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What changed in Noble Corp plc's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Noble Corp plc's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+438 added−616 removedSource: 10-K (2024-02-23) vs 10-K (2023-03-09)

Top changes in Noble Corp plc's 2023 10-K

438 paragraphs added · 616 removed · 313 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

50 edited+14 added−91 removed39 unchanged
Biggest changeName Make Year Built (1) Water Depth Rating (feet) (2) Drilling Depth Capacity (feet) Location Status (3) Floaters—19 Drillships—15 Noble Bob Douglas GustoMSC P10000 2013 12,000 40,000 Guyana Active Noble Don Taylor GustoMSC P10000 2013 12,000 40,000 Guyana Active Noble Faye Kozack Samsung 120000 Double Hull 2013 12,000 40,000 US Gulf of Mexico Active Noble Gerry de Souza Samsung 120000 Double Hull 2011 12,000 40,000 Nigeria Active Noble Globetrotter I Globetrotter Class 2011 10,000 30,000 Mexico Active Noble Globetrotter II Globetrotter Class 2013 10,000 30,000 US Gulf of Mexico Active Noble Sam Croft GustoMSC P10000 2014 12,000 40,000 Guyana Active Noble Stanley Lafosse Samsung 120000 Double Hull 2014 12,000 40,000 US Gulf of Mexico Active Noble Tom Madden GustoMSC P10000 2014 12,000 40,000 Guyana Active Pacific Meltem Samsung 120000 Double Hull 2014 12,000 40,000 Las Palmas Stacked Pacific Scirocco Samsung 120000 Double Hull 2011 12,000 40,000 Las Palmas Stacked Noble Valiant Samsung 96000 2014 12,000 40,000 Suriname Active Noble Venturer Samsung 96000 2014 12,000 40,000 Ghana Active Noble Viking Samsung 96000 2014 12,000 40,000 Malaysia Active Noble Voyager (6) Samsung 96000 2015 12,000 40,000 Mexico Active Semisubmersibles—4 Noble Deliverer DSS21-DPS2 2010 10,000 40,000 Australia Active Noble Developer DSS21-DPS2 2009 10,000 40,000 Brazil Active Noble Discoverer (6) DSS21-DPS2 2009 10,000 40,000 Guyana Active Noble Explorer (6) DSS20-CAM-M 2003 3,281 30,000 Azerbaijan Stacked Independent Leg Cantilevered Jackups—13 Noble Highlander (4) F&G JU-2000E 2016 400 30,000 Denmark Available Noble Innovator (5) MCS CJ70-150MC 2003 492 30,000 UK Active Noble Integrator (5) MCS CJ70-X150 MD 2015 492 40,000 Norway Active Noble Interceptor (5) MCS CJ70-X150 MD 2014 492 40,000 Denmark Active Noble Intrepid (5) (6) MCS CJ70-X150 MD 2014 492 40,000 UK Available Noble Invincible (5) MCS CJ70-X150 MD 2016 492 40,000 Norway Active Noble Mick O’Brien (4) F&G JU-3000N 2013 400 35,000 Qatar Active Noble Reacher (4) (6) MCS CJ50-X100 MC 2009 350 30,000 Denmark Active Noble Regina Allen (4) F&G JU-3000N 2013 400 30,000 Trinidad & Tobago Shipyard Noble Resilient (4) MCS CJ50-X100 MC 2008 350 30,000 UK Active Noble Resolute (4) MCS CJ50-X100 MC 2008 350 30,000 Netherlands Active Noble Resolve (4) MCS CJ50-X100 MC 2009 350 30,000 Denmark Active Noble Tom Prosser (4) F&G JU-3000N 2014 400 30,000 Australia Available (1) All of our current rigs were delivered to the Company new from the shipyard.
Biggest changeWe own and operate all of the units included in the table. 9 Name Make Year Built (1) Water Depth Rating (feet) (2) Drilling Depth Capacity (feet) Location Status (3) Floaters—19 Drillships—15 Noble Bob Douglas GustoMSC P10000 2013 12,000 40,000 Guyana Active Noble Don Taylor GustoMSC P10000 2013 12,000 40,000 Guyana Active Noble Faye Kozack Samsung 96000 2013 12,000 40,000 Brazil Active Noble Gerry de Souza Samsung 120000 Double Hull 2011 12,000 40,000 Nigeria Active Noble Globetrotter I Globetrotter Class 2011 10,000 30,000 US Gulf of Mexico Active Noble Globetrotter II Globetrotter Class 2013 10,000 30,000 US Gulf of Mexico Active Noble Sam Croft GustoMSC P10000 2014 12,000 40,000 Guyana Active Noble Stanley Lafosse Samsung 96000 2014 12,000 40,000 US Gulf of Mexico Active Noble Tom Madden GustoMSC P10000 2014 12,000 40,000 Guyana Active Pacific Meltem Samsung 96000 2014 12,000 40,000 Las Palmas Stacked Pacific Scirocco Samsung 120000 Double Hull 2011 12,000 40,000 Las Palmas Stacked Noble Valiant Samsung 96000 2014 12,000 40,000 US Gulf of Mexico Active Noble Venturer Samsung 96000 2014 12,000 40,000 Ghana Active Noble Viking Samsung 96000 2014 12,000 40,000 Malaysia Active Noble Voyager Samsung 96000 2015 12,000 40,000 Suriname Active Semisubmersibles—4 Noble Deliverer DSS21-DPS2 2010 10,000 40,000 Australia Active Noble Developer DSS21-DPS2 2009 10,000 40,000 Trinidad & Tobago Available Noble Discoverer DSS21-DPS2 2009 10,000 40,000 Colombia Active Noble Explorer (4) DSS20-CAM-M 2003 3,281 30,000 Azerbaijan Stacked Independent Leg Cantilevered Jackups—13 Harsh environment—8 Noble Highlander F&G JU-2000E 2016 400 30,000 Denmark Stacked Noble Mick O’Brien F&G JU-3000N 2013 400 35,000 Qatar Active Noble Regina Allen F&G JU-3000N 2013 400 30,000 Argentina Active Noble Resilient MCS CJ50-X100 MC 2008 350 30,000 Denmark Active Noble Resolute MCS CJ50-X100 MC 2008 350 30,000 Netherlands Active Noble Resolve MCS CJ50-X100 MC 2009 350 30,000 Denmark Active Noble Tom Prosser F&G JU-3000N 2014 400 30,000 Malaysia Active Noble Reacher MCS CJ50-X100 MC 2009 350 30,000 Denmark Active Ultra-harsh environment—5 Noble Innovator MCS CJ70-150MC 2003 492 30,000 UK Active Noble Integrator MCS CJ70-X150 MD 2015 492 40,000 Norway Active Noble Interceptor MCS CJ70-X150 MD 2014 492 40,000 Denmark Available Noble Intrepid MCS CJ70-X150 MD 2014 492 40,000 UK Active Noble Invincible MCS CJ70-X150 MD 2016 492 40,000 Norway Active 10 (1) All of our current rigs were delivered to the Company new from the shipyard.
The following terms generally describe the key aspects of our contracts: • contract duration extending over a specific period of time or a period necessary to drill a defined number of wells; • payment of compensation to us (generally in US Dollars although some customers, typically national oil companies, require a part of the compensation to be paid in local currency) on a “daywork” basis, so that we receive a fixed amount for each day (“dayrate”) that the drilling unit is operating under contract (a lower rate or no compensation is payable during periods of equipment breakdown and repair or adverse weather or in the event operations are interrupted by other conditions, some of which may be beyond our control); • provisions permitting early termination of the contract by the customer (i) if the unit is lost or destroyed, (ii) if operations are suspended for a specified period of time due to breakdown of equipment or breach of contract or (iii) for convenience with the payment of contractually specified termination amounts; • provisions allowing the impacted party to terminate the contract if specified “force majeure” events beyond the contracting parties’ control occur for a defined period of time; • payment by us of the operating expenses of the drilling unit, including labor costs and the cost of incidental supplies; • provisions that allow us to recover our mobilization and demobilization costs associated with moving a drilling unit from one regional location to another which, under certain market conditions, may not allow us to receive full reimbursement of such costs; • provisions that allow us to recover certain cost increases from our customers in certain long-term contracts; • provisions that require us to lower dayrates for documented cost decreases in certain long-term contracts; and • provisions that allocate responsibility and liability through indemnification provisions for risks related to personal injury, property damage or loss, environmental damages, damage to the reservoir and other matters.
The following terms generally describe the key aspects of our contracts: • contract duration extending over a specific period of time or a period necessary to drill a defined number of wells; • payment of compensation to us (generally in US dollars although some customers, typically national oil companies, require a part of the compensation to be paid in local currency) on a “daywork” basis, so that we receive a fixed amount for each day (“dayrate”) that the drilling unit is operating under contract (a lower rate or no compensation is payable during periods of equipment breakdown and repair or adverse weather or in the event operations are interrupted by other conditions, some of which may be beyond our control); 7 • provisions permitting early termination of the contract by the customer (i) if the unit is lost or destroyed, (ii) if operations are suspended for a specified period of time due to breakdown of equipment or breach of contract, or (iii) for convenience with the payment of contractually specified termination amounts; • provisions allowing the impacted party to terminate the contract if specified “force majeure” events beyond the contracting parties’ control occur for a defined period of time; • payment by us of the operating expenses of the drilling unit, including labor costs and the cost of incidental supplies; • provisions that allow us to recover our mobilization and demobilization costs associated with moving a drilling unit from one regional location to another which, under certain market conditions, may not allow us to receive full reimbursement of such costs; • provisions that allow us to recover certain cost increases from our customers in certain long-term contracts; • provisions that require us to lower dayrates for documented cost decreases in certain long-term contracts; and • provisions that allocate responsibility and liability through indemnification provisions for risks related to personal injury, property damage or loss, environmental damages, damage to the reservoir, and other matters.
The Code of Conduct also includes our responsibility and commitment to follow all applicable laws as well as our own internal policies, and extends requirements to any supplier or third party who works with Noble to comply with similar fundamental principles. Operating our business in a socially responsible way is integral to our identity.
The Code of Conduct also includes our 12 responsibility and commitment to follow all applicable laws as well as our own internal policies, and extends requirements to any supplier or third party who works with Noble to comply with similar fundamental principles. Operating our business in a socially responsible way is integral to our identity.
NobleAdvances and our experienced team of instructors have provided introductory level training, intermediate and advanced well-specific scenario training for Noble employees, industry professionals and third party industry service providers. NobleAdvances allows us to deliver Noble-specific training that includes our policies, procedures and culture. Incorporating this into our well control and cyber training has proven to be important to training.
NobleAdvances and our experienced team of instructors have provided introductory, intermediate, and advanced level, well-specific scenario training for Noble employees, industry professionals, and third-party industry service providers. NobleAdvances allows us to deliver Noble-specific training that includes our policies, procedures, and culture. Incorporating this into our well control, compliance, and cyber training has proven to be important to training.
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. Our website address is https://www.noblecorp.com. Investors should also note that we announce material financial information in SEC filings, press releases and public conference calls.
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. Our website address is http://www.noblecorp.com. Investors should also note that we announce material financial information in SEC filings, press releases, and public conference calls.
For additional information, please read Part I, Item 1A, “Risk Factors—Risk Related to Our Business and Operations—Unionization efforts, labor interruptions and labor regulations could have a material adverse effect on our operations.” Our compliance program is focused on ensuring adherence with high ethical standards and applicable laws and setting the tone for an ethical business practices and work environment throughout the Company.
For additional information, please read Part I, Item 1A, “Risk Factors—Risk Related to Our Business and Operations—Unionization efforts, labor interruptions and labor regulations could have a material adverse effect on our operations.” Our compliance program is focused on promoting adherence with high ethical standards and applicable laws and setting the tone for an ethical business practices and work environment throughout the Company.
This type of drilling unit typically exhibits excellent stability characteristics, providing a stable platform for drilling in even rough seas. Semisubmersible drilling units hold their position over the drilling location using either an anchored mooring system or a DPS and may be self-propelled. Noble’s fleet consists of four moored ultra-deepwater semisubmersible drilling units. Jackups .
This type of drilling unit typically exhibits excellent stability characteristics, providing a stable platform for drilling in even rough seas. Semisubmersible drilling units hold their position over the drilling location using either an anchored mooring system or a DPS and may be self-propelled. Noble’s fleet consists of 4 moored ultra-deepwater semisubmersible drilling units. Jackups .
We will focus on ensuring that our fleet of floating and jackup rigs meet the demands of increasingly complex drilling programs required by our customers as well as ensuring that we continue to maintain a strong financial position. Climate change is an environmental, social and economic challenge facing everyone today.
We will focus on providing that our fleet of floating and jackup rigs meet the demands of complex drilling programs required by our customers as well as ensuring that we continue to maintain a strong financial position. Climate change is an environmental, social, and economic challenge facing everyone today.
We also manage rig operating costs through the implementation and continuous improvement of innovative systems and processes, which includes the use of data analytics and predictive maintenance technology. Our organization prioritizes financial discipline, cash flow generation and returning cash to shareholders.
We also manage rig operating costs through the implementation and ongoing improvement of innovative systems and processes, which includes the use of data analytics and predictive maintenance technology. Our organization prioritizes financial discipline, cash flow generation, and returning cash to shareholders.
We are committed to continuous improvement and a sustainable energy future, supported by our efforts to protect the environment throughout our operations and safely provide reliable and efficient services to allow access to resources essential for human and economic prosperity.
We are committed to ongoing improvement and a sustainable energy future, supported by our efforts to protect the environment throughout our operations and safely provide reliable and efficient services to allow access to resources essential for human and economic prosperity.
Jackup drilling units are designed to provide drilling solutions in depths ranging from less than 100 feet to as deep as 500 feet of water with drilling hookloads up to 2,500,000 pounds. Jackup rigs can be used in open water exploration locations, as well as over fixed, bottom-supported platforms.
Jackup drilling units are designed to provide drilling solutions in depths ranging from less than 100 feet to as deep as 500 feet of water with drilling hook loads up to 2,500,000 pounds. Jackup rigs can be used in open water exploration locations, as well as over fixed, bottom-supported platforms.
Item 1. Business. Overview Noble Corporation plc (formerly known as Noble Finco Limited), a public limited company incorporated under the laws of England and Wales, is a leading offshore drilling contractor for the oil and gas industry. We provide contract drilling services to the international oil and gas industry with our global fleet of mobile offshore drilling units.
Item 1. Business. Overview Noble Corporation plc, a public limited company incorporated under the laws of England and Wales, is a leading offshore drilling contractor for the oil and gas industry. We provide contract drilling services to the international oil and gas industry with our global fleet of mobile offshore drilling units.
Our fleet consists predominately of technologically advanced units, equipped with sophisticated systems and components prepared to execute our customers’ increasingly complicated offshore drilling programs safely and with greater efficiency contributing to an overall reduction of our carbon footprint.
Our fleet consists predominately of technically advanced units equipped with sophisticated systems and components prepared to execute our customers’ complicated offshore drilling programs safely and with greater efficiency contributing to an overall reduction of our carbon footprint.
Accordingly, we conduct formal and informal meetings with employees, regular executive-led podcasts, issue periodic publications of Company activities and other matters of interest to the Company’s OneNoble app and offer a variety of training, including in-house through NobleAdvances, our state-of-the-art training facility in Sugar Land, Texas.
We place considerable value on the training and development of our employees. Accordingly, we conduct formal and informal meetings with employees, regular executive-led podcasts, issue periodic publications of Company activities, and other matters of interest to the Company’s OneNoble app and offer a variety of training, including in-house through NobleAdvances, our state-of-the-art training facility in Sugar Land, Texas.
Based on guidance from the SEC, we may use the investor relations section of our website to communicate with our investors. It is possible that the financial and other information posted there could be deemed to be material information.
Based on guidance from the SEC, we may use the investor relations section of our website to communicate with our investors. It is possible that the financial and other information (including fleet status reports) posted there could be deemed to be material information.
Global energy demand is predicted to increase over the coming decades, and we expect that offshore oil and gas will continue to play an important and sustainable role in meeting this demand. We expect inflationary pressures and supply chain disruptions to persist, and potentially accelerate, which has led or may lead to increased costs of services.
Global energy demand is predicted to increase over the coming decades, and we expect that offshore oil and gas will continue to play an important and sustainable role in meeting this demand. We expect inflationary pressures to persist, which has led or may lead to increased costs of services.
Significant Customers During the three years ended December 31, 2022, we principally conducted our contract drilling operations in Canada, Far East Asia, the Middle East, the North Sea, Oceania, the Black Sea, Africa, South America and the US Gulf of Mexico.
Significant Customers During the three years ended December 31, 2023, we principally conducted our contract drilling operations in Africa, Far East Asia, the Middle East, the North Sea, Oceania, South America, and the US Gulf of Mexico.
At December 31, 2022, our fleet was located in Africa, Far East Asia, the Middle East, the North Sea, Oceania, South America and the US Gulf of Mexico. Our fleet consists of the following types of mobile offshore drilling units: Floaters .
At December 31, 2023, our fleet was operating in Africa, Far East Asia, the Middle East, the North Sea, Oceania, South America, and the US Gulf of Mexico. Our fleet consists of the following types of mobile offshore drilling units: Floaters .
The Noble Code, Noble’s code of business conduct and ethics (the “Code of Conduct”), exemplifies the foundation of our commitments to our Core Values of safety, environmental stewardship, honesty and integrity, respect and performance.
The Noble Code, Noble’s code of business conduct and ethics (the “Code of Conduct”), encompasses our commitments to our Core Values of safety, environmental stewardship, honesty and integrity, respect, and performance.
As of December 31, 2022, our fleet of 32 drilling rigs consisted of 19 floaters and 13 jackups.
As of December 31, 2023, our fleet of 32 drilling rigs consisted of 19 floaters and 13 jackups.
This rise was the result of the combination of growing confidence in commodity prices remaining at or above current levels, heightened focus on energy security, recent multi-year underinvestment in the development and exploration of hydrocarbons, and relative attractiveness of offshore plays with respect to both cost and a carbon emissions perspective resulted in an overall increase in global rig demand in 2022.
This increase in global rig demand has been the result of the combination of growing confidence in commodity prices remaining at or above current levels, heightened focus on energy security, recent multi-year underinvestment in the development and exploration of hydrocarbons, and relative attractiveness of offshore plays with respect to both cost and a carbon emissions perspective.
Daily, the crew onboard each rig work together to achieve specific safety and environmental objectives and if all objectives are met, then the day is counted as a SAFE Day. Under our SAFE Day program, in 2022, our rigs achieved the SAFE objectives 98.4% of available days, which is a slight decrease over 2021 performance.
Daily, the crew onboard each rig works together to achieve specific safety and environmental objectives and if all objectives are met, then the day is counted as a SAFE Day. Under our SAFE Day program, in 2023, our rigs achieved the SAFE objectives 98.7% of available days, which is a slight improvement over 2022 performance.
On July 31, 2020 (the “Petition Date”), our former parent company, Noble Holding Corporation plc, a public limited company incorporated under the laws of England and Wales (“Legacy Noble” or the “Predecessor”), and certain of its subsidiaries, including Finco, filed voluntary petitions in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) seeking relief under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”).
On July 31, 2020 (the “Petition Date”), our former parent company, Noble Holding Corporation plc, a public limited company incorporated under the laws of England and Wales (“Legacy Noble” or the “Predecessor”), and certain of its wholly-owned subsidiaries, including Noble Finance Company, an exempted company incorporated in the Cayman Islands with limited liability (“Finco”), filed voluntary petitions in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) seeking relief under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”).
In connection with the Chapter 11 Cases and the Plan, on and prior to the Emergence Effective Date (as defined herein), Legacy Noble and certain of its subsidiaries effectuated certain restructuring transactions pursuant to which Legacy Noble formed Noble Cayman, as an indirect wholly owned subsidiary of Legacy Noble and transferred to Noble Cayman substantially all of the subsidiaries and other assets of Legacy Noble.
In connection with the Chapter 11 Cases and the Plan, on and prior to the Emergence Effective Date (as defined herein), Legacy Noble and certain of its subsidiaries effectuated certain restructuring transactions pursuant to which Legacy Noble formed Noble Corporation, an exempted company incorporated in the Cayman Islands with limited liability (“Noble Cayman”), as an indirect wholly owned subsidiary of Legacy Noble and transferred to Noble Cayman substantially all of the subsidiaries and other assets of Legacy Noble.
The mobile offshore drilling units comprising our offshore rig fleet operate in a global market for contract drilling services and are often redeployed to different regions due to changing demands of our customers, which consist primarily of large, integrated, independent and government-owned or controlled oil and gas companies throughout the world. 7 We typically provide contract drilling services under an individual contract, on a dayrate basis.
The mobile offshore drilling units comprising our offshore rig fleet operate in a global market for contract drilling services and are often redeployed to different regions due to changing demands of our customers, which consist primarily of large, integrated, independent, and government-owned or controlled oil and gas companies throughout the world.
The following table sets forth revenues from our customers as a percentage of our consolidated operating revenues: Successor Predecessor Period From Period From February 6, 2021 January 1, 2021 through through Year Ended December 31, 2022 December 31, 2021 February 5, 2021 December 31, 2020 Royal Dutch Shell plc (“Shell”) 12.0 % 13.3 % 30.0 % 21.7 % Exxon Mobil Corporation (“ExxonMobil”) 32.3 % 39.1 % 29.8 % 26.6 % Equinor ASA (“Equinor”) 6.4 % 3.1 % 5.2 % 14.3 % Saudi Arabian Oil Company (“Saudi Aramco”) — % 9.8 % 13.9 % 13.8 % No other customer accounted for more than 10 percent of our consolidated operating revenues in 2022, 2021 or 2020.
The following table sets forth revenues from our customers as a percentage of our consolidated operating revenues: Successor Predecessor Period From Period From February 6, 2021 January 1, 2021 Year Ended Year Ended through through December 31, 2023 December 31, 2022 December 31, 2021 February 5, 2021 Exxon Mobil Corporation (“ExxonMobil”) 24.5 % 32.3 % 39.1 % 29.8 % Shell plc 13.6 % 12.0 % 13.3 % 30.0 % TotalEnergies 10.5 % 9.7 % 3.3 % — % Saudi Arabian Oil Company (“Saudi Aramco”) — % — % 9.8 % 13.9 % No other customer accounted for more than 10 percent of our consolidated operating revenues in 2023, 2022, or 2021.
This had a positive impact on both utilization and day rates for certain of our rig classes. The global rig supply has come down from historic highs as Noble and other offshore drilling contractors have retired less capable and idle assets.
This had a positive impact on both utilization and day rates for certain of our rig classes. The global rig supply has come down from historic highs as Noble and other offshore drilling contractors have retired less capable and idle assets. Concurrently, the incoming supply of newbuild offshore drilling rigs has diminished materially, with several newbuild rigs stranded in shipyards.
Various regulators have proposed or adopted rules requiring the monitoring and reporting of GHG emissions from specified sources in the United States, including, among other things, certain offshore activities relating to oil and gas production.
There is ongoing attention concerning the global climate and the effect of greenhouse gas (“GHG”) emissions. Various regulators have proposed or adopted rules requiring the monitoring and reporting of GHG emissions from specified sources in the United States, including, among other things, certain offshore activities relating to oil and gas production.
Available Information 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.
Available Information 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 as soon as reasonably practicable after such material is electronically filed with or furnished with the SEC.
(2) Rated water depth for drillships and semisubmersibles reflects the maximum water depth for which a floating rig has been designed for drilling operations. 10 (3) Rigs listed as “active” are operating, preparing to operate or under contract; rigs listed as “available” are actively seeking contracts and may include those that are idle or warm stacked; rigs listed as “shipyard” are in a shipyard or preparing to enter a shipyard for construction, repair, refurbishment or upgrade; rigs listed as “stacked” are idle without a contract and have reduced or no crew and are not actively marketed in present market conditions.
(3) Rigs listed as “active” are operating, preparing to operate or under contract; rigs listed as “available” are actively seeking contracts and may include those that are idle or warm stacked; rigs listed as “shipyard” are in a shipyard or preparing to enter a shipyard for construction, repair, refurbishment or upgrade; rigs listed as “stacked” are idle without a contract, have reduced or no crew, or are not actively marketed in present market conditions.
However, at the same time, there continues to be a global dependence on the combustion of hydrocarbons to provide reliable and affordable energy. Low-cost and low-emission barrels are still necessary to meet energy needs, both current and future.
Our industry could be further challenged as our customers rebalance their capital investments more towards alternative energy sources. However, at the same time, there continues to be a global dependence on the combustion of hydrocarbons to provide reliable and affordable energy. Low-cost and low-emission barrels are still necessary to meet energy needs, both current and future.
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 industry-leading utilization; coupled with an unwavering commitment to best-in-class safety performance and customer satisfaction.
We have one of the youngest and highest specification fleets of global scale in the industry, with diversification across asset classes, geographic regions, and customers. The Company has a track record of industry-leading utilization, coupled with a commitment to best-in-class safety performance and customer satisfaction. We strive to be a leader in industry innovation and first-mover in sustainability.
Once the hull is elevated to the desired level, or jacked up, the drilling package can be extended out over an existing production platform or the open water location and drilling can commence.
Once the hull is elevated to the desired level, or jacked up, the drilling package can be extended out over an existing production platform or the open water location and drilling can commence. Noble’s fleet of 13 jackups consists of high-specification units capable of drilling in up to 500 feet of water.
We are committed to a policy of recruitment and promotion based upon job qualifications, performance and merit without discrimination. Safety and Environmental Stewardship. Noble is committed to operating with excellent health, safety and environmental (“HSE”) performance as part of our business strategy in order to add further value for employees, customers and shareholders.
Noble is committed to operating with excellent health, safety, and environmental (“HSE”) performance as part of our business strategy in order to add further value for employees, customers, and shareholders.
Each contract’s final terms and conditions are the result of negotiations with our customers, and many contracts are awarded through a competitive bidding process.
We typically provide contract drilling services under an individual contract on a dayrate basis. Each contract’s final terms and conditions are the result of negotiations with our customers, and many contracts are awarded through a competitive bidding process.
As of December 31, 2022, this metric was only available to vessels owned by Noble prior to the Business Combination with Maersk Drilling, and is being phased in across the vessels acquired as part of the Business Combination. When integration activities are complete, all current Noble vessels will be utilizing this program. Training and Continuing Education.
As of December 31, 2023, this metric was only available to vessels owned by Noble prior to the Business Combination with Maersk Drilling and all but four vessels acquired as part of the Business Combination. Once integration activities are completed during the first quarter of 2024, all current Noble vessels will utilize this program. Training and Continuing Education.
We are committed to continuous improvement and a sustainable energy future, supported by our efforts to protect the environment throughout our operations and safely provide reliable and efficient services to allow access to resources essential for human and economic prosperity. There is ongoing attention concerning the global climate and the effect of greenhouse gas (“GHG”) emissions.
Environmental Responsibility Climate change is an environmental, social, and economic challenge facing everyone today. We are committed to continuous improvement and a sustainable energy future supported by our efforts to protect the environment throughout 13 our operations and safely provide reliable and efficient services to allow access to resources essential for human and economic prosperity.
Demand for offshore drilling services is driven by the offshore exploration and development programs of oil and gas operators, which in turn are influenced by many factors.
(4) Rig is held for sale as of December 31, 2023. Market The offshore contract drilling industry is a highly competitive and cyclical business. Demand for offshore drilling services is driven by the offshore exploration and development programs of oil and gas operators, which in turn are influenced by many factors.
It is currently a similar story in the Norway ultra-harsh environment jackup market where current activity also remains below historical levels, despite the market being attractive to operators given it is characterized by low-cost and low-emission barrels. The energy transition from hydrocarbons to renewables poses a challenge to the oil and gas sector and our market.
It is currently a similar story in the Norway ultra-harsh environment jackup market where current activity also remains below historical levels, despite the market being attractive to operators given it is characterized by low-cost and low-emission barrels. While the length of contract terms has started to moderately increase, the overall market remains characterized by generally shorter-term contracts.
Energy rebalancing trends have accelerated in recent years as evidenced by promulgated or proposed government policies and commitments by many of our customers to further invest in sustainable energy sources. Our industry could be further challenged as our customers rebalance their capital investments more towards alternative energy sources.
The energy transition from hydrocarbons to renewables poses a challenge to the oil and gas sector and our market. Energy rebalancing trends have accelerated in recent years as evidenced by promulgated or proposed government policies and commitments by many of our customers to further invest in sustainable energy sources.
Although the market outlook in our business varies by geographical region and water depth, we remain encouraged by the recovery in the ultra-deepwater floater market, with overall demand having increased from 2020 lows. Our customers continue to focus on the highest specification floaters, which represents the majority of our floater fleet.
However, we expect many of these stranded newbuild rigs may continue to make their way into the global market over the next few years. Although the market outlook in our business varies by geographical region and water depth, we remain encouraged by the outlook in the ultra-deepwater floater market, with overall demand having increased from 2020 lows.
Contract Drilling Services We report our contract drilling operations as a single reportable segment, Contract Drilling Services, which reflects how we manage our business.
We actively look to collaborate with our customers to evaluate economic alternatives for reducing the carbon footprint of our drilling rigs. Contract Drilling Services We report our contract drilling operations as a single reportable segment, Contract Drilling Services, which reflects how we manage our business.
During 2022, oil prices generally remained at levels that were supportive of offshore exploration and development activity. While the ongoing Russia-Ukraine conflict and related sanctions, inflationary pressures and the subsequent government and central bank efforts to curb inflation, recession concerns, and supply chain disruptions did create some uncertainty relating to future global energy demand, global rig demand increased in 2022.
While ongoing geopolitical crises and related sanctions, inflationary pressures and the subsequent government and central bank efforts to curb inflation, recession concerns, and supply chain disruptions have created some uncertainty relating to future global energy demand, global rig demand has increased since 2021.
After several years of a significantly oversupplied rig market, industry conditions had started to gradually improve in 2019, which was evidenced by increasing utilization and improving dayrates. However, in the first half of 2020, this gradual recovery was abruptly halted as oil prices experienced concurrent supply and demand shocks.
Over the last decade, the offshore drilling industry has experienced significant volatility and change. After several years of a significantly oversupplied rig market, industry conditions had started to gradually improve in 2019. However, in the first half of 2020, this gradual recovery was abruptly halted by production disagreements among OPEC+ members and the global COVID-19 pandemic.
Accordingly, our financial statements and notes after the Emergence Effective Date are not comparable to our financial statements and notes on and prior to that date.
Accordingly, our financial statements and notes after the Emergence Effective Date are not comparable to our financial statements and notes on and prior to that date. Strategy Our business strategy is centered around seeking to engage in efficient, reliable, and safe offshore drilling to provide the best services for our customers.
During periods of depressed market conditions, such as the one we recently experienced for a number of years, our customers may attempt to renegotiate or repudiate their contracts with us although we seek to enforce our rights under our contracts. The renegotiation may include changes to key contract terms, such as pricing, termination and risk allocation.
In such cases where we agree, we generally limit the exposure with a monetary cap and other restrictions. During periods of depressed market conditions, our customers may attempt to renegotiate or repudiate their contracts with us although we seek to enforce our rights under our contracts.
Human Capital In connection with the completion of the Business Combination with Maersk Drilling in October 2022, we increased the size of our combined workforce. As such, at December 31, 2022, we had approximately 3,800 employees, excluding approximately 2,000 persons we engaged through labor contractors or agencies. Approximately 80 percent of our workforce is located offshore.
Human Capital At December 31, 2023, we had approximately 3,600 employees, excluding approximately 1,700 persons we engaged through labor contractors or agencies. Approximately 79% percent of our workforce is located offshore.
The Combined company has a track record of industry-leading utilization; coupled with an unwavering commitment to best-in-class safety performance and customer satisfaction. We strive to be a leader in industry innovation and first-mover in sustainability.
We have one of the youngest and highest specification fleets of global scale in the industry, with diversification across asset classes, geographic regions, and customers. The Company has a track record of high utilization coupled with a commitment to safety and customer satisfaction. We strive to be a leader in industry innovation and sustainability.
We have also experienced an overall increase in the global jack-up market, with the Middle East being the largest component of this increase. As of the date of this report, the majority of our jack-up fleet is positioned in the North Sea.
Our customers continue to focus on the highest specification floaters, which represents the majority of our floater fleet. We have also experienced an overall demand increase in the global jackup market, with the Middle East being the largest component of 11 this increase.
Except to the extent explicitly stated herein, documents and information contained on or linked to or from our website are not part of, and are not incorporated by reference into, this report.
Documents and information on our website or our social media channels are not incorporated by reference herein. 14
Removed
Finco was an indirect, wholly owned subsidiary of Legacy Noble prior to the Emergence Effective Date and a direct, wholly owned subsidiary of Noble Cayman on and after the Emergence Effective Date and prior to the Merger Effective Date, and has been an indirect, wholly owned subsidiary of Noble on and after the Merger Effective Date.
Added
The renegotiation may include changes to key contract terms, such as pricing, termination, and risk allocation.
Removed
As of December 31, 2022, Noble’s principal asset is all of shares of Finco. Finco has no public equity outstanding. The consolidated financial statements of Noble include the accounts of Finco, and Noble conducts substantially all of its business through Finco and its subsidiaries. As such, the terms “Predecessor” and “Successor” also refers to Finco, as the context requires.
Added
The following table presents certain information concerning our offshore fleet at February 22, 2024.
Removed
Strategy 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.
Added
(2) Rated water depth for drillships and semisubmersibles reflects the maximum water depth for which a floating rig has been designed for drilling operations.
Removed
We actively look to partner with our customers to evaluate economic alternatives for reducing the carbon footprint of our drilling rigs. Oversight of our sustainability is at the Board level, with the Safety and Sustainability Committee assisting in that oversight role with respect to the Corporation’s sustainability policies and practices.
Added
Since 2021, oil prices have generally remained at levels that are supportive of offshore exploration and development activity.
Removed
Noble’s fleet of 13 jackups consists of high-specification units capable of drilling in up to 500 feet of water. 9 The following table presents certain information concerning our offshore fleet at February 26, 2023. We own and operate all of the units included in the table.
Added
While we remain encouraged about increasing overall rig demand, to the extent global macroeconomic concerns become more prevalent, we could experience downward pressure on oil and gas prices as well as overall rig demand for both floaters and jackups. As of the date of this report, the majority of our jackup fleet is positioned in the North Sea.
Removed
(4) Harsh environment capability. (5) Ultra harsh environment capability. (6) Rig name reflects the newly assigned name planned for the legacy Maersk Drilling rig; the official vessel renaming process is ongoing. Market The offshore contract drilling industry is a highly competitive and cyclical business.
Added
This leads to an increased number of rig contract start-ups, both with different customers and different regions, which may require incremental resources and cost. Additionally, this has resulted in, and is likely to continue to result in, lower overall effective utilization for our fleet driven by more idle time between contracts.
Removed
We strive to be a leader in industry innovation and first-mover in sustainability. Over the last decade, the offshore drilling industry has experienced significant volatility and change, which has meaningfully impacted both the supply of, and demand for, offshore rigs.
Added
Additionally, we expect supply chain disruptions to continue, and potentially accelerate, as geopolitical crises, and their respective regional and global ramifications, have the potential to negatively impact our ability to conduct our day-to-day operations.
Removed
The supply shock was driven by production disagreements among OPEC+ members that resulted in a sudden and a significant oversupply of oil, and the demand shock by the onset of the global COVID-19 pandemic that resulted in a meaningful reduction in global economic activity and produced significant uncertainty among our customers.
Added
Talent Management. Noble is committed to a number of initiatives that directly support our employee talent management. Noble has implemented a Diversity, Equity, and Inclusion (“DEI”) policy reflecting the Company’s commitment to and outlining the Company’s efforts regarding DEI.
Removed
Concurrently, the incoming supply of newbuild offshore drilling rigs has diminished materially, with 11 several newbuild rigs stranded in shipyards. However, we expect many of these stranded newbuild rigs may make their way into the global market over the next few years.
Added
As part of our DEI policy, Noble aspires to: • Promote equal opportunity and non-discrimination • Build diverse talent and fostering inclusion • Safeguard good working conditions Noble’s DEI initiatives include diverse recruitment shortlists, efforts to build diverse talent pipelines, and promoting inclusion to provide healthy working conditions that enable our employees to reach their full potential.
Removed
Noble’s commitment to a strong compliance culture is fundamental to who we are as a leading offshore drilling contractor. We are also committed to uphold 12 our Core Value of respecting the dignity and worth of all employees and are committed to advancing a more diverse and inclusive workplace.
Added
In order to enable regular feedback loops and a continuous focus on employee engagement, we have implemented quarterly Employee Engagement Surveys, results of which are shared with the organization and leaders engage their teams in a conversation regarding the results and subsequent actions.
Removed
Recruitment and Promotions. We value a healthy culture of ingenuity and adaptability where everyone has an equal opportunity to thrive. We recognize that an inclusive and diverse workforce is key to the advancement and retention of the best qualified people leading to strong innovation and our continued success.
Added
During 2023, Noble implemented a new approach across the combined organization which focuses on enabling performance through continuous conversations between the leader and the employee. The conversations are intended to take place at least twice a year and follow a structured framework pertaining to contributions, engagement, and development, and incorporate two-way feedback.
Removed
Safety and environmental stewardship are cornerstones of who we are, what we stand for and what we do every day to deliver a high-quality operation.
Added
We also identify high-performing and high-potential individuals within Noble and aspire to ensure succession planning regarding all critical positions. We focus on engagement and retention of such individuals by aspiring to offer experiences and opportunities that demonstrate our commitment to their ongoing growth. Safety and Environmental Stewardship.
Removed
We place considerable value on the training and development of our employees and maintain a practice of keeping them informed on matters affecting them, as well as on the performance of the Company.
Added
As such, we regularly assess the environmental impact of operations, focusing on the reduction of GHG emissions, operational discharges, water use, and waste. Furthermore, we actively look to collaborate with our customers to evaluate economic alternatives for reducing the carbon footprint of our drilling rigs.
Removed
The commitment to keep the center running and provide world-class training throughout the downturn has shown our clients that our commitment to safety and excellence is the Noble way.
Added
Noble may also use social media channels including, but not limited to, Noble's accounts on LinkedIn, Facebook, Instagram, and Twitter, to communicate with investors and the public about its business, services, and other matters, and those communications could be deemed to be material information.
Removed
During the COVID-19 pandemic, we developed and incorporated virtual and worksite training courses into our existing infrastructure, some of which are facilitated through our rig-based leadership and are accredited through the International Association of Drilling Contractors.
Removed
Governmental Regulations and Environmental Matters Our environmental commitment is to protect our world and its resources in a manner consistent with our Mission and Core Values.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

157 edited+58 added−116 removed116 unchanged
Biggest changeThe price of oil and gas and the level of activity in offshore oil and gas exploration and development are extremely volatile and are affected by numerous factors beyond our control, including: • worldwide production, current demand, and our customer’s views of future demand for oil and gas, which are impacted by changes in the rate of economic growth in the global economy; 18 • the cost of exploring for, developing, producing and delivering oil and gas; • the ability of OPEC and OPEC+ to set and maintain production levels and pricing; • expectations regarding future energy prices; • increased supply of oil and gas resulting from onshore hydraulic fracturing activity and shale development; • the relative cost of offshore oil and gas exploration versus onshore oil and gas production; • potential acceleration in the development, and the price and availability, of alternative fuels or energy sources; • allocation of capital to E&P operations within customers’ broader portfolios; • the level of production in non-OPEC+ countries; • inventory levels, and the cost and availability of storage and transportation of oil, gas and their related products; • worldwide financial instability or recessions; • regulatory restrictions or any moratorium on offshore drilling; • the discovery rate of new oil and gas reserves either onshore or offshore; • the rate of decline of existing and new oil and gas reserves; • available pipeline and other oil and gas transportation capacity; • oil refining capacity; • the ability of oil and gas companies to raise capital; • limitations on liquidity and available credit; • advances in exploration, development and production technology either onshore or offshore; • technical advances affecting energy consumption, including the displacement of hydrocarbons through increasing transportation fuel efficiencies; • merger, acquisition and divestiture activity among oil and gas producers; • the availability of, and access to, suitable locations from which our customers can produce hydrocarbons; • adverse weather conditions, including hurricanes, typhoons, cyclones, winter storms and rough seas; • the occurrence or threat of epidemic or pandemic diseases, such as COVID-19, or any governmental response to such occurrence or threat; • tax laws, regulations and policies; • laws, regulations and other initiatives related to environmental matters, including those involving alternative energy sources, the phase-out of fossil fuel vehicles, and the risks of global climate change; • the political environment of oil-producing regions, including uncertainty or instability resulting from civil disorder, an outbreak or escalation of armed hostilities or acts of war or terrorism, such as the conflict between Russia and Ukraine; and • the laws, regulations and policies of governments regarding exploration and development of their oil and gas reserves or speculation regarding future laws or regulations.
Biggest changeWhile the price of oil and gas remains volatile, the level of activity in offshore oil and gas exploration and development can be extremely volatile and can be affected by numerous factors beyond our control, including: • worldwide production, current demand, and our customer’s views of future demand for oil and gas, • changes in the rate of economic growth in the global economy; • the cost of exploring for, developing, producing, and delivering oil and gas; • the ability of OPEC and OPEC+ to set and maintain production levels and pricing; • expectations regarding future energy prices; • increased supply of oil and gas resulting from onshore hydraulic fracturing activity and shale development; • the relative cost of offshore oil and gas exploration versus onshore oil and gas production; • potential acceleration in the investment, development, and the price and availability, of alternative fuels or energy sources; • allocation of capital to exploration and production operations within customers’ broader portfolios; • the level of production in non-OPEC+ countries; • inventory levels and the cost and availability of storage and transportation of oil, gas, and their related products; • worldwide financial instability or recessions; • regulatory restrictions or any moratorium on offshore drilling or the availability of offshore lease or concession areas; • the discovery rate of new oil and gas reserves either onshore or offshore; • the rate of decline of existing and new oil and gas reserves; • available pipeline and other oil and gas transportation capacity; • oil refining capacity; • the ability of oil and gas companies to raise capital; • limitations on liquidity and available credit; • advances in exploration, development, and production technology either onshore or offshore; • technical advances affecting energy consumption, including the displacement of hydrocarbons; • merger, acquisition, and divestiture activity among oil and gas industry participants; • the availability of, and access to, suitable locations from which hydrocarbons can be produced; • adverse weather and sea conditions, including hurricanes, typhoons, cyclones, winter storms, and rough seas; 15 • the occurrence or threat of a major natural disaster, catastrophic event, epidemic, or pandemic diseases, as well as any governmental response to such occurrence or threat; • changes in and compliance with tax laws, regulations, and policies; • changes in and compliance with environmental laws, regulations, and other initiatives, including those involving alternative energy sources, the phase-out of fossil fuel consuming vehicles, and the risks of global climate change; • the political environment of oil-producing countries or regions, including uncertainty or instability resulting from civil disorder, geopolitical instability, border disputes, or an outbreak or escalation of armed hostilities or acts of war or terrorism, such as the conflict between Russia and Ukraine, Middle East conflicts, and the Guyana-Venezuela dispute, and their respective regional and global ramifications; and • the laws, regulations, and policies of governments regarding exploration and development of their oil and gas reserves or speculation regarding future laws or regulations.
Our inability to perform under our contractual obligations or to execute definitive agreements, our customers’ inability or unwillingness to fulfill their contractual commitments to us, including as a result of contract repudiations or our decision to accept less favorable terms on our drilling contracts, or the failure of actual results to reflect the assumptions we use to estimate backlog for certain contracts, could have a material adverse effect on our business, financial condition and results of operations.
Our inability to perform under our contractual obligations, execute definitive agreements, our customers’ inability or unwillingness to fulfill their contractual commitments to us, including as a result of contract repudiations or our decision to accept less favorable terms on our drilling contracts, or the failure of actual results to reflect the assumptions we use to estimate backlog for certain contracts could have a material adverse effect on our business, financial condition, and results of operations.
While the Company maintains a cybersecurity program, which includes administrative, technical, and organizational safeguards, a significant cyberattack or incident—either with our systems or a critical third-party systems—could disrupt our operations and result in downtime, loss of revenue, harm to the Company's reputation, or the loss, theft, corruption or unauthorized release of our critical data or those with whom we do business, as well as result in higher costs to correct and remedy the effects of such incidents, including potential extortion, unforeseen payments associated with ransomware or ransom demands.
The Company maintains a cybersecurity program, which includes administrative, technical, and organizational safeguards, a significant cyberattack or incident, either with our systems or a critical third-party systems, could disrupt our operations and result in downtime, loss of revenue, harm to the Company's reputation, or the loss, theft, corruption, or unauthorized release of our critical data or those with whom we do business, as well as result in higher costs to correct and remedy the effects of such incidents, including potential extortion, unforeseen payments associated with ransomware, or ransom demands.
If new regulations, policies, operating procedures and the possibility of increased legal liability resulting from the adoption or amendment of rules and regulations applicable to our operations in the United States or other jurisdictions are viewed by our current or future customers as a significant impairment to expected profitability on projects, then they could discontinue or curtail their offshore operations in the impacted region, thereby adversely affecting our operations by limiting drilling opportunities or imposing materially increased costs.
If new regulations, policies, operating procedures, and the possibility of increased legal liability resulting from the adoption or amendment of rules and regulations applicable to our operations in the United States or other jurisdictions are viewed by our current or future customers as a significant impairment to expected profitability on projects, then they could discontinue or curtail their offshore operations in the impacted region, thereby, adversely affecting our operations by limiting drilling opportunities or resulting in materially increased costs.
In addition, our ability to resolve disputes or enforce contractual provisions may be negatively impacted with these contracts. We can provide no assurance that the increased risk exposure will not have an adverse impact on our future operations or that we will not increase the number of rigs contracted to national oil companies with commensurate additional contractual risks.
In addition, our ability to resolve disputes or enforce contractual provisions may be negatively impacted with these contracts. We can provide no assurance that the increased risk exposure will not have an adverse impact on our future operations or 17 that we will not increase the number of rigs contracted to national oil companies with commensurate additional contractual risks.
In addition, existing regulations might be revised or reinterpreted, new laws, regulations and permitting requirements might be adopted or become applicable to us, our rigs, our customers, our vendors or our service providers, 38 and future changes in laws and regulations could significantly increase our costs and could have a material adverse effect on our business, financial condition and results of operations.
In addition, existing regulations might be revised or reinterpreted, new laws, regulations, and permitting requirements might be adopted or become applicable to us, our rigs, our customers, our vendors, or our service providers, and future changes in laws and regulations could significantly increase our costs and could have a material adverse effect on our business, financial condition, and results of operations.
Some jurisdictions enforce strict technical requirements on the rigs requiring substantial physical modification to the rigs before they can be utilized. Such modifications may require significant capital expenditures, and as a result, may limit the use of the rigs in those jurisdictions in the future. In addition, mobilization carries the risk of damage to the rig.
Some jurisdictions enforce strict technical requirements on the rigs requiring substantial physical modification to the rigs before they can be utilized. Such modifications may require significant capital expenditures, and as a result, may limit the use of the rigs in those 21 jurisdictions in the future. In addition, mobilization carries the risk of damage to the rig.
Our failure to comply with these covenants could result in an event of default which, if not cured or waived, could result in all obligations under the Revolving Credit Facility to be declared due and payable immediately and all commitments thereunder to be terminated.
Our failure to comply with these covenants could result in an event of default which, if not cured or waived, could result in all obligations under the 2023 Revolving Credit Facility to be declared due and payable immediately and all commitments thereunder to be terminated.
We may not be able to perform under these contracts as a result of operational or other breaches or due to events beyond our control, and we may not be able to ultimately execute a definitive agreement in 21 cases where one does not currently exist.
We may not be able to perform under these contracts as a result of operational or other breaches or due to events beyond our control, and we may not ultimately execute a definitive agreement in cases where one does not currently exist.
We may be required to make significant capital expenditures to comply with governmental laws and regulations. Governments in some foreign countries are increasingly active in regulating and controlling the ownership of concessions, the exploration for oil and gas, and other aspects of the oil and gas industries.
We may be required to make significant capital expenditures to comply with governmental laws and regulations. Governments in some countries are increasingly active in regulating and controlling the ownership of concessions, the exploration for oil and gas, and other aspects of the oil and gas industries.
As a result, these investors could have significant influence over all matters presented to our shareholders for approval, including 29 election and removal of our directors, change in control transactions and the outcome of all actions requiring a majority shareholder approval.
As a result, these investors could have significant influence over all matters presented to our shareholders for approval, including election and removal of our directors, change in control transactions, and the outcome of all actions requiring a majority shareholder approval.
Contracts with national oil companies are often non-negotiable and may expose us to greater commercial, political and operational risks than we assume in other contracts, such as exposure to materially greater environmental liability and other claims for damages (including consequential damages) and personal injury related to our operations, or the risk that the contract may be terminated by our client without cause on short-term notice, contractually or by governmental action, under certain conditions that may not provide us an early termination payment, collection risks and political risks.
Contracts with national oil companies are often non-negotiable and may expose us to greater commercial, political and operational risks than we assume in other contracts, such as exposure to materially greater environmental liability and other claims for damages (including consequential damages) and personal injury related to our operations, or the risk that the contract may be terminated by our customer without cause on short-term notice, contractually or by governmental action, under certain conditions that may not provide us an early termination payment, collection risks and political risks.
New rules, regulations and requirements, or a return to the requirements of the 2016 versions of the BSEE and BOEM regulations, including the adopti on of new safety requirements and policies relating to the approval of drilling permits, restrictions on oil and gas development and production activities in the US Gulf of Mexico and elsewhere, implementation of safety and environmental management systems, mandatory third party compliance audits, and the promulgation of numerous Notices to Lessees or similar new regulatory requirements outside of the United States, may impact our operations by causing increased costs, delays and operational restrictions.
New rules, regulations, and requirements, or a return to the requirements of the 2016 versions of the BSEE and BOEM regulations, including the adoption of new safety requirements and policies relating to the approval of drilling permits, restrictions on oil and gas development and production activities in the US Gulf of Mexico and elsewhere, implementation of safety and environmental management systems, mandatory third-party compliance audits, and the promulgation of numerous Notices to Lessees or similar new regulatory requirements outside of the United States, may impact our operations by causing increased costs, delays, and operational restrictions.
Further, we operate or have operated in certain less-developed countries with legal systems that are not as mature or predictable as those in more developed countries, which can lead to greater uncertainty in legal matters and proceedings.
Further, we operate or have operated in certain less-developed countries with legal systems that are not as mature as those in more developed countries, which can lead to greater uncertainty in legal matters and proceedings.
Further, 22 unionized employees of third parties on whom we rely may be involved in labor disruptions, strikes or other forms of labor unrest, causing operational disruptions.
Further, unionized employees of third parties on whom we rely may be involved in labor disruptions, strikes, or other forms of labor unrest, causing operational disruptions.
Our customers have historically assumed most of the responsibility for and indemnified us from loss, damage or other liability resulting from pollution or contamination, including clean-up and removal and third-party damages arising from operations under the contract when the source of the pollution originates from the well or reservoir, including those resulting from blow-outs or cratering of the well.
Our customers have historically assumed most of the responsibility for and indemnified us from loss, damage, or other liability resulting from pollution or contamination, including clean-up and removal and third-party damages arising from operations under the contract when the source of the pollution originates from the well or reservoir, including those resulting from blow-outs or loss of well control.
The failure to complete a rig upgrade, refurbishment or repair on time, or at all, may result in related loss of revenues, penalties, or delay, renegotiation or cancellation of a drilling contract or the recognition of an asset impairment. Additionally, capital expenditures could materially exceed our planned capital expenditures.
The failure to complete a rig upgrade, refurbishment, or repair on time, or at all, may result in related loss of revenues, liquidated damages, penalties, or delay, renegotiation, or cancellation of a drilling contract or the recognition of an asset impairment. Additionally, capital expenditures could materially exceed our planned capital expenditures.
The Revolving Credit Agreement contains various restrictive covenants that may limit our management’s discretion in certain respects.
The 2023 Revolving Credit Agreement contains various restrictive covenants that may limit our management’s discretion in certain respects.
We still face resistance with some clients when attempting to allocate less risk to us and lower caps for damage caused by our gross negligence or willful misconduct or reduce our exposure with respect pollution or contamination.
We still face resistance with some customers when attempting to allocate less risk to us and lower caps for damage caused by our gross negligence or willful misconduct or reduce our exposure with respect pollution or contamination.
Our operations are subject to various laws and regulations in countries in which we operate, including laws and regulations relating to: • the environment and the health and safety of personnel; • the importing, exporting, equipping and operation of drilling rigs; • currency exchange controls; • oil and gas exploration and development; • taxation of offshore earnings and earnings of expatriate personnel; and • use and compensation of local employees and suppliers by foreign contractors.
Our operations are subject to various laws and regulations in countries in which we operate, including laws and regulations relating to: • the environment and the health and safety of personnel; • the importing, exporting, equipping, and operation of drilling rigs; • finance and currency exchange controls; • oil and gas exploration and development; • taxation of local and offshore earnings and earnings of expatriate personnel; and • use and compensation of local employees, contractors, and suppliers, and involvement of foreign contractors.
If our drilling rigs are idle for reasons that are not related to the ability of the rig to operate, our customers are entitled to pay a waiting, or standby, rate that is lower than the full operational rate.
If our drilling rigs are idle for reasons that are not related to the ability of the rig to operate, our customers may be entitled to pay a waiting, or standby, rate that is lower than the full operational rate.
Suspension of drilling contract payments, prolonged payment of reduced rates or termination of any drilling contract as a result of an interruption of operations as described herein could materially adversely affect our business, financial condition and results of operations.
Suspension of drilling contract payments, payment of liquidated damages, prolonged payment of reduced rates, or termination of any drilling contract as a result of an interruption of operations as described herein could materially adversely affect our business, financial condition, and results of operations.
Working remotely has significantly increased the use of technological and online telecommunication services and remote networking, which enable employees to work outside of our corporate infrastructure and, in some cases, use their own personal devices.
Working remotely has significantly increased the use of technological and online telecommunication services and remote networking, which enable employees to work outside of our corporate infrastructure and, in some cases, use their own personal equipment.
Additionally, disruptions to the ability of our suppliers, manufacturers and service providers to supply labor, parts, equipment or services in the jurisdictions in which we operate, whether as a result of government actions, labor shortages, travel restrictions, the inability to source labor, parts or equipment from affected locations or other effects related to the COVID-19 pandemic, have increased our operating costs and the risk of rig downtime and negatively impacted our ability to meet commitments to customers and may continue to do so in the future.
Additionally, disruptions to the ability of our suppliers, manufacturers, and service providers to supply labor, parts, equipment, or services in the jurisdictions in which we operate, whether as a result of government actions, labor shortages, travel restrictions, the inability to source labor, parts or equipment from affected locations, or other effects related to the COVID-19 pandemic or other public health emergency, have increased our operating costs and the risk of rig downtime and negatively impacted our ability to meet commitments to customers and may do so in the future.
In addition, we may reactivate rigs that have been cold or warm stacked and make selective acquisitions of rigs. Our customers may also require certain shipyard reliability upgrade projects for our rigs.
In addition, we may reactivate rigs that have been cold or warm stacked and make selective acquisitions of rigs. Our customers may also require certain upgrade projects for our rigs.
In addition, if our drilling rigs are taken out of service for maintenance and repair for a period of time that exceeds the scheduled maintenance periods set forth in our drilling contracts, we will not be entitled to payment of dayrates until the rig is able to work.
In addition, if our drilling rigs are taken out of service for maintenance and repair for a period of time that exceeds the scheduled maintenance periods set forth in our drilling contracts, we may not be entitled to payment of full dayrates until the rig is able to work.
Inflationary factors such as increases in labor costs, material costs and overhead costs may adversely affect our operating results and cash flows. We have experienced increases in the cost of labor and materials during the year ended December 31, 2022, and we currently expect these inflationary pressures to continue into 2023.
Inflationary factors such as increases in labor costs, material costs, and overhead costs may adversely affect our operating results and cash flows. We have experienced increases in the cost of labor and materials during the year ended December 31, 2023, and we currently expect inflationary pressures to continue into 2024.
Sales of substantial amounts of the Ordinary Shares, or the perception that such sales could occur, may adversely affect the trading price of the Ordinary Shares. 43 Item 1B. Unresolved Staff Comments. None.
Sales of substantial amounts of the Ordinary Shares, or the perception that such sales could occur, may adversely affect the trading price of the Ordinary Shares. 35 Item 1B. Unresolved Staff Comments. None.
We have not been, and may continue not to be, able to renew or replace certain expiring contracts, and our customers have sought, and may continue to seek, to terminate, renegotiate or repudiate our drilling contracts and have had, and may continue to have, financial difficulties that prevent them from meeting their obligations under our drilling contracts.
We have not been, and may continue not to be, able to renew or replace certain expiring contracts, and our customers have sought, and may seek in the future, to terminate, renegotiate, or repudiate our drilling contracts and have had, and may have in the future, financial difficulties that prevent them from meeting their obligations under our drilling contracts.
If the market for our services improves and we seek to reactivate warm or cold stacked rigs, upgrade our working rigs or purchase additional rigs, these reductions and global supply chain constraints could make it more difficult for us to find equipment and parts for our rigs.
If the market for our se rvices improves and we seek to reactivate warm or cold stacked rigs, upgrade our working rigs, or purchase additional rigs, these reductions and global supply chain constraints could make it more difficult for us to find equipment and parts for our rigs .
Certain shareholders own a significant portion of our outstanding equity securities, and their interests may not always coincide with the interests of other holders of the Ordinary Shares. As noted above, a large percentage of the Ordinary Shares are held by a relatively small number of investors.
Certain shareholders own a significant portion of our outstanding equity securities, and their interests may not always coincide with the interests of other holders of the Ordinary Shares. A large percentage of the Ordinary Shares are held by a relatively small number of investors.
As a public company, we are subject to the reporting requirements of the Exchange Act (the “Exchange Act”), and are required to comply with the applicable requirements of the Sarbanes-Oxley Act.
As a public company, we are subject to the reporting requirements of the Exchange Act, and are required to comply with the applicable requirements of the Sarbanes-Oxley Act.
Any investments in our rigs may not result in an 25 increased dayrate for or income from such rigs. A disproportionate change in the amount of operating and maintenance costs in comparison to dayrates could have a material adverse effect on our business, financial condition and results of operations.
Any investments in our rigs may not result in an increased dayrate for or income from such rigs. A disproportionate change in the amount of operating and maintenance costs in comparison to dayrates could have a material adverse effect on our business, financial condition, and results of operations. Inflation may adversely affect our operating results.
Drilling contracts with national oil companies may expose us to greater risks than we normally assume in drilling contracts with non-governmental clients.
Drilling contracts with national oil companies may expose us to greater risks than we normally assume in drilling contracts with non-governmental customers.
These hazards could cause personal injury or loss of life, suspend drilling operations, result in regulatory investigation or penalties, seriously damage or destroy property and equipment, result in claims by employees, customers or third parties, cause environmental damage and cause substantial damage to oil and gas producing formations or facilities.
These hazards could cause personal injury, including claims of post-traumatic stress or loss of life, suspend drilling operations, result in regulatory investigation or penalties, seriously damage or destroy property and equipment, result in claims by employees, customers, or third parties, cause environmental damage, and cause substantial damage to oil and gas producing formations or facilities.
We are exposed to risks relating to operations in international locations, including the mobilization and de-mobilization of our rigs to and from such locations.
We are exposed to risks relating to operations in international locations, including the mobilization and demobilization of our rigs to and from such locations.
Adverse developments affecting the industry as a result of one or more of these factors, including a decline in the price of oil and gas from their current levels or the failure of the price of oil and gas to remain consistently at a level that encourages our clients to expand their capital spending, the inability of our customers to access capital on economically advantageous terms, including as a result of the increasing focus on climate change by investors, a global recession, reduced demand for oil and gas products, or a perception that the demand for hydrocarbons will significantly decrease, increased supply due to the development of new onshore drilling and production technologies, and increased regulation of drilling and production, particularly if several developments were to occur in a short period of time, would have a material adverse effect on our 19 business, financial condition and results of operations.
Adverse developments affecting the industry as a result of factors such as those listed above, including a decline in the price of oil and gas from their current levels or the failure of the price of oil and gas to consistently remain at or above a level that encourages our customers to expand their capital spending, the inability of our customers to access capital on economically advantageous terms, including as a result of the increasing focus on climate change by investors, a global recession, reduced demand for oil and gas products, or a perception that the demand for hydrocarbons will significantly decrease, increased supply due to the development of new onshore drilling and production technologies, and increased regulation of drilling and production, particularly if several developments were to occur in a short period of time, would have a material adverse effect on our business, financial condition, and results of operations.
In addition, BOEM released a Notice to Lessees and Operators in the Outer Continental Shelf (“NTL”) in September 2016 that updated offshore bonding requirements. The NTL was only partially implemented before being rescinded and replaced by a proposed rule addressing offshore bonding published in October 2020.
For example, BOEM released a Notice to Lessees 29 and Operators in the Outer Continental Shelf (“NTL”) in September 2016 that updated offshore bonding requirements. The NTL was only partially implemented before being rescinded and replaced by a proposed rule addressing offshore bonding published in October 2020.
In addition, we may also take an impairment loss on capital spares and other capital equipment when we deem the value of those items has declined due to factors like obsolescence, deterioration or damage. Based upon our impairment analyses for the years ended December 31, 2022 and 2021, we did not record any impairment ch arges.
In addition, we may also take an impairment loss on capital spares and other capital equipment when we deem the value of those items has declined due to factors like obsolescence, deterioration or damage. Based upon our impairment analyses for the years ended December 31, 2023 and 2022, we did not record any impairment charges.
Moreover, when our rigs are undergoing upgrade, refurbishment and repair, they may not earn a dayrate during the period they are out of service. If we experience substantial delays and cost overruns in our shipyard projects, it could have a material adverse effect on our business, financial condition and results of operations. We currently have no new rigs under construction.
Moreover, when our rigs are undergoing upgrade, refurbishment, and repair, they may not earn a dayrate during the period they are out of service. If we experience substantial delays and cost overruns in our shipyard projects, it could have a material adverse effect on our business, financial condition, and results of operations.
Further, we have previously, and may in the future have to, temporarily shut down operations of one or more of our rigs if there is an outbreak of COVID-19 or vacancies of essential positions due to COVID-19 infections, which could have a material negative impact on our business, financial condition and results of operations.
Further, we have previously, and may in the future have to, temporarily shut down operations of one or more of our rigs if there is an outbreak of COVID-19 or other public health emergency or vacancies of essential positions due to related infections, which could have a material negative impact on our business, financial condition, and results of operations.
Although we maintain insurance in the geographic areas in which we operate, pollution, reservoir damage and environmental risks generally are not fully insurable . Our insurance policies may not adequately cover our losses or may have exclusions of coverage for some losses.
Although we maintain insurance in the geographic areas in which we operate, pollution, reservoir damage, and environmental risks generally are not fully insurable. Our insurance policies may not adequately cover our losses or may have exclusions of coverage for some losses. We do not have insurance coverage for all risk exposures.
Demand for drilling services depends on a variety of economic and political factors and the level of activity in offshore oil and gas exploration and development and production markets worldwide.
Demand for drilling services depends on a variety of economic and political factors and the level of activity in offshore oil and gas exploration and development and production markets around the world.
Acting on this directive, BSEE announced a proposed rule in September 2022 that would amend the 2019 version of BSEE’s well control rule. The 2022 proposal would revise elements that were amended or rescinded in 2019, including requirements applicable to blowout preventer system operation, failure analyses and investigations, and submittal of information to BSEE.
Acting on this directive, BSEE announced a proposed rule in September 2022 that amended the 2019 version of BSEE’s well control rule and revised elements that were amended or rescinded in 2019, including requirements applicable to blowout preventer system operation, failure analyses, and investigations, and submittal of information to BSEE.
Potential difficulties that may be encountered in the integration process include, among other factors: • the inability to successfully integrate the businesses of Noble and Maersk Drilling, operationally and culturally, in a manner that permits us to achieve the full revenue and cost savings anticipated from the Business Combination; • complexities, including increased demands of management and employees, associated with managing a larger, more complex, integrated business; 31 • difficulties in integrating Maersk Drilling’s and Noble’s respective enterprise resource planning software; • risks related to the design and implementation of a combined internal control environment; • not realizing anticipated synergies; • attempts by third parties to terminate or alter their contracts with us, including as a result of change of control provisions; • the inability to retain key employees and otherwise integrate personnel from the two companies; • potential unknown liabilities and unforeseen expenses associated with the Business Combination; • difficulty or inability to comply with the covenants of the debt of the combined company; • difficulty or inability in refinancing existing indebtedness of Noble or Maersk Drilling as it comes due, including certain indebtedness of Maersk Drilling that became current in the fourth quarter of 2022 and is due to mature in the fourth quarter of 2023; • integrating relationships with customers, vendors and business partners; • performance shortfalls, including operating, safety, or environmental performance as a result of the diversion of management’s and employees’ attention caused by integrating Noble’s and Maersk Drilling’s operations; and • the disruption of, or the loss of momentum in, our ongoing business or inconsistencies in standards, controls, procedures and policies.
Potential difficulties that may be encountered in the integration process include, among other factors: • the inability to successfully integrate the businesses of Noble and Maersk Drilling, operationally and culturally, in a manner that permits us to achieve the full revenue and cost savings anticipated from the Business Combination; • complexities, including increased demands of management and employees, associated with managing a larger, more complex, integrated business; • difficulties in integrating Maersk Drilling’s and Noble’s respective enterprise resource planning software; • risks related to the design and implementation of a combined internal control environment; • not realizing anticipated synergies; • attempts by third parties to terminate or alter their contracts with us, including as a result of change of control provisions; • the inability to retain key employees and otherwise integrate personnel from the two companies; • potential unknown liabilities and unforeseen expenses associated with the Business Combination; • difficulty or inability to comply with the covenants of the debt of the combined company; • integrating relationships with customers, vendors, and business partners; • performance shortfalls, including operating, safety, or environmental performance as a result of the diversion of management’s and employees’ attention caused by integrating Noble’s and Maersk Drilling’s operations; and • the disruption of, or the loss of momentum in, our ongoing business or inconsistencies in standards, controls, procedures, and policies.
A failure to comply with the covenants, ratios or tests in the indenture governing the Second Lien Notes, if not cured or waived, could have a material adverse effect on Finco’s and our business, financial condition and results of operations. Finco’s existing and future indebtedness may have cross-default and cross-acceleration provisions.
A failure to comply with the covenants, ratios, or tests in the indenture, if not cured or waived, could have a material adverse effect on our business, financial condition, and results of operations. Our existing and future indebtedness may have cross-default and cross-acceleration provisions.
In particular, the Revolving Credit Agreement limits Finco’s ability and the ability of its restricted subsidiaries to, among other things and subject to certain limitations and exceptions, (i) incur, assume or guarantee additional indebtedness; (ii) pay dividends or distributions on capital stock or redeem or repurchase capital stock; (iii) make investments; (iv) repay, redeem or amend certain indebtedness; (v) sell stock of its subsidiaries; (vi) transfer or sell assets; (vii) create, incur or assume liens; (viii) enter into transactions with certain affiliates; (ix) merge or consolidate with or into any other person or undergo certain other fundamental changes; and (x) enter into certain burdensome agreements.
In particular, the 2023 Revolving Credit Agreement limits the ability of Noble Finance II LLC (“Noble Finance II”) and the ability of its restricted subsidiaries to, among other things and subject to certain limitations and exceptions, (i) incur, assume or guarantee additional indebtedness, (ii) pay dividends or distributions on capital stock or redeem or repurchase capital stoc k, (iii) make investments, (iv) repay, redeem, or amend certain indebtedness, (v) sell stock of its subsidiaries, (vi) transfer or sell assets, (vii) create, incur, or assume liens, (viii) enter into transactions with certain affiliates, (ix) merge or consolidate with or into any other person or undergo certain other fundamental changes, and (x) enter into certain burdensome agreements.
Reports indicate that entities or groups, including cybercriminals, competitors, and nation state actors, have mounted cyber-attacks on businesses and other organizations solely to disable or disrupt computer systems, disrupt operations and, in some cases, steal data.
Entities or groups, including cybercriminals, competitors, and nation state actors, have mounted cyber-attacks on businesses and other organizations solely to disable 23 or disrupt computer systems, disrupt operations and, in some cases, steal data.
As a result, if market conditions further improve and we seek to reactivate warm or cold stacked rigs, upgrade our working rigs or purchase additional rigs, we may face shortages of qualified personnel, which would impair our ability to attract qualified personnel for our new or existing drilling units, impair the timeliness and quality of our work and create upward pressure on personnel costs, any of which could adversely affect our operations.
As a result, if market conditions improve following a period of reduced demand and we seek to reactivate warm or cold stacked rigs, move rigs to a new locale, upgrade our working rigs, or purchase additional rigs, we may face shortages of qualified personnel, which would impair our ability to attract qualified personnel for our new or existing drilling units, impair the timeliness and quality of our work and create upward pressure on personnel costs, any of which could adversely affect our operations.
There can also be no assur a nce that those parties with contractual obligations to indemnify us will necessarily be in a financial position to do so.
There can also be no assurance that those parties with contractual obligations to indemnify us will necessarily be in a financial position to do so.
The level of oil and gas prices has had, and may in the future have, a material adverse effect on demand for our services, and we expect that future declines in prices would have a material adverse effect on our business, results of operations and financial condition.
The level of oil and gas prices has had, and may in the future have, a material adverse effect on demand for our services, and future declines in prices would likely have a material adverse effect on our business, results of operations, and financial condition.
If any of these customers were to terminate or fail to perform their obligations under their contracts and we were not able to find other customers for the affected drilling units promptly, our financial condition and results of operations could be materially adversely affected. Our business involves numerous operating hazards.
If any of these customers were to terminate or fail to perform their obligations under their contracts and we were not able to find other customers for the affected drilling units promptly, our financial condition, and results of operations could be materially adversely affected.
Our ability to do business in a number of jurisdictions is subject to maintaining required licenses and permits and complying with applicable laws and regulations. For example, all of our drilling units are subject to regulatory requirements of the flag state where the drilling unit is registered.
Our ability to do business in a number of jurisdictions is subject to maintaining required licenses and permits and complying with applicable laws and regulations. For example, all of our drilling units are subject to regulatory requirements of the flag state, the country where a drilling unit is registered. The applicable flag state requirements are consistent with international maritime standards.
These projects and other efforts of this type are subject to risks of cost overruns or delays inherent in any large construction project as a result of numerous factors, including the following: • shortages of equipment, materials or skilled labor; • work stoppages and labor disputes; • unscheduled delays in the delivery of ordered materials and equipment; • local customs strikes or related work slowdowns that could delay importation of equipment or materials; • weather interferences; • difficulties in obtaining necessary permits or approvals or in meeting permit or approval conditions; • design and engineering problems; • inadequate regulatory support infrastructure in the local jurisdiction; • latent damages or deterioration to hull, equipment and machinery in excess of engineering estimates and assumptions; • unforeseen increases in the cost of equipment, labor and raw materials, particularly steel due to inflation or other factors; • unanticipated actual or purported change orders; • client acceptance delays; • disputes with shipyards and suppliers; • delays in, or inability to obtain, access to funding; • shipyard availability, failures and difficulties, including as a result of financial problems of shipyards or their subcontractors; and • failure or delay of third-party equipment vendors or service providers.
These projects typically become more time consuming and expensive the older the fleet becomes and are subject to risks of cost overruns or delays inherent in any large construction project as a result of numerous factors, including the following: • shortages of equipment, materials, or skilled labor; • work stoppages and labor disputes; • unscheduled delays in the delivery of ordered materials and equipment; • local customs strikes or related work slowdowns that could delay importation of equipment or materials; • weather interferences; • difficulties in obtaining necessary permits or approvals or in meeting permit or approval conditions; • design and engineering problems; • inadequate regulatory support infrastructure in the local jurisdiction; • latent damages or deterioration to hull, equipment and machinery in excess of engineering estimates and assumptions; 24 • unforeseen increases in the cost of equipment, labor, and raw materials, particularly steel due to inflation or other factors; • unanticipated actual or purported change orders; • customer acceptance delays; • disputes with shipyards and suppliers; • delays in, or inability to obtain, access to funding; • shipyard availability, failures, and difficulties, including as a result of financial problems of shipyards or their subcontractors; and • failure or delay of third-party equipment vendors or service providers.
These requirements would increase the cost of operating in these countries, which could materially adversely affect our business, financial condition and results of operations.
These requirements would increase the cost of operati ng in these countries, which could materially adversely affect our business, financial condition, and results of operations.
A high rate of inflation, including a continuation of inflation at the current rate, may have an adverse effect on our ability to maintain current levels of gross margin and general and administrative expenses as a percentage of total revenue, if our dayrates do not increase sufficiently to cover these increased costs.
A high rate of inflation, including a continuation of inflation at the current rate, may have an adverse effect on our ability to maintain current levels of gross margin and general and administrative expenses as a percentage of total revenue, if our dayrates do not increase sufficiently to cover these increased costs, as well as result in increases in our capital expenditures.
Further, if current competitors or new market entrants implement new or differentiated technical capabilities, services or standards, which may be more attractive to our customers or price their product offerings more competitively, it could have a material adverse effect on our business, financial condition and results of operations. Our industry is also cyclical.
Further, if current competitors implement new or differentiated technical capabilities, services or standards, which may be more attractive to our customers or price their product offerings more competitively, it could have a material adverse effect on our business, financial condition, and results of operations.
These matters may include, among other things, contract disputes, personal injury claims, asbestos and other toxic tort claims, environmental claims or proceedings, employment matters, issues related to employee or representative conduct, governmental claims for taxes or duties, and other litigation that arises in the ordinary course of our business.
We are, from time to time, involved in various litigation matters. These matters may include, among other things, contract disputes, personal injury claims, asbestos, and other toxic tort claims, environmental claims or proceedings, employment matters, issues related to employee or representative conduct, governmental claims for taxes or duties, and other litigation that arises in the ordinary course of our business.
Operational interruptions or maintenance or repair work may cause our customers to suspend or reduce payment of dayrates until operation of the respective drilling rig is resumed, which may lead to loss of revenue or termination or renegotiation of the drilling contract.
Operational interruptions, maintenance, or repair work may delay commencement of operations or cause our customers to suspend or reduce payment of dayrates until operation of the respective drilling rig is resumed, which may lead to loss of revenue, payment of liquidated damages, termination, or renegotiation of the drilling contract.
In addition, our reputation and the market for our securities may be adversely affected if we engage in certain other activities, such as entering into drilling contracts with individuals or entities in countries subject to significant US sanctions and embargo laws that are not controlled by the governments of those countries, or engaging in operations associated with those countries pursuant to contracts with third parties that are unrelated to those countries or entities controlled by their governments.
In addition, our reputation and the market for our securities may be adversely affected if we engage in certain other activities, such as entering into drilling contracts with individuals or entities in countries subject to significant US sanctions and embargo laws that are not controlled by the governments of those countries, or engaging in operations associated with those countries pursuant to contracts with third parties that are unrelated to those countries or entities controlled by their governments. 31 We are, or in the future could be, subject to litigation that could have an adverse effect on us.
In addition, the Revolving Credit Agreement obligates Finco and its restricted subsidiaries to comply with certain financial maintenance covenants and, under certain conditions, to make mandatory prepayments and reduce the amount of credit available under the Revolving Credit Facility, all as described in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations— Liquidity and Capital Resources— Post-emergence Debt—Senior Secured Revolving Credit Facility.” Such mandatory prepayments and commitment reductions may affect cash available for use in the Company’s business.
In addition, the 2023 Revolving Credit Agreement obligates Noble Finance II LLC and its restricted subsidiaries to comply with certain financial maintenance covenants and, under certain conditions, to make mandatory prepayments and reduce the amount of credit available under the 2023 Revolving Credit Facility, all as described in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations— Liquidity and Capital Resources— Amended and Restated Senior Secured Revolving Credit Agreement.” Such mandatory prepayments and commitment reductions may affect cash available for use in the Company’s business.
If we are unable to mitigate the negative consequences of any change in law, audit, business activity or other matter, this could cause our consolidated effective income tax rate to increase and cause a material adverse effect on our financial position, operating results and/or cash flows.
If we are unable to mitigate the negative consequences of any change in law, audit, business activity, or other matter, this could cause our consolidated effective income tax rate to increase and cause a material adverse effect on our financial position, operating results, and/or cash flows. Fluctuations in exchange rates and nonconvertibility of currencies could result in losses to us.
A disruption or delay in the deliveries from such third-party suppliers, capacity constraints, production disruptions, price increases (including those related to inflation and supply chain disruptions), defects or quality-control issues, recalls or other decreased availability or servicing of parts and equipment could adversely affect our ability to reactivate rigs, upgrade working rigs, purchase additional rigs or meet our commitments to customers on a timely basis, adversely impact our operations and revenues by resulting in uncompensated downtime, reduced dayrates, the incurrence of liquidated damages or other penalties or the cancellation or termination of contracts, or increase our operating costs.
A disruption or delay in the deliveries from such third-party suppliers, capacity constraints, production disruptions, price increases (including those related to inflation and supply chain disruptions), defects or quality-control issues, recalls, or other decreased availability or servicing of parts and equipment could adversely affect our ability to reactivate rigs, upgrade working rigs, purchase additional rigs, or meet our commitments to customers on a timely basis, adversely impact our operations and revenues by resulting in uncompensated downtime, reduced dayrates, the incurrence of liquidated damages, or other penalties or the cancellation or termination of contracts, or increase our operating costs. 25 We may experience risks associated with future mergers, acquisitions, or dispositions of businesses or assets or other strategic transactions.
There is increasing worldwide attention concerning the issue of climate change and the effect of GHGs and other sustainability and energy rebalancing matters. This increased attention may result in new environmental laws or regulations that may unfavorably impact us, our suppliers and our customers.
There is increasing worldwide attention concerning the issue of climate change and the effect of GHGs and other sustainability and energy rebalancing matters. This increased attention has led to and may result in additional environmental laws or regulations that may unfavorably impact our business, or that of our suppliers and our customers.
We may also incur losses as a result of an inability to collect revenues due to a shortage of convertible currency available to the country of operation, controls over currency exchange or controls over the repatriation of income or capital. Inflation may adversely affect our operating results.
We may also incur losses as a result of an inability to collect revenues due to a shortage of convertible currency available to the country of operation, controls over currency exchange or controls over the repatriation of income or capital.
Although the industry is experiencing a rationalization and correction of the global offshore rig supply, which has resulted in an increase in dayrates, we continue to experience competition from newbuild rigs, including rigs that have been stranded in shipyards, that have either already entered the market or are available to enter the market.
Although the industry has experienced a rationalization and correction of the global offshore rig supply, we continue to experience competition from newbuild rigs, including rigs that have been stranded in shipyards, that have either already entered the market or are available to enter the market.
The mobilization of rigs is expensive and time-consuming and can be impacted by several factors including, but not limited to, governmental regulation and customs practices, availability of tugs and tow vessels, weather, currents, political instability, civil unrest, and military actions, such as the conflict between Russia and Ukraine, and rigs may as a result become stranded.
The mobilization of rigs is expensive and time-consuming and can be impacted by several factors including, but not limited to, governmental regulation and customs practices, availability of tugs and tow vessels, weather, currents, political instability, civil unrest, and military actions, such as the conflict between Russia and Ukraine, Middle East conflicts, and the Guyana-Venezuela dispute, and their respective regional and global ramifications, and rigs may as a result become stranded.
However, continued development of these recent initiatives or new legislation and regulatory programs to reduce GHG emissions could increase our cost of doing business, discourage our customers from drilling for hydrocarbons, or otherwise have an adverse effect on our business, financial condition and results of operations.
However, new legislation and regulatory programs to reduce GHG emissions, or increased reporting obligations, could increase our cost of doing business, discourage our customers from drilling for hydrocarbons, or otherwise have an adverse effect on our business, financial condition, and results of operations.
Any failure to comply with applicable legal and regulatory trading obligations could also result in criminal and civil penalties and sanctions, such as fines, imprisonment, debarment from government contracts, seizure of shipments and loss of import and export privileges.
Shipping delays or denials could cause unscheduled operational downtime. Any failure to comply with applicable legal and regulatory trading obligations could also result in criminal and civil penalties and sanctions, such as fines, imprisonment, debarment from government contracts, seizure of shipments, and loss of import and export privileges.
For example, certain countries within which we operate or own substantial assets have enacted changes to their tax laws in response to the Organization for Economic Cooperation and Development’s ongoing Base Erosion and Profit Shifting initiatives and these and other countries may enact changes to their tax laws or practices in the future (prospectively or retroactively), which may have a material adverse effect on our financial position, operating results and/or cash flows. 35 The United States enacted the Inflation Reduction Act of 2022 (the “Inflation Reduction Act”) on August 16, 2022.
For example, certain countries within which we operate or own substantial assets have enacted changes to their tax laws in response to the Organization for Economic Cooperation and Development’s (“OECD”) ongoing Base Erosion and Profit Shifting initiatives and these and other countries may enact changes to their tax laws or practices in the future (prospectively or retroactively), which may have a material adverse effect on our financial position, operating results and/or cash flows.
Several factors could cause operational interruptions, including: • breakdowns of equipment and other unforeseen engineering problems; • work stoppages, including labor strikes; • shortages of material and skilled labor; • delays in repairs by suppliers; • surveys by government and maritime authorities; • periodic classification surveys; • inability to obtain permits; • severe weather, strong ocean currents or harsh operating conditions; • force majeure events; and • the occurrence or threat of epidemic or pandemic diseases, such as COVID-19, or any government response to such occurrence or threat.
Several factors could cause operational interruptions, including: • breakdowns of equipment and other unforeseen engineering problems; • work stoppages, including labor strikes; • shortages of material and skilled labor; • shipyard availability, failures, and difficulties; • delays in repairs by suppliers; • surveys by government and maritime authorities; • periodic classification surveys; • delays imposed by or resulting from compliance with permits, laws, regulations, or litigation; 22 • severe weather, strong ocean currents, or harsh operating conditions; • force majeure events; and • the occurrence or threat of epidemic or pandemic diseases, such as COVID-19, or any government response to such occurrence or threat.
Data Protection Act, the EU General Data Protection Regulation, the Data Protection Law, as revised, of the Cayman Islands, the California Consumer Privacy Act, the Cyber Incident Reporting for Critical Infrastructure Act, and other similar legislation in domestic and international 27 jurisdictions pose increasingly complex compliance challenges and potentially elevate costs, and any failure to comply with these laws and regulations could result in significant penalties and legal liability.
In addition, laws and regulations governing, or proposed to govern, cybersecurity, data privacy and protection, and the unauthorized disclosure of confidential or protected information, including the UK Data Protection Act, the EU General Data Protection Regulation, the Data Protection Law, as revised, of the Cayman Islands, the California Consumer Privacy Act, the Cyber Incident Reporting for Critical Infrastructure Act, and other similar legislation in domestic and international jurisdictions pose increasingly complex compliance challenges and potentially elevate costs, and any failure to comply with these laws and regulations could result in significant penalties and legal liability.
Any violation of anti-bribery or anti-corruption laws, including the Foreign Corrupt Practices Act, the United Kingdom Bribery Act, or similar laws and regulations could result in significant expenses, divert management attention, and otherwise have a negative impact on us. We operate in countries known to have a reputation for corruption.
Any violation of anti-bribery or anti-corruption laws, including the Foreign Corrupt Practices Act, the United Kingdom Bribery Act, or similar laws and regulations could result in significant expenses, divert management attention, and otherwise have a negative impact on the company.
Due to travel restrictions and mandatory quarantine measures designed to prevent or reduce the spread of COVID-19, we have experienced, and may continue in the future to experience, increased difficulties, delays and expenses in moving our personnel to and from our operating locations. We may be unable to pass these increased expenses to our customers.
Due to travel restrictions and mandatory quarantine measures, we have experienced, and may in the future to experience, increased difficulties, delays, and expenses in moving our personnel to and from our operating locations. We may be unable to pass these increased expenses to our customers.
Recently, oil prices have partially recovered but have been volatile. However, higher prices do not necessarily translate into increased drilling activity because our clients take into account a number of considerations when they decide to invest in offshore oil and gas resources, including expectations regarding future commodity prices and demand for hydrocarbons.
Higher prices do not necessarily translate into increased drilling activity because our customers typically take into account a number of considerations when they decide to invest in offshore oil and gas resources, including expectations regarding future commodity prices and demand for hydrocarbons.
We are subject to the risk that we, our affiliated entities or their respective officers, directors, employees and agents may take action determined to be in violation of such anti-corruption laws, including the US Foreign Corrupt Practices Act of 1977 (the “ FCPA ” ), the United Kingdom Bribery Act 2010 (the “ UK Bribery Act ” ), the United Kingdom Modern Slavery Act 2015 (the “UK Modern Slavery Act”) and similar laws in other countries.
We are subject to the risk that we, our affiliated entities or their respective officers, directors, employees, and agents may take action determined to be in violation of such local laws or laws applicable to us and those acting on our behalf, including the US Foreign Corrupt Practices Act of 1977 (the “FCPA”), the United Kingdom Bribery Act 2010 (the “UK Bribery Act”), the United Kingdom Modern Slavery Act 2015 (the “UK Modern Slavery Act”) and similar laws.
We currently have US windstorm coverage for most of our US fleet subject to certain limits but will continue to monitor the insurance market conditions in 26 the future and may decide not to, or be unable to, purchase named windstorm coverage for some or all of the rigs operating in the US Gulf of Mexico.
We will continue to monitor the insurance market conditions in the future and may decide not to, or be unable to, purchase named windstorm coverage for some or all of the rigs operating in the US Gulf of Mexico.
Governmental and other entities in various US states, such as California and New York, have filed lawsuits against coal, gas 41 oil and petroleum companies. These suits allege damages as a result of climate change, and the plaintiffs are seeking unspecified damages and abatement under various tort theories.
Governmental and other entities in various US states, such as California and New York, have filed lawsuits against energy companies. These suits allege damages as a result of climate change, and the plaintiffs are seeking unspecified damages and abatement under various tort theories. Similar lawsuits may be filed in other jurisdictions both in the US and globally.
If mitigation measures put in place are not effective, it could lead to significant financial downtime, adversely affect our ability to meet our commitments towards our customers, potential cancellation or termination of drilling contracts, suspension or termination of operations, regulatory penalties or sanctions, property, environmental and other damage claims by customers or other third parties, which may in turn have a material adverse effect on the our business, financial condition, results of operations, and reputation. 30 We engage third-party subcontractors to perform some parts of our projects and in respect of new business models a majority of the services under a project may be subcontracted to third-party subcontractors.
If mitigation measures put in place are not effective, it could lead to significant financial downtime, adversely affect our ability to meet our commitments with our customers, potential cancellation or termination of drilling contracts, suspension or termination of operations, regulatory penalties or sanctions, or property, environmental, and other damage claims by customers or other third parties, which may in turn have a material adverse effect on the our business, financial condition, results of operations, and reputation.
In addition, efforts have been made and continue to be made in the international community toward the adoption of international treaties or protocols related to climate change and for the imposition of hydrocarbon-based fuel usage reductions, and encouraging the implementation of net-zero GHG emission pledges.
In addition, efforts have been made and continue to be made in the international community toward the adoption or enhancement of international treaties or protocols related to protecting the environment, reducing climate change, reducing the use of hydrocarbon-based fuel reductions, and encouraging the implementation of GHG emission reduction pledges.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAs of December 31, 2022, we were involved in a number of lawsuits, regulatory matters, disputes and claims, asserted and unasserted, all of which have arisen in the ordinary course of our business and for which we do not expect the liability, if any, to have a material adverse effect on our consolidated financial position, results of operations or cash flows.
Biggest changeAs of December 31, 2023, we were involved in a number of lawsuits, regulatory matters, disputes, and claims, asserted and unasserted, all of which have arisen in the ordinary course of our business and for which we do not expect the liability, if any, to have a material adverse effect on our consolidated financial position, results of operations, or cash flows.
Additional information regarding legal proceedings is presented in “Note 18— Commitments and Contingencies” to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. Item 4. Mine Safety Disclosures. Not applicable. 44 PART II
Additional information regarding legal proceedings is presented in “Note 14 — Commitments and Contingencies” to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. Item 4. Mine Safety Disclosures. Not applicable. 37 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDuring the year ended December 31, 2022, we repurchased 407,477 of our Ordinary Shares, which were subsequently cancelled. Dividends The declaration and payment of dividends require the authorization of the Board of Directors of Noble. Such may be paid only out of Noble’s “distributable reserves” on its statutory balance sheet in accordance with law.
Biggest changeDividends The declaration and payment of dividends require the authorization of the Board of Directors. Such may be paid only out of Noble’s “distributable reserves” as determined by reference to relevant statutory accounts in accordance with English law. Therefore, Noble is not permitted to pay dividends out of share capital, which includes share premium.
For more information on the terms of exercise and other features of the warrants, see “Note 10— Equity” to our consolidated financial statements included in Item 8 of Part II of this Annual Report on Form 10-K.
For more information on the terms of exercise and other features of the warrants, see “Note 9 — Equity” to our consolidated financial statements included in Item 8 of Part II of this Annual Report on Form 10-K.
Total return assumes the reinvestment of dividends, if any, in the security on the ex-dividend date. This graph depicts the past performance for the period from June 9, 2021, the day our Noble Cayman Shares began trading on the NYSE, through December 31, 2022, and in no way should be used to predict future share performance.
Total return assumes the reinvestment of dividends, if any, in the security on the ex-dividend date. This graph depicts the past performance for the period from June 9, 2021, the day our Noble Cayman Shares began trading on the NYSE, through December 31, 2023, and in no way should be used to predict future share performance.
The payment of future dividends will depend on our results of operations, financial condition, cash requirements, future business prospects, contractual and indenture restrictions and other factors deemed relevant by our Board of Directors. 45 Stock Performance Graph The chart below presents a comparison of the cumulative total returns, assuming $100 was invested at the beginning of the period for Noble, the Standard & Poor's 500 Index (“S&P 500”), the PHLX Oil Service Sector Index (“OSX”) and the Dow Jones US Oil Equipment and Services.
The payment of future dividends will depend on our results of operations, financial condition, cash requirements, future business prospects, contractual and indenture restrictions, and other factors deemed relevant by our Board. 38 Stock Performance Graph The chart below presents a comparison of the cumulative total returns, assuming $100 was invested at the beginning of the period for Noble, the Standard & Poor's 500 Index (“S&P 500”), the PHLX Oil Service Sector Index (“OSX”), and the Dow Jones US Oil Equipment and Services.
INDEXED RETURNS Company / Index June 9, 2021 December 31, 2021 December 31, 2022 Noble Corporation plc $ 100.00 $ 100.24 $ 152.36 S&P 500 Index 100.00 112.95 90.99 Dow Jones US Oil Equipment & Services Index 100.00 77.84 127.98 OSX Index 100.00 78.50 124.90 The above graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate it by reference into such filing. 46 Item 6. [Reserved]
INDEXED RETURNS Company / Index June 9, 2021 December 31, 2021 December 31, 2022 December 31, 2023 Noble Corporation plc $ 100.00 $ 100.24 $ 152.36 $ 197.37 S&P 500 Index 100.00 112.95 90.99 113.04 Dow Jones US Oil Equipment & Services Index 100.00 77.84 127.98 132.25 OSX Index 100.00 78.50 124.90 125.00 The above graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate it by reference into such filing. 39 Item 6. [Reserved].
On March 6, 2023, there were 134,820,112 Ordinary Shares outstanding held by 15 shareholder accounts of record. This figure does not include an estimate of the indeterminate number of beneficial holders whose shares may be held of record by brokerage firms and clearing agencies.
This figure does not include an estimate of the indeterminate number of beneficial holders whose shares may be held of record by brokerage firms and clearing agencies.
Removed
Market for Shares and Related Shareholder Information On June 9, 2021, the ordinary shares, par value $0.00001 per share, of Noble Cayman (the “Noble Cayman Shares”) began trading on the NYSE under the symbol “NE.” In connection with the Business Combination with Maersk Drilling, prior to the opening of trading on September 30, 2022, the Noble Cayman Shares were suspended from trading on the NYSE.
Added
Market for Shares and Related Shareholder Information Our shares are listed on the New York Stock Exchange under the ticker symbol “NE” and on the Nasdaq Copenhagen A/S under the ticker symbol “NOBLE.” On February 15, 2024, there were 142,766,794 Ordinary Shares outstanding held by 10 shareholder accounts of record.
Removed
The Ordinary Shares began regular-way trading on the NYSE using Noble Cayman’s trading history under the ticker symbol “NE” immediately following the suspension of trading of the Noble Cayman Shares. In addition, the Ordinary Shares were listed and began trading on Nasdaq Copenhagen A/S (“Nasdaq Copenhagen”) under the symbol “NOBLE” in connection with the closing of the Business Combination.
Added
Exercises of Warrants During the three months ended December 31, 2023: • 13,243 Ordinary Shares were issued to holders of our Tranche 1 Warrants pursuant to exercises of 15,164 Tranche 1 Warrants; and • 5,461 Ordinary Shares were issued to holders of our Tranche 2 Warrants pursuant to exercises of 5,476 Tranche 2 Warrants.
Removed
Exercises of Warrants During the year ended December 31, 2022: • 1,372,756 Noble Cayman Shares or Ordinary Shares, as the case may be, were issued to holders of Noble Cayman Tranche 1 Warrants or Tranche 1 Warrants, as the case may be, pursuant to exercises of 2,107,614 Noble Cayman Tranche 1 Warrants or Tranche 1 Warrants, as the case may be; • 1,997,926 Noble Cayman Shares or Ordinary Shares, as the case may be, were issued to holders of Noble Cayman Tranche 2 Warrants or Tranche 2 Warrants, as the case may be, pursuant to exercises of 2,771,274 Noble Cayman Tranche 2 Warrants or Tranche 2 Warrants, as the case may be; • 143 Noble Cayman Shares or Ordinary Shares, as the case may be, were issued to holders of Noble Cayman Tranche 3 Warrants or Tranche 3 Warrants, as the case may be, pursuant to exercises of 3,774 Noble Cayman Tranche 3 Warrants or Tranche 3 Warrants, as the case may be; and • 6,462,767 Noble Cayman Shares were issued to holders of Noble Cayman Penny Warrants (as defined herein) pursuant to exercises of 6,463,182 Noble Cayman Penny Warrants.
Added
Share Repurchases The following table presents information about our purchases of equity securities for the three months ended December 31, 2023: Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of a Publicly Announced Plans or Programs (1) Maximum Number (or Approximate Dollar Value) of Shares that may yet be Purchased Under the Plans or Programs (1) October 1 - 31, 2023 — — — $ 305,000,187 November 1 - 30, 2023 — — — $ 305,000,187 December 1- 31, 2023 329,069 $ 45.03 329,069 $ 290,174,049 Total 329,069 329,069 $ 290,174,049 (1) Subject to restrictions under applicable law discussed in “Note 9 — Equity” to our consolidated financial statements, we announced a share repurchase plan on November 2, 2022, to purchase up to $400 million of outstanding Ordinary Shares or Warrants.
Removed
Share Repurchases Under law, the Company is only permitted to purchase its own Ordinary Shares by way of an “off-market purchase” in a plan approved by shareholders. Such may be paid only out of Noble’s “distributable reserves” on its statutory balance sheet in accordance with law.
Added
The $400 million authorization does not have a fixed expiration and may be modified, suspended, or discontinued at any time. The program does not obligate us to acquire any particular amount of shares. During the three months ended December 31, 2023, we repurchased 329,069 of our Ordinary Shares, which were subsequently cancelled.
Removed
As of the date of this report, we have shareholder authority to repurchase up to 15% per annum of the issued share capital of the Company as of the beginning of each fiscal year for a five-year period (subject to an overall aggregate maximum of 20,601,161 Ordinary Shares).
Removed
Therefore, Noble is not permitted to pay dividends out of share capital, which includes share premium.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

88 edited+48 added−79 removed36 unchanged
Biggest changeCalculations in the above table exclude the five jackups sold in the fourth quarter of 2022 in connection with the Rig Transaction, following the closing of the sale on October 5, 2022. 51 Contract Drilling Services The following table presents the operating results for our contract drilling services segment for the period indicated (dollars in thousands): Successor Predecessor Period From Period From February 6, 2021 January 1, 2021 Year ended through through December 31, 2022 December 31, 2021 February 5, 2021 Operating revenues: Contract drilling services $ 1,332,841 $ 708,131 $ 74,051 Reimbursables and other (1) 81,006 62,194 3,430 $ 1,413,847 $ 770,325 $ 77,481 Operating costs and expenses: Contract drilling services $ 897,096 $ 639,442 $ 46,965 Reimbursables (1) 64,427 55,832 2,737 Depreciation and amortization 146,879 89,535 20,622 General and administrative 82,177 62,476 5,727 Merger and integration costs 84,668 24,792 — Gain on sale of operating assets, net (90,230) (185,934) — Hurricane losses and (recoveries), net 60 23,350 — 1,185,077 709,493 76,051 Operating income (loss) $ 228,770 $ 60,832 $ 1,430 (1) We record reimbursements from customers for out-of-pocket expenses as operating revenues and the related direct costs as operating expenses.
Biggest change(3) Figures in the table include the rigs acquired in connection with the Business Combination and exclude the five jackup rigs (each a “Remedy Rig,” and collectively the “Remedy Rigs”) sold in October 2022. 43 Contract Drilling Services The following table presents the operating results for our contract drilling services segment for the period indicated (dollars in thousands): Years ended December 31, Change 2023 2022 $ % Operating revenues: Contract drilling services $ 2,461,715 $ 1,332,841 $ 1,128,874 85 % Reimbursables and other (1) 127,303 81,006 46,297 57 % $ 2,589,018 $ 1,413,847 $ 1,175,171 83 % Operating costs and expenses: Contract drilling services $ 1,452,281 $ 897,096 $ 555,185 62 % Reimbursables (1) 91,642 64,427 27,215 42 % Depreciation and amortization 301,345 146,879 154,466 105 % General and administrative 128,413 82,177 46,236 56 % Merger and integration costs 60,335 84,668 (24,333) (29) % Gain on sale of operating assets, net — (90,230) 90,230 (100) % Hurricane losses and (recoveries), net (19,703) 60 (19,763) (32,938) % 2,014,313 1,185,077 829,236 70 % Operating income (loss) $ 574,705 $ 228,770 $ 345,935 151 % (1) We record reimbursements from customers for out-of-pocket expenses as operating revenues and the related direct costs as operating expenses.
(2) One of our long-term drilling contracts with Shell, the Noble Globetrotter II, contains a dayrate adjustment mechanism that utilizes an average of market rates that match a set of distinct technical attributes and is subject to a modest discount, beginning on the fifth-year anniversary of the contract and continuing every six months thereafter.
(2) One of our long-term drilling contracts with Shell plc, the Noble Globetrotter II, contains a dayrate adjustment mechanism that utilizes an average of market rates that match a set of distinct technical attributes and is subject to a modest discount, beginning on the fifth-year anniversary of the contract and continuing every six months thereafter.
We recognize uncertain tax positions that we believe have a greater than 50 percent likelihood of being sustained upon challenge by a tax authority. We cannot predict or provide assurance as to the ultimate outcome of any existing or future assessments.
We recognize uncertain tax positions that we believe have a greater than 50% likelihood of being sustained upon challenge by a tax authority. We cannot predict or provide assurance as to the ultimate outcome of any existing or future assessments.
Changes in these judgments or estimates can have a material impact on the valuation of the respective assets and liabilities acquired and our results of operations in periods after acquisition.
Changes in these judgments or estimates can have a material impact on the valuation of the respective assets and liabilities acquired and our results of 50 operations in periods after acquisition.
We also manage rig operating costs through the implementation and continuous improvement of innovative systems and processes, which includes the use of data analytics and predictive maintenance technology. As of the filing date of this Annual Report on Form 10-K, our fleet of 32 drilling rigs consisted of 19 floaters and 13 jackups strategically deployed worldwide.
We also manage rig operating costs through the implementation and continuous improvement of innovative systems and processes, which includes the use of data analytics and predictive maintenance technology. As of the filing date of this Annual Report on Form 10-K, our fleet of 32 drilling rigs consists of 19 floaters and 13 jackups strategically deployed worldwide.
See “Note 9— Debt” to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
See “Note 8 — Debt” to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
At December 31, 2022, we had other commitments that we are contractually obligated to fulfill with cash if the obligations are called. These obligations include letters of credit that guarantee our performance as it relates to our drilling contracts, tax and other obligations in various jurisdictions.
At December 31, 2023, we had other commitments that we are contractually obligated to fulfill with cash if the obligations are called. These obligations include letters of credit that guarantee our performance as it relates to our drilling contracts, tax, and other obligations in various jurisdictions.
However, we expect many of these stranded newbuild rigs may make their way into the global market over the next few years. Although the market outlook in our business varies by geographical region and water depth, we remain encouraged by the recovery in the ultra-deepwater floater market, with overall demand having increased from 2020 lows.
However, we expect many of these stranded newbuild rigs may continue to make their way into the global market over the next few years. Although the market outlook in our business varies by geographical region and water depth, we remain encouraged by the outlook in the ultra-deepwater floater market, with overall demand having increased from 2020 lows.
The following discussion should be read in conjunction with the consolidated financial statements and related notes contained in this Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed by Noble and Finco. Executive Overview Noble is a leading offshore drilling contractor for the oil and gas industry.
The following discussion should be read in conjunction with the consolidated financial statements and related notes contained in this Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed by Noble. Executive Overview Noble is a leading offshore drilling contractor for the oil and gas industry.
(4) Percent of available days committed is calculated by dividing the total number of days our rigs are operating under contract for such period by the product of the number of our rigs, including cold-stacked rigs, and the number of calendar days in such period.
(5) Percent of available days committed is calculated by dividing the total number of days our rigs are operating under contract for such period by the product of the number of our rigs, including cold-stacked rigs, and the number of calendar days in such period.
In addition, $9.5 million is due on a long-term basis under the Danish Holiday Act of 2020. For a description of our operating lease obligations, refer to “Note 13— Leases” to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
In addition, $9.9 million is due on a long-term basis under the Danish Holiday Act of 2020. For a description of our operating lease obligations, refer to “Note 11 — Leases” to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
The following discussion is intended to assist you in understanding our financial position at December 31, 2022 and 2021, and our results of operations for the year ended December 31, 2022, the period from February 6 through December 31, 2021, and the period from January 1 through February 5, 2021.
The following discussion is intended to assist you in understanding our financial position at December 31, 2023 and 2022, and our results of operations for the years ended December 31, 2023 and 2022, the period from February 6 through December 31, 2021, and the period from January 1 through February 5, 2021.
For additional information, see “Note 4— Acquisitions and Divestitures” and “Note 7— Property and Equipment” to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. Hurricane Losses and Recoveries, Net.
For additional information, see “Note 4 — Acquisitions and Divestitures” to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. Hurricane losses and recoveries, net.
Summary of Contractual Cash Obligations and Commitments We have $175.9 million of long-term tax reserves for uncertain tax positions, including interest and penalties, which are included in “Other liabilities” due to the difficulty in making reasonably reliable estimates of the timing of cash settlements to taxing authorities.
Summary of Contractual Cash Obligations and Commitments We have $202.3 million of long-term tax reserves for uncertain tax positions, including interest and penalties, which are included in “Other liabilities” due to the difficulty in making reasonably reliable estimates of the timing of cash settlements to taxing authorities.
We may seek to refinance all or a portion of our long-term debt obligations, including the Revolving Credit Facility, the Second Lien Notes and the New DNB Credit Facility, though any such refinancing transactions are subject to market and other conditions and there are no assurances that we will complete any such transactions, in whole or in part, or as to the amount or timing of any such transactions.
We may seek to refinance all or a portion of our long-term debt obligations, including the 2023 Revolving Credit Facility, though any such refinancing transactions are subject to market and other conditions and there are no assurances that we will complete any such transactions, in whole or in part, or as to the amount or timing of any such transactions.
While the ongoing Russia-Ukraine conflict and related sanctions, inflationary pressures and the subsequent government and central bank efforts to curb inflation, recession concerns, and supply chain disruptions did create some uncertainty relating to future global energy demand, global rig demand increased in 2022.
While the ongoing Russia-Ukraine conflict and related sanctions, inflationary pressures and the subsequent government and central bank efforts to curb inflation, recession concerns, and supply chain disruptions did create some uncertainty relating to future global energy demand, global rig demand has increased since 2021.
During the year ended December 31, 2022, Noble recognized a gain, net of transaction costs, of $90.2 million in connection with the sale of the Divestment Business and the Noble Clyde Boudreaux .
During the year ended December 31, 2022, Noble recognized a gain, net of transaction costs, of $90.2 million in connection with the sale of the Remedy Rigs and the Noble Clyde Boudreaux .
This rise was the result of the combination of growing confidence in commodity prices remaining at or above current levels, heightened focus on energy security, recent multi-year underinvestment in the development and exploration of hydrocarbons, and relative attractiveness of offshore plays with respect to both cost and a carbon emissions perspective resulted in an overall increase in global rig demand in 2022.
This increase in global demand has been the result of the combination of growing confidence in commodity prices remaining at or above current levels, heightened focus on energy security, recent multi-year underinvestment in the development and exploration of hydrocarbons, and relative attractiveness of offshore plays with respect to both cost and a carbon emissions perspective.
Our customers continue to focus on the highest specification floaters, which represents the majority of our floater fleet. We have also 48 experienced an overall increase in the global jack-up market, with the Middle East being the largest component of this increase.
Our customers continue to focus on the highest specification floaters, which represents the majority of our floater fleet. We have also observed an overall demand increase in the global jackup market, with the Middle East being the largest component of this increase.
At December 31, 2022, $12.1 million of pension obligations will be due in the next twelve months and the remainder of $121.7 million will be due subsequent to 2023. See “Note 15— Employee Benefit Plans” to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
At December 31, 2023, $12.6 million of pension obligations will be due in the next twelve months and the remainder of $125.0 million will be due subsequent to 2024. See “Note 13 — Employee Benefit Plans” to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Any excess of the purchase price over the fair value amounts assigned to assets and liabilities is recorded as goodwill. To the extent the estimated fair value of the net assets acquired exceeded the purchase price, we recognize a bargain purchase gain.
Assets acquired and liabilities assumed are recognized at the date of acquisition at their respective estimated fair value. Any excess of the purchase price over the fair value amounts assigned to assets and liabilities is recorded as goodwill. To the extent the estimated fair value of the net assets acquired exceeded the purchase price, we recognize a bargain purchase gain.
New DNB Credit Facility On November 22, 2022, Noble entered into a Term Facility Agreement among Maersk Drilling, as the borrower, the Company, as parent guarantor, certain subsidiaries of Maersk Drilling thereto as guarantors, and the lenders identified therein, with DNB Bank ASA, New York Branch acting as Agent.
On December 22, 2022, the DNB Credit Facility and related Noble guarantee were terminated and, Maersk Drilling, as the borrower, the Company, as parent guarantor, certain subsidiaries of Maersk Drilling as guarantors, and the lenders identified therein, with DNB Bank ASA, New York Branch acting as Agent entered into a new Term Facility Agreement (the “New DNB Credit Facility”).
See “Note 14— Income Taxes” to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. At December 31, 2022, $159.7 million of long-term debt will be due in the next twelve months and $513.1 million will be due subsequent to 2023.
See “Note 12 — Income Taxes” to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. At December 31, 2023, no long-term debt is due in the next twelve months and $600.0 million will be due subsequent to 2024.
For additional information about our Second Lien Notes, see “Note 9— Debt” to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
For additional information about our 2023 Revolving Credit Facility, see “Note 8 — Debt” to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Under the CEA, the table above includes awarded and remaining term of two years and 11 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.
Under the CEA, the table above includes awarded and remaining term of three years and five months related to each of the four following rigs: the Noble Tom Madden, Noble Bob Douglas, Noble Don Taylor, and Noble Sam Croft .
Outlook During 2022, oil prices generally remained at levels that were supportive of offshore exploration and development activity.
Since 2021, oil prices generally remained at levels that were supportive of offshore exploration and development activity.
Our industry could be further challenged as our customers rebalance their capital investments more towards alternative energy sources. However, at the same time, there continues to be a global dependence on the combustion of hydrocarbons to provide reliable and affordable energy. Low-cost and low-emission barrels are still necessary to meet energy needs, both current and future.
Our industry could be further challenged as our customers rebalance their capital investments more towards alternative energy sources. However, at the same time, there continues to be a global dependence on the combustion of hydrocarbons to provide reliable and affordable energy.
We currently operate, and have in the past operated, in a number of countries throughout the world and our tax returns filed in those jurisdictions are subject to review and examination by tax authorities within those jurisdictions.
We believe that our tax return positions are appropriately supported, but tax authorities can challenge certain of our tax positions. We currently operate, and have in the past operated, in a number of countries throughout the world and our tax returns filed in those jurisdictions are subject to review and examination by tax authorities within those jurisdictions.
In the fourth quarter of 2022, we purchased $40.7 million aggregate principal amount of our Second Lien Notes for approximately $46.2 million, plus accrued interest, as open market repurchases and recognized a loss of approximately $4.4 million.
Debt Open Market Repurchases In the third and fourth quarter of 2022, we purchased $42.3 million aggregate principal amount of our Second Lien Notes for approximately $48.1 million, plus accrued interest, as open market repurchases and recognized a loss of approximately $4.6 million.
Typical assumptions used in our estimate include current market conditions, timing of future contract awards and expected operating dayrates, operating costs, utilization rates, discount rates, capital expenditures, market values, weighting of market values, reactivation costs, estimated economic useful lives and marketability of a unit. During the years ended December 31, 2022 and 2021, no impairment charges were recognized.
Typical assumptions used in our estimate include current market conditions, timing of future contract awards, and expected operating dayrates, operating costs, utilization rates, discount rates, capital expenditures, market values, weighting of market values, reactivation costs, estimated economic useful lives, and marketability of a unit.
For additional information, see “Note 4— Acquisitions and Divestitures” and “Note 5— Merger and Integration Costs” to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. 53 Gain on Sale of Operating Assets, Net.
This decrease was partly offset by an increase in costs and professional fees incurred to integrate systems. For additional information, see “Note 4 — Acquisitions and Divestitures” and “Note 5 — Merger and Integration Costs” to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. Gain on sale of operating assets, net.
Share Repurchases Under law, the Company is only permitted to purchase its own Ordinary Shares by way of an “off-market purchase” in a plan approved by shareholders. Such may be paid only out of Noble’s “distributable reserves” on its statutory balance sheet in accordance with law.
Share Repurchases Under law, the Company is only permitted to purchase its own Ordinary Shares by way of an “off-market purchase” pursuant to a contract approved by shareholders. Such purchases may be paid for only out of Noble’s “distributable 48 reserves” as determined by reference to relevant statutory accounts in accordance with law.
Accordingly, we may be required to increase or decrease our reserve levels. At December 31, 2022, loss reserves for personal injury and protection claims totaled $35.3 million, of which $15.5 million is included in “Other current liabilities” and $19.8 million in “Other long-term liabilities” in the accompanying Consolidated Balance Sheets.
Accordingly, we may be required to increase or decrease our reserve levels. At December 31, 2023, loss reserves for personal injury and protection claims totaled $63.9 million, of which $21.9 million was included in “Other current liabilities” and $42.0 million in “Other long-term liabilities” in the accompanying Consolidated Balance Sheets.
During the year ended December 31, 2022, we repurchased 407,477 of our Ordinary Shares, which were subsequently cancelled.
During the year ended December 31, 2023, we repurchased 2.3 million of our Ordinary Shares, which were subsequently cancelled.
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 industry-leading utilization; coupled with an unwavering commitment to best-in-class safety performance and customer satisfaction.
We have one of the youngest and highest specification fleets of global scale in the industry, with diversification across asset classes, geographic regions, and customers. The Company has a track record of industry-leading utilization coupled with a commitment to best-in-class safety performance and customer satisfaction. We strive to be a leader in industry innovation and first-mover in sustainability.
Those factors include, but are not limited to, the price and price stability of oil and gas, the relative cost and carbon footprint of offshore resources within each operator’s broader energy portfolio, global 47 macroeconomic conditions, world energy demand, the operator’s strategy toward renewable energy sources, environmental considerations and governmental policies.
Those factors include, but are not limited to, the price and price stability of oil and gas, the relative cost and carbon footprint of offshore resources within each operator’s broader energy portfolio, global macroeconomic conditions, world energy demand, the operator’s strategy toward renewable energy sources, environmental considerations, and governmental policies. 40 Over the last decade, the offshore drilling industry has experienced significant volatility and change, which has meaningfully impacted both the supply of, and demand for, offshore rigs.
For additional information on the Business Combination, see “Note 4— Acquisitions and Divestitures” to our consolidated financial statements included in Item 8 of Part II of this Annual Report on Form 10-K. Listing.
For additional information, see “Note 8 — Debt” to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. Interest income and other, net.
During the year ended December 31, 2022, floaters generated revenue of $997.8 million , as compared to $482.3 million in the Prior Year Successor Period.
During the year ended December 31, 2023, floaters generated revenue of $2.0 billion, as compared to $997.8 million in year ended December 31, 2022.
For additional information, see “Note 4— Acquisitions and Divestitures” to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. Income Tax Provision (Benefit). We recorded income tax expense of $22.6 million and $0.4 million during the year ended December 31, 2022 and the Prior Year Successor Period, respectively.
Noble recognized a $5.0 million gain on the bargain purchase of Maersk Drilling for the year ended December 31, 2023. For additional information, see “Note 4 — Acquisitions and Divestitures” to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. Income tax benefit (provision).
During the year ended December 31, 2022, Noble incurred $84.7 million of merger and integration costs primarily in connection with the Business Combination with Maersk Drilling. During the Prior Year Successor Period, Noble incurred $24.8 million of merger and integration costs in connection with the Pacific Drilling Merger and the Business Combination with Maersk Drilling.
Noble incurred $60.3 million and $84.7 million of merger and integration costs during the years ended December 31, 2023 and 2022, respectively, primarily in connection with the Business Combination with Maersk Drilling in October 2022.
For additional information regarding our backlog, see “—Contract Drilling Services Backlog.” Capital Expenditures Capital expenditures totaled $193.6 million, $159.9 million, and $10.3 million, for the year ended December 31, 2022, the Prior Year Successor Period and the Prior Year Predecessor Period, respectively.
For additional information regarding our backlog, see “ — Contract Drilling Services Backlog.” Capital Additions Capital additions totaled $454.3 million and $193.6 million for the years ended December 31, 2023 and 2022, respectively.
However, in the first half of 2020, this gradual recovery was abruptly halted as oil prices experienced concurrent supply and demand shocks.
However, in the first half of 2020, this gradual recovery was abruptly halted as oil prices experienced concurrent supply and demand shocks that were the result of disagreements among OPEC+ members and the global COVID-19 pandemic, respectively.
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. The following table presents the average rig utilization, operating days and average dayrates for our rig fleet for the periods indicated.
Key Operating Metrics 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.
In the year ended 2022, we utilized approximately $48.1 million of cash to repurchase $42.3 million aggregate principal amount of our Second Lien Notes plus accrued interest, as open market repurchases and recognized a loss of approximately $4.6 million. The Prior Year Successor Period included net payments on our Revolving Credit Facility.
During the year ended December 31, 2022, we refinanced part of the assumed debt from the Business Combination, resulting in a net pay down of $277.3 million, and utilized approximately $48.1 million of cash to repurchase $42.3 million aggregate principal amount of our Second Lien Notes, plus accrued interest, as open market repurchases and recognized a loss of approximately $4.6 million.
The declaration and payment of dividends require the authorization of the Board of Directors of Noble. Such dividends may be paid only out of Noble’s “distributable reserves” on its statutory balance sheet in accordance with law. Therefore, Noble is not permitted to pay dividends out of share capital, which includes share premium.
The declaration and payment of dividends require authorization of the Board of Directors, provided that such dividends on issued share capital may be paid only out of the Company’s “distributable reserves” as determined by reference to relevant statutory accounts in accordance with English law. The Company is not permitted to pay dividends out of share capital, which includes share premiums.
Capital expenditures for the year ended December 31, 2022 consisted of the following: • $111.0 million for sustaining capital; • $45.0 million in major projects, including subsea and other related projects; and • $37.6 million for rebillable capital and contract modifications.
Capital additions for the year ended December 31, 2023, consisted of the following: • $258.9 million for sustaining capital; • $166.7 million in major projects, including subsea and other related projects; and • $28.7 million for rebillable capital and contract modifications.
Income Taxes We estimate income taxes and file tax returns in each of the taxing jurisdictions in which we operate and are required to file a tax return. At the end of each year, an estimate for income taxes is recorded in the financial statements. Tax returns are generally filed in the subsequent year.
At the end of each year, an estimate for income taxes is recorded in the financial statements. Tax returns are generally filed in the subsequent year. A reconciliation of the estimate to the final tax return is done at that time, which will result in changes to the original estimate.
Over the last decade, the offshore drilling industry has experienced significant volatility and change, which has meaningfully impacted both the supply of, and demand for, offshore rigs. After several years of a significantly oversupplied rig market, industry conditions had started to gradually improve in 2019, which was evidenced by increasing utilization and improving dayrates.
After several years of a significantly oversupplied rig market, industry conditions had started to gradually improve in 2019, which was evidenced by increasing utilization and improving dayrates.
DSF Credit Facility As of December 31, 2022, Maersk Drilling had $149.7 million of outstanding term loans under the DSF Credit Facility, which were paid in full with cash on hand on February 23, 2023. See “Note 9— Debt” to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
The DSF Credit Facility was repaid in full on February 23, 2023, using cash on hand and the facility is no longer in place as of December 31, 2023. See “Note 8 — Debt” to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
While backlog did not include any letters of intent as of December 31, 2022, in the past we have included in backlog certain letters of intent that we expect to result in binding drilling contracts. As of December 31, 2022, contract drilling services backlog totaled approximately $3.9 billion, which represents approximately 57 percent of available days for 2023.
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 December 31, 2023, in the past we have included in backlog certain letters of intent that we expect to result in binding drilling contracts.
Liquidity and Capital Resources Senior Secured Revolving Credit Facility As of December 31, 2022, we had no loans outstanding and $21.1 million of letters of credit issued under our senior secured revolving credit agreement (the “Revolving Credit Facility”) and an additional $8.7 million in letters of credit and 54 surety bonds issued under bilateral arrangements.
As of December 31, 2023, we had no borrowings outstanding and $7.4 million of letters of credit issued under our 2023 Revolving Credit Facility and an additional $108.1 million in letters of credit and surety bonds issued under bilateral arrangements.
For the year ended December 31, 2022 our financial and operating results include: • operating revenues totaling $1,413.8 million; • net income of $168.9 million or $1.73 per diluted share; • net cash provided by operating activities totaling $281.0 million; • successful completion of the Business Combination with Maersk Drilling; and • nothing drawn down on the Revolving Credit Facility as of December 31, 2022 and cash of $476.2 million.
For the year ended December 31, 2023, our financial and operating results include: • operating revenues totaling $2.6 billion; • net income of $481.9 million or $3.32 per diluted share; • net cash provided by operating activities totaling $574.3 million; • nothing drawn down on the 2023 Revolving Credit Facility as of December 31, 2023, and • a year end cash balance of $360.8 million.
The payment of future dividends will depend on our results of operations, financial condition, cash requirements, future business prospects, contractual and 56 indenture restrictions and other factors deemed relevant by our Board of Directors; however, at this time, we do not expect to pay any dividends in the foreseeable future.
The payment of future dividends will depend on our results of operations, financial condition, cash requirements, future business prospects, the availability of sufficient distributable reserves, contractual and indenture restrictions, and other factors deemed relevant by our Board.
Noble incurred $22.0 million of costs during the year ended December 31, 2022, which primarily related to additional costs as a result of the Hurricane Ida incident, which was offset by insurance recoveries of $21.9 million.
Noble recognized $31.8 million of costs during the year ended December 31, 2023, in connection with the Hurricane Ida incident, which was offset by the recognition of insurance recoveries of $51.5 million. During the year ended December 31, 2022, Noble recognized $22.0 million of costs, which was offset by the recognition of insurance recoveries of $21.9 million.
For further discussion of these risks, see Part I, Item 1A, “Risk Factors—Regulatory and Legal Risks—Increasing attention to environmental, social and governance matters and climate change may impact our business and financial results.” Critical Accounting Estimates We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States (“US GAAP”), which require us to make estimates that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures of contingent assets and liabilities.
Critical Accounting Estimates We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States (“US GAAP”), which require us to make estimates that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures of contingent assets and liabilities.
These letters of credit obligations are not normally called, as we typically comply with the underlying performance requirement. At December 31, 2022, $14.1 million letters of credit and commercial commitments will be due in the next twelve months and the remainder of $15.7 million will be due subsequent to 2023.
We expect to comply with the underlying performance requirements and we expect obligations under these letters of credit and surety bonds will not be called. At December 31, 2023, $16.9 million letters of credit and commercial commitments will expire in the next twelve months and the remainder of $98.6 million will expire subsequent to 2024.
For additional information, see “Note 9— Debt“ to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. Gain on Bargain Purchase. Noble recognized a $62.3 million gain on the bargain purchase of Pacific Drilling during the Prior Year Successor Period.
For additional information, see “Note 12 — Income Taxes” to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. We recognized other income of $14.4 million for the year ended December 31, 2022. Gain on bargain purchase.
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.
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 2022 and 2023, we incurred and, in 2024, we anticipate to incur, additional expenses and capital costs related to the damage and repair of a jackup rig.
Average Rig Utilization (1) Operating Days (2) Average Dayrates (2) Successor Predecessor Successor Predecessor Successor Predecessor Year Ended December 31, 2022 Period From February 6, 2021 through December 31, 2021 Period From January 1, 2021 through February 5, 2021 Year Ended December 31, 2022 Period From February 6, 2021 through December 31, 2021 Period From January 1, 2021 through February 5, 2021 Year Ended December 31, 2022 Period From February 6, 2021 through December 31, 2021 Period From January 1, 2021 through February 5, 2021 Floaters (3) 77 % 71 % 86 % 3,654 2,561 216 $ 273,500 $ 208,443 $ 231,745 Jackups (3) 77 % 68 % 58 % 2,751 2,545 252 119,251 88,742 95,212 Total 77 % 70 % 68 % 6,405 5,106 468 $ 207,240 $ 148,780 $ 158,228 (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.
Average Rig Utilization (1) Operating Days (2) Average Dayrates (2) Year Ended December 31, Year Ended December 31, Year Ended December 31, 2023 2022 2023 2022 2023 2022 Floaters (3) 73 % 77 % 5,067 3,654 $382,041 $273,500 Jackups (3) 64 % 77 % 3,272 2,751 128,161 119,251 Total 69 % 77 % 8,339 6,405 $282,392 $207,240 (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.
We may seek to fund any such redemptions, repurchases or acquisitions of the Second Lien notes through the issuances of long-term debt securities or other similar instruments, subject to market conditions or other factors. 55 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 our credit facilities and we believe this will provide us with sufficient ability to fund our cash flow needs over the next 12 months.
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.
Sources and Uses of Cash Our principal sources of capital in 2022 were cash generated from operating activities. Cash on hand during 2022 was primarily used for the following: • normal recurring operating expenses; • repurchases or repayments of debt and interest; • fees and expenses related to merger and integration costs of the Business Combination; and • capital expenditures.
Cash on hand during the current period was primarily used for the following: • normal recurring operating expenses; • planned and discretionary capital expenditures; • repurchase, redemptions, or repayments of debt and interest; • fees and expenses related to merger and integration costs; • share repurchases and dividend payments; and • certain contractual cash obligations and commitments.
Depreciation and amortization totaled $146.9 million and $89.5 million during the year ended December 31, 2022, and the Prior Year Successor Period respectively. Depreciation increased by $57.4 million in 2022 primarily due to $47.9 million related to 18 rigs and related equipment acquired in the Business Combination.
Depreciation and amortization totaled $301.3 million and $146.9 million during the years ended December 31, 2023 and 2022, respectively. The increase of $154.5 million was primarily due to $132.1 million related to 18 rigs and related equipment acquired in the Business Combination with Maersk Drilling in October 2022.
Average dayrates have not been adjusted for the non-cash amortization related to favorable and unfavorable customer contract intangibles. (3) Calculations in the table include the rigs acquired in connection with the Business Combination Agreement after the Closing Date of October 3, 2022.
Average dayrates have not been adjusted for the non-cash amortization related to favorable and unfavorable customer contract intangibles.
The amounts ultimately paid upon resolution of audits could be materially different from the amounts previously included in our income tax expense and, therefore, could have a material impact on our tax provision, net income and cash flows. 60 Our gross deferred tax asset balance at year-end reflects the application of our income tax accounting policies and is based on management’s estimates, judgments and assumptions regarding realizability.
Our gross deferred tax asset balance at year end reflects the application of our income tax accounting policies and is based on management’s estimates, judgments, and assumptions regarding realizability.
These increases were offset by the divestiture of a semi-submersible unit in early 2022 and two units in the Prior Year Successor Period. Jackups. During the year ended December 31, 2022, contract drilling services costs related to jackups was $296.9 million. Contract drilling services costs related to jackups totaled $270.7 million in the Prior Year Successor Period.
These increases were offset by $3.9 million due to the divestiture of a semisubmersible unit late in the first quarter of 2022. Jackups. During the year ended December 31, 2023, total contract drilling services cost related to jackups was $340.0 million, as compared to $296.9 million in year ended December 31, 2022.
Such tax benefits were offset by tax expenses of $2.3 million related to the sale of the Remedy Rigs, $10.8 million related to contract fair value amortization, and various recurring items comprised of Guyana excess withholding tax on gross revenue of $34.7 million and annual current and deferred tax expense accrual of $24.9 million primarily in Luxembourg, Switzerland, U.S, Norway, and Ghana.
Such tax benefits were offset by tax expenses of $2.3 million related to the sale of the Remedy Rigs, $10.8 million related to contract fair value amortization, and various recurring items comprised of Guyana excess withholding tax on gross revenue of $34.7 million and annual current and deferred tax expense accrual of $24.9 million primarily in Luxembourg, Switzerland, US, Norway, and Ghana. 2022 Compared to 2021 Information related to a comparison of our results of operations for the year ended December 31, 2022, compared to the period from February 6 through December 31, 2021, (“Prior Year Successor Period”) and the period from January 1 through February 5, 2021, (“Prior Year Predecessor Period”) is included in Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 9, 2023.
We strive to be a leader in industry innovation and first-mover in sustainability. Our fleet consists predominately of technologically advanced units, equipped with sophisticated systems and components prepared to execute our customers’ increasingly complicated offshore drilling programs safely and with greater efficiency.
Our fleet consists predominately of technologically advanced units, equipped with sophisticated systems and components prepared to execute our customers’ complicated offshore drilling programs safely and with greater efficiency. We are primarily focused on the ultra-deepwater market and the harsh and ultra-harsh environment jackup markets, which typically are more technically challenging markets in which to operate.
At December 31, 2022, we had a total contract drilling services backlog of approximately $3.9 billion, which includes a commitment of 57 percent of available days for 2023.
The Compulsory Purchase was completed in the fourth quarter of 2022, at a cost of $69.9 million, paid in DKK and 4.1 million shares issued. At December 31, 2023, we had a total contract drilling services backlog of approximately $4.8 billion, which includes a commitment of 65% of available days for 2024.
For additional information about our Revolving Credit Facility, see “Note 9— Debt” to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. Second Lien Notes Indenture As of December 31, 2022, we had outstanding $173.7 million aggregate principal amount of our Second Lien Notes.
For additional information, see “Note 8 — Debt“ to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. 45 Gain (loss) on extinguishment of debt, net.
At December 31, 2021, loss reserves for personal injury and protection claims totaled $14.8 million and is included in “Other current liabilities” in the accompanying Consolidated Balance Sheets. Pension Plans Accounting for employee benefit plans involves numerous assumptions and estimates.
At December 31, 2022, loss reserves for personal injury and protection claims totaled $35.3 million of which $15.5 million was included in “Other current liabilities” and $19.8 million in “Other long-term liabilities” in the accompanying Consolidated Balance Sheets. Business Combinations We follow the acquisition method of accounting for business combinations.
On December 22, 2022, the Utilisation Date (as defined in the New DNB Credit Facility) occurred under the New DNB Credit Facility, and Maersk Drilling borrowed the full $350.0 million available thereunder. See “Note 9— Debt” to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
See “Note 8 — Debt” to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
As of December 31, 2022, the Company had $175.9 million of long-term tax reserves for unrecognized tax benefits, including interest and penalties, which are included in “Other liabilities”.
As of December 31, 2023 and 2022, the Company had $202.3 million and $175.9 million of long-term tax reserves for unrecognized tax benefits, including interest and penalties, which are included in “Other liabilities.” The amounts ultimately paid upon resolution of audits could be materially different from the amounts previously included in our income tax expense and, therefore, could have a material impact on our tax provision, net income and cash flows.
Operating Costs and Expenses Floaters. During the year ended December 31, 2022, total contract drilling services costs related to floaters was $600.2 million. Contract drilling services costs related to floaters totaled $368.7 million in the Prior Year Successor Period.
Additionally, jackups revenue from net non-cash amortization related to off-market customer contract assets and liabilities increased $25.5 million in the current period. Operating Costs and Expenses Floaters. During the year ended December 31, 2023, total contract drilling services cost related to floaters was $1.1 billion, as compared to $600.2 million in year ended December 31, 2022.
Impairment assessment inherently involves management judgments as to assumptions about expected future cash flows and the impact of market conditions on those assumptions. Due to the many variables inherent in this estimation, differences in assumptions may have a material effect on the results of our impairment analysis.
During the years ended December 31, 2023 and 2022, no impairment charges were recognized. 49 Impairment assessment inherently involves management judgments as to assumptions about expected future cash flows and the impact of market conditions on those assumptions.
Our total capital expenditure estimate for 2023, net of client reimbursables, is expected to range between $325 million and $365 million, of which approximately $210 to $230 million is currently anticipated to be spent for sustaining capital.
Our total capital additions estimate for 2024, net of reimbursements, is expected to range between $400.0 million and $440.0 million, of which approximately $270.0 million to $300.0 million is currently anticipated to be spent for sustaining capital. We expect to fund these capital additions with cash generated by our operations and cash on hand.
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.” As of December 31, 2022, ExxonMobil and Aker BP represented approximately 41.1 percent and 21.5 percent of our backlog, respe ctively. 50 Results of Operations Results for the year ended December 31, 2022 compared to the period from February 6 through December 31, 2021 (“Prior Year Successor Period”) and the period from January 1 through February 5, 2021 (“Prior Year Predecessor Period”) Net income for the year ended December 31, 2022 was $168.9 million, or $1.73 per diluted share, on operating revenues of $1.4 billion.
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.” As of December 31, 2023, ExxonMobil, Aker BP, and Petrobras represented approximately 42.5%, 15.3%, and 12.9% of our backlog, respectively.
Global energy demand is predicted to increase over the coming decades, and we expect that offshore oil and gas will continue to play an important and sustainable role in meeting this demand. We expect inflationary pressures and supply chain disruptions to persist, and potentially accelerate, which has led or may lead to increased costs of services.
Low-cost and low-emission barrels are expected to be the most attractive conventional source to meet 41 energy needs, both currently and in the future. Global energy demand is predicted to increase over the coming decades, and we expect that offshore oil and gas will continue to play an important and lasting role in meeting this demand.
The primary drivers of the increase are: (i) eight additional floaters acquired in the Business Combination with Maersk Drilling in the fourth quarter of 2022; (ii) five additional floaters acquired in April 2021 from Pacific Drilling; (iii) additional available days in the current year compared to the Prior Year Successor Period; and iv) increased crew and material costs across the fleet due to inflation.
The primary drivers of the increase were $335.0 million related to the eight additional floaters acquired in the Business Combination with Maersk Drilling in October 2022 and $180.6 million in increased crew, repairs and maintenance, and material costs across the remainder of the fleet.
We anticipate additional capital costs to repair the Noble Regina Allen, however, we are in the process of completing an insurance claim for reimbursement to cover the majority of the costs. From time to time we consider possible projects that would require expenditures that are not included in our capital budget, and such unbudgeted expenditures could be significant.
From time to time we consider possible projects and may have certain events that would require expenditures that are not included in our capital budget, and such unbudgeted expenditures could be significant. In addition, while liquidity and preservation of capital remains our top priority, we will continue to evaluate acquisitions of drilling units from time to time.
Noble incurred $30.9 million of costs and received recoveries of $7.5 million from our insurance in connection to damages sustained from Hurricane Ida during the Prior Year Successor Period. For additional information, see ”Note 7— Property and Equipment” to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
See “Note 8 — Debt” to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

10 edited+1 added−11 removed8 unchanged
Biggest changeBecause they bear interest at a fixed rate, the fair value of our Second Lien Notes will fluctuate based on changes in market expectations for interest rates and perceptions of our credit risk. The fair value of our total debt was $692.1 million at December 31, 2022.
Biggest changeAt December 31, 2023, we had no borrowings outstanding under the 2023 Revolving Credit Facility and $7.4 million of performance letters of credit outstanding thereunder. Because they bear interest at a fixed rate, the fair value of our 2030 Notes will fluctuate based on changes in market expectations for interest rates and perceptions of our credit risk.
Therefore, we maintain an unfunded, nonqualified excess benefit plan designed to maintain benefits for specified employees at the formula level in the qualified salary US plan.
Therefore, we maintain an unfunded, nonqualified excess benefit plan designed to maintain 51 benefits for specified employees at the formula level in the qualified salary US plan.
In addition, a decline in the fair value of these plan assets, in the absence of additional cash contributions to the plans by Noble, could increase the amount of pension cost required to be recorded in future periods by Noble. 63
In addition, a decline in the fair value of these plan assets, in the absence of additional cash contributions to the plans by Noble, could increase the amount of pension cost required to be recorded in future periods by Noble. 52
Interest Rate Risk We are subject to market risk exposure related to changes in interest rates on borrowings under the Revolving Credit Facility and the New DNB Credit Facility, and may be subject to similar exposure on future borrowing arrangements.
Interest Rate Risk We are subject to market risk exposure related to changes in interest rates on borrowings under the 2023 Revolving Credit Facility and may be subject to similar exposure on future borrowing arrangements.
Based on current projections, a 10% increase in the average exchange rates of all foreign currencies would hypothetically increase our future estimated operating expenses by approximately $19.0 million.
Based on current projections, a 10% increase in the average exchange rates of all foreign currencies would hypothetically increase our future estimated operating expenses by approximately $3.9 million.
At December 31, 2022, the value of the investments in the pension funds was $214.4 million, and a hypothetical 10.0% percent decrease in the value of the investments in the fund would have reduced the value of the fund by approximately $21.4 million.
At December 31, 2023, the value of the investments in the pension funds was $216.0 million, and a hypothetical 10.0% decrease in the value of the investments in the fund would have reduced the value of the fund by approximately $21.6 million.
We have documented policies and procedures to monitor and control the use of derivative instruments. We do not engage in derivative transactions for speculative or trading purposes, nor are we a party to leveraged derivatives.
In order to help manage this potential risk, we periodically enter into derivative instruments to manage our net exposure to fluctuations in currency exchange rates. We have documented policies and procedures to monitor and control the use of derivative instruments. We do not engage in derivative transactions for speculative or trading purposes, nor are we a party to leveraged derivatives.
Interest on borrowings under the New DNB Credit Facility is based on Term SOFR plus an agreed upon percentage point spread. Borrowings under the Revolving Credit Facility, if any, bear interest at LIBOR plus an applicable margin, which is currently 4.75%, or a base rate stated in the agreement plus an applicable margin, which is currently 3.75%.
Borrowings under the 2023 Revolving Credit Facility, if any, bear interest at SOFR plus 0.10% plus an applicable margin, which is currently 2.75%, or a base rate stated in the agreement plus an applicable margin, which is currently 1.75%.
However, outside the United States, a portion of our expenses are incurred in local currencies. 62 Therefore, when the US Dollar weakens (strengthens) in relation to the currencies of the countries in which we operate, our expenses reported in US Dollars will increase (decrease).
Therefore, when the US dollar weakens (strengthens) in relation to the currencies of the countries in which we operate, our expenses reported in US dollars will increase (decrease). We are exposed to risks on future cash flows to the extent that foreign currency expenses exceed revenues denominated in the same foreign currency.
Foreign Currency Risk Although we are a UK company, we define foreign currency as any non-US dollar denominated currency. Our functional currency is the US Dollar.
The fair value of our total debt was $626.5 million at December 31, 2023. Foreign Currency Risk Although we are a UK company, we define foreign currency as any non-US dollar denominated currency. Our functional currency is the US dollar. However, outside the United States, a portion of our expenses are incurred in local currencies.
Removed
On March 5, 2021, the Financial Conduct Authority in the UK issued an announcement on the future cessation or loss of representativeness for LIBOR benchmark settings currently published by ICE Benchmark Administration.
Added
Several of our regional shorebases have a significant amount of their cash operating expenses payable in foreign currencies. In order to limit the potential risk of currency fluctuations, we periodically enter into forward contracts, which have historically settled monthly in the operations’ respective local currencies. All of these contracts had a maturity of less than 12 months.
Removed
The announcement confirmed that LIBOR will either cease to be provided by any administrator or will no longer be representative after December 31, 2021 for all non-USD LIBOR reference rates, and for certain short-term USD LIBOR references rates, and after June 30, 2023 for other reference rates.
Removed
While the Revolving Credit Facility contains hardwired “fallback” provisions providing for an alternative reference rate upon the occurrence of certain events related to the phase-out of LIBOR, the alternative reference rate plus any associated spread adjustment may result in interest rates higher than LIBOR.
Removed
As a result, our interest expense under our Revolving Credit Facility could increase as a result of the phase-out of LIBOR. In connection with the Business Combination with Maersk Drilling that closed on October 3, 2022, the Company guaranteed the DSF Credit Facility and interest rate swap contracts.
Removed
At December 31, 2022, we had $149.7 million outstanding under the DSF Credit Facility and none of the interest rate swaps were outstanding. On February 23, 2023, we repaid the remaining amount under the DSF Credit Facility in full using cash on hand.
Removed
At December 31, 2022, we had no borrowings outstanding under the Revolving Credit Facility and $21.1 million of performance letters of credit outstanding thereunder. At December 31, 2022, we had $349.4 million in carrying amount outstanding under the New DNB Credit Facility.
Removed
Based on current projections, a 10% increase in the floating portion of the interest rates on our New DNB Credit Facility would hypothetically increase our future estimated interest expense by approximately $1.8 million.
Removed
We are exposed to risks on future cash flows to the extent that foreign currency expenses exceed revenues denominated in the same foreign currency. To help manage this potential risk, we periodically enter into derivative instruments to manage our net exposure to fluctuations in currency exchange rates.
Removed
Realized gains and losses as well as changes in the fair values of derivative financial instruments are recognized in the income statement in “Interest income and other, net.” Several of our regional shorebases have a significant amount of their cash operating expenses payable in foreign currencies.
Removed
Foreign currency forward contracts entered into to manage this risk typically have maturities of less than 12 months. During the year ended December 31, 2022 we acquired forward contracts in the Business Combination with Maersk Drilling and entered into new forward contracts as others expired, of which $1.3 million was outstanding as of December 31, 2022.
Removed
During 2021, we did not enter into any forward foreign currency contracts. As of the end of the Prior Year Successor Period, and the end of the Prior Year Predecessor Period, we had no outstanding derivative contracts.

Other NE 10-K year-over-year comparisons