Good morning. My name is Sylvia and I will be your conference operator today. At this time, I would like to welcome everyone to the Noble Drilling fourth quarter 2010 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ prepared remarks, there will be a question-and-answer period. (Operators Instructions) As a reminder, ladies and gentlemen, this conference is being recorded today, Thursday, January 27, 2011. Thank you. I would now like to introduce Mr. Lee Ahlstrom, Vice President of Investor Relations and Planning. Mr. Ahlstrom, you may begin your conference.

Thank you, Sylvia, and welcome to Noble Corp’s fourth quarter and full year 2010 earnings call. Before we begin, I’d like to remind everyone that any statements we make today about our plans, expectations, estimates, predictions or similar expressions for the future, including those concerning the drilling business, financial performance, operating results, tax rates, spending guidance, backlog, day rates, contract tenders, and extensions or commencements, letters of intent, the outlook for the U.S. Gulf of Mexico and other regions, new bill delivery costs and dates, plans and objectives of management for future operations, and the outcome of any litigation, dispute or investigation are 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 these forward-looking statements. We have included summary balance sheets and income and cash flow statements with our earnings news release. Also note that we may use non-GAAP financial measures in the call today. If we do, you will find the required supplemental disclosure for these measures, including the most directly comparable GAAP measure and an associated reconciliation on our website. Now, I’ll turn the call over to David Williams, our President, Chairman, and Chief Executive Officer.

Thanks, Lee. Hello, everyone, and thanks for joining us today. With me in Geneva are Tom Mitchell, our CFO, and Roger Hunt, our Senior Vice President of Marketing and Contracts. I’d like to start off today by thanking our employees for turning in another year of impressive results. Advancing the safety culture and maintaining a focus on operational integrity are not always the easiest things to do especially when you’re already in a leadership position. However, our worldwide efforts in these areas continue to increase awareness and drive results to the point that we turned in our second-best ever safety performance in our 90-year history, coming in right behind 2009’s record-breaking results. Furthermore, I’m pleased to see that our overall potential severity rate continues to follow a downward trend. And while four of our seven operating divisions have extended their record-breaking results last year, more work lies ahead of us in 2011 and beyond as we journey towards creating a truly accident-free environment. With respect to 2010, the best thing I can say is we’re glad it’s over. We had some wins last year, including our acquisition with Frontier, our agreements with Shell, and the announcements about our newbuild jackups. But we certainly faced our share of challenges, including the fallout from Macondo, both in the U.S. and abroad, continuing uncertainty in Mexico and some construction challenges. I’d like to talk about some of these issues today. Going into 2010, about 30% of our budget’s revenue was projected to come out of the U.S. Gulf of Mexico. So when the Macondo event occurred, we were exposed. When the government imposed a moratorium, a tragic situation was compounded by economic uncertainty. In the wake of what was believed to be a six-month moratorium and because of where we were on the…

Thank you, David. Today, we’ll run a bit of time going through our fourth quarter and full year results, and then I’ll review the guidance for 2011. Last night, we reported fourth quarter net income of 99 million or $0.39 per fully diluted share on total revenues of 644 million. For the 12 months ending December 31, 2010, our net income was 773 million or $3.02 per fully diluted share on total revenues of 2.8 billion. Our acquisition of Frontier in July makes direct quarter-on-quarter and year-on-year comparison difficult, but to give you a frame of reference, fourth quarter of 2009 earnings per share were $1.72 and the full year 2009 earnings were 6.42. As you can see from the numbers in the Macondo incident, the second quarter of 2010 has had a tremendous negative impact on operations and profitability throughout the remainder of the year. Contract drilling services revenues increased quarter on quarter by 5% to 614 million. Average daily revenues for the fourth quarter of about a 141,000 were up 11% from the previous quarter. Relative to the third quarter, the revenue increase was primarily driven by demobilization fees that was on the Duchess, Seillean (inaudible) and also in Mexico, as David mentioned. Fewer days in the shipyard, the Noble Therald Martin rolling from a day rate of 114 to 270,000 and revenues on the Amos Runner, which was working in the U.S. Gulf of Mexico (inaudible). Offsetting these increases were rigs rolling to lower rates in the North Sea, in the Middle East and an increase in the number of stack days primarily in Mexico and in the North Sea. Our contract drilling services cost for the fourth quarter were 332 million, up 5% from the third quarter 2010. On a per-operating-day basis, fourth quarter 2010 cost…

Thank you, Tom, and good morning to everybody. Let me begin by updating you on the backlog specifics. At December 31, the value of the backlog was approximately 12.7 billion, which breaks down to 11.4 billion for floating units and 1.3 for our jackups. About 53% of our days for 2011 are already booked and 31% are booked for 2012. As David mentioned, 2010 was a difficult year. And two of Noble’s major market areas, the U.S. Gulf and Mexico, we experienced significant disruptions that are carrying out to 2011. In the Gulf, despite the absence of an official moratorium and a resumption of work to two of our rigs, we simply cannot predict when a return to normal might occur or what the new normal might look like. We expect to see additional units leave the Gulf region, which may at some point impact the broader deepwater market. However, the global deepwater segment has so far continued to be relatively stable. There are a number of opportunities across all water depths in various other regions of the world and rates to mid, deep, and also deepwater are generally flat. On the jackup front, activity and rates have been pretty consistent with what we saw over in the third quarter of 2010, with the obvious exception of Mexico, where a number of our units have rolled up contract, and in the North Sea, where we’re seeing the usual winter slowdown. Let’s talk about some specific details of different regions, starting in the U.S. Gulf. The first hurdle is operator’s compliance with NTL-06 and 10. NTL-10 seems to be the bigger holdup with questions around what both surface and subsea containment devices need to look like to win approval from BOEM. However, despite recent negative press reports, we do believe our…

Thank you, Roger. Sylvia, we’re ready to go ahead and take questions. I would like to remind everybody that we do have the one question with one follow-up rule and since our prepared remarks went a little bit longer than usual this morning, it will be as important as ever to follow that rule so we can make sure we get through as many questions as possible.

(Operator Instructions) Your first question comes from Joe Hill from Tudor Pickering. Joe Hill – Tudor Pickering: Good morning, guys.

Good morning, Joe. Joe Hill – Tudor Pickering: Dave, I was wondering if you could give us some insight as to what you’re thinking about your options exercise potential given the multiple factors you have to consider with regards to your operating cash flow, your balance sheet, et cetera, and whether or not you’d be willing to pull the trigger on all six in a fairly short period of time or whether that’s not really realistic.

Well, Joe, it depends on what we see in the marketplace. I will tell you that we’re sitting on $12.5 billion of firm backlog that goes out a long time, but we think it’s very secure. We clearly have a great relationship with Shell. Our relationship with Petrobras is very good and so we think the strength of our backlog is very, very good. With all of the ship we have under construction, the two Bullys, the two Globetrotters, and now the two Hyundai ships, for us, they’re all under contract, so we only have one spec newbuild, so clearly I think that from a cash flow perspective or balance sheet perspective, we could handle it. The question is going to be what we see in the marketplace as we go through the next few months and see what the opportunities look like and see how confident we are and the one we’ve got that’s available, and we will see the marketplace. But we like the prices, we like the fact that the last newbuild cycle and some of the current speculative builds that might be developed for sale or $800 million or better, these are very high-quality units. There’s some innovations on there that we like and these are very well laid out. We like the design and we like the price. We undertook Globetrotters because of the pricing scenario and the timing. The prices of these ships have come down and so we’re very comfortable with the price and we like where we are. So I can’t answer if we will or if we won’t. We like the price and we like the long-term view, the macroview of this business. Joe Hill – Tudor Pickering: Okay. And just to follow up, the rate on the Boudreaux is 290 a day which was a bit lower than I would’ve thought an asset in that class would get today. Can you comment on that and whether or not that’s indicative of what similar assets are probably going for?

Yes, Joe. We might wish for a higher day rate also but the market is – with all the disruption the Gulf of Mexico, the market is what it is. I think if you look around, then you’ll see moored semis at around to 300 and there has been another fixtures in Brazil at around that level. But we’re pleased with the opportunity to relocate it and move on. Joe Hill – Tudor Pickering: Okay. Fair enough. Thanks, guys.

Clearly, we wanted it out of the Gulf of Mexico.

Your next question comes from Kurt Hallead from RBC Capital. Kurt Hallead – RBC Capital: Hey, good morning, Tom. David, I was just wanting to get an update from you with respect to your embarking on this newbuild program and asset upgrade process, can you remind us what your return targets are for your newbuilds both in terms of floaters and jackups, and is there a significant differential in the return expectations for those two asset classes?

Kurt, we’ve never really published what our hurdle rate is for investment, but the fact that we’ve done so many of them against firm contracts, I think you can do the math. We’ve seen a number of analysts have computed what they think the returns look like on the newbuild that we announced and others. I don’t think our view of the world has changed, and like I just said on the previous question, we like the price of these rigs and we like what the deepwater business looks like going forward. So I think you can take what we’ve done and use that as a proxy for the future. Our view of the world hasn’t changed. We like where we are right now. Kurt Hallead – RBC Capital: Okay. And then my follow-up question would be as, once again, you embark on a newbuild program and it’s pretty clear there is a demand poll taking place for these new assets, are you undertaking this process with some contractual discussions taking place behind the scenes or are these being done truly on a speculative-type basis?

These are on-spec. We certainly have a dialogue going on with a lot of customers. There is a lot of interest already. We’ve had some interest in the jackups and we’ve had some discussions about the ships. But these, we undertook to do these on-spec. Kurt Hallead – RBC Capital: Okay.

The one ship with Shell, that contract was in place. But the rest of them were on-spec. Kurt Hallead – RBC Capital: Okay. Thank you.

Thank you.

Your next question comes from Ian McPherson from Simmons. Ian McPherson – Simmons: Hey, thanks. Roger, I was wondering if you could update us on what you’re hearing with regard to Petrobras and their appetite for rigs out of the existing market for prompt deliverability this year. It’s been a while since we had an update on that process, so any thoughts there?

Petrobras is in the market and I really think, Ian, they’re going to continue to be in the market. I think they’ve got one or two tenders being processed right now. They’re for 1500 (inaudible) program. I suspect that the strategy is to attempt to pull in much more capable units. So that’s in play. It’s hard to judge. I guess our view is ultimately Petrobras will facilitate construction locally, whether it’s the full 28 or some lesser numbers, who knows. But it’s going to take a long time to bring those to market. I’ve seen interviews that somewhere between 10 to 20 additional units will be required over the next couple of years to fill the void placed on their published programs. So, in short, I think we’re going to see Petrobras as a very active customer for ultra-deepwater rigs for the foreseeable future. Ian McPherson – Simmons: Okay. A separate unrelated follow-up, David, I think you alluded in your remarks about the possibility of using some of your older rigs as a source of cash if the prices are amenable. Would you hazard any guess as to which second-hand market might be more appealing to you for selling between floaters and jackups in 2011?

No, I mean, we have some rigs that would not be (inaudible) to report and we have some floaters and some jackups. We have entertained discussions with a number of people about a round of various rigs over time but haven’t come to a conclusion on a deal that we thought was satisfactory, but I’m hopeful that we may be able to in the future. So we have some (inaudible) Ian McPherson – Simmons: Okay. Alright, thank you.

Your next question comes from Mike Urban from Deutsche Bank. Mike Urban – Deutsche Bank: Thanks. Good morning. I just have one quick question. I’m thinking of the answer I wanted to hear from you, guys. As you wait for Mexico to come back into the market, and I know you said you anticipate those rigs going back, is there any thought at all of attempting to work those rigs in the U.S.?

You know, Mike, I think it’s a question of timing. Everything we see right now is – we’ve heard this before – that the Petrobras is really trying to fast-track a seven-rig (inaudible) that appears to be targeted towards (inaudible). And that’s for April’s data issued. So the quick answer is, if all that happens and we’re successful, the rigs go back to work, so there’s really enough time to be serious about looking at alternatives (inaudible). Mike Urban – Deutsche Bank: I apologize. I was actually talking about the jackups.

You said Petrobras, but you mean – Mike Urban – Deutsche Bank: I’m sorry. Pemex. I apologize.

You’re talking about Pemex? Mike Urban – Deutsche Bank: Yes, yes.

Yes, it’s alright, Mike. I looked it up and everybody’s waving at me. Mike Urban – Deutsche Bank: It happens to me all the time.

Does it make sense now? Mike Urban – Deutsche Bank: Yes, yes. The same question on that, I guess on the jackups, if Mexico, Pemex, doesn’t move as quickly, is there any thought to working with jackups and the Gulf? I guess that would be a no, but I just wanted to hear.

The challenge is you take a 60-day job in the Gulf and it turns into 80 days and you miss a delivery date with Pemex, you miss your tenure date. So they have arranged a delivery, so it’s just hard to do both. Mike Urban – Deutsche Bank: Alright. That’s all for me, thank you.

You next question comes from Dave Wilson from Howard Weil. Dave Wilson – Howard Weil: Good afternoon and good morning, gentlemen. A real quick question on the newbuild drillships. Just kind of go through the reason or the reasons you didn’t go with another buoy design or the Globetrotter design on those rigs?

We entertained about five different yards. We looked at five or six different yards. We looked at STX as one of those. We looked at all of the known yards and evaluated the different designs. We put together about a 10-person team from all over the world, did a full evaluation of all the designs, specifications, the yard capability, the yard’s history, the prices. We did a full-blown clean sheet of paper analysis on that one. Dave Wilson – Howard Weil: Okay. But as far as the design itself, nothing that you saw there versus the other two designs that you like better?

Well, we like both. We like the Hyundai ship. It’s a big ship. But like I said, we didn’t exclude anybody. We ran a full-blown process on a bunch of yards, and with the features and the price and the delivery that we could get, this was the best alternative. If you’re getting to are we scared of the Bullys or the Globetrotters, no. It’s four of those things to be commissioned in a row with (inaudible). We sort of took that into account. But the prices on the other competitive ships were $700, $800 million. A couple of years ago, while we’re trying to figure out how to keep the prices down, we squeezed Globetrotter 2 down about as low as you can get it, and these prices got very competitive with that. So we did a clean sheet of paper analysis on features, capability, size, operability, everything. We didn’t exclude anybody, and this was the design that the team came up with as the best bet. That’s how we did it. Dave Wilson – Howard Weil: Okay, great. Thanks, Dave.

Your next question comes from Dan Boyd from Goldman Sachs. Dan Boyd – Goldman Sachs: Hey, good morning, guys.

Hey, Dan. Dan Boyd – Goldman Sachs: Dave, I’d like to better understand what was going on here with the substitution with Shell. I know you, guys, have a great relationship with them, so they allowed you to take the Phoenix down to Brazil. But was that at all related then to the contract, the LOI that you have with the Clyde Boudreaux?

No. No, it wasn’t. The Phoenix deal has been in the works for a while. The Boudreaux are more recent commitment. No, they weren’t interconnected at all. This was really was and when the Phoenix was up and running, Shell, they’re big buoys, they said they could use a gap or they’d deploy it someplace else, and they looked at other places to deploy it. They had opportunities for it in other places, I think. But when we attended the meeting with Petrobras, they voiced concerns. The issue on the Muravlenko was just you don’t want a rig in the shipyard in Brazil over Christmas and Carnival. And so you got to be able to sequentially do the upgrades so that you don’t fall over the end of the year ‘cause nothing happens. And so this rig is not going to make it in the shipyard till 2013 and there was almost no time left on the contract, post upgrade, and then with the 16-3/4 BOP and Petrobras’ now desire to high grade the whole fleet in anticipation of this result, we were faced with another upgrade, another major upgrade on the rig that was going to get very little benefit of this very expensive upgrade. So when Shell said, "Gee, if we could find a home, we might be interested," the light goes on and Roger and his guys jumped on it very quickly, and we were able to facilitate a swap. As it turns out it’s a perfect solution. Dan Boyd – Goldman Sachs: Okay. Great. And then maybe you could give us a little more confidence in why the other two drillships in Brazil will continue on their contracts, the upgraded. Is the reliability and utilization of those rigs much better than the Muravlenko, and how do the upgrades compare?

The upgrades are very similar but the Segerius – the module was built. It’s about to sail very quickly. That’s the last we’ve seen it. They’ll get a lot of years of benefit from that upgrade and the Eason is right behind it. The uptime on both of those rigs has been fine, and when we went down there and talked to them, we talked specifically about, "Are you talking about the program or are you talking about the rig?" And this was a very focused conversation on the Muravlenko. So there aren’t really concerns about the other two in Petrobras’ mind or ours. Those upgrades are all headed down the road. I want to say that the module for the Segerius was shipped here very quickly and Petrobras is satisfied that what we’re doing is appropriate and that they’ll get the reliability they want. So there’s never really been a real issue on the other two. Dan Boyd – Goldman Sachs: Okay. Thank you for the clarification.

Dan, I think it’s worthwhile noting that the bonus potential that we’ve received on the Segerius and the Eason we’re both up 2010 over 2009.

The next question comes from Geoff Kieburtz from Weeden. Geoff Kieburtz – Weeden: Thanks very much. Roger, I wondered if you could elaborate a little bit on your comment about customers’ preference for new builds. You seem to suggest that it was not exclusively based on technical capabilities. Can you elaborate a little bit on that?

I think we’re making the point that a customer has a choice even though the program does not require – bigger (inaudible) bigger living quarters – if those features are reliable to them and the marginal price is in their economics, then they’re going to choose the newer rig. I think that’s what we’re referring to. Geoff Kieburtz – Weeden: Is that a change?

No, I don’t think it’s a change, it’s just an evolution. You’re seeing that now that the utilization rates on the new jackup fleets, for example, are probably closer to 90%, whereas the global utilization rate on the whole fleet is around 70%. There’s been a lot of talk about this (inaudible) in softer markets. You’ll see it in stronger markets than the gap between what an older asset could earn and a newer asset is going to close. Question forward is I guess is what is the future going to hold relative to those two sets of equipment. Geoff Kieburtz – Weeden: Is it any more pronounced in the floaters versus the jackups?

No. I think it’s more a level of absolute specification. There’s a real gap between the capabilities of the dynamically positioned ultra-deepwater fleet and for the mid-water deepwater fleet. Geoff Kieburtz – Weeden: And could you maybe just reconcile that last comment with the earlier comment about being fairly confident about the prospects for Noble’s mid water and moored semi assets?

A lot of that story is around the EVA class and they do represent a niche in the market. They’re capable of working in water depths up to 8,000 feet and beyond. When they came to be, they were very efficient assets in terms capital sufficiency and that over time has translated in for our customers. We believe that they’re going to have access to a deepwater tool and the pricing of that will arguably be less than what they might have to pay for an ultra-deepwater proof. Geoff Kieburtz – Weeden: Got it. Thank you very much.

Thank you.

Your next question comes from Scott Grouper from Bernstein. Scott Grouper – Sanford Bernstein: Good morning, gentlemen. Turning back to the construction options, David, you touched on your general thoughts for the options, but would you be willing to exercise the drillships options specifically on a speculative basis if it required utilizing your balance sheet?

Well, we certainly have the balance sheet capacity, but I don’t know that that really will play into the decision of whether or not we exercise that option or not. We got plenty of room on the balance sheet, if we want to do it. So the decision of whether or not we build more or don’t is not going to be regulated on whether or not we go to the balance sheet or not. It’s really what we see in the marketplace and what we think the benefits of that asset would be to the fleet long term. Scott Grouper – Sanford Bernstein: Okay. Got it. And in a non-related follow-up, your four jackups are now working as accommodation units in the Middle East, what are the prospects for a few of those units back to work in a drilling mode?

For 2011 in the near time, I think Big Driver (ph) and Admark (ph) is going to be Aramco’s level of intake. They’re in the process of bidding about 10 jobs right now. A little bit difficult to tell whether more than one of those is actually a marginal increase in their recount. It has happened before. Aramco uses its bid process sometimes to increase their intakes. I think what you’re going to see is Aramco, when they get through, you may see a little bit of increase in demand and we are – long story, but we are participating in the active process right now. So, yes, there is an opportunity for some of the rigs to switch from hotel work to drilling work. Scott Grouper – Sanford Bernstein: And do you have any idea in terms of when that bidding process would be concluded?

Predicting when Aramco wraps up the bidding process is (inaudible), but, oh, sometime in the next 90 days. Scott Grouper – Sanford Bernstein: Okay. Thanks you.

Your next question is from Doug Becker from Merrill Lynch. Doug Becker – Merrill Lynch: Thanks. David, Roger, you both mentioned a lot of interest for the Jim Day which is very understandable given the specs. What’s the range of start dates for the potential work that you’re seeing?

If it’s the Gulf of Mexico project, you know the answer to that. It’s all dependent upon the customer getting (inaudible). If it’s overseas, and some of these opportunities are, it’s kind of as soon as possible which really translates into a mid-year Q3-type start-up. So the Gulf of Mexico, I’d say, as soon as everything normalizes. Overseas, it’s probably middle of the year. Doug Becker – Merrill Lynch: Okay. And then there were no share of purchases in the fourth quarter?

The balance sheets’ strength has been highlighted a number of times. Doug Becker – Merrill Lynch: Are share of purchases off the table while the newbuilds and options are outstanding or could we see both going forward?

We have an active buyback program and we haven’t stopped it. We buy shares the full quarter, but we have so much stuff going on. So there’s no reason to think that we’re out of the buyback business forever. Doug Becker – Merrill Lynch: Okay, thanks.

Your next question comes from Arun Jayaram from Credit Suisse. Arun Jayaram – Credit Suisse: Good morning. I just have a quick one. Tom, can you elaborate a little bit on the tax rate, the guidance at 22%, versus, I think, just under 16% this year?

Yes, Arun. I would use 22 right now as a target for you, guys, and I’m going to have to adjust. This is extremely volatile right now with the drop in the revenue, in particular, in the Gulf and Mexico. It has a huge impact on it for the reasons that I described last quarter. There’s a component of our partnership which is basically a fixed tax cost. And so as your revenues move up and down, it’s extremely volatile. So, I can’t really give you much more other than to tell you it’s likely to be a little bit off of that as the best guess I can give you right now. You’ve seen the volatility in the last couple of quarters, it’s not going to go away until the rigs go back to work in the Gulf and so we go back to work in Mexico. So I would just look at that as our best target for right now and we will try to keep you fresh, either through the fleet status process or next quarter when we talk to you. Arun Jayaram – Credit Suisse: All right, fair enough. Roger, on the Pemex tenders, (inaudible) outstanding today, can you just highlight when the bids are due for those and when do you expect the additional five tenders to be issued by Pemex?

I’m looking. The bid is due – I think I might have to get back to you, Arun. It’s all over the board. The five (inaudible) ones I talked to you about, I think we’re going to find 10 of them around here in a couple of weeks because (inaudible) see us, but the ones that are already in play to date is ranging from April 6 to May 22. Arun Jayaram – Credit Suisse: Okay, thank you very much.

We’ll be around to take one last question here.

Your final question comes from Robin Shoemaker from Citi. Robin Shoemaker – Citi: One question, Roger, you mentioned shipyard capacity is getting pretty tight, especially for 2013 but also 2014 delivery. Do you anticipate that the cost of these vessels –deep-water rigs—are going to start to escalate as we get into later in this year from the very attractive pricing levels you see now or has something happened in the interim between the last cycle where the shipyards had become much more efficient and are able earn their desired margins with much lower prices?

Boy, I think we’d really like to support the case in the latter but so much of this requires equipment which comes from the major equipment manufacturers, (inaudible) Maritime, etcetera. So, when we think of what the price – the major cost component size, you’ve got shipyard and the equipment. I think a reasonable guess or expectation would be rather that the next round of orders are probably going to be at a higher profit.

Okay. And just similarly on these payment terms which seem to have so heavily back-end or delivery date waited, do you think that’s also a transitory kind of opportunity for you guys?

Yes, I’d yes. It’s probably the pricing inflation.

Yes. Alright, thank you.

I want to make a clarification. You know I was looking at the wrong column. I was looking at the stat, date of the job, (inaudible) to the due date, hence, probably (inaudible) when I get an update. The bid date is late February and 23 March.

Alright. Well, thank you, Sylvia, for your help today and thank you all for joining us. As you know, Brooke and I will be available the rest of the day to answer any questions you might have, and we will see you back here for the First Quarter 2011 in April. Thank you very much.

Thank you.

Ladies and gentlemen, this concludes the Fourth Quarter Earnings Call. Thank you for participating. You may now disconnect.