Noble Corporation plc announces fleet retirements

Rhea-AI Summary

Noble (NYSE: NE) has announced plans to divest two cold stacked drillships, the Pacific Meltem and Pacific Scirocco. The company aims to eliminate costs associated with these non-operational units and focus resources on its marketed fleet. The divestment strategy includes potentially scrapping the units, effectively retiring them permanently from drilling operations.

CEO Robert W. Eifler explained that the decision to retire these non-contributing assets stems from a continuous cost-benefit evaluation of idle capacity. The move is expected to be immediately cash flow accretive and result in a more optimized fleet composition for Noble.

Positive

• Immediate improvement in cash flow expected from cost elimination
• Strategic fleet optimization through removal of non-contributing assets
• Reduction in maintenance costs for idle vessels

Negative

• Reduction in total fleet capacity
• Potential write-down of asset value from vessel retirement

Insights

Offshore Drilling Industry Analyst

Noble 's strategic decision to retire two cold stacked drillships marks a significant shift in fleet optimization that will generate immediate positive cash flow impact. The move to permanently remove the Pacific Meltem and Pacific Scirocco from the global drilling fleet demonstrates prudent capital allocation in the current market environment.

This fleet rationalization carries several key implications:

• Immediate reduction in holding costs, typically ranging from $5,000 to $15,000 per day per unit for cold stacked rigs
• Elimination of future reactivation costs, which could exceed $50 million per unit
• Enhanced fleet utilization metrics by removing non-contributing assets
• Improved balance sheet efficiency through reduced carrying costs

The timing is particularly strategic as the offshore drilling market continues to strengthen. By divesting these assets now, Noble can redirect resources to its active fleet during a period of improving dayrates and utilization. The decision to permanently retire these units, rather than maintain them for potential future reactivation, suggests management's confidence in achieving better returns through their existing marketed fleet.

This move aligns with the broader industry trend of 'right-sizing' drilling fleets, where operators focus on maintaining newer, more capable assets while retiring older or less competitive units. The retirement of these specific vessels will contribute to reducing global fleet supply, potentially supporting stronger pricing power for remaining assets in the market.

HOUSTON, Feb. 3, 2025 /PRNewswire/ -- Noble Corporation plc ("Noble" or the "Company") (NYSE: NE) today announces plans to divest the cold stacked drillships Pacific Meltem and Pacific Scirocco in order to eliminate costs related to these units and prioritize resources on the existing marketed fleet.  The Company intends to divest these units in a manner which would effectively retire them permanently from drilling operation, including potentially scrapping the units.

Robert W. Eifler, President and Chief Executive Officer of Noble Corporation plc, stated, "Our decision to retire these non-contributing assets is based on a continuous cost-benefit evaluation of idle capacity.  These retirements will be immediately cash flow accretive and result in a leaner, fitter fleet composition for Noble going forward."

About Noble Corporation
Noble is a leading offshore drilling contractor for the oil and gas industry.  The Company owns and operates one of the most modern, versatile, and technically advanced fleets in the offshore drilling industry.  Noble and its predecessors have been engaged in the contract drilling of oil and gas wells since 1921.  Noble performs, through its subsidiaries, contract drilling services with a fleet of offshore drilling units focused largely on ultra-deepwater and high specification jackup drilling opportunities in both established and emerging regions worldwide.  For further information visit www.noblecorp.com or email investors@noblecorp.com.

Forward-Looking Statements
This announcement includes "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, as amended. All statements other than statements of historical facts included in this announcement are forward looking statements, including those regarding expectation for divestitures and their anticipated impacts. Forward-looking statements involve risks, uncertainties and assumptions, and actual results may differ materially from any future results expressed or implied by such forward-looking statements. When used in this announcement, or in the documents incorporated by reference, the words "guidance," "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "on track," "plan," "possible," "potential," "predict," "project," "should," "would," "achieve," "shall," "target," "will" and similar expressions are intended to be among the statements 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 announcement and we undertake no obligation to revise or update any forward-looking statement for any reason, except as required by law. Risks and uncertainties include, but are not limited to, those detailed in Noble's most recent Annual Report on Form 10-K, Quarterly Reports Form 10-Q and other filings with the U.S. Securities and Exchange Commission, including, but not limited to, risks related to the recently completed Diamond Transaction, including the risk that the benefits of the transaction may not be fully realized or may take longer to realize than expected. 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. With respect to our capital allocation policy, distributions to shareholders in the form of either dividends or share buybacks are subject to the Board of Directors' assessment of factors such as business development, growth strategy, current leverage and financing needs. There can be no assurance that a dividend or buyback program will be declared or continued.

View original content:https://www.prnewswire.com/news-releases/noble-corporation-plc-announces-fleet-retirements-302366912.html

SOURCE Noble Corporation plc

FAQ

Which drillships is Noble (NE) retiring in February 2025?

Noble is retiring two cold stacked drillships: the Pacific Meltem and Pacific Scirocco.

How will Noble 's drillship retirement affect its cash flow?

The retirement of the drillships will be immediately cash flow accretive by eliminating costs associated with maintaining the idle vessels.

What is Noble 's plan for the Pacific Meltem and Pacific Scirocco drillships?

Noble plans to divest these units in a manner that would permanently retire them from drilling operations, potentially including scrapping the units.

Why is Noble (NE) retiring these two drillships in 2025?

Noble is retiring these drillships based on a continuous cost-benefit evaluation of idle capacity, aiming to eliminate costs and prioritize resources on the existing marketed fleet.