Noble Corporation's CEO Presents At UBS Global Energy & Gas Conference (Transcript)

Noble Corporation (NE)

UBS Global Energy & Gas Conference Call

May 22, 2012 09:40 am ET

Executives

David Williams - Chairman, President and CEO

Analysts

Angie Sedita - UBS

Presentation

Angie Sedita - UBS

Good morning. Our next presenter is David Williams who is the Chairman, President and CEO of Noble Corporation, positions he has held since January 2008. Prior to that he was the Senior VP and COO from 2007 to 2008 of Noble and before that he served five years as Executive VP of Diamond Offshore. Dave, David has certainly led Noble through an impressive transformation of the company’s rig fleet through sizeable new build program which will result in a top-tier rig fleet upon completion. With that I will turn to David.

David Williams

Thank you, Angie. It’s a pleasure to be here, I appreciate the opportunity to come talk about Noble and appreciate the opportunity to get back to Texas. Geneva is not the hot bed of oilfield activities (inaudible) I think. So, it’s great to be back here.

Our presentation today does include some forward-looking statements. These statements are based on our current understanding of factors that affect our business, either directly or indirectly. Assumptions built in those statements could prove incorrect, leading to materially different conclusions. So please see our Form 10-K for a complete list of risks associated with the business.

Today, there are just a few things I would like to cover. I would like to give a brief overview of Noble and a little bit of history, not much, cover some details behind the strategy that Andy talked about that we’re working to design and transform the fleet to a much more premium status and finish them with comments on these sector activity, especially in deepwater also, talk a little bit about jackups, but primarily the [ore].

So, I will put this picture up. It's a great picture, shows the Bully in the front, undergoing sea trials in the Gulf of Mexico as Globetrotter was sailing, the Gulf of Mexico passed it. A lot of you will think it’s a rig picture. It’s actually not, very rarely you get to a ship, so this is [Caliber] in the same picture. But it's a great picture I like it, so I felt that it (inaudible) alright.

Noble is a 91-year old company started at 1921 by [Samuel] Lloyd Noble, he actually borrowed money from his mother to buy used land rig and started drilling land, wells on shore in around the Ardmore area. We drilled our first well offshore in the 30s and actually one of our first overseas assignments was in World War II, we drilled 100 wells offshore with Forest, kind of author (inaudible) very interesting book called [A Secret Shore] was about drilling wells in the UK during the war.

Actually the onshore business in the mid 90s and today we operate a suite of exclusively offshore rigs. By rig account we are the second largest offshore drilling contractors with 79 units that counts 14 semis, 14 ships, 49 jackups and then we also have two submersibles which are stacked on a shelf in the US Gulf of Mexico. We also have an FPSO and we operate the [Harbania] platform of Eastern Canada for Exxon Mobil, we’ve operated that since the start.

Of those 79 rigs we have 11 rigs currently in a construction. I’ll talk about those in a little bit more detail here in a minute. We operate most of the major offshore regions around the world. On the floating side, it's primarily deep water. We only have three floating rigs that operate at less than 4000 feet of water. So we are almost exclusively a deep water contractor. We operate predominately in the US Gulf of Mexico and Brazil, but we also have operations -- floating operations in the North sea, the Mediterranean and we’ll soon start in Australia.

Our jackup fleet is primarily located in, given the 49 rigs primarily located and so on the more active basis, we’ve 12 rigs in Mexico, we have 15 rigs in the Middle East and we have eight jackups in the North Sea. We are again in the process of transforming the fleet into a much more premium capability through the investment of well over $5 billion which will add 8 new ultra-deepwater drillships and 6 high specification jackups. 8 of those ships have already been delivered and there are five that remain in the yard.

Our current contract backlog stands at over $40.5 billion and extends through the end of decade extends out in to the year 2023. Our fleet expansion is driving industry-leading earnings and cash flow growth and we believe that provides real opportunities for shareholders moving forward. Our revenue backlog as measured by firm contracts represents the second largest backlog among drillers. Again it was a little over $40.5 billion at the end of first quarter of March 31 st 2012. And we expect this number to build as we see continued improvement in fleet activity, just general fleet activity as we had contracts for our remaining fleet and we also expect to see the backlog expand and grow as we add contracts for our ultra-deepwater drillships that are uncommitted, the three uncommitted ships and the five uncommitted jack ups.

So we have opportunities for the backlog to actually expand a good bit. The only jackup of the of the six that has contract. We recently announced a contract on the first at Noble Regina Allen for 18 months of $230,000 a day in the North Sea. This backlog provides great earnings visibility for us again. I said it went through into 2023, gives us a good visibility of the future which helps in planning, but it gives us a lot of diversity and a lot of flexibility in moving forward with the investment program.

Read the rest of this transcript for free on seekingalpha.com