Noble Reports First Quarter 2004 Results



Noble Corporation (NYSE: NE) reported net income for the first quarter of 2004 of $28.3 million, or $0.21 per diluted share, on operating revenues of $245.4 million, compared to net income of $39.4 million, or $0.30 per diluted share, on operating revenues of $245.0 million for the first quarter of 2003. At March 31, 2004, the Company's consolidated balance sheet reflected $2.24 billion in shareholders' equity, $272.1 million in cash and marketable debt securities, and $570.7 million in total debt. Net cash provided by operating activities for the three month period ended March 31, 2004 was $61.6 million. James C. Day, Chairman and Chief Executive Officer, said, "As anticipated, even with strong product pricing, the U.S. Gulf shelf and West Africa markets have been slow to recover."

Offshore contract drilling services revenues from deepwater drilling units (capable of drilling in 4,000 feet or greater) accounted for approximately 34 percent and 36 percent of the Company's total offshore contract drilling services revenues for the first quarter of 2004 and 2003, respectively. The Company currently operates seven deepwater semisubmersibles in the Gulf of Mexico and one deepwater semisubmersible and three deepwater drillships offshore Brazil. Offshore contract drilling services revenues from international sources accounted for approximately 70 percent and 74 percent of the Company's total offshore contract drilling services revenues for the first quarter of 2004 and 2003, respectively.

The average dayrate for the Company's international rigs was $52,713 in the first quarter of 2004 compared to $56,444 in the first quarter of 2003. Utilization on these rigs decreased from 90 percent in the first quarter of 2003 to 80 percent in the first quarter of 2004. Results for the first quarter of 2004 were adversely impacted by continued weak market conditions in West Africa and maintenance projects on the Company's drillships in Brazil. These items were partially offset by solid performance in Mexico and the Middle East. Operating days for the Company's six jackups in West Africa decreased by 236 days from the first quarter of 2003 as only two units operated during the first quarter of 2004. However, one of the stacked jackups commenced a two-year contract on April 1, 2004, and the Company is actively marketing the remaining units. One of the Company's three drillships in Brazil was stacked for all of the first quarter 2004. Due to this inactivity, the Company is currently performing regulatory maintenance and upgrades to the unit, scheduled to be completed during the third quarter of 2004. During the first quarter of 2004, the Company performed a combined 66 days of maintenance on its two remaining drillships.

In the Middle East, the Company experienced an increase of 180 operating days from the first quarter of 2003, primarily due to the acquisition of the Noble Charlie Yester and Noble Gene House jackups in September 2003 and July 2003, respectively. In Mexico, the Company experienced an increase of 275 operating days due to the Company's mobilization of three jackup rigs to Mexico from the U.S. Gulf of Mexico since the beginning of the first quarter of 2003. Since September 2002, the Company has mobilized a total of seven jackups from the U.S. Gulf of Mexico to Mexico for long-term contracts with Petroleos Mexicanos.

The average dayrate on our deepwater assets in the U.S. Gulf of Mexico capable of drilling in 6,000 feet or greater decreased three percent to $110,322 in the first quarter of 2004, while utilization increased to 100 percent this quarter from 86 percent in the first quarter of 2003. The average dayrate on the Company's domestic jackup rigs was $41,292 in the first quarter of 2004, or 45 percent higher than the same quarter of 2003. Utilization on these units increased to 95 percent as compared to 79 percent in the first quarter of 2003. However, the Company had 177 fewer operating days for domestic jackup rigs during the first quarter of 2004 as compared to the same quarter of 2003 following the mobilization of the three jackups out of this region to Mexico since the beginning of 2003. Our eight premium jackups in Mexico had an average dayrate in the first quarter of 2004 of $51,342, or 24 percent higher than the average dayrate of our two premium jackups in the U.S. Gulf of Mexico, with 100 percent utilization.

The increase in the Company's operating costs and expenses in the first quarter of 2004 as compared to the same quarter in 2003 was attributable primarily to the addition of four operating rigs since the beginning of 2003. The Noble Charlie Yester commenced a three-year contract in India at the end of 2003. The Noble Gene House is currently operating in the Middle East. The Company activated the Noble Lorris Bouzigard and Noble Therald Martin semisubmersibles in March 2003 and November 2003, respectively. The Company is currently marketing these two units in the U.S. Gulf of Mexico and certain international markets.

Day said, "While we believe the drilling markets overall will be highly volatile over the near term, the trend in activity should be positive."
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