Good morning. My name is Krista, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Noble Corporation Plc First Quarter 2019 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question-and-answer session. [Operator Instructions] Thank you. Mr. Jeff Chastain, Vice President Investor Relations. You may begin.

Thank you, Krista, and welcome everyone, to Noble Corporation's first quarter 2019 earnings conference call. Thank you for your interest in the Company. In case you missed it, a copy of Noble's earnings report issued last evening along with the supporting statements and schedules can be found on the Noble Corporation website, and that's noblecorp.com. Julie Robertson, will begin the discussion this morning, but before I turn the call over to her, I'd like to remind everyone that we may make statements about our operations, opportunities, plans, operational or financial performance, the drilling business or other matters that are not historical facts and are forward-looking statements that are subject to certain 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. And this would include the price of oil and gas, customer demand, operational and other risks. Our actual results could differ materially from these forward-looking statements and Noble does not assume any obligation to update these statements. Also note, we are referencing non-GAAP financial measures in the call today. You will find the required supplemental disclosure for these measures, including the most directly comparable GAAP measure and an associated reconciliation on the website. And finally, as we have done for several quarters now, we will be post to our website a summary of our financial guidance covered on today’s call. And with that, I'll now turn the call over to Julie Robertson, Chairman, President and Chief Executive of Noble.

Thank you, Jeff, and good morning, ladies and gentlemen. We appreciate you taking the time to join us today for our first quarter 2019 results and your continued interest in Noble. It has been a promising start to the year and we have a number of details and encouraging developments to review relating to Noble and the offshore drilling industry. In addition to Jeff, joining me today are Adam Peakes, our Senior Vice President and Chief Financial Officer; and Robert Eifler, our Senior Vice President of Marketing and Contracts. Adam will lead you through a discussion of first quarter financial results and update financial guidance for the year, and Robert will provide a review of the Noble fleet and an assessment of global offshore regions and opportunities. I will then offer some closing comments before we begin taking your questions. I'm encouraged by our strong start to 2019 and the growing evidence is steady fundamental improvement in the offshore drilling industry. With regard to the first quarter, I could speak to progress on several fronts. In February, we added a second newbuild jackup to the fleet with the purchase of the Noble Joe Knight. The rig is currently completing client requested upgrades and commissioning and preparation for an expected third quarter commencement of a three-year contract offshore Saudi Arabia. The Joe Knight is a sister rig to the Noble Johnny Whitstine, which was purchase last September and convinced the three-year contract offshore Saudi Arabia in mid-April. First quarter total fleet utilization improved to 76%. Although only modestly better than the previous quarter it is significantly improved from total fleet utilization of 47% in the first quarter last year. Utilization of our 13 rig jackup fleet of which 11 units were active in the first quarter remained at an industry leading…

Thank you, Julie. Good morning and welcome to everyone. First quarter 2019 results were highlighted by further improvements in total fleet operating days with utilization for the quarter reaching 76% compared to 47% in the same quarter of 2018. Also contracts only services revenues finished the quarter at the high end of our guided range while the company delivered another quarter of excellent operational performance as demonstrated by fleet uptime of 97.8%, which remain near record levels. These outcomes supported the higher than guidance level of EBITDA in the first quarter. A greater importance and as Julie touched on, the combination of well timed rig reactivations and strong fleet positioning has played a significant role with regard to our commercial achievements through April and leave the company favorably positioned as we were reassessed the financial outlook for the remainder of 2019. I will review our updated thoughts on financial guidance in a moment. First, I want to review some important aspects of our first quarter performance. For the first quarter, Noble reported a net loss attributable to the company of $71 million or $0.29 per diluted share. As was noted in our earning report $4 million or $0.02 per diluted share was accounted for as discontinued operations resulting from the recognition of a reserve for a Mexico customs audit that extends back to our previous ownership of the standards specification assets that operated in that country. The Company's net loss from continuing operations was $67 million or $0.27 per diluted share on total revenues of $283 million. The results included an after tax gain of $25 million or $0.10 per diluted share, resulting from the early extinguishment of debt following our March, 2019 cash tender offer. I'll provide some additional details on the tender offer in a moment. Excluding the…

Thank you, Adam. Good morning and welcome to everyone on the call. Like Julie and Adam, I am also encouraged by the steady evidence of improvement in the market for offshore drilling services. Only a quarter ago, we sided concerned about delays and operator drilling plans following what proved to be a short lived decline in crude prices during late 2018. That concern has largely been dismissed due to mounting evidence of an industry that continues as steady and broadening climb off a cyclical bottom and there is no better evidence of fundamental industry gain then rigs are turning to work. During the first quarter, the industry slowing rig fleet was awarded a total of 59 contracts including an impressive 45 awards in the month of February. The inflection in customer awards drove utilization of the industry's marketed floaters at the end of the first quarter to 80% the highest measure reported since September, 2015. Also the same utilization measure was matched by the industry's Jacqueline Fleet, which closed the first quarter at 80% marketing utilization while a subset of the jackup fleet representing premium rig designs approach to a hundred percent marketing utilization over the initial four months of 2019 we have seen an estimated 44 rig years awarded to jackups with more contract awards imminent. Before I closed my comments today, I'll provide some perspective on where floating and jackup demand is most apparent and more importantly where we could experience further contracting success as the year progresses. Some interesting trends are gaining strength early on in 2019 and these movements are expected to play a significant role in elevating rig activity over the near to intermediate term. First, we have begun to experience a lengthening of contract duration for jackups with the measure over the first four…

Thank you, Robert and Adam. Before we begin addressing your question, I want to offer some final thoughts. We have many reasons this morning for our positive tone. First, we note undeniable improvement and enthusiasm toward our industry. After 48 months, a very challenging conditions we can refer to an industry that is now on a positive different trajectory. Affirming the fundamental indicators as noted by Robert, strongly suggest a broadening industry recovery as the year progresses and we enter 2020. Our customers are increasingly turning to projects in their offshore portfolio as they evaluate economically attractive programs with a potential to significantly augment future production and reserves. Marketed utilization of the industries offshore fleet has begun to tighten, and as Robert noted, evidence continues to appear in support of further rig demand for both floating and jackup units. Tightening of capacity is increasingly evident in the Noble fleet. Among our floating rigs, the Company has 57% of the days available over the next 12 months currently committed to contracts, up from at least 49% at the beginning of the year. At our jackup fleet 81% of the available days over the next 12 months are contracted compared to 75% as the year began. Further tightening is increasingly likely in both areas of the business. As I said in my opening comments, I'm very encouraged by our achievements over the first four months of 2019. I believe Noble has established an enviable competitive position as prospects for a healthier industry cycle unfold. Another opportunistic rig purchase, a highly successful reactivate and position strategy, newest contract awards and extensions in key offshore basins along with a strong revenue backlog in value adding fleet enhancements, collectively fortify our industry position as recovery in offshore activity progresses and new opportunities emerged. The regional positioning of our diversified fleet of jackup and floating rigs is exceptional and combining with our high standards was consistently safe and efficient operations, Noble has the attributes for long-term success. \ As always, I want to thank the Noble team around the globe, their continued dedication, commitment, and hard work which combine for superior operating performance for our customers. These men and women continue to exemplify the Noble culture, which sets us apart from our peers and I'm grateful for their unwavering loyalty and support. I'll now turn the call back over to Jeff.

Okay, Julie. Thank you. Krista, we have a number of questions in the queue today, so let's go ahead and get started. If you begin the – assembling the queue, I’ll remind everyone to please limit their questioning to one and a follow-up, so that we can take as many questions to the top of the hour as possible. Krista, go ahead with the first question please.

Certainly. Our first question comes from the line of Kurt Hallead with RBC. Please go ahead. Your line is open.

Hey, good morning.

Good morning, Kurt.

It sounds like there's more positive momentum building, which is good to know after a number of challenging years. So in that context, you guys have, I believe four rigs that are currently idle, given the backdrop of improving demand dynamics, I was wondering you could give us some perspectives on how many of those four rigs do you think could potentially find some work before maybe the end of 2019? And if you're so willing to make an assessment as well as how many of those four rigs could find their way back into the market? And then as part of that process, what are the cost dynamics of potentially getting those rigs to get ready and get back to work?

Sure, Kurt. I’ll take that one. So the Paul Romano I think has a very good chance of getting back to work this year. We're evaluating a number of opportunities right now all over the globe. There are only a few more rigs available out there and we think that fits nicely into a couple of different opportunities. On the cold-stacked rigs, I think it's a bit of a different story. As we've said before in order to reactivate those, we'd be looking for a significant recruitment of costs during the initial contract. And that hasn't changed at all. We are bidding certainly the day in the Adkins into a number of opportunities. We continue to believe those rigs have a few unique capabilities including their size, hook load, DP3 status and the fact that they're upgradable to add mooring and potentially some offline efficiency activities. We believe those have a place in a couple of different regions around the world. We need the market to catch up and allow us to justify the reactivation costs. So we're not there yet. But we do think that those rigs have the potential to offer some efficiencies to some customers around the world.

I appreciate that. What the cost for bringing the Romano and getting that ready to work and what's the cost maybe getting one of those cold-stacked rigs back into working order?

Romano, we’ll say $3 million to $5 million and I think probably at the lower end of that range depending on where we take the rig. And then the cold-stacked rigs, we've said previously is $50 million to $100 million and that depends largely on the customer requirements and again where we would put them to work.

And Kurt, this is Adam. I guess I'd just add to it. Our CapEx guidance assumes the Romano’s, is back working. So that's already embedded into the CapEx that we've put forward as our 2019 guidance. It does not have anything as it relates to the day in the Atkins. I think from Robert's comments, I think sitting here in the room we think it's highly unlikely that that's a 2019 event for the day in the Atkins.

I appreciate that color. Maybe one additional follow-up, just in the context of as the market's improving and as you're most likely going to have a number of opportunities, bring at least one of those cold stacked rigs back to work over the next year and a half. What kind of contract duration would you be willing to entertain and what kind of cash margin would you require in order to get the return necessary to bring that back into service, so one of those rigs back into service?

Sure. So multivariable equation there, I think really, we just want significant payback of the reactivation costs during the term of the first contract. So margins aren't there today. We think that – we get to a place here sometime next year where that becomes a possibility and we're marketing the rigs as such. So I think mainly we're looking for a return on the investment and we want to see a significant portion of that during the term of the first contract.

Okay, great. Thanks. Appreciate all that color. Thank you.

Thanks, Kurt.

And your next question comes from the line as Sasha Sanwell with UBS Securities. Please go ahead. Your line is open.

Thank you and good morning. Yes, just wanted to start off kind of following up in your commentary on the industry of recovery. In the last year earnings call, you spoke about how Noble is looking at. I guess indexed and type mechanisms to kind of bridge the gap to a more resilient dayrate environment that we could have in 2020. And so kind of given the focus and discipline in near-term bidding strategies, could we get an update in your thinking there and maybe what you're seeing in the marketplace today?

Sure. I think one of the biggest changes in the last few months has been I think along the lines of price options that were a lot less willing to give out price options today and when a customer really needs some level, certainly we have been looking at indexing mechanisms to address options. And I think that's an effective way to bridge the gap that we continue to think that this market is changing quickly and evolving, both on the jackup side and on the drillship side. And we continue to entertain measures that would allow us to bridge that gap and allow us to maintain what we think right now is a good exposure to a rising dayrate environment, so that that's top on our list right now.

Thank you. That's helpful. And maybe if we can get an update on your thinking on the floater market in Brazil and West Africa, and how that shaping up? So Robert, you highlighted the uptick in demand, right? And one of your peers referenced a potential doubling of the rig count in Brazil by 2022, right. So Noble isn't present. I have a bestseller West Africa at this point, right? All the clearly you've operated there in the past. You've built a very strong presence, Guyana, Suriname, the cycle. But maybe how much of a strategic imperative is rebuilding a present in those two markets, especially as we think about the day in the Atkins.

Sasha, as Robert noted in his comments, we do expect a pretty – great deal of further tendering in Brazil towards the end of this year and certainly into 2020, not only with Petrobras obviously, but obviously IOC. And we do think it's important. As you noticed, we had a strong presence in Brazil in the past as well as West Africa. And we certainly believe that the Brazil market is important for us to return to and we fully intend to work toward that. We do think that's a good opportunity for some of the cold stacked rigs, which we've been asking about this morning. We do think it's important to get back into at least one or both of those markets. Robert, do you want to add anything?

No, I think in the very near-term West Africa is less likely for us to in Brazil just by because of where we're located today. But we're starting to see a few [indiscernible] opportunities there and that's really encouraging really from kind of a macro supply view so.

Thank you. I'll turn it over.

Thank you, Sasha.

And your next question comes from the line of Sean Meakim with J.P. Morgan. Please go ahead. Your line is open.

Thanks. Hey, good morning.

Good morning, Sean.

So maybe staying in that part of the world, could you maybe give us a sense of what you think is the capacity for no oil rigs he put to work over the long-term? And I guess part of what I'm trying to get at in the near-term is how much are you able to extract synergies, shore-based cost of absorption with the three rigs in Guyana and then the one in Suriname. And just thinking about how does that overlap with what shore-based fixed assets you have today in Brazil? Just try to think about how your footprint looks today and as the opportunity set evolves, your ability to drive value and margin through that footprint.

Well, Sean, as you may know we still actually have a yard facility in Brazil remaining from our former operation down there. So we are well positioned to be able to quickly put rigs back to work in that market. We know that market well. We've very comfortable working there and look for the opportunity. So you're right. We already have some infrastructure set up there. In terms of the massive rigs, the three rigs that we have working in Guyana. You are all on, I mean, it's a great setup to have and great to be able to have three like real shifts in that same market. So you can share spares et Cetera, and between the rigs with it's a wonderful setup for us and we're glad to be able to operate like that, obviously we have some one-off operations which are not ideal and not what we – not as old, but certainly Guyana as exactly very much what we want to see going forward. And the rig and shore-based actually, we'll obviously we'll be very close and can benefit from some of those things synergies. Bob, do you want add anything?

The only thing I'd add is that synergies cut both ways and we think that it's effective for our customer there too to be able to move bricks around and share technology and so we're really pleased to be that the current contractor of choice there and we see a great deal of work they're moving forward.

Okay. Thank you for that feedback. And maybe moving to the Eastern Hemisphere, could we maybe get a little more feedback on the market opportunity in Australia? We've talked to the past about, I think you guys have appetite at least you believe there's appetite for jackups in the region? What kind of assets would make sense there? Is demand and the market conditions sufficient for a newbuild purchase in placement like you done in other markets? And also I just thought I'd like, so as an aside, maybe the appetite for more SMEs in that market was pretty good. And so how does that opportunity said look for the Boudreaux as a next stop?

We got to let Robert comment further, but we agreed that there's a lot of opportunity in the Australian market and it is a great market for more semis, without a doubt. And to your point about would we be interested in doing a newbuild purchase in that market? Sean, as you know, we're always looking for ways to grow our fleet and grow a company. And if that made economic sense for shareholders, we would certainly look has certainly concerned about it as an opportunity. Rob, you want to comment on?

I'd just say, there's limited supply in Australia, because of the safety case regime there. And I think on the jackup side it's been about a 1.5 rig market for quite some time and which is difficult because of the costs of getting in and out or are quite high. But we see that improving now with some of the gas projects that need to be delivered. Tom Prosser is going to move over to the East Coast of Australia. And so we think there's room, we think it's built a great brand for the JU-3000 and we think there's potentially room for another JU-3000 in there. Certainly there's competition, but again, the spot somewhat limited. And then on the MOD rigs, five Boudreaux has worked there before. We've maintained the safety case there. So Australia is absolutely a target for us in the future.

Very good. Thank you for that feedback.

Thank you, Sean.

And your next question comes from the line of Ian Macpherson with Simmons. Please go ahead. Your line is open.

Good morning, everybody.

Good morning, Ian.

I wanted to first ask about the MPD contract enhancements for the Bulgaria well and you said that you'll get a dayrate uplift. I was wondering if you could describe that a little bit more in terms of the size or just a ballpark that and also how long that uplift goes for?

Ian, when we said effective dayrate increases because it's a lump sum amount that we received from Shell for the MPD system and installation on the rig. So it's just a lump sum. So that's what we referred to as the effective dayrate increase.

So for modeling purposes will we see that on a lumped basis or going forward for the term of the well?

Yes, it's based out over some incremental payments, it is only applicable to this specific well and then we just got – it's a not insubstantial payback on the cost of the system.

Okay. Picking up, Adam, I wanted to ask about the working capital movement, which has been a little bit volatile lately, the past few quarters and it moved against you in Q1. I just want to get your perspective on working capital movements for the balance of this year. If you could put some light on that please. Thanks.

Yes, it's a good – happy to – Ian, it's a good question. I think there was a little noise in first quarter that is shown in the numbers. I've seen a few people comment on it. I think the receivables balance; it's really a timing issue as much as anything else. And so I think it very much will normalize over the course of the year. In fact, in April alone, we've cleaned up some of that, so there've been some one-time issues that happened to – we close out the quarter where there were still some receivable balances pending, but nothing in terms of being worried about it. It's largely corrected itself in April and I think will be normalized going forward.

Normalized meaning essentially neutral would be the bogey for the full-year.

Yes, I think that's right. I mean, look we will certainly – as we turned to the upturn and start growing the business, you'll have the normal working capital that results from that. But I think as we look at 2019, I think it's basically flat.

Great. Thanks, Adam. I’ll pass it over.

Thanks, Ian.

And your next question comes from the line of Connor Lynagh with Morgan Stanley. Please go ahead. Your line is open.

Thanks. Good morning.

Good morning, Connor.

I was wondering if you guys could – you mentioned the Middle East as a strong market in light of the contracts that we just saw from Qatar. And I'm wondering if you could speak to what you see as opportunities for the Mick O'Brien, and just generally where you see rigs serving incremental demand in that market? I mean, are you going to have to pull from yards, are you going to have to pull from other regions? What sort of the knock on effect you see from strength in that market?

Yes. Sure, Connor. This is Robert. So I think it's widely publicized at this stage that we were not given the final award for the Qatar gas tender, so the Mick O'Brien will be searching for work elsewhere. We do have several opportunities that we've been tracking. And you can expect just in changing customers a small gap there, but we do anticipate picking up some work fairly quickly for that. To the second part of your question, that was an exciting tender in large part because of the high specification on the rigs. We hear they may even need a few more rigs. And so, I think you probably going to have to move rigs in from outside the region to service any additional rings that they might award.

Got it. And beyond the gas work there, have you generally seen a shift in the preference for higher spec rigs in that market? Or is that unique to that contract opportunity?

Yes, I think that's been one of the major stories, if we don't say higher specification, I think we could at least say newer. There's been a shift into the more – into a preference for the more modern rigs by a number of the biggest jackup consumers there. And we think that's an important trend that's only going to gain momentum. The Middle East has 200 rigs right now. A number of them continued to be legacy assets and standard assets. And I think as that market shifts into the newer more efficient rigs that's going to be a meaningful shift in the demand equation on the jackup side.

Got it. Thanks. I’ll turn it back.

Thanks, Connor.

And your next question comes from the line of Jud Bailey with Wells Fargo. Please go ahead. Your line is open.

All right, thanks. Good morning.

Good morning, Jud.

Hey, most of my questions were answered. But I have kind of a big picture question. If I look at your fleet, it's not that dissimilar from some of your peers where you're starting to build nice backlog in the 2020 a lot of your better rigs now don't have availability until the middle of next year. As that has happened, have you – is the customer tone starting to change at all? I mean, is there more of a sense of urgency that now some of the better rigs just simply aren't available this year and into early next year? I'd just be curious if the tone from the customer base is starting to change is as backlog begins to build here of just the last few months.

Jud, I'll let Robert, answer that. But yes, definitely customer sentiment is changing. We feel like we're incredibly well positioned with our contracts on our deepwater units where they are written out and when they're rolling off. So that we can help you take advantage of continuing to improve the market. But yes, it's definitely their story to be some tightening and not higher in deepwater market and operators are syncing that. I'll ask Robert to add anything you'd like.

No, I think that's it. I think the only other note I'd make is that, we think rates are off bottom now for the high end of the drillship segment. We spent a lot of effort reactivating the fleet and getting it positioned and we're very proud going into this kind of mid 2020 timeframe that you've quoted to have some availability and hopefully take advantage of the right movement that we've already seen.

Okay. Thanks for that. And then my follow-up would just be on the Croft. I know it's got some option wells that can take it into early next year, but where we do anticipate that rig ultimately, what do you think it stays in and kind of Central America or do you – how do you think about that rig and it's kind of next contracted to stay wells, are you looking at term opportunities? Just help us think about that rig and its next opportunity. Sure.

Sure. So, I think it stays in the Western Hemisphere, although that's not a guaranteed, but we're focusing most of our marketing efforts in the Western Hemisphere right now. I think when you look at kind of late 2019 and early 2020, there are a lot of shorter-term prospects out there and that's part of what we think is going to drive the utilization in the early part of 2020. So we're more than happy to continue to take short-term jobs for that rig as we watched the market. We think longer-term opportunities will continue to develop and we'll evaluate those on a case by case basis, and measure that against the broader market throughout the Western Hemisphere and that includes what country we've made it into in, in certain economic factors that go along with that. Certainly we'd be happy to have it in that – in the region where it'll end in Suriname but we think also there'll be a bunch of opportunities north and south of there.

Okay, great. Thanks. I'll turn it back.

Thanks. Krista, final question please. Certainly, our final question comes from the line of Taylor Zurcher with Tudor, Pickering & Holt. Please go ahead. Your line is open.

Hey, good morning and thanks for squeezing me in. One question on the Don Taylor, you've clearly developed a pretty close relationship with Exxon down to Guyana and so I'm curious if that contract was privately negotiated or competitively bid? And then secondarily, if you could help us think about the best way to think about the rate for that contract, either relative to its previous rate or are relative to the other two drillships you have currently working down in Guyana for Exxon.

Okay.

Yes. Sure. So that was a direct negotiation, you were saying direct negotiations, across the world. Right now, we've certainly seen an uptick that's been benefiting. I think our industry a across the board. On the rate, we're not disclosing the rate a couple points we – top bottom and it does involve two different rates and it goes higher during the second six months of that contract.

Okay. Fair enough. And maybe a follow-up there. Guyana is clearly going to be a healthy source of floating rig years for probably years to come and so I'm curious just from a marketing perspective two of the rigs, really all three of the rigs are contracted into mid 2020 or early 2021. And so when you have a wealth of opportunities developing around the globe or from a marketing perspective, are you always -- are you already having to bid those rigs and into their next contracts or are those sort of a kind of wait and see approach as in year that the contract end date as it relates to finding the follow on work?

Well, I think it's a little too early right now really for 2020 work and certainly 2021 work. Obviously we're in close communication with the customer there, daily – mainly on an operational basis. You're right, there's tons of work there. And we're really focused on staying competitive in providing the service to the customer there. So that they'll want us back.

Great. Thanks.

Thanks Taylor.

Okay. With that we're going to close today's call and again, thank you for your participation and the Krista, we also thank you for coordinating the call today. Good day everyone.

And this concludes today's conference call. You may now disconnect.