Business Context and Reporting Period
Company: Noble Corporation plc
Filing Type: Form 10-K (Annual Report)
Period Ended: December 31, 2025
Business Overview: Noble is a leading offshore drilling contractor providing contract drilling services globally with a fleet of mobile offshore drilling units. As of December 31, 2025, the fleet consisted of 36 rigs (25 floaters and 11 jackups). The company completed its acquisition of Diamond Offshore Drilling, Inc. on September 4, 2024, significantly expanding its asset base.
Key Financial Metrics
| Metric | 2025 | 2024 |
|---|---|---|
| Operating Revenues | $3.29 billion | $3.06 billion |
| Net Income | $216.7 million | $448.4 million |
| Diluted EPS | $1.35 | $2.96 |
| Operating Cash Flow | $951.7 million | $655.5 million |
| Cash and Cash Equivalents (Year End) | $471.4 million | $247.3 million |
| Total Debt (Long-Term) | $1.98 billion | $1.98 billion |
| Capital Expenditures | $500.1 million | $520.3 million |
Debt Structure: Includes $1.4 billion in 8.000% Senior Notes due 2030 and $550.0 million in 8.500% Senior Secured Second Lien Notes due 2030. No borrowings were outstanding under the $550 million 2023 Revolving Credit Facility as of year-end.
Material Changes vs. Prior Period
- Revenue Growth: Operating revenues increased 7% to $3.29 billion, driven primarily by the inclusion of Diamond Offshore Drilling assets acquired in late 2024, which contributed approximately $626 million in floater revenue.
- Profitability Decline: Net income decreased 52% to $216.7 million. This decline was primarily due to a $82.7 million impairment charge on specific rigs (Noble Globetrotter II, Noble Reacher, and Noble Resolve) and higher depreciation/amortization ($585.5 million vs. $428.6 million) resulting from the expanded fleet.
- Operating Costs: Total operating costs and expenses increased 17% to $2.87 billion. Contract drilling services costs rose 14%, largely attributable to the additional rigs from the Diamond acquisition and increased mobilization and insurance costs.
- Utilization: Average rig utilization decreased to 66% in 2025 from 72% in 2024. Floater utilization dropped to 67% (from 69%), while jackup utilization fell to 64% (from 77%).
- Dayrates: Average dayrates for floaters decreased to $402,703 from $427,192, while jackup dayrates increased to $185,337 from $153,321.
Guidance, Outlook, and Risks
Outlook: Management remains encouraged by the long-term outlook for the ultra-deepwater floater market but notes lingering utilization headwinds for the near term compared to 2023-2024 levels. Economic uncertainty, lower commodity prices, and trade policy tariffs present potential demand risks. Capital expenditures for 2026 are estimated between $590 million and $640 million.
Backlog: As of December 31, 2025, contract drilling services backlog totaled approximately $7.0 billion, representing 57% of available days committed for 2026.
Key Risks and Contingencies:
- Asset Impairment: The company recorded $82.7 million in impairment charges in 2025. Future impairments remain possible if market conditions deteriorate or reactivation costs exceed projections.
- Divestitures: In December 2025, Noble signed agreements to sell six jackup rigs for an aggregate of $424 million ($274 million cash, $150 million seller notes). Five sales closed in Q1 2026; the final closing is expected in Q3 2026.
- Tax Matters: Significant tax audit claims (approx. $351 million) remain outstanding, primarily in Brazil. The company maintains a reserve for uncertain tax positions of $119.2 million.
- Market Cyclicality: The offshore drilling industry is highly cyclical. Demand is sensitive to oil prices, OPEC+ production levels, and customer capital spending.
Investor Verification Checklist
- Impairment Triggers: Verify the specific assumptions used for the $82.7 million impairment charge and monitor for potential future write-downs on the remaining fleet.
- Divestiture Execution: Confirm the closing of the six jackup rig sales and the terms of the $150 million seller notes issued to Borr Drilling Limited.
- Utilization Trends: Monitor quarterly rig utilization rates, particularly for the lower-specification drillships and semi-submersibles, which face potential headwinds.
- Tax Resolution: Track the status of the $351 million in outstanding tax audit claims, specifically in Brazil, and any changes to the $119.2 million uncertain tax position reserve.
- Debt Covenants: Review compliance with financial covenants in the 2023 Revolving Credit Agreement and the indentures for the 2030 Notes and Diamond Second Lien Notes.