Earnings

Noble's 2027 Backlog Now Tilts 20% Toward Second Half, A Reversal From Recent Years

The driller has about 20% more capacity under contract for late 2027 than early 2027, versus a 33% shortfall two years ago.

Noble already has about 20% more capacity under contract in the second half of 2027 than in the first half, CFO Richard Barker said on the offshore driller's third-quarter earnings call Tuesday, calling it "a noteworthy contrast with recent years." Backlog stands at $6.7 billion, including about $2.6 billion scheduled to convert to revenue in 2027.

A backlog that slopes upward

Noble, an offshore drilling contractor that earns a fixed dayrate for each day a rig works, has seen its contract profile flip. CEO Robert Eifler said on the call that 12 months ago, second-half 2026 contracted days were 5% below the first half. Two years ago, second-half 2025 coverage was 33% below the first half.

Barker guided first-quarter 2027 adjusted EBITDA to be broadly similar to the fourth quarter of 2026, then to build "meaningfully higher each quarter" through the year. Formal 2027 guidance comes on next quarter's call. He said Noble is also chasing opportunities starting around mid-year that would add to the contracted step-up.

Eifler said the backlog gives "a clear line of sight to a significant cash flow inflection" through 2027.

A quarter of rigs between contracts

The third quarter itself was softer. Adjusted EBITDA was $201 million, down 5% from the prior quarter as the Black Rhino, Discoverer, Venturer and Globetrotter 1 had fewer days on contract. Revenue was $684 million, the adjusted margin 28%, and free cash flow was negative $48 million after $192 million of capital spending. Eifler said the Voyager started its four-year Shell contract in the US Gulf in late September, a few weeks later than planned.

Noble narrowed 2026 guidance to $2.85 billion to $2.9 billion in revenue and $850 million to $900 million in adjusted EBITDA, and declared a 50-cent dividend for the fourth quarter. It won about $560 million of new awards over three months, including a Tullow contract in Ghana and a Total Energies contract in Nigeria. The Noble Resolve sale closed October 9, and the Globetrotter 2 sale for $38 million is expected to close in the fourth quarter.

A tightening deepwater market

Eifler said 109 of 110 marketed ultra-deepwater rigs are contracted now or in the future, topping the 2024 high of 105. Leading-edge dayrates for high-end drillships are in the mid-$400,000s up to $500,000. Working utilization of 88 rigs is still 10 short of the 2024 peak.

He said customers have shown no demand response to higher oil prices and remain disciplined. On supply, he said "it's not hard to draw a straight line to a fully sold-out market for high-end deepwater rigs within the next year or so." He added that Noble is well positioned even under a more moderate demand scenario.

Barker said normalized net capital spending should run near $400 million, excluding the Klaus Bachmann upgrade, with just over half of that rig's spending falling in 2027.

Noble will give formal 2027 guidance on its next earnings call.