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Noble Corporation (NE)
Q1 2011 Earnings Call
April 21, 2011 9:00 am ET
David Williams – Chairman, President, Chief Executive Officer
Tom Mitchell – Chief Financial Officer
Roger Hunt – Senior Vice President, Marketing and Contracts
Lee Ahlstrom – Vice President of Investor Relations and Planning
Omar Nokta – Dahlman Rose
Ian Macpherson – Simmons & Co.
Collin Gerry – Raymond James
Dave Wilson – Howard Weil
Arun Jayaram – Credit Suisse
Judd Bailey – Jefferies & Co.
Joseph Triepke – Guggenheim
Max Barrett – Tudor, Pickering, Holt
Matt Beeby - Global Hunter Securities
David Smith – Johnson Rice
Jay Frank – Deutsche Bank
Previous Statements by NE
» Noble Corporation CEO Discusses Q4 2010 Results - Earnings Call Transcript
» Noble Corp. CEO Discusses Q3 2010 Results - Earnings Call Transcript
» Noble Corp. Q2 2010 Earnings Call Transcript
Thank you. I would now like to introduce Mr. Lee Ahlstrom, Vice President of Investor Relations and Planning. Mr. Ahlstrom, you may begin your conference.
Thank you, Regina, and welcome to Noble Corp.’s first quarter 2011 earnings call. Before we begin, I’d like to 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, financial performance, operating results, tax rates, spending guidance, backlog, day rates, contracts, tenders, extensions or announcements, letters of intent, the outlook for the U.S. Gulf of Mexico and other regions, new build delivery costs and dates, plans and objectives of management for future operations, and the outcome of any litigation, dispute or investigation are 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 these forward-looking statements.
We have included summary balance sheets and income and cash flow statements with our earnings news release. Also note that we may use non-GAAP financial measures in the call today. 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.
Now I’ll turn the call over to David Williams, our Chairman, President and Chief Executive Officer. David?
Thanks, Lee. Good morning and thanks for joining us today. With me today in Geneva are Tom Mitchell, our CFO, and Roger Hunt, our Senior Vice President of Marketing and Contracts.
Today’s call marks two important milestones: first, on Friday, April 1 Noble turned 90 years old. From very modest origins as a land drilling company, Noble has been on a continuous path of fleet enhancement and has now evolved into one of the largest and most formidable offshore drilling contractors in the industry. This is a company with an incredible legacy that has always been focused on creating shareholder value, running the safest and most efficient operations possible, and protecting the health and safety of both the employees and the environment. As we continue to enrich our fleet, I want to thank everyone who has contributed to making Noble what it is today. It’s likely none of us will be around in another 90 years but I believe that we are laying the foundations today that future shareholders and company leaders will look back on with pride.
The second milestone is that we are now one year removed from Macondo. While we are continuing to suffer from the continuing effects of the moratorium and the permitorium, we are finally beginning to see some real signs of improvement. Not only are some rigs starting to return to work in the U.S. but we’ve also seen improvement in our utilization elsewhere in the world, and the environment continues to look promising.
Furthermore, our fleet enhancement program is well underway and we are creating real earnings power for the future. This year alone, we plan to deliver three ships, but our growth doesn’t stop just there. Last December, we launched the latest phase of our fleet renewal efforts with the announcement of two high-spec heavy duty harsh environment JU3000N jackups. We quickly followed that in January with the announcement of two high specification ultradeep water drill ships. As you know, our agreements with the shipyards include a series of options for additional rigs, four for the jackups and two for the ships. During the first quarter, we exercised half of the options – two jackups and one ship – at attractive pricing that we believe will deliver strong returns.
All in all, Noble has committed to more than $2.7 billion of new build spending in the last five months, all with well-established yards using proven designs with very attractive financing and payment terms, and the assets we’re adding are at the top end of the technology curve. For example, our jackups have 2.5 million pound hook loads, nearly 15 million pounds of variable deck load, and quarters that can hold up to 150 people. As you look at both the existing assets and those under construction, there are only a handful of rigs of this capability anywhere in the world. The ships are also going to be some of the most capable units in existence. Dual-derrick rigs with 2.5 million pound load paths, these ships will be capable of carrying two complete BOP stacks and of handling multiple Christmas trees, making them ideal tools for exploration and development.