Noble Corporation plc — FY2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. This is an annual report, not a standalone Q4 report. Noble is an offshore drilling contractor; at year-end it operated 32 rigs (19 floaters and 13 jackups) in one reportable segment. The Maersk Drilling acquisition closed in October 2022. Comparisons with 2021 require caution: Maersk was included only after closing, the 2021 Successor period covers February 6–December 31, and fresh-start accounting makes Predecessor and Successor periods not fully comparable.
Financial and operating performance
| Metric | FY2022 | Comparison / context |
|---|---|---|
| Operating revenue | $1,413.8 million | $770.3 million for February 6–December 31, 2021; periods and fleet scope differ |
| Operating income | $228.8 million | $60.8 million in the 2021 Successor period |
| Net income | $168.9 million; diluted EPS $1.73 | $102.0 million; diluted EPS $1.51 in the 2021 Successor period |
| Operating margin | Approximately 16.2% | Calculated as operating income divided by revenue |
| Net cash from operations | $281.0 million | $51.6 million in the 2021 Successor period |
| Cash and cash equivalents | $476.2 million | At December 31, 2021: $194.1 million |
| Working capital | $384.7 million | At December 31, 2021: $207.3 million |
| Total debt | $672.8 million | Includes $159.7 million of current maturities; cash exceeded debt by about $196.6 million |
| Capital expenditures | $193.6 million | 2023 estimate: $325–$365 million, net of client reimbursables |
Average fleet utilization was 77% in 2022, versus 70% in the 2021 Successor period. Average dayrate rose to $207,240 from $148,780. Floater dayrate averaged $273,500 and jackup dayrate $119,251. Higher activity, dayrates, and the acquired fleet contributed to revenue growth; inflation and added operating days and rigs increased costs.
FY2022 results included $84.7 million of merger and integration costs, a $90.2 million net gain on asset sales, $42.7 million of interest expense, and $22.6 million of income tax expense. The reported operating result therefore reflects significant transaction and disposal items.
Material changes and transactions
- Noble completed its acquisition of Maersk Drilling in October 2022, adding rigs and broadening geographic and customer exposure. Maersk contributed $341.5 million of revenue and a $21.7 million net loss from October 3 through year-end.
- Noble sold five jackup rigs and related operations to Shelf Drilling for $375 million cash in October, recognizing an $85.1 million gain.
- The company entered a new $350 million DNB term facility in December. At year-end, it also had $173.7 million of Second Lien Notes and $149.7 million under the DSF facility; the DSF balance was repaid in February 2023.
- Noble repurchased $42.3 million principal amount of Second Lien Notes for approximately $48.1 million, including accrued interest, and recognized a $4.6 million loss. It also repurchased and cancelled 407,477 ordinary shares during 2022.
Liquidity, outlook, risks, and unusual items
At December 31, 2022, there were no Revolving Credit Facility loans outstanding and $21.1 million of letters of credit issued under the facility. Management said it expected operating cash flow, cash on hand, asset-sale proceeds, and available facilities to fund needs over the next 12 months. It reported $3.9 billion of drilling backlog, including 57% of available days committed for 2023; backlog is not guaranteed revenue and is exposed to downtime, rate adjustments, customer termination, and other contract risks.
Management described improving global rig demand and a recovery in ultra-deepwater floaters, while noting that market conditions vary by region and rig type. It expects inflation and supply-chain disruption to persist and potentially accelerate. The company expects $325–$365 million of 2023 capital expenditures, including approximately $210–$230 million for sustaining capital, and anticipates $125 million of annual run-rate cost synergies within two years of the Maersk combination. Synergies and timing are uncertain. Noble did not expect to pay dividends in the foreseeable future.
- Integration and controls: Management identified a material weakness in acquired Maersk Drilling IT general controls, involving program-change management and user access. Maersk was excluded from the year-end internal-control assessment; the weakness had not caused a reported financial-statement misstatement. Management and the auditor reported effective controls for the assessed scope.
- Debt and refinancing: Debt agreements impose financial and operating covenants. The filing identifies debt refinancing, covenant compliance, and access to liquidity as risks.
- Customer concentration: ExxonMobil and Aker BP represented approximately 41.1% and 21.5% of backlog, respectively; ExxonMobil generated 32.3% of 2022 revenue.
- Tax and legal exposures: Disputed tax audit claims totaled approximately $641.3 million; Noble said it would defend its positions and did not expect their resolution to materially harm the consolidated financial statements. Long-term reserves for uncertain tax positions, including interest and penalties, were $175.9 million. Hurricane Ida personal-injury litigation remained at an early stage, with outcomes uncertain.
- Other risks: Offshore drilling is cyclical and sensitive to oil and gas activity, rig supply, dayrates, energy-transition policies, inflation, labor and supplier availability, weather, operational incidents, and environmental regulation. Insurance and contractual indemnities may not cover all losses.
Investor verification priorities
- Review the full-year results against a like-for-like fleet and period, accounting for Maersk’s post-close contribution, fresh-start accounting, asset sales, and merger costs.
- Confirm current backlog conversion, contract extensions, dayrate-reset terms, and the concentration of backlog with ExxonMobil and Aker BP.
- Track cash generation, capital spending, debt maturities, covenant headroom, and the effect of the February 2023 DSF repayment.
- Monitor integration progress, remediation of Maersk’s IT control weakness, and realization of the stated $125 million synergy target.
- Assess the status and potential cash impact of the disputed tax audits and Hurricane Ida claims.