operating income
   $ 485,800     $ 12     $ 485,812     $ 424,227     $ 35,918     $ 460,145     $ 513,636     $ 465     $ 514,101  
 
                                                      
 
                                                                        
Operating statistics
                                                                        
Jackups:
                                                                        
Average Rig Utilization
     80 %                     93 %                     86 %                
Operating Days
     3,076                       3,481                       3,242                  
Average Dayrate
   $ 157,381                     $ 147,081                     $ 158,359                  
 
                                                                        
Semisubmersibles — (6,000 feet or greater):
                                                                        
Average Rig Utilization
     94 %                     90 %                     100 %                
Operating Days
     596                       572                       630                  
Average Dayrate
   $ 408,510                     $ 323,830                     $ 369,988                  
 
                                                                        
Semisubmersibles — (less than 6,000 feet):
                                                                        
Average Rig Utilization
     100 %                     100 %                     100 %                
Operating Days
     273                       273                       270                  
Average Dayrate
   $ 251,945                     $ 192,416                     $ 246,118                  
 
                                                                        
Drillships:
                                                                        
Average Rig Utilization
     100 %                     67 %                     62 %                
Operating Days
     273                       182                       168                  
Average Dayrate
   $ 226,187                     $ 131,174                     $ 291,854                  
 
                                                                        
Submersibles:
                                                                        
Average Rig Utilization
     88 %                     67 %                     67 %                
Operating Days
     161                       182                       180                  
Average Dayrate
   $ 63,324                     $ 53,039                     $ 58,452                  
 
                                                                        
Total:
                                                                        
Average Rig Utilization
     84 %                     90 %                     86 %                
Operating Days
     4,379                       4,690                       4,490                  
Average Dayrate
   $ 198,270                     $ 167,002                     $ 194,308                  

 

7

 

NOBLE CORPORATION AND SUBSIDIARIES
CALCULATION OF BASIC AND DILUTED NET INCOME
(In thousands, except per share amounts)
(Unaudited)
The following table sets forth the computation of basic and diluted net income per share:
                                 
    Three months ended     Six months ended  
    June 30,     June 30,  
    2009     2008     2009     2008  
Allocation of net income
                                
Basic
                                
Net income
   $ 391,849     $ 375,718     $ 806,144     $ 759,906  
Earnings allocated to unvested share-based payment awards
     (4,174 )     (3,324 )     (7,671 )     (6,418 )
 
                        
Net income to common shareholders — basic
   $ 387,675     $ 372,394     $ 798,473     $ 753,488  
 
                        
 
                                
Diluted
                                
Net income
   $ 391,849     $ 375,718     $ 806,144     $ 759,906  
Earnings allocated to unvested share-based payment awards
     (4,161 )     (3,313 )     (7,650 )     (6,386 )
 
                        
Net income to common shareholders — diluted
   $ 387,688     $ 372,405     $ 798,494     $ 753,520  
 
                        
 
                                
Weighted average number of shares outstanding — basic
     258,487       266,465       258,874       266,458  
Incremental shares issuable from assumed exercise of stock options
     839       2,049       702       1,967  
 
                        
Weighted average number of shares outstanding — diluted
     259,326       268,514       259,576       268,425  
 
                        
 
                                
Earnings per share
                                
Basic
   $ 1.50     $ 1.40     $ 3.08     $ 2.83  
Diluted
   $ 1.49     $ 1.39     $ 3.08     $ 2.81  

 

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