Noble NYSE: NE reported first-quarter 2026 results marked by strong cash generation, continued shareholder returns, and a series of new contract awards that management said reinforce tightening conditions in the deepwater and harsh-environment offshore drilling markets.
First-quarter results and cash returns
President and CEO Robert Eifler said the company delivered “a solid start to the year,” citing adjusted EBITDA of $277 million and free cash flow of $169 million. Chief Financial Officer Richard Barker reported contract drilling services revenue of $742 million and an adjusted EBITDA margin of 35%.
Noble maintained its quarterly dividend, paying $0.50 per share during the first quarter. Eifler said the board also declared a $0.50 per share dividend for the second quarter, which he described as part of the company’s “consistent and highly differentiated return of cash strategy.”
Contract awards lift backlog to $7.5 billion
Eifler said Noble secured approximately $565 million of new contract awards over the past three months. With those awards, Barker said total backlog stood at $7.5 billion as of April 26. Barker noted the company’s backlog excludes reimbursable revenue and ancillary services, and includes about $1.8 billion expected to convert to revenue over the remainder of 2026 and $2.4 billion in 2027.
Recent awards and updates highlighted on the call included:
- Noble Courage (Brazil): A “slightly more than three-year” Petrobras extension that keeps the rig working through the end of 2030. Eifler said the extension adds $339 million of net incremental backlog and includes a day rate reduction from $290,000 to $280,000 from April 1, 2026 through late 2027, followed by an extension at “just over $309,000 per day.”
- Noble Deliverer (Australia): A five-well Woodside contract supporting reactivation. Eifler said the contract is valued at $121 million based on an estimated 300 days of firm scope, excluding options and excluding potential additional services and upgrades.
- Noble Developer (Guyana): A one-well ExxonMobil contract at $375,000 per day, expected to slot in around year-end after the current program.
- Noble BlackRhino (U.S. Gulf of Mexico): Commenced an exercised option well for Beacon with an estimated duration of 100 days.
- Noble Venturer (Ghana): A one-well contract with Planet One at a day rate of $430,000, expected to begin late this year with an estimated 45-day duration and two unpriced options.
- Noble Viking (Malaysia): An additional one-well contract expected to extend operations through October.
Market commentary: tightening ultra-deepwater conditions
Eifler said deepwater demand indicators are “flashing green,” arguing the trend has been in motion for months and is not simply a function of recent oil price volatility. He said energy security concerns and a higher oil futures strip are supportive of demand, particularly in deepwater and harsh-environment markets.
He pointed to an acceleration in contracting activity, noting the first quarter included 32 rig years of ultra-deepwater (UDW) fixtures, about double the average quarterly pace of last year. After Petrobras completed a wave of extensions in April, Eifler said “this month alone has already had more than 40 additional UDW rig years fixed,” pushing year-to-date backlog additions above all of last year’s contracting volumes.
Despite the rise in fixtures, Eifler said open demand has continued to expand. He said the company observed slightly over 100 rig years of open floater demand last quarter and that figure has “now eclipsed 110 rig years.”
On the supply side, Eifler said total UDW contracted utilization is 105 rigs, or 95% of marketed supply, including 14 rigs with future contracts that are not yet working—six of which are Noble rigs. He emphasized the expected “convergence” of future contracted utilization and present utilization over the next 6 to 12 months as a factor that could tighten the market further, adding that the dynamic is contributing to “upward day rate pressure.” Eifler said Noble believes floater rates are likely to move higher through the rest of the year.
Asked about whether higher oil prices and geopolitical developments are directly changing customer behavior, Eifler said there is “an increase in narrative” around exploration, but he did not cite specific examples tied directly to the Iran conflict. He added that customers continue to emphasize capital discipline, and that Noble’s optimism “does not require them to abandon any discipline.”
Guidance maintained; Deliverer reactivation raises CapEx outlook
Barker said Noble is maintaining its full-year 2026 guidance for total revenue of $2.8 billion to $3.0 billion, including approximately $150 million in reimbursable and other revenue, and adjusted EBITDA of $940 million to $1.02 billion.
However, the company increased its 2026 capital expenditures guidance by $25 million due to the Noble Deliverer reactivation. In response to a question from Citigroup, Eifler said the $25 million reflects the “total required for the Woodside contract,” and that any additional upgrades would require incremental capital beyond that amount.
Barker said the lower end of the adjusted EBITDA guidance range is “fully contracted by current backlog.” He added that a stronger-than-expected first quarter was offset by several items, including:
- Notice of early contract termination on the Noble Mick O’Brien
- The lower near-term day rate revision related to the Noble Courage blend-and-extend
- Slightly later estimated commencement dates for the Noble Gerry de Souza and Noble Endeavor due to customer schedules
Barker also told JPMorgan that buying out leases on Black Ships blowout preventer (BOP) systems is expected to benefit EBITDA by about $25 million on an annualized basis, with about half of that benefit realized in 2026 as the leases are bought out during the year.
Mick O’Brien early termination and balance sheet actions
Eifler said Noble experienced limited operational disruption from the Iran conflict, primarily involving the Noble Mick O’Brien jackup in the Middle East. He said crew and related personnel were safely evacuated during the early days of the conflict.
Barker provided additional details, reminding investors Noble sold the rig to Borr Drilling in January but has continued to manage it under a bareboat arrangement through the completion of its Qatar contract. On April 12, Noble received notice of early release from the customer, Huey LNG, and is winding down operations. Barker said the termination becomes effective after 30 days and is expected to have an approximately $15 million negative impact, reflecting remaining bareboat obligations through early December 2026 and stacking costs. In a later question, Barker characterized the $15 million as “about the six months of the bareboat charter plus stacking costs,” and said the rig will move over to Borr in early December.
On cash flow items in the quarter, Barker said Noble received $210 million in proceeds from the jackup sale to Borr Drilling, in addition to a $150 million seller’s note recorded in other assets. The company also redeemed $55 million principal amount of 8.5% senior secured notes at 103, which Barker described as an opportunistic move enabled by a clause in legacy Diamond notes allowing repurchases of 10% at that price. He added that management expects to refinance and consolidate the company’s debt structure “at the right time,” anticipating “material cash interest savings” on an annual basis.
Looking ahead, Eifler said the company is focused on executing a slate of rig startups beginning this summer, and he said projects were progressing well despite strained logistics and timing pressures related to broader dislocations, including those stemming from the Strait of Hormuz impasse. He added that Noble’s outlook for 2027 has improved versus last quarter, citing the Deliverer contract and improving market dynamics for open drillship capacity.
About Noble NYSE: NE
Noble NYSE: NE is an offshore drilling company that provides drilling services to the global oil and gas industry. The firm operates a fleet of mobile offshore drilling units and delivers contract drilling solutions for exploration and production activities. Its core business centers on executing drilling programs for upstream energy companies across a range of water depths and operating environments.
Products and services include the operation and management of offshore drilling rigs — such as drillships, semisubmersibles and jackups — along with associated technical, engineering and project management services.
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