noble corporation value + execution = noble david...
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Noble Corporation
Value + Execution = Noble
2008 CEO Energy/Power ConferenceNew YorkSeptember 2-4, 2008
David W. WilliamsChairman, President andChief Executive Officer
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This presentation contains “forward-looking statements” about our business, financial performance and prospects. Statements about our plans, intentions, expectations, beliefs, estimates, predictions or similar expressions for the future are forward-looking statements. We cannot assure you that the outcomes of these forward-looking statements will be realized. Various factors could cause actual results to differ materially. We discuss these factors, including risks and uncertainties, from time to time in our SEC filings. The Company disclaims any duty to update the information presented here. The material presented is copyrighted by the Company and cannot be printed, recorded or rebroadcast without our express written consent. We have attached a reconciliation to GAAP of any non-GAAP measures appearing in this presentation. Additional information about Noble Corporation is available on our Web site at www.noblecorp.com.
Forward Looking Statement
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Noble’s AssetsAligning Rigs Around Customers and Geology
43 – Jackups13 – Semisubmersibles
3 – Submersibles3 – Drillships
1H 2008 Drilling Revenues by Region Key Customers by Revenue 1H 2008
PEMEX
Shell
ExxonMobil
Petrobras
Anadarko (including farmouts)
Total = $1.6 Billion
U.S. GoM22%
Middle East21%
Mexico20%
North Sea18%
West Africa12%
Brazil7%
Includes revenues fromNOC partners
4Source: Noble Corporation
Noble NewbuildsDelivering Organic Earnings Growth
Noble Roger Lewis
Middle East
400’ IC
Noble Hans Deul
(China)
400’ IC
Noble Scott Marks
(China)
400’ IC
Noble Clyde Boudreaux
Gulf of Mexico
10,000’
Noble Dave Beard
(China)
10,000’
Noble Danny Adkins and
Noble Jim Day
(Singapore)
12,000’
2007—Delivered 2008 2009
Noble’s newbuild program includes 4 new ultra-deepwater semi-submersibles and 3 high-spec jackupsAll rigs are already under long-term contractsIn total, the rigs could add up to $1.85 per share in earnings by 2010
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2008 First Half Financial Highlights
Noble EPS and Cash Flow
2.83
$4.48
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
'03 '04 '05 '06 '07 '081H
Cash
Flo
w
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
$4.50
$5.00
EP
S
Cash Flow
EPS
Noble achieved both record cash and earnings-the highest throughout its 86 year history
Strong operating cost control: $51,495 per day vs. 4Q07 costs of $49,900 per day
Contract drilling margin of 68.9%
Noble continued to focus on the core drilling business by monetizing North Sea Platform Drilling business
Spending on capital ($525 million), dividends ($223 million) and share repurchase ($27 million) accounted for 80% of our cash flow from operations ($936 million)
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Continued Strong MarginsMargin, Not Dayrate, Drives Results
Source: 10-k filings; Peers include DO, ESV, RDC, RIG, PDE
2002 2003 2004 2005 2006 2007 1H08
Noble Peer Peer
Peer Peer Peer
Pre-Tax Contract Drilling Margin
70
50
40
10
20
30
60
Noble consistently delivers sector-leading gross margins, a measure of our focus on managing the day-to-day business with a focus on cost control
80%
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Brazil Noble ClydeBoudreaux
GoM EVAs Middle EastJackups
North Sea Jackups
Continued Strong MarginsOpportunities for Expanding Margins
1H 2008 Pre-tax Drilling Margin Normalized to 100%
Source: Noble
2010 Margin Expansion Potential Based on Known and Assumed Dayrates
200%
360%
100
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$1,000
$100
$425
$725
$1,175
$1,600
$2,175
$3,425
$1,225
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2008Remaining
2009 2010 2011 2012 2013 2014 2015 2016
Jackup Backlog
DeepwaterBacklog
Fleet Contract PositionUnprecedented Backlog of $11.9 billion
Backlog by Year$ Million
Notes: As of 8.28.08Includes maximum current performance bonus potential on rigs in Brazil and Noble Dave Beard. Includes 5 year term on Noble Paul Wolff, maximum bonus potential, paid shipyard time. Assumes constant rates on the four jackups in Mexico where rates are indexed to international markets. Does not include submersibles.
$
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Fleet Contract PositionNoble’s Fleet Is In High Demand
2008 2009 2010 2011 2012 2013 2014
Percentage of Noble Rigs ContractedDrillships
Source: Noble as of 8.28.2008; assumes 5 year term on Noble Paul Wolff
Semi’s
100%
75
50
25
Jackups
10
48%47%45%41%
34%
52%53%55%59%
66%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2008 2009 2010 2011 2012
Deepwater Jackups
Fleet Contract PositionDeepwater Revenue Contribution Growing
Relative Contribution of Deepwater vs. Jackups
Source: Noble Corporation internal modeling-8.01.08
As Noble’s 16 deepwater rigs roll to higher rates or are delivered, deepwater revenue as a percentage of the total will approach the contribution from our 43 jackups
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Deepwater Contract PositionLittle Availability
Current Contract Durations with Dayrates in $ Thousand
* Includes bonus, assumes 5 year term on Noble Paul Wolff commitment
‘08 2009
Noble Paul Romano
Noble Leo Segerius
Noble Amos Runner
Noble Muravlenko
Noble Ton van Langeveld
Noble Clyde Boudreaux
Noble Lorris Bouzigard
Noble Homer Ferrington
Noble Paul Wolff
GoM
GoM
Brazil
GoM
Brazil
North Sea
GoM
West Africa
Brazil
$380$360
$227
$482
2010
Noble Roger Eason Brazil
Noble Therald Martin Brazil
$515
Noble Dave Beard Brazil
Noble Jim Day GoM
Noble Danny Adkins GoM
Noble Max Smith Mexico
Noble Jim Thompson GoM
2011 2012 2013 2014 2015 2016
$505
$270 $335
$505
UC
UC
UC
$430
$220
$492*$197*
$138* $334*
$297*$131*
$525 $345*
$399*
OPT.
OPT.
$484
$435
$434
Yard
Yard
Yard$155*
$425
Rigs in Red Are Currently Bidding
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0
5
10
15
20
25
30
1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Industry DynamicsLong-term: Demand will increase
Difficult to believe that the US populous will adjust its lifestyle downward to match the rest of the world much easier to believe that the rest of the world will continue to move theirs upward
China buying 6-8 million cars/yearIndia buying 1-2 million cars/year
Energy is not ‘the end,’ it is ‘the means to the end,’ i.e., a better lifestyle
Difficult to see how renewables will be able to contribute meaningfully in the near-term
China and U.S. per Capita Oil ConsumptionBarrels per person per year
Source: Energy Directions Inc., BP Statistical Review; Simmons Int’l
India
Japan
United States
Worldwide Average United States 100 Years Ago
China
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Industry DynamicsShort-term: Pullback Not ImpactingCustomer Discussions
45
0
10
20
30
40
50
60
70
80
Operator Oil Price Planning Forecasts
$/BBL
Ranges for InternationalJackup Fixtures Vs. Oil Price
($ Thousands)
2002 2008
0
50
100
150
200
250
300
$100/bbl2/26/2008
$140/bbl6/27/2008
250’ ILC
300’ ILC
Source: ODS; Noble
Average
Average Oil Price -1 Year
$ $
14
Industry DynamicsOil Price—Perfect Storm or is $70 the new $20?
Demand-led increases in priceLittle ability to substituteLow political/social will to effect real change in behavior or policyContinuing geo-political instabilityInternal political issues in major oil producing nations
MexicoNigeria
Deepwater discoveries are large, but will take years to impact pricesMature fields continue to declineLittle spare capacityAging workforce of experts to locate, develop, and produce new discoveriesLimited ability to impact rig supply (equipment & shipyard)
Source: EIA
You Are Here
$0
$20
$40
$60
$80
$100
$120
$140
Jan
-86
Jan
-88
Jan
-90
Jan
-92
Jan
-94
Jan
-96
Jan
-98
Jan
-00
Jan
-02
Jan
-04
Jan
-06
Jan
-08
Spot Crude Price$/bbl
Business is still cyclical, but unlikely to see $20 againThe world needs more oil, quickly
VenezuelaUSA
15
21
36
5
10
3
1
10
4
7
2
7
43
1
1
2
0
2
4
6
8
10
12
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Newbuild Jackups Being AbsorbedDeliveries and Contract Terms
2007-2009 Jackup Deliveries
2007 2008 2009
300’
350’
375’
400’
300’
350’
375’
400’
300’
350’
375’
400’
Note: Does not include jackups delivered to NOCs or jackups of non-standard depthSource: ODS; Lehman Bros.; Noble
Lighter shade—ContractedDarker shade--Uncontracted
0
5
10
15
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30
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45
Ave
rag
e C
on
tra
ct
Te
rm (
Mo
nth
s)
0
50
100
150
200
250
Ave
rag
e D
ay R
ate
($
Th
ou
sa
nd
s)
2007-2009 Contract Terms
2007 2008 2009
300’
350’
375’
400’
300’
350’
375’
400’
300’
350’
375’
400’
16
-30
-10
10
30
50
70
90
19
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19
52
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98
20
00
20
02
20
04
20
06
20
08
20
10
Additions to the Fleet Attrition Scheduled Construction / On OrderSource: ODS-Petrodata, Inc
Industry DynamicsWorldwide Jack-up Newbuilds and Attrition1950-2011
252 jackups delivered from 1979
through 1983
252 jackups delivered from 1979
through 1983
108 rigs delivered or under construction
2007 - 16
2008 - 31
2009 - 39
2010 – 21
2011 – 1
108 rigs delivered or under construction
2007 - 16
2008 - 31
2009 - 39
2010 – 21
2011 – 1
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Operational ExcellenceDelivering for Our Customers
AMERICA’S Safest Companies
Offshore EnergyAchievement Award –
HSE Category
Noble recently was named the winner of the 2007 MMS National SAFE Award, marking the second
consecutive year to deliver outstanding safety and environmental results in the US Gulf of Mexico
National Offshore Safety Award for
Excellence &
MMS Houma District Award for
Excellence
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Operational Excellence Keeping Our People Safe
Historical Safety Performance Noble’s Philosophy on Safety
Recordable Incident RatesNoble vs. IADC
Source: Noble Corporation and the IADC.
Noble IADC
Why It Matters
.0
1.0
2.0
3.0
4.0
5.0
6.0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Good safety results in outstanding employee moraleGood safety performance means fewer employee injuries and lowers direct and indirect operating costsContractor safety is a key metric used by operators in bid evaluations
Safety is paradigm of the organization and must not be compromisedA competitive environment internally drives better HSE performance Higher HSE standards improve the entire industry’s resultsHSE performance must be measured and benchmarkedA solid HSE management system is critical to success
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ChallengesRiding the Wave
PeopleRecruitingRetention
CostsLaborRepair & Maintenance
GrowthFocused on deepwater assetsDisciplined evaluationWide range of potential opportunities advanced in parallel
NewbuildsAsset purchasesLarger-scale M&A
Key Issues
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Why Own Noble?
Strong deepwater exposure
Industry-leading margins
Quality organic earnings growth
Focused Value creation
Strong and flexible balance sheet
Industry-leading safety performance
Consistent Execution
Noble: Right Values, Right People, Right Assets, Right Focus…
Right Now!
Noble Corporation
Noble Corporation 13135 South Dairy Ashford Suite 800Sugar Land, Texas 77478
281-276-6100www.noblecorp.com
Investor contact:
Lee M. AhlstromVice President IR & Planning281-276-6440