Noble Service Company Third Quarter 2026 Earnings Call and Webcast - NOBLE CORP PLC

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 third quarter 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 one on your telephone keypad if you would like to withdraw your question press star one again please remember to keep your questions to one question one follow-up please thank you i would now like to turn the call over to ian mcpherson please go ahead thank you operator and welcome everyone to noble corporations third quarter 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. 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 10Q 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. Thanks, Ian. Welcome, everyone, and thank you for joining us. I'll open today's call with a brief summary of our third quarter 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 the third quarter, we earned adjusted EBITDA of $201 million with free cash flow of negative $48 million. We again distributed our 50 cent quarterly dividend. And yesterday, our board declared a $0.50 per share dividend for the fourth quarter, 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 Black Rhino, Discoverer, Venturer, and Globetrotter 1, each of which had fewer days on contract in Q3 compared to Q2. These were partially offset by the resumed operation of our two rigs in Brazil in July, as well as the Jerry D'Souza's contract startup in August. Additionally, the Voyager commenced its four-year contract with Shell in the U.S. 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 Voyageur. Next, in our major project startup 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 Total and Suriname. Over the past three months, we have secured new contract awards totaling approximately $560 million. dollars first the noble black rhino has been awarded a four-well contract with total energies in nigeria expected to commence within the next few weeks this program has an estimated duration of 150 days and includes options for up to six additional wells next i'm pleased to announce that the noble faye kozak was awarded a five-well contact with tallow in ghana scheduled to commence in mid-2027 with an estimated duration of approximately 250 days. Also, the sixth generation drill ship Noble Globetrotter 1 has been awarded a contract with Total Energies 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 RIGA 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. Continuing with frontier exploration in South America, the Noble Black Hawk has been awarded a one-well contract with Apache in Uruguay that's 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 NPD or any other additional services. As the Black Hawk is winding down its current work in the U.S. 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's expected to commence in mid-2027 with an estimated duration of 50 to 90 days. Upon completion of this campaign, the rig is scheduled to commence its P&A program with of Tonico Phillips at the Echo Fisk Field in the third quarter of 2027 with an estimated duration of 670 days. And finally, the Noble Intrepid was awarded a one-wall contract with Orlin that is expected to commence in Q3, 2027 with the estimated duration of 40 to 60 days. With these awards, our current backlog stands at $6.7 billion. Now, zooming out for a moment to the broader market, recent trends across both the deep water and harsh environment sectors are continuing to gain nice momentum deep water 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 pictures confirming day rate recovery for high-end drill ships 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%. percent 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've 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 this creates a fulcrum for the active rig count to potentially expand over the next few quarters as additional contracts are executed so the deep water market is firming up consistent with what we've been anticipating for a while now and this is despite the fact that we really haven't seen any real demand response so far this year resulting from higher commodity prices on the contrary the u.s 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. However, the departure of a few drill ships 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 recount dip from the high teens down to the mid-teens and now back up to the high teams with strengthening norway day rates accompanying the migration of capacity back in to that region and speaking of norway i would further add that the Norwegian jacked-up market is also developing into a bright spot for Noble. With our recent contract awards, we now have four of our five CJ70 jacked ups contracted in Norway for the first time, which is very promising improvement with leading-edge day rates ranging between $230,000 to $300,000, depending on work mode and contract duration. Currently, the Noble Innovator, the older unit among our five CJ70s, remains uncontracted, but we're optimistic about contracting that rig fairly soon in the southern North Sea, where day rates are structurally lower. But nonetheless, this gives us a clear shot at approaching effectively full utilization for our jackups in 2027. Now, I'll pass the call over to Richard for the financial review. Thank you, Robert, and good morning or good afternoon all. In my prepared remarks today, I will briefly review the highlights of our third quarter and then discuss the outlook for the fourth quarter of 2026. Starting with our quarterly results, total revenue for the third quarter totaled $684 million, adjusted EBITDA was $201 million, and adjusted EBIDDA margin was 28%. Q3 cash flow from operations was $144 million, capital expenditures were $192 million and free cash flow was negative $48 million. On October 9th, the sale of the Noble Resolve was finalized with the company receiving the remaining $45 million of proceeds. Further, the sales of the Nobel Globetrotter 2 is expected to close in the fourth quarter of 2026 for a purchase price of $38 million. Summarized on page 5 of the earnings presentation slides, our total backlog as of October 26 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 and 2.9 billion, compared with 2.8 and 2 .9 billion previously, and adjusted EBITDA to between 850 and 900 million, compared with 850 million and 925 million previously, as we expect Q4 to be slightly lower compared to Q3. Revenue is 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 to $705 million, compared with $615 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 reimbursedables, our capital expenditures guidance would have otherwise remained within the prior range. Looking ahead, while we plan to provide formal guidance for 2027 or next quarter's earnings call, I would like to share the following directional indicators. In the first quarter of 2027, adjusted EBITDA is expected to be broadly similar to Q4 2026. We then expect adjusted EBIDDA 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 second half of the year compared to the first half. This is a noteworthy contrast with recent years in terms of the general slope of our contract coverage for the following year. And as Robert referenced, there were several opportunities we were 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'll now pass it back to Robert for concluding remarks. Thanks, Richard. To wrap up, we're 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. And specifically, based on the robust portfolio of contract opportunities in front of us today, 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. 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. The backlog that we've 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 second half of 2027 versus the first half of the year. And 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. And 24 months ago, when we were in the relatively early days of the emerging downdraft in the market, our contract coverage in the second half 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. And with that as a launch point, we're increasingly excited about the opportunities set in front of us. Operator, we're ready to go to questions. 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 Aaron Gyrum from J.P. Morgan. Please go ahead. hey robert and team i was wondering if you could you know comment a little bit on you know kind of changes you've seen in the overall market uh since last quarter and you gave your semi-annual review of rig demand you know we have noted that the contracted a rig count um has moved up by about five rigs i think last quarter about 104 and now you're at at 109 so so maybe just comment on what you're seeing that's evolved over the last, call it, 90 days and maybe add a little bit of regional color as well. Appreciate that. Sure, Ray. Good morning and thanks for the question. Yeah, you know, we noted in the prepared remarks that we were in a bit of a doldrum over the summer months on fixtures and you've referenced those that are known where we're up a handful of rigs on total demand rig count. What I would say is, beyond that, we see now, I think, two to three opportunities in the U.S. 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're feeling very good about demand emerging in India. So if you recall, there was some excitement there, and then some tenders were postponed. And since that time, it appears obvious to us that that, I don't know, anywhere from two, but probably something closer to four good drill ships are going to be needed in India starting in late 27 and 28. I think those are probably the most bullish changes that we've seen in the last nine days are U.S. and India. Great. And my follow-up, Robert, we're still in the early innings of kind of the OFS earnings season, But one of the themes that SLB highlighted on their call is just this renewed interest in exploration. And we did note in your updated fleet status report some opportunities in Peru and Uruguay. So I was wondering if you could just comment on general trends you're seeing in exploration over the next 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 expiration opportunities that tend to be a couple wells here or there? Yeah. So I think if you just walk back through just a tiny history of expiration, I think it was around three years ago where we started seeing our customers start to talk a little Bitmore about reserve replacement. And 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, I guess, public commitments by our customers in 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 wildcat exploration, which I think is where you really want to be looking right now. And so I would agree completely with what SLB said. The only thing I would say is in terms of what has hit our business, you've seen a couple of your reference on our fleet status. It's not a needle mover, I don't think, for our business from where we sit today. We're 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 expiration in 2027. And then you asked about development. And this cycle's been, I don't know if it's been reversed, but most of what's driven the demand heretofore has been development projects. So it's like a lot of things that had been delayed in years past are now starting up. That's what's driving, I think, the global uptick that we see in late and have referenced in late 27. And so it included in a lot that I think the exploration we've seen over the last couple of years has all been infield exploration. and so we watch that closely the percentage of our wells that's in field exploration has stayed relatively flat over the last few years and so we're like you really watching some more wildcat type exploration closely and we're hopeful that that starts to define the next phase in this uptick that we've been calling for here but I think 27 is when we might get a little bit more clarity there Thanks a lot Your next question comes from the line of Frederik Steen with Clarkson Securities. Please go ahead. 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. But I wanted to, you know, with race 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're now in for a short term contract towards the the part of 2027. Feel free to give specifics, but if you were to take a portfolio view of maybe the drill ships in particular that have open capacity, what kind of utilization should be expected in those areas which are now, at least for now, uncovered? Thanks. yeah thanks so the all three of the well all of the rigs are competing and well they're competing in slightly different markets uh the viking um i think you know it's very likely to stay in southeast asia we have a number of opportunities um uh for for that rig uh that would close some of the gap before its long-term contract so you know i think it could perhaps get up to in the 50 type range uh on utilization uh next year but you know it's the fleet status shows we need to win some work uh there um and then i would lump the other rigs probably into more of a similar group so i mentioned on the prepared remarks that we do have some work for the black hawk that we're Hopeful comes through prior to its transit down to Uruguay. And then there's a fair amount of work following that. And so we think between the hawk and the black rhino that there are a lot of opportunities towards the end of 27 and 28, most of which are for the long term. So we're pretty We're pretty comfortable that we're going to fill in some white space on those rigs. The Stanley LaFosse has work potential both in the U.S. and then outside the U。S. And I guess what I would say there is if it were to go outside the O.S., that's more likely to go back to work in late 27, early 28, that kind of time frame. All right, that's very helpful. And then as a follow-up, or three or two questions, if I'm completely honest. The first one is, with rates being higher for the deepwater market at the moment, what kind of delta should we expect for the Guiana rigs in terms of repricing and the mechanism that's at play there? I think it's being discussed, is it every September and March or something? And how will that tie into your financials next year and 28 for that matter? And second, are you able to provide some guidance on how the agreement on the Globetrotter 1 works? This is more of a call-out arrangement with minimum utilization rather than a regular day-to-day contract. Thanks. Yes. Yes. So on the CEA, I guess I'd kind of say what we always say, which is it tracks the market extremely well. We set the latest rate about a month ago that it'll start next year because we had one rate through all of 26 and then we have a rate that'll start in late 27. And, you know, 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. And that'll be a six-month rate starting in January 1st. And we just adjusted the timing on that this year. So we had one rate for all this year, and then the next six- month rate starts January 1. It's just easier for everybody. um uh over to the globetrotter one uh putting aside its its exploration drilling well the intervention project is three years long it has a minimum of 150 days per year included in that and then it's as most people listening probably know the intervention market is just a little bit different than the drilling market it's planned on a much much shorter uh cycle and it's more of i'd call we call it call out work which um compared to our drilling work it is effectively call outwork and so the way i would think about that program is that it's roughly kind of break even at the minimum number of days per year and then 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 kind of be that hybrid where it does intervention work, but can also head to run to some drilling wells where needed, as we've seen. And 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's not going to be a real needle mover for us from a free cash flow generation perspective. All right. I appreciate all the color. That's what I had today. Thank you very much. Your next question comes from the line of Scott Gruber with Citigroup. Please go ahead. Yes, good morning. I just wanted to follow up on the last line of questions. So, you know, I'm a globetrotter. As you kind of cycle between kind of working and not working, can you help us on the cost side of things? You know, how should we think about costs while working and not working and how you think about kind of managing those costs through the kind of on-off schedule? Yeah. So, not working we can get the costs well down, Call it to about 50% of what a tier one drill ship might cost. And while it's working, it's only slightly higher than that. Call it 60% of a working drill ship in that range. That's an intervention mode. And so when I mentioned that sort of cash flow breakeven to moderately better than that, that's assuming that full intervention cost load all the way through. So that's about 60% of the cost of a working Tier 1 roof. Gotcha. Gotcha. And do you have much insight, you know, today in terms of, you know, the uptime extending beyond the 150 kind of days annual commitment? We don't right now. I mean, we're hopeful that we can, I think, 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 kind of around 300 days. And then an average would probably be halfway between 150 and 300. So, you know, just over 200, low 200s per day. I mean, for years. Okay. Yeah. If I could just squeeze in one more, too. You know, on the Guyanese rates, those are measured against market rates, not stock, correct? And does the measuring stick a global market rate or more regionalized to Latin America or the Americas in total? It's a global market rate for a tier one drill ship. Gotcha. For realized, right, not spot? Yeah, so what, yes, it is. It's, the way I would say it works in practice, which I love the way this is set up, is because it's negotiated each round. And so 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 kind of all gets thrown out on the table and negotiated. It's not just a formulaic average of an Excel sheet's printout. And frankly, that's why I think it tracks the market so well. Yep. Gotcha. I appreciate that. I'll turn it back. Thank you. Thanks. Our next question comes from the line of Keith Begman with Pickering Energy Partners. Please go ahead. Hey, good morning, and thanks for taking my question. 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. I mean, are you seeing some of the smaller independent drillers in the Gulf worry about a lack of rig supply? And in the next years, we see, you know, potentially several longer-term programs in West Africa and Southeast Asia. And in that case, I mean 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. What I would say is it is becoming increasingly obvious that supply could be an issue. I think to our customers broadly, whether they're small or large, whether someone has brought a program forward out of that, I wish I could say yes, but I'm not sure that we've actually seen that. Okay. Thank you. And then my second question is just around, I mean, how are customers thinking about contract duration today? You know, we've seen day rates continue to tick up here a little bit here over the last couple months. You know are they looking to lock stuff up for potentially prices to rise further or are they, you know, potentially pushing stuff off right now thinking hopefully day rates come back down? Just maybe recent customer conversations around that. yeah i would say uh just tracking over the last 90 days that urgency has gone up not down but i would also say that we're we're far from a market where there's legitimate concern about not being able to drill a program because of because of supply so whatever kind of middle ground that is. I think we're starting to hear more comments about how it's looking pretty tight going into 2028. The deep water market's looking really tight. But we're still a ways away from the urgency we've seen in certain past cycles where it's really driving duration decisions. I think duration decisions are still largely driven by need. okay perfect that's really helpful i really appreciate it i'll turn it back thanks guys your next question comes from the line of eddie cam with barclays please go ahead hi good morning um so you mentioned that the deep water 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've 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? And if that's the case, what do you think is the main reason that customers are sort of holding back at this point? Yeah, it's – and you're breaking up a little bit, but so why are the higher commodity prices from this year not driving activity, we cast it as a positive because just because obviously more cash flow for our customers is good for us. We really haven't seen very much increase. We haven't seen, I don't think we've seen any demand that's arisen from this. And, you know, I think it's because, A, discipline has ruled our customers for this entire cycle, up cycle, mid cycle, wherever we are right now, and that's not going to change. And so there's additional cash flow right now which is good. It's not translating into drilling just yet, which obviously we wish it had. I think we remain hopeful that in 27 we'll see some additional exploration work. We mentioned that earlier. And then 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. So I think there's an understanding that the current oil price could go right back down almost overnight, given the geopolitical drivers and everything that's out there. And so people aren't really willing to make long-term decisions off of it right now. We've 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's bumped up a little bit, but it has been a lot less volatile than near-term pricing all the way through all of this. And so I think we've just seen our customers maintain a disciplined and steady posture towards deepwater drilling. It's positive. I think any of our customers would say that they have a belief that deepwater is going to gain market share here through time, but it's not being strongly affected by the events of this year. Okay. Got it. Understood. Thanks for that, Culler. My follow-up was just on your commentary on leading edge day rates on recent contracts for Tier 1 drill ships now in the mid-400s and close to 500,000 a day, which is evident from the recent contracting we've seen. I mean, it wasn't too long ago when we were in the low 400s, so just curious if sort of 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 sort of in line with your expectations based on the demand outlook that you had seen. yeah so i think there's two things going on the answer is no it's not not surprising uh back in 21 and 22 that kind of time frame we saw rates move at least as fast i would argue actually on a percentage basis much faster so it happens so i Think there's a couple things going on one. We are plus five-ish units here recently. The marketed utilization is up to like 99%. So probably working utilization matters a little bit more for total pricing. So I think you'd see an even a much bigger move if working utilization, 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. But nonetheless, people can see out and see what we see, which is not only 99% market utilization, but a working rig count at late 27 that's roughly equal to where we are today, maybe slightly up from where we're at today, which means every incremental contract that's signed for late 27 adds to the working rig account. And so, you know, people see what we see, and the market's pricing accordingly. I think it makes sense. Thank you. I'll turn it back. Your next question comes from the line of Jeff LeBlanc with TPH Research. Please go ahead. Good morning, Robert and team. Thank you for taking my question. I wanted to see on the jackups, Is the expectation that the Ford Jacob should remain in Norway moving forward, or should we still expect some move between the two sides of the market? Yeah, I think we're finally, for the first time in years, hopeful that the four newest CJ-70s are going to stay in Norway. Okay. And then the secondary question is, on the Global Globetrotter 2, excuse me, is the expectation that that drill ship will remain in the global marketed fleet once the sale completes, or will it be removed? This is the GT2. No, it's coming out of the drilling fleet. Thank you very much. I'll hand the call back to the operator. Thanks, Joe. Your next question comes from the line of Noel Parks with Kiwi Brothers. Please go ahead. Hi. Good morning. It was really interesting to hear what you've seen as far as continued support for exploration out there in the marketplace, and I guess that makes me think a bit more about maybe pivoting back to talking about the development side. So, of course, products are generally economic at far below the current prices we're seeing. But I'm just wondering, are you detecting any greater confidence among producers, maybe reflected in their budgeting for 2027 into to 2028, where perhaps the industry is taking the Iran war supply disruptions considerably more seriously than certainly the markets have. So I just wonder if you sense a little bit more urgency on the development side. Yeah, I got to say, we have, 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 like thinking about drilling rigs. But we have seen remarkably little change in the stance of our customers, and they continue, by our observation, they continue to use very conservative break-even oil price assumptions, and they continue to be extremely disciplined. I think we're thinking about the future as if that does not change, and I'm fond of saying that. We're fans of efficiency because the deep water is drilling itself into work as it gets more efficient. But we very much see the future of deep water working because barrels are profitable at that kind of 60s and 70s range and really below that for break-even. 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 haven't changed our stance on that at all now. Great. Thanks a lot. Your next question comes from the line of Greg Lewis with BTIG. Please go ahead. Hey, thank you, and good morning, everybody, and thanks for squeezing me in here. You know, Robert, you provided a lot of color in the market. I was hoping to kind of 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 kind of a couple questions around here, but coming off of the down cycle, as you look at your fleet today, is it kind of where it needs to be for the next couple years of the up cycle? I get we're upgrading the Great White, the Kloss rig, but like other rigs, right, as we think about where they are, could we be thinking about, hey, you know what, this rig needs this upgrade, this ring needs that upgrade, or could we actually see kind of a move lower in CapEx as we look out over the next couple of years? yeah how about this let me explain a little bit around the types of of uh upgrades we've made and then i'll hand it to richard and he can give you a little um kind of i guess uh history of our of our capex and how it's fit into this cycle um so everything we've done the class bachman we fundamentally changed the the marketability of that rig by making it norway compliant so i think i think that's baked in now that rig is worth substantially more because if it's or increased earnings power because of the upgrades that we're performing on that rig right now. So that's been, you know, that rig is capable of working in Norway. It will go to Norway, and it's a great place for the rig. We're very, very proud to be supported by our customer in moving that rig into that region. Everything else falls into kind of a different bucket, which would be a range of, obviously, maintenance capex over to some more specific upgrades. But I am extremely pleased with where we're going to sit by the end of 2027 on all of our Tier 1 drill ships. Every single one of those will have NPD. We will have two 2.8-million-pound derricks that are highly competitive in the U.S. Gulf. We have added crown mana compensators where needed, and already a majority of our fleet has larger thrusters that allow them to work, but effectively anywhere around the globe, there are a lot of drill ships out there that actually can't work in some of the emerging markets. So it's obviously coming at a cost right now in 26 and in early 27, but we are so well set up with the quality of our fleet going into late 27 and 28. These are life of asset upgrades, and I actually think the timing is darn close to perfect for us on having made these investments. And, Greg, just to add to that, obviously we're spending a lot of capital on the fleet right now. That will continue, if you will, through, you know, kind of mid-next year. But obviously the earnings power that this kind of increases or the increase in earnings power around that fleet is significant. So once you get to kind of second half of next year, you know, the EBITDA and free cash flow run rates are pretty significant. Maybe just to put kind of normalized capex into focus here, what we said at the beginning of the year was that, I quote, net capex would be in the high 300s to kind of 400 range on a normalized basis. This would exclude the Klaus Bachmann. You know, we are seeing some inflationary pressure. So I think you should think about normalized capex for us in the higher end of that range. So call it in that kind of $400 million kind of area type context. Obviously, that excludes the Klauss-Bachmann. And as you think about 2027, we probably have just over half of the Klaus Bachmann CapEx to spend in 2027. So from a kind of a net CapEx perspective, I think hopefully that gives you some guidance here for kind of 27 and beyond. Yeah. And just so as we think about that rig, that rig's starting up in March. So when it leaves for that maiden voyage, it's good to go. It's not going to go back in, right correct that is right yes okay and and then i did have one other question just you know robert this is is for you just it's been interesting i mean clearly we've always seen um you know rig rig pockets contracted right obviously you guys have the four rigs that with with exxon and guiana um you Know you were able to get those two shell rigs um you Now this development work We've been talking a lot about development drilling, but I guess my question is, at this point, as we look out over the next couple 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're doing simply because we want to be in the right place at the right time to potentially win some of these multi-rig tenders? Yeah, so there are multiple multi-rigg development programs out there, and I think that's one of the things that makes us so excited going into exiting 27, 27, because we think now we have some clearer sight that those are going to come through. I think we've always been selective. We have, you know, really embraced efficiency and technology, as I mentioned, around the CapEx upgrades. And those really pay for themselves in development projects way more than anywhere else. And so we've targeted and really wanted to be in some of these bigger development projects. I think we've done a good job and had a fair amount of success there. That won't necessarily change for us, and there are some additional projects out there that are on the table for us. Nothing's done yet. but obviously pricing has moved and will continue to move with whatever the market dictates but nothing's really changed about where we see our strengths as a company. Okay, super helpful. Thanks and have a great day. Thank you. There are no further questions at this time. I would like to turn it back to Ian McPherson for closing remarks. 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 this concludes today's conference call you may now disconnect