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Q4 2012 Earnings Call
January 24, 2013 9:00 am ET
Jeffrey L. Chastain - Vice President of Investor Relations
David W. Williams - Chairman, Chief Executive Officer and President
James A. MacLennan - Chief Financial Officer and Senior Vice President
Roger B. Hunt - Senior Vice President of Marketing and Contracts
David Wilson - Howard Weil Incorporated, Research Division
Todd P. Scholl - Clarkson Capital Markets, Research Division
Robin E. Shoemaker - Citigroup Inc, Research Division
Matthew D. Conlan - Wells Fargo Securities, LLC, Research Division
Judson E. Bailey - ISI Group Inc., Research Division
Justin Sander - RBC Capital Markets, LLC, Research Division
James D. Crandell - Dahlman Rose & Company, LLC, Research Division
Ian Macpherson - Simmons & Company International, Research Division
Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division
Scott Gruber - Sanford C. Bernstein & Co., LLC., Research Division
Previous Statements by NE
» Noble Management Discusses Q3 2012 Results - Earnings Call Transcript
» Noble Management Discusses Q2 2012 Results - Earnings Call Transcript
» Noble Corporation's CEO Presents at UBS Global Energy & Gas Conference (Transcript)
Jeffrey L. Chastain
Okay. Thank you, Regina, and welcome, everyone, to Noble Corporation's fourth quarter 2012 earnings call. We appreciate your interest in the company. A copy of Noble's earnings report issued last evening, along with the supporting statements and schedules, can be found on the Noble website, that's www.noblecorp.com.
Before I turn the call over to David Williams, I'd like to once again remind everyone that any statements we make about our plans, expectations, estimates, predictions or similar expressions for the future, including those concerning the drilling business, market outlook and industry fundamentals, financial performance, operating results, fleet condition, performance and downtime, also tax rates, spending guidance, backlog, dayrates, contract opportunities, tenders, announcements, commencements and extensions, letters of intent, and finally, growth opportunities, newbuild delivery costs and dates and plans and objectives of management for future operations are all forward-looking statements and are subject to risks and uncertainties. Our filings with the U.S. Securities and Exchange Commission, which are posted on our website, discuss the risks and uncertainties in our business and industry and the various factors that could keep outcomes of any forward-looking statements from being realized. Our actual results could differ materially from those forward-looking statements.
Also note that we may use non-GAAP financial measures in today's call. If we do, you will find the required supplemental disclosure for these measures, including the most directly comparable GAAP measure and an associated reconciliation, on our website.
Okay. With that, I'll now turn the call over to Dave Williams, Chairman, President and Chief Executive of Noble.
David W. Williams
All right. Thanks, Jeff. Good morning, everyone, and welcome. Joining me today in Geneva are James MacLennan, Senior Vice President and Chief Financial Officer; and Roger Hunt, our Senior Vice President of Marketing and Contracts. Jeff is handling his duties from Houston today.
Today, we will plan to cover a lot of details especially as it pertains to the financial discussion. I'll open with a word on a few noteworthy accomplishments in 2012 that are helping to reposition Noble for new opportunities for the years to come. I will also provide some color on our strategic transformation and catch you up on some late 2012 and early 2013 developments in the fleet. I'll also want to address operational downtime as an area of disappointment where we intend to show improvement in 2013. Following James' financial discussion, which includes 2013 guidance, and Roger's comments on the impressive opportunities we see in 2013 for the offshore business, I'll close with some thoughts on primary objectives and the focus for Noble in our new year. We will then take your questions after that.
We registered a number of meaningful achievements in 2012 as we continue to process and transition the company into a premium asset base. First and foremost, we began operations on 3 new ultra-deepwater drillships, the Bully I, Bully II and Globetrotter I, and placed drillship, Noble Leo Segerius, back into service following the completion of a life-enhancement project. Each of these rigs are on a better position to provide a meaningful contribution to our financial results in 2013, following time in 2012, to work through some operational challenges.
Also, the unique and innovative multipurpose tower found on the Bully I, Bully II and the Globetrotter I was employed for the first time on a mobile offshore drilling rig in 2012 displaying advanced features and a safe, efficient configuration. The towers and their components performed very well in these rigs and we are pleased with their respective operational and -- operations and functionality to date. In fact, on Globetrotter I, we set a string of 14-inch casing weighing right at 2 million pounds without incident. In addition, we made substantial progress on our remaining 11 newbuild projects over the course of 2012 and in 2013. As of January, all 6 of the JU3000N jackups are now under construction at the Jurong yard at Singapore, and by mid-February, all 4 of our Hyundai ultra-deepwater drillships will be under construction when the planned steel cutting ceremony takes place on ship number 4.
We are positioned to take delivery of 3 JU3000N jackups and 3 ultra-deepwater drillships in 2013, driving earnings and cash flow growth prospects in 2014 and beyond. As you saw and disclosed in our press release issued last night, we've secured contracts from our newbuild jackups, Noble Houston Colbert and Noble Sam Turner, the third and fourth orders placed with Jurong. Roger will cover the terms of these and other contracts in more detail shortly. Also, many of you are aware that the Noble Regina Allen experienced a setback in early December 2012 when it tilted during a jacking system test being conducted by the shipyard. Safety for those working on the rig was our primary concern and thankfully, of more than 700 people aboard the rig, there were no serious injuries reported that resulted from that incident. By January 16, the yard had leveled the hull in a safe and controlled manner and the rig is now securely berthed at the Jurong yard. Based on an investigation conducted by the shipyard and the vessel designer, I can report that the legs, jacking system and hull suffered no structural damage. Data collected to date by the various investigation teams has ruled out structural or component defects and teams are now concentrated on the jacking software control logic, electrical components relating to the jacking system and the brake holding capacity.