Noble Corp. to Set Up New Offshore Drilling Company

Noble Corporation announced today that its Board of Directors has approved a plan to separate a business comprised of many of its standard specification drilling units, resulting in the creation of two separate and highly focused offshore drilling companies.

The drilling units that would be owned and operated by the new company comprise most of the standard specification drilling units in the Noble fleet, including five drillships, three semisubmersibles, 34 jackups, two submersibles, and one FPSO. The new company would also be responsible for the Hibernia platform operations. Noble will continue to own and operate its high-specification assets with particular operating focus in deepwater and ultra-deepwater markets for drillships and semisubmersibles and harsh environment and high-specification markets for jackups.

The plan approved by the Board of Directors involves the separation of the standard specification business through the distribution of the shares of the new company to Noble shareholders in a spin-off that would be tax-free to shareholders. Subject to business, market, regulatory and other considerations, the separation may be preceded by an initial public offering of up to 20 percent of the shares of the new company. Consummation of the transaction is contingent upon the receipt of a tax ruling from the IRS, which Noble expects to receive soon. If Noble proceeds with the IPO as part of the spin-off, Noble expects that the new company would file a registration statement for the IPO with the U.S. Securities and Exchange Commission in late 2013 or early 2014. The transaction is also subject to the approval of Noble’s shareholders, which the company anticipates seeking in the second quarter of 2014. Noble anticipates that the spin-off would be completed by the end of 2014. Noble expects that the new company would use the net proceeds from borrowings by the new company (and the IPO if undertaken) to repay to Noble the debt the new company would incur to Noble in order to acquire the standard specification business and assets from Noble. Noble expects that, in turn, it would use such proceeds to repay outstanding indebtedness of Noble and its subsidiaries.

The purpose of the separation is to:

*Separate Noble’s existing rig fleet into high specification and deepwater and ultra-deepwater assets, which will remain with Noble, and many standard specification assets, which will comprise the new company’s fleet, as set forth in the attachment to this release;
*allow each company to have a more focused business and operational strategy;
*enhance each company’s growth potential and overall valuation of its assets;
*provide each company with a greater ability to make business and operational decisions in the best interests of its particular business and to allocate capital and corporate resources with a focus on achieving its strategic priorities;
*better utilize the professionalism and skills of Noble’s team and culture to deliver excellent service, safety and operational integrity to its customers;
**improve each company’s ability to attract and retain individuals with the appropriate skill sets as well as to better align compensation and incentives with the performance of these different businesses; and
allow the financial markets and investors to evaluate each company more effectively.
David W. Williams, who will remain as Chairman, President and Chief Executive Officer of Noble, said, “The purpose of the separation is for Noble to move forward with our development as a robust high specification and deepwater drilling company through continued execution of newbuilds and fleet enhancements. By separating these two businesses, we believe each company will be able to better leverage the overall value of its fleet by focusing on the drivers of its particular business.”

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Press Release, September 25, 2013