Noble Corporation PLC (NE) 2025 Q4 法說會逐字稿

Thank you for standing by. My name is Carrie, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Noble Corporation fourth-quarter 2025 earnings conference call. (Operator Instructions)

I would now like to turn the call over to Mr. Ian MacPherson. You may begin.

Thank you, operator, and welcome, everyone, to Noble Corporation's fourth-quarter 2025 earnings conference call. You can find a copy of our earnings report, along with the supporting statements and schedules on our website at noblecorp.com. We will reference an earnings presentation that's posted in the Investor Relations page of our website.

Today's call will feature prepared remarks from our President and CEO, Robert Eifler; as well as our CFO, Richard Barker. We also have with us Blake Denton, Senior Vice President of Marketing and Contracts; and Joey Kawaja, Senior Vice President of Operations.

During the course of this call, we may make certain forward-looking statements regarding various matters related to our business and companies that are not historical facts. Such statements are based upon current expectations and assumptions of management and are therefore subject to certain risks and uncertainties. Many factors could cause actual results to 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 can find the required supplemental disclosure for these measures, including the most directly comparable GAAP measure and an associated reconciliation in our earnings report issued yesterday and filed with the SEC.

Now I'll turn the call over to Robert Eifler, President and CEO of Noble.

Thanks, Ian. Welcome, everyone, and thank you for joining us. Today, I'll walk through our financial and operational highlights, recent commercial wins, market outlook, including our semiannual review of deepwater rig demand around the world and a brief update on our fleet strategy. Richard will then provide a financial overview, and I'll wrap up with closing remarks before we go to Q&A.

Starting with Q4, we reported adjusted EBITDA of $232 million and free cash flow of $35 million, bringing adjusted EBITDA for the full year 2025 slightly above the $1.1 billion midpoint of our original guidance. We have maintained our return of capital program, returning an additional $80 million to shareholders through our $0.50 per share quarterly dividend in Q4. Yesterday, our Board declared a $0.50 per share dividend for the current quarter.

Turning to the commercial highlights. We've continued to see strong booking levels across our fleet with backlog increasing to $7.5 billion. First, the Noble GreatWhite has been awarded a 3-year contract with Aker BP in Norway, valued at $473 million, including mobilization, but excluding additional fees for integrated services and bonus potential. This marks the GreatWhite's first campaign in Norway and represents a significant step in expanding our presence on the Norwegian continental shelf and deepening our important relationship with Aker BP. We expect CapEx of approximately $160 million for the rig's reactivation, Norwegian certification and contract preparation.

This is a highly strategic investment with a compelling return profile as we anticipate total EBITDA potential of approximately $240 million over the 3-year contract period, essentially targeting a recovery of the capital in the first 2 years of the program and positioning the GreatWhite very well for the future as one of the most technically capable units in the Norway floater market. And of course, the access to the Norway market should result in a structural enhancement to the long-term earnings profile and NAV of the rig.

Next, the Noble Gerry de Souza was awarded a 2-year contract with Exxon in Nigeria. This contract valued at $292 million is scheduled to start around the middle of this year and is followed by 3 1-year options. We are looking forward to redeploying the de Souza in Nigeria following the rig's previous campaign there from 2023 to 2025. In the U.S. Gulf, the Noble BlackRhino has recently been awarded 1 well plus 1 option well with Beacon.

The firm well is an estimated 50-day workover set to start in March, and the option well is for an estimated 100 days of drilling work.

Next, the Noble Developer received a 3-well contract with BP in Trinidad that's scheduled to commence in early 2027 at a day rate of $375,000 with estimated duration of 240 days, plus 3 option wells with similar duration. As a side note, the Developer has been made available for this contract as the previously announced long-term contract with Total and Suriname scheduled to start later this year has been reassigned to the Noble Discoverer. Perhaps somewhat counterintuitively, our sixth-generation D-class semis actually began to realize an earlier demand recovery than some of the higher-spec seventh-gen rigs, with both the Developer and Discoverer now booked out for a combined total of nearly 5 rig years. Additionally, the Deliverer looks well positioned for a good amount of work that's expected to start next year. Hopefully, we will have some positive news to report on the Deliverer before too long.

Staying in South America, the Noble Endeavor has been awarded an 11-well contract with an undisclosed operator that's expected to commence late this year with estimated duration of 18 months at a rate of $300,000 per day, plus mobilization and demobilization fees and potential for performance bonus. And finally, in Southeast Asia, we have firmed up contracts for an additional 5 to 6 months of work this year through the expansion of existing work scopes plus one additional option well. So we now expect the Viking to be solid through July with additional opportunities under discussion that would carry term for the rigs through this year and beyond.

Now on to the market outlook. Despite the ongoing abundance of macro uncertainties and Brent prices hovering around 5-year lows in recent months between $60 and $70 per barrel, floater contracting activity has been resilient, underscoring our customers' multiyear planning horizon for their highly strategic deepwater assets. Including our recent contract awards, the contracted UDW rig count has now bounced back up to 105, up from a recent low of 97 early last year and is closing in on the 2024 high watermark of 107 contracted UDW rigs. On this basis, the contracted utilization rate of the marketed fleet is 95%. That said, these figures all reflect the gross number of contracted rigs, including those which are currently idle but have contracts starting in the future.

Alternatively, the number of UDW rigs currently working under contract today is 90, which represents marketed utilization of 82% on a present basis and, of course, gives rise to the soft day rates we've seen recently.

These divergent utilization statistics tell us a couple of things. First, the industry fleet has added backlog depth but hasn't yet fully worked through the prompt white space overhang. And second, the foundation has been set for a steadily improving activity level as we progress through this year and into 2027. Of note, 6 of the 14 rigs that sit idle today with future contracts in hand are Noble rigs, the Noble BlackRhino, Voyager, Valiant, GreatWhite, Gerry de Souza and Endeavor. We believe this is a strong indicator of improving utilization on the come for the industry fleet and especially the Noble fleet. More on this later.

Focusing on the near term, there are still about 25 UDW floaters with contracts expiring during the course of this year. For context, this is essentially the same as the fleet's rollover profile in 2025 and does not cause concern. While this churn will still probably continue to result in some idle gaps this year, overall, the white space across the industry looks to be on the retreat. And if the overall contracting cadence remains on trend, then we would expect to see some convergence between the present and future utilization metrics. Against this firming but not yet decisively tight backdrop, day rates for Tier 1 drillships have settled at around $400,000 per day with lower-spec units recently capturing low to high $300,000 per day.

Geographically, the recent deepwater demand trend has been characterized by steady strength in South America, a slight decrease in the U.S. Gulf and upticks throughout other regions, including West Africa, the Med and Black Sea and Asia Pacific. Starting first in South America, where contracted UDW demand stands at 44 total units, including 34 rigs in Brazil. Although Petrobras budget pressure has emerged as a near-term headwind, resulting in slower contract executions and ongoing blend and extend negotiations with contractors, including ourselves, thus far, this has been offset by increased demand from other operators, both within Brazil and elsewhere throughout the region.

Later this year, the Noble Discoverer will wrap up its program in Colombia and is planned to commence its 3-year campaign with Total and Suriname. We remain in constructive dialogue with Petrobras regarding contract extensions for either or both of our 2 Brazil rigs, the Noble Faye Kozack and Noble Courage. Overall, with Petrobras paring back activity by a few rigs over the short term, while other operators throughout the region are net adding, we would expect South America to remain roughly flat over the next year relative to today's record high contracted UDW rig count of 44. U.S. Gulf has softened recently with the Noble BlackRhinos' recent contract award bringing the contracted UDW rig count back up to 21, which is 1 to 2 rigs below last year's average level.

We had predicted this slight pullback in the U.S. Gulf, and it appears now that this has more or less fully played out.

Next, on to West Africa, where contracted UDW demand has recently rebounded to 15 rigs with the Noble Gerry de Souza back under contract. This is an uptick from last year's trough demand level of 12, although there is still some variability to demand in this region with a few rigs contracted into other regions later this year. The pipeline of open demand throughout Africa remains highly promising, including at least 5 active or pending long-term tenders throughout Angola, Nigeria, Côte d'Ivoire, Ghana and Namibia, plus the potential for multiple additional rig lines in Mozambique over the next couple of years. So overall, the West Africa plus Mozambique region appears poised to grow into a mid- to high teens UDW rig count as these various programs come online.

The Mediterranean and Black Sea has been a growth pocket, partly due to the continued expansion of Turkish Petroleum's offshore ambitions. The region is now up to 11 rigs, up from an average of 7 to 9 last year. And this could expand to 12 rigs by the second half of this year with the commencement of 2 programs in the Med offsetting the conclusion of the Noble Globetrotter I's contract in the Black Sea. Visibility beyond this year isn't quite clear yet with a number of rigs rolling off contract by year-end, but the long-term trend has been one of secular UDW demand growth. So from where we stand today, an estimated range of 10 to 12 rigs going forward looks sustainable.

Continuing with the Eastern Hemisphere strength, the Asia Pacific plus India region is witnessing a significant recovery with contracted UDW activity rebounding over the next year from a trough level of 4 rigs to 8 currently. Additionally, the pipeline of open demand in the region remains robust with over 30 rig years of active tenders and pretenders outstanding, including a variety of requirements throughout Southeast Asia, India and Australia. All of this indicates a likely upward bias of at least a couple of more UDW units through 2027. Rounding out the global picture, the harshy environment North Sea and Norway market currently represents 22 units of total floater demand, 7 of which are satisfied by UDW semis, which is up by 1 to 2 units compared to a year ago. We are very excited to kick off preparations for the Noble GreatWhite 3-year program with Aker BP starting next year and the redeployment of both the GreatWhite and the Endeavor points to a tightening market for Harsh semis.

So the pathway back to 105 total contracted UDW rigs that we described on our earnings call last summer has, in fact, materialized, if anything, faster than we had hoped. This is good momentum, but there's still some work to be done to arrest the recontracting churn.

The average Brent crude price of $68 per barrel in 2025 was down by 15% compared to 2024, which I believe makes Noble's 30% year-over-year backlog growth stand out incredibly well by comparison. However, we believe that a broader industry uptrend will necessarily require at least a modicum of positive upstream cash flow momentum. With both spot and long-term Brent futures hovering in the high $60s per barrel, our end markets are, for the most part, highly economic, whereas our customers' budgets remain relatively inert, which creates friction for significant expansion in drilling activity and day rates. The great news for Noble is that our backlog progresses have already formed a strong foundation for rising utilization, EBITDA and free cash flow without necessarily a great deal of wind at our backs from a macro perspective. This sets us up well toward our goal of maintaining our robust shareholder capital returns through a transitional year in 2026 and supports visibility for a meaningful step-up in free cash flow next year even in a flat world.

Before I turn the call over to Richard, I'd like to provide a brief update on our fleet strategy. Last month, we completed the sale of 5 jackups to Borr Drilling for $360 million. Additionally, the $64 million sale of a sixth jackup Noble Resolve is expected to close in Q3 upon completion of its current contract. As we continue to sharpen Noble's strategic focus around the high-end deepwater and CJ70 jackup market, we have in the process unlocked capital available both for fleet reinvestment, in particular, the highly strategic reactivation and upgrade of the GreatWhite as well as for preserving a highly flexible balance sheet and industry-leading shareholder capital returns program.

On the jackup side, we remain fully committed to the CJ70 market in Norway and the North Sea, and we are encouraged to see early indications of the strongest utilization outlook for this fleet in many years. This aligns very nicely with our entry into the NCS floater market with the GreatWhite next year.

With that, I'll pause here and pass the call to Richard.

Thank you, Robert, and good morning or good afternoon all. In my prepared remarks today, I will briefly review the highlights of our fourth quarter and full year 2025 results and then discuss our outlook for 2026.

Starting with our quarterly results. Contract Drilling Services revenue for the fourth quarter totaled $705 million. Adjusted EBITDA was $232 million and adjusted EBITDA margin was 30%. Q4 cash flow from operations was $187 million. Capital expenditures were $152 million and free cash flow was $35 million.

Last quarter, we terminated the BOP service agreement on the 4 Black ships, which increased fourth quarter CapEx by $18 million. For the full year 2025, we generated $3.3 billion in revenue and $1.1 billion in adjusted EBITDA. CapEx net of proceeds from insurance claims of $497 million included approximately $25 million of rebillable CapEx and the aforementioned CapEx for the termination of the BOP service agreement. This all resulted in $454 million in free cash flow for the year.

As summarized on Page 5 of the earnings presentation slides, our total backlog as of February 11 stands at $7.5 billion. As a reminder, our backlog excludes reimbursable revenue as well as revenue from ancillary services. Our current backlog includes approximately $2.3 billion that is scheduled for revenue conversion during the remainder of 2026 as well as a slightly greater amount that's already booked for 2027. This is the first instance in many years in which our year 2 backlog has exceeded prompt year backlog at this point in the calendar, which highlights the embedded utilization and earnings ramp that we anticipate for 2027. I'll circle back to this point in just a moment.

Referring to Page 9 of the earnings presentation, we are providing full year 2026 guidance for total revenue between $2.8 billion and $3 billion, which includes approximately $150 million in reimbursable and other revenue and adjusted EBITDA between $940 million to $1.02 billion. The low end of our adjusted EBITDA range is fully covered by our existing firm backlog plus a measure of relatively high confidence options. We currently expect Q1 adjusted EBITDA to be roughly flat versus last quarter. We also anticipate a slightly higher weighting of adjusted EBITDA in the second half of the year compared to the first half, although not dramatic.

Total capital expenditures in 2026 are expected to be between $590 million and $640 million. This range includes approximately half of the $160 million GreatWhite project CapEx, with the remaining half included in the 2027 CapEx, approximately $25 million of customer reimbursable CapEx and approximately $50 million of additional project-related CapEx associated with the $1.3 billion of contract awards we announced in late January. While our CapEx for this year is amplified by previously announced upgrade projects, including the Noble Voyager and the Noble Venturer as well as capital associated with more recent contracts, including the GreatWhite, Endeavor and Gerry de Souza, these expenditures represent life of asset upgrades that support a fundamental enhancement to the NAV of our fleet and all with very robust project IRRs. This capital is an important enabler to a structurally higher level of potential EBITDA and free cash flow for our fleet. And as discussed earlier, this is all supported by 2027 backlog currently higher than 2026 backlog.

Looking ahead to 2027 and beyond, we would expect CapEx net of customer reimbursements to taper meaningfully towards a range in the high $300 million to $400 million, excluding the remaining GreatWhite project capital, which is essentially how we would think about the go-forward run rate for the fleet, barring any meaningful additional contract supported project capital. A few other elements for 2026 to consider are as follows. Firstly, we expect cash taxes to be approximately 11% to 12% of adjusted EBITDA. Secondly, during 2026, we anticipate a maximum potential outlay of up to $85 million associated with the possible buyout of the BOP leases on the 4 Black ships. This possible buyout is not included in our capital expenditure guidance.

Next, we expect a favorable working capital reduction of around $100 million this year, partly driven by CapEx reimbursables. Additionally, when modeling cash balances, recall that the sale of 5 jack-ups to Borr Drilling brought in $210 million in cash proceeds last month plus $150 million seller note. We also expect to close the additional $64 million cash sale of the Noble Resolve to Ocean Oilfield in the third quarter. As it relates to the Noble Resolve, we received approximately 1/3 of the sale proceeds as a deposit in Q4 2025. Lastly, our guidance reflects inflation rates in the low single-digit area on average across various cost components.

With the significant recent advancements with our contract backlog underpinning forward revenue visibility, coupled with the anticipated normalization of net CapEx to a lower sustaining range after this year, we have increasing tangible visibility for a healthy inflection in both EBITDA and free cash flow next year. By way of illustration, assuming 13 of our 15 Tier 1 drillships working at current market rates, contribution from all 3 D rigs and the remainder of our fleet essentially contracted at current status quo, we can envision an annualized run rate of around $1.3 billion in EBITDA with corresponding free cash flow of approximately $600 million in the second half of 2027.

With that, I'll pass the call back to Robert for closing remarks.

Thanks, Richard. To sum up, I'm incredibly excited about this moment for Noble. All of the strategy and effort that our organization has invested over the past 5 years is truly paying off as evidenced by our backlog build and widespread relationships with the world's most active deepwater producers. On backlog, our outperformance is a direct result of our strategy and has differentiated Noble over the past year, fundamentally recasting our contract coverage profile and substantially underwriting the material earnings and free cash flow inflection that Richard just mentioned.

In connection with several of our major contract awards, we are making significant strategic investments to support our First Choice Offshore strategy. With these investments, our fleet of 15 high-spec drillships will all have owned and integrated MPD or CML systems. 2/3 will be equipped with NOV's leading-edge automation technology, including advanced robotics on several rigs and 2 will feature 2.8 million pound derricks. Additionally, the GreatWhite's modifications will place it as a Tier 1 floater in Norway alongside our leading fleet of ultra-harsh CJ70 jackups. With all of this, we strongly believe that Noble has the most advanced automated fleet in deepwater and in NCS.

As Richard mentioned, the significant increase in our backlog with over 90% of our 24 floaters now contracted, combined with the unique characteristic of having greater year 2 backlog in the books than current year backlog, serves to provide a direct line of sight to run rating approximately $1.3 billion of annualized EBITDA by the second half of 2027, even without any improvement in day rates. And with 10 of our 15 drillships already secured by long-term programs, this implies only a small handful of highly marketable rigs to be contracted in order to derisk that trajectory towards the highest free cash flow level this company has seen in over a decade.

And I would further add that nothing about our near-term rollovers gives rise to significant concern as the demand pipeline appears quite robust with resource holders continuing to look offshore for future oil and gas developments of scale with advantaged economics. This is evidenced by a 33% increase versus last year in open tenders and pre-tenders for floaters, which is now back to around 100 rig years of open demand in the public domain, i.e., not counting direct award opportunities. Several high-profile and long-anticipated FIDs in places like Namibia, Suriname and Mozambique, for example, stand out as key contributors to this next leg of the offshore cycle. But as we have discussed earlier, there is considerable global breadth to the story.

Previously, on our second quarter earnings call last summer, we communicated a milestone objective of $400 million to $500 million of run rate free cash flow by the second half of 2026. Since that time, we have taken strategic investment decisions that have pushed the time horizon of this inflection back to 2027. However, we can now visualize around $600 million of run rate free cash flow by the second half of next year at current market rates with significant leverage to day rate upside beyond this. And based on the emerging utilization improvement across the global fleet as well as the encouraging leading indicators on forward demand, we would expect to see an upward bias to day rates from here. As we've seen before, rates can move from the low 400s to the high 400s in the blink of an eye.

So it will be interesting to see where this next part of the cycle takes us. But in the meantime, we will remain laser-focused on execution and continuing to deliver value for our customers and shareholders.

With that, I'll turn it back over to the operator for questions.

(Operator Instructions) Arun Jayaram, JPMorgan Securities.

Robert, I was wondering if you could give us your thoughts on industry consolidation. Obviously, seen a large merger announced earlier this week. And just your overall thoughts on the implications to Noble and your overall strategy.

Yes. I mean, look, consolidation has been the path for this industry post-COVID. Obviously, we participated in that. And then this week, there's been a really significant announcement. I think with the outlook for our industry, I think consolidation is the obvious path throughout the energy complex, throughout the entire chain.

It's obviously been no different for the drillers. And I'd say we certainly have benefited from it through the past years. We're a better company today than when we started this journey. And I'm hopeful that broadly consolidation makes the entire industry better and more capable and more efficient because that's the path forward for the drillers.

Got it. I have my follow-up, Robert. Obviously, you've been a participant, as you mentioned, in industry consolidation, including the Diamond Offshore transaction, Maersk -- you obviously have a very capable offshore rig fleet, compete at the very high end, high-spec end of the market. Do you feel you have sufficient scale now if the other deal does get through regulatory approval? And thoughts, do you see a window of opportunity perhaps to maybe further expand your opportunity set perhaps in the floater market?

Obviously, you've been divesting some of your shallow water jackups.

Yes. Look, I think the answer strangely enough, is the same today as it would have been before Monday's announcement that we feel we have scale. We -- I repeat myself, but we're a better company today than we were before because of the scale we've built. And there are going to be opportunities out there. We will continue to look at everything, and we will continue to be as picky as we ever have been on ensuring that any opportunity we look at sits in kind of the right place for us as a company in terms of the type of asset and the quality of the asset.

Scott Gruber, Citigroup.

I want to inquire about the recent strength in the sixth-generation market. I think your recent contracts surprised the market. I guess, first, what's driving that? Is that just a collection of kind of projects moving forward? Is it a bit of kind of value buying by customers?

And you mentioned prospects on the deliverer. Just curious whether you think you can get some good term on that rig as well.

Yes, it's a good question and not necessarily something we would have predicted a couple of years ago for sure. What I would say, I think -- so our D-class semis are most of our sixth-gen rigs. And those are the most capable non-Norway semis out there. They have both moored capability and DP, and they're set up particularly well for certain types of operations. And so what I would say is for that class of 3 rigs, it is a project-specific right place, right time kind of phenomenon.

I think it's sustainable. I don't mean to suggest that this is a window in time. But I think the fact that they've kind of contracted prior to the seventh gens is a phenomenon being at the right place and the right time for the right projects. It's not a value decision by our customers, as you mentioned, which is a good thought. But I do not believe that's what's driving it at all.

Got it. And then we've kind of long thought that the sixth gens, we need to see better utilization to get another round of upward momentum in rates across the collective seventh and sixth gen marketplace. It seems like the direction of travel there is positive. And you mentioned line of sight to potentially getting back to 105 UDWs. What does it take to get some upward momentum in rates?

Just do you think you have to kind of eclipse that level if crude prices do stay subdued or just kind of getting back there? Do you think you've inject enough tightness back into the market? Or do we need to see crude prices improve to kind of see some additional spending capacity by customers? Just some thoughts on the conditions that could drive some day rate improvement here?

Yes. It's really a question. I wish I had the answer. I think it's a mixture of both. I think what we're -- this phenomena where we're seeing higher backlog kind of in year 2 than year 1 right now, I think, is somewhat crude agnostic, and I think is perhaps driven more by the realization that a volume of barrels is going to have to be produced from deepwater, and those are all obviously long cycle, et cetera.

And so I think that is more driven by this return to deepwater that we've seen play out over the last couple of years. However, the incremental rigs that probably define the tightness in supply and demand our crude price does matter for near-term projects. And that's why we kind of outlined in our script the problem, not the answer. I personally am quite optimistic for 2027 for the reasons I mentioned in the prepared remarks. But we need another, say, 5 rigs -- rig contracts that we don't see anywhere out there today to come through to really get to an extremely tight market, call it.

I'm pretty confident that all of the -- that everything is set up to supply that. I don't think there's any reason that, that couldn't happen by 2027, let me put it that way. But we're a little cautious to say we're kind of going to have to see how '26 plays out here right now. I will say I think there are a lot of contracts that are going to get announced here, not just Noble, just across the board over the next few months. And I think that, obviously, that should all be well received.

We're including all of that in our analysis. And we're pretty hopeful that here going into 2027, we've got the various pieces for a tightening market.

Eddie Kim, Barclays.

I'll ask sort of the pricing question in a little bit of a different way. And I appreciate all the detailed commentary on the outlook. You said recent day rate fixtures for Tier 1 drillships have been in the kind of plus or minus 400,000 a day range. You pointed to a tightening market as we progress through this year. Do you think we could start seeing fixtures sometime next year in 2027 back up into the mid-400s range?

Or does that maybe look like more of a 2028 event just based on conversations you're having and the opportunities you're seeing out there today?

Yes. I think the possibility is there. I think I would stop a little bit short of making that the base case today, but maybe it's a 50-50. I don't know. It's so hard to predict.

But look, I think all of the pieces are laid out, and we need just a little bit more contribution worldwide to really tighten up the market going into mid next year. I would say a couple of things about us specifically. One, the things Richard laid out in his script are all completely out with day rate improvement. So we feel with our unique backlog curve where we've done a lot of the 2027 work already, we feel that we're extremely well positioned for an inflection here without day rate improvement. And then two, I would say, also, I really like the way the fleet is -- fleet contracting is staggered right now.

So we've got a nice mix of short-term availability, long-term contracting. And then, of course, our CDA reprices up and down. And so I think I'm pretty pleased right now with the way the Noble fleet sits looking forward and everything.

Got it. My follow-up is just on negotiations with Petrobras. We haven't really heard any news about blend and extend either from you or anyone else. I would have thought that we might have seen something on the Faye Kozack in your fleet update several weeks ago.

You mentioned negotiations are still ongoing. When do you expect these will conclude? And separately, I mean, Petrobras has a tender out for Buzios and Tupi and Marrow fields. Is it fair to say they're unlikely to award these contracts until those blend and extend negotiations have concluded? Just any thoughts there would be great.

Yes. It's a good question, something we're tracking closely along with everyone else. we're hopeful that the next couple of months bring a fair amount of news. If you look at it through Petrobras' lens, they have an incredibly complicated set of dynamics with their -- they've got more deepwater rigs than anyone else out there. They are managing the tenders you mentioned as well as the blend and extends all at the exact same time.

And that's a heavy lift. And so you could easily see how that could get pushed out a little bit past the next couple of months. I would add color kind of referring back to our remarks that we do think maybe Petrobras rig numbers probably come down a couple of rigs, but we think non-Petrobras players in Brazil are going to basically make up that supply change in 2027. And then from there, who knows, plans change. And so we're generally positive, optimistic about Brazil being kind of worse, flat, which is in a really good place right now and hopefully up by a couple of rigs over the next couple of years.

Fredrik Stene, Clarksons Securities.

Thank you for the prepared and detailed remarks on the rig market in particular. I wanted to ask a bit more about the Norwegian market because a couple of moves here that you've done recently, one, obviously signing the GreatWhite with Aker BP and focusing your jackup fleet solely on the heavy-duty harsh environment market. If you take that kind of combined with your prepared remarks where you said that the outlook, I think, for these particular markets were better than you've seen in many years. Are you able to elaborate a bit on that and maybe specifically on the jackup side since the GreatWhite after all has been contracted for 3 years? -- why -- what makes you optimistic?

And what should we -- how should we think about the jack-up fleet in '27, '28, where there is some space that definitely needs to be filled?

Yes, it's a good question. I don't want to imply more than too much optimism. Look, we've got contracts for the CJ70s. A number of those are in the U.K. sector, which is great.

I'm not sure that we see a renaissance in shallow water in Norway right now. So I don't want to overstate that or have that misunderstood. But we do have contracts for everything. We do have multiple customers that are looking at and considering potential jobs in Norway. So the market has expanded well past just Equinor.

And obviously, I include Equinor and the multiple customers. But I think with the rigs kind of in a steady state utilization right now and some ongoing conversations, it just feels like it's more likely to get better than worse for sure. Okay. Maybe Norway specific stays more flat than up, but it definitely feels flat or up right now. And we think we have the most capable rigs in the world ready to go if we do get an incremental unit or 2 of demand in Norway.

That's very helpful. One quick one more. Turning to the floater fleet. You have the Globerottter I soon will go off contract. You have the Apex that's idle.

Deliver, you seem very optimistic about potentially having a good chunk of work from '27 and beyond. But do you have any commentary on how you view the Ocean Apex and the Globeetrottter in your fleet as we look forward?

Yes. So on the Gloetrottter, we've said before that we're effectively bidding those into intervention or niche drilling applications. So obviously, the Black Sea qualifies for that since those rigs can go under the bridge pretty quickly and efficiently. I think the intervention market remains out there. And we're -- I'd say we're kind of chasing a mixture of intervention and potentially some niche programs for the Globeetonor.

Apex is probably -- we'll see what happens with that rig. So there's, I guess, less on the horizon for that rig. We're going to keep looking hard at that one.

Ben Sommers, BTIG.

So first on the BlackRhino and kind of just the U.S. Gulf market in general. Just kind of curious, it was great to see that rig get some work, and I know we have the 100-day drilling option. But just curious kind of longer term there, what you think the potential is for maybe more spot work in the U.S. Gulf or potentially moving that rig elsewhere? Any color there would be helpful.

Yes. It's a good question. That's -- we're spending our -- myself and our marketing group spending a lot of time on that rig. We have multiple opportunities -- so I would say for 2026, we're hopeful that there's some spot work out there, but there's probably not a huge amount of upside on the rig, hopefully some. I think the more exciting programs for that rig really are in 2027.

Those exist both in the U.S. and outside of the U.S. And we've got a couple of different opportunities with some of our closest customers globally, and we're hopeful that we can land something there. That rig is an excellent rig. It's outfitted very well for big development campaigns and obviously can perform with the best of them for shorter-term exploration jobs as well.

So we're hopeful to land something here before too long.

Awesome. And then kind of just more broadly, I know you guys spoke on the 2027 kind of expected demand pickup. I guess, is there any kind of concern there that projects could continue to shift to the right, I guess, particularly in a market like West Africa? Or are we pretty confident here that, that's kind of in the past now and that demand should really begin to substantially pick up in 2027? Just kind of curious on anything here and there.

Not a day, I don't wake up concerned about things getting pushed to the right. So it's obviously always a risk in our business. When you've got Brent in the 60s, it's always going to be a risk in the business. Partly why we're not exactly calling for or predicting with certainty what happens in 2027. But I will say, with all of the backlog that's been announced by Noble and our competitors, and I think an amount of backlog that will be announced here in the coming months, the number of pieces that need to fall in place for a tight 2027 are substantially lower than what we've seen in quite some time.

We threw out the statistic about the kind of open demand that's out there. There's obviously direct negotiations that are in excess of those numbers. And we look at where we sit today in the year and the rollovers, it's kind of -- there's no story -- negative story about 2026 rollovers. It looks like upstream CapEx is either flat or up. And if you try to decode what that means for deepwater and commentary around it, it feels like that's a reasonable story for 2026.

And for us, you add all of those together, and it gives us a fair amount of optimism for a pretty tight market in 2027.

Keith Beckmann, Pickering Energy Partners.

I had a question kind of relating around the CapEx on the 9 contracts outside of the GreatWhite. So I think it's about $50 million of CapEx, and I believe you guys said it was related to the Endeavor and the de Souza. Can you sort of bucket between those 2 rigs roughly what that is for me?

Yes. So I think you're talking about the incremental $50 million of contract capital that we announced in conjunction with the $1.3 billion of backlog here about 2 weeks or so ago. I think about that incremental capital is kind of split between the Endeavor and the DS.

Awesome. And then my other question was just relating around -- I think this was said on maybe a little bit earlier, but just relating around the remaining 5 jack-ups. Does it potentially make sense if somebody comes in with the right price now to kind of make yourself the largest pure-play floater fleet? Just any color around that.

Yes. Look it's a good question. No, we're committed to the CJ 70s. When we announced the merger with Maersk, we chose to put our secondary headquarters in Stavanger. We have an established extremely capable operation there.

And with the addition of Ocean GreatWhite, some added scale. So we're pretty happy with where we sit there right now.

And that concludes the Q&A portion of today's call. I would now like to turn the call back over to Mr. Ian MacPherson for any closing remarks.

Thank you for joining us today, everyone. We appreciate your interest, and we will look forward to speaking with you again next quarter. Have a great day.

Thank you for your participation. This does conclude today's conference. You may now disconnect.