Operator: Hello, and thank you for standing by. My name is Lacey, and I will be your conference operator today. At this time, I would like to welcome everyone to the Noble Corporation Q3 2026 Earnings Call and webcast. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. Please remember to keep your questions to 1 question and 1 follow-up, please. Thank you. I would now like to turn the call over to Ian Macpherson. Please go ahead.
Ian Macpherson: Thank you, operator, and welcome everyone to Noble Corporation's Q3 2026 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 as well that's posted on 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 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.
Ian Macpherson: Several factors could cause actual results to differ materially from these forward-looking statements, including those described in our earnings release and in our most recent annual report in Form 10-K and quarterly reports on Form 10-Q filed with the SEC. Noble does not assume any obligation to update these statements. Also note we are referencing non-GAAP financial measures on the call today. You can find the required supplemental disclosure for these measures, including the most directly comparable GAAP measure and associated reconciliation in our earnings report issued yesterday, furnished to the SEC and posted to our website. Now, I'll turn the call over to Robert Eifler, President and CEO of Noble.
Robert Eifler: Thanks, Ian. Welcome everyone, and thank you for joining us. I will open today's call with a brief summary of our Q3 highlights and recent contract awards, followed by an update on the market. Richard will then cover the financials before I wrap up with closing remarks and move to Q&A. During Q3, we earned adjusted EBITDA of $201 million with free cash flow of -$48 million. We again distributed our $0.50 quarterly dividend, and yesterday our board declared a $0.50 per share dividend for Q4, maintaining our consistent return of capital program. The 5% sequential decrease in adjusted EBITDA resulted from a number of rigs transitioning between contracts, including the BlackRhino, Discoverer, Venturer, and Globetrotter I, each of which had fewer days on contract in Q3 compared to Q2.
Robert Eifler: These were partially offset by the resumed operation of our two rigs in Brazil in July, as well as the Gerry de Souza's contract start-up in August. Additionally, the Voyager commenced its four-year contract with Shell in the US Gulf in late September. Final commissioning and weather delays resulted in a few weeks later start than planned for this contract, but we are excited to now be underway with the Voyager. Next, in our major project start-up queue, we are looking forward to the Valiant and Discoverer scheduled commencement right around the end of this year on their long-term development campaign for TotalEnergies in Suriname. Over the past three months, we have secured new contract awards totaling approximately $560 million. First, the Noble BlackRhino has been awarded a four-well contract with TotalEnergies in Nigeria, expected to commence within the next few weeks.
Robert Eifler: This program has an estimated duration of 150 days and includes options for up to six additional wells. Next, I am pleased to announce that the Noble Faye Kozack was awarded a five-well contract with Tullow in Ghana, scheduled to commence in mid-2027 with an estimated duration of approximately 250 days. Also, the sixth-generation drillship Noble Globetrotter I has been awarded a contract with TotalEnergies for light well intervention services under a three-year capacity reservation agreement with the first scope of work scheduled to commence in Angola in Q3 or Q4 next year. However, prior to this, the rig is scheduled for a recently awarded two-well exploration campaign with Occidental in Peru commencing in Q2 2027, which leverages the Globetrotter's unique capability to transit through the Panama Canal in order to access this remote drilling location.
Robert Eifler: Continuing with frontier exploration in South America, the Noble BlackHawk has been awarded a one-well contract with Apache in Uruguay that is expected to commence in Q4 2027 with an estimated duration of 50 days and a contract value of approximately $25 million, plus additional fees for mobilization and demobilization. This contract value does not include MPD or any other additional services. As the BlackHawk is winding down its current work in the US Gulf, we are continuing to pursue promising leads for additional work for the rig next year prior to the Uruguay move. Switching over to Norway, the Noble Interceptor has been awarded a one-well contract with DNO that is expected to commence in mid-2027 with an estimated duration of 50 to 90 days.
Robert Eifler: Upon completion of this campaign, the rig is scheduled to commence its P&A program with ConocoPhillips at the Ekofisk field in Q3 2027 with an estimated duration of 670 days. The Noble Intrepid was awarded a one-well contract with ORLEN that is expected to commence in Q3 2027 with an estimated duration of 40 to 60 days. With these awards, our current backlog stands at $6.7 billion. Zooming out for a moment to the broader market, recent trends across both the deepwater and harsh environment sectors are continuing to gain nice momentum.
Robert Eifler: Deepwater contracting activity, which started out the year gangbusters but then hit a quiet patch between May and July, has recently re-accelerated over the past few months with a spate of recent fixtures confirming day rate recovery for high-end drillships in the mid-$400s, up to $500,000 per day as current utilization, but to greater extent, anticipated 2027 utilization continues to firm up. Today, 109 out of 110 marketed UDW rigs are contracted currently or in the future, putting contracted utilization at 99%. This eclipses the 2024 high watermark of 105 contracted rigs. Meanwhile, current working utilization of 88 rigs is still 10 units shy of the 2024 peak. However, we have reached a point now where the number of pending contract startups for currently idle rigs modestly exceeds the number of contract rollovers over the next six months or so.
Robert Eifler: This creates a fulcrum for the active rig count to potentially expand over the next few quarters as additional contracts are executed. The deepwater market is firming up, consistent with what we have been anticipating for a while now. This is despite the fact that we really have not seen any real demand response so far this year resulting from higher commodity prices. On the contrary, the US Gulf, which has historically been one of the more demand elastic markets through commodity cycles, has been a noted soft spot amidst an otherwise robust global market throughout this year. Having now retreated from a low 20s rig count in recent years to a mid-teens market presently, we do expect to see some improvement in the Gulf next year based on current customer dialogue.
Robert Eifler: However, the departure of a few drillships to other regions could likely create upward day rate pressure in order to drive capacity back into the Gulf. Perhaps similar to recent dynamics in the harsh semi market, which in recent years has seen Norway rig count dip from the high teens down to the mid-teens and now back up to the high teens, with strengthening Norway day rates accompanying the migration of capacity back into that region. Speaking of Norway, I would further add that the Norwegian jackup market is also developing into a bright spot for Noble. With our recent contract awards, we now have four of our five CJ70 jackups contracted in Norway for the first time, which is a very promising improvement, with leading-edge day rates ranging between $230,000 to 300,000, depending on work mode and contract duration.
Robert Eifler: Currently, the Noble Innovator, the older unit among our five CJ70s, remains uncontracted. We are optimistic about contracting that rig fairly soon in the southern North Sea, where day rates are structurally lower. Nonetheless, this gives us a clear shot at approaching effectively full utilization for our jackups in 2027. Now I will pass the call over to Richard for the financial review.
Richard Barker: Thank you, Robert, and good morning or good afternoon all. in my prepared remarks today, I will briefly review the highlights of our Q3 and then discuss the outlook for Q4 2026. Starting with our quarterly results. Total revenue for Q3 totaled $684 million. Adjusted EBITDA was $201 million, and adjusted EBITDA margin was 28%. Q3 cash flow from operations was $144 million. Capital expenditures were $192 million, and free cash flow was -$48 million. On 9 October, the sale of the Noble Resolve was finalized, with the company receiving the remaining $45 million of proceeds. Further, the sale of the Noble Globetrotter II is expected to close in Q4 2026 for a purchase price of $38 million.
Richard Barker: As summarized on page 5 of the earnings presentation slides, our total backlog as of 26 October stands at $6.7 billion. As a reminder, our backlog excludes reimbursable revenue as well as revenue from ancillary services. Our current backlog includes approximately $2.6 billion that is scheduled for revenue conversion in 2027. Referring to page 9 of the earnings presentation, we have narrowed our full-year 2026 guidance for total revenue to between $2.85 billion and $2.9 billion, compared with $2.8 billion and $2.9 billion previously, and adjusted EBITDA to between $850 million and $900 million, compared with $850 million and $925 million previously, as we expect Q4 to be slightly lower compared to Q3.
Richard Barker: Revenue was narrowed around the high end of the previous range, driven by higher reimbursable revenue than previously expected, while adjusted EBITDA was narrowed around the lower end, driven primarily by slightly later starts for the Voyager and the Valiant. Additionally, capital expenditure guidance for this year has been increased to $680 million to $705 million, compared with $615 million to $665 million previously, with the increase primarily attributable to higher customer reimbursable capital expenditures, which is now expected to total roughly $65 million for this year as compared to $25 million previously. If you exclude this $14 million increase in reimbursables, our capital expenditures guidance would have otherwise remained within the prior range. Looking ahead, while we plan to provide formal guidance for 2027 on next quarter's earnings call, I would like to share the following directional indicators.
Richard Barker: In the first quarter of 2027, adjusted EBITDA is expected to be broadly similar to Q4 2026. We then expect adjusted EBITDA to build meaningfully higher each quarter as we progress through the year, supported by the buildup in our contract coverage, with already approximately 20% more capacity under contract in the H2 of the year compared to the H1. This is a noteworthy contrast with recent years in terms of the general slope of our contract coverage for the following year. As Robert referenced, there were several opportunities we are actively chasing that start around the middle of the year that would build on top of this already existing contracted step-up. With that, I will now pass it back to Robert for concluding remarks.
Robert Eifler: Thanks, Richard. To wrap up, we are excited about both the direction of the market as well as Noble's positioning as we ramp into some pretty meaningful contract startups over the coming quarters. The gathering drumbeat of exploration and reserve replacement imperatives facing resource holders, combined with a forward oil price curve that has been melting higher through the end of the decade, have the potential to drive meaningfully tighter market conditions ahead. Specifically, based on the robust portfolio of contract opportunities in front of us today, it is not hard to draw a straight line to a fully sold-out market for high-end, deepwater rigs within the next year or so. Even under a more moderate demand scenario, however, we believe Noble is exceptionally well-positioned to execute our playbook, generate durable free cash flow, and deliver substantial returns of capital to shareholders through cycle.
Robert Eifler: The backlogs that we have secured since last year provides a clear line of sight to a significant cash flow inflection as we move through 2027 with, as Richard just highlighted, approximately 20% more contracted fleet capacity already secured in the H2 of 2027 versus the H1 of the year. Of course, we will have some opportunity to build on this. This dynamic, in particular, is clearly supportive of an improving outlook, especially when contrasted against comparable measurements in recent years when the deepwater outlook has been burdened by significant white space problems. For example, 12 months ago, our H2 2026 days under contract were 5% shy of H1 2026 contracted days.
Robert Eifler: 24 months ago, when we were in the relatively early days of the emerging downdraft in the market, our contract coverage in the H2 of 2025 was at that time actually 33% below H1 2025. So today's situation does indeed represent a very pronounced upturn in the shape of our backlog heading into 2027. With that as a launch point, we are increasingly excited about the opportunities set in front of us. Operator, we are ready to go to questions.
Operator: At this time, I would like to remind everyone, in order to ask a question, please press star 1 on your telephone keypad. Your first question comes from the line of Arun Jayaram from JPMorgan. Please go ahead.
Arun Jayaram: Hey, Robert and team. I was wondering if you could comment a little bit on changes you have seen in the overall market since last quarter, and you gave your semiannual review of rig demand. We have noted that the contracted rig count has moved up by about 5 rigs. I think last quarter was about 104, and now you are at 109. So, maybe just comment on what you are seeing that has evolved over the last, call it, 90 days, and maybe add a little bit of regional color as well. Appreciate that.
Robert Eifler: Sure, Arun. Good morning, and thanks for the question. We noted in the prepared remarks that we were in a bit of a doldrum over the summer months on fixtures, and you have referenced those that are known where we are up a handful of rigs on total demand rig count. What I would say is beyond that, we see now, I think, 2 to 3 opportunities in the US Gulf that are somewhat closer to firm than we saw 90 days ago, which is obviously extremely helpful. And we see everything moving forward as planned through CARICOM and West Africa. And then I would also note probably the other most notable change is we are feeling very good about demand emerging in India. So if you recall, there was some excitement there and then some tenders were postponed.
Robert Eifler: Since that time, it appears obvious to us that, I do not know, anywhere from 2, but probably something closer to 4 good drillships are going to be needed in India starting in late 2027 and 2028. I think those are probably the most bullish changes that we have seen in the last 90 days are US and India.
Arun Jayaram: Great. My follow-up, Robert, we are still in the early innings of the OFS earnings season, but one of the themes that SLB highlighted on their call is just this renewed interest in exploration. We did note in your updated fleet status report some opportunities in Peru and Uruguay. I was wondering if you could just comment on general trends you are seeing in exploration over the next, call it, 12 to 18 months and maybe part and parcel with that, are you seeing opportunities for chunkier development opportunities which could have a little bit of a longer-term duration to those versus some of the exploration opportunities that tend to be a couple wells here or there?
Robert Eifler: Yeah. I think if you just walk back through just a tiny history of exploration, I think it was around 3 years ago where we started seeing our customers start to talk a little bit more about reserve replacement. Then, in the last 18 months or so, we started to see some real movement among our customers and increased narratives, specifically in exploration. There have been some public commitments by our customers and statements around a return to exploration in various different regions. 2027 has been cited as a year where we would perhaps see an uptick in some of the, call it wildcat exploration, which I think is where you really want to be looking right now. I would agree completely with what SLB said. The only thing I would say is in terms of what has hit our business, you have seen the couple you referenced in our fleet status. It is not a needle mover, I do not think, for our business from where we sit today.
Robert Eifler: We are very hopeful that as our customers exit budget season with really good cash flow during 2026, that we might actually see some more evidence of wildcat exploration in 2027. Then you asked about development. This cycle has been, I do not know if it has been reversed, but most of what has driven the demand heretofore has been development projects. It is like a lot of things that had been delayed in years past are now starting up. That is what is driving, I think, the global uptick that we see and have referenced in late 2027. Included in a lot of that, I think the exploration we have seen over the last couple of years has all been infield exploration. We watch that closely. The percentage of our wells that is infield exploration has stayed relatively flat over the last few years.
Robert Eifler: We are, like you, really watching some more wildcat type exploration closely, and we are hopeful that that starts to define the next phase in this uptick that we have been calling for here. I think 2027 is when we might get a little bit more clarity there.
Arun Jayaram: Thanks a lot, team.
Operator: Your next question comes from the line of Fredrik Stene with Clarksons Securities. Please go ahead.
Fredrik Stene: Hey, Robert and team, and thank you for taking my question. I would argue that you provided a relatively strong contracting update today with rates being supportive on most of these contracts. Particularly happy to read and hear your commentary about the jackups, which have been lagging a bit with leading edge rates now being stronger. With rates being in a good place, I wanted to touch a bit on utilization, maybe in the near to medium term for certain specific rigs. You have some open capacity next year on the Stanley Lafosse. You have the Viking that has availability, and obviously the BlackHawk, which you have now in for a short-term contract towards the latter part of 2027.
Fredrik Stene: Feel free to give specifics, but if you were to take a portfolio view of maybe the drillships in particular that have open capacity, what kind of utilization should we expect in those areas which are now, at least for now, uncovered? Thanks.
Robert Eifler: Fredrik, thanks. All of the rigs are competing in slightly different markets. The Viking, I think it is very likely to stay in Southeast Asia. We have a number of opportunities for that rig that would close some of the gap before its long-term contract. I think it could perhaps get up to in the 50% type range on utilization next year. But as the fleet status shows, we need to win some work there. Then I would lump the other rigs probably into more of a similar group. I mentioned on the prepared remarks that we do have some work for the BlackHawk that we are hopeful comes through, excuse me, prior to its transit down to Uruguay. Then there is a fair amount of work following that.
Robert Eifler: We think between the Hawk and the BlackRhino, that there are a lot of opportunities towards the end of 2027 and 2028, most of which are for the long term. We are pretty comfortable that we are going to fill in some white space on those rigs. The Stanley Lafosse has work potential both in the US and then outside the US. I guess what I would say there is if it were to go outside the US, that is more likely to go back to work in late 2027, early 2028, that kind of timeframe.
Fredrik Stene: All right. That is very helpful. Then as a follow-up, or three or two questions if I were to, I am completely honest. The first one is, with rates being higher for ultra-deep water market at the moment, what kind of delta should we expect for the Guyana rigs in terms of repricing and the mechanism that is at play there? I think it is being discussed every September and March or something. How will that play into your financials next year and 2028 for that matter? Second, are you able to provide some guidance on how the agreement on the Globetrotter I work, since it is more of a call-out arrangement with minimum utilization rather than a regular day-to-day contract? Thanks.
Robert Eifler: Yes. On the CEA, I guess I would say what we always say, which is it tracks market extremely well. We set the latest rate about a month ago, that will start next year. We had one rate through all of 2026, and then we have a rate that will start in late 2027. We never disclose the rates. What I would say is that it was set right around a month ago, maybe just a bit more, and it tracks the market very closely. That will be a six-month rate, starting on 1st January. We just adjusted the timing on that this year. So we had one rate for all of this year, and then the next six months rate starts on 1 January. It is just easier for everybody. Over to the Globetrotter I, putting aside its exploration drilling well, the intervention project is three years long.
Robert Eifler: It has a minimum of 150 days per year included in that. As most people listening probably know, the intervention market is just a little bit different than the drilling market. It is planned on a much, much shorter cycle, and it is more of, we call it call-out work, which, compared to our drilling work, it is effectively call-out work. The way I would think about that program is that it is roughly break-even at the minimum number of days per year. As call-out work fills in extra days, then we can earn some margin on top of that. We really like it. We think that that rig is very well set up to be that hybrid where it does intervention work, but can also head to run to some drilling wells where needed, as we have seen.
Robert Eifler: With a potential uptick in exploration and our belief for a long time that intervention is going to grow through time, we think this is a good contract for the rig, even if it is not going to be a real needle mover for us from a free cash flow generation perspective.
Fredrik Stene: All right. Appreciate all the color. That is what I had today. Thank you very much.
Robert Eifler: Thanks.
Operator: Your next question comes from the line of Scott Gruber with Citigroup. Please go ahead.
Scott Gruber: Yes, good morning. I just wanted to follow up on the last line of questions. On the Globetrotter, as you cycle between working and not working, can you help us on the cost side of things? How should we think about cost while working and not working, and how you think about managing those costs through the on-off schedule?
Robert Eifler: Well, not working, we can get the costs well down, call it to about 50% of what a Tier-1 drillship might cost. While it is working, it is only slightly higher than that. Call it 60% of a working drillship, in that range. That is in intervention mode. When I mentioned that sort of cash flow breakeven to moderately better than that is assuming that full intervention cost load all the way through. So that is call it 60% of the cost of a working Tier 1 rig.
Scott Gruber: Got you. Do you have much insight today in terms of the uptime extending beyond the 150 days annual commitment?
Robert Eifler: We don't right now. I'm just going to throw out there, a great year we think would be to be able to double that number and keep it working around 300 days. An average would probably be halfway in between 150 and 300, so just over 200, low 200s per day. I mean, per year, excuse me.
Scott Gruber: Okay. If I could just squeeze in one more too. On the Guyanese rates, those are measured against market rates, not spot, correct? Is the measuring stick a global market rate or more regionalized to Latin America or the Americas in total?
Robert Eifler: It's a global market rate for a Tier-1 drillship.
Scott Gruber: Got you. For realized, right? Not spot.
Robert Eifler: Yes. Yes, it is. The way I would say it works in practice, which I love the way this is set up, is because it is negotiated each round. Because fixtures are all so bespoke, and almost every fixture has some sort of special story to it, all of that does go into consideration. So that all gets thrown out on the table and negotiated. It is not just a formulaic average of an Excel sheets printout. Frankly, that is why I think it tracks the market so well.
Scott Gruber: Yep. Got you. I appreciate that. I will turn it back. Thank you.
Robert Eifler: Thanks.
Operator: Your next question comes from the line of Keith Beckmann with Pickering Energy Partners. Please go ahead.
Keith Beckmann: Hey, good morning, and thanks for taking my question.
Keith Beckmann: I just wanted to ask around, I wanted to dig into the Gulf a little bit more around some of the comments you had earlier. Are you seeing some of the smaller independent drillers in the Gulf worry about a lack of rig supply into next year as we see potentially several longer-term programs in West Africa and Southeast Asia? In that case, is that what potentially causes them to move some of these programs up from maybe what their expectations were before? Just any commentary around that.
Robert Eifler: What I would say is it is becoming increasingly obvious that supply could be an issue, I think, to our customers broadly, whether they are small or large. Whether someone has brought a program forward out of that, I wish I could say yes, but I am not sure that we have actually seen that.
Keith Beckmann: Okay. Thank you. My second question is just around how are customers thinking about contract duration today? We have seen day rates continue to tick up here a little bit over the last couple of months. Are they looking to lock stuff up before potentially prices rise further? Are they potentially pushing stuff off right now thinking hopefully day rates come back down? Just maybe recent customer conversations around that.
Robert Eifler: Yeah. I would say just tracking over the last 90 days that urgency has gone up, not down. But I would also say that we are far from a market where there is legitimate concern about not being able to drill a program because of supply. Whatever kind of middle ground that is, I think we are starting to hear more comments about how it is looking pretty tight going into 2028. The deepwater market is looking pretty tight. But we are still a ways away from the urgency we have seen in certain past cycles, where it is really driving duration decisions. I think duration decisions are still largely driven by need.
Keith Beckmann: Okay, perfect. That is really helpful. I really appreciate it. I will turn it back. Thanks, guys.
Robert Eifler: Thank you.
Operator: Our next question comes from the line of Eddie Kim with Barclays. Please go ahead.
Eddie Kim: Hi, good morning. You mentioned that the deepwater market is firming up despite no demand uplift so far this year from higher commodity prices. Could you elaborate on that for us? Is it your view that the recent contracting increase we have seen would have happened even without the increase in oil prices, and that we should have seen more multi-year contracts announced by now given the elevated level of oil prices? If that is the case, what do you think is the main reason that the customers are holding back at this point?
Robert Eifler: Yeah. Eddie, you are breaking up a little bit. Why are the higher commodity prices from this year not driving activity? We cast it as a positive because obviously more cash flow for our customers is good for us. We really have not seen very much increase. I do not think we have seen any demand that has arisen from this. I think it is because, A, discipline has ruled our customers for this entire cycle, up cycle, mid-cycle, wherever we are right now. That is not going to change. There is additional cash flow right now, which is good. It is not translating into drilling just yet, which obviously we wish it had. I think we remain hopeful that in 2027 we will see some additional exploration work. We mentioned that earlier.
Robert Eifler: I would say just the nature of all of the markets this year have been, I think, a little bit baffling for a lot of people. I think there is an understanding that the current oil price could go right back down almost overnight given the geopolitical drivers and everything that is out there. People are not really willing to make long-term decisions off of it right now. We have pointed to the middle part of the Brent curve as probably the best indicator of our business for quite some time, and as we mentioned, it has bumped up a little bit. It has been a lot less volatile than near-term pricing all the way through all of this. I think we have just seen our customers maintain a disciplined and steady posture towards deepwater drilling. It is positive.
Robert Eifler: I think any of our customers would say that they have a belief that deepwater is going to gain market share here through time. It is not being strongly affected by the events of this year.
Eddie Kim: Got it. Understood. Thanks for that color. My follow-up is just on your commentary on leading-edge day rates on recent contracts for Tier-1 drillships now in the mid-$400s and close to $500,000 a day, which is evident from the recent contracting we have seen. It was not too long ago when we were in the low $400s. Just curious if the progression of day rates has increased faster than you would have expected at the beginning of the year, or if the pace has been in line with your expectations based on the demand outlook that you had seen.
Robert Eifler: Yeah. I think there are two things going on. The answer is no, it is not surprising. Back in 2021 and 2022, that kind of timeframe, we saw rates move at least as fast, I would argue, actually, on a percentage basis, much faster. It happens. I think there are a couple of things going on. One, we are +5-ish units here recently. The marketed utilization is up to 99%. Probably working utilization matters a little bit more for total pricing. I think you would see a much bigger move if working utilization goes up to that 99% range, which, as we said in the comments, you can see a path to that for 2028 right now.
Robert Eifler: Nonetheless, people can see out and see what we see, which is not only 99% marketed utilization, but a working rig count in late 2027 that is roughly equal to where we are today, maybe slightly up from where we are today, which means every incremental contract that is signed for late 2027 adds to the working rig count. People see what we see and the market is pricing accordingly. I think it makes sense.
Eddie Kim: Thank you. I will turn it back.
Operator: Your next question comes from the line of Jeff LeBlanc with TPH Research. Please go ahead.
Jeff LeBlanc: Good morning, Robert and team. Thank you for taking my question. I wanted to see on the jackups, is the expectation that the four jackups should remain in Norway moving forward, or should we still expect some move between the two sides of the market?
Robert Eifler: Yeah, I think we are finally, for the first time in years, hopeful that the four newest CJ70s are going to stay in Norway.
Jeff LeBlanc: Okay. The secondary question is on the Noble Globetrotter II, is the expectation that that drillship will remain in the global marketed fleet once the sale completes, or will it be removed?
Robert Eifler: Is this the GT II?
Jeff LeBlanc: Yeah.
Robert Eifler: No, it is coming out of the drilling fleet.
Jeff LeBlanc: Okay. Thank you very much. I will hand the call back to the operator.
Robert Eifler: Thanks, Jeff.
Operator: Your next question comes from the line of Noel Parks with Tuohy Brothers. Please go ahead.
Noel Parks: Hi. Good morning. It was really interesting to hear what you have seen as far as continued support for exploration out there in the marketplace. I guess that makes me think a bit more about maybe pivoting back to talking about the development side. Of course, projects are generally economic at far below the current prices we are seeing. I am just wondering, are you detecting any greater confidence among producers maybe reflected in their budgeting for 2027 into 2028, where perhaps the industry is taking the Iran war supply disruptions considerably more seriously than certainly the markets have? I just wonder if you sense a little bit more urgency on the development side.
Robert Eifler: Yeah. I have to say, from what we see, which granted is never at the very cutting edge of how our customers are thinking by the time it gets down to thinking about drilling rigs, but we have seen remarkably little change in the stance of our customers. By our observation, they continue to use very conservative break-even oil price assumptions, and they continue to be extremely disciplined. I think we are thinking about the future as if that does not change. I am fond of saying that we are fans of efficiency because the deepwater is drilling itself into work as it gets more efficient. We very much see the future of deepwater working because barrels are profitable at that kind of 60s and 70s range and really below that for break even.
Robert Eifler: But that our customers are willing to drill and develop large projects at prices that fit nicely into the middle parts of the Brent curve. We have not changed our stance on that at all on the outlook.
Noel Parks: Great. Thanks a lot.
Operator: Your next question comes from the line of Greg Lewis with BTIG. Please go ahead.
Greg Lewis: Hey, thank you and good morning, everybody, and thanks for squeezing me in here. Robert provided a lot of color on the market. I was hoping to get a big picture around how we should be thinking about CapEx. I think one of the things, clearly, you guys are generating a lot of cash. I guess a couple of questions around here, but coming off of the down cycle, as you look at your fleet today, is it where it needs to be for the next couple of years of the upcycle? I get we are upgrading the GreatWhite, the Claus rig, but other rigs, as we think about where they are, could we be thinking about, "Hey, you know what? This rig needs this upgrade. This rig needs that upgrade." Or could we actually see a move lower in CapEx as we look out over the next couple of years?
Robert Eifler: Yeah. How about this? Let me explain a little bit around the types of upgrades we have made, and then I will hand it to Richard, and he can give you a little, I guess, history of our CapEx and how it fit into this cycle. Everything we have done, the Claus Bachmann, we fundamentally changed the marketability of that rig by making it Norway compliant. I think that is baked in now. That rig is worth substantially more because of its increased earnings power, because of the upgrades that we are performing on that rig right now. That rig is capable of working in Norway. It will go to Norway, and it is a great place for the rig. We are very proud to be supported by our customer in moving that rig into that region.
Robert Eifler: Everything else falls into a different bucket, which would be a range of obviously maintenance CapEx over to some more specific upgrades. I am extremely pleased with where we are going to sit by the end of 2027 on all of our Tier-1 drillships. Every single one of those will have MPD. We will have two 2.8-million-pound derricks that are highly competitive in the US Gulf. We have added crown-mounted compensators where needed, and already a majority of our fleet has larger thrusters that allow them to work effectively anywhere around the globe. There are a lot of drillships out there that actually cannot work in some of the emerging markets. So, it is obviously coming at a cost right now in 2026 and in early 2027. But we are so well set up with the quality of our fleet going into late 2027 and 2028.
Robert Eifler: These are life-of-asset upgrades. I actually think the timing is darn close to perfect for us on having made these investments.
Richard Barker: Greg, just to add to that, obviously, we are spending a lot of capital on the fleet right now. That will continue, if you will, through mid-next year. But obviously the earnings power that this kind of increases, or the increase in earnings power around our fleet is significant. So once you get to H2 of next year, the EBITDA and free cash flow runway, it is pretty significant. Maybe just to put normalized CapEx into focus here, what we said at the beginning of the year was that, quote, "Net CapEx would be in the high $300 million to $400 million range on a normalized basis." This would exclude the Claus Bachmann. We are seeing some inflationary pressure, so I think you should think about normalized CapEx for us in the high end of that range. So call it in that $400 million kind of area type context.
Richard Barker: Obviously, that excludes the Claus Bachmann. As you think about 2027, we probably have just over half of the Claus Bachmann CapEx to spend in 2027. So from a net CapEx perspective, I think hopefully that gives you some guidance here for 2027 and beyond.
Greg Lewis: Yeah, just as we think about that rig, that rig is starting up in March, so when it leaves for that maiden voyage, it is good to go. It is not going to go back in, right?
Richard Barker: Correct. That is right. Yes.
Greg Lewis: Okay. Then I did have one other question, Robert, this is for you. It has been interesting, clearly we have always seen rig pockets contracted, right? Obviously, you guys have the four rigs with Exxon in Guyana. You were able to get those two Shell rigs, this development work, we have been talking a lot about development drilling. But I guess my question is, at this point, as we look out over the next couple of years, and our understanding is there is still a couple opportunities for multi-rigs going with one customer in one region for development drilling. Are we at a point now with the fleet where we need to start maybe being a little more selective in some of the work we are doing simply because we want to be in the right place at the right time to potentially win some of these multi-rig tenders?
Robert Eifler: Well, there are multiple multi-rig development programs out there. I think that is one of the things that makes us so excited going into or exiting 2027, because as we think now, we have some clearer sight that those are going to come through. I think we have always been selective. We have really embraced efficiency and technology, as I mentioned, around the CapEx upgrades. Those really pay for themselves in development projects way more than anywhere else. So we have targeted and really wanted to be in some of these bigger development projects. I think we have done a good job with and had a fair amount of success there. That will not necessarily change for us, and there are some additional projects out there that are on the table for us. Nothing is done yet. But obviously pricing has moved, and will continue to move with whatever the market dictates.
Robert Eifler: Nothing is really changed about where we see our strengths as a company.
Greg Lewis: Okay. Super helpful. Thanks, and have a great day.
Robert Eifler: Thank you.
Operator: There are no further questions at this time. I would like to turn it back to Ian Macpherson for closing remarks.
Ian Macpherson: Thank you everyone for joining us today. We appreciate your interest in Noble, and we will look forward to speaking with you next quarter. Have a great day.
Operator: This concludes today's conference call. You may now disconnect.
