Offshore drilling contractor Noble Corporation reported a wider loss for the third quarter of 2026 as revenue and earnings declined, although approximately $560 million in new drilling contract awards boosted its backlog to $6.7 billion.

The company posted a net loss of $117 million, or $0.73 per diluted share, compared with a loss of $21 million, or $0.13 per share, in the same quarter last year. The result also marked a deterioration from the $37 million loss recorded in the second quarter of 2026.

Quarterly revenue fell to $729 million from $798 million a year earlier, while adjusted EBITDA declined to $201 million from $254 million. Adjusted earnings swung to a loss of $0.57 per share from a profit of $0.19 per share in the prior-year period.

Despite generating $60 million in operating income, Noble recorded a $133 million income tax provision that weighed heavily on its bottom line.

The company attributed part of the sequential decline in adjusted EBITDA to several drilling rigs moving between contracts, although operations successfully resumed on both of its rigs in Brazil.

Utilization across Noble’s 28 marketed rigs improved to 70% from 67% in the previous quarter.

Noble secured approximately $560 million in new contracts since its July fleet status update, adding around 44 months of floater backlog and 26 months of jackup backlog.

The awards cover offshore drilling operations across Africa, South America and the North Sea.

Among the major contracts, TotalEnergies awarded the Noble BlackRhino a four-well drilling program offshore Nigeria, expected to begin in the fourth quarter of 2026. Tullow also contracted the Noble Faye Kozack for five wells offshore Ghana, with operations scheduled to start in mid-2027.

In Norway, the Noble Interceptor secured a drilling assignment with DNO, followed by an approximately 670-day plugging and abandonment program for ConocoPhillips at the Ekofisk field.

Meanwhile, Occidental awarded the Noble Globetrotter I a two-well contract offshore Peru at a dayrate of $400,000. The rig is subsequently expected to undertake well intervention work for TotalEnergies in West Africa under a three-year capacity reservation agreement.

Recent contract awards indicate firmer pricing in parts of the offshore drilling market, with leading-edge dayrates for top-tier drillships ranging from the mid-$400,000s to $500,000. Ultra-harsh-environment jackup rates ranged between $230,000 and $300,000.

Noble expects its contracted fleet capacity in the second half of 2027 to be approximately 20% higher than in the first half, positioning the company for improved utilization and cash generation.

Noble narrowed its full-year 2026 revenue forecast to $2.85 billion–$2.90 billion, compared with its previous range of $2.80 billion–$2.90 billion.

Its adjusted EBITDA guidance was tightened to $850 million–$900 million from $850 million–$925 million.

However, the company raised its capital expenditure outlook to $680 million–$705 million, primarily reflecting higher customer-reimbursable spending.

Third-quarter operating cash flow totaled $144 million, while capital expenditures reached $192 million, resulting in negative free cash flow of approximately $48 million.

Noble ended September with $337 million in cash and approximately $1.9 billion in debt principal.

Despite the quarterly loss and negative free cash flow, the company maintained its quarterly dividend of $0.50 per share, payable in December.

Looking ahead, Noble expects improving contract coverage and offshore rig utilization to support a meaningful recovery in cash flow beginning in the second half of 2027, although management acknowledged that higher oil prices have so far provided limited additional momentum to offshore drilling demand.

freestar.config.enabled_slots.push({ placementName: “oilprice_medrec_incontent”, slotId: “oilprice_medrec_incontent” });

This post appeared first on https://oilprice.com