Lunch with Management David W. Williams Chairman, President and CEO 35 Years of Experience Simon W. Johnson Senior Vice President Marketing and Contracts 18 Years of Experience Bernie G. Wolford Senior Vice President Operations…
Market Review Simon W. Johnson SVP Marketing and Contracts September 4, 2014
Background Grand themes Turnkey construction Nation building Ease of access to finance Flattening client demand Modest supply over-run 4
Current Market Features Short-term outcomes Fragmented utilization Rigs competing downwards Continuing sublets Newbuild delivery deferrals Rig swaps new for old Stack inventory growing Performance matters Special challenges…
Large Backlog Providing Excellent Visibility Pro Forma At June 30, 2014: 11.1 Billion Backlog by Client Estimated Annual Contribution 4 2.9 3 2.3 2.1 2 1.5 1.4 0.9 1 0 2014 2015 2016 2017…
Limited Jackup Exposure in 2015 Percentage of Available Operating Days Noble Fleet 2014 2015 2016 11% 23% 30% 77% 70% 89% Committed to Contracts Uncommitted to Contracts Source: Noble PostSpin as of June 30, 2014 7
Limited Near-Term Floater Exposure Percentage of Available Operating Days Noble Fleet 2014 2015 2016 27% 38% 54% 54% 46% 73% 62% Committed to Contracts Uncommitted to Contracts Source: Noble PostSpin as of June 30,…
15 Jackup Rigs Contract Visibility Average contract length of 20 months per rig July January July January July 2014 2015 2015 2016 2016 Committed Shipyard/Mob Envl Enhancement 9
20 Floating Rigs Contract Visibility 8 rigs contracted to mid 2017 or later (incl. 3 beyond 2020) July January July January July 2014 2015 2015 2016 2016 Committed Shipyard/Mob New Fixture 10
Fundamentals Remain Strong Worldwide oil production is not keeping up with consumption Oil price demonstrating great stability above economic thresholds Offshore operators have limited discretion in timing CAPEX Despite the…
Fundamentals Remain Strong Majors struggling to replace reserves Deepwater production rates are highbut so is depletion New discoveries - West Africa Pre-salt, East Africa LNG, Flemish Pass New provinces - Arctic 12
Market Catalysts Elections in Brazil and Nigeria Market rates generating their own demand Operator CAPEX recovery Energy reform in Mexico Oil and gas price improvement Things to watch: October 2014 operator budget cycle End…
Nobles Proposition Strong customer relationships Superior and well-balanced fleet Experience in key drilling markets Best-in-class project delivery Improving operational performance Exceptional contract backlog Current…
Lunch with Noble Management Operations Excellence September 4, 2014
Safety 16
Predictable Execution is no Accident Recordable Incident Rates Noble vs. IADC 6.0 Safety is a paradigm of the organization and must not 5.0 be compromised. 4.0 3.0 IADC (offshore) 2.0 Noble 1.0 .0 17
Personnel Development 18
Noble NEXT Center - Investing in People 2,000 employees have attended 240 courses in the last year Including 20 customized to serve our high-spec fleet State of the art simulations: Drilling Dynamic Positioning Power…
Noble Next Center Highlights Delivered 25 IADC accredited well control courses Integrated DP Operations and Power Management Systems Simulations Fully simulated High spec fleet drilling controls Received 2014 NOIA Safety in…
Newbuild Startups 21
New Build Crew Readiness Assuring Readiness through: Crews Systems Familiarization Training Training delivered pre-commencement All Crews and all Positions Focused on Critical Knowledge and Skills Delivered on Deck and on the Rig…
Noble Sam Croft Delivery 90 Days from delivery in Korea to Drilling in US Gulf 23
Subsea Uptime 24
Subsea Uptime Performance Delivering more consistent performance as result of: Best in Class Subsea Engineer Development Program Right-Sized Investment in Critical Capital Spares Working to consistent and high maintenance…
Improving Uptime Floaters Only - Subsea Downtime through June 2014 12% 9.87% 10% 8.44% 8.14% 8% 7.51% 6% 4.26% 4% 2% 0% 2010 2011 2012 2013 2014 Noble delivered 6 newbuild drillships 2012 to date. 26
Revenue Efficiency 27
Limited Special Hull Survey Exposure Special Survey Forecast (5 Yearly Surveys) 3 2 Number of Rigs 7th 1 7th 1st 1st 0 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 28
Shipyard Days Historical and Forecast Shipyard Days 250 All Rigs 200 Alan Hay Charles Copeland David Tinsley 150 Gene House Jim Thompson Joe Beall Roger Lewis 100 Jim Thompson Paul Wolff Bully I Clyde Boudreaux Paul…
Results Focused 30
Financially Focused and Agile Well maintained assets Actively managed Crew Headcount Improved uptime results in reduced maintenance, transport and service costs Efficient newbuild startups reduce ramp up costs and accelerate…
Wrap Up 32
Building a High Reliability Organization Improved Rig Specific Integrated Management Injury Prevention: Hand & Work Instructions and JSA System Body Placement Operational Readiness through Enhancing Environmental Training and…
David W. Williams Chairman, President and Chief Executive Officer Noble Analyst Luncheon September 4, 2014
Well-Timed Shipyard Program Winding Down 2013 2014 Globetrotter II Noble Noble Noble Noble Noble Don Taylor Bob Douglas Houston Colbert Sam Croft Tom Madden Noble Noble Noble Noble Noble Mick OBrien Regina Allen Sam…
Significant Aspect of Fleet Transformation 11 Billion in Capital Committed or Spent To Date New Rig Deliveries by Year and Newbuild Capex Newbuild Capex Rig Additions ( Millions) 7 2,000 Rigs Added: 12 Semis and Drillships 1.7…
Capital Expenditures in Decline with Reduction in Newbuild Project Backlog ( Billions) 3 2.5 2.6 2.6 2.0 2 1.7 1 .55 - .65 0 2011 (A) 2012 (A) 2013 (A) 2014 (P) 2014 (P) 2015 (P) (Post-Paragon) Note: Capital…
Capital Allocation Where we have been: Where we are going: Dominated by newbuild Evaluate further fleet program enhancements Disciplined approach to Expect to at least maintain dividend dividend level through Retirement of…
Capital Allocation Where we have been: Where we are going: Dominated by newbuild Evaluate further fleet program enhancements Disciplined approach to dividend Retirement of maturing debt 39
Capital Allocation Where we are going Evaluate further fleet enhancements New orders no spec. orders Unique rig solutions for niche markets M&A targets Nobles fleet in five years 40
Capital Allocation Where we have been: Where we are going: Dominated by newbuild Evaluate further fleet program enhancements Disciplined approach to Expect to at least maintain dividend dividend level through Retirement of…
Capital Allocation Where We are Going Sustainable dividend through industry pause Further increase as approved by Board Backlog provides multi-year buffer Current Annual Yield Dividends/ 5.4% Newbuild Recent Pro Forma Backlog…
Large Backlog Providing Excellent Visibility Pro Forma At June 30, 2014: 11.1 Billion Estimated Annual Contribution 4 2.9 3 2.3 2.1 2 1.5 1.4 0.9 1 0 2014 2015 2016 2017 2018 2019- 2023…
Capital Allocation Where we have been: Where we are going: Dominated by newbuild Evaluate further fleet program enhancements Disciplined approach to Expect to at least maintain dividend dividend level through Retirement of…
Capital Allocation Where we have been: Where we are going: Dominated by newbuild Evaluate further fleet program enhancements Disciplined approach to Expect to at least maintain dividend dividend level through Retirement of…
Balance Sheet Total Debt at 6/30/14 - 6.0 Billion 1.7 billion in proceeds from Paragon transaction received in late July, used to repay short- term debt Pro Forma total debt reduced to 4.3 billion Liquidity at 6/30/14 (revolving…
Capital Allocation Where we have been: Where we are going: Dominated by newbuild Evaluate further fleet program enhancements Disciplined approach to Expect to at least maintain dividend dividend level through Retirement of…
Noble is Favorably Positioned for Success Spin-off of Paragon is complete 35-rig fleet is younger, more versatile premium assets Well-timed newbuilds with exceptional program execution Excellent contracts in place, producing a…
Noble Corporation plc Devonshire House 1 Mayfair Place London W1J 8AJ England www.noblecorp.com Investor contacts: Jeffrey L. Chastain Vice President Investor Relations 281-276-6383 John S. Breed Director Investor Relations…
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