Noble Corporation Reports Second Quarter Earnings of $1.49 per Share

ZUG, Switzerland and SUGAR LAND, Texas, July 22 /PRNewswire-FirstCall/ -- Noble Corporation 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.

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".

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 [phone], or internationally [phone], using access code: 72480778 or by asking for the Noble Corporation 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 [phone] 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.

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

Noble Corporation

CONTACT: Investors, Lee M. Ahlstrom, Vice President - Investor Relations
and Planning, [phone], or Media, John S. Breed, Director of Corporate
Communications, [phone], both of Noble Drilling Services Inc.

Web Site: http://www.noblecorp.com/