Welcome to Noble Corporation Second Quarter Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question and answer session. [Operator Instructions]. As a reminder, this conference is being recorded Thursday July 19, 2007. I would now like to turn the conference over to Mr. Mark Jackson, Chairman, President and Chief Executive Officer of Noble Corporation. Please go ahead sir.

Good afternoon and welcome to Noble Second Quarter Earnings Call. It's been a great quarter for drilling start performance for Noble in particular. Year-to-date, Noble shares are about 33%, we are second in share performance unlike the peers. Since our year-end Noble Max fear threat [ph] more than 50% enjoying new all time highs and breaking the $100 per share barrier. Its only the mark that's recognizing our performance our customers are also in a recent independent customer statistics and survey, Noble was rated number one in the deepwater, number one in West Africa and number one in the Middle East, was the only offshore drill we scored ace in all five of the rating categories. We've had a great quarter includes some very significant contract, we announced in the press release last night and we started talking about our results in the markets. Before we begin our comments, let me ask Bob to read our Safe Harbor statement.

Thank you Mark and good afternoon. I will remind everyone that any statements we make today about our plans, expectations, estimates, predictions or similar expressions for the future our forward-looking statements and are subject to risks and uncertainties. Our filings with the U.S. Securities and Exchange Commission which are posted on our website, discuss the risks and uncertainties in our business and industry and the various factors that could keep outcomes of any forward-looking statements from being realized. Our actual results could differ materially from our expectations. We have included detailed balance sheets and the income and cash flows statements with our earnings news release. Now. I'll turn the call to Mark.

Thanks Bob. Let me also take a minute to introduce the team that is delivering results we are going to talk about today. Following my comments, Tom Mitchell, our CFO will walk us through the Financials. Lee Ahlstrom from our VP of IR and Planning will update our guidance numbers. David Williams, who we announced from the quarter is taken on responsibility of Chief Operating Officer, will discuss worldwide markets and our operational performance. Then we will open up the line for questions, to help answer these questions we also have Scott Marks our Senior VP of Engineering and Julie Robertson, Executive Vice President also with this. I'd kike to begin today by making a few comments about the macro outlook because that's always going to be what drives demand for our services. The IEA recently published its Mid-Term Global outlook report in which it concludes that global supply demand scenarios are likely to continue to be supportive that commodity prices. In the report, IEA predicts global oil demand will increase from average 2.2% per year through 2012. On the supply side, OPEC spare per capacity is expected to be tight and non-OPEC capacity businesses are likely to continue to experience the lows as well as downward volume revisions. One example is the Chevron's recent announcement that they will be delaying the development of Jackfield in the U.S. Gulf of Mexico because they are unable to secure a rig. Additionally, the decline of existing fields like Mexico's Cantarell highlight the need for more exploration and development. And again, this is very positive for offshore growing community. And it is into premier jackups already in Mexico, PEMEX is tendering for more. And as we announced Nobel secured a letter of award from PEMEX for a three-year contract on the Noble Max…

Thanks Mark and good afternoon. This morning we reported quarterly earnings of $2.16 for fully diluted share on net income of $290 million. Earnings were up $0.30 per share or 16% over the last quarter driven mostly by our rigs moving to higher dayrates while mentioning cost control. You will also note that we had a 153 more operating days during the quarter which contributed to higher revenues mainly because of that Noble Therald Martin who tend to serve us and the Noble Clyde Boudreaux grow went on the payroll. With this level of performance we achieved a new record high contract drilling margin of 67.7%. The financials are pretty straight forward and you had a chance to review them in the release so I don't think we need to spend a lot of time detailing outline items, but I will make a couple of comments. Contract drilling costs are inline with our projections. We continue to be on target for our 15% increase in per day operating cost for the year versus our per day cost at the end of '06. The biggest drivers of cost increases right now are labor where we continue to see pressure and cost associated with funding the performance plan in our divisions because of our strong performance today. I'd also like to note that the $212 million of contract drilling expense includes about $3 million of cost associated with settling personal injury claims for offshore personnel which date back to '05 and prior. Additionally, we recovered about $4.8 million of our cost increases through cost escalation billings this quarter. You will also note that SG&A is up above last quarter's number. There are a number of components here first almost $4 million or $0.02 of share after tax related to Jim Day's retirement,…

Thanks Tom. We don't have a great deal new for each day in terms of guidance for the rest of the year, but we will do some updating. As Tom mentioned, we continue to target the increase in contract drilling service costs on a per rig operating day basis at 15% versus our year-end 2006 performance which includes the effect of the Boudreaux and the Lewis commencing operations. We are still expecting full year DD&A to come in somewhere between $300 million and $315 million which means it should ramp up significantly in the third and fourth quarters. Capital spending should pick up the Boudreaux was out of the yard in operating and the Roger Lewis will begin earning revenue in the third quarter as described in the fleet status report. Now in our last call we gave guidance of about $58 million for SG&A for the remainder of the year. That's a non-include expenses in the quarter $4 million related to the retirement expense over the $1.7 million of expenses related to the independent investigation of Nigerian operations neither of which were anticipated. Now as you can imagine estimating expenses associated with the investigation is difficult, but internally we are estimating about another $6 million in cost for the second half of 2007 we predict the outlook for full year SG&A up to around $70 million. That we expect the engineering and consulting line on the income statement to essentially be breakeven for the rest of the year so there maybe some additional cost perhaps as much as $0.5 million as we finalize the sale of the rotary tool business. We continue to expect our capital budget to be in the range of $1.2 billion to $1.3 billion and that's consistent with the comments we made on our last call. With respect to 2008, we are still not prepared to get cost or CapEx guidance to you yet on that and I'll turn it back over to Mark.

Thanks Lee. David will you make some comments operations?

Sure Mark, thanks. Let's begin today by going around the world and talking about how about particularly the international jackup market which seems to be the focus of most of the concerns in the financial community. Overall, we continue to be pleased with our performance in international jackup markets. We still see incremental demand from our customers almost every where outside of two markets the U.S. Gulf which Mark mentioned earlier, which we believe it will continue to be unstable and unpredictable and the North Sea which we see essentially is a balance market for the time being with little of no movement of rigs in or out. In Mexico, we have been awarded one year contracts for our final three uncommitted jackups in that market. The Nobel Bill Jennings of 390 foot rig and $186,000 per day. The Nobel Lewis Dugger a 300 footer at $171,000 per day in the Nobel Tom Jobe with 250 foot rig at $150,000 a day. All of these rigs operate under North side charters and the rates are consistent with the rates that we see in other international markets. Additionally PEMEX has already tendered for three more jackups and we have heard the possibly there maybe more tender forth coming as PEMEX continues to try to wrestle with the significant issues they are facing it can't drill. In West Africa we are back to normal operations after localized social and less complicated safe operations for short time leading up to elections last night. The Noble Don Walker returned to work on July 1 after short forced majority period. And we have not any problems since then. Additionally, we are aware of tenders for an incremental six additional rigs in the market all with multi-year term. The Middle East continues to be very strong…

Thank you David. With that operator, we would now like to open the call for questions.

Thank you. [Operator Instructions]. The first question comes from line of Mr. Ian Macpherson of Simmons and Co. Please proceed with your question. Ian Macpherson - Simmons & Company International: Hey good morning and nice job on the quarter and with the new contracts?

Thank you.

Thank you Ian. Ian Macpherson - Simmons & Company International: But question for Mark or for David or whoever would like to answer it. We have always been under the impression that one of the impairment to getting favorable deepwater contracts with PEMEX was there only termination clauses. So, how did you work with them on that front?

David take that.

Well Ian, what's we have already said about Mexico is every contract in Mexico has some sort of termination rights because it's part of constitutional law. We were the only contractor that did the tender that came out with that could give an early delivery of a newbuild rig. I'm sorry of a deepwater rig and that picked our interest even though we worked a little bitter in their tender, they were very interested in our available... availability for '08 and so that kind of facilitated and opting for a stock. Given the issues they have at Cantarell and given the necessary success of PEMEX in the Mexican environment we don't see a way in the world they are going to let this rig go. Ian Macpherson - Simmons & Company International: Okay. So, I understand that that they still have they set the language in the contract but you are not concerned about the ramifications of that?

We are not concerned about what's in the contract whether it's in the contract or not doesn't changed whether or not they had that right, but no, we are not concerned about it. The PEMEX has identified a multitude of structures this is what their base in their future. We are going to be in their drill and our three year contract well before the other rigs they have contracted. We just don't see the risk. I mean they need the rigs desperately. Ian Macpherson - Simmons & Company International: Got you. Okay thanks.

Ian can I answer this going back David five years as you may remember some of the comments that were made 5 years ago as we began to move nine jackups out of the U.S. Gulf to Mexico we only had one there and as you recall the comment concern five years ago was rolled, these contracts have 30 day cancellation clauses why would you move jackups out of this U.S. Gulf market that's going to be so hot to Mexico. In the strategy, then was right we believe if you look at opportunities around the world for people can drill in deepwater. Mexico has the best prospects yet to be touched. We believe that's the market of the future. We believe with are the best deepwater driller in the world and by that relationship will only be cemented with PEMEX and we think it's a great strategic move. I mean that's why this year PEMEX will be our single largest customer Ian Macpherson - Simmons & Company International: Okay. Thanks for that color Mark.

Vanessa, do we have another question ?

Next question comes from the line Arun Jayram of Credit Suisse. Please proceed with your question

Good afternoon

Good afternoon

Mark including the Boudreaux you guys have seven rigs including 3 jackups and 4 floaters that you are adding to the fleet over the next several years. I just wondered if you could remind us, how much earnings power on a per share basis you think you'll get from these assets from 2010 timeframe as well as the anticipated returns from these newbuilds.

The last slide I can recall, I think you are testing my memory now just make sure that I use the same number, the last slide we used said that as we went into 2010 leaving 2009 it was $3.90 a share on the assets that you just mentioned. Obviously, the rates return you know range any where from low teens on for examples jackups that had the lower dayrate contracts with Shell, to the mid 30s on the things that we have recently signed. And so, as those contracts rolled on the other units we believe that all will be in the 25% - 30% range on returns so there are going to be great additions to the fleet and the keys making sure as David highlighted that we execute get those things out. Obviously, we weren't happy that we didn't hit our target in the Boudreaux but we are going to give our best. I know everyone know these assets will come out that's going to be the key to get them out on time and on budget.

Okay, so that $4 in earnings isn't going to come. And last question in terms of Max Smith was this structured as a modified bareboat charter some more to the other jackup contract. And if so, can you just give us what the operating costs will look like relative to what you are doing in the U.S. though?

This is not a bareboat charter, this will be a fully crude operation for us and the cost in Mexico will include some you know it's an international operation so it will be normally higher than what we see in the U.S. Gulf.

Okay, and last quick question. The interest... I think you said it get on the payroll in the fourth quarter of 2008, is that early or mid or any idea of that?

There... our contract now runs through the first quarter of '08 plus whatever well might be in progress. So its somewhere deepwater wells we are drilling now, have a potential to run fairly long plus we will do the... we have a shipyard job and ENC5 [ph] upgrades some other work we are waiting for [ph] get on the. So fourth quarter is what we've told PEMEX and that gives us a little bit of room to finish the well we've got and then move down there. I mean I would say early to mid fourth quarter at the latest. Our expectation would probably down there before that but it just depends on the well that we are drilling when our contract expires during first quarter next year.

Okay. Thanks a lot

Our next question comes from line of Robert Mackenzie of FBR please proceed with your question

Hey guys. I wanted to ask some more color if you can share with us on the contracts of the jackups in the Middle East and what you are seeing there and as a related follow up, great rate on the Leo Segerius is that indicative of the market developing now in Brazil or there is one option where should we expect to see things going forward given how rates have historically been a little below market there?

Well, Petrobras does a very good job of managing that market. This was a very optimistic opportunity for us, I mean Chevron had a distinct need. They have a program down there and the timing of there need 50 availability this rig and it was just, it was kind of a home run our marketing guys got in there and worked this thing pretty hard. I think it's indicative of the notional idea that Petrobras is going to have to recognize if they can continue to do contracts at the rates down them. So, I think this is going to be an eye opener for them as do not find a rub their nose in anything but, the rights to take down what the indigenous contractors and some of our peers down there are not reflective of the market and so our expectation is they are going to have to move up or they all want to file in the quarter, I doubt it. But it's a short term opportunity, the timing was perfect, our guys got in there. We're able to facilitate in opportunity that was kind of behind the scenes, it was a great deal for us.

And the Mid-East rates?

Sorry.

And the Mid-East rates for Burns in this range?

The Mid-East rates well in this range I'll tell you it is a 160. The other rig is at the request of the operator private but we are not embarrassed about it it's above that number.

Okay, and then a follow up on the cash flow statement, spending the share repurchase program, pending the Nigerian investigations, would you expect to keep that suspended for the duration of the investigation and if that drags on. Does that then make your capital allocation decisions looking at maybe building another rig more attractive?

It's really impossible for us to answer that right now, not knowing how long the investigation will go.

Okay. Thanks.

We just can't give a lot more color on that on anything to do with the investigation Rob.

Okay.

But I would say that when you look at a decision to change your cap allocation that we don't view this situation as anything that's going to change our strategy. Okay so, obviously you do see we are dealing with... but it's not changing the strategies of the company or how we have been intended to pull our capital this time.

Great. Thank you very much.

Our next question comes from the line of Daniel Boyd of Goldman Sachs. Please proceed with your question.

Hi, can you give us an update on the three drill ships that you have in Brazil, I know you talked a little bit before about potentially, on divesting those or upgrading those but given the rates I don't know if those plans are the same?

It's a good question Daniel, and I think what it does it raises the bar on both options, because as we shared with you we think those drill ships have a unique niche in possibly any link value, one of the things that we were discussing before the call came on was, what happens if we got asked, how does you get $20... $525,000 a day, and David was going to say, they won't give us $530. But always sets a great dayrate which moves the value of those assets of regardless of what you do and so as you look at the value of the assets, we are going to look at is better to monetize them with cash, then use those proceeds for a positive share repurchase activity, or then to do the major upgrades that we discussed would be the range of $150 million with a 150 days of shipyard cost and so those are the two options that we are exploring right now.

Okay. And then just over the house cleaning question, on the Max Smith typically with the prior morning upgrades you are doing it looks like you have the customer pay for part of the dayrate what was going to be in the shipyard and then also help pay for the cost that upgrade. How do you see that moving with the Max Smith considering it will be between the two contracts?

With Max Smith we purchased most of the equipment, we are going to do the upgrade because it makes sense for us do it given the environmental conditions that we are seeing in the way that hurricanes are being kind of re-classified so we are going to go ahead and do it. It's really built into our numbers but it is going to be for our count.

Okay. Thanks. That's all.

Our next question comes from the line of Pierre Conner of Capital One Southcoast. Please proceed with your question.

Good morning... good afternoon everybody.

Good afternoon Pierre.

MarkI think you generally answered my question about in strategic in your moves to get the Max Smith to Mexico a couple of times but maybe without the wells in too much, I guess there are some other assets coming into that region at a much later dates that turn out traditional contract drilling operators and is that where you see potential JV or asset opportunities, so if you get foot in the door in the deepwater first?

I don't know, if it's... it's a good question, I don't know if it necessarily means that we are more likely to do a JV but we believed its... it will make us the customer of choice that is one reason that David and couple other guys, on this wanted to do a full accrue is that, a lot of our -- all eyes will be on these first couple wells they drill within PEMEX and obviously we want to make sure it's the best they have ever seen and if we achieve that we had in other locations then it would be their customer choice which we think strategically then that markets going to need a lot of deepwater assets. So what we like about it, is so far the other players that we had heard mention are not established players in the market which we believe even gives us more advantage long term. At the same time we are all obviously very exited that's obviously a huge dayrate and the contract for the moment de mode is outstanding, the guys are being humble. I mean the company is protected going down and back on the transaction. But strategically it was a huge move for the company. It's exactly what we wanted to achieve this year.

Absolutely. And related to that on a high rate in the margins. Great work David on the up time 98% this quarter up a little bit sequentially and I guess my thought is to ask you about what are you doing to ensure with margins as they are know you told about 67% margins you know to get that everyday to get that daily contract are you changing any prevented maintenance, are you required additional spare and going to prevent our city [ph] from the rate that kind of thing which you are getting higher and higher margin and higher sensitivity to that...?

I think Noble always has a good management and make sure they have what they need in place. I would say only thing that really is required now to maintain that postures looking further out into the future with lead time items with lead time on specific items of equipment we are getting longer and longer. So we were looking further into the future than we had to in the past to make sure that we have everything we need to make sure that the rates can maintain this level performance as we go through the cycles everything is getting harder to come by and further up in the field further out in advance so every operation is looking further to make sure that we have we need, when we need it just to make sure we keep the rigs up and running everyday.

When you look back it wasn't only sexy you know a year two years ago when we are talking about what we are being contractually with getting reimbursements and from the focus of the roles on the dayrates but as we mentioned the increase in cost 4.8 that was reimbursed by the customer, but I'm looking at some of the people here on one of our contracts in deepwater to acquire the modifications that we made to this contract compared to the prior contract in one month. We got paid $2.1 million of revenue that would have been downtime underneath the old contract and for that's huge. So things you can do in the contract that's when you asked the question of what are we doing to hold that going into future it gets back to the things that David and the team is doing on downtime and safety and also the thick guys and Mark you are doing on the contract side of it.

Okay got it. That's helpful. I will turn it back thanks gentlemen.

Thank you our next question comes from the line Angeline Sedita of Lehman Brothers. Please proceed with your question.

Thanks good afternoon guys and congrats on the new contract, very impressive. Mark something you touched in the beginning of your comments was the number of assets you are potentially interested on the specs out there. Just a little bit of color if you could are these joint ventures potential for ownership and potential timing of that are you hoping to wait to the rigs are closer to delivery for potentially bargaining power and on price. Or could this actually be something sooner?

You Angeline its impossible to predict because, we look at things everyday and so which one comes from the region of which one is one that works for us its kind of hard to tell. But it could be any of those combinations the keeping is that people are the most significant issue. And what you want to do is leverage people. So you got to make sure if in the joint venture situation at the end of the day our shareholders benefit from the structure. So we are not diluting our people by putting them on as to we get half of, are you with me? So the structure has to be right for us because that's what's going to drive these deals and why people interested and why they are approaching the established players as they got operations they have people. And obviously you know you were as you some of the problems that some of the new guys have had and their pretty high profile issue. So we think those are have been and they are going to be there and so we are going to pursue that and I think those things are going to happen when they happen and that sounds outright. But that's how those things always work, but we don't see any less activity, we don't see any less opportunity than what we saw in the last quarter.

Andthen as a follow up. I know you have believe you have done some pre engineering work on a new built Super EVA. Just your thoughts on there on new construction still looking at it or not?

We are that's one things that one of our objective's this year was to complete all the detailed engineering on the super EVA we had concept designs but not detailed designs so we can get a better hand on cost estimates. We'll complete those issues and would be in a position to market that asset to customers going into 2008.

Okay. Then a follow up to that and what type of term would you look at for that type of construction?

Oh! gosh you know we always see for something three years plus but you go back to Jim if you can get over half your money back in two years, that wouldn't slow us down either.

Great perfect. Thanks guys.

Thanks Angie.

Our next question comes from line of Dan Pickering. Please proceed with your question.

Good morning. David I heard you talk about various markets around the world one of the markets you mentioned was India. I think we saw couple of newbuild announcements contracted there earlier this week at rates that surprised me kind of 140 a day. Were those kind of unique brother-in-law type contracts or what's going on in that market. Its just one is hard pressed to see and to can you give us some color.

Dan there is a lot of demand over there the contracts you are talking about I think were indigenous Indian company is bidding to ONGC for some longer term opportunities. And so I think its more of an anomaly than a reflection in the market you know its market where we are active we certainly don't see rates at that level for our rigs over there and don't see where you are going to see you know real contractors is biding in those kinds of levels in this market.

Okay thanks and then by the sagacious post to Chevron contract I mean what's the visibility for that rig and the thoughts beyond the Chevron contract?

Well you know like to dig deep don't you. We just finished Chevron deal and Chevron actually has some options. So we will we haven't stop talking about that so we have a multitude of opportunities for the rig right there in Brazil with a couple of operators and we may very well take the rig through to another market given a right opportunity. There are opportunities for the right kind of rigs in the right ... in different markets around the world. So the future is great which way we are going I am not sure.

Okay, and the option with Chevron are those price or those market rates?

They are there is limited duration in their asset price.

Okay thank you. Thanks a lot.

Yes.

Our next question comes from the line of Geoff Kieburtz of Citigroup. Please proceed with your question.

Thanks. In lees comments he mentioned that you didn't want to talk about the CapEx plans beyond the current year. But I kind of get the sense that without being find that you expect to continue redeploying all of your cash flow in the operation is that the correct understanding?

Not necessary operationally we planned I think Tom's comment was that we don't intend to build cash.

Right.

And so therefore either we redeployed it into opportunities to add assets or share repurchases or acquisitions.

Okay alright, but I guess the share... can you prioritize among those three?

No Geoff that hasn't changed. The number one priority assuming all of our assets are complete would be to add world class assets total fleet to have a higher rate of return. And then secondly and by the way it is a matter to us whether that's a newbuild or we acquire it, I mean its either way. And then secondly would be our repurchase programs we are returning that cash to our shareholders in some form.

Are you seeing acquisition opportunity you mentioned you are looking at things everyday, are you seeing asset acquisition opportunities that match or exceed the returns you would expect from a newbuild?

That's a good question. I think depending on how you look at it's just the way to look at that. Obviously, they are going to be somewhat better because of timing. As you know when asset that comes to you in six months versus three years will have superior economics every time and that's the thing we wave very happily. So, I think the answer to your question is that acquiring an asset that's under construction would probably have higher economics that it would starting construction on something that will be delivered for three and half years at best.

Okay, because of the timing difference?

Absolutely.

And you did comment briefly about the still considering that drillship upgrades and I guess maybe I don't have widen of vision here but, at the rates you are getting... I mean what would you expect the rate differential to be, if you were to take one of those out of service for 150 days and put $150 million into it?

It's a good question Geoff. We won't bring our economics on the 525 dayrate though. So you look at that dayrate and say that is I think they have got a great explanation to that contract and how we look at it. The real issue is during the Petrobras is the market rate or they going to be willing to pay on those units because those assets are going to require major investments over time. If you want to work in a $300,000 type dayrate, okay, and so that's reality of it, and our customers are going to ask us to do that, to be compared with other assets that are down there. And so we got to evaluate that decision against it for someone, who is out there, who would love to put those assets into their fleet at a very, very attractive sales price. And we are going to do whatever gives the highest return to the shareholder.

Alright. Thanks very much.

You're welcome.

Our next question comes from the line of Mike Drickamer of Morgan, Keegan. Please proceed with your question. Michael J. Drickamer - Morgan, Keegan & Company, Inc: Hi good morning or good afternoon guys.

Good afternoon Mike. Michael J. Drickamer - Morgan, Keegan & Company, Inc: You guys talk about that you are looking at rigs all the time, looking a lot of these speculative results, do you have concerns about quality of these newbuilds, perhaps you can share with us what you are hearing or seeing on the quality, are the speculators cutting any corners in the construction?

I will say most of the rigs that we would consider as a part of the due diligence process, most of the rigs that are being built, are being built in yards that we think are high quality yards with supervisions either provided by the yard or other manufacturing groups. That should be able to deliver the kind of quality that we need. Some of the steps certainly, some that we would investigate very deeply before we would make an investment decision at one of these, spec newbuilds. Michael J. Drickamer - Morgan, Keegan & Company, Inc: Okay. But even with the high quality shipyards do you still expect there to be cost over run and translate and allow these results correct?

Well I think it's inevitable, I mean as you know its 137 rigs out there five years ago they weren't. Three probably in the world so I mean, we need ramp up the number of, the amount of work and the amount of money that's invested and I don't know how many, I don't how many top... trying to manufacture but it's a lot more the next two years and maybe last 10 years probably. So there is just, a lot of there a lot of pressure on the system to be over deliver the kind of equipment that we are looking to deliver. So I think it's I think there's going to be problems.

Davidyou had a great point because, even on the bigger to be specific with issues that we had it wasn't a fact we didn't get the steel cap or still on the rig, it wasn't that we couldn't get morning systems installed that really came down to the commissioning of the drilling packages and that again everyone's giving their best efforts but it's tie. People shrink I mean there, everyone's running full out, round the clock so those were the issues that we saw on something that's happening today. I mean think about what's going to happen in 12 months, 18 months when you double or triple the number of commissionings, you got to ask Pete Miller a piece to add you know 1,500 people in 12 months to handle this sort of activity. And so, we just look at the sheer activity it's coming at the industry and limit the number of resources that our vendors have at great companies that just can't get enough people. Michael J. Drickamer - Morgan, Keegan & Company, Inc: I will make sure I ask Pete that question. Thanks a lot guys.

But those comments came from us.

Came from diamond or someone. Michael J. Drickamer - Morgan, Keegan & Company, Inc: Already guys.

Don't worry.

Our next question comes from the line of Jud Bailey of Jefferies and Company. Please proceed with your question. Judson E. Bailey - Jefferies & Co.: Thank you, good afternoon. Mark quick question you got 45 for the Max Smith, is there any reason we could not assume that your other EVA's and some of the other similar type rigs would not get similar rate when they roll later in '08 into 2009?

Certainly that's the benchmark for us, and I know David incurred in the marketing team will they will be the first closed they talk about extending those contracts and we will have to see where those contracts are for areas they work in but we think that's a good dayrate flat asset. Judson E. Bailey - Jefferies & Co.: Okay. Follow up is it fair to say since Petrobras is not able to renew the areas that they are probably looking to replace that rig or so in a market for another similar 5,000 foot water depth rate rig to work in Brazil?

I certainly have a need for the assets frankly they just found out its Segerius going to Chevron about a week ago. So Petrobras, a very good customer we have... we've been down there number of times in discussions with them about not only Segerius which was the first of the rigs to roll out. But the whole package of our five existing rigs about extensions are all over, and they have a definite need they, Petrobras is that the form on deepwater and they have got a sincere need whether or not they are going to go out specifically and try to replace the Segerius or what you will have to ask them but they definitely had a need for our rigs and others. Judson E. Bailey - Jefferies & Co.: Okay. If I could follow up there was one number I didn't catch earlier in the call, what was the percentage you recovered from cost escalation, provisions that you quoted earlier?

It was $4.8 million. Judson E. Bailey - Jefferies & Co.: $4.8 million, great thank you.

Our next question comes from the line of Philip Dodge of Stanford Group. Please proceed with your question.

Hello thank you more on the subject of spec new builds do you have opinion of how many of those spec new bills may change hands before they find a contract and also related to that the number of buyers that are... they are along with you looking at that market?

We wanted the statistic that you used at what...

It's about 55 or 56 rigs that are being built by 35 companies or so. If you take out of the mix companies that we would call sort of real drilling contractors or people who have ended the business clearly with a goal to become a drilling contractor for the long term. So you've got a bunch of companies out there to have between 1 and 2 rigs and we would expect a lot of those to change chance.

And how many people are looking at the strategy of buying those rigs?

Well I am not sure we can really comment on that I will [Multiple Speaker] some keys about

The numbers are that we could... pretty well identify ourselves.

Yes you could probably think you are out... the shortlist is that would be interested in lot of these different kinds of assets.

Okay thanks.

Your next question comes from line of Bryan Mechinn of RBC Capital Market. Please proceed with your question.

Hey guys actually Kurt Hallead here.

Hi Kurt.

Any specific question you guys referenced in your press release the signing of these two jackups to contracts in the Middle East you didn't reference the dayrate could you give us an update on that?

One of those dayrates is the operators requested that we keep it private the Chuck Syring was 160.

The one that they requested you keep quiet is that because they would like 250,000 a day or something like that?

You have drawn your own conclusions I think what I said earlier was at that rate we would be proud of and it's above the 160. The Chuck Syring is a 254 foot rig and we did 160 the other rig is little bit higher speck and you can draw your concludes form that but it's a rate that we are proud of.

Alright then the follow up I had was on the Max Smith, so you got some time decline the end of when this contract... current contract ends and when its on that $484,000 a day I think you got about two quarters in there, what's the game plan over that two quarter period.

Well... that is the date we've given PEMEX because of we... our contract runs through the end of March plus whatever well is in progress. So if we are drilling a 30 day well will be finished early if we are drilling a 90 day well it could go over that longer. So, we are not going to be doing there is no gap. We'll deliver... we will finish our well here we'll go on to shipyard and do our NC5 upgrade and then we will head straight to Mexico so we've got a, probably I don't say 90 days or so shipyard time in Noble there and the rest will be drilled up somebody.

Okay. And then lastly I just want to follow up on your earlier comment Mark, your reference consolidation and I tried your comment about the sea drill in the aspect of, can you reiterate what you said again about the U.S contract as was that highly likely or highly unlikely that there would be consolidation?

I guess we just stated that investors and outside force that triggers consolidation. We don't see a move differed by the U.S base companies to consolidate a lot of talk but not a lot of action and we believe what was driving those discussions was the idea of someone from across the sea making something happen making an offer study some activity that would then lead to a series of advance. But that hasn't happened we'd believe what had happen. But you have seen recently for Hercules and Topco combined that can lead other activity but we don't think it's highly likely.

And then if I just one last one of I may can you update us on what percentage of your deepwater contracts you have cost escalation closes on and if possible if you could break that out by '07 '08, and if you get out '09 year or not?

Kurt we don't have that power plant we have said before in the past that we have about 63% of our contracts across the fleets that have escalation costs I don't think that numbers has meaningfully changed we typically are able to secure cost escalating clauses on contracts which have longer than a year term. Because, if just a year you just reprise the contract when it rolls over. So, you can look across the fleet see what's multi year in terms in the contract link and be pretty comfortable that those all have some form cost escalation in there.

And I would add one thing that I think it's very important going back to example that we made reference to I think as is important or maybe more important in cost escalators is a down time provisions are the things that we put in our deepwater contracts to give us reimbursements when we, going into in continuous operations. And that was example that I used to the for again on one rig even to get a contract we got a year ago, we got paid $2.1 million of the revenues that a year ago like contract that look have been paid because we are looking continuous operations it's in thing on the magnet side that we will reimburse force so, that is the key on most important contracts.

Got it. Thanks a lot.

But I think one more question.

Okay, thank you our next question comes in the line David Smith of J.P. Morgan. Please proceed with your question.

Good afternoon gentlemen.

Good afternoon David.

I was, I know you guys take a longer term due where to position your rigs and I'm wondering in that context where you view the Arctic in particular on that list?

That's a good question; it takes a very special kind of rig to be able to work in the Arctic. We don't have anything in our fleet that's really geared for that at this point of time. So that would be a certainly, if there are some success and some opportunities that would certainly be in place and we would be interested pursuing but with the current make up of the fleet that we have, I don't think we will be able to suit rig in Artic environment.

I guess I was thinking on that question in context of M&A opportunities?

Well, we will see how they do, you know in M&A opportunities I think we have addressed pretty same I am not sure we have grown out in past some by these that had raised specifically slated for that market until we saw there was some real where we go to go pursue.

And we all haven't seen any opportunities today on assets that would be in that category, it isn't?

It's a tough environment to work in and your margins quite frankly might not be as high as they would be some of the more attractive markets that we are in.

Okay. I would appreciate that. Also unless after, you have mentioned the six additional requirements, wondering in just in the context of the recent applicable security issues if those requirements, how solid they look?

Well we wouldn't have put them on the call, if we didn't think they are real, but not all in Nigeria, they are down on the coast so we are pretty confident about their real life jobs.

Good point. Thank you.

Thank you.

Well that's it. Thank you very much, for hosting the call for us today, thank you all for attending as always Brook and I will be able for follow up, surely after the call here and we thank you very much for your continue interest in supporting Nobel.

Thank you ladies and gentlemen. That does conclude the conference call for today. We thank you for your participation and we ask that you please disconnect your lines.