Noble Q2 Earnings Call Highlights

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Noble (NYSE:NE) reported second-quarter 2026 adjusted EBITDA of $212 million on contract drilling services revenue of $679 million, as operational suspensions involving two rigs in Brazil weighed on results and prompted the offshore driller to lower its full-year outlook.

Adjusted EBITDA margin was 30% in the quarter. Cash flow from operations totaled $144 million, while capital expenditures were $205 million, resulting in negative free cash flow of $59 million, according to Chief Financial Officer Richard Barker.

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President and CEO Robert Eifler said the company returned an additional $80 million to shareholders during the quarter through its $0.50-per-share quarterly dividend. Noble’s board also declared another $0.50-per-share dividend payable in September.

Brazil disruption drives revised guidance

Noble said second-quarter performance was adversely affected by $43 million from an operational suspension involving the Noble Courage and Noble Faye Kozack in Brazil. Both rigs are now operating, but the company’s updated guidance includes at least an additional $15 million revenue reduction through January 2027 as it works toward administrative solutions following the suspension.

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Eifler said the shutdowns during May and June followed an audit by Brazil’s ANP regulator. He said Noble could not provide extensive detail because the matter remains ongoing, but noted that the company’s revised outlook reflects a range of possible outcomes.

The company reduced its 2026 total revenue guidance to $2.8 billion to $2.9 billion, compared with its prior range of $2.8 billion to $3.0 billion. Full-year adjusted EBITDA guidance was cut to $850 million to $925 million from $940 million to $1.02 billion previously.

Barker said the reduction primarily reflects the Brazil impact, along with the transfer of work from the Noble Innovator to the Noble Intrepid and Noble Viking options that are now more likely to begin in 2027. Capital expenditure guidance was unchanged at $615 million to $665 million, including an estimated $25 million of customer-reimbursable Capital spending.

New contracts add $200 million in backlog

Noble secured two new contracts during the past three months, adding approximately $200 million of backlog. The Noble Viking received a six-well contract in the Asia-Pacific region expected to cover most of 2028, with options extending into 2029.

Separately, the company’s recently renamed Noble Claus Bachmann, formerly the Ocean GreatWhite, was awarded a three-well contract with BP in the U.K. North Sea. The contract is expected to last 150 to 210 days at a day rate of $320,000, plus mobilization fees, beginning in March 2027. The work is scheduled to occur immediately before the rig starts a three-year contract with Aker BP in Norway.

Total backlog stood at $6.8 billion as of July 27, including about $1 billion expected to convert to revenue during the remainder of 2026 and $2.3 billion in 2027. Backlog excludes reimbursable revenue and ancillary services.

The current backlog also reflects an anticipated earlier completion of the Noble Stanley Lafosse’s wells-based campaign, now expected in January 2027 rather than July 2027. Eifler said the customer continues to seek rig capacity and Noble is participating in that tender.

Deepwater outlook shifts toward international markets

Eifler said global ultra-deepwater demand remains strong despite oil-price volatility tied to the Iran conflict. During the first half of 2026, 77 rig-years of ultra-deepwater backlog were contracted, the highest level in more than a decade, he said.

Open floater demand remains above 95 rig-years, all outside Brazil, while 104 rigs are contracted now or in the future. That represents 95% contracted utilization of the marketed fleet. Current utilization was 79%, based on 87 ultra-deepwater units under contract, and Noble expects that figure to rise as long-term programs begin.

Recent fixtures have reached the mid-$400,000-per-day range, according to Eifler, though he said longer-term work farther into the future generally commands higher rates than near-term gap-filler assignments.

• South America: Regional ultra-deepwater demand stands at 41 units, including 32 in Brazil. Noble expects the broader South American market to absorb two to three additional units over the next year, supported by Guyana-Suriname and opportunities in Colombia, Peru, Uruguay and potentially Venezuela.
• U.S. Gulf: Demand has declined to 19 units from 21 six months earlier. Noble said current oil prices could support a stabilized 20-rig market over time, while the potential movement of two to three rigs overseas could keep drillship capacity fully utilized.
• Africa: West Africa and Mozambique have 22 rig-years of open demand across public tenders and pre-tenders. Noble expects the region could grow into the high teens in rig demand by the second half of 2027.
• Asia-Pacific and India: The region has 42 rig-years of open demand, representing 45% of the global total. Noble said India’s exploration campaign appears delayed by about a year due to planning and funding lead times rather than canceled.

Eifler said Noble could move one or two rigs between regions as opportunities develop, with potential work seen in the U.S. Gulf, West Africa, Asia-Pacific, and Central and Northern South America.

Capital structure and fleet activity

During June, Noble issued $800 million of 6.25% senior unsecured notes due 2034 to refinance legacy Diamond bonds and a portion of existing Noble bonds. Barker said the refinancing simplifies the company’s capital structure and is expected to produce $35 million in annual cash benefits, primarily from interest expense and tax-related savings.

The company also completed an $18 million lease buyout for the third of four Blackships blowout preventer systems. The final buyout is expected in the fourth quarter at the same cost. Noble recorded a $42 million impairment tied to the Ocean Apex sale for scrap; the sale closed in early July and generated $5 million in net proceeds.

Looking ahead, Eifler said the company expects a “meaningful earnings inflection” by the second half of 2027, supported by contract startups already in backlog and additional work for its remaining available rig capacity. He said Noble expects to provide further contract news in the coming quarter.

About Noble (NYSE:NE)

Noble (NYSE: NE) is an offshore drilling company that provides drilling services to the global oil and gas industry. The firm operates a fleet of mobile offshore drilling units and delivers contract drilling solutions for exploration and production activities. Its core business centers on executing drilling programs for upstream energy companies across a range of water depths and operating environments.

Products and services include the operation and management of offshore drilling rigs — such as drillships, semisubmersibles and jackups — along with associated technical, engineering and project management services.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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