noble corporation noble: staying the course lee m. ahlstrom vice
TRANSCRIPT
Noble Corporation
Noble: Staying the Course
Johnson Rice Energy ConferenceOctober 5-6, 2009New Orleans
Lee M. AhlstromVice President, Investor Relations and Planning
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This presentation contains “forward-looking statements” about our business, financial performance and prospects. Statements about our plans, intentions, expectations, beliefs, estimates, predictions or similar expressions for the future are forward-looking statements. We cannot assure you that the outcomes of these forward-looking statements will be realized. Various factors could cause actual results to differ materially. We discuss these factors, including risks and uncertainties, from time to time in our SEC filings. The Company disclaims any duty to update the information presented here. The material presented is copyrighted by the Company and cannot be printed, recorded or rebroadcast without our express written consent. We have attached a reconciliation to GAAP of any non-GAAP measures appearing in this presentation. Additional information about Noble Corporation is available on our Web site at www.noblecorp.com.
Forward Looking Statement
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Today’s Discussion
Who is Noble?
Thoughts on the Cycle
Managing Through Uncertainty
Windows of Opportunity
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Noble EPS and Cash Flow
$5.85
3.08
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
'04 '05 '06' '07 '08 '09YTD
Ca
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$0.00
$1.00
$2.00
$3.00
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$5.00
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Cash Flow
EPS
Who is Noble?Aligning Rigs Around Customers and Geology
43 – Jackups13 – Semisubmersibles
4 – Drillships2 – Submersibles
2009 1H Drilling Revenues by RegionTotal 1.7 Billion
U.S. GoM20% Middle East
17%
Mexico24%
North Sea*22%
West Africa*8%
Brazil9%
Note: Beginning in 2Q09, the Noble Homer Ferrington is being managed out of the North Sea divisionSource: Noble Corporation
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0
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1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Economic RecoveryWhat We Believe: Demand Will Increase Over Time
Difficult to believe that the US populous will adjust its lifestyle downward to match the rest of the world
Much easier to believe that the rest of the world will continue to move theirs upward
Energy is not ‘the end,’ it is ‘the means to the end,’ i.e., a better lifestyle
Difficult to see how renewables will be able to contribute meaningfully in the near-term
China and U.S. per Capita Oil ConsumptionBarrels per person per year
Source: Energy Directions Inc., BP Statistical Review, Simmons Int’l;CIA Factobook, Noble
India
Japan
United States
Worldwide AverageUnited States 100 Years Ago
China
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Managing Through UncertaintyDeepwater Remains Strong
Floater Utilization Trends
Source: ODS Petrodata 9.30.2009
40
50
60
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100
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-90
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-91
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Floaters > 4,000'
Floaters < 4,000'
PercentageDeepwater and ultra-deepwater floater utilization continues to be strong
Midwater floater utilization and dayrates have weakened and there are a number of idle rigs in this segment
Strategy matters!
Fleet compositionCustomer base
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Managing Through UncertaintyJackups Are Challenged
Jackup Utilization Trends
Source: ODS Petrodata 9.30.2009
0
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20
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40
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60
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80
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100
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-90
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International ILCs
US GoM jackups
Percentage
International jackup utilization holding up significantly better than US Gulf of Mexico
Likewise, international dayrates no where near cash operating costs
Strategy matters!
Commodity exposureCustomer base
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Strategy MattersStrong Deepwater Fleet and High Quality Jackups
179 8
18
28
7 512
4
80
10
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30
40
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RIG NE PDE SDRL DO ESV RDC
>= 7,500'>= 4,000' < 7,500'
Deepwater and Ultra-Deepwater Rig Count
Jackup Rig Count
3 314 17 18
3519
10
6 75
12
46
12 4
4
8
8
05
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0
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RIG NE ESV RDC DO SDRL PDE
> 400'>= 350' < 400'>= 300' < 350'< 300'Non-ILC
Source: ODS Petrodata 8.18.2009
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2008 Key Customers by Revenue
PEMEX
ExxonMobil
Shell
Anadarko (including farmouts)
Petrobras
Strategy MattersThe Importance of the Customer Base
National Oil Companies & Super Majors
76%
Small Independents
6%
Large Independents
18%
Approximate Backlog Composition by Customer Type
Source: Noble Corp.; As of 8.14.2009
Includes revenues fromNOC partners
Noble strategy has been to target National Oil Companies and Super Majors
Have different strategic imperatives versus independentsTend to maintain activity levels through cycle troughs
Commodity price stabilization expected to lead to increased activity levels in 2009 vs. 2010
53% of companies surveyed in Barclay’s Original E&P Spending Survey-Mid-Year Update expected their 2010 capital spending to increaseDnBNor’s recent spending survey suggests 2010 spending levels will be similar to 2008 with National Oil Companies leading the way
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What to Do While Waiting for the Recovery?
Take advantage of downtime to complete needed shipyard inspections, repairs, and upgrades
Focus on driving costs and maintaining margins
Continue to build backlog
Deliver our shipyard projects
Look for opportunities to grow the fleet
Manage the balance sheet wisely
Learn French
It’s a Cyclical Business, and We Know How to Manage It
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20082009 1H
Managing Through Uncertainty Top Operating Margins
NE ESV DO RIG RDC PDE
2008 Full Year and 2009 First Half Contract Drilling Margins
75%
65
55
45
Note: The margins for Rowan Companies represent the combined offshore and onshore businessSource: Noble Corporation; Peer press releases
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$2,660
$420
$840
$95
$1,075$1,125
$1,800
$927
$3,300
$2,700
$1,900
$1,200
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2005 2006 2007 2008 2009 H1 &Remaining(Does notinclude Q3
YTD)
2010 2011 2012 2013 2014 2015 2016
JackupBacklog
DeepwaterBacklog
Historical Contract Drilling Services
Managing Through Uncertainty Backlog of $8.9 billion
Historical Revenues and Backlog Potential by Year$ Million
Notes: As of 9.30.2009Includes 75% performance bonus potential on rigs in Brazil including the Noble Dave Beard. Includes 5 year term on Noble Paul Wolff and paid shipyard time for the three drillship projects in Brazil. Assumes constant rates on the five jackups in Mexico where rates are indexed to international markets. Backlog includes Letters of Intent and newbuild rigs with contracts. Newbuild client contracts contain termination provisions for late delivery.
$
EPS $1.08 $2.67 $4.48 $5.85 H1: $3.08
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RDC NE RIG ESV PDE DONE RIG ESV RDC PDE DO
Managing Through Uncertainty Strong Jackup Position vs. Competitors
Percentage of Jackup Rig Days Contracted
2009 Remaining 2010
100%
75
50
25
100%
75
50
25
Source: ODS Petrodata; Data as of 9.30.09
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Growing Shareholder ValueNewbuild Construction Update
Noble Scott MarksLast of three 400’ JU-2000E harsh environment jackups was unloaded in Rotterdam August 18, 2009Commenced two-year contract with Venture Production plc in the North Sea
Noble Dave Beard10,000’ DP2 Semi-submersibleCompleting construction and commissioning in BrazilExpected to commence five-year contract with Petrobras in Brazil on January 1, 2010Delivery schedule successfully renegotiated with Petrobras to mitigate late delivery penalty
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Growing Shareholder ValueNewbuild Construction Update
Noble Danny Adkins12,000’ DP3 Semi-submersibleExpect to depart shipyard in Singapore at the end of SeptemberExpected to commence four-year contract with Shell in the US GoM in February 2010Delivery schedule successfully renegotiated for mutual benefit
Noble Jim Day12,000’ DP3 Semi-submersibleExpect to depart shipyard in Singapore in April 2010Expected to commence four-year contract with Marathon Oil in August 2010
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Globetrotter-Class NewbuildNoble’s Next-Generation Drillship
EconomicsConstruction Cost: $585 MMDelivery: Second half 2011Estimated OPEX: $120k per dayResults at a dayrate of $550k
Estimated IRR: >16 %Estimated 2012 EPS: ~$0.40Estimated 2012 CFPS: ~$0.45
SpecificationsWater depth: 10,000’Length: 620’Breadth: 105’Displacement: 59,500 tonsDrilling depth: 40,000’VDL: 19,800 tonsQuarters: 180DP-3
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Operational ExcellenceDelivering for Our Customers
AMERICA’S Safest Companies
Offshore EnergyAchievement Award –
HSE Category
National Offshore Safety Award for
Excellence (Three consecutive
years)Named to
BusinessWeek’s Top 50 Companies for 2009
Named to Fortune’s Top 100 Fastest-Growing Companies for 2009
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Operational Excellence Keeping Our People Safe
Historical Safety Performance Noble’s Philosophy on Safety
Recordable Incident RatesNoble vs. IADC
Source: Noble Corporation and the IADC. *2009 YTD IADC based on preliminary data
Noble IADC
Why It Matters.0
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*Good safety results in outstanding employee moraleGood safety performance means fewer employee injuries and lowers direct and indirect operating costsContractor safety is a key metric used by operators in bid evaluations
Safety is paradigm of the organization and must not be compromisedA competitive environment internally drives better HSE performance Higher HSE standards improve the entire industry’s resultsHSE performance must be measured and benchmarkedA solid HSE management system is critical to success
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Windows of Opportunity The Strength of Noble’s Optionality
Start with a Clean Balance Sheet...
…Enhanced by Strong Free Cash Flow
Add a Strategic Goal of Growing the Deepwater Element of the Fleet…
…Combined with a Disciplined Investment Philosophy…
OPTIONALITY!
Value-AddingAcquisitions
Returns toShareholders
Build DryPowder
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9.8
7.0
11.6
7.0
14.5
9.8
0
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NE RIG DO ESV RDC PDE
Windows of OpportunityFor Investors
2010 First Call Price/Earnings Ratio
Source: First Call; Noble; calculated based on EPS estimates and share closing prices on 8.28.2009.
Despite…Strong backlogGrowing deepwater fleetPreferred customer baseTop operating marginsClean balance sheetDisciplined investment strategyIndustry-leading safety performance
…Noble trades at a discount to the peer group
Now is the time to invest…Right Focus…Right People…Right Assets…Right Now!
Noble Corporation
Noble Corporation 4-6 Avenue IndustrielleCH-1227 CarougeGenève, Switzerland
www.noblecorp.com
Investor contact:
Lee M. AhlstromVice President IR & Planning281-276-6440