ne-20250331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________________________________________________________________________

FORM 10-Q

_____________________________________________________________________________________________________


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

_____________________________________________________________________________________________________

Commission file number: 001-41520

Noble Corporation plc

(Exact name of registrant as specified in its charter)

_____________________________________________________________________________________________________


England and Wales						98-1644664
(State or other jurisdiction of incorporation or organization)						(I.R.S. employer identification number)

2101 City West Boulevard, Suite 600, Houston, Texas, 77042

(Address of principal executive offices) (Zip Code)

Registrant’s Telephone Number, Including Area Code: (281) 276-6100

_____________________________________________________________________________________________________

_______________________________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
A Ordinary Shares, par value $0.00001 per share	NE	New York Stock Exchange
Tranche 1 Warrants of Noble Corporation plc	NE WS	New York Stock Exchange
Tranche 2 Warrants of Noble Corporation plc	NE WSA	New York Stock Exchange

_____________________________________________________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☑ No ☐

Number of shares outstanding at April 25, 2025: Noble Corporation plc - 158,783,479

TABLE OF CONTENTS

Page

PART I

FINANCIAL INFORMATION

Item 1.

Financial Statements (Unaudited)

Condensed Consolidated Balance Sheets as of March 3 1 , 20 25 , and December 31, 2024

Condensed Consolidated Statements of Operations for the three months ended March 31 , 202 5 and 2024

Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31 , 202 5 and 2024

Condensed Consolidated Statements of Cash Flows for the thr ee months ended March 31 , 202 5 and 2024

Condensed Consolidated Statements of Equity for the three months ended March 31 , 202 5 and 2024

Notes to Unaudited Condensed Consolidated Financial Statements

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Item 4.

Controls and Procedures

PART II

OTHER INFORMATION

Item 1.

Legal Proceedings

Item 1A.

Risk Factors

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 5.

Item 6.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

NOBLE CORPORATION plc AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)


	March 31, 2025		December 31, 2024
ASSETS
Current assets
Cash and cash equivalents	$	303,755	$	247,303
Accounts receivable, net	756,303		796,961
Taxes receivable	59,048		56,389
Prepaid expenses and other current assets	324,099		288,211
Total current assets	1,443,205		1,388,864
Intangible assets	—		214
Property and equipment, at cost	6,955,070		6,904,731
Accumulated depreciation	(1,006,622)		(868,914)
Property and equipment, net	5,948,448		6,035,817

Other assets	518,308		539,873
Total assets	$	7,909,961	$	7,964,768
LIABILITIES AND EQUITY
Current liabilities

Accounts payable	$	306,972	$	397,622
Accrued payroll and related costs	93,686		116,877
Taxes payable	83,148		78,900
Interest payable	75,751		36,075

Other current liabilities	360,405		310,888
Total current liabilities	919,962		940,362
Long-term debt	1,978,771		1,980,186
Deferred income taxes	5,217		9,202
Noncurrent contract liabilities	916		8,580
Other liabilities	347,186		375,052
Total liabilities	3,252,052		3,313,382
Commitments and contingencies (Note 10)
Shareholders’ equity
Common stock, $0.00001 par value; 158,774,661 and 158,946,711 ordinary shares outstanding as of March 31, 2025, and December 31, 2024, respectively	1		1
Additional paid-in capital	4,234,188		4,236,172
Retained earnings	419,550		411,244
Accumulated other comprehensive income (loss)	4,170		3,969
Total shareholders’ equity	4,657,909		4,651,386
Total liabilities and equity	$	7,909,961	$	7,964,768

See accompanying notes to the unaudited condensed consolidated financial statements.

NOBLE CORPORATION plc AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)


	Three Months Ended March 31,
	2025		2024
Operating revenues
Contract drilling services	$	832,428	$	612,425
Reimbursables and other	42,059		24,659
	874,487		637,084
Operating costs and expenses
Contract drilling services	462,099		389,867
Reimbursables	31,784		17,680
Depreciation and amortization	143,137		86,698
General and administrative	35,208		25,961
Merger and integration costs	14,920		9,331


	687,148		529,537
Operating income (loss)	187,339		107,547
Other income (expense)
Interest expense, net of amounts capitalized	(40,467)		(17,544)


Interest income and other, net	1,837		(4,735)
Income (loss) before income taxes	148,709		85,268
Income tax benefit (provision)	(40,406)		10,213
Net income (loss)	$	108,303	$	95,481

Per share data
Basic:
Net income (loss)	$	0.68	$	0.67
Diluted:
Net income (loss)	$	0.67	$	0.66

See accompanying notes to the unaudited condensed consolidated financial statements.

NOBLE CORPORATION plc AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)


	Three Months Ended March 31,
	2025		2024
Net income (loss)	$	108,303	$	95,481
Other comprehensive income (loss)


Net changes in pension and other postretirement plan assets and benefit obligations recognized in other comprehensive income (loss), net of tax provision (benefit) of zero and zero for the three months ended March 31, 2025 and 2024, respectively.	201		(29)

Other comprehensive income (loss), net	201		(29)
Comprehensive income (loss)	$	108,504	$	95,452

See accompanying notes to the unaudited condensed consolidated financial statements.

NOBLE CORPORATION plc AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Three Months Ended March 31,
	2025		2024
Cash flows from operating activities
Net income (loss)	$	108,303	$	95,481
Adjustments to reconcile net income (loss) to net cash flow from operating activities:
Depreciation and amortization	143,137		86,698
Amortization of intangible assets and contract liabilities, net	(7,450)		(20,353)



Deferred income taxes	20,499		(5,275)
Amortization of share-based compensation	7,051		7,538
Other costs, net	(11,469)		1,705
Changes in components of working capital and other operating activities:
Change in taxes receivable	(3,998)		(32,710)
Net changes in other operating assets and liabilities	14,987		(4,395)
Net cash provided by (used in) operating activities	271,060		128,689
Cash flows from investing activities
Capital expenditures	(113,536)		(166,610)
Proceeds from insurance claims	15,391		—


Net cash provided by (used in) investing activities	(98,145)		(166,610)
Cash flows from financing activities






Warrants exercised	38		6
Share repurchases	(20,000)		—
Dividend payments	(81,406)		(59,418)
Taxes withheld on employee stock transactions	(9,073)		(53,431)
Finance lease payments	(6,019)		—

Net cash provided by (used in) financing activities	(116,460)		(112,843)
Net increase (decrease) in cash, cash equivalents, and restricted cash	56,455		(150,764)
Cash, cash equivalents, and restricted cash, beginning of period	252,279		367,745
Cash, cash equivalents, and restricted cash, end of period	$	308,734	$	216,981

See accompanying notes to the unaudited condensed consolidated financial statements.

NOBLE CORPORATION plc AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(In thousands)

(Unaudited)


	Shares			Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income (Loss)		Total Equity
	Balance	Par Value
Balance at December 31, 2024	158,947	$	1	$	4,236,172	$	411,244	$	3,969	$	4,651,386
Employee related equity activity
Amortization of share-based compensation	—	—		7,051		—		—		7,051
Issuance of share-based compensation shares	564	—		—		—		—		—
Shares withheld for taxes on equity transactions	—	—		(9,073)		—		—		(9,073)
Warrants exercised	1	—		38		—		—		38
Share repurchases	(737)	—		—		(20,000)		—		(20,000)
Dividends	—	—		—		(79,997)		—		(79,997)
Net income (loss)	—	—		—		108,303		—		108,303
Other comprehensive income (loss), net	—	—		—		—		201		201
Balance at March 31, 2025	158,775	$	1	$	4,234,188	$	419,550	$	4,170	$	4,657,909

See accompanying notes to the unaudited condensed consolidated financial statements.

NOBLE CORPORATION plc AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - CONTINUED

(In thousands)

(Unaudited)


	Shares			Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income (Loss)		Total Equity
	Balance	Par Value
Balance at December 31, 2023	140,774	$	1	$	3,377,048	$	541,159	$	3,032	$	3,921,240
Employee related equity activity
Amortization of share-based compensation	—	—		7,538		—		—		7,538
Issuance of share-based compensation shares	2,042	—		—		—		—		—
Shares withheld for taxes on equity transactions	—	—		(53,431)		—		—		(53,431)
Warrants exercised	—	—		6		—		—		6

Dividends	—	—		—		(57,782)		—		(57,782)
Net income (loss)	—	—		—		95,481		—		95,481
Other comprehensive income (loss), net	—	—		—		—		(29)		(29)
Balance at March 31, 2024	142,816	$	1	$	3,331,161	$	578,858	$	3,003	$	3,913,023

See accompanying notes to the unaudited condensed consolidated financial statements.

NOBLE CORPORATION plc AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)

Note 1 — Organization and Basis of Presentation

Noble Corporation plc, a public limited company incorporated under the laws of England and Wales (“Noble”, the “Company”, or “we”), 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. Noble and its predecessors have been engaged in the contract drilling of oil and gas wells since 1921. As of the filing date of this report, our fleet of 40 drilling rigs consisted of 27 floaters and 13 jackups.

We report our contract drilling operations as a single reportable segment, Contract Drilling Services, which reflects how we manage our business. 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 accompanying unaudited condensed consolidated financial statements of Noble have been prepared pursuant to the rules and regulations of the US Securities and Exchange Commission (“SEC”) as they pertain to Quarterly Reports on Form 10-Q. Accordingly, certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. The unaudited financial statements are prepared on a going concern basis and reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the financial position and results of operations for the interim periods on a basis consistent with the annual audited consolidated financial statements. All such adjustments are of a recurring nature. The December 31, 2024, Condensed Consolidated Balance Sheet presented herein is derived from the December 31, 2024, audited consolidated financial statements. These interim financial statements should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2024, filed by Noble. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

Note 2 — Acquisitions

Business Combination with Diamond Offshore Drilling

On June 9, 2024, Noble entered into an agreement and plan of merger (the “Diamond Merger Agreement”) with Diamond Offshore Drilling, Inc. (“Diamond”), Dolphin Merger Sub 1, Inc., and Dolphin Merger Sub 2, Inc., under which Noble would acquire Diamond in a stock plus cash transaction (the “Diamond Transaction”). On September 4, 2024 (“the Diamond Closing Date”), Noble completed its acquisition of Diamond. Pursuant to the terms and conditions set forth in the Diamond Merger Agreement, Diamond shareholders received 0.2316 shares of Noble, plus cash consideration of $5.65 per share for each share of Diamond. Total consideration for the acquisition was $1.5 billion, which included $610.3 million in cash paid and $879.9 million in non-cash consideration, primarily related to ordinary shares, par value $0.00001 per share (“Ordinary Shares”) issued to legacy Diamond shareholders and the replacement of each legacy Diamond performance-vesting and time-vesting restricted stock unit covering shares of Diamond. The Diamond Transaction was accounted for using the acquisition method of accounting under ASC Topic 805, Business Combinations, with Noble being treated as the accounting acquirer.

Note 3 — Accounting Pronouncements

Accounting Standards Adopted

There have been no new accounting standards adopted during the current quarter.

Recently Issued Accounting Standards

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20). The FASB issued the update to improve the relevance and consistency in application of the induced conversion guidance in Subtopic 470-20, Debt— Debt with Conversion and Other Options. When the terms of a convertible debt instrument are changed to induce conversion of the instrument, current generally accepted accounting principles provide guidance for determining whether the transaction should be accounted for as an induced conversion (as opposed to a debt extinguishment). The induced conversion guidance was

NOBLE CORPORATION plc AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)

written in the context of share-settled convertible debt before cash convertible instruments became prevalent in the marketplace. The Company does not expect this pronouncement to have any impact on our consolidated financial statements.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendments in the update require disclosure, in the notes to financial statements, of specified information about certain costs and expenses. An entity is not precluded from providing additional voluntary disclosures that may provide investors with additional decision-useful information. The amendments in the update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company continues to evaluate the potential impact of this pronouncement.

In December 2023, the FASB issued ASU No. 2023-09 ("ASU 2023-09"), Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires, among other things, the following for public business entities: (i) enhanced disclosures of specific categories of reconciling items included in the rate reconciliation, as well as additional information for any of these items meeting certain qualitative and quantitative thresholds, (ii) disclosure of the nature, effect, and underlying causes of each individual reconciling item disclosed in the rate reconciliation and the judgment used in categorizing them if not otherwise evident, and (iii) enhanced disclosures for income taxes paid, which includes federal, state, and foreign taxes, as well as for individual jurisdictions over a certain quantitative threshold. The amendments in ASU 2023-09 eliminate the requirement to disclose the nature and estimate of the range of the reasonably possible change in unrecognized tax benefits for the 12 months after the balance sheet date. The provisions of ASU 2023-09 are effective for annual periods beginning after December 15, 2024; early adoption is permitted. The Company continues to evaluate the potential impact of this pronouncement.

Note 4 — Income (Loss) Per Share

The following table presents the computation of basic and diluted income (loss) per share:


	Three Months Ended March 31,
	2025		2024
Numerator:
Net income (loss)	$	108,303	$	95,481


Denominator:
Weighted average shares outstanding – basic	159,006		141,954
Dilutive effect of share-based awards	2,134		1,574
Dilutive effect of warrants	797		1,703
Weighted average shares outstanding – diluted	161,937		145,231
Per share data:
Basic
Net income (loss)	$	0.68	$	0.67
Diluted
Net income (loss)	$	0.67	$	0.66

Only those items having a dilutive impact on our basic income (loss) per share are included in diluted income (loss) per share. The following table displays the share-based instruments that have been excluded from diluted income (loss) per share since the effect would have been anti-dilutive:


	Three Months Ended March 31,
	2025	2024

Warrants (1)	2,773	2,774

(1)Represents the total number of warrants outstanding which did not have a dilutive effect. In periods where the warrants are determined to be dilutive, the number of shares which will be included in the computation of diluted

NOBLE CORPORATION plc AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)

shares is determined using the Treasury Stock Method, adjusted for mandatory exercise provisions under the warrant agreements, if applicable.

Share Capital

As of March 31, 2025, Noble had approximately 158.8 million A Ordinary Shares outstanding as compared to approximately 158.9 million Ordinary Shares outstanding at December 31, 2024. In addition, as of March 31, 2025, 0.9 million Tranche 1 Warrants, 0.9 million Tranche 2 Warrants, and 2.8 million Tranche 3 Warrants were outstanding and exercisable. We also have 5.4 million Ordinary Shares authorized and reserved for issuance pursuant to equity awards under the Noble Corporation plc 2022 Long-Term Incentive Plan.

Our most recent quarterly dividend payment to shareholders, totaling approximately $79.4 million (or $0.50 per share), was declared on February 17, 2025, and paid on March 20, 2025, to shareholders of record at close of business on March 5, 2025.

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. 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 of Directors.

Share Repurchases

Under English 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 (except where the purchase is for the purposes of, or pursuant to, any employees’ share scheme). Such purchases may be paid for either (i) out of Noble’s “distributable reserves” as determined by reference to relevant statutory accounts in accordance with English law or (ii) from the proceeds of a fresh issue of shares made for the purpose of financing the purchase. 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 commencing on September 28, 2022 (subject to an overall aggregate maximum of 20,601,161 Ordinary Shares). During the three months ended March 31, 2025 and 2024, we repurchased 0.7 million and none of our Ordinary Shares, respectively. All repurchased shares were subsequently cancelled.

Warrants

The tranche 1 warrants (the “Tranche 1 Warrants”) are exercisable for one Ordinary Share per warrant at an exercise price of $19.27 per warrant, the tranche 2 warrants (the “Tranche 2 Warrants”) are exercisable for one Ordinary Share per warrant at an exercise price of $23.13 per warrant, and the tranche 3 warrants (the “Tranche 3 Warrants”) are exercisable for one Ordinary Share per warrant at an exercise price of $124.40 per warrant.

Note 5 — Property and Equipment

Property and equipment, at cost, for Noble consisted of the following:


	March 31, 2025		December 31, 2024
Drilling equipment and facilities	$	6,749,303	$	6,650,034
Construction in progress	143,835		197,789
Other	61,932		56,908
Property and equipment, at cost	$	6,955,070	$	6,904,731

Capital additions, including capitalized interest, during the three months ended March 31, 2025 and 2024, totaled $89.5 million and $114.9 million, respectively.

As of March 31, 2025, the rigs Pacific Meltem and Pacific Scirocco qualified as held for sale and were included in “Other assets” on our Consolidated Balance Sheet at their carrying values of $22.7 million and $8.9 million, respectively.

NOBLE CORPORATION plc AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)

Note 6 — Debt

Amended and Restated Senior Secured Revolving Credit Agreement

In April 2023, Noble entered into the Amended and Restated Senior Secured Revolving Credit Agreement, dated April 18, 2023, and as amended on June 24, 2024 (the “2023 Revolving Credit Agreement”), by and among Noble Finance II LLC (“Noble Finance II”), Noble International Finance Company, Noble Drilling A/S, and certain additional subsidiaries of Noble Finance II as from time to time designated by Noble Finance II, as borrowers, the lenders and issuing banks party thereto from time to time, and JPMorgan Chase Bank, N.A., as administrative agent, collateral agent, and security trustee. The revolving credit facility under the 2023 Revolving Credit Agreement (the “2023 Revolving Credit Facility”) provides for commitments of $550.0 million with maturity in 2028. The guarantors (the “Guarantors”) under the 2023 Revolving Credit Facility are the same subsidiaries of Noble Finance II that are or will be guarantors of the 2030 Notes (as defined below). As of March 31, 2025, we had no borrowings outstanding and $19.8 million of letters of credit issued under the 2023 Revolving Credit Agreement.

8.000% Senior Notes due 2030

On April 18, 2023, Noble Finance II, a wholly owned subsidiary of Noble, issued $600.0 million in aggregate principal amount of its 8.000% Senior Notes due 2030 (the “Initial 2030 Notes”). On August 22, 2024, Noble Finance II issued an additional $800.0 million in aggregate principal amount of its 8.000% Senior Notes due 2030 (the “Additional 2030 Notes” and, together with the Initial 2030 Notes, the “2030 Notes”) at a premium of 103% bringing the total outstanding principal amount to $1.4 billion. The 2030 Notes were issued pursuant to an indenture, dated April 18, 2023 (as supplemented or otherwise modified from time to time, the “Noble Indenture”), among Noble Finance II, certain subsidiaries of Noble Finance II party thereto, as guarantors, and U.S. Bank Trust Company, National Association, as trustee, paying agent, and registrar.

The 2030 Notes are unconditionally guaranteed on a senior unsecured basis by the Guarantors and will be unconditionally guaranteed on the same basis by certain of Noble Finance II’s future subsidiaries that guarantee certain indebtedness of Noble Finance II and the Guarantors, including the 2023 Revolving Credit Facility.

The 2030 Notes will mature on April 15, 2030, and interest on the 2030 Notes is payable semi-annually in arrears on each April 15 and October 15, commencing October 15, 2023, to holders of record on the April 1 and October 1 immediately preceding the related interest payment date, at a rate of 8.000% per annum.

Diamond Second Lien Notes due 2030

On September 21, 2023, Diamond Foreign Asset Company and Diamond Finance, LLC (collectively referred to as the “Issuers”) issued $550.0 million aggregate principal amount of 8.500% Senior Secured Second Lien Notes due October 2030 (the “Diamond Second Lien Notes”) with interest payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2024. The Diamond Second Lien Notes are fully and unconditionally guaranteed, jointly and severally, on a senior secured basis by Noble Offshore Drilling, Inc. (formerly known as Dolphin Merger Sub 2, Inc. and as successor by merger with Diamond Offshore Drilling, Inc.) (“NODI”) and each of its existing restricted subsidiaries (other than the Issuers) and by certain of NODI’s future restricted subsidiaries.

The Diamond Second Lien Notes obligate NODI and its subsidiaries to comply with an indenture dated as of September 21, 2023 (as supplemented and otherwise modified from time to time, the “Diamond Second Lien Indenture”), among the Issuers, NODI, certain of its subsidiaries party thereto, as guarantors, and HSBC Bank USA, National Association, as trustee and collateral agent. The Diamond Second Lien Indenture contains covenants that, among other things, restrict NODI’s ability and the ability of certain of its subsidiaries to: (i) incur additional debt and issue certain preferred stock; (ii) incur or create liens; (iii) make certain dividends, distributions, investments, and other restricted payments; (iv) sell or otherwise dispose of certain assets; (v) engage in certain transactions with affiliates; and (vi) merge, consolidate, amalgamate, or sell, transfer, lease, or otherwise dispose of all, or substantially all, of the assets of NODI and such subsidiaries taken as a whole. These covenants are subject to important exceptions and qualifications.

Diamond Credit Agreement

On September 4, 2024, in connection with the closing of the Diamond Transaction, Noble terminated Diamond’s $300.0 million senior secured revolving credit facility under the Diamond Credit Agreement (as defined herein). The revolving commitments under the Diamond Credit Agreement were scheduled to mature on April 22, 2026. At the time of the Diamond Transaction and the termination of the commitments under the Diamond Credit Agreement, Diamond had no outstanding borrowings under the Diamond Credit Agreement.

NOBLE CORPORATION plc AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)

Fair Value of Debt

Fair value represents the amount at which an instrument could be exchanged in a current transaction between willing parties. The estimated fair value of our debt instruments was based on the quoted market prices for similar issues or on the current rates offered to us for debt of similar remaining maturities (Level 2 measurement). The fair value of the 2023 Revolving Credit Facility approximates its respective carrying amount as its interest rate is variable and reflective of market rates.

The following table presents the carrying value, net of unamortized debt issuance costs and discounts or premiums, and the estimated fair value of our total debt, not including the effect of unamortized debt issuance costs, respectively:


	March 31, 2025				December 31, 2024
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Senior secured notes
8.000% Senior Notes due April 2030	$	1,400,811	$	1,401,302	$	1,401,214	$	1,414,266
8.500% Senior Secured Second Lien Notes due October 2030	577,960		564,955		578,972		571,428
Credit facility
Amended and Restated Senior Secured Revolving Credit Facility	—		—		—		—
Total debt	1,978,771		1,966,257		1,980,186		1,985,694
Less: Current maturities of long-term debt	—		—		—		—
Long-term debt	$	1,978,771	$	1,966,257	$	1,980,186	$	1,985,694

Note 7 — Revenue and Customers

Disaggregation of Revenue

The following table provides information about contract drilling services revenue by rig types:


	Three Months Ended March 31,
	2025		2024
Floaters	$	693,451	$	494,467
Jackups	138,977		117,958
Total	$	832,428	$	612,425

Contract Balances

Accounts receivable are recognized when the right to the consideration becomes unconditional based upon contractual billing schedules. Payment terms on invoiced amounts are typically 30 to 60 days. Customer contract assets and liabilities generally consist of deferred revenue and contract costs resulting from past transactions related to the provision of services under contracts with customers. Current contract asset and liability balances are included in “Prepaid expenses and other current assets” and “Other current liabilities,” respectively, and noncurrent contract assets and liabilities are included in “Other assets” and “Other liabilities,” respectively, on our Condensed Consolidated Balance Sheets. Off-market customer contract assets and liabilities have been recognized in connection with the merger, pursuant to a Business Combination Agreement, dated November 10, 2021, as amended, by and among Noble, Noble Finco Limited (n/k/a Noble Corporation plc), Noble Newco Sub Limited, the Drilling Company of 1972 A/S, a Danish public limited liability company (“Maersk Drilling”), and the other parties thereto (the “Business Combination with Maersk Drilling”) and the Diamond Transaction, and are included in “Intangible assets” and “Noncurrent contract liabilities,” respectively.

NOBLE CORPORATION plc AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)

The following table provides information about contract assets and contract liabilities from contracts with customers:


	March 31, 2025		December 31, 2024
Current customer contract assets	$	24,899	$	26,049
Noncurrent customer contract assets	8,940		11,042
Total customer contract assets	33,839		37,091

Current deferred revenue	(60,578)		(61,506)
Noncurrent deferred revenue	(44,405)		(40,439)
Total deferred revenue	$	(104,983)	$	(101,945)

Significant changes in the remaining performance obligation contract assets and the contract liabilities balances for the three months ended March 31, 2025 and 2024, are as follows:


	Contract Assets		Contract Liabilities
Net balance at December 31, 2024	$	37,091	$	(101,945)

Additions to deferred costs	10,183		—
Additions to deferred revenue	—		(59,999)
Amortization of deferred costs	(13,435)		—
Amortization of deferred revenue	—		56,961
Total	(3,252)		(3,038)

Net balance at March 31, 2025	$	33,839	$	(104,983)

Net balance at December 31, 2023	$	4,416	$	(43,072)

Additions to deferred costs	3,748		—
Additions to deferred revenue	—		(23,911)
Amortization of deferred costs	(2,707)		—
Amortization of deferred revenue	—		7,208
Total	1,041		(16,703)

Net balance at March 31, 2024	$	5,457	$	(59,775)

Contract Costs

Certain direct and incremental costs incurred for upfront preparation, initial rig mobilization, and modifications are costs of fulfilling a contract and are recoverable. These recoverable costs are deferred and amortized ratably to contract drilling expense as services are rendered over the initial term of the related drilling contract. Certain of our contracts include capital rig enhancements used to satisfy our performance obligations.

Off-market Customer Contract Assets and Liabilities

In connection with the Business Combination with Maersk Drilling, the Company recognized additional fair value adjustments of $23.0 million. As of March 2025, these intangible assets were fully amortized as a reduction of contract drilling services revenue from the closing date of the Business Combination with Maersk Drilling through the remainder of the contracts.

In connection with the Business Combination with Maersk Drilling and the Diamond Transaction, the Company recognized fair value adjustments of $237.7 million and $27.7 million, respectively, related to certain unfavorable customer contracts

NOBLE CORPORATION plc AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)

acquired. These liabilities will be amortized as an increase to contract drilling services revenue from the closing date of the Business Combination with Maersk Drilling and the Diamond Closing Date, respectively, through the remainder of the contracts.


	Unfavorable contacts		Favorable contracts
Balance at December 31, 2024	$	(8,580)	$	214
Additions	—		—
Amortization	7,664		(214)
Balance at March 31, 2025	$	(916)	$	—

Estimated future amortization over the expected remaining contract periods:


	Year Ended December 31,
	2025		Total
Unfavorable contracts	$	916	$	916
Favorable contracts	—		—
Total	$	916	$	916

Note 8 — Income Taxes

At March 31, 2025, the Company had deferred tax assets of $323.9 million, net of valuation allowance. Additionally, the Company also had deferred tax liabilities of $5.2 million, inclusive of a valuation allowance of $17.5 million.

During the three months ended March 31, 2025, the Company recognized additional discrete deferred tax benefits of $56.6 million related to releases and adjustments of valuation allowance for deferred tax benefits primarily in Luxembourg.

At March 31, 2024, the Company had deferred tax assets of $209.5 million, net of valuation allowance. Additionally, the Company also had deferred tax liabilities of $10.3 million, inclusive of a valuation allowance of $18.8 million.

During the three months ended March 31, 2024, the Company recognized additional discrete deferred tax benefits of $18.5 million related to releases and adjustments of valuation allowance for deferred tax benefits in Guyana, Nigeria, Switzerland, and Luxembourg.

In deriving the above net deferred tax benefits, the Company relied on sources of income attributable to the projected taxable income for the period covered by the Company’s relevant existing drilling contracts based on the assumption that the relevant rigs will be owned by the relevant rig owners during the relevant existing drilling contract periods. Given the mobile nature of the Company’s assets, we are not able to reasonably forecast the jurisdictions in which taxable income from future drilling contracts may arise. We also have limited objective positive evidence in historical periods. Accordingly, in determining the amount of additional deferred tax assets to recognize, we did not consider projected book income beyond the conclusion of existing drilling contracts. As new drilling contracts are executed or as current contracts are extended, we will reassess the amount of deferred tax assets that are realizable. Finally, once we have established sufficient objective positive evidence for historical periods, we may consider reliance on forecasted taxable income from future drilling contracts.

At March 31, 2025, the reserves for uncertain tax positions totaled $186.2 million (net of related tax benefits of $12.4 million). At December 31, 2024, the reserves for uncertain tax positions totaled $197.9 million (net of related tax benefits of $3.7 million).

It is reasonably possible that our existing liabilities related to our reserve for uncertain tax positions may fluctuate in the next 12 months primarily due to the completion of open audits, the expiration of statutes of limitation, or favorable resolutions to ongoing tax litigation.

During the three months ended March 31, 2025, our tax provision included tax benefits of $56.6 million related to releases of valuation allowance for deferred tax benefits primarily in Luxembourg and a net tax benefit of $10.0 million related to

NOBLE CORPORATION plc AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)

uncertain tax position movements. Such tax benefits are offset by tax expenses related to recurring quarterly accruals of $107.0 million mostly in Guyana, Luxembourg, Switzerland, and the United States.

Note 9 — Employee Benefit Plans

Pension costs (gain) include the following components:


	Three Months Ended March 31,
	2025				2024
	Non-US		US		Non-US		US
Interest cost	$	546	$	2,260	$	516	$	2,188
Return on plan assets	(472)		(2,147)		(564)		(2,311)
Recognized net actuarial (gain) loss	53		(11)		24		—
Net pension benefit cost (gain)	$	127	$	102	$	(24)	$	(123)

During the three and three months ended March 31, 2025 and 2024, we made no contributions to our pension plans. Effective December 31, 2016, employees and alternate payees accrue no future benefits under the US plans and, as such, Noble recognized no service costs with the plans for the three and three months ended March 31, 2025 and 2024.

Note 10 — Commitments and Contingencies

Tax Matters

Audit claims of approximately $317.4 million at March 31, 2025, attributable to income and other business taxes remain outstanding and are under continued objection by Noble. Such audit claims are mostly attributable to Brazil. This remains under continued monitoring and evaluation on a quarterly basis as facts change and as audits and/or litigation continue to progress. We intend to vigorously defend our reported positions and currently believe the ultimate resolution of the audit claims will not have a material adverse effect on our consolidated financial statements.

We operate in numerous 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 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.

Hurricane Ida Personal Injury Claims

As previously disclosed, in preparation for Hurricane Ida in the United States Gulf of America, also known as the United States Gulf of Mexico, in August 2021, the Noble Globetrotter II successfully secured the well it was drilling and detached from the blowout preventer without incident. However, during transit, the lower marine riser package and a number of riser joints separated from the rig, and certain other damage occurred. Due to the environmental conditions, a number of crew members were treated for injuries and released from medical care. We have had multiple parties, some of which are subject to a third-party contractual indemnity to our benefit, filed answers to the Limitation of Liability Action in the United States District Court Western District of Louisiana seeking damages related to physical and emotional harm allegedly suffered as a result of the Hurricane Ida incident. All parties have entered, or are expected to enter, into settlement and release agreements with respect to the claims. We have insurance for such claims with a deductible of $5.0 million, in addition to contractual indemnity for a portion of the third-party claims. Timing differences are likely to exist between the funding of any losses incurred and the receipt of insurance proceeds reflected in the Company’s financial statements.

Services Agreement

In February 2016, Diamond entered into a ten-year agreement with a subsidiary of Baker Hughes Company (formerly named Baker Hughes, a GE company) to provide services with respect to certain blowout preventer and related well control equipment on our drillships. Such services include management of maintenance, certification, and reliability with respect to such equipment. Future commitments under the contractual services agreements are estimated to be approximately $24.7 million annually. Total future commitments are projected to be $61.4 million in the aggregate over the remaining term of the agreement, including a $37.0 million commitment for the purchase of consumables and capital spare parts owned and controlled by the vendor at the end of the service arrangement.

NOBLE CORPORATION plc AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)

Letters of Credit and Surety Bonds

As of March 31, 2025, we had $19.8 million of letters of credit issued under the 2023 Revolving Credit Facility and an additional $141.3 million in letters of credit and surety bonds issued under bilateral arrangements which guarantee our performance as it relates to our drilling contracts, contract bidding, tax appeals, customs duties, and other obligations in various jurisdictions. 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.

Other Contingencies

We are a defendant in certain other claims and litigation arising out of operations in the ordinary course of business, including personal injury claims, the resolution of which, in the opinion of management, will not be material to our financial position, results of operations, or cash flows. There is inherent risk in any litigation or dispute and no assurance can be given as to the outcome of these claims.

Note 11 — Supplemental Financial Information

Condensed Consolidated Balance Sheets Information

Restricted cash

Noble’s restricted cash balance was $5.0 million as of March 31, 2025, and December 31, 2024. All restricted cash is recorded in “Prepaid expenses and other current assets.”

Condensed Consolidated Statements of Cash Flows Information

Operating cash activities

The net effect of changes in other assets and liabilities on cash flows from operating activities is as follows:


	Three Months Ended March 31,
	2025		2024
Accounts receivable	$	40,658	$	(41,382)
Other current assets	(20,885)		14,102
Other assets	22,120		17,848
Accounts payable	(66,570)		19,918
Other current liabilities	52,897		(11,543)
Other liabilities	(13,233)		(3,338)
Total net change in assets and liabilities	$	14,987	$	(4,395)

Non-cash investing and financing activities

Non-cash investing and financing activities excluded from unaudited Condensed Consolidated Statements of Cash Flows are as follows:


	Three Months Ended March 31,
	2025		2024
Accrued capital expenditures at period end	$	41,515	$	63,000

Note 12 — Information about Noble Finance II

8.000% Senior Notes due 2030

Noble Finance II, a wholly-owned, indirect subsidiary of Noble, is the issuer of the 2030 Notes and, one or more 100% wholly-owned, direct and indirect subsidiaries of Noble Finance II are the unconditional guarantors, or are otherwise obligated as of March 31, 2025, with respect to the 2030 Notes. See “Note 6 — Debt” for additional information.

The Noble Indenture contains a covenant that requires Noble Finance II to furnish to holders of the 2030 Notes certain financial information relating to Noble Finance II and its restricted subsidiaries. The obligation to furnish such information may be satisfied by providing financial information of Noble along with a description of the differences between such information and the financial information of Noble Finance II and its restricted subsidiaries on a standalone basis.

NOBLE CORPORATION plc AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)

The summarized financial information below reflects the consolidated accounts of Noble Finance II:


	March 31, 2025
Balance Sheet
Cash and cash equivalents	$	200,142
Total current assets	1,855,607
Total current liabilities	710,408
Total debt	1,400,811
Total shareholders' equity	4,650,419


	Three Months Ended March 31, 2025
Statement of Operations
Operating revenues	$	639,547
Operating costs and expenses	482,170
Depreciation and amortization	104,713

Statement of Cash Flows
Net cash provided by (used in) operating activities	$	266,097
Capital expenditures	(80,124)
Proceeds from disposal of assets, net	—
Dividend payments	—

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion is intended to assist you in understanding our financial position at March 31, 2025, and our results of operations for the three months ended March 31, 2025 and 2024. The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and related notes contained in this Quarterly Report on Form 10-Q, the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “Form 10-K”), filed by Noble Corporation plc, a public limited company incorporated under the laws of England and Wales (“Noble”) and our other filings with the US Securities and Exchange Commission (“SEC”). References in this Quarterly Report on Form 10-Q to “Noble,” the “Company,” “we,” “us,” “our,” and words of similar meaning refer collectively to Noble and its consolidated subsidiaries.

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act, as amended. All statements other than statements of historical facts included in this report or in the documents incorporated by reference, are forward looking statements, including those regarding expected financial performance, revenues, expected utilization, and fleet status, stacking of rigs, effects of new rigs on the market revenues, impact of the Diamond Transaction, operating expenses, cash flows, contract status, tenders, terms and duration, dayrates, termination and extensions, contract backlog, the availability, delivery, mobilization, stacking or reactivation, contract commencement, relocation or other movement of rigs and the timing thereof, contract claims, capital expenditures, insurance maintenance and renewals, access to financing, rig demand, peak oil, the offshore drilling market, oil prices, production levels among members of the Organization of Petroleum Exporting Countries (“OPEC”) and other oil and gas producing nations (together with OPEC, “OPEC+”), and any expectations we may have with respect thereto, our future financial position, business strategy, impairments, repayment of debt, credit ratings, liquidity, borrowings under any credit facilities or other instruments, sources of funds, cost inflation, planned acquisitions or divestitures of assets, governmental regulations and permitting, taxes and tax rates, indebtedness covenant compliance, dividends and distributable reserves, share repurchases, progress, plans and goals related to environmental, social, and governance matters, the outcome of tax disputes, assessments and settlements, and expense management, the outcome of any dispute, litigation, audit or investigation, plans, foreign currency requirements, results of joint ventures, general economic, market, including inflation, recessions and the impact of new or increased tariffs, trends and outlook, general political conditions, including political tensions, conflicts and war, timing for compliance with any new regulations the benefits or results of acquisitions or dispositions. When used in this report or in the documents incorporated by reference, the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “on track,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would,” “shall,” “target,” “will,” and similar expressions are intended to be among the terms that identify forward-looking statements. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot assure you that such expectations will prove to be correct. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and we undertake no obligation to revise or update any forward-looking statement for any reason, except as required by law. Actual results may differ materially from any future results expressed or implied by such forward-looking statements, and the expectations expressed in forward-looking statements are subject to a number of risks, uncertainties and assumptions, which include, but are not limited to: a decline in the price of oil or gas, reduced demand for oil and gas products and increased regulation of drilling and production, price competition and cyclicality in the offshore drilling industry, offshore rig supply, dayrates and demand for rigs, contract duration, renewal, terminations and repricing, national oil companies and governmental clients, contract backlog, customer and geographic concentration, operational hazards and risks, labor force unionization, labor interruptions and labor regulations, major natural disasters, catastrophic events, acts of war, terrorism or social unrest, pandemic, or other similar event, joint ventures as well as investments in associates, international operations and related mobilization and demobilization of rigs, operational interruptions, delays, upgrades, refurbishment and repair of rigs and any related delays and cost overruns or reduced payment of dayrates, impacts of inflation, renewal of insurance, protection of sensitive information, operational technology systems and critical data, the ability to attract and retain skilled personnel or the increased cost in doing so, supplier capacity constraints or shortages in parts or equipment, supplier production disruptions, supplier quality and sourcing issues or price increases, future mergers, acquisitions or dispositions of businesses or assets or other strategic transactions, hurricanes and windstorm damage, responding to long-term changes in the energy mix, non-performance of suppliers or third-party subcontractors, risks related to the Diamond Transaction and related integration, compliance with governmental laws and regulations, increasing attention to environmental, social, and governance matters, including climate change and accountability for public statements about ESG efforts, compliance with anti-bribery or anti-corruption, international trade laws and regulations, litigation, our ability to maintain effective disclosure controls and procedures and internal control over financial reporting, impairments on property and equipment, including rigs and related capital spares, operating and financial restrictions and maintenance of covenants in our debt documents, tax disputes or tax challenges, as well as those “Risk Factors” referenced or described in Part II, Item 1A “Risk Factors” of this Form 10-Q, Part I, Item 1A. “Risk Factors” of our Form 10-K, and in our other filings with the SEC. We cannot control such risk factors and other uncertainties, and in many cases, we cannot predict the risks and uncertainties that could cause our actual results to differ materially from those indicated by the forward-looking statements. You should consider these risks and uncertainties when you are evaluating us. Future quarterly dividends and other shareholder returns will be subject to, amongst other things, approval by the Board of Directors and may be modified as market conditions dictate.

Our 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. 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. 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. 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. Except to the extent explicitly stated herein, documents and information on our website or our social media channels are not incorporated by reference herein.

Executive Overview

Noble is a leading offshore drilling contractor for the oil and gas industry. As of the filing date of this Quarterly Report on Form 10-Q, Noble performs, through its subsidiaries, contract drilling services with a fleet of 40 drilling rigs, consisting of 27 floaters and 13 jackups focused largely on ultra-deepwater and high-specification jackup drilling opportunities in both established and emerging regions worldwide. We typically employ each drilling unit under an individual contract, and many contracts are awarded based upon a competitive bidding process.

We report our contract drilling operations as a single reportable segment, Contract Drilling Services, which reflects how we manage our business. 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.

Market Outlook

In recent years, oil prices have generally remained at levels that are supportive of offshore exploration and development activity and global rig demand recovered to eclipse pre-pandemic levels, albeit with some moderation since early 2024 and a further correction more recently with spot prices for Brent crude currently in the mid to high $60s per barrel in April 2025 compared to an average price of $80 per barrel during 2024. Current demand and utilization levels are supported by the combination of the outlook for longer-term commodity prices, heightened focus on energy security, the capital intensity of depletion replacement, and relative attractiveness of offshore plays with respect to both cost and carbon emissions. The increase in global rig demand since 2021 has had a positive impact on dayrates for most rig classes although dayrates have generally plateaued more recently.

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. 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 and despite recent downward pressure on the price of oil, we remain encouraged by the long-term outlook in the ultra-deepwater floater market. However, within this ultra-deepwater market, our customers continue to focus on our highest specification floaters, which represents the majority of our floater fleet. Assuming current market fundamentals, continued customer prioritization towards these highest specification floaters is likely to result in lower utilization for our lower specification drillships and our semi-submersibles. Demand for midwater semisubmersibles is primarily driven by brownfield activity in mature basins, especially in Northwest Europe, South America, and the Asia Pacific regions, where a generally stable level of baseload demand is supported by infield drilling and plug and abandonment requirements. Despite some recent contract suspensions in select jackup markets, we have also observed an overall demand increase in the global jackup market since 2020. While we remain encouraged about overall long-term rig demand, as evidenced by recent multi-year, multi-rig contracts that we have booked into backlog during April 2025, the near term utilization outlook for both floaters and jackups over the next several quarters is anticipated to be lower than the utilization rates realized during the prior two years. Furthermore, economic uncertainty and lower commodity prices arising from recent trade policy and tariffs, compounded with OPEC’s stated intent to increase oil production, collectively present a potential for additional demand risk for offshore rigs in the near term.

As of the date of this report, the majority of our jackup fleet is positioned in the North Sea. While we have seen generally stable demand in the UK and southern North Sea in recent years, overall activity levels in the region remain subdued compared to historical levels. Similarly, the ultra-harsh environment jackup market in Norway also remains below historical levels despite the market being attractive to operators given it is characterized by low-cost and low-emission barrels.

Returning to the broader offshore drilling market, while there are a number of multi-year contracts out for tender, the overall market remains characterized by generally shorter-term contracts. This leads to an increased number of rig contract start-ups, both with different customers and among different regions, which may require incremental resources and costs. 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.

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. Our industry could be further challenged as resource holders and policy makers continue to evaluate and calibrate strategies and capital flows to address global energy needs. Ultimately, however, there continues to be a global dependence on products made from hydrocarbons and on the combustion of hydrocarbons to provide reliable and affordable energy. Low-cost and low-emission barrels are expected to be the most attractive conventional source to meet 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.

Our cost profile remains sensitive to global labor market conditions, capital intensive repair and maintenance scopes on our rigs, global trade and sanctions regimes, including the impacts of new or increased tariffs or trade wars, and geopolitical crises and their respective regional and global ramifications. Each of these factors has the potential to adversely impact our ability to conduct our day-to-day operations and manage costs, with uncertainty related to trade policy and tariffs also having the ability to negatively impact rig demand.

Contract Drilling Services Backlog

We maintain a backlog of commitments for contract drilling services. 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 March 31, 2025, in the past we have included in backlog certain letters of intent that we expect to result in binding drilling contracts. As of March 31, 2025, contract drilling services backlog totaled approximately $5.4 billion.

We calculate backlog for any given unit and period by multiplying the full contractual operating dayrate for such unit by the number of days remaining in the period, and include certain assumptions based on the terms of certain contractual arrangements, discussed in the notes to the table below. The reported contract drilling services backlog does not include amounts representing revenues for mobilization, demobilization, and contract preparation, which ar

SEC Form 10-Q filed by Noble Corporation plc A