Noble Corporation (NYSE:NE) Q2 2023 Earnings Call Transcript

Robert Eifler: Yes, it’s a great question, kind of right at the heart of the decision. Well, first of all, we’ve been spending time in coming up with the dividend and announcing it, we are all very aligned in making sure that it’s sustainable. So you’re right. we look at through cycle rates. — and we can consider what happens post a dayrate peak. As you said, the next couple of years look great. And we think, as we said in the prepared comments that there are a lot of things that are very much in place to drive this cycle for quite a long time, much more than the next couple of years. We’ll have to see how everything plays out. But we do think 24 and 25 are going to be are predicting. And so we would look to grow our return of capital as that happens, always with a mind towards sustainability, though, on the dividend side.

And I think that’s also one of the reasons why having a mixture makes a lot of sense for an offshore driller today, a mixture of obviously being dividend and buybacks.

Greg Lewis: And then just wanted to talk a little bit about the North Sea market. Obviously, there’s some open days here, but really, I guess, were contractors. I guess a 2-part question. One is, should we see any white space on kind of the North Sea fleet get filled up in the back half of this year? Or is it really looking ahead to 24% and that — I imagine the answer will include that. Any kind of view on the recent news by the U.K. government about — it seems like they’re trying — it seems like they’re beyond the flat tax that they’re changing and the — it seems like more recently they’re talking to trying to incentivize some more activity out of the U.K. just around the whole energy security team that everybody at this point is pretty familiar with.

Blake Denton: Yes, Greg. Thanks for the question. This is Blake again. Of course, demand in the North Sea is still lagging the rest of the world there. But there are some positive signs in the periphery. I mean you mentioned a really important one recently in the new licensing comments. And then there’s also some carbon capture demand that could play out. And of course, the harsh environment tightness kind of can play out in the competition zone, particularly for our CJ70s, which are the most capable to compete with semis in that space. But all of that is a little bit too far in the future to see it and really talk about it as direct demand. And so we do see white space for some of our jackups, uncontracted jack-ups into 2024.

Robert Eifler: And I’d add to that, too. I think we’re — sorry, but just quickly, I think I agree completely. And I think, too, it’s a bit of a funny period of time right now where utilization in the North Sea and Rest of World is out of balance. And so I think that’s just a time and a place. I think that, that will balance out perhaps as this year unfolds and certainly into 2024, whether that’s because rigs leave the North Sea or because we see some sort of reaction to policy shift or CCS, we’ll see. But most of the jackups really excluding the Norway class jackups, but the non-Norway class jackups, ours and our competitors are pretty mobile. And I think you’ll see all of that balance out in time.

Greg Lewis: Great. interests you both mentioned the CCS dynamic, honestly, that wasn’t something I was thinking too much about. Is that kind of more on the well intervention side? Like any kind of just high-level views on where you see the jackup demand coming from in realizing CCS is more of a, call it, medium, longer-term probably demand driver. But would that just — any — what would those rigs kind of be doing as they’re working on that. I don’t think they’re drilling new wells.