UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31,June 30, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from            to             

Commission file number: 001-41520
Noble Corporation plc
(Exact name of registrant as specified in its charter)

England and Wales 98-1644664
(State or other jurisdiction of incorporation or organization)(I.R.S. employer identification number)
13135 Dairy Ashford, Suite 800, Sugar Land, Texas, 77478
(Address of principal executive offices) (Zip Code)
Registrant’s Telephone Number, Including Area Code: (281) 276-6100

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
A Ordinary Shares, par value $0.00001 per shareNENew York Stock Exchange
Tranche 1 Warrants of Noble Corporation plcNE WSNew York Stock Exchange
Tranche 2 Warrants of Noble Corporation plcNE WSANew York Stock Exchange
_____________________________________________________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.   Yes ☑    No ☐

Number of shares outstanding at May 1,July 31, 2023: Noble Corporation plc -138,629,270 137,083,812



TABLE OF CONTENTS
   Page
PART I  
Item 1  
  
  
  
  
  
  
Item 2 
Item 3 
Item 4 
PART II  
Item 1 
Item 1A
Item 2 
Item 6 
  

2


PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
NOBLE CORPORATION plc AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
March 31, 2023December 31, 2022June 30, 2023December 31, 2022
ASSETSASSETSASSETS
Current assetsCurrent assetsCurrent assets
Cash and cash equivalentsCash and cash equivalents$186,186 $476,206 Cash and cash equivalents$255,356 $476,206 
Accounts receivable, netAccounts receivable, net563,055 468,802 Accounts receivable, net516,800 468,802 
Taxes receivableTaxes receivable38,627 34,087 Taxes receivable54,371 34,087 
Prepaid expenses and other current assetsPrepaid expenses and other current assets84,310 72,695 Prepaid expenses and other current assets106,091 72,695 
Total current assetsTotal current assets872,178 1,051,790 Total current assets932,618 1,051,790 
Intangible assetsIntangible assets27,411 34,372 Intangible assets17,018 34,372 
Property and equipment, at costProperty and equipment, at cost4,217,524 4,163,205 Property and equipment, at cost4,329,002 4,163,205 
Accumulated depreciationAccumulated depreciation(251,480)(181,904)Accumulated depreciation(322,444)(181,904)
Property and equipment, netProperty and equipment, net3,966,044 3,981,301 Property and equipment, net4,006,558 3,981,301 
GoodwillGoodwill15,026 26,016 Goodwill14,626 26,016 
Other assetsOther assets191,733 141,385 Other assets226,582 141,385 
Total assetsTotal assets$5,072,392 $5,234,864 Total assets$5,197,402 $5,234,864 
LIABILITIES AND EQUITYLIABILITIES AND EQUITYLIABILITIES AND EQUITY
Current liabilitiesCurrent liabilitiesCurrent liabilities
Current maturities of long-term debtCurrent maturities of long-term debt$15,000 $159,715 Current maturities of long-term debt$— $159,715 
Accounts payableAccounts payable265,583 290,690 Accounts payable310,723 290,690 
Accrued payroll and related costsAccrued payroll and related costs55,837 76,185 Accrued payroll and related costs77,049 76,185 
Taxes payableTaxes payable56,294 56,986 Taxes payable57,337 56,986 
Interest payableInterest payable4,218 9,509 Interest payable10,267 9,509 
Other current liabilitiesOther current liabilities66,045 74,013 Other current liabilities58,775 74,013 
Total current liabilitiesTotal current liabilities462,977 667,098 Total current liabilities514,151 667,098 
Long-term debtLong-term debt505,654 513,055 Long-term debt585,389 513,055 
Deferred income taxesDeferred income taxes9,430 9,335 Deferred income taxes9,807 9,335 
Noncurrent contract liabilitiesNoncurrent contract liabilities121,194 181,883 Noncurrent contract liabilities79,792 181,883 
Other liabilitiesOther liabilities268,830 256,408 Other liabilities288,843 256,408 
Total liabilitiesTotal liabilities1,368,085 1,627,779 Total liabilities1,477,982 1,627,779 
Commitments and contingencies (Note 13)Commitments and contingencies (Note 13)Commitments and contingencies (Note 13)
Shareholders’ equityShareholders’ equityShareholders’ equity
Common stock, $0.00001 par value; 138,623 ordinary shares outstanding as of March 31, 2023; 134,681 ordinary shares outstanding as of December 31, 2022
Common stock, $0.00001 par value; 137,084 ordinary shares outstanding as of June 30, 2023; 134,681 ordinary shares outstanding as of December 31, 2022Common stock, $0.00001 par value; 137,084 ordinary shares outstanding as of June 30, 2023; 134,681 ordinary shares outstanding as of December 31, 2022
Additional paid-in capitalAdditional paid-in capital3,348,852 3,347,507 Additional paid-in capital3,358,108 3,347,507 
Retained earningsRetained earnings353,993 255,930 Retained earnings359,809 255,930 
Accumulated other comprehensive income (loss)Accumulated other comprehensive income (loss)1,461 3,647 Accumulated other comprehensive income (loss)1,502 3,647 
Total shareholdersequity
Total shareholdersequity
3,704,307 3,607,085 
Total shareholdersequity
3,719,420 3,607,085 
Total liabilities and equityTotal liabilities and equity$5,072,392 $5,234,864 Total liabilities and equity$5,197,402 $5,234,864 
See accompanying notes to the unaudited condensed consolidated financial statements.
3


NOBLE CORPORATION plc AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
 
Three Months Ended March 31,Three Months Ended June 30,Six Months Ended June 30,
202320222023202220232022
Operating revenuesOperating revenuesOperating revenues
Contract drilling servicesContract drilling services$575,290 $195,035 Contract drilling services$606,180 $262,463 $1,181,470 $457,498 
Reimbursables and otherReimbursables and other34,764 15,195 Reimbursables and other32,355 12,690 67,119 27,885 
610,054 210,230 638,535 275,153 1,248,589 485,383 
Operating costs and expensesOperating costs and expensesOperating costs and expenses
Contract drilling servicesContract drilling services361,789 166,083 Contract drilling services362,533 178,145 724,322 344,228 
ReimbursablesReimbursables26,006 13,478 Reimbursables24,796 10,333 50,802 23,811 
Depreciation and amortizationDepreciation and amortization69,942 25,605 Depreciation and amortization71,324 26,636 141,266 52,241 
General and administrativeGeneral and administrative30,037 17,524 General and administrative32,352 16,687 62,389 34,211 
Merger and integration costsMerger and integration costs11,631 9,521 Merger and integration costs22,452 9,057 34,083 18,578 
(Gain) loss on sale of operating assets, net(Gain) loss on sale of operating assets, net— (4,562)(Gain) loss on sale of operating assets, net— 1,103 — (3,459)
Hurricane losses and (recoveries), netHurricane losses and (recoveries), net3,544 17,212 Hurricane losses and (recoveries), net15,934 (14,407)19,478 2,805 
502,949 244,861 529,391 227,554 1,032,340 472,415 
Operating income (loss)Operating income (loss)107,105 (34,631)Operating income (loss)109,144 47,599 216,249 12,968 
Other income (expense)Other income (expense)Other income (expense)
Interest expense, net of amounts capitalizedInterest expense, net of amounts capitalized(16,872)(7,680)Interest expense, net of amounts capitalized(14,662)(7,715)(31,534)(15,395)
Gain (loss) on extinguishment of debt, netGain (loss) on extinguishment of debt, net(26,397)— (26,397)— 
Interest income and other, netInterest income and other, net2,026 450 Interest income and other, net(2,940)1,081 (914)1,531 
Income (loss) before income taxesIncome (loss) before income taxes92,259 (41,861)Income (loss) before income taxes65,145 40,965 157,404 (896)
Income tax benefit (provision)Income tax benefit (provision)15,804 5,205 Income tax benefit (provision)671 (3,908)16,475 1,297 
Net income (loss)Net income (loss)$108,063 $(36,656)Net income (loss)$65,816 $37,057 $173,879 $401 
Per share dataPer share dataPer share data
Basic:Basic:Basic:
Net income (loss)Net income (loss)$0.80 $(0.54)Net income (loss)$0.48 $0.53 $1.27 $0.01 
Diluted:Diluted:Diluted:
Net income (loss)Net income (loss)$0.74 $(0.54)Net income (loss)$0.45 $0.45 $1.19 $— 
See accompanying notes to the unaudited condensed consolidated financial statements.
4


NOBLE CORPORATION plc AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
(Unaudited)
Three Months Ended March 31,Three Months Ended June 30,Six Months Ended June 30,
202320222023202220232022
Net income (loss)Net income (loss)$108,063 $(36,656)Net income (loss)65,816 37,057 173,879 401 
Other comprehensive income (loss)Other comprehensive income (loss)Other comprehensive income (loss)
Net changes in pension and other postretirement plan assets and benefit obligations recognized in other comprehensive income (loss), net of tax provision (benefit) of $2,436 and zero for the three months ended March 31, 2023 and 2022, respectively.(2,186)(424)
Net changes in pension and other postretirement plan assets and benefit obligations recognized in other comprehensive income (loss), net of tax provision (benefit) of zero and $2 for the three months ended June 30, 2023 and 2022, respectively, and $2,436 and $2 for the six months ended June 30, 2023 and 2022, respectively.Net changes in pension and other postretirement plan assets and benefit obligations recognized in other comprehensive income (loss), net of tax provision (benefit) of zero and $2 for the three months ended June 30, 2023 and 2022, respectively, and $2,436 and $2 for the six months ended June 30, 2023 and 2022, respectively.41 (1,163)(2,145)(1,587)
Other comprehensive income (loss), netOther comprehensive income (loss), net(2,186)(424)Other comprehensive income (loss), net41 (1,163)(2,145)(1,587)
Comprehensive income (loss)Comprehensive income (loss)$105,877 $(37,080)Comprehensive income (loss)$65,857 $35,894 $171,734 $(1,186)
See accompanying notes to the unaudited condensed consolidated financial statements.
5


NOBLE CORPORATION plc AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
Three Months Ended March 31,Six Months Ended June 30,
2023202220232022
Cash flows from operating activitiesCash flows from operating activitiesCash flows from operating activities
Net income (loss)Net income (loss)$108,063 $(36,656)Net income (loss)$173,879 $401 
Adjustments to reconcile net income (loss) to net cash flow from operating activities:Adjustments to reconcile net income (loss) to net cash flow from operating activities:Adjustments to reconcile net income (loss) to net cash flow from operating activities:
Depreciation and amortizationDepreciation and amortization69,942 25,605 Depreciation and amortization141,266 52,241 
Amortization of intangible assets and contract liabilities, netAmortization of intangible assets and contract liabilities, net(53,728)14,099 Amortization of intangible assets and contract liabilities, net(84,737)28,354 
(Gain) loss on extinguishment of debt, net(Gain) loss on extinguishment of debt, net26,397 — 
(Gain) loss on sale of operating assets, net(Gain) loss on sale of operating assets, net— (6,767)(Gain) loss on sale of operating assets, net— (6,767)
Deferred income taxesDeferred income taxes(27,237)(6,143)Deferred income taxes(57,179)(15,730)
Amortization of share-based compensationAmortization of share-based compensation9,651 6,795 Amortization of share-based compensation18,854 13,839 
Other costs, netOther costs, net1,184 (1,190)Other costs, net5,404 (3,364)
Changes in components of working capitalChanges in components of working capitalChanges in components of working capital
Change in taxes receivableChange in taxes receivable(4,540)(1,820)Change in taxes receivable(20,284)(345)
Net changes in other operating assets and liabilitiesNet changes in other operating assets and liabilities(166,415)(45,736)Net changes in other operating assets and liabilities(55,520)(32,330)
Net cash provided by (used in) operating activitiesNet cash provided by (used in) operating activities(63,080)(51,813)Net cash provided by (used in) operating activities148,080 36,299 
Cash flows from investing activitiesCash flows from investing activitiesCash flows from investing activities
Capital expendituresCapital expenditures(62,734)(47,045)Capital expenditures(169,530)(79,525)
Proceeds from disposal of assets, netProceeds from disposal of assets, net— 14,247 Proceeds from disposal of assets, net— 15,756 
Net cash provided by (used in) investing activitiesNet cash provided by (used in) investing activities(62,734)(32,798)Net cash provided by (used in) investing activities(169,530)(63,769)
Cash flows from financing activitiesCash flows from financing activitiesCash flows from financing activities
Issuance of debtIssuance of debt600,000 — 
Repayments of debtRepayments of debt(152,215)— Repayments of debt(673,411)— 
Debt extinguishment costsDebt extinguishment costs(25,697)— 
Debt issuance costsDebt issuance costs(24,914)— 
Warrants exercisedWarrants exercised21 118 Warrants exercised102 440 
Share repurchasesShare repurchases(10,000)— Share repurchases(70,000)— 
Taxes withheld on employee stock transactionsTaxes withheld on employee stock transactions(8,327)(4,926)Taxes withheld on employee stock transactions(8,355)(4,926)
Net cash provided by (used in) financing activitiesNet cash provided by (used in) financing activities(170,521)(4,808)Net cash provided by (used in) financing activities(202,275)(4,486)
Net increase (decrease) in cash, cash equivalents and restricted cashNet increase (decrease) in cash, cash equivalents and restricted cash(296,335)(89,419)Net increase (decrease) in cash, cash equivalents and restricted cash(223,725)(31,956)
Cash, cash equivalents and restricted cash, beginning of periodCash, cash equivalents and restricted cash, beginning of period485,707 196,722 Cash, cash equivalents and restricted cash, beginning of period485,707 196,722 
Cash, cash equivalents and restricted cash, end of periodCash, cash equivalents and restricted cash, end of period$189,372 $107,303 Cash, cash equivalents and restricted cash, end of period$261,982 $164,766 
See accompanying notes to the unaudited condensed consolidated financial statements.

6


NOBLE CORPORATION plc AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(In thousands)
(Unaudited)
SharesAdditional
Paid-in
Capital
Retained
Earnings (Accumulated Deficit)
Accumulated Other Comprehensive Income (Loss)Total
Equity
SharesAdditional
Paid-in
Capital
Retained
Earnings (Accumulated Deficit)
Accumulated Other Comprehensive Income (Loss)Total
Equity
BalancePar Value
Balance at December 31, 202160,172 $1 $1,393,255 $101,982 $5,389 $1,500,627 
Employee related equity activity
Amortization of share-based compensation— — 6,795 — — 6,795 
Issuance of share-based compensation shares365 — — — — — 
Shares withheld for taxes on equity transactions— — (4,926)— — (4,926)
Warrant exercises2,535 — 118 — — 118 
Net income (loss)— — — (36,656)— (36,656)
Other comprehensive income (loss), net— — — — (424)(424)
Balance at March 31, 202263,072 $1 $1,395,242 $65,326 $4,965 $1,465,534 
BalancePar ValueAdditional
Paid-in
Capital
Retained
Earnings (Accumulated Deficit)
Accumulated Other Comprehensive Income (Loss)Total
Equity
Balance at December 31, 2022Balance at December 31, 2022134,681 $1 $3,347,507 $255,930 $3,647 $3,607,085 Balance at December 31, 2022134,681 $1 
Employee related equity activityEmployee related equity activityEmployee related equity activity
Amortization of share-based compensationAmortization of share-based compensation— — 9,651 — — 9,651 Amortization of share-based compensation— — 9,651 — — 9,651 
Issuance of share-based compensation sharesIssuance of share-based compensation shares440 — — — — — Issuance of share-based compensation shares440 — — — — — 
Shares withheld for taxes on equity transactionsShares withheld for taxes on equity transactions— — (8,327)— — (8,327)Shares withheld for taxes on equity transactions— — (8,327)— — (8,327)
Warrant exercisesWarrant exercises3,772 — 21 — — 21 Warrant exercises3,772 — 21 — — 21 
Share repurchasesShare repurchases(270)— — (10,000)— (10,000)Share repurchases(270)— — (10,000)— (10,000)
Net income (loss)Net income (loss)— — — 108,063 — 108,063 Net income (loss)— — — 108,063 — 108,063 
Other comprehensive income (loss), netOther comprehensive income (loss), net— — — — (2,186)(2,186)Other comprehensive income (loss), net— — — — (2,186)(2,186)
Balance at March 31, 2023Balance at March 31, 2023138,623 $1 $3,348,852 $353,993 $1,461 $3,704,307 Balance at March 31, 2023138,623 1 3,348,852 353,993 1,461 3,704,307 
Employee related equity activityEmployee related equity activity
Amortization of share-based compensationAmortization of share-based compensation— — 9,203 — — 9,203 
Issuance of share-based compensation sharesIssuance of share-based compensation shares— — — — — 
Shares withheld for taxes on equity transactionsShares withheld for taxes on equity transactions— — (28)— — (28)
Warrant exercisesWarrant exercises— 81 — — 81 
Share repurchasesShare repurchases(1,550)— — (60,000)— (60,000)
Net income (loss)Net income (loss)— — — 65,816 — 65,816 
Other comprehensive income (loss), netOther comprehensive income (loss), net— — — — 41 41 
Balance at June 30, 2023Balance at June 30, 2023137,084 $1 $3,358,108 $359,809 $1,502 $3,719,420 
See accompanying notes to the unaudited condensed consolidated financial statements.



7


NOBLE CORPORATION plc AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - CONTINUED
(In thousands)
(Unaudited)

SharesAdditional
Paid-in
Capital
Retained
Earnings (Accumulated Deficit)
Accumulated Other
Comprehensive
Income (Loss)
Total
Equity
BalancePar Value
Balance at December 31, 202160,172 $1 $1,393,255 $101,982 $5,389 $1,500,627 
Employee related equity activity
Amortization of share-based compensation— — 6,795 — — 6,795 
Issuance of share-based compensation shares365 — — — — — 
Shares withheld for taxes on equity transactions— — (4,926)— — (4,926)
Warrant exercises2,535 — 118 — — 118 
Net income (loss)— — — (36,656)— (36,656)
Other comprehensive income (loss), net— — — — (424)(424)
Balance at March 31, 202263,072 1 1,395,242 65,326 4,965 1,465,534 
Employee related equity activity
Amortization of share-based compensation— — 7,044 — — 7,044 
Issuance of share-based compensation shares3,978 — 322 — — 322 
Shares withheld for taxes on equity transactions— — — — — — 
Warrant exercises— — — — — — 
Net income (loss)— — — 37,057 — 37,057 
Other comprehensive income (loss), net— — — — (1,163)(1,163)
Balance at June 30, 202267,050 $1 $1,402,608 $102,383 $3,802 $1,508,794 
See accompanying notes to the unaudited condensed consolidated financial statements.
8

NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)

Note 1— Organization and Basis of Presentation
Noble Corporation plc, a public limited company incorporated under the laws of England and Wales (“Noble”), is a leading offshore drilling contractor for the oil and gas industry. We provide contract drilling services to the international oil and gas industry with our global fleet of mobile offshore drilling units. Noble and its predecessors have been engaged in the contract drilling of oil and gas wells since 1921. As of March 31,June 30, 2023, our fleet of 32 drilling rigs consisted of 19 floaters and 13 jackups.
We report our contract drilling operations as a single reportable segment, Contract Drilling Services, which reflects how we manage our business. The mobile offshore drilling units comprising our offshore rig fleet operate in a global market for contract drilling services and are often redeployed to different regions due to changing demands of our customers, which consist primarily of large, integrated, independent and government-owned or controlled oil and gas companies throughout the world.
In September 2022, as a result of the Merger (as defined herein), Noble became the successor issuer to Noble Corporation, an exempted company incorporated in the Cayman Islands with limited liability (“Noble Cayman”), for purposes of and pursuant to Rule 12g-3(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). References in this Quarterly Report on Form 10-Q to “Noble,” the “Company,” “we,” “us,” “our” and words of similar meaning refer collectively to Noble and its consolidated subsidiaries.
The accompanying unaudited condensed consolidated financial statements of Noble have been prepared pursuant to the rules and regulations of the US Securities and Exchange Commission (“SEC”) as they pertain to Quarterly Reports on Form 10-Q. Accordingly, certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. The unaudited financial statements are prepared on a going concern basis and reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the financial position and results of operations for the interim periods, on a basis consistent with the annual audited consolidated financial statements. All such adjustments are of a recurring nature. The December 31, 2022 Condensed Consolidated Balance Sheet presented herein is derived from the December 31, 2022 audited consolidated financial statements. These interim financial statements should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2022, filed by Noble. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.
Note 2— Acquisitions and Divestitures
Business Combination with Maersk Drilling
On September 30, 2022 (the “Merger Effective Date”), pursuant to a Business Combination Agreement, dated November 10, 2021 (as amended, the “Business Combination Agreement”), by and among Noble, Noble Cayman, Noble Newco Sub Limited, a Cayman Islands exempted company and a direct, wholly owned subsidiary of Noble (“Merger Sub”), and The Drilling Company of 1972 A/S, a Danish public limited liability company (“Maersk Drilling”), Noble Cayman merged with and into Merger Sub (the “Merger”), with Merger Sub surviving the Merger as a wholly owned subsidiary of Noble. As a result of the Merger, Noble became the ultimate parent of Noble Cayman and its respective subsidiaries.
On October 3, 2022 (the “Closing Date”), pursuant to the Business Combination Agreement, Noble completed a voluntary tender exchange offer to Maersk Drilling’s shareholders (the “Offer” and, together with the Merger and the other transactions contemplated by the Business Combination Agreement, the “Business Combination”) and because Noble acquired more than 90% of the issued and outstanding shares of Maersk Drilling, nominal value Danish krone (“DKK”) 10 per share (“Maersk Drilling Shares”), Noble redeemed all remaining Maersk Drilling Shares not exchanged in the Offer for, at the election of the holder, either A ordinary shares, par value $0.00001 per share, of Noble (“Ordinary Shares”) or cash (or, for those holders that did not make an election, only cash), under Danish law by way of a compulsory purchase (the “Compulsory Purchase”), which was completed in early November 2022. Upon completion of the Compulsory Purchase, Maersk Drilling became a wholly owned subsidiary of Noble.
89

NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
The Merger was accounted for as a business combination in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 805, Business Combinations, where Noble is the accounting acquirer. Under the acquisition method of accounting, the assets and liabilities of Maersk Drilling and its subsidiaries were recorded at their respective fair values on the Closing Date. Total consideration for the acquisition was $2.0 billion, which included $5.6 million in net cash paid and $2.0 billion in non-cash consideration, primarily related to Ordinary Shares issued to legacy Maersk shareholders and the replacement of legacy Maersk Drilling restricted stock unit awards. The purchase price allocation is preliminary and subject to change. The amounts recognized will be finalized as the information necessary to complete the analysis is obtained, but no later than one year after the Closing Date.
910

NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
Determining the fair value of the assets and liabilities of Maersk Drilling requires judgment and certain assumptions to be made. The most significant fair value estimates related to the valuation of Maersk Drilling’s offshore drilling units and long term debt. The following table represents the preliminary allocation of the total purchase price of Maersk Drilling to the identifiable assets acquired and the liabilities assumed based on the fair values as of the Closing Date.
Purchase price consideration:
Fair value of Noble shares transferred to legacy Maersk Drilling shareholders$1,793,351 
Cash paid to legacy Maersk Drilling shareholders887 
Fair value of replacement Maersk Drilling RSU Awards attributable to the purchase price6,780 
Deal Completion Bonus6,177 
Fair Value of Compulsory Purchase193,678 
Total purchase price consideration$2,000,873 
Assets acquired:
Cash and cash equivalents$172,205 
Accounts receivable, net250,251 
Taxes receivable20,603 
Prepaid expenses and other current assets (1)
41,06843,168 
Total current assets484,127486,227 
Intangible assets22,991 
Property, plant and equipment, net2,756,096 
Other assets (1)
94,882 
Total assets acquired3,358,0963,360,196 
Liabilities assumed:
Current maturities of long-term debt129,130 
Accounts payable130,273 
Accrued payroll and related costs (1)
21,78423,884 
Taxes payable38,218 
Interest payable800 
Other current liabilities41,253 
Total current liabilities361,458363,558 
Long-term debt596,692 
Deferred income taxes4,071 
Noncurrent contract liabilities237,703 
Other liabilities (1)
172,325171,925 
Total liabilities assumed1,372,2491,373,949 
Net assets acquired1,985,8471,986,247 
Goodwill acquired (1)
15,02614,626 
Purchase price consideration$2,000,873 
(1)During the threesix months ended March 31,June 30, 2023, the Company recorded tax adjustments, which resulted in a net increase to deferred tax assets of $25.2 million, a net increase to reserves for uncertain tax positions of $14.2$13.8 million, and a decrease of goodwill of $11.0$11.4 million. Other adjustments were made to remeasure certain payroll tax related balances. The effect of the changes to the provisional amounts on the current period statement of operations that would have been recognized in previous periods if the adjustment to provisional amounts had been recognized as of the Closing Date was immaterial.

1011

NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)

The goodwill recognized in the Merger represents the excess of the gross consideration transferred over the fair value of the underlying net tangible and identifiable intangible assets acquired and liabilities assumed. Goodwill recognized is attributable to anticipated synergies expected to arise in connection with the acquisition. All of the goodwill was assigned to our single reporting unit, Contract Drilling Services. The goodwill is not deductible for tax purposes. The Company did not recognize any goodwill impairment during the three and six months ended March 31,June 30, 2023. See “Note 4— Acquisitions and Divestitures” in our Annual Report on Form 10-K for the year ended December 31, 2022 for additional information on the Business Combination.
Note 3— Accounting Pronouncements
Accounting Standards Adopted
We do not believe that any recently issued accounting standards would have a material effect on the accompanying unaudited condensed consolidated financial statements.
Recently Issued Accounting Standards
There have been no new accounting pronouncements not yet effective that have significance, or potential significance, to our unaudited condensed consolidated financial statements.
Note 4— Income (Loss) Per Share
The following table presents the computation of basic and diluted income (loss) per share for Noble:share:
Three Months Ended March 31,Three Months Ended June 30,Six Months Ended June 30,
202320222023202220232022
Numerator:Numerator:Numerator:
Basic
Net income (loss)Net income (loss)$65,816 $37,057 $173,879 $401 
Net income (loss)$108,063 $(36,656)
Diluted
Net income (loss)$108,063 $(36,656)
Denominator:Denominator:Denominator:
Weighted average shares outstanding – basicWeighted average shares outstanding – basic134,751 67,643 Weighted average shares outstanding – basic138,058 69,789 136,502 68,722 
Dilutive effect of share-based awardsDilutive effect of share-based awards3,271 — Dilutive effect of share-based awards3,242 3,378 3,242 3,378 
Dilutive effect of warrantsDilutive effect of warrants7,971 — Dilutive effect of warrants5,692 9,535 6,810 9,185 
Weighted average shares outstanding – dilutedWeighted average shares outstanding – diluted145,993 67,643 Weighted average shares outstanding – diluted146,992 82,702 146,554 81,285 
Per share dataPer share dataPer share data
Basic:
BasicBasic
Net income (loss)Net income (loss)$0.80 $(0.54)Net income (loss)$0.48 $0.53 $1.27 $0.01 
Diluted:
DilutedDiluted
Net income (loss)Net income (loss)$0.74 $(0.54)Net income (loss)$0.45 $0.45 $1.19 $— 
Only those items having a dilutive impact on our basic income (loss) per share are included in diluted income (loss) per share. The following table displays the share-based instruments that have been excluded from diluted income (loss) per share since the effect would have been anti-dilutive:
Three Months Ended March 31,Three Months Ended June 30,Six Months Ended June 30,
202320222023202220232022
Share-based awardsShare-based awards— 3,376 Share-based awards— — — — 
Warrants (1)
Warrants (1)
2,774 17,366 
Warrants (1)
2,774 2,778 2,774 2,778 
(1)Represents the total number of warrants outstanding which did not have a dilutive effect. In periods where the warrants are determined to be dilutive, the number of shares which will be included in the computation of diluted shares is determined using the treasury stock method, adjusted for mandatory exercise provisions under the warrant agreements if applicable.
1112

NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
shares is determined using the treasury stock method, adjusted for mandatory exercise provisions under the warrant agreements if applicable.
Share Capital
As of March 31,June 30, 2023, Noble had approximately 138.6137.1 million Ordinary Shares outstanding as compared to approximately 134.7 million Ordinary Shares outstanding at December 31, 2022. In addition, as of March 31,June 30, 2023, 3.6 million Tranche 1 Warrants, 3.6 million Tranche 2 Warrants and 2.8 million Tranche 3 Warrants (each as defined herein) were outstanding and exercisable. We also have 1.3 million Ordinary Shares authorized and reserved for issuance pursuant to equity awards under the Noble Corporation plc 2022 Long-Term Incentive Plan.
The declaration and payment of dividends require the authorization of the Board of Directors of Noble. Such may be paid only out of Noble’s “distributable reserves” on its statutory balance sheet in accordance with law. Therefore, Noble is not permitted to pay dividends out of share capital, which includes share premium. The payment of future dividends will depend on our results of operations, financial condition, cash requirements, future business prospects, contractual and indenture restrictions and other factors deemed relevant by our Board of Directors.
Share Repurchases
Under applicable law, the Company is only permitted to purchase its own Ordinary Shares by way of an “off-market purchase” in a plan approved by shareholders. Such may be made only out of Noble’s “distributable reserves” on its statutory balance sheet in accordance with applicable law. As of the date of this report, we have shareholder authority to repurchase up to 15% per annum of the issued share capital of the Company as of the beginning of each fiscal year for a five-year period (subject to an overall aggregate maximum of 20.6 million Ordinary Shares). During the three and six months ended June 30, 2023, respectively, we repurchased 1.6 million and 1.8 million of our Ordinary Shares, which were subsequently cancelled. The Inflation Reduction Act of 2022 imposes a 1% excise tax on stock repurchases by publicly traded U.S. corporations that occur after December 31, 2022. Such tax may also apply if a domestic affiliate of a publicly traded foreign corporation purchases, or is deemed to fund the purchase of, the shares of the publicly traded foreign corporation. None of these conditions were met for share repurchases to date, and are not expected to be met for future repurchases; as such, the excise tax should not be applicable to Noble.
Warrants
On the Merger Effective Date, immediately prior to the effective time of the Merger (the “Merger Effective Time”), we had outstanding 6.2 million Noble Cayman Tranche 1 Warrants of Noble Cayman, 5.6 million Noble Cayman Tranche 2 Warrants of Noble Cayman and 2.8 million Noble Cayman Tranche 3 Warrants (together with theof Noble Cayman Tranche 1 Warrants and the Noble Cayman Tranche 2 Warrants,(collectively, the “Noble Cayman Warrants”). At the Merger Effective Time, each Noble Cayman Warrant outstanding immediately prior to the Merger Effective Time was converted automatically into a Warrant to acquire a number of Ordinary Shares equal to the number of Noble Cayman Shares underlying such Noble Cayman Warrant, with the same terms as were in effect immediately prior to the Merger Effective Time under the terms of the applicable Noble Cayman Warrant Agreement.
The Tranche 1 Warrants of Noble (the “Tranche 1 Warrants”) are exercisable for one Ordinary Share per warrant at an exercise price of $19.27 per warrant, the Tranche 2 Warrants of Noble (the “Tranche 2 Warrants”) are exercisable for one Ordinary Share per warrant at an exercise price of $23.13 per warrant and the Tranche 3 Warrants of Noble (the “Tranche 3 Warrants”) are exercisable for one Ordinary Share per warrant at an exercise price of $124.40 per warrant (in each case as may be adjusted from time to time pursuant to the applicable Warrant Agreement). The Tranche 1 Warrants and the Tranche 2 Warrants are exercisable until 5:00 p.m., Eastern time, on February 4, 2028 and the Tranche 3 Warrants are exercisable until 5:00 p.m., Eastern time, on February 4, 2026. The Tranche 1 Warrants and the Tranche 2 Warrants have Black-Scholes protections,protection, including in the event of a Fundamental Transaction (as defined in the applicable warrant agreement). The Tranche 1 Warrants and the Tranche 2 Warrants also provide that while the Mandatory Exercise Condition (as defined in the applicable Warrant Agreement) set forth in the applicable Warrant Agreement has occurred and is continuing, Noble or the Required Mandatory Exercise Warrantholders (as defined in the applicable Warrant Agreement) have the right and option (but not the obligation) to cause all or a portion of the Warrants to be exercised on a cashless basis. In the case of Noble, under the Mandatory Exercise Condition, all of the Tranche 1 Warrants or the Tranche 2 Warrants (as applicable) would be exercised. In the case of the electing Required Mandatory Exercise Warrantholders, under the Mandatory Exercise Condition, all of their respective Tranche 1 Warrants or Tranche 2 Warrants (as applicable) would be exercised. Mandatory exercises entitle the holder of each Warrant subject thereto to (i) the number of Ordinary Shares issuable upon exercise of such Warrant on a cashless basis and (ii) an amount payable in cash, Ordinary Shares or a combination thereof (in Noble’s sole discretion) equal to the Black-Scholes Value (as defined in the applicable Warrant Agreement) with respect to the number of Ordinary Shares withheld upon exercise of such Warrant on a cashless basis. At March 31,June 30, 2023, the Mandatory Exercise Condition set forth in the Warrant Agreements for the Tranche 1 Warrants and the Tranche 2 Warrants was satisfied.
Share Repurchases
Under applicable law, the Company is only permitted to purchase its own Ordinary Shares by way of an “off-market purchase” in a plan approved by shareholders. Such may be made only out of Noble’s “distributable reserves” on its statutory balance sheet in accordance with applicable law. As of the date of this report, we have shareholder authority to repurchase up to 15% per annum of the issued share capital of the Company as of the beginning of each fiscal year for a five-year period (subject to an overall aggregate maximum of 20,601,161 Ordinary Shares). During the three months ended March 31, 2023, we repurchased 270,098 of our Ordinary Shares, which were subsequently cancelled.
1213

NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
Tranche 2 Warrants was satisfied. On June 26, 2023 the Company was approved to list the Tranche 1 Warrants and the Tranche 2 Warrants on the New York Stock Exchange under the symbols “NE WS” and “NE WSA,” respectively.
Note 5— Property and Equipment
Property and equipment, at cost, for Noble consisted of the following:
March 31, 2023December 31, 2022June 30, 2023December 31, 2022
Drilling equipment and facilitiesDrilling equipment and facilities$4,062,384 $3,997,498 Drilling equipment and facilities$4,100,796 $3,997,498 
Construction in progressConstruction in progress114,284 123,911 Construction in progress188,062 123,911 
OtherOther40,856 41,796 Other40,144 41,796 
Property and equipment, at costProperty and equipment, at cost$4,217,524 $4,163,205 Property and equipment, at cost$4,329,002 $4,163,205 
Capital expenditures, including capitalized interest, during the three months ended March 31,June 30, 2023 and 2022, totaled $54.9$115.9 million and $44.8$31.3 million, respectively, and totaled $170.9 million and $76.1 million during the six months ended June 30, 2023 and 2022, respectively.
During the first quarter of 2022, we sold the Noble Clyde Boudreaux for total net proceeds of $14.2 million, resulting in a gain of $6.8 million, which was offset by additional costs related to the sale of rigs in Saudi Arabia in 2021.
Note 6— Debt
Senior Secured Revolving Credit Facility
On February 5, 2021, Noble Finance Company (“Finco”) and Noble International Finance Company (“NIFCO”), each indirect wholly-ownedwholly owned subsidiaries of Noble, entered into a senior secured revolving credit agreement (the “Revolving“2021 Revolving Credit Agreement”) providing for a $675 million senior secured revolving credit facility (with a $67.5 million sublimit for the issuance of letters of credit thereunder) (the “Revolving“2021 Revolving Credit Facility”) and cancelled all debt that existed immediately prior to February 5, 2021.in connection with Noble's emergence from bankruptcy. The 2021 Revolving Credit Facility was set to mature on July 31, 2025. Subject to the satisfaction of certain conditions, Finco could from time to time designate one or more of Finco’s other wholly owned subsidiaries as additional borrowers under the 2021 Revolving Credit Agreement (collectively with Finco and NIFCO, the “Borrowers”). As of March 31, 2023, we had no loans outstanding and $21.1 million of letters of credit issued under the Revolving Credit Facility.
All obligations of the Borrowers under the 2021 Revolving Credit Agreement, certain cash management obligations and certain swap obligations were unconditionally guaranteed, on a joint and several basis, by Finco and certain of its direct and indirect subsidiaries (collectively with the Borrowers, the “Credit Parties”), including a guarantee by each Borrower of the obligations of each other Borrower under the 2021 Revolving Credit Agreement. All such obligations, including the guarantees of the 2021 Revolving Credit Facility, were secured by senior priority liens on substantially all assets of, and the equity interests in, each Credit Party, subject to certain exceptions and limitations described in the 2021 Revolving Credit Agreement. None of Pacific Drilling Company LLC, Maersk Drilling or any of their respective current subsidiaries was a guarantor of the 2021 Revolving Credit Facility, and none of their assets secured the 2021 Revolving Credit Facility.
The loans outstanding under the 2021 Revolving Credit Facility bore interest at a rate per annum equal to the applicable margin plus, at Finco’s option, either: (i) the reserve-adjusted LIBORLondon Inter-Bank Offered Rate ("LIBOR") or (ii) a base rate, determined as the greatest of (x) the prime loan rate as published in The Wall Street Journal, (y) the federal funds effective rate plus 1/2 of 1%, and (z) the reserve-adjusted one-month LIBOR plus 1%. The applicable margin was initially 4.75% per annum for LIBOR loans and 3.75% per annum for base rate loans and would be increased by 50 basis points after July 31, 2024, and could be increased by an additional 50 basis points under certain conditions described in the 2021 Revolving Credit Agreement.
The Borrowers were required to pay customary quarterly commitment fees and letter of credit and fronting fees.
Availability of credit (whether borrowings or letters of credit) under the 2021 Revolving Credit Agreement was subject to the satisfaction of certain conditions, including, after giving effect to any such credit and the application of the proceeds (if any) thereof, (i) the aggregate amount of Available Cash (as defined in the 2021 Revolving Credit Agreement) could not exceed $100.0 million, (ii) if the Consolidated First Lien Net Leverage Ratio (as defined in the 2021 Revolving Credit Agreement)
14

NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
would be greater than 5.50 to 1.00, then the aggregate principal amount outstanding under the 2021 Revolving Credit Facility could not exceed $610.0 million, and (iii) the Asset Coverage Ratio (as described below) must be at least 2.00 to 1.00.
Mandatory prepayments and, under certain circumstances, commitment reductions were required under the Revolving Credit Facility in connection with (i) certain asset sales, asset swaps and events of loss (subject to reinvestment rights if no event of default existed) and (ii) certain debt issuances. Available Cash in excess of $150.0 million was also required to be
13

NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
applied periodically to prepay loans (without a commitment reduction). The loans under the 2021 Revolving Credit Facility could be voluntarily prepaid, and the commitments thereunder voluntarily terminated or reduced, by the Borrowers at any time without premium or penalty, other than customary breakage costs.
The 2021 Revolving Credit Agreement obligated Finco and its restricted subsidiaries to comply with the following financial maintenance covenants:
as of the last day of each fiscal quarter, the ratio of Adjusted EBITDA to Cash Interest Expense (each as defined in the 2021 Revolving Credit Agreement) was not permitted to be less than (i) 2.00 to 1.00 for each four fiscal quarter period ending on or before June 30, 2024, and (ii) 2.25 to 1.00 for each four fiscal quarter period ending thereafter; and
as of the last day of each fiscal quarter, the ratio of (i) Asset Coverage Aggregate Rig Value (as defined in the 2021 Revolving Credit Agreement) to (ii) the aggregate principal amount of loans and letters of credit outstanding under the 2021 Revolving Credit Facility (the “Asset Coverage Ratio”) was not permitted to be less than 2.00 to 1.00.
The 2021 Revolving Credit Facility contained financial maintenance, affirmative and negative covenants, representations and warranties and events of default that the Company considered customary for facilities of this type.
Please see “Note 15— Subsequent Events” regardingAmended and Restated Senior Secured Revolving Credit Agreement
On April 18, 2023, certain refinancing transactionssubsidiaries of Noble entered into an Amended and Restated Senior Secured Revolving Credit Agreement, dated April 18, 2023 (the “2023 Revolving Credit Agreement” and the facility thereunder, the "2023 Revolving Credit Facility"), by and among Noble Finance II, LLC (“Noble Finance II”), NIFCO and Noble Drilling A/S, as borrowers, the lenders and issuing banks party thereto from time to time and JPMorgan Chase Bank, N.A., as administrative agent, collateral agent and security trustee. The 2023 Revolving Credit Facility provides for commitments of $550 million with maturity in 2028. The guarantors under the 2023 Revolving Credit Facility are the same subsidiaries of Noble Finance II that occurred subsequent to March 31,are or will be guarantors of the 2030 Notes (as defined below). As of June 30, 2023, we had no loans outstanding and $19.1 million of letters of credit issued under the 2023 Revolving Credit Agreement.
All obligations of the Borrowers under the 2023 Revolving Credit Agreement, certain cash management obligations, certain letter of credit obligations and certain swap obligations are unconditionally guaranteed, on a joint and several basis, by the Noble Finance II and certain of its direct and indirect subsidiaries (the Guarantors, and together with the Borrowers, the “Credit Parties”), including a guarantee by each Borrower of the obligations of each other Borrower under the 2023 Revolving Credit Agreement. All such obligations, including the amendment and restatementguarantees of the 2023 Revolving Credit Facility, are secured by senior priority liens on substantially all assets of, and the equity interests in, each Credit Party, including substantially all rigs owned by subsidiaries of Noble as of the date of the 2023 Revolving Credit Agreement (the “Effective Date”), along with certain other rigs in the future such that collateral rigs shall generate at least 80% of the revenue of all rigs owned by Noble Finance II and its restricted subsidiaries and the ratio of the aggregate rig value of the collateral rigs to the commitments under the 2023 Revolving Credit Facility is at least 5.00 to 1.00, in each case, subject to certain exceptions and limitations described in the 2023 Revolving Credit Agreement.
The loans outstanding under the 2023 Revolving Credit Facility bear interest at a rate per annum equal to the applicable margin plus, at Noble Finance II’s option, either: (i) the Term SOFR Rate (as defined in the 2023 Revolving Credit Agreement) plus 0.10%; or (ii) a base rate, determined as the greatest of (x) the prime loan rate as published in the Wall Street Journal, (y) the NYFRB Rate (as defined in the 2023 Revolving Credit Agreement) plus 1/2 of 1%, and (z) the one-month Term SOFR Rate plus 0.10% plus 1%. The applicable margin is initially 2.75% per annum for Term SOFR Rate loans and 1.75% per annum for base rate loans and will range based on the Consolidated Total Net Leverage Ratio (as defined in the 2023 Revolving Credit Agreement, which allows for certain cash netting depending on the amount of loans and letters of credit outstanding under the 2023 Revolving Credit Facility at the time of calculation), from 2.75% per annum to 3.75% per annum for Term SOFR Rate loans and 1.75% per annum to 2.75% per annum for base rate loans. The Borrowers are required to pay interest on (i) overdue principal at the rate equal to 2.00% per annum in excess of the applicable interest rate under the
15

NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
2023 Revolving Credit Facility, to the extent lawful, and (ii) overdue installments of interest, if any, without regard to any applicable grace period, at 2% in excess of the interest rate applicable to base rate loans, to the extent lawful.
The Borrowers are required to pay a quarterly commitment fee to each lender under the 2023 Revolving Credit Facility, which accrues at a rate per annum equal to (i) 0.50% on the average daily unused portion of such lender’s commitments under the 2023 Revolving Credit Facility during the period from and including the Effective Date to and including the third anniversary of the Effective Date, (ii) during the period from the third anniversary of the Effective Date to and including the fourth anniversary of the Effective Date, a rate per annum equal to 0.75% and (iii) thereafter, a rate per annum equal to 1.00%. The Borrowers are also required to pay customary letter of credit and fronting fees.
Borrowings under the 2023 Revolving Credit Agreement may be used for working capital and other general corporate purposes. Availability of borrowings under the 2023 Revolving Credit Facility is subject to the satisfaction of certain conditions, including that, after giving effect to any such borrowings and the application of the proceeds thereof, the aggregate amount of Available Cash (as defined in the 2023 Revolving Credit Agreement) would not exceed $250 million.
Mandatory prepayments and, under certain circumstances, commitment reductions are required under the 2023 Revolving Credit Facility in connection with (i) certain asset sales, asset swaps and events of loss (subject to reinvestment rights if no event of default exists) and (ii) certain debt issuances. Available Cash in excess of $250 million at the end of any month is also required to be applied to prepay loans (without a commitment reduction). The loans under the 2023 Revolving Credit Facility may be voluntarily prepaid, and the commitments thereunder voluntarily terminated or reduced, by the Borrowers at any time without premium or penalty, other than customary breakage costs.
The 2023 Revolving Credit Agreement obligates Noble Finance II and its restricted subsidiaries to comply with the following financial covenants:
as of the last day of each fiscal quarter, the Interest Coverage Ratio (as defined in the 2023 Revolving Credit Agreement) is not permitted to be less than 2.50 to 1.00; and
as of the last day of each fiscal quarter, the Consolidated Total Net Leverage Ratio is not permitted to be greater than 3.00 to 1.00.
The 2023 Revolving Credit Agreement contains other affirmative and negative covenants, representations and warranties and events of default that Noble views as customary for a financing of this type. The occurrence of any event of default under the 2023 Credit Agreement would permit all obligations under the 2023 Revolving Credit Facility to be declared due and payable immediately and all commitments thereunder to be terminated.
8.000% Senior Notes due 2030
On April 18, 2023, Noble Finance II, a wholly owned subsidiary of Noble, issued $600 million in aggregate principal amount of its 8.000% Senior Notes due 2030 (the “2030 Notes”). The 2030 Notes were issued pursuant to an indenture, dated April 18, 2023, among Noble Finance II, the subsidiaries of Noble Finance II party thereto (the “Guarantors”), as guarantors, and U.S. Bank Trust Company, National Association, as trustee.
The 2030 Notes are unconditionally guaranteed on a senior unsecured basis by the Guarantors and will be unconditionally guaranteed on the same basis by certain of Noble Finance II’s future subsidiaries that guarantee certain indebtedness of Noble Finance II and the Guarantors, including the 2023 Revolving Credit Facility.
The 2030 Notes will mature on April 15, 2030, and interest on the 2030 Notes is payable semi-annually in arrears on each April 15 and October 15, commencing October 15, 2023, to holders of record on the April 1 and October 1 immediately preceding the related interest payment date, at a rate of 8.000% per annum.
At any time prior to April 15, 2026, Noble Finance II may, from time to time, redeem up to 40% of the aggregate principal amount of 2030 Notes at a redemption price of 108% of the principal amount of the 2030 Notes redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on an interest payment date that is on or prior to the redemption date), in an amount not greater than the net cash proceeds of one or more equity offerings by Noble Finance II, subject to certain requirements. In addition, prior to April 15, 2026, Noble Finance II may redeem the 2030 Notes at a redemption price equal to 100% of the principal amount of the 2030 Notes redeemed, plus an applicable make-whole premium and accrued and unpaid interest, if any, to, but excluding, the redemption date. At any time on or after April 15, 2026, Noble Finance II may redeem all or part
16

NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
of the 2030 Notes at fixed redemption prices (expressed as percentages of the principal amount) beginning at 104.00% and decreasing thereafter, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
If a Change of Control Triggering Event (as defined in the indenture governing the 2030 Notes) occurs, each holder of 2030 Notes may require Noble Finance II to repurchase all or any part of that holder’s 2030 Notes for cash at a price equal to 101% of the aggregate principal amount of the 2030 Notes repurchased, plus any accrued and unpaid interest thereon, if any, to, but excluding, the date on which the notes are repurchased (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date).
The indenture governing the 2030 Notes contain customary covenants and events of default.
The indenture governing the 2030 Notes contains a covenant that requires Noble Finance II to furnish to holders of the 2030 Notes certain financial information relating to Noble Finance II and its restricted subsidiaries. The obligation to furnish such information may be satisfied by providing financial information of Noble along with a description of the differences between such information and the financial information of Noble Finance II and its restricted subsidiaries on a standalone basis. As a result of Noble conducting substantially all of its business through Noble Finance II, the financial position and results of operations for Noble Finance II are the same as the information presented for Noble in all material respects, with the exception of operating income (loss) and gain (loss) on extinguishment of debt. For the three and six months ended June 30, 2023, Noble Finance II’s operating income (loss) was $16.3 million and $30.8 million higher, respectively, than that of Noble. The operating income (loss) difference is primarily a result of expenses related to corporate legal costs and administration charges attributable to Noble for operations support and stewardship-related services.
Second Lien Notes
On February 5, 2021, pursuant to the Backstop Commitment Agreement, dated October 12, 2020, Noble Cayman and Finco consummated a rights offering (the “Rights Offering”) of senior secured second lien notes (the “Second Lien Notes”) and associated Noble Cayman Shares at an aggregate subscription price of $200.0 million.
An aggregate principal amount of $216.0 million of Second Lien Notes was issued in the Rights Offering, which included the aggregate subscription price of $200.0 million plus a backstop fee of $16.0 million which was paid in kind. The Second Lien Notes were set to mature on February 15, 2028. The Second Lien Notes were fully and unconditionally guaranteed, jointly and severally, on a senior secured second-priority basis, by the direct and indirect subsidiaries of Finco that are Credit Parties under the 2021 Revolving Credit Facility. None of Pacific Drilling Company LLC, Maersk Drilling or any of their respective current subsidiaries was a guarantor of the Second Lien Notes, and none of their assets secured the Second Lien Notes.
The Second Lien Notes and such guarantees were secured by senior priority liens on the assets subject to liens securing the 2021 Revolving Credit Facility, including the equity interests in Finco and each guarantor of the Second Lien Notes, all of the rigs owned by the Company as of February 5, 2021 or acquired by Restricted Subsidiaries of the Company thereafter, certain assets related thereto, and substantially all other assets of Finco and such guarantors, in each case, subject to certain exceptions and limitations.
Interest on the Second Lien Notes accrued, at Finco’s option, at a rate of: (i) 11% per annum, payable in cash; (ii) 13% per annum, with 50% of such interest to be payable in cash and 50% of such interest to be payable by issuing additional Second Lien Notes (“PIK Notes”); or (iii) 15% per annum, with the entirety of such interest to be payable by issuing PIK Notes. Finco paid interest semi-annually in arrears on February 15 and August 15 of each year, commencing August 15, 2021. The Company accrued interest at the rate of 11% per annum, as the most recent payment and the payment upon the full redemption of the Second Lien Notes were made in cash.
On or after February 15, 2024, Finco could redeem all or part of the Second Lien Notes at fixed redemption prices (expressed as percentages of the principal amount), plus accrued and unpaid interest, if any, to, but excluding, the redemption date. Finco could also redeem the Second Lien Notes, in whole or in part, at any time and from time to time on or before February 14, 2024 at a redemption price equal to 106% of the principal amount plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date, plus a “make-whole” premium. Notwithstanding the foregoing, if a Change of Control (as defined in the Second Lien Notes Indenture) occurred prior to (but not including) February 15, 2024, then, within 120 days of such Change of Control, Finco could elect to purchase all remaining outstanding Second Lien Notes at a redemption price equal to 106% of the principal amount, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date.
The Second Lien Notes contained covenants and events of default that the Company considered customary for notes of this type.
Please see “Note 15— Subsequent Events” regarding certain refinancing transactions that occurred subsequent to March 31,On April 18, 2023, includingwe redeemed the full redemptionapproximately $173.7 million aggregate principal amount of outstanding Second Lien Notes using a portion of the Second Lien Notes.
14

NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollarproceeds from the offering of the 2030 Notes, and share amounts in tables are in thousands, except per share data)
recognized a loss of approximately $25.7 million.
DNB Credit Facility and New DNB Credit Facility
Upon closing the Business Combination with Maersk Drilling (the “Closing Date”), Noble guaranteed the Term and Revolving Facilities Agreement dated December 6, 2018, by and among Maersk Drilling, the rig owners and material intra-group charterers party thereto and DNB Bank ASA as agent (as amended from time to time, the “DNB Credit Facility”).
17

NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
On November 22, 2022, Maersk Drilling, as the borrower, the Company, as parent guarantor, certain subsidiaries of Maersk Drilling as guarantors, and the lenders identified therein, with DNB Bank ASA, New York Branch acting as Agent entered into a new Term Facility Agreement (the “New DNB Credit Facility”). On December 22, 2022, the Utilization Date (as defined in the New DNB Credit Facility) occurred under the New DNB Credit Facility, at which time the loans outstanding under the DNB Credit Facility were repaid with the proceeds of the full $350.0 million available under the New DNB Credit Facility.
The term loan under the New DNB Credit Facility required quarterly amortization payments on March 15, June 15, September 15 and December 15 of $2.5 million per quarter in the first year, $7.5 million per quarter in the second year, $12.5 million per quarter in the third year, and a balloon payment payable on the termination of the New DNB Credit Facility in an amount equal to the remaining outstanding principal amount of the loan. The loan under the New DNB Credit Facility accrued interest at an initial rate of Term SOFR (as defined therein) + 3.50% with quarterly step-ups commencing on the first anniversary of the Utilization Date of an additional (i) 0.15% per quarter during months 13 to 24 after the Utilization Date (with total Margin (as defined therein) payable during the fourth quarter of that period being Term SOFR + 4.10%) and (ii) 0.25% per quarter during months 25 to 36 after the Utilization Date (with total Margin payable during the fourth quarter of that period being Term SOFR + 5.10%). The New DNB Credit Facility had the following financial covenants (each as defined in the New DNB Credit Facility): (i)) The Company’s liquidity could not at any time be less than $200.0 million; (ii) Maersk Drilling’s liquidity could not at any time be less than $50 million; (iii) Maersk Drilling’s leverage ratio could not at any time be greater than 4.75:1.00; and (iv) Maersk Drilling’s equity ratio could not at any time be less than 35%. The New DNB Credit Facility also contained affirmative and negative covenants, representations and warranties, and events of default that the Company considered customary for facilities of this type. The New DNB Credit Facility was set to mature in December 2025.
Please see “Note 15— Subsequent Events” regarding certain refinancing transactions that occurred subsequent to March 31,On April 18, 2023, includingwe repaid the payoff$347.5 million of outstanding borrowings under the New DNB Credit Facility.Facility using a portion of the proceeds from the offering of the 2030 Notes, and recognized a loss of approximately $0.7 million.
DSF Credit Facility
The Company guaranteed the Term Loan Facility Agreement dated December 10, 2018 by and between Maersk Drilling and Danmarks Skibskredit A/S as lender, agent, and security agent (as amended from time to time, the “DSF Credit Facility”) in connection with the Business Combination with Maersk Drilling that closed on October 3, 2022. The DSF Credit Facility was repaid in full on February 23, 2023 using cash on hand.
Debt Open Market Repurchases
In August 2022, we purchased $1.6 million aggregate principal amount of our Second Lien Notes for approximately $1.8 million, plus accrued interest, as open market repurchases and recognized a loss of approximately $0.2 million. In the fourth quarter of 2022, we purchased $40.7 million aggregate principal amount of our Second Lien Notes for approximately $45.1 million, plus accrued interest, as open market repurchases and recognized a loss of approximately $4.4 million.
Fair Value of Debt
Fair value represents the amount at which an instrument could be exchanged in a current transaction between willing parties. The estimated fair value of our debt instruments was based on the quoted market prices for similar issues or on the current rates offered to us for debt of similar remaining maturities (Level 2 measurement). The fair value of each of the Revolving Credit Facility, the New DNB Credit Facility and the DSF Credit Facility approximates its respective carrying amount as its interest rate is variable and reflective of market rates. All remaining fair value disclosures are presented in “Note 11— Fair Value of Financial Instruments.”
1518

NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
The following table presents the carrying value, net of unamortized debt issuance costs and discounts or premiums, and the estimated fair value of our total debt, not including the effect of unamortized debt issuance costs, respectively:
June 30, 2023December 31, 2022
March 31, 2023December 31, 2022Carrying ValueEstimated Fair ValueCarrying ValueEstimated Fair Value
Carrying ValueEstimated Fair ValueCarrying ValueEstimated Fair Value
Senior secured notes:
Senior secured notesSenior secured notes
8.000% Senior Notes due April 20308.000% Senior Notes due April 2030$585,389 $608,058 $— $— 
11.000% Senior Notes due February 202811.000% Senior Notes due February 2028$173,696 $188,761 $173,695 $192,353 11.000% Senior Notes due February 2028— — 173,695 192,353 
Credit facility:
Senior Secured Revolving Credit Facility matures July 2025— — — — 
Term Loans:— — — — 
Credit facilityCredit facility
Amended and Restated Senior Secured Revolving Credit Facility matures April 2028Amended and Restated Senior Secured Revolving Credit Facility matures April 2028— — — — 
Term LoansTerm Loans
New DNB Credit Facility matures December 2025New DNB Credit Facility matures December 2025346,958 347,500 349,360 350,000 New DNB Credit Facility matures December 2025— — 349,360 350,000 
DSF Credit Facility matures December 2023DSF Credit Facility matures December 2023— — 149,715 149,715 DSF Credit Facility matures December 2023— — 149,715 149,715 
Total debtTotal debt520,654 536,261 672,769 692,068 Total debt585,389 608,058 672,770 692,068 
Less: Current maturities of long-term debtLess: Current maturities of long-term debt15,000 — 159,715 — Less: Current maturities of long-term debt— — 159,715 — 
Long-term debtLong-term debt$505,654 $536,261 $513,054 $692,068 Long-term debt$585,389 $608,058 $513,055 $692,068 
Note 7— Accumulated Other Comprehensive Income (Loss)
The following table presents the changes in the accumulated balances for each component of “Accumulated other comprehensive income (loss)” for the three and six months ended March 31,June 30, 2023 and 2022. All amounts within the table are shown net of tax.
Defined Benefit Pension Items (1)
Balance at December 31, 2022$3,647 
Activity during period:
Other comprehensive income before reclassifications(2,186)
Amounts reclassified from AOCI— 
Net other comprehensive income (loss)(2,186)
Balance at March 31, 20231,461 
Activity during period:
Other comprehensive loss before reclassifications41 
Amounts reclassified from AOCI— 
Net other comprehensive loss41 
Balance at June 30, 2023$1,502 
19

NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
Defined Benefit Pension Items (1)
Balance at December 31, 2021$5,389 
Activity during period:
Other comprehensive income before reclassifications(424)
Amounts reclassified from AOCI— 
Net other comprehensive income (loss)(424)
Balance at March 31, 2022$4,965
Balance at December 31, 2022$3,647 
Activity during period:
Other comprehensive loss before reclassifications(2,186)(1,163)
Amounts reclassified from AOCI— 
Net other comprehensive income (loss)loss(2,186)(1,163)
Balance at March 31, 2023June 30, 2022$1,4613,802 
(1)Defined benefit pension items relate to actuarial changes, the amortization of prior service costs and the unrealized gain (loss) on foreign exchange on pension assets. Reclassifications from AOCI are recognized as expense on our Condensed Consolidated Statements of Operations through “Other income (expense).” See “Note 10— Employee Benefit Plans” for additional information.
16

NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
Note 8— Revenue and Customers
Disaggregation of Revenue
The following table provides information about contract drilling revenue by rig types:
Three Months Ended March 31,Three Months Ended June 30,Six Months Ended June 30,
202320222023202220232022
FloatersFloaters$476,234 $141,213 Floaters$493,983 $202,690 $970,216 343,903 
JackupsJackups99,056 53,822 Jackups112,197 59,773 211,254 113,595 
TotalTotal$575,290 $195,035 Total$606,180 $262,463 $1,181,470 $457,498 
Contract Balances
Accounts receivable are recognized when the right to consideration becomes unconditional based upon contractual billing schedules. Payment terms on invoiced amounts are typically 30 to 60 days. Customer contract assets and liabilities generally consist of deferred revenue and contract costs resulting from past transactions related to the provision of services under contracts with customers. Current contract asset and liability balances are included in “Prepaid expenses and other current assets” and “Other current liabilities,” respectively, and noncurrent contract assets and liabilities are included in “Other assets” and “Other liabilities,” respectively, on our Consolidated Balance Sheets. Off-market customer contract assets and liabilities have been recognized in connection with our emergence from Chapter 11 and the Business Combination with Maersk Drilling and are included in “Intangible assets” and “Noncurrent contract liabilities,” respectively.
The following table provides information about contract assets and contract liabilities from contracts with customers:
March 31, 2023December 31, 2022
Current customer contract assets$12,601 $11,169 
Noncurrent customer contract assets329 368 
Total customer contract assets12,930 11,537 
Current deferred revenue(37,282)(40,214)
Noncurrent deferred revenue(17,280)(19,583)
Total deferred revenue$(54,562)$(59,797)
1720

NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
The following table provides information about contract assets and contract liabilities from contracts with customers:
June 30, 2023December 31, 2022
Current customer contract assets$9,051 $11,169 
Noncurrent customer contract assets289 368 
Total customer contract assets9,340 11,537 
Current deferred revenue(26,163)(40,214)
Noncurrent deferred revenue(14,727)(19,583)
Total deferred revenue$(40,891)$(59,797)
Significant changes in the remaining performance obligation contract assets and the contract liabilities balances for the threesix months ended March 31,June 30, 2023 and 2022 are as follows:
Contract AssetsContract LiabilitiesContract AssetsContract Liabilities
Net balance at December 31, 2022Net balance at December 31, 2022$11,537 $(59,797)
Amortization of deferred costsAmortization of deferred costs(14,206)— 
Additions to deferred costsAdditions to deferred costs12,009 — 
Amortization of deferred revenueAmortization of deferred revenue— 38,481 
Additions to deferred revenueAdditions to deferred revenue— (19,575)
TotalTotal(2,197)18,906 
Net balance at June 30, 2023Net balance at June 30, 2023$9,340 $(40,891)
Net balance at December 31, 2021Net balance at December 31, 2021$5,744 $(27,755)Net balance at December 31, 2021$5,744 $(27,755)
Amortization of deferred costsAmortization of deferred costs(3,866)— Amortization of deferred costs(13,870)— 
Additions to deferred costsAdditions to deferred costs5,052 — Additions to deferred costs21,323 — 
Amortization of deferred revenueAmortization of deferred revenue— 8,219 Amortization of deferred revenue— 29,462 
Additions to deferred revenueAdditions to deferred revenue— (19,011)Additions to deferred revenue— (46,507)
TotalTotal1,186 (10,792)Total7,453 (17,045)
Net balance at March 31, 2022$6,930 $(38,547)
Net balance at June 30, 2022Net balance at June 30, 2022$13,197 $(44,800)
Net balance at December 31, 2022$11,537 $(59,797)
Amortization of deferred costs(5,433)— 
Additions to deferred costs6,826 — 
Amortization of deferred revenue— 19,048 
Additions to deferred revenue— (13,813)
Total1,393 5,235 
Net balance at March 31, 2023$12,930 $(54,562)
Contract Costs
Certain direct and incremental costs incurred for upfront preparation, initial rig mobilization and modifications are costs of fulfilling a contract and are recoverable. These recoverable costs are deferred and amortized ratably to contract drilling expense as services are rendered over the initial term of the related drilling contract. Certain of our contracts include capital rig enhancements used to satisfy our performance obligations.
21

NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
Future Amortization of Deferred Revenue
The following table reflects revenue expected to be recognized in the future related to deferred revenue, by rig type, as of March 31,June 30, 2023:
For the Years Ended December 31,For the Years Ended December 31,
20232024202520262027 and beyondTotal20232024202520262027 and beyondTotal
FloatersFloaters$32,302 $8,284 $6,861 $— $— $47,447 Floaters$19,341 $8,268 $6,846 $— $— $34,455 
JackupsJackups1,738 2,227 2,205 622 — 6,792 Jackups1,164 2,228 2,205 622 — 6,219 
OtherOther$323 $— $— $— $— $323 Other217 — — — — 217 
TotalTotal$34,363 $10,511 $9,066 $622 $— $54,562 Total$20,722 $10,496 $9,051 $622 $— $40,891 
The revenue included above substantially consists of expected mobilization, demobilization, and upgrade revenue for unsatisfied performance obligations. The amounts are derived from the specific terms within drilling contracts that contain such provisions, and the expected timing for recognition of such revenue is based on the estimated start date and duration of each respective contract based on information known at March 31,June 30, 2023. The actual timing of recognition of such amounts may vary due to factors outside of our control. We have taken the optional exemption, permitted by accounting standards, to exclude disclosure of the estimated transaction price related to the variable portion of unsatisfied performance obligations at the end of the reporting period, as our transaction price is based on a single performance
18

NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
obligation consisting of a series of distinct hourly, or more frequent, periods, the variability of which will be resolved at the time of the future services.
Off-market Customer Contract Assets and Liabilities
Upon emergence from the Chapter 11 Cases and in connection with the Business Combination with Maersk Drilling, the Company recognized fair value adjustments of $113.4 million and $23.0 million, respectively, related to intangible assets for certain favorable customer contracts. These intangible assets will be amortized as a reduction of contract drilling services revenue from February 5, 2021 and the Closing Date, respectively, through the remainder of the contracts.
In connection with the Business Combination with Maersk Drilling, the Company recognized a fair value adjustment of $237.7 million related to certain unfavorable customer contracts acquired. These liabilities will be amortized as an increase to contract drilling services revenue from the Closing Date through the remainder of the contracts.
Unfavorable contractsFavorable
contracts
Balance at December 31, 2022Balance at December 31, 2022$(181,883)$34,372 
AdditionsAdditions— — 
AmortizationAmortization102,091 (17,354)
Balance at June 30, 2023Balance at June 30, 2023$(79,792)$17,018 
Unfavorable contractsFavorable contracts
Balance at December 31, 2021Balance at December 31, 2021$— $61,849 Balance at December 31, 2021$— $61,849 
AdditionsAdditions— — Additions— — 
AmortizationAmortization— (14,099)Amortization— (28,355)
Balance at March 31, 2022$— $47,750 
Balance at December 31, 2022$(181,883)$34,372 
Additions— — 
Amortization60,689 (6,961)
Balance at March 31, 2023$(121,194)$27,411 
Balance at June 30, 2022Balance at June 30, 2022$— $33,494 
Estimated future amortization over the expected remaining contract periods:
For the Years Ended December 31,For the Years Ended December 31,
202320242025Total202320242025Total
Unfavorable contractsUnfavorable contracts$72,547 $40,439 $8,208 $121,194 Unfavorable contracts$31,145 $40,439 $8,208 $79,792 
Favorable contractsFavorable contracts$(16,785)$(10,626)$— $(27,411)Favorable contracts$(6,394)$(10,624)$— $(17,018)
Total Total$55,762 $29,813 $8,208 $93,783 Total$24,751 $29,815 $8,208 $62,774 
22

NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
Note 9— Income Taxes
At March 31,June 30, 2023, the Company had deferred tax assets of $151.3$181.6 million, net of valuation allowance. Additionally, the Company also had deferred tax liabilities of $9.4$9.8 million, inclusive of a valuation allowance of $19.2 million.
During the three months ended March 31,June 30, 2023, the Company recognized additional discrete deferred tax benefits of $44.0$50.7 million related to releases and adjustments of valuation allowance for deferred tax benefits in Guyana, Norway, Switzerland and Luxembourg.
During the six months ended June 30, 2023, the Company recognized additional discrete deferred tax benefits of $84.6 million, $3.9 million and $6.1$7.2 million in Guyana, Norway and Switzerland, respectively, and recognized a $4.5 million deferred tax expense adjustment in Luxembourg.respectively.
In deriving the above net deferred tax benefits, the Company relied on sources of income attributable to the projected taxable income for the period covered by the Company’s relevant existing drilling contracts based on the assumption that the relevant rigs will be owned by the currentrelevant rig owners during the relevant existing drilling contract periods. Given the mobile nature of the Company’s assets, we are not able to reasonably forecast the jurisdictions in which taxable income from future drilling contracts may arise. We also have limited objective positive evidence in historical periods. Accordingly, in determining the amount of additional deferred tax assets to recognize, we did not consider projected book income beyond the conclusion of existing drilling contracts. As new drilling contracts are executed or as current contracts are extended, we will reassess the amount of deferred tax assets that are realizable. Finally, once we have established sufficient objective positive evidence for historical periods, we may consider reliance on forecasted taxable income from future drilling contracts.
19

NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
At March 31,June 30, 2023, the reserves for uncertain tax positions totaled $188.6$196.9 million (net of related tax benefits of $0.1 million). At December 31, 2022, the reserves for uncertain tax positions totaled $175.9 million (net of related tax benefits of $0.3 million).
During the three months ended March 31, 2023, we booked purchase price adjustments that resulted in a net increase to reserves for uncertain tax positions of $14.2 million.
It is reasonably possible that our existing liabilities related to our reserve for uncertain tax positions may fluctuate in the next 12 months primarily due to the completion of open audits or the expiration of statutes of limitation.
During the current quarter,three months ended June 30, 2023, our tax provision included a Luxembourgtax benefits of $50.7 million related to releases and adjustments of valuation allowance increase of $4.5 million,for deferred tax expensebenefits in Guyana, Norway, Switzerland and Luxembourg, and a tax benefit of $6.8 million related to a Ghana uncertain tax position release. Such tax benefits are offset by tax expenses related to a Mexico uncertain tax position of $9.8 million, contract fair value amortization of $4.2$4.7 million and current and deferred tax expense related to various recurring quarterly accruals of $25.6$42.2 million primarily in Guyana, Luxembourg,Australia and Switzerland. SuchLuxembourg.
During the six months ended June 30, 2023, our tax expenses were offset byprovision included tax benefits of $95.8 million related to releases of valuation allowance for deferred tax benefits in Guyana, Norway and Switzerland, a deferred tax benefit of $50.1$6.8 million related to a release of valuation allowance in Guyana and Switzerland.
During the three months ended March 31, 2022, ourGhana uncertain tax provision included netposition release. Such tax benefits of $3.8 millionare offset by tax expenses related to a releaseMexico uncertain tax position of valuation allowance$9.8 million, contract fair value amortization of $8.9 million and various recurring quarterly accruals of $67.4 million primarily in Guyana, Australia and Luxembourg.
In Denmark, prior to the Merger, Maersk Drilling was subject to a mandatory joint taxation scheme with all other Danish entities under the common control of A.P. Møller Holding A/S. To the extent Maersk Drilling incurred tax losses in Denmark until the Merger, such losses may be utilized by other jointly taxed entities. Noble may be compensated through a joint taxation contribution when such losses are utilized. In the event that A.P. Møller Holding A/S or any jointly taxed entity is subject to audits for Guyana deferredyears and periods prior to and until the Merger and such audits result in adjustments to relevant tax benefits, $0.9 millionreturns, adjustments to the prior year joint tax contributions may be required. This could result in additional compensation to Noble or refunds payable by Noble to A.P. Møller Holding A/S or to any previous joint taxation group administration company of previously received joint taxation contributions. Since the Merger and through June 30, 2023, Noble has not recognized adjustments under this arrangement related to an adjustmentthe period beginning with the Merger.
The Finance (No 2) Act 2023, which includes the UK’s introduction of Pillar 2, received Royal Assent on July 11, 2023. We are continuing to Swiss deferred tax benefits,evaluate the impact of this legislation, but we do not currently believe the implications should have a material adverse effect on the Company’s unaudited condensed consolidated financial statements.
23

NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and $1.3 million related primarily to deferred tax adjustments. Such tax benefits were partially offset by tax expenses of $0.8 million related to various recurring items.share amounts in tables are in thousands, except per share data)
Note 10— Employee Benefit Plans
Pension costs (gain) include the following components for the three months ended March 31,June 30, 2023 and 2022:
Three Months Ended March 31,
20232022Three Months Ended June 30,
Non-USUSNon-USUS20232022
Non-USUSNon-USUS
Interest costInterest cost$549 $2,248 $323 $1,688 Interest cost$575 $2,248 $298 $1,688 
Return on plan assetsReturn on plan assets(468)(2,394)(376)(3,145)Return on plan assets(491)(2,396)(347)(3,145)
Recognized net actuarial (gain) lossRecognized net actuarial (gain) loss63 (57)— (5)
Net pension benefit cost (gain)Net pension benefit cost (gain)$147 $(205)$(49)$(1,462)
Six Months Ended June 30,
20232022
Non-USUSNon-USUS
Interest costInterest cost$1,124 $4,496 621 3,376 
Return on plan assetsReturn on plan assets(959)(4,790)(723)(6,290)
Recognized net actuarial (gain) lossRecognized net actuarial (gain) loss59 (58)— (5)Recognized net actuarial (gain) loss122 (115)— (10)
Net pension benefit cost (gain)Net pension benefit cost (gain)$140 $(204)$(53)$(1,462)Net pension benefit cost (gain)$287 $(409)$(102)$(2,924)
During the three and six months ended March 31,June 30, 2023 and 2022, we made no contributions to our pension plans. Effective December 31, 2016, employees and alternate payees accrue no future benefits under the US plans and, as such, Noble recognized no service costs with the plans for three and six months ended March 31,June 30, 2023 and 2022.
Note 11— Fair Value of Financial Instruments
The following tables present the carrying amount and estimated fair value of our financial instruments recognized at fair value on a recurring basis:
March 31, 2023June 30, 2023
Estimated Fair Value MeasurementsEstimated Fair Value Measurements
Carrying AmountQuoted Prices in Active Markets (Level 1)Significant Other Observable Inputs
(Level 2)
Significant Unobservable Inputs
(Level 3)
Carrying AmountQuoted Prices in Active Markets (Level 1)Significant Other Observable Inputs
(Level 2)
Significant Unobservable Inputs
(Level 3)
Assets -
AssetsAssets
Foreign currency forward contractsForeign currency forward contracts$2,163 $— $2,163 $— Foreign currency forward contracts$1,052 $— $1,052 $— 
Liabilities -
LiabilitiesLiabilities
Foreign currency forward contractsForeign currency forward contracts$966 $— $966 $— Foreign currency forward contracts$659 $— $659 $— 
2024

NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
December 31, 2022December 31, 2022
Estimated Fair Value MeasurementsEstimated Fair Value Measurements
Carrying AmountQuoted Prices in Active Markets (Level 1)Significant Other Observable Inputs
(Level 2)
Significant Unobservable Inputs
(Level 3)
Carrying AmountQuoted Prices in Active Markets (Level 1)Significant Other Observable Inputs
(Level 2)
Significant Unobservable Inputs
(Level 3)
Assets -
AssetsAssets
Foreign currency forward contractsForeign currency forward contracts$2,422 $— $2,422 $— Foreign currency forward contracts$2,422 $— $2,422 $— 
Liabilities -
LiabilitiesLiabilities
Foreign currency forward contractsForeign currency forward contracts$1,124 $— $1,124 $— Foreign currency forward contracts$1,124 $— $1,124 $— 
Our cash, cash equivalents and restricted cash, accounts receivable and accounts payable are by their nature short-term. As a result, the carrying values included in our Condensed Consolidated Balance Sheets approximate fair value.
Note 12— Derivative Instruments
Although we are a UK company, we define foreign currency as any non-US dollar denominated currency. Our functional currency is the US Dollar. We are exposed to risks on future cash flows to the extent that expenses denominated in a foreign currency are not equal to revenues denominated in the same foreign currency. The Company uses foreign currency forward contracts to manage our net exposure to fluctuations in currency exchange rates. Currencies of the Company’s derivative instruments include DKK, the Australian dollar (“AUD”) and the British pound sterling (“GBP”). Currency derivatives are mainly realized within one year. We did not enter into any derivative contracts during the three and six months ended March 31,June 30, 2022.
We have exposure related to changes in interest rates on borrowings under the 2023 Revolving Credit Facility and may be subject to similar exposure on future borrowing arrangements. We were subject to changes in interest rates on borrowings under the DSF Facility and the New DNB Credit Facility prior to repayment of these instruments. The Company may use interest rate swap contracts to manage our exposure to fluctuations in interest rates. The Company did not enter into any interest rate swap contracts during the threesix months ended March 31,June 30, 2023 or 2022.
Derivative financial instruments are recognized on the trading date and measured at fair value using generally accepted valuation techniques based on relevant observable inputs. The Company does not enter into derivative transactions for speculative purposes and for accounting purposes we have not elected to apply hedge accounting for these transactions. Realized gains and losses as well as changes in the fair values of derivative financial instruments are recognized in the income statement in “Interest income and other, net.”
The following table summarizes notional value of currency derivative contracts as of March 31,June 30, 2023:
March 31, 2023June 30, 2023
Foreign CurrencyUSD EquivalentForeign CurrencyUSD Equivalent
DKK to USDDKK to USD349,23549,746DKK to USD194,42427,759
AUD to USDAUD to USD38,45026,456AUD to USD22,49415,432
GBP to USDGBP to USD6,3117,694GBP to USD4,3275,287
The following gains (losses) from derivative instruments were recognized on our Condensed Consolidated Statements of Operations:
Derivative InstrumentDescriptionMarch 31, 2023
Foreign currency forward contractsRealized gain (loss)(117)
Foreign currency forward contractsUnrealized gain (loss)13 
Derivative InstrumentDescriptionThree Months Ended
June 30, 2023
Six Months Ended
June 30, 2023
Foreign currency forward contractsRealized gain (loss)581 464 
Foreign currency forward contractsUnrealized gain (loss)(918)(905)
2125

NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
Note 13— Commitments and Contingencies
Tax matters
Audit claims of approximately $641.1$587.6 million attributable to income and other business taxes remain outstanding and are under continued objection by Noble. Such audit claims are attributable to Mexico related to tax years 2007 and 2009, Australia related to tax years 2013 to 2016, Guyana related to tax years 2018 to 2020,2021, Saudi Arabia related to tax years 2015 to 2019, Nigeria related to tax years 2010 to 2019, Ghana related to tax years 2011 to 2017 and Egypt related to tax years 2012 to 2016. We intend to vigorously defend our reported positions and currently believe the ultimate resolution of the audit claims will not have a material adverse effect on our condensed consolidated financial statements. This remains under continued monitoring and evaluation on a quarterly basis as facts change and as audits and/or litigation continue to progress.
We operate in a number of countries throughout the world and our tax returns filed in those jurisdictions are subject to review and examination by tax authorities within those jurisdictions. We recognize uncertain tax positions that we believe have a greater than 50 percent50% likelihood of being sustained upon challenge by a tax authority. We cannot predict or provide assurance as to the ultimate outcome of any existing or future assessments.
Hurricane Ida Personal Injury Claims
In preparation for Hurricane Ida in the US Gulf of Mexico in August 2021, the Noble Globetrotter II successfully secured the well it was drilling and detached from the blowout preventer without incident. Due to the environmental conditions, a number of crew members were treated for injuries and released from medical care. We have had multiple parties, some of which are subject to a third-party contractual indemnity to our benefit, who have filed answers to the Limitation of Liability Action in the United States District Court Western District of Louisiana, seeking damages related to physical and emotional harm allegedly suffered as a result of the Hurricane Ida incident. We are in the discovery phase and we intend to defend ourselves vigorously against these claims, although there is inherent risk in litigation, and we cannot predict or provide assurance as to the ultimate outcome of this lawsuit. As claims progress, the Company’s estimated loss could change from time to time, and any such change individually or in the aggregate could be material. We have insurance for such claims with a deductible of $5.0 million, in addition to contractual indemnity owed to us for a portion of the third-party claims. Timing differences are likely to exist between any losses incurred and the recognition and receipt of insurance proceeds reflected in the Company’s financial statements. Costs, as well as insurance recoveries, are presented in “Hurricane losses and (recoveries), net” on the Condensed Consolidated Statement of Operations.
Letters of credit and surety bonds
As of March 31,June 30, 2023, we had $21.1$19.1 million of letters of credit issued under the 2023 Revolving Credit Facility and an additional $117.2$76.5 million in letters of credit and surety bonds issued under bilateral arrangements which guarantee our performance as it relates to our drilling contracts, contract bidding, tax appeals, customs duties, and other obligations in various jurisdictions. We expect to comply with the underlying performance requirements and we expect obligations under these letters of credit and surety bonds will not be called.
Other contingencies
We have entered into agreements with certain of our executive officers, as well as certain other employees. These agreements generally provide for certain compensation and other benefits if the employee is terminated without cause or if the employee resigns for good reason (within the meaning set forth in the agreements). In addition, certain of these agreements contain provisions that are triggered upon a change of control of Noble (within the meaning set forth in the agreements) and a termination of employment without cause or if the employee resigns for good reason in connection with a change of control. The agreements initially have three year terms and automatically extend, unless either party provides notice not to extend, and provide for certain compensation and other benefits depending on the circumstances.
We are a defendant in certain claims and litigation arising out of operations in the ordinary course of business, including other personal injury claims, the resolution of which, in the opinion of management, will not be material to our financial position, results of operations or cash flows. There is inherent risk in any litigation or dispute and no assurance can be given as to the outcome of these claims.
2226

NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
Note 14— Supplemental Financial Information
Condensed Consolidated Balance Sheets Information
Noble’s restricted cash balance as of March 31,June 30, 2023 and December 31, 2022 was $3.2$6.6 million and $9.5 million, respectively. All restricted cash is recorded in “Prepaid expenses and other current assets.”
Condensed Consolidated Statements of Cash Flows Information
Operating cash activities
The net effect of changes in other assets and liabilities on cash flows from operating activities is as follows:
Noble
Three Months Ended March 31,Six Months Ended June 30,
2023202220232022
Accounts receivableAccounts receivable$(94,253)$(47,077)Accounts receivable$(47,998)$(58,361)
Other current assetsOther current assets(16,972)(583)Other current assets(35,641)2,239 
Other assetsOther assets(650)(3,523)Other assets4,287 (3,971)
Accounts payableAccounts payable(17,317)4,135 Accounts payable18,754 19,221 
Other current liabilitiesOther current liabilities(35,575)(14,350)Other current liabilities(13,450)(17,281)
Other liabilitiesOther liabilities(1,648)15,662 Other liabilities18,528 25,823 
Total net change in assets and liabilitiesTotal net change in assets and liabilities$(166,415)$(45,736)Total net change in assets and liabilities$(55,520)$(32,330)
Non-cash investing and financing activities
Additions to property and equipment, at cost for which we had accrued a corresponding liability in accounts payable as of March 31,June 30, 2023 and December 31, 2022 were $62.2$71.3 million and $196.4$70.0 million, respectively.

Note 15— Subsequent Events
Issuance of 8.000% Senior Notes due 2030
On April 18,July 11, 2023, Noble Finance II, LLC (“announced that its board of directors approved a declaration of a quarterly cash interim dividend on its Ordinary Shares of $0.30 per share. This dividend is to be payable on September 14, 2023, to shareholders of record at close of business on August 17, 2023. On July 26, 2023, Noble Finance II”), a wholly owned subsidiary of Noble, issued $600.0received an exercise notice for approximately 2.4 million in aggregate principal amount of its 8.000% Senior Notes due 2030 (the “2030 Notes”). The 2030 Notes were issued pursuant to an indenture, dated April 18, 2023, among Noble Finance II, the subsidiaries of Noble Finance II party thereto,Tranche 1 Warrants and approximately 2.5 million Tranche 2 Warrants which have not yet settled as guarantors, and U.S. Bank Trust Company, National Association, as trustee.
The indenture governing the 2030 Notes contains a covenant that requires Noble Finance II to furnish to holders of the 2030 Notes certain financial information relatingfiling date of this Quarterly Report and is expected to Noble Finance II and its restricted subsidiaries. The obligation to furnish such information may be satisfied by providing financial information of Noble along with a description of the differences between such information and the financial information of Noble Finance II and its restricted subsidiaries on a standalone basis. As of March 31, 2023, which was prior toresult in the issuance of the 2030 Notes and related contribution transactions, Noble Finance II did not have any operating activities and did not have any restricted subsidiaries.
Redemption of Second Lien Notes
On April 18, 2023, we redeemed the approximately $173.74.1 million aggregate principal amount of outstanding Second Lien Notes using a portion of the proceeds from the offering of the 2030 Notes.
New DNB Credit Facility Payoff
On April 18, 2023, we repaid the $347.5 million of outstanding borrowings under the New DNB Credit Facility using a portion of the proceeds from the offering of the 2030 Notes.
Amendment and Restatement of Revolving Credit Agreement
On April 18, 2023, subsidiaries of Noble amended and restated the Revolving Credit Agreement by entering into an Amended and Restated Senior Secured Revolving Credit Agreement, dated April 18, 2023 (the “2023 Revolving Credit Agreement”), by and among Noble Finance II, NIFCO and Noble Drilling A/S, as borrowers, the lenders and issuing banks party thereto from time to time and JPMorgan Chase Bank, N.A., as administrative agent, collateral agent and securityOrdinary Shares.
23

NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
trustee. The revolving credit facility under the 2023 Revolving Credit Agreement (the “2023 Revolving Credit Facility”) provides for commitments of $550.0 million. The guarantors under the 2023 Revolving Credit Facility are the same subsidiaries of Noble Finance II that are or will be guarantors of the 2030 Notes.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion is intended to assist you in understanding our financial position at March 31,June 30, 2023, and our results of operations for the three and six months ended March 31, 2023June 30, 2022 and 2022. The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and related notes contained in this Quarterly Report on Form 10-Q, the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022, filed by Noble Corporation plc, a public limited company incorporated under the laws of England and Wales (“Noble”) and our other filings with the US Securities and Exchange Commission (“SEC”).
On September 30, 2022 (the “Merger Effective Date”), pursuant to a Business Combination Agreement, dated November 10, 2021 (as amended, the “Business Combination Agreement”), by and among Noble, Noble Corporation, an exempted company incorporated in the Cayman Islands with limited liability (“Noble Cayman”), Noble Newco Sub Limited, a Cayman Islands exempted company and a direct, wholly owned subsidiary of Noble (“Merger Sub”), and The Drilling Company of 1972 A/S, a Danish public limited liability company (“Maersk Drilling”), Noble Cayman merged with and into Merger Sub (the “Merger”), with Merger Sub surviving the Merger as a wholly owned subsidiary of Noble. As a result of the Merger, Noble became the ultimate parent of Noble Cayman and its respective subsidiaries.
On October 3, 2022, (the “Closing Date”), pursuant to the Business Combination Agreement, Noble completed a voluntary tender exchange offer to Maersk Drilling’s shareholders (the “Offer” and, together with the Merger and the other transactions contemplated by the Business Combination Agreement, the “Business Combination”) and because Noble acquired more than 90% of the issued and outstanding shares of Maersk Drilling, nominal value Danish krone (“DKK”) 10 per share (“Maersk Drilling Shares”), Noble redeemed all remaining Maersk Drilling Shares not exchanged in the Offer for, at the election of the holder, either A ordinary shares, par value $0.00001 per share, of Noble (“Ordinary Shares”) or cash (or, for those holders that did not make an election, only cash), under Danish law by way of a compulsory purchase (the “Compulsory Purchase”), which was completed in early November 2022. Upon completion of the Compulsory Purchase, Maersk Drilling became a wholly owned subsidiary of Noble.
The Merger was accounted for as a business combination in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 805, Business Combinations, where Noble is the accounting acquirer. See “Note 4— Acquisitions and Divestitures” in our Annual Report on Form 10-K for the year ended December 31, 2022 for additional information on the Business Combination.
As a result of the Merger, Noble became the successor issuer to Noble Cayman for purposes of and pursuant to Rule 12g-3(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). References in this Quarterly Report on Form 10-Q to “Noble,” the “Company,” “we,” “us,” “our” and words of similar meaning refer collectively to Noble and its consolidated subsidiaries.
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Forward-Looking Statements
This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the US Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act.Act, as amended. All statements other than statements of historical facts included in this report or in the documents incorporated by reference, are forward looking statements, including those regarding agreements regardingexpected financial performance, revenues, expected utilization and fleet status, stacking of rigs, effects of new rigs on the market revenues, operating expenses, cash flows, contract status, tenders, terms and duration, dayrates, termination and extensions, contract backlog, the availability, delivery, mobilization, stacking or reactivation, contract commencement, relocation or other movement of rigs and the timing thereof, contract claims, capital expenditures, insurance maintenance and renewals, access to financing, rig demand, peak oil, the offshore drilling market, oil prices, production levels among members of the Organization of Petroleum Exporting Countries (“OPEC”) and other oil and gas producing nations (together with OPEC, “OPEC+”), and any expectations we may have with respect thereto, and those regarding rig demand, peak oil, the offshore drilling market, oil prices, contract backlog, fleet status, our future financial position, business strategy, impairments, repayment of debt, credit ratings, liquidity, borrowings under any credit facilities or other instruments, sources of funds, cost inflation, future capital expenditures, contract commitments, dayrates, contract commencements, extensionplanned acquisitions or renewals, contract tenders, the outcomedivestitures of any dispute, litigation, audit or investigation, plans and objectives of management for future operations, foreign currency requirements, results of joint ventures, indemnity and other contract claims, reactivation, refurbishment, conversion and upgrade of rigs, rig acquisitions and dispositions, industry conditions, access to financing, impact of competition,assets, governmental regulations and permitting, availability of labor, worldwide economic conditions, taxes and tax rates, indebtedness covenant compliance, dividends and distributable reserves, share repurchases, progress, plans and goals related to environmental, social and governance matters; the outcome of tax disputes; assessments and settlements; and expense management, the outcome of any dispute, litigation, audit or investigation, plans, foreign currency requirements results of joint ventures, general economic, market, including inflation and recessions, trends and outlook; general political conditions, including political tensions, conflicts and war, timing, benefits or results of acquisitions or dispositions (including the Business Combination (as defined herein) and our plans, objectives, expectations and intentions related to the Business Combination), and timing for compliance with any new regulations areregulations. Forward-looking statements involve risks, uncertainties and assumptions, and actual results may differ materially from any future results expressed or implied by such forward-looking statements. When used in this report or in the documents incorporated by reference, the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “on track,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would,” “shall,” “target,” “will” and similar expressions are intended to be among the statements that identify forward-looking statements. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot assure you that such expectations will prove to be correct. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and we undertake no obligation to revise or update any forward-looking statement for any reason, except as required by law. We have identified factors, includingRisks and uncertainties include, but are not limited to risks and uncertainties relating to the Business Combination, (including the risk that the Business Combination disrupts Noble’s current plans, potential difficulties in employee retention asto: a result of the Business Combination, the outcome of any legal proceedings that may be instituted against Noble related to the Business Combination Agreement or the Business Combination, volatilitydecline in the price of the securitiesoil or gas, reduced demand for oil and gas products and increased regulation of Noble due to a variety of factors, including changesdrilling and production, price competition and cyclicality in the competitive marketsoffshore drilling industry, offshore rig supply, dayrates and demand for rigs, contract duration, renewal, terminations and repricing, national oil companies and governmental clients, contract backlog, customer concentration, operational hazards and risks, labor force unionization, labor interruptions and labor regulations, public health issues, including epidemics or pandemics such as the COVID-19 pandemic, joint ventures as well as investments in which Noble plansassociates, international operations and related mobilization and de-mobilization of rigs, operational interruptions, delays, maintenance and resulting reduced payment of dayrates, maintenance and renewal of insurance, protection of sensitive information, operational technology systems and critical data, upgrades, refurbishment and repair of rigs and any related delays and cost overruns, the ability to operate, variationsattract and retain skilled personnel or the increased cost in performance across competitors, changesdoing so, supplier capacity constraints or shortages in parts or equipment, supplier production disruptions, supplier quality and sourcing issues or price increases, future mergers, acquisitions or dispositions of businesses or assets or other strategic transactions, acts of terrorism, piracy and political and social unrest, hurricanes and related windstorm damage, responding to energy rebalancing, non-performance of suppliers or third-party subcontractors, the Business Combination and related integration, the maintenance of effective internal controls, impairments on property and equipment, including rigs and related capital spares, operating, financial restrictions and maintenance of covenants in our debt financing, tax disputes or tax challenges, compliance with Governmental laws and regulations affecting Noble’s business and changes in the combined capital structure, the ability to implement business plans, forecasts, and other expectations (including with respect to synergies and financial and operational metrics, such as EBITDA and free cash flow) in connection with the Business Combination, the ability to identify and realize additional opportunities, the failure to realize anticipated benefits of the Business Combination, the potential impact of the Business Combination on relationships with third parties, and risks associated with assumptions that parties make in connection with the parties’ critical accounting estimates and other judgments), the effects of public health threats, pandemics and epidemics, and the adverse impact thereof on our business, financial condition and results of operations (including but not limited to our growth, operating costs, supply chain, availability of labor, logistical capabilities, customer demand for our services and industry demand generally, our liquidity, the price of our securities and trading markets with respect thereto, our ability to access capital markets, and the global economy and financial markets generally), the effects of actions by or disputes among OPEC+ members with respect to production levels or other mattersincluding those related to the price of oil, market conditions, cost inflation, factors affecting the level of activity in the oilanti-bribery or anti-corruption, environmental protection and gas industry, the conflict in Ukraine, supplyhealth and demand of drilling rigs, factors affecting the duration of contracts, the actual amount of downtime, factors that reduce applicable dayrates, operating hazardssafety and delays, risks associated with operations outside the United States (“US”), actions by regulatory authorities, credit rating agencies, customers, joint venture partners, contractors, lendersdisputes and other third parties, legislation and regulations affecting drilling operations, compliance with or changes in environmental, health, safety, tax and other regulations or requirements or initiatives (including those addressing the impact of global climate change or air emissions), violations of anti-corruption laws, shipyard risk and timing, delays in mobilization of rigs, hurricanes and other weather conditions, and the future price of oil and gas,litigation that could cause actual plans or results to differ materially from those included in any forward-looking statements. Actual results could differ materially from those expressed as a result of various factors.factors and could, among other impacts, impact our ability to repurchase shares and declare and pay dividends such that we suspend our share repurchase program and reduce, suspend, or totally eliminate dividend payments in the future. These factors include those “Risk Factors” referenced or described in Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2022 and in our other filings with the SEC. We cannot control such risk factors and other uncertainties, and in many cases, we cannot predict the risks and uncertainties that could cause our actual results to differ materially from those indicated by the forward-looking statements. You should consider these risks and uncertainties when you are evaluating us. Future quarterly dividends and other shareholder returns will be subject to, amongst other things, approval by the board of directors, and may be modified as market conditions dictate.
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Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available free of charge at our website.
26


The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov.
Our website address is http://www.noblecorp.com. Investors should also note that we announce material financial information in SEC filings, press releases and public conference calls. Based on guidance from the SEC, we may use the investor relations section of our website to communicate with our investors. It is possible that the financial and other information (including fleet status reports) posted there could be deemed to be material information. Noble may also use social media channels including, but not limited to, Noble's accounts on LinkedIn, Facebook, Instagram and Twitter, to communicate with investors and the public about its business, services and other matters, and those communications could be deemed to be material information. Except to the extent explicitly stated herein, documents and information on our website or our social media channels are not incorporated by reference herein.
2730


Executive Overview
Noble is a leading offshore drilling contractor for the oil and gas industry. As of the filing date of this Quarterly Report on Form 10-Q, Noble performs, through its subsidiaries, contract drilling services with a fleet of 32 drilling rigs, consisting of 19 floaters and 13 jackups focused largely on ultra-deepwater and high-specification jackup drilling opportunities in both established and emerging regions worldwide. We typically employ each drilling unit under an individual contract, and many contracts are awarded based upon a competitive bidding process.
We report our contract drilling operations as a single reportable segment, Contract Drilling Services, which reflects how we manage our business. The mobile offshore drilling units comprising our offshore rig fleet operate in a global market for contract drilling services and are often redeployed to different regions due to changing demands of our customers, which consist primarily of large, integrated, independent and government-owned or controlled oil and gas companies throughout the world.
Recent Events
DSF Credit Facility Payoff.Dividends. On February 23,July 11, 2023, we repaidNoble announced that its board of directors approved a declaration of a quarterly cash interim dividend on its Ordinary Shares of $0.30 per share. This dividend is to be payable on September 14, 2023, to shareholders of record at close of business on August 17, 2023. Going forward, the remaining amount under the DSF Credit Facility in full using cashCompany intends to pay dividends on hand.a quarterly basis, and this initial dividend represents $1.20 on an annualized basis. However, any future dividend is subject to declaration by our board of directors based on our earnings, capital requirements, financial condition, and other factors considered relevant by our board of directors.
Debt Refinancing. On April 18, 2023, Noble Finance II, LLC (“Noble Finance II”), a wholly owned subsidiary of Noble, issued $600.0$600 million in aggregate principal amount of its 8.000% Senior Notes due 2030 (“2030 Notes”). The 2030 Notes were issued pursuant to an indenture, dated April 18, 2023, among Noble Finance II, the subsidiaries of Noble Finance II party thereto, as guarantors, and U.S. Bank Trust Company, National Association, as trustee. The net proceeds from the offering of 2030 Notes were primarily used to (i) repay the approximately $347.5 million of outstanding borrowings under the New DNB Credit Facility, (ii) to redeem (the “Redemption”) the approximately $173.7 million aggregate principal amount of outstanding Second Lien Notes, and (iii) to pay any premiums, fees and expenses related to the Redemption and the issuance of the 2030 Notes.
The indenture governing the 2030 Notes contains a covenant that requires Noble Finance II to furnish to holders of the 2030 Notes certain financial information relating to Noble Finance II and its restricted subsidiaries. The obligation to furnish such information may be satisfied by providing financial information of Noble along with a description of the differences between such information and the financial information of Noble Finance II and its restricted subsidiaries on a standalone basis. As a result of March 31, 2023, which was prior to the issuanceNoble conducting substantially all of the 2030 Notes and related contribution transactions,its business through Noble Finance II, did not have anythe financial position and results of operations for Noble Finance II are the same as the information presented for Noble in all material respects, with the exception of operating activitiesincome (loss) and did not have any restricted subsidiaries.gain (loss) on extinguishment of debt. For the three and six months ended June 30, 2023, Noble Finance II’s operating income (loss) was $16.3 million and $30.8 million higher, respectively, than that of Noble. The operating income (loss) difference is primarily a result of expenses related to corporate legal costs and administration charges attributable to Noble for operations support and stewardship-related services.
Amendment and Restatement of Revolving Credit Agreement. On April 18, 2023, subsidiaries of Noble amended and restated the 2021 Revolving Credit Agreement by entering into an Amended and Restated Senior Secured Revolving Credit Agreement, dated April 18, 2023 (the “2023 Revolving Credit Agreement”), by and among Noble Finance II, NIFCO and Noble Drilling A/S, as borrowers, the lenders and issuing banks party thereto from time to time and JPMorgan Chase Bank, N.A., as administrative agent, collateral agent and security trustee. The revolving credit facility under the 2023 Revolving Credit Agreement (the “2023 Revolving Credit Facility”) provides for commitments of $550.0 million.$550 million with maturity in 2028. The guarantors under the 2023 Revolving Credit Facility are the same subsidiaries of Noble Finance II that are or will be guarantors of the 2030 Notes.
Market Outlook
The offshore contract drilling industry is a highly competitive and cyclical business. Demand for offshore drilling services is driven by the offshore exploration and development programs of oil and gas operators, which in turn are influenced by many factors. Those factors include, but are not limited to, the price and price stability of oil and gas, the relative cost and
31


carbon footprint of offshore resources within each operator’s broader energy portfolio, global macroeconomic conditions, world energy demand, the operator’s strategy toward renewable energy sources, environmental considerations and governmental policies.
In the provision of offshore contract drilling services, success in securing contracts is primarily governed by price, a rig’s availability, drilling capabilities and technical specifications and the drilling contractor’s safety performance record. Other factors include experience of the workforce, process efficiency, condition of equipment, operating integrity, reputation, industry standing and client relations.
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We maintain a global operational presence and compete in many of the major offshore oil and gas basins worldwide with a primary focus on the ultra-deepwater market and the harsh, and ultra-harsh environment jackup markets. All our drilling rigs are mobile, and we may reposition our drilling rigs among regions for a variety of reasons, including in response to customer requirements. We compete in both the jackup and floating rig markets, each of which may have different supply and demand dynamics at a given period in time or in different regions.
The Business Combination with Maersk Drilling in October 2022 created one of the youngest and highest specification fleets of global scale in the industry, with diversification across asset classes, geographic regions and customers. The combined company has a track record of high utilization; coupled with an unwavering commitment to safety and customer satisfaction. We strive to be a leader in industry innovation and sustainability.
During 2022, oilOil prices generally remainedremain at levels that wereare supportive of offshore exploration and development activity. While the ongoing Russia-Ukraine conflictactivity and related sanctions, inflationary pressures and the subsequent government and central bank efforts to curb inflation, recession concerns, and supply chain disruptions did create some uncertainty relating to future global energy demand, global rig demand increased in 2022.
is increasing. This risedemand increase was the result ofcaused by the combination of growing confidence in commodity prices, remaining at or above current levels, heightened focus on energy security, recent multi-year underinvestment in the development and exploration of hydrocarbons, and relative attractiveness of offshore plays with respect to both cost and carbon emissions resulted in an overall increase in global rig demand in 2022.emissions. This increase had a positive impact on both utilization and day ratesdayrates for certain of our rig classes.
The global rig supply has come down from historic highs as Noble and other offshore drilling contractors have retired less capable and idle assets. Concurrently, the incoming supply of newbuild offshore drilling rigs has diminished materially, with several newbuild rigs stranded in shipyards. However, we expect manyseveral of these stranded newbuild rigs may makeare making their way into the global market and we expect this trend to continue over the next few years.years for the most capable units.
Although the market outlook in our business varies by geographical region and water depth, we remain encouraged by the recovery in the ultra-deepwater floater market, with overall demand having increased from 2020 lows. Our customers continue to focus on the highest specification floaters, which represents the majority of our floater fleet. We have also experienced an overall increase in the global jack-up market, with the Middle East being the largest component of this increase.
AsHowever, as of the date of this report, the majority of our jack-up fleet is positioned in the North Sea. While we are starting to see some increased tender activity in the UK North Sea, overall activity levels in this region remain subdued compared to historical levels. The Norway ultra-harsh environment jackup market is similar, where current activity also remains below historical levels, despite the market being attractive to operators given it is characterized by low-cost and low-emission barrels.
The energy transition from hydrocarbons to renewables poses a challenge to the oil and gas sector and our market. Energy rebalancing trends have accelerated in recent years as evidenced by promulgated or proposed government policies and commitments by many of our customers to further invest in sustainable energy sources. Our industry could be further challenged as our customers rebalance their capital investments more towards alternative energy sources. However, at the same time, there continues to be a global dependence on the combustion of hydrocarbons to provide reliable and affordable energy. Low-cost and low-emission barrels are still necessaryexpected to be the most attractive conventional source to meet energy needs, both currentcurrently and in the future. Global energy demand is predicted to increase over the coming decades, and we expect that offshore oil and gas will continue to play an important and lasting role in meeting this demand.
We expect inflationary pressures and supply chain disruptions to persist, and potentially accelerate, which has led or may lead to increased costs of services.
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Contract Drilling Services Backlog
We maintain a backlog of commitments for contract drilling services. Our contract drilling services backlog reflects estimated future revenues attributable to signed drilling contracts. While backlog did not include any letters of intent as of March 31,June 30, 2023, in the past we have included in backlog certain letters of intent that we expect to result in binding drilling contracts. As of March 31,June 30, 2023, contract drilling services backlog totaled approximately $3.7$5.0 billion, which includes a commitment of approximately 58 percent64% of available days for the remainder of 2023.
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We calculate backlog for any given unit and period by multiplying the full contractual operating dayrate for such unit by the number of days remaining in the period, and include certain assumptions based on the terms of certain contractual arrangements, discussed in the notes to the table below. The reported contract drilling services backlog does not include amounts representing revenues for mobilization, demobilization and contract preparation, which are not expected to be significant to our contract drilling services revenues, amounts constituting reimbursables from customers or amounts attributable to uncommitted option periods under drilling contracts or letters of intent.
The table below presents the amount of our contract drilling services backlog as of March 31,June 30, 2023, and the percent of available operating days committed for the periods indicated:
Year Ending December 31,Year Ending December 31,
Total
2023 (1)
2024202520262027Total
2023 (1)
2024202520262027
(In thousands)(In thousands)
Contract Drilling Services BacklogContract Drilling Services BacklogContract Drilling Services Backlog
Floaters (2)(3)
Floaters (2)(3)
$2,626,385$1,189,250$928,046$509,089$— $— 
Floaters (2)(3)
$3,898,418$934,286$1,177,310$871,001$663,132$252,689
JackupsJackups1,109,699220,414273,579235,148205,598174,960Jackups1,134,377172,948326,073254,798205,598174,960
TotalTotal$3,736,084$1,409,664$1,201,625$744,237$205,598$174,960Total$5,032,795$1,107,234$1,503,383$1,125,799$868,730$427,649
Percent of Available Days Committed (4)
Percent of Available Days Committed (4)
Percent of Available Days Committed (4)
Floaters (3)
Floaters (3)
63 %36 %19 %— %— %
Floaters (3)
68 %43 %30 %23 %%
JackupsJackups52 %34 %24 %18 %14 %Jackups58 %42 %27 %18 %14 %
TotalTotal58 %35 %21 %%%Total64 %43 %29 %21 %11 %
(1)Represents a nine-monthsix-month period beginning AprilJuly 1, 2023.
(2)One of our long-term drilling contracts with Shell, the Noble Globetrotter II, contains a dayrate adjustment mechanism that utilizes an average of market rates that match a set of distinct technical attributes and is subject to a modest discount, beginning on the fifth-year anniversary of the contract and continuing every six months thereafter. The contract now has a contractual dayrate floor of $275,000 per day. The dayrate for this rig will not be lower than the higher of (i) the contractual dayrate floor or (ii) the market rate as calculated under the adjustment mechanism.
(3)Noble entered into a multi-year Commercial Enabling Agreement (the “CEA”) with ExxonMobil in February 2020. Under the CEA, dayrates earned by each rig will be updated twice per year to the projected market rate at the time the new rate goes into effect, subject to a scale-based discount and a performance bonus that appropriately aligns the interests of Noble and ExxonMobil. Under the CEA, the table above includes awarded and remaining term of two years and 74 months related to each of the four following rigs: the Noble Tom Madden, Noble Bob Douglas, Noble Don Taylor and Noble Sam Croft. Under the CEA, ExxonMobil may reassign terms among rigs.
(4)Percent of available days committed is calculated by dividing the total number of days our rigs are operating under contract for such period by the product of the number of our rigs, including cold-stacked rigs, and the number of calendar days in such period.
The amount of actual revenues earned and the actual periods during which revenues are earned may be materially different than the backlog amounts and backlog periods presented in the table above due to various factors, including, but not limited to, shipyard and maintenance projects, unplanned downtime, the operation of market benchmarks for dayrate resets, achievement of bonuses, weather conditions, reduced standby or mobilization rates and other factors that result in
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applicable dayrates lower than the full contractual operating dayrate. In addition, amounts included in the backlog may change because drilling contracts may be varied or modified by mutual consent or customers may exercise early termination rights contained in some of our drilling contracts or decline to enter into a drilling contract after executing a letter of intent. As a result, our backlog as of any particular date may not be indicative of our actual operating results for the periods for which the backlog is calculated. See Part I, Item 1A, “Risk Factors – Risks Related to Our Business and Operations – Our current backlog of contract drilling revenue may not be ultimately realized” in our Annual Report on Form 10-K for the year ended December 31, 2022.
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As of March 31,June 30, 2023, ExxonMobil and Aker BP represented approximately 39.5 percent46.2% and 22.0 percent15.9% of our backlog, respectively.
Strategy
Our business strategy is centered around efficient, reliable and safe offshore drilling to provide the best services for our customers. The Business Combination with Maersk Drilling created one of the youngest and highest specification fleets of global scale in the industry, with diversification across asset classes, geographic regions and customers. The combined company has a track record of high utilization; coupled with an unwavering commitment to safety and customer satisfaction. We strive to be a leader in industry innovation and sustainability.
Our fleet consists predominately of technologically advanced units, equipped with sophisticated systems and components prepared to execute our customers’ increasingly complicated offshore drilling programs safely and with greater efficiency, including with respect to our carbon footprint. We are primarily focused on the ultra-deepwater market and the harsh, and ultra-harsh environment jackup markets, which typically present more technically challenging conditions in which to operate.
We emphasize safe operations, environmental stewardship, and superior performance through a structured management system, the employment of qualified and well-trained crews and onshore support staff, the care of our surroundings and the neighboring communities where we operate, and other activities advancing our environmental sustainability, social responsibility, and good governance. We also manage rig operating costs through the implementation and continuous improvement of innovative systems and processes, which includes the use of data analytics and predictive maintenance technology.
Our organization prioritizes financial discipline, cash flow generation and returning cash to shareholders. We will focus on ensuring thatmaintaining the quality of our fleet of floating and jackup rigsin order to meet the demands of increasingly complex drilling programs required by our customers as well as ensuring that we continue to maintainmaintaining a strong financial position.
Climate change is an environmental, social and economic challenge facing everyone today. We are committed to continuous improvementbuilding on the Company’s strategy of enabling long-term sustainable value creation. Noble’s sustainability mission is to help provide affordable energy efficiently, safely and a sustainable energy future, supportedsustainably, by our efforts to protect the environment throughout our operationsleveraging longstanding customer relationships and safely provide reliable and efficient services to allow access to resources essential for human and economic prosperity.unique innovation capabilities. We actively look to partnercollaborate with our customers to evaluate economic alternatives for reducing the carbon footprint of our drilling rigs.rigs such as by equipping our crews offshore with real-time energy consumption data and analysis to optimize efficiency, modifying our offshore assets with more energy efficient equipment, and testing fuel additives designed to improve generator efficiency. Oversight of our sustainability is at the Boardboard level, with the Safety and Sustainability Committee assisting in that oversight role with respect to the Corporation’sour sustainability policies and practices.
Results of Operations
Results for the Three Months Ended March 31,June 30, 2023 and 2022
Net income for the three months ended March 31,June 30, 2023, (the “current quarter”), was $108.1$65.8 million, or $0.74$0.45 per diluted share, on operating revenues of $610.1$638.5 million compared to net lossincome for the three months ended March 31,June 30, 2022, (the “prior quarter”), of $36.7$37.1 million, or $0.54$0.45 per diluted share, on operating revenues of $210.2$275.2 million.
Key Operating Metrics
Operating results for our contract drilling services segment are dependent on three primary metrics: operating days, dayrates and operating costs. We also track rig utilization, which is a function of operating days and the number of rigs in our fleet. For more information on operating costs, see “Contract Drilling Services” below.
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The following table presents the average rig utilization, operating days and average dayrates for our rig fleet for the periods indicated:
Average Rig Utilization (1)
Operating Days (2)
Average Dayrates (2)
Average Rig Utilization (1)
Operating Days (2)
Average Dayrates (2)
Three Months Ended March 31,Three Months Ended March 31,Three Months Ended March 31,Three Months Ended June 30,Three Months Ended June 30,Three Months Ended June 30,
202320222023202220232022202320222023202220232022
FloatersFloaters77 %71 %1,314 729 331,705 213,194 Floaters76 %81 %1,305 813 363,167 266,887 
JackupsJackups70 %63 %877 450 97,940 119,606 Jackups62 %68 %786 495 128,885 120,824 
TotalTotal74 %68 %2,191 1,179 $238,130 $177,458 Total70 %76 %2,091 1,308 $275,066 $211,626 
(1)We define utilization for a specific period as the total number of days our rigs are operating under contract, divided by the product of the total number of our rigs, including cold stacked rigs, and the number of calendar days in such period. Information reflects our policy of reporting on the basis of the number of available rigs in our fleet, excluding newbuild rigs under construction.fleet.
(2)An operating day is defined as a calendar day during which a rig operated under a drilling contract. We define average dayrates as revenue from contract drilling services earned per operating day. Average dayrates exclude the effect of non-cash amortization related to favorable and unfavorable off-market customer contract assets and liabilities.
Contract Drilling Services
The following table presents the operating results for our contract drilling services segment for the periods indicated (dollars in thousands):
Three Months Ended March 31,ChangeThree Months Ended June 30,Change
Operating revenues:Operating revenues:20232022$%Operating revenues:20232022$%
Contract drilling servicesContract drilling services$575,290 $195,035 $380,255 195 %Contract drilling services$606,180 $262,463 $343,717 131 %
Reimbursables and other (1)
Reimbursables and other (1)
34,764 15,195 19,569 129 %
Reimbursables and other (1)
32,355 12,690 19,665 155 %
610,054 210,230 399,824 190 %638,535 275,153 363,382 132 %
Operating costs and expenses:Operating costs and expenses:Operating costs and expenses:
Contract drilling servicesContract drilling services$361,789 $166,083 $195,706 118 %Contract drilling services$362,533 $178,145 $184,388 104 %
Reimbursables (1)
Reimbursables (1)
26,006 13,478 12,528 93 %
Reimbursables (1)
24,796 10,333 14,463 140 %
Depreciation and amortizationDepreciation and amortization69,942 25,605 44,337 173 %Depreciation and amortization71,324 26,636 44,688 168 %
General and administrativeGeneral and administrative30,037 17,524 12,513 71 %General and administrative32,352 16,687 15,665 94 %
Merger and integration costsMerger and integration costs11,631 9,521 2,110 22 %Merger and integration costs22,452 9,057 13,395 148 %
(Gain) loss on sale of operating assets, net(Gain) loss on sale of operating assets, net— (4,562)4,562 (100)%(Gain) loss on sale of operating assets, net— 1,103 (1,103)(100)%
Hurricane losses and (recoveries), netHurricane losses and (recoveries), net3,544 17,212 (13,668)(79)%Hurricane losses and (recoveries), net15,934 (14,407)30,341 (211)%
502,949 244,861 258,088 105 %529,391 227,554 301,837 133 %
Operating income (loss)Operating income (loss)$107,105 $(34,631)$141,736 (409)%Operating income (loss)$109,144 $47,599 $61,545 129 %
(1)We record reimbursements from customers for out-of-pocket expenses as operating revenues and the related direct costs as operating expenses. Changes in the amount of these reimbursables generally do not have a material effect on our financial position, results of operations or cash flows.
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The following table provides information about contract drilling revenue and costs by rig types (dollars in millions except average dayrates):
Three Months Ended March 31,Three Months Ended June 30,
2023202220232022
FloatersJackupsFloatersJackupsFloatersJackupsFloatersJackups
Contract drilling services revenuesContract drilling services revenues$476.2$99.1$141.2$53.8Contract drilling services revenues$494.0$112.2$202.7$59.8
Contract drilling services costsContract drilling services costs$270.9$90.9$103.8$62.3Contract drilling services costs$278.4$84.1$117.4$60.7
Average Rig UtilizationAverage Rig Utilization77 %70 %71 %63 %Average Rig Utilization76 %62 %81 %68 %
Operating DaysOperating Days1,314 877 729 450 Operating Days1,305 786 813 495 
Average DayratesAverage Dayrates$331,705$97,940$213,194$119,606Average Dayrates$363,167 $128,885 $266,887 $120,824 
Total rigsTotal rigs— Beginning19 13 12 Total rigs— Beginning19 13 11 
— Acquired— — — — — Acquired— — — — 
— Disposed— — — — Disposed— — — — 
— Ending19 13 11 — Ending19 13 11 
Contract Drilling Services Revenues
Floaters. During the firstsecond quarter of 2023, floaters generated revenue of $476.2$494.0 million, as compared to $141.2$202.7 million in the firstsecond quarter of 2022. The increase in revenue is mainly attributable to (i) $187.3$170.9 million provided by the eight additional floaters acquired in the Business Combination with Maersk Drilling in October 2022; and (ii) $90.4$99.6 million due to an increase in average day ratesdayrates in the current period; and (iii) $9.9period. These increases were partly offset by $5.9 million due to a net increase infrom rigs with fewer operating days in the current period. Additionally, floater revenue for the current period increased $47.3$27.0 million due to additional net non-cash amortization related to off-market customer contract assets and liabilities.
Jackups. During the firstsecond quarter of 2023, jackups generated revenue of $99.1$112.2 million, as compared to $53.8$59.8 million in the firstsecond quarter of 2022. The increase in revenue is mainly attributable to $60.6$79.1 million provided by the 10 additional jackups acquired in the Business Combination with Maersk Drilling in October 2022. This increase was offset by (i) $22.8$21.1 million for the divestiture of jackup rigs (the “Remedy Rigs”) in October 2022 in connection with the Business Combination with Maersk Drilling; and (ii) $7.4$17.5 million from rigs with less operating days in the current period. Additionally, contract drilling revenue for the current period increased $13.2$10.9 million due to additional net non-cash amortization related to off-market customer contract assets and liabilities.
Operating Costs and Expenses
Floaters. During the firstsecond quarter of 2023, total contract drilling services costs related to floaters was $270.9$278.4 million, as compared to $103.8$117.4 million in the firstsecond quarter 2022. The primary drivers of the increase are: (i) $123.2$117.1 million related to the eight additional floaters acquired in the Business Combination with Maersk Drilling in October 2022; and (ii) $47.4$43.9 million in increased crew, repairs and maintenance and material costs across the remainder of the fleet, some of which was driven by inflation. These increases were offset by $3.5 million due to the divestiture of a semi-submersible unit late in the first quarter of 2022.
Jackups. During the firstsecond quarter of 2023, total contract drilling services cost related to jackups was $90.9$84.1 million, as compared to $62.3$60.7 million in the firstsecond quarter 2022. During the current quarter, cost increases are primarily related to $59.4driven by $55.5 million related to the 10 additional jackups acquired in conjunction with the Business Combination with Maersk Drilling in October 2022. These increases were partly offset by the reduction of $28.9$25.9 million in expenses after the sale of the Remedy Rigs in October 2022.
Depreciation and Amortization. Depreciation and amortization totaled $69.9$71.3 million and $25.6$26.6 million during the firstsecond quarter of 2023 and 2022, respectively. Depreciation and amortization increased by $44.3$44.7 million in the current quarter primarily due to $47.2$48.0 million related to 18 rigs and related equipment acquired in the Business Combination with Maersk Drilling in October 2022. This increase was partially offset by the sale of the five Remedy Rigs in October 2022.
General and Administrative Expenses. General and administrative expenses totaled $32.4 million and $16.7 million during the second quarter of 2023 and 2022, respectively. The increase is primarily related to the Business Combination with Maersk Drilling in October 2022, with increases across several categories including employee related costs.
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Merger and Integration Costs. Noble incurred $22.5 million and $9.1 million of merger and integration costs during the second quarter of 2023 and 2022, respectively, primarily as a result of the Business Combination with Maersk Drilling in October 2022. Cumulative costs primarily relate to severance plans and share-based compensation charges, transaction-related acquisition costs, professional fees, and certain integration-related activities that are directly attributable to the Business Combination. In the second quarter of 2023, we incurred incremental severance costs as compared to the same period in the prior year. For additional information, see “Note 2— Acquisitions and Divestitures” to our unaudited condensed consolidated financial statements.
(Gain) Loss on Sale of Operating Assets. During the second quarter of 2022, Noble incurred costs of $1.1 million related to professional fees in connection with the anticipated sale of the Remedy Rigs in October 2022.
Hurricane losses and (recoveries), net. Noble incurred $15.9 million of costs, net of recoveries, during the second quarter of 2023 in connection with the Hurricane Ida incident. For additional information about the Hurricane Ida incident, see “Note 13— Commitments and Contingencies” to our unaudited condensed consolidated financial statements.
Other Income and Expenses
Interest Expense. Interest expense totaled $14.7 million and $7.7 million during the second quarter of 2023 and 2022 respectively. The increase was mainly due to the additional debt assumed in the Business Combination with Maersk Drilling in October 2022 and the issuance of 8.000% Senior Notes in April 2023. For additional information, see “Note 6— Debt” to our unaudited condensed consolidated financial statements.
Income Tax (Provision) Benefit. We recorded an income tax benefit of $0.7 million and an income tax provision of $3.9 million during the second quarter of 2023 and 2022, respectively.
During the second quarter of 2023, our tax provision included tax benefits of $50.7 million related to releases and adjustments of valuation allowance for deferred tax benefits in Guyana, Norway, Switzerland and Luxembourg, and a tax benefit of $6.8 million related to a Ghana uncertain tax position release. Such tax benefits are offset by tax expenses related to a Mexico uncertain tax position of $9.8 million, contract fair value amortization of $4.7 million and various recurring quarterly accruals of $42.2 million primarily in Guyana, Australia and Luxembourg.
During the second quarter of 2022, our tax provision included net tax benefits of $4.5 million related to a release of valuation allowance for Guyana deferred tax benefits, a tax benefit of $6.5 million related to a release of valuation allowance for Luxembourg deferred tax benefits. Such tax benefits were offset by tax expenses related to various recurring items comprised of Guyana excess withholding tax on gross revenue of $8.8 million and quarterly tax expense accrual of $6.1 million mostly in Luxembourg and Switzerland.
Results for the Six Months Ended June 30, 2023 and 2022
Net income for the six months ended June 30, 2023 was $173.9 million, or $1.19 per diluted share, on operating revenues of $1.2 billion compared to compared to net income for the six months ended June 30, 2022 of $0.4 million, or zero per diluted share, on operating revenues of $485.4 million.
Key Operating Metrics
Operating results for our contract drilling services segment are dependent on three primary metrics: operating days, dayrates and operating costs. We also track rig utilization, which is a function of operating days and the number of rigs in our fleet. For more information on operating costs, see “—Contract Drilling Services” below.
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The following table presents the average rig utilization, operating days and average dayrates for our rig fleet for the periods indicated:
Average Rig Utilization (1)
Operating Days (2)
Average Dayrates (2)
Six Months Ended June 30,Six Months Ended June 30,Six Months Ended June 30,
202320222023202220232022
Floaters76 %76 %2,618 1,541 347,383 241,510 
Jackups66 %65 %1,663 945 112,571 120,244 
Total72 %72 %4,281 2,486 $256,170 $195,429 
(1)We define utilization for a specific period as the total number of days our rigs are operating under contract, divided by the product of the total number of our rigs, including cold stacked rigs, and the number of calendar days in such period. Information reflects our policy of reporting on the basis of the number of available rigs in our fleet.
(2)An operating day is defined as a calendar day during which a rig operated under a drilling contract. We define average dayrates as revenue from contract drilling services earned per operating day. Average dayrates exclude the effect of non-cash amortization related to favorable and unfavorable off-market customer contract assets and liabilities.
Contract Drilling Services
The following table presents the operating results for our contract drilling services segment for the periods indicated (dollars in thousands):
Six Months Ended June 30,Change
Operating revenues:20232022$%
Contract drilling services$1,181,470 $457,498 $723,972 158 %
Reimbursables and other (1)
$67,119 $27,885 39,234 141 %
$1,248,589 $485,383 $763,206 157 %
Operating costs and expenses:
Contract drilling services$724,322 $344,228 $380,094 110 %
Reimbursables (1)
50,802 23,811 26,991 113 %
Depreciation and amortization141,266 52,241 89,025 170 %
General and administrative62,389 34,211 28,178 82 %
Merger and integration costs34,083 18,578 15,505 83 %
(Gain) loss on sale of operating assets, net— (3,459)3,459 (100)%
Hurricane losses and (recoveries), net19,478 2,805 16,673 594 %
1,032,340 472,415 559,925 119 %
Operating income (loss)$216,249 $12,968 $203,281 1,568 %
(1)We record reimbursements from customers for out-of-pocket expenses as operating revenues and the related direct costs as operating expenses. Changes in the amount of these reimbursables generally do not have a material effect on our financial position, results of operations or cash flows.
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The following table provides information about contract drilling revenue and costs by rig types (dollars in millions except average dayrates):
Six Months Ended June 30,
20232022
FloatersJackupsFloatersJackups
Contract drilling services revenues$970.2$211.3$343.9$113.6
Contract drilling services costs$549.4$174.9$221.5$122.7
Average Rig Utilization76 %66 %76 %65 %
Operating Days2,618 1,663 1,541 945 
Average Dayrates$347,383 $112,571 $241,510 $120,244 
Total rigs— Beginning19 13 12 
— Acquired— — — — 
— Disposed— — — 
— Ending19 13 13 
Contract Drilling Services Revenues
Floaters. During the six months ended June 30, 2023, floaters generated revenue of $970.2 million, as compared to $343.9 million in the six months ended June 30, 2022. The increase in revenue is mainly attributable to (i) $358.1 million provided by the eight additional floaters acquired in the Business Combination with Maersk Drilling in October 2022; and (ii) $198.2 million due to an increase in average dayrates in the current period. These increases were partly offset by $21.0 million from rigs with fewer operating days in the current period. Additionally, floater revenue for the current period increased $74.4 million due to additional net non-cash amortization related to off-market customer contract assets and liabilities.
Jackups. During the six months ended June 30, 2023, jackups generated revenue of $211.3 million , as compared to $113.6 million in the six months ended June 30, 2022. The increase in revenue is mainly attributable to $139.8 million provided by the 10 additional jackups acquired in the Business Combination with Maersk Drilling in October 2022. This increase was offset by (i) $43.9 million for the divestiture of the Remedy Rigs in October 2022 in connection with the Business Combination with Maersk Drilling; and (ii) $24.6 million from rigs with less operating days in the current period. Additionally, contract drilling revenue for the current period increased $24.0 million due to additional net non-cash amortization related to off-market customer contract assets and liabilities.
Operating Costs and Expenses
Floaters. During the six months ended June 30, 2023, total contract drilling services costs related to floaters was $549.4 million, as compared to $221.5 million in the six months ended June 30, 2022. The primary drivers of the increase are: (i) $238.1 million related to the eight additional floaters acquired in the Business Combination with Maersk Drilling in October 2022; and (ii) $93.6 million in increased crew, repairs and maintenance and material costs across the remainder of the fleet, some of which was driven by inflation. These increases were offset by $3.8 million due to the divestiture of a semi-submersible unit late in the first quarter of 2022.
Jackups. During the six months ended June 30, 2023, total contract drilling services cost related to jackups was $174.9 million, as compared to $122.7 million in the six months ended June 30, 2022. During the current quarter, cost increases are primarily driven by $114.5 million related to the 10 additional jackups acquired in conjunction with the Business Combination with Maersk Drilling in October 2022. These increases were partly offset by the reduction of $54.8 million in expenses after the sale of the Remedy Rigs in October 2022.
Depreciation and Amortization.Depreciation and amortization totaled $141.3 million and $52.2 million during the six months ended June 30, 2023 and 2022, respectively. Depreciation and amortization increased by $89.1 million in the current year primarily due to $95.2 million related to 18 rigs and related equipment acquired in the Business Combination with Maersk Drilling in October 2022. This increase was partially offset by the sale of the five Remedy Rigs in October 2022 and the divestiture of a semi-submersible unit in the first quarter of 2022.
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General and Administrative Expenses.General and administrative expenses totaled $30.0$62.4 million and $17.5$34.2 million during the first quarter ofsix months ended June 30, 2023 and 2022, respectively. The increase is primarily related to the Business
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Combination with Maersk Drilling in October 2022, with increases across several categories such as personnel and innovationincluding employee related costs.
Merger and Integration Costs. Noble incurred $11.6$34.1 million and $9.5$18.6 million of merger and integration costs during the first quarter ofsix months ended June 30, 2023 and 2022, respectively, primarily as a result of the Business Combination with Maersk Drilling.Drilling in October 2022. Cumulative costs primarily relate to severance plans and share-based compensation charges, transaction-related acquisition costs, professional fees, and certain integration-related activities that are directly attributable to the Business Combination. In the six months ended June 30, 2023, we incurred incremental severance costs and costs related to integration-related activities as compared to the same period in the prior year. For additional information, see “Note 2— Acquisitions and Divestitures” to our unaudited condensed consolidated financial statements.
(Gain) Loss on Sale of Operating Assets. During the first quarter ofsix months ended June 30, 2022, Noble recognized a gain of $6.8 million in connection with the sale of the Noble Clyde Boudreaux, which was offset by costs incurred of $1.1 million related to professional fees in connection with the anticipated sale of the Remedy Rigs in October 2022 and additional costs recognized of $2.2 million related to the sale of rigs in Saudi Arabia in 2021.
Hurricane lossesLosses and (recoveries)(Recoveries), net.net. Noble incurred $3.5 million and $17.2$19.5 million of costs, net of recoveries, during the first quarter ofsix months ended June 30, 2023 and 2022, respectively, in connection with the Hurricane Ida incident. For additional information about the Hurricane Ida incident, see “Note 13— Commitments and Contingencies” to our unaudited condensed consolidated financial statements.
OtherOther Income and ExpensesExpenses.
Interest Expense. Interest expense totaled $16.9$31.5 million and $7.7$15.4 million during the first quarter ofsix months ended June 30, 2023 and 2022 respectively. The increase was mainly due to the additional debt assumed in the Business Combination with Maersk Drilling.Drilling in October 2022, and the issuance of 8.000% Senior Notes in April 2023. For additional information, see “Note 6— Debt” to our unaudited condensed consolidated financial statements.
Income Tax (Provision) Benefit. We recorded an income tax benefit of $15.8$16.5 million and $5.2$1.3 million during the first quarter ofsix months ended June 30, 2023 and 2022, respectively.
During the current quarter,six months ended June 30, 2023, our tax provision included a Luxembourgtax benefits of $95.8 million related to releases of valuation allowance increase of $4.5 million,for deferred tax expensebenefits in Guyana, Norway and Switzerland, a tax benefit of $6.8 million related to a Ghana uncertain tax position release. Such tax benefits are offset by tax expenses related to a Mexico uncertain tax position of $9.8 million, contract fair value amortization of $4.2$8.9 million and current and deferred tax expense related to various recurring quarterly accruals of $25.6$67.4 million primarily in Guyana, Luxembourg,Australia and Switzerland. Such tax expenses were offset by a deferred tax benefit of $50.1 million related to a release of valuation allowance in Guyana and Switzerland.Luxembourg.
During the prior quarter,six months ended June 30, 2022, our tax provision included net tax benefits of $3.8$8.2 million related to a release of valuation allowance for Guyana deferred tax benefits, a tax benefit of $6.5 million related to a release of valuation allowance for Luxembourg deferred tax benefits, $0.9 million related to an adjustment to Swiss deferred tax benefits, and $1.3 million related primarily to deferred tax adjustments. Such tax benefits were partially offset by tax expenses of $0.8 million related to various recurring items.items comprised of Guyana excess withholding tax on gross revenue of $10.5 million and quarterly tax expense accrual of $5.0 million mostly in Luxembourg and Switzerland.
Liquidity and Capital Resources
Debt Refinancing
As of March 31, 2023, we had outstanding $173.7 million aggregate principal amount of our Second Lien Notes and $347.0 million aggregate principal amount outstanding under our New DNB Credit Facility. On April 18, 2023, Noble Finance II, LLC (“Noble Finance II”), a wholly owned subsidiary of Noble, issued $600.0$600 million in aggregate principal amount of its 8.000% Senior Notes due 2030 (“2030 Notes”). The 2030 Notes were issued pursuant to an indenture, dated April 18, 2023, among Noble Finance II, the subsidiaries of Noble Finance II party thereto, as guarantors, and U.S. Bank Trust Company, National Association, as trustee. The net proceeds from the offering of 2030 Notes were primarily used to (i) repay the approximately $347.5 million of outstanding borrowings under the New DNB Credit Facility, (ii) to redeem (the “Redemption”) the approximately $173.7 million aggregate principal amount of outstanding Second Lien Notes, and (iii) to pay any premiums, fees and expenses related to the Redemption and the issuance of the 2030 Notes. As of June 30, 2023, we had outstanding $600.0 million aggregate principal amount of our 2030 Notes.
Other Debt Repayments
On February 23, 2023, we also repaid the remaining amount under the DSFTerm Loan Facility Agreement dated December 10, 2018 by and between Maersk Drilling and Danmarks Skibskredit A/S as lender, agent, and security agent (as amended from time to time, the “DSF Credit FacilityFacility”) in full using cash on hand.
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Senior Secured Revolving Credit Facility
As of March 31, 2023, we had no loans outstanding and $21.1 million of letters of credit issued under the Revolving Credit Facility. For additional information about our Revolving Credit Facility as of March 31, 2023, see “Note 6— Debt” to our condensed consolidated financial statements.
On April 18, 2023, certain subsidiaries of Noble amended and restated the Revolving Credit Agreement by enteringentered into an Amended and Restated Senior Secured Revolving Credit Agreement, dated April 18, 2023 (the “2023 Revolving Credit Agreement”), by and among Noble Finance II, NIFCO and Noble Drilling A/S, as borrowers, the lenders and issuing banks party thereto from time to time and JPMorgan Chase Bank, N.A., as administrative agent, collateral agent and security trustee. The revolving credit facility under the 2023 Revolving Credit Agreement (the “2023 Revolving Credit Facility”)
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provides for commitments of $550.0 million.$550 million with maturity in 2028. The guarantors under the 2023 Revolving Credit Facility are the same subsidiaries of Noble Finance II that are or will be guarantors of the 2030 Notes.
As of June 30, 2023, we had no loans outstanding and $19.1 million of letters of credit issued under the 2023 Revolving Credit Facility. For additional information about our 2023 Revolving Credit Facility as of June 30, 2023, see “Note 6— Debt” to our unaudited condensed consolidated financial statements.
Letters of credit and surety bonds
As of March 31,June 30, 2023, we had $21.1$19.1 million of letters of credit issued under the 2023 Revolving Credit Facility and an additional $117.2$76.5 million in letters of credit and surety bonds issued under bilateral arrangements which guarantee our performance as it relates to our drilling contracts, contract bidding, tax appeals, customs duties, and other obligations in various jurisdictions. We expect to comply with the underlying performance requirements and we expect obligations under these letters of credit and surety bonds will not be called.
Sources and Uses of Cash
Our principal sources of capital in the current period were cash generated from operating activities.activities as well as net proceeds from the issuance of the 2030 Notes. Cash on hand during the current period was primarily used for the following:
normal recurring operating expenses;
repurchase, redemptions or repayments of debt and interest,
fees and expenses related to merger and integration costs;
share repurchases; and
capital expenditures.
Currently, our anticipated cash flow needs, both in the short-term and long-term, may include the following:
normal recurring operating expenses;
planned and discretionary capital expenditures;
repurchase, redemptions or repayments of debt and interest, including related fees;
fees and expenses related to merger and integration costs;
share repurchases and dividends; and
certain contractual cash obligations and commitments.
We currently expect to fund our cash flow needs with cash generated by our operations, cash on hand, proceeds from sales of assets, net proceeds from issuance of the 2030 Notes, or borrowings under our 2023 Revolving Credit Facility and we believe this will provide us with sufficient liquidity to fund our cash flow needs over the next 12 months. Subject to market conditions and other factors, we may also issue equity or long-term debt securities to fund our cash flow needs and for other purposes.
Net cash used inprovided by operating activities was $63.1$148.1 million and $51.8$36.3 million for the threesix months ended March 31,June 30, 2023 and 2022, respectively. The threesix months ended March 31,June 30, 2023 and 2022 had cash outflows from operating assets and liabilities. We had working capital of $409.2$418.5 million at March 31,June 30, 2023 and $384.7 million at December 31, 2022. Cash flow was adversely impacted by a significant expansion of working capital in the first quarter of 2023, which we expect to be largely reversed in the second quarter.
Net cash used in investing activities was $62.7$169.5 million and $32.8$63.8 million for the threesix months ended March 31,June 30, 2023 and 2022, respectively. During the threesix months ended March 31,June 30, 2023, our capital expenditures consisted primarily of routine projects associated with overhauls and upgrades on various rigs in the newly combined fleet. During the threesix months ended March 31,June 30, 2022, our capital expenditures includes the managed pressure upgrade on the Noble Gerry de Souza, and was offset against proceeds from the sale of the Noble Clyde Boudreaux.
Net cash used in financing activities was $170.5$202.3 million and $4.8$4.5 million for the threesix months ended March 31,June 30, 2023 and 2022, respectively. The current period includessix months ended June 30, 2023 include the repayment of the DSF Credit Facility in full, using cash on hand.
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hand, redemption of Second Lien Notes, repayment of the DNB Credit Facility and issuance of 2030 Notes. We also repurchased 1.8 million of our Ordinary Shares for total of $70.0 million.
At March 31,June 30, 2023, we had a total contract drilling services backlog of approximately $3.7$5.0 billion, which includes a commitment of approximately 58 percent64% of available days for our Noble rigs for the remainder of 2023. For additional information regarding our backlog, see “—Contract“Contract Drilling Services Backlog.”
Capital Expenditures
Capital expenditures totaled $54.9$170.9 million for the threesix months ended March 31,June 30, 2023 and consisted of the following:
$29.894.2 million for sustaining capital;
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$20.357.7 million in major projects, including subsea and other related projects; and
$4.819.0 million for rebillable capital and contract modifications.
Our total capital expenditure estimate for the year ending December 31, 2023, net of client reimbursables, is expected to range between $325 million and $365 million, of which approximately $210 to $230 million is currently anticipated to be spent for sustaining capital. We anticipate additional capital costs to repair the Noble Regina Allen, however, we are in the process of completing an insurance claim for reimbursement.
From time to time we consider possible projects that would require expenditures that are not included in our capital budget, and such unbudgeted expenditures could be significant. In addition, while liquidity and preservation of capital remains our top priority, we will continue to evaluate acquisitions of drilling units from time to time.
Environmental Matters
We are subject to numerous international, federal, state and local laws and regulations relating to the protection of the environment and of human health and safety. For a discussion of the most significant of these laws and regulations, see Part I, Item 1, “Business—Governmental Regulations and Environmental Matters” in our Annual Report on Form 10-K for the year ended December 31, 2022.
Continuing political and social attention to the issue of global climate change has resulted in a broad range of proposed or promulgated laws focusing on greenhouse gas reduction and related public disclosures. The costs of implementing these rules and continuing compliance and disclosure could be substantial. These proposed or promulgated laws apply or could apply in countries where we have interests or may have interests in the future. Laws in this field continue to evolve, and while it is not possible to accurately estimate either a timetable for implementation or our future compliance or reporting costs relating to implementation, such laws, if enacted, could have a material impact on our results of operations and financial condition. Climate change could also increase the frequency and severity of adverse weather conditions, including hurricanes, typhoons, cyclones, winter storms and rough seas. If such effects were to occur, they could have an adverse impact on our operations. For a discussion of climate change, see Part I, Item 1, “Business—Governmental Regulations and Environmental Matters—Climate Change” in our Annual Report on Form 10-K for the year ended December 31, 2022.
In addition, increasing social attention to ESG matters and climate change has resulted in demands for action related to climate change and energy rebalancing matters, such as promoting the use of substitutes to fossil fuel products, encouraging the divestment of fossil fuel equities, and pressuring lenders and other financial services companies to limit or curtail activities with fossil fuel companies. Initiatives to incentivize a shift away from fossil fuels could reduce demand for hydrocarbons, thereby reducing demand for our services and causing a material adverse effect on our earnings, cash flows and financial condition. For further discussion of these risks, see Part I, Item 1A, “Risk Factors—Regulatory and Legal Risks—Increasing attention to environmental, social and governance matters and climate change may impact our business and financial results” in our Annual Report on Form 10-K for the year ended December 31, 2022.
Critical Accounting Estimates
We prepare our unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States, which require us to make estimates that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures of contingent assets and liabilities. We disclose our significant accounting policies in “Note 1— Organization and Significant Accounting Policies” to our audited consolidated financial statements included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2022.
For information about our critical accounting policies and estimates, see Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2022. As of March 31,June 30, 2023, there have been no material changes to the judgments, assumptions and estimates upon which our critical accounting policies and estimates are based.
New Accounting Pronouncements
See Part I, Item 1, Financial Statements, “Note 3— Accounting Pronouncements,” to the unaudited condensed consolidated financial statements for a description of the recent accounting pronouncements.
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Item 3. Quantitative and Qualitative Disclosures about Market Risk
There has been no significant change in our exposure to market risk when compared to those disclosed in Part II, Item 7A. “Quantitative and Qualitative Disclosures about Market Risk” in our Annual Report on Form 10-K for the year ended December 31, 2022.
Item 4. Controls and Procedures
Robert W. Eifler, President and Chief Executive Officer (Principal Executive Officer) of Noble, and Richard B. Barker, Senior Vice President and Chief Financial Officer (Principal Financial Officer) of Noble, have evaluated the disclosure controls and procedures of Noble as of the end of the period covered by this report. On the basis of this evaluation, Mr. Eifler and Mr. Barker have concluded that Noble’s disclosure controls and procedures were effective as of March 31,June 30, 2023. Noble’s disclosure controls and procedures are designed to ensure that information required to be disclosed by Noble in the reports that it files with or submits to the SEC are recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.
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In accordance with interpretive guidance issued by SEC staff, companies are allowed to exclude an acquired business from the assessment of internal control over financial reporting during the first year following the date on which the acquisition is completed and from the assessment of disclosure controls and procedures to the extent subsumed in such internal control over financial reporting. In accordance with this guidance, as the Company acquired Maersk Drilling on October 3, 2022, management’s evaluation and conclusion as to the effectiveness of the Company’s disclosure controls and procedures as of December 31, 2022 excluded the portion of disclosure controls and procedures that are subsumed by internal control over financial reporting of Maersk Drilling as of March 31,June 30, 2023.
Other than the aforementioned acquisition, during the quarter ended June 30, 2023, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Information regarding legal proceedings is presented in “Note 13— Commitments and Contingencies,” to our unaudited condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q and is incorporated herein by reference.
Item 1A. Risk Factors
There are numerous factors that affect our business and results of operations, many of which are beyond our control. You should carefully read and consider “Item 1A. Risk Factors” in Part I and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II of our Annual Report on Form 10-K for the year ended December 31, 2022, which contains descriptions of significant risks that might cause our actual results of operations in future periods to differ materially from those currently anticipated or expected. There have been no material changes from the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Exercises of Warrants
During the three months ended March 31,June 30, 2023:
2,251,0262,097 Ordinary Shares were issued to holders of our Tranche 1 Warrants pursuant to exercises of 2,631,2162,135 Tranche 1 Warrants; and
1,521,2601,784 Ordinary Shares were issued to holders of our Tranche 2 Warrants pursuant to exercises of 1,908,9481,830 Tranche 2 Warrants.Warrants; and
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2 Ordinary Shares were issued to holders of our Tranche 3 Warrants pursuant to exercises of 46 Tranche 3 Warrants.
Such Ordinary Shares were issued pursuant to the exemptions from the registration requirements of the Securities Act under Section 4(a)(2) under the Securities Act or Section 1145 of the Bankruptcy Code. For more information on the terms of exercise and other features of the warrants, see our Annual Report on Form 10-K for the year ended December 31, 2022.
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Share Repurchases
The following table presents information about our purchases of equity securities for the three months ended June 30, 2023:
Period
Total Number of Shares Purchased (1)
Average Price Paid per Share
Total Number of Shares Purchased as Part of a Publicly Announced Plans or Programs (1)
Maximum Number (or Approximate Dollar Value) of Shares that may yet be Purchased Under the Plans or Programs (1)
April 1 - 30, 2023— — — $375,000,141 
May 1 - 31, 2023869,548 $38.40 869,548 $341,593,701 
June 1 - 30, 2023680,561 $39.06 680,561 $315,000,160 
Total1,550,109 1,550,109 $315,000,160 
(1)Subject to restrictions under applicable law discussed in “Note 4— Income (Loss) Per Share” to our unaudited condensed consolidated financial statements, we announced a share repurchase plan on Nov 2, 2022 to purchase up to $400 million of outstanding Ordinary Shares or Warrants. The $400 million authorization does not have a fixed expiration, and may be modified, suspended or discontinued at any time. The program does not obligate us to acquire any particular amount of shares. During the three months ended June 30, 2023, we repurchased 1,550,109 of our Ordinary Shares, which were subsequently cancelled.
Item 5. Other Information
Our directors and executive officers may from time to time enter into plans or other arrangements for the purchase or sale of our shares that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or may represent a non-Rule 10b5-1 trading arrangement under the Exchange Act. During the three months ended June 30, 2023, no such plans or other arrangements were adopted, terminated or modified.
On August 2, 2023, Noble adopted the Noble Corporation plc Executive Change in Control Severance Plan (the “Change in Control Plan”), which provides “double trigger” severance payments and benefits to certain employees including our named executive officers (other than William E. Turcotte). The policy provides an eligible participant with certain payments and benefits in the event that the participant experiences a qualifying termination following a change in control. In the event that an eligible executive’s employment is terminated without cause by Noble or for good reason by the executive within the 24-month period following the occurrence of a change in control, such executive would become entitled to receive, subject to their execution of a release of claims: (1) a lump sum cash payment equal to the sum of the executive’s base salary and target annual cash bonus multiplied by the multiple applicable for such executive’s role (i.e., 3.0 for our Chief Executive Officer and 2.0 for all other covered named executive officers); (2) any unpaid annual cash bonus for the year preceding the year of termination; (3) a pro-rated annual cash bonus for the year of termination based on actual performance; (4) Noble-paid COBRA continuation coverage for up to 18 months following the date of termination; (5) reimbursement for up to $50,000 in outplacement services; and (6) accelerated vesting of equity awards, with any outstanding performance-based equity awards determined based on (i) with respect to any completed performance periods or achieved performance measures, actual performance as of the termination date, and (ii) with respect to incomplete performance periods and performance measures, the target or 100% performance level. The Change in Control Plan contains a modified cutback provision whereby payments payable to an executive may be reduced if doing so would put the executive in a more advantageous after-tax provision than if payments were not reduced and the executive became subject to excise taxes under Section 4999 of the Code.
On August 2, 2023, Noble also adopted the Noble Corporation plc Executive Severance Plan (the “Severance Plan”), which provides severance payments and benefits to certain employees, including our named executive officers (other than William E. Turcotte), outside the context of a change in control. The Severance Plan provides an eligible participant with payments and benefits in the event of an involuntary termination without cause or, for certain employees including our eligible named executive officers, a termination due to good reason. In the event of such a qualifying termination under the Severance Plan, each executive would become entitled to receive, subject to the executive’s execution of a release of claims: (1) a lump sum cash payment equal to the sum of the executive’s base salary and target annual cash bonus multiplied by the multiple applicable for such executive’s role (i.e., 2.0 for our Chief Executive Officer and 1.0 for all other covered named
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executive officers); (2) any unpaid annual cash bonus for the year preceding the year of termination; (3) a pro-rated annual cash bonus for the year of termination based on actual performance; (4) Noble-paid COBRA continuation coverage for up to 12 months following the date of termination; (5) reimbursement for up to $50,000 in outplacement services; (6) accelerated vesting of time-based equity awards; and (7) continued eligibility to vest in outstanding performance-based equity awards determined based on (i) with respect to any completed performance periods or achieved performance measures, actual performance, and (ii) with respect to incomplete performance periods and performance measures, actual performance over the full performance period and pro-rated based on the number of months the executive was employed during the applicable performance period.
The foregoing descriptions of the Change in Control Plan and the Severance Plan do not purport to be complete and are qualified in their entirety by reference to the full text of the plans, which are filed as Exhibits 10.1 and 10.2, respectively, to this Quarterly Report on Form 10-Q and are incorporated herein by reference.

Item 6. Exhibits
The following exhibits are filed as part of this Quarterly Report on Form 10-Q.
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Index to Exhibits
Exhibit
Number
Exhibit
2.1
2.2†
2.3†
2.4†
2.5†2.1†
2.62.2
2.7†
2.8†^
3.1
4.1
10.1*^
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Exhibit
Number
Exhibit
10.2*^
10.3*
10.3*‡10.4*
10.4†10.5*
10.6†
31.1
31.2
32.1+
32.2+
101.INSInline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
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Exhibit
Number
Exhibit
101.SCHInline XBRL Taxonomy Extension Schema Document.
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document.
101.LABInline XBRL Taxonomy Extension Label Linkbase Document.
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document.
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*    Management contract or compensatory plan or arrangement.
†    Certain portions of the exhibit have been omitted. The Company agrees to furnish a supplemental copy with any omitted information to the SEC upon request.
‡    Certain portions of this exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K. The Company agrees to furnish supplementally an unredacted copy of this exhibit to the SEC upon request.
^    Certain personally identifiable information contained in this exhibit has been redacted pursuant to Item 601 (a)(6) of Regulation S-K.
+    Furnished in accordance with Item 601(b)(32)(ii) of Regulation S-K.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Noble Corporation plc, a public limited company formed under the laws of England and Wales
 
/s/ Richard B. BarkerMay 4,August 3, 2023
Richard B. Barker
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
Date
/s/ Laura D. CampbellMay 4,August 3, 2023
Laura D. Campbell
Vice President, Chief Accounting Officer and Controller
(Principal Accounting Officer)
Date

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