Good morning. My name is Regina and I will be your conference operator today. At this time I would like to welcome everyone to the Noble Corp fourth quarter yearend 2011 earnings call. (Operator Instructions.) As a reminder, ladies and gentlemen, this conference is being recorded today, Thursday, January 26th, 2012. Thank you. I would now like to introduce Mr. Jeff Chastain, Vice President of Investor Relations. Mr. Chastain, you may begin your conference.

Thank you, Regina, I would like to welcome everyone this morning to Noble Corporation’s fourth quarter 2011 earnings call. A copy of the company’s earnings report issued last evening along with the supporting statements and schedules can be found on the Noble website at noblecorp.com. Also let me use this opportunity to notify you that members of the executive management of Noble will host an Analyst Day on Thursday, May the 24th. The event which will begin with a reception on the evening of May 23rd will cover strategic, financial operations and marketing discussions and will include a tour of the company’s subsea control center in North Houston. Additional details will be sent out shortly and will also be available on the Noble website. We hope you can confirm your attendance. Before I turn the call over to David, I’d like to remind everyone that any statements we make about our plans, expectations, estimates, predictions or similar expressions for the future, including those concerning the drilling business, the financial performance, operating results, tax rates, spending guidance, backlog, day rates, market outlook, contract commencements, tenders, extensions or announcements; rig demand, fleet condition or performance; industry fundamentals; new build delivery costs and dates, and plans and objectives of management for future operations are all forward-looking statements and are subject to risks and uncertainties. Our filings with the US 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. 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 the website. I’ll now turn the call over to David Williams, Chairman, President and Chief Executive of Noble.

You will have the opportunity to meet James in the company weeks as we conduct meetings with many of you. In addition to James today, Roger Hunt is here, our Senior Vice President of Marketing and Contracts and Dennis Lubojacky, Vice President and Controller. I will begin today with some general comments on our 2011 accomplishments that we expect will create value in future quarters including progress made towards our fleet transformation. I will talk briefly on the fourth quarter results specifically as it pertains to downtime during the quarter and how we are addressing this issue. I will then turn the call over James who will provide more detail comments on our quarterly performance and give you some guidance for 2012. After that Roger will follow with some color on the offshore market and some of the exciting developments that we are observing around the world. I will then make some final comments before we would take your questions. However, with the departure from the shipyard of the Noble Bully I in September and the Noble Bully II and Globetrotter I in December, we ended 2011 with 11 shipyard projects in progress and three rigs in various stages of acceptance testing, prior to actually commencing work later this quarter. To update you, the Noble Bully I successfully deployed it’s BOP in the US Gulf of Mexico and is expected to begin its five-year contract within the next couple of weeks. The Noble Bully II is in transit to Brazil where we expect the rig to begin its 10-year contract in March and the Noble Globetrotter I has completed its required incline test and will conduct its sea trials and mobilize the US Gulf of Mexico, commencing its 10-year contract right about the very end of March. The eight new…

Thank you, David and good morning to everyone. I look-forward to meeting with many of you in the coming weeks or months. Today, I’ll provide you some insight into our fourth quarter and our full year 2011 results. I’ll give also guidance on specific aspects of the income statement as well as how we see things developing in 2012, particularly in light of the addition of new assets during 2012. Last night we reported fourth quarter net income of $127 million or $0.50 per fully diluted share. Total revenues was $751 million. These results compare to net income in the third quarter of $135 million or $0.53 per diluted share. Total revenues in the third quarter of 2011 was $738 million. For the 12 months ended December 31, 2011 net income was $371 million or $0.46 per diluted share on total revenues of $2.7 billion. Contract drilling services revenues in the fourth quarter were $720 million, up a modest 2% from the third quarter of 2011, reflecting primarily the return of several rigs to active service, including the Noble Paul Romano, Noble Gene House, Noble Joe Beall, Noble Roy Butler and the Noble Dick Favor. These had a combined favorable impact of $23 million. Also the Noble driller located in the U.S Gulf of Mexico returned to full operating day rates of 375,000 in the quarter after having spent most of the third quarter, at a standby rate of 85000. This had a $6 million favorable impact. The utilization in the fourth quarter reflected high fleet activity improving from 77% in the third quarter to 79%. Unexpected downtime on the Noble Roger Eason relating to thruster repairs and the completion of contracts on three jack-ups in Mexico, partially offsetting increase in revenues during the fourth quarter with an unfavorable impact…

Thank you, James and good morning to all. Consistent with the scope of David’s and James remarks I will state the developments over the past quarter and the past year and as well as address the outlook for 2012 and beyond. Our industry continues to experience solid signs of recovery in both the shallow and deepwater sectors. This recovery is occurring in multiple geographies. Utilization is improving and day rates are falling. Whenever, we take call back rigs entering the markets we know it’s available at the time. During the fourth quarter of 2011 we saw several of our rigs return to work including the semi Paul Romano which in October commenced the contract in Egypt; the jackups Gene House and Joe Beall, which commenced three contracts in Saudi Arabia and the jackup Dick Favor which was reactivated for work in Bahrain. We continue to experience a study for our bids and concluded contracts on six jackups and the deepwater semi are quite reserved. But we’ll draw at least in Brazil in a year, and 800 day program in Australia at a base rate of $417,500. Our contracting successors continued in the early 2012 signing a three year contract for the semi Jim Day in the US Gulf of Mexico at a base rate of $530,000 and a jackup rig in Charles Copeland in the Middle East at a day rate of $95,000. Contract backlog has once again begun to expand. Since the end of the third quarter, when we added sort of $12.8 billion, we have increased backlog by $900 million with new contracts in Mexico, the North Sea, the Eastern Mediterranean, Australia and Africa bringing the total to $13.7 billion at the year-end. This backlog breaks down into $11.7 billion for floaters and $2 billion for jackups. Adding…

And finally we expect to be in a position to update you on the progress towards or identifying some of the older and lower specification units of the fleet that might be candidates for disposition. This is a process that we have had under view for the past year and we have realized considerable progress in this regard. We hope to be able to give you an update very soon on what our outlook would be for those units. With that I will turn the call back over to Jeff.

(Operator Instructions) Our first question comes from the line of Ian Macpherson with Simmons and Company

David, can you share with us how your discussions are going with customers as you are trying to weave in more protection for you know assuring the risk of more BOP-related downtime on your contracts and how receptive they are to sharing the burden of this higher scrutiny and what you think is realistic in terms of the give and take there?

Probably, a good indicator is we just announced the new 3-year contract for the Jim Day. And without getting in specific details, we can share with you that if one looks at the whole combination of how downtime is treated in the new contract versus the last, we do see considerable movement in the amount of allowance that are allotted for events, plus there is a willingness to share any gains in terms of reduction of downtime hours, you know comes back to us in the form of a bonus. So, that is one example. I think it is a recognition of that, the old fashioned templates will have to change and so as we speak to all of our customers about new programs, that said area gets a lot of attention.

In the opening comments regarding what you’re doing, you have five subsea crews going to six, and you are adding resources to this problem, which it sounds like you’re going to get accretive, you are going to see accretive benefits from that in 2012 if I understand correctly. But when we go from 12 to 13, are there going to be non-recurring costs that we can think about as we look from 12 to 13 associated with this ramp up in addressing the issue?

Well, I think what we are looking at Ian is kind of a new norm. If our downtime improves, which it will, it will put everything that we build that will pay for this group, this group will pay for itself. These efforts will pay for themselves. So I think you will see some increased costs, but I think you will see increased performance over time. You know the industry has always had some subsea downtime issues and this is something that as we look to go into deeper water and expand the fleet, extending our subsea capabilities that we have been talking about for long time. Macondo made it a lot more urgent and a little more robust than what we’d intended. We are certainly spending a lot more on spares than what we had contemplated three or four years ago. But this will reap benefits not only in the subsea fleet, but the level of scrutiny on all BOP systems including the jackup system. That will become the norm going forward, so we are ramping up our ability to respond in all phases of our well control integrity capability.

Your next question comes from the line of Kurt Hallead with RBC Capital Markets.

Just had a question regarding the market dynamics and Roger you got to put a lot of things in a context relative to what you have been talking about in the last call in October and I wonder if you might be able to characterize what’s going on right know and put it into context, right. Post Macondo, a lot of the tone and direction of the market was pretty soft or weak or whatever term you want to put it, it seems like the tone is starting to improve and to me it seems like the underlying fundamentals maybe starting to accelerate. So this may not be at the fever pitch of 2008, but how would you characterize the current discussions you are having with clients, how enthusiastic are they, how anxious are they to get the work, are we at the cusp of something that we haven’t seen in three, four or five years?

Similar story in the deep water sector. We spoke to you couple of times during the year to the question about how much lead time are customers giving because it used to be several years back in this lead that you talked about, it was about a two to three year lead time. But given the access to visible supply customers had the luxury to wait. Now, we see as I remarked most of the visible supply in 2012 is probably spoken for and so you might see more activity around the assets becoming available in 2013 and beyond. Does that address your question?

Yeah, that was very helpful. Now in the context of that I think we all have good reason to be skeptical about what Mexico’s needs are in the timeframes in which they may actually book the equipment, but can you, is there any indication at all that this is going to be the real deal and these rigs are actually going to get the contracts this year and do you think that Pemex has softened up on some of their specs that kind of kept the drilling contractors from really entering the market?

What I would share with you is that I think there is a desire to really change. I can share with you that in the last week or so the CEO of Pemex has visited us and others in the Mexico market and he spent the time to encourage us not to be disheartened and so I suspect that you will see a fairly rapid pickup here in the months ahead.

And David if I may this whole process you are putting in place to address the equipment reliability and maintenance and so forth. Is there any way to potentially give us an indication as when we get start to see that impacting the P&L?

The process for has been ongoing as you know and we committed early on to kind tell you what we could but unfortunately there is a not a lot been happening there. As we started this last year we started to look at the market. We thought we were a little bit early in the cycle and as Roger has pointed out, the cycle is kind of outrun the process. We have spent a lot of more time this year putting rigs back to work then we thought we would, which has impacted our expenses but also we’ll improve our performance going forward because the rigs are kind of ahead of schedule. There is three possible outcomes to this and they are that we decide there is suite of rigs that we would want to dispose them and we may consider a spin the best one or there maybe an opportunity to sell some of the assets. We think that the timing is every good and both of those scenarios have positives and negatives and the third outcome is, we just decided we are making too much money with them. The interesting part of this process is when we started, we had a number of rigs idle and here we sit today. We just put the Dick Favor to work for $95000 a day. We in the last year have put, little over last year have entered the market that, we have been the largest provider of premium equipment in the Middle East for a number of years. We have never worked in Saudi, now we find ourselves with five rigs in Saudi with long-term contracts and we have opportunities for more. So, the challenge for us is not just to make any decision, what we want to make sure we do is we make the correct decision and we are keenly focused on creating value for shareholders and making sure that we make the best decision we can. We have a board meeting next week and we will discuss the outcome and the possibilities of all three of these scenarios with the board and then we will make a recommendation and I am sure with our board, we will have a vigorous debate. If we sell these rigs given where the market is, we are going to be giving up some earnings and that is difficult to challenge sometimes. So we are still in it, we are going to be very deliberate about it. And we will tell you as soon as we can what the outcome of the study is. And I am sorry, it’s a long answer to it. A very good question and I wish I had a better answer for you. But that’s where we are.

Your next question comes from the line of Robin Shoemaker with Citi.

David, I wanted to ask you, going back to this rig downtime issue. Some of the vendors that you used have described a kind of a major effort to upgrade their capabilities to handle multiple BOP upgrade simultaneously. So, with this kind of parallel effort going on with what you are doing, do you think there really is going to be a meaningful improvement in efficiency in handling these BOP controlled system upgrades in ’12?

Well, the answer is yes. I will tell you that we’re not sitting back waiting on our vendors. I am delighted to note that they’re telling you that they’re doing that and they’re telling us the same thing. We have on a vendor level, engaged our two primary vendors who manage our, provide most of our subsea drill systems, to help initiate fairly succinct initiatives to be able to drive improved efficiency and reliability. We are working that very hard on a couple of fronts. One thing that I will share with you people may not know, if you look at the rigs that we’ve delivered starting with the Clyde Boudreaux, the Beard, Adkins, Day and then Globetrotters and all four HHI ships, they all had exactly the same BOP. And then if you go back before that to the Homer Ferrington and all the EVAs, they all have the same exact BOP. So in terms of what we are trying to do in terms of, kind of fleet standardization issues if you will, for us to be able to get a very competent at what we are doing, we’re not waiting on our vendors. We’re working with our vendors. We’re working this on the contracts front. As Roger talked about, we’re working on the vendor front. We’re intending to elevate our game. We’re able to get our BOPs recertified for the rigs we want to put back to work fairly quickly. The BOPs that we have around the world are in good shape with good paper trails. The challenge for us is being able to manage the process going forward and make sure that when the BOPs on bottom, we can keep it on bottom. I alluded to in my comments some things that may not cost to stack profit pre-Macondo. We have had cases where we had leaking valves or non critical functions and it is almost by definition and by design these valves are designed to vent fluid. So it is not as if that they are not functioning. But they may not be functioning perfectly and on a noncritical function in the past if you had a full capability undersea drilling you keep drilling. If you had a leaky valve or an open function on a blue part on a pipe ramp you wouldn’t mess with it you just keep going, if you had full function on the yellow and it is not an issue of well bore integrity you keep drilling. Now very often the regulators will make you pull stack and that is as you know in the deep water that is not a two day event that is from start to finish can be ten to fifteen days. So there is a lot of places to work this and are we going to get better in 2012? Yes, we will get better in 2012.

Okay. I just wanted to ask another unrelated question, which is, we are hearing about the possible orders of semi submersible rigs out, ultra-deepwater semi. And I am not sure what is really driving that but apparently there is quite a few increase with the ship yards there. But can you shed any light on that versus a clear preference that you had and other contractors for drillship designs like the Bully and the Globetrotter in this new rig building cycle.

I think we drove a lot of the commitments to ships in the past. What drove us to do, what Globetrotter for us when we acquired Frontier which is in the Bully and Shale was a smaller footprint and a more finally designed and integrated marine and drilling package that was a more efficient design. And that's also a benefit that we think accrues to the HHI ship which is one of the reasons we landed on it. But those ship designs are existing; they are in shipyards that had the capability to build those. They are known and we were I think very much at that time looking at a hard exploration protocol going forward with moving ships around the world you know from one place to the other. We talked about East Africa, getting to East Africa is not anywhere; it’s not easy to get there anywhere. So mobility was a big deal and proven designs and known designs were kind of drove the value and the price into it. Semisubmersibles are still I think about many operators a preferred tool for subsea completion and development program just because the inherent stability that the columns through the wave area give you just environmental transparency. And so while big ships have great motion characteristics in many cases you are not going to be able to match that of a semisubmersible. So when you get into harsher environments you know North Sea, West of Britain, Norway, semisubmersibles may continue to be the preferred tool. I think one of the reasons that contractors have not been as active building is more bent steel so they are more expensive and there weren't as many fully engineered, fully developed designs out there. We've heard the same thing about the semisubmersible interest and I’ll ask Roger if he has got any comments to add to what I have said.

Yeah, Robin I think a couple of comments there also. The Statoil CAT D process that is you know some time ago and it was really about developing a tool that would ultimately replace their floating fleet. Since then there has been some fairly significant discoveries and that has increased the hype around harsh environment semis. So some of what you’re hearing is kind of shipyards talking up the semi side of it because the orders of drillships basically dried out. But having said that, I think it is interesting to look at the harsh environments like the Northern North Sea and answer the question at what stage you know will the existing fleet have to be replaced. So I think a lot it has got to do with the answer to that question.

Your next question comes from the line of Matt Conlan with Wells Fargo.

So this question actually is coming towards you I think. It sounds like you guys are going to be hitting the dead markets again. And I would like know with whether you know bring a perspective of its different from what the company said previously about what the appropriate level of leverage is for the company? And you know one of your competitors is a testament that the rating agencies really don’t put much weight on backlog its much more about cash flow. And want to know how you and the teams think about protecting or improving your credit rating during the speculative investment program and how that influence your decision to sell spin or keep those jackups that are becoming more profitable?

Matt, I think there were about six questions in that. I’ll try and touch on those as I can. Do I bring up the perspective that different, I am sure I bring a perspective that’s different, is it something that is a different direction on this company as going in the past. No, I don’t think so, not at all. The company has been managed relatively conservatively, and it’s kind of the way I think to, I know this management team; I have worked with some of them in the past. So I am not that much different by history. And as to a perspective on leverage or on the rating agencies, we’re going to talk about that in good time at the right time. We are looking obviously and clearly based on the numbers we have given you, we are looking at various alternatives; when we are ready and it will probably be sooner rather than later, we’ll be talking to the Street about where we plan to go from a balance sheet perspective. As to the decision to keep or let go with spin-off some of the jack-ups, David covered that in detail. I really can’t add anything to that. As he mentioned, it’s likely to be a subject of considerable debate for the Board and again as with debt, we would hope to have something to tell the market sooner than later.

Our next question comes from the line of Scott Gruber with Bernstein.

David, you have the Max Smith in the yard, but based upon your prepared remarks, it doesn’t sound like there is going to be the BOP systems materially upgraded or any other systems for that matter. You know, in order to meet customer demands on an EVA class rig, it sounds like that the current specs are sufficient. It doesn’t sound like you need material upgrades, material capital investment in an EVA class rig to meet customer demand. Is that an appropriate characterization of the market today?

As the Max Smith sits today, just from a care perspective, that’s probably accurate. There is a couple of things, that we brought the rigs, it’s been in Mexico now for about four years and we’ve got some steel work to do. We’ve got some regulatory requirements to do. We will do some BOP work and recertification work on it. There is one thing about the Max Smith, when we did the mooring upgrade to the other EVAs of more rigs in the Gulf of Mexico, drifting to 12 point mooring systems, we did not completed that upgrade on that Max Smith. It’s been operating at nine point mooring system, which would be fine in the US Gulf of Mexico, in certain places under certain conditions. Certainly, in non-hurricane season and under certain circumstances, would be workable in hurricane season. But from a capital perspective, that’s one thing that we’re looking at now, if we were to decide to keep the rig in the US Gulf of Mexico. From a BOP’s perspective, it’s already got a five run stack that we would do some modifications to it to be consistent with what we’ve done to the rest of the fleet. But do we need to go out and buy, you know $100 million worth of stuff, no. We’ve got some steel work; we’ve got some other repairs to do and we’ve got opportunities for the rig both in the US market and some international markets. One of the joys of working for international or national oil companies is when you finish in their home state you are obliged to remove the rigs. So we need it. We have to move the Max Smith out of Mexico and when we have some work we will do it. So we picked a shipyard that we know, that’s where we have good access to it. And I don’t expect it will be very long before we have something to report to the market and so like I said we have a number of opportunities and I think our last EVA extensions both on the Max Smith, Romano and Runner are reasonable expectations of what the market should support for the rig and so we will be back to you whenever we get the right opportunity.

The next question comes from the line of Jim Crandell with Dahlman Rose.

Roger, could you give us your thoughts about how the oil companies are thinking about ultra-deepwater rig availability; I think David and you have discussed about the pendulum sort of swinging back towards the advantage of the contract there; is that pendulum moved and altered the level of anxiety on the part of the major oil companies in terms of rig availability or is it too early to stay that yet in the cycle?

Jim, I love that word. I think different customers are having different reactions; I think some of them have looked at the statistics and basically taken a decision that we do not need to change our tender process. But giving a project 12 months of lead time and you know just looking at the raw statistics of availability in 2012, 2013 is that we’re going to be okay. I see the same customers now, but to use your word, but certainly they are realizing that the rate of pickup is faster today than it was six months ago. And so I think you will see a level of awards over the next period, the next couple of quarters that is much faster than we have seen prior to that.

Your next question comes from the line of Todd Scholl with Clarkson Capital.

I was just wondering if maybe you could give us an idea of first of all what you are seeing in terms of prospects for the Jim Day in terms of a term work and then secondly you still have the FPSO that you acquired and I was just wondering if you've seen any prospects in putting that back to work or if that was something that you are still considering possibly divesting.

Two questions and first one was Jim Day, you asked relative to term work. I am taking your question to, can we share anything about the period now to when Shell picked it up again. And actually that's like breaking news. We can share with you that around about 1 February when the contract finishes, Shell will commence a new agreement. It will run for about 75 days. The rate is 530 plus bonus and then the rig will go to an independent to drill a well and the rate will be 550. So the Jim Day is basically booked continuously up until the middle of the year depending on the length of these programs and we are very confident of being able to fill the remaining space prior to the long-term Shell contract.

Your next question comes from the line of Joe Hill with Tudor Pickering Holt.

David, what are your current thoughts on reactivating the Bouzigard and how much would it cost to bring that out of stack?

Joe, we would only reactivate the Bouzigard for an assignment there was non-US Gulf as we sit today. And I will be honest with you, I don’t have a current estimate of what it would take to reactivate. We have not fully recertified the BOP. We have for efficiency and to be expeditious, taking some components of the BOPs to use on getting some other rigs back to work faster. So I don’t want to characterize this as cannibalizing a rig because we haven’t because the process is returning those components back, repaired. But the Bouzigard, it’s a second-generation hull with a stretch mooring system. It certainly has an application in the right environment in the right market. Certainly with the fifth BOP in a different BOP configuration, it could be an active US Gulf from Mexico rig. It doesn’t have the fifth BOP, if in the event they get that as a stable requirement, it’s not now a requirement, but if it becomes that. So right now the Bouzigard will be a candidate for an international assignment with our position with the Romano and the Ferrington, previously we’ve been more actively focused on those rigs. We have bid the Bouzigard on a few jobs, but there is nothing for it to talk right now.

Your next question comes from the line of Dave Wilson with Howard Weil.

David, if you could clarify one of your comments of the percentages you gave regarding the downtime in 2011 for the subsea and top drives, how much of that was customer driven versus what you would have done regardless?

We don’t really get into bait with our customers. If the rig will perform as it’s supposed to, its downtime, the regulatory bodies have some influence over that and we along with our customers will query them about certain peculiarities or certain circumstances, but I think what I said was about 55% of our downtime was subsea or subsea control system related stuff. And a good bid of that would not, we would not have had pre-Macondo. And I don’t think I gave statistics on exactly what it was. But it’s not an insignificant amount. The regulatory bodies and rightly so given their perspective have been extremely reticent to let you continue to operate if there is any function they won’t fully function and keep in mind and we are talking about that these things are designed to maintain wellbore integrity, but they have got multiple layers of redundancy. And in the past if you had a non-critical well integrity function and the one I think I used was an open function on a pipe rim or something like, it is not material in terms of your current operation for wellbore integrity. If you had functionality on a blue pod, but not on the yellow pod or an A bus or B bus, some place where you had redundancy instead of some place else, you keep drilling. Now or as we have went through last year, they would not allow you to do that. They would make you trip the stack and repair it. I suspect and I assess that I believe and I think we have already seen it in a couple of cases where the government has gotten a little more reasonable about when they make a trip the stack and I think that’s one of the mitigating…

Okay. Sure and along those lines, something we’re seeing here. Does that mean that your going forward, there is always going to be this, certain amount of unplanned downtime that we are going to experience because of some redundancies you’re feeling I know you guys are taking proactive steps to eliminate that but how much of this additional downtime do you think you can get eliminated by being proactive. To me it seems like there is still going to be some downtime that is out there it is going make you like you alluded to earnings and then things hard to predict for you guys.

Well that is a sequel of questions, how good can we get it? It is like safety performance it will never be perfect. These rigs are made to run and one of the things that I was worried about post Macondo is you take a very high tech system and if it turns off your computer and I am not computer competent person, so I don’t even know the terminology, if can't reboot it. But you take one of these high spec rigs and you set it up for a year and you wanted to go out there and just push a button everything kick back up. This stuff is made to run. It is very high specs stuff, it is very high performing equipment but if you run it 24x7, 365 days a year for five days or five years run between special surveys, there is stuff that’s going to break and there are maintenance elements that we are going to have to take care. So as good as Roger is, and as good as his team is I don’t think we will ever get this thing ever to 100% revenue efficiency. Our goal and what we are committed to do from a engineering, operation, marketing and the whole corporation is committed to get this as good as we can and that’s what we are focused on.

The next question comes from the line of James West with Barclays Capital.

A quick question on the ultra deepwater. If we go back six months ago 500,000 above was kind of above. Two months ago we were looking at 550 and of course you’ve got rigs now at 530 and the Jim Day is 550 and with your bonus potential above 600 so would you be thinking about contracts over the next several months in the 600 plus range for ultra-deepwater.

I will let Roger answer that question. You bring a smile on my face just, I will let Roger answer that question.

Okay.

I guess I would be a little cautious to be inclined to reset price deck. The kind of the sticker or the front page number is one thing. I think going forward as important as the day rate is the quality of the underlined contract and it ties in a lot of what we've been talking about here on how you look at subsea downtime, which the word downtime may become something other than downtime. It may become preventative maintenance. If it may become a routine operations, just recognizing that that's the well that we operate in. So I would be cautious about being too optimistic on what kind of price movements we may see. I just think we will see quite a few data points and so we can have this conversation six months from now.

Okay, fair enough. But you wouldn't disagree that there's at least the momentum heading in that direction.

We are looking forward to seeing this carry it below.

Fair enough and then David I was like curious on your comments around the potential sales spin or not selling some of the older assets, understanding that a lot of the equipments going back to work and so you would be giving up earnings. Have you changed your view on what the equity market is going to pay for your order equipment because I think a part of the thesis here was you divest some older equipment, you should get a better evaluation because of the higher spec nature of the fleet at that point has that changed in your mind?

No, I never has change in my mind, but we still owns so we haven’t got anybody that agrees with me yet. This is a process whereby if you look at the most of the jackups, I shouldn’t say most, a lot of the jackups and there have been a lot that they have been build over the last eight, five, six, seven years and you know as they become the new the lower end of those specifications. They become the new commodity rigs going forward. Clearly, through this period that we have been they have commanded a materially higher rate than a lot of the rest of the fleet. And so the fact that Noble is blessed with a fleet that’s in good condition and we are able to more quickly I think take advantage of a rising market and some of the other because of the condition of fleet has put us in a position where even though these rigs, they maybe older that the quality of assets puts them to work faster than some of the other groups may. And so you got kind of pick your times if you want to monetize these things and of course the rising market is when you time is and it gets to the top its hard to do, if it rolls over you can’t get more. And so our timing is critical, we’ve been looking at this for long time and I’ll be really honest and I’ve said it before the market has just outrun us and I don’t take that I am not trying to set any expectations one way or the other of what the outcome is going to be, because I don’t know yet. This is, we’ve a very engaged board, very bright board and this is going to be the day we’ll have within management level view and we’ll make a recommendation and they will, we’ll see how it turns out. But its almost like at this point there is no wrong answer I think and its because the assets are performing well; the market is in the right place and the flipside of it, if we decide to sell them if get a good valuation this is an opportunity we may never have again. So that’s the debate we’ll be having and I wish I could give you better guidance. I just don’t have it right now.

Understood; but you will, you do intend to make some type of statement after the board debate this year, next week?

Well, we intend to have -- we’ll make a statement as soon as we have an answer.

Regina, we’ve gone a bit past the top of the hour; let’s take two more questions please.

Your next question comes from the line of Robert Mackenzie with FBR Capital Markets.

It has dragged on, most of have been answered, but a couple of quick ones if I may. You put the Charles Copeland back to drilling work from accommodation work, the Chuck Syring, looks like it’s available here; how would you describe the prospects for that here Roger?

They are reflective of the way we see the Middle East you know which is, it’s a good market. A lot of movement over last 12 months, being driven mostly by ARAMCO and ARAMCO right now is around I think around 30 jackups. Anybody’s bet on where that’s going to finish. A lot of discussion that that number may move to 40 by the end of this year. So that’s the way I would be looking at the Middle East as just how many jackups Saudi takes in the next 12 months.

Okay, well in that context then and it’s not the similar to our view, how would you describe the prospects for rate momentum; I mean, last cycle we saw similar jackups in the high hundreds range, may be in the low two’s at some instances. How would you characterize your view of the upside in rigs over the next 12-18 months?

Well, if I would quickly answer that every chance that that will continue to increase. I think you will see the next round of fixtures for the oil rigs in ARAMCO to be well into the hundreds. And again, it’s going to be depending at the highest spec units; they’re going to demand higher pricing.

Any comments on potential reactivation of the Don Walker?

It’s an opportunity.

Is there anything close to in discussions or is that just little further out?

That’s a little further out.

Your final question comes from the line of David Smith with Johnson Rice.

First, looking at cost inflation, how should we think about the portion of cost inflation that you should recover via contract cost escalation provisions? Thinking about that 6% to 8% cost inflation you threw out?

Inflation recovery factors are never 100% and they are never perfect. We have them in many of our contracts, certainly more now than we did in the last cycle I would say going forward. But they always lag and they’re always there. They always lag a little bit and they’re never as sufficient as you like them to be. So there will be some over term. There will be some, I guess, margin leakage. It is very slow and I would say it’s very small. But over the next three or four years, if we have contracts now starting four-five year contracts that have some coverage and not full coverage, you’ll see some contracts are better than others. So the best way to monitor that is see how it goes through the year as we see inflation start to get hold.

And the final question for Roger; we’ve seen some really impressive strength in the ultra-deepwater rigs. How do you think about the potential for the more deepwater rigs to either follow that trend directionally or even start to narrow that pricing gap with the ultra-deepwater rigs?

We like the prospects; we like the availability of the rigs of the rigs that I cited you know which in the first half is the Max Smith and then the Ferrington and the Romano. And I think there is an opportunity to see some upward direction in those fixes; however it’s got to do with positioning, so you know with Mediterranean having some discoveries and expensive mobilizations you know that’s likely to generate some pricing opportunities.

Thanks David, and thanks everyone for your participation on today’s call and your interest in Noble. Please make a note that Noble’s first quarter 2012 results will be reported on April 18th with a conference call scheduled for April 19th and we will confirm those dates about three weeks prior. I will be available to take any follow-up questions over the day; Regina, thank you for coordinating the call. Good day everyone.

Ladies and gentlemen, this does conclude today’s conference. Thank you all for participating. And you may now disconnect.