Noble 8K Reports Second Quarter 2006 Results | SEC 20 Jul 06

NOBLE REPORTS SECOND QUARTER 2006 RESULTS

SUGAR LAND, Texas, July 20, 2006 — PRNewswire-FirstCall — Noble Corporation (NYSE: NE) reported net income for the second quarter of 2006 of $179.8 million, or $1.30 per diluted share, on operating revenues of $517.5 million, compared to net income of $73.3 million, or $0.53 per diluted share, on operating revenues of $344.0 million for the second quarter of 2005. Net income for the six months ended June 30, 2006 was $325.0 million, or $2.35 per diluted share, on operating revenues of $979.4 million, compared to net income of $118.8 million, or $0.87 per diluted share, on operating revenues of $654.3 million for the six months ended June 30, 2005, a 173 percent increase in net income and a 50 percent increase in operating revenues. Our results for the 2006 second quarter and year-to-date include a pre-tax loss of $3.8 million ($0.02 per diluted share after tax) on the sale of the software business of our Maurer Technology Incorporated subsidiary in June 2006.

At June 30, 2006, the Company’s consolidated balance sheet reflected $3.0 billion in shareholders’ equity, $261.0 million in cash and marketable securities, and $698.6 million in total debt. Net cash provided by operating activities for the six month period ended June 30, 2006 was $370.6 million as compared to $190.2 million in the comparable period of 2005. Debt as a percentage of total capitalization was 19 percent at June 30, 2006, decreasing from 29 percent at December 31, 2005.

James C. Day, Chairman of the Board and Chief Executive Officer, said, “Our strategic decision in 2001 to reduce our jackup fleet in the U.S. Gulf of Mexico by moving units to regions with greater geological potential clearly has had a positive impact on our financial results. Notwithstanding the moderating shallow water market, the deepwater U.S. Gulf of Mexico continues to be quite active.”

Net income for the second quarter of 2006 increased 24 percent from the first quarter of 2006 as average dayrates on the Company’s deepwater units continued to increase. Additionally, total operating days increased 2 percent, primarily resulting from theNoble Joe Alfordwhich returned to work in early April after repairing damages caused by Hurricane Rita.

Compared to the second quarter of 2005, net income for the second quarter of 2006 increased 145 percent due principally to higher dayrates, increased utilization rates across the fleet and additional operating days. In August of 2005, we activated theNoble Mark Burnsand also acquired the remaining 50 percent interest in theNoble Harvey Duhaney.

Offshore contract drilling services revenues from deepwater drilling units (capable of drilling in water depths of 4,000 feet or greater) accounted for approximately 37 percent and 35 percent of the Company’s total contract drilling services revenues for the second quarter of 2006 and 2005, respectively. The Company currently operates five deepwater semisubmersibles in the Gulf of Mexico, one deepwater semisubmersible and three deepwater drillships offshore Brazil, and one deepwater semisubmersible in Nigeria. In addition, theNoble Therald Martinis currently undergoing shipyard upgrades prior to mobilization to Brazil in late July. The Company recently received new commitments for two existing semisubmersibles, theNoble Ton van Langeveldwhich will work for Venture Production plc (“Venture Production”) in the North Sea at $360,000 per day commencing in or about May 2008, and theNoble Homer Ferringtonwill work for Anadarko Petroleum Company in Nigeria at a dayrate of $434,000 commencing in or about January 2008. Contract drilling services revenues from international sources accounted for approximately 71 percent and 74 percent of the Company’s total contract drilling services revenues for the second quarter of 2006 and 2005, respectively.

The average dayrate for the Company’s international jackups was $72,601 in the second quarter of 2006 compared to $51,747 in the second quarter of 2005. Utilization on these units increased slightly to 98 percent in the recent quarter as compared to 97 percent in the second quarter of 2005. The Company

recently announced the receipt of a letter of award from Venture Production to enter into a contract to build a F&G JU-2000E enhanced premium jackup. The commitment will have a contract term of two years at a dayrate of $210,000. Venture Production currently plans to deploy the rig in the North Sea. This is the third F&G JU-2000E newbuild jackup the Company plans to deliver over the next three years.

The average dayrate on the Company’s deepwater units in the U.S. Gulf of Mexico capable of drilling in water depths of 6,000 feet or greater increased 118 percent to $273,779 in the second quarter of 2006 compared to $125,866 in the second quarter of 2005. The deepwater market in the U.S. Gulf and Brazil remains strong.

Day said, “Worldwide drilling activity should remain strong even though near term commodity prices are under some pressure, most particularly North American natural gas.”

The Company repurchased 1,000,000 of its ordinary shares in the second quarter at an average price of $68.71 per share, excluding related transaction costs.

Noble Corporation is a leading provider of diversified services for the oil and gas industry. Contract drilling services are performed with the Company’s fleet of 63 mobile offshore drilling units located in key markets worldwide. This fleet consists of 13 semisubmersibles, three dynamically positioned drillships, 44 jackups and three submersibles. The fleet count includes three F&G JU-2000E enhanced premium newbuild jackups under contract for construction, with scheduled delivery of the first unit in the third quarter of 2007, the second unit in first quarter of 2008 and the third unit in the first quarter of 2009. Approximately 84 percent of the fleet is currently deployed in international markets, principally including the Middle East, Mexico, the North Sea, Brazil, West Africa and India. The Company provides technologically advanced drilling-related products and services designed to create value for our customers. The Company also provides labor contract drilling services, well site and project management services, and engineering services. The Company’s ordinary shares are traded on the New York Stock Exchange under the symbol “NE”.

This news release may contain “forward-looking statements” about the business, financial performance and prospects of the Company. Statements about the Company’s or management’s plans, intentions, expectations, beliefs, estimates, predictions, or similar expressions for the future are forward-looking statements. No assurance can be given that the outcomes of these forward-looking statements will be realized, and actual results could differ materially from those expressed as a result of various factors. A discussion of these factors, including risks and uncertainties, is set forth from time to time in the Company’s filings with the U.S. Securities and Exchange Commission. Additional information on Noble Corporation is available via the worldwide web at http://www.noblecorp.com.

NCA-382
7/20/06

For additional information, contact:
Lee M. Ahlstrom, Vice President – Investor Relations and Planning
Noble Drilling Services Inc.
Noble Corporation, 281-276-6100

NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2006			2005			2006			2005

OPERATING REVENUES
Contract drilling services	$	476,339		$	303,911		$	893,971		$	566,315
Reimbursables		20,640			18,655			43,712			43,157
Labor contract drilling services		17,967			17,531			35,198			35,672
Engineering, consulting and other		2,568			3,911			6,548			9,189

		517,514			344,008			979,429			654,333


OPERATING COSTS AND EXPENSES
Contract drilling services		181,139			145,907			349,044			289,929
Reimbursables		17,544			16,546			37,596			39,452
Labor contract drilling services		15,175			14,476			30,072			29,665
Engineering, consulting and other		7,270			5,733			10,700			11,621
Depreciation and amortization		62,545			59,529			121,906			115,906
Selling, general and administrative		10,655			10,099			20,940			17,917
Hurricane losses and recoveries, net		—			—			(4,404	)		—

		294,328			252,290			565,854			504,490


OPERATING INCOME		223,186			91,718			413,575			149,843

OTHER INCOME (EXPENSE)
Interest expense, net of amount capitalized		(1,773	)		(5,192	)		(14,252	)		(11,127	)
Other, net		1,893			2,876			4,394			6,211


INCOME BEFORE INCOME TAXES		223,306			89,402			403,717			144,927
INCOME TAX PROVISION		(43,545	)		(16,092	)		(78,725	)		(26,087	)


NET INCOME	$	179,761		$	73,310		$	324,992		$	118,840


NET INCOME PER SHARE:
Basic	$	1.31		$	0.54		$	2.38		$	0.88
Diluted	$	1.30		$	0.53		$	2.35		$	0.87

WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		136,800			136,065			136,759			135,637
Diluted		138,297			137,300			138,375			136,936

NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)


	June 30,			December 31,
	2006			2005
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	223,890		$	121,845
Investment in marketable securities		37,113			44,457
Accounts receivable		384,172			276,688
Insurance receivables		58,921			51,565
Inventories		4,266			3,940
Prepaid expenses		24,945			10,064
Other current assets		28,765			13,896

Total current assets		762,072			522,455


PROPERTY AND EQUIPMENT
Drilling equipment and facilities		4,596,562			4,178,097
Other		71,318			66,698

		4,667,880			4,244,795
Accumulated depreciation		(1,339,539	)		(1,245,776	)

		3,328,341			2,999,019


INVESTMENTS IN MARKETABLE SECURITIES		1,555			673,639
OTHER ASSETS		167,215			151,254

	$	4,259,183		$	4,346,367


LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt	$	9,295		$	8,972
Accounts payable		118,012			93,914
Accrued payroll and related costs		84,328			78,558
Taxes payable		44,828			45,245
Interest payable		10,264			9,640
Other current liabilities		38,330			23,006

Total current liabilities		305,057			259,335


LONG-TERM DEBT		689,342			1,129,325
DEFERRED INCOME TAXES		239,848			227,589
OTHER LIABILITIES		6,081			6,290

		1,240,328			1,622,539


MINORITY INTEREST		(7,655	)		(7,906	)

SHAREHOLDERS’ EQUITY
Ordinary shares-par value $0.10 per share		13,680			13,701
Capital in excess of par value		960,191			1,024,470
Retained earnings		2,050,010			1,736,015
Restricted stock (unearned compensation)		—			(17,099	)
Accumulated other comprehensive income		2,629			(25,353	)

		3,026,510			2,731,734

	$	4,259,183		$	4,346,367

NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)


	Six Months Ended June 30,
	2006			2005
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	324,992		$	118,840
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		121,906			115,906
Deferred income tax provision		12,259			9,835
Equity in income of joint venture		—			(2,388	)
Distributions received from joint venture		—			2,194
Stock-based compensation expense		10,382			3,365
Other		11,241			1,158
Other changes in current assets and liabilities:
Accounts receivable		(106,945	)		(42,624	)
Other current assets		(31,205	)		(11,347	)
Accounts payable		6,011			(8,326	)
Other current liabilities		21,919			3,584

Net cash provided by operating activities		370,560			190,197


CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions and related capital upgrades		(264,672	)		(56,709	)
Other capital expenditures		(160,431	)		(52,376	)
Major maintenance expenditures		(43,782	)		(29,078	)
Proceeds from sales of property and equipment		—			993
Proceeds from Smedvig Disposition		691,261			—
Investment in marketable securities		—			(23,349	)
Proceeds from sales of marketable securities		6,582			106,679
Increase in restricted cash		—			(28,920	)

Net cash provided by (used for) investing activities		228,958			(82,760	)


CASH FLOWS FROM FINANCING ACTIVITIES
Payments on credit facilities		(135,000	)		(65,000	)
Payments of other long-term debt		(604,404	)		(4,108	)
Proceeds from issuance of ordinary shares		7,642			53,955
Proceeds from issuance of Senior Notes		295,953			—
Payment of dividends		(10,997	)		(5,429	)
Repurchases of ordinary shares		(50,667	)		—

Net cash used for financing activities		(497,473	)		(20,582	)


NET INCREASE IN CASH AND CASH EQUIVALENTS		102,045			86,855

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		121,845			58,790


CASH AND CASH EQUIVALENTS, END OF PERIOD	$	223,890		$	145,645

NOBLE CORPORATION AND SUBSIDIARIES
FINANCIAL AND OPERATIONAL INFORMATION BY SEGMENT
(In thousands, except utilization amounts, operating days and average dayrates)
(Unaudited)


	Three Months Ended June 30,																											Three Months Ended March 31,
	2006														2005													2006
	International			Domestic											International			Domestic										International			Domestic
	Contract			Contract			Engineering								Contract			Contract			Engineering							Contract			Contract			Engineering
	Drilling			Drilling			& Consulting		Other			Total			Drilling			Drilling			& Consulting		Other		Total			Drilling			Drilling			& Consulting		Other			Total
OPERATING REVENUES
Contract drilling services	$	338,750		$	137,589		$	—	$	—		$	476,339		$	224,518		$	79,393		$	—	$	—	$	303,911		$	282,156		$	135,476		$	—	$	—		$	417,632
Reimbursables		12,517			2,704			91		5,328			20,640			7,933			4,826			1,884		4,012		18,655			11,981			6,229			20		4,842			23,072
Labor contract drilling services		—			—			—		17,967			17,967			—			—			—		17,531		17,531			—			—			—		17,231			17,231
Engineering, consulting and other		556			105			1,907		—			2,568			761			285			2,865		—		3,911			449			163			3,368		—			3,980

	$	351,823		$	140,398		$	1,998	$	23,295		$	517,514		$	233,212		$	84,504		$	4,749	$	21,543	$	344,008		$	294,586		$	141,868		$	3,388	$	22,073		$	461,915


OPERATING COSTS AND EXPENSES
Contract drilling services	$	140,880		$	39,741		$	6	$	512		$	181,139		$	113,107		$	32,800		$	—	$	—	$	145,907		$	129,928		$	37,977		$	—	$	—		$	167,905
Reimbursables		10,639			2,298			78		4,529			17,544			6,195			4,602			1,919		3,830		16,546			9,257			6,073			10		4,712			20,052
Labor contract drilling services		—			—			—		15,175			15,175			—			—			—		14,476		14,476			—			—			—		14,897			14,897
Engineering, consulting and other		352			(46	)		7,161		(197	)		7,270			195			134			5,216		188		5,733			124			(110	)		3,420		(4	)		3,430
Depreciation and amortization		49,328			12,986			190		41			62,545			46,993			11,770			99		667		59,529			46,096			13,143			83		39			59,361
Selling, general and administrative		5,877			3,804			631		343			10,655			7,012			2,513			234		340		10,099			5,574			3,306			167		1,238			10,285
Hurricane losses and recoveries, net		—			—			—		—			—			—			—			—		—		—			—			(4,404	)		—		—			(4,404	)

	$	207,076		$	58,783		$	8,066	$	20,403		$	294,328		$	173,502		$	51,819		$	7,468	$	19,501	$	252,290		$	190,979		$	55,985		$	3,680	$	20,882		$	271,526


OPERATING STATISTICS
Jackups:
Average Rig Utilization		98	%		N/A								98	%		97	%		100	%						97	%		100	%		86	%							99	%
Operating Days		3,672			N/A								3,672			3,266			182							3,448			3,510			155								3,665
Average Dayrate	$	72,601			N/A							$	72,601		$	51,747		$	60,865						$	52,228		$	64,887		$	101,112							$	66,419

Semisubmersibles — (6,000 feet or greater):
Average Rig Utilization		100	%		100	%							100	%		100	%		96	%						97	%		100	%		100	%							100	%
Operating Days		182			364								546			182			348							530			180			360								540
Average Dayrate	$	145,698		$	273,779							$	231,085		$	158,779		$	125,866						$	137,168		$	89,261		$	241,562							$	190,795

Semisubmersibles — (less than 6,000 feet):
Average Rig Utilization		100	%		100	%							100	%		100	%		100	%						100	%		100	%		100	%							100	%
Operating Days		91			168								259			91			182							273			90			180								270
Average Dayrate	$	196,709		$	128,147							$	152,279		$	84,742		$	77,611						$	79,988		$	113,430		$	124,183							$	120,599

Drillships:
Average Rig Utilization		100	%		N/A								100	%		95	%		N/A							95	%		100	%		N/A								100	%
Operating Days		273			N/A								273			260			N/A							260			270			N/A								270
Average Dayrate	$	96,313			N/A							$	96,313		$	72,707			N/A						$	72,707		$	104,189			N/A							$	104,189

Submersibles:
Average Rig Utilization		N/A			97	%							97	%		N/A			95	%						95	%		N/A			67	%							67	%
Operating Days		N/A			264								264			N/A			258							258			N/A			180								180
Average Dayrate		N/A		$	61,402							$	61,402			N/A		$	40,267						$	40,267			N/A		$	58,506							$	58,506

Total:
Average Rig Utilization		98	%		99	%							98	%		97	%		97	%						97	%		100	%		88	%							98	%
Operating Days		4,218			796								5,014			3,799			970							4,769			4,050			875								4,925
Average Dayrate	$	80,311		$	172,950							$	95,011		$	59,099		$	81,848						$	63,726		$	69,668		$	154,830							$	84,798

Noble 8-KNoble Reports Second Quarter 2006 Results