Discussion Reply

The strategic analysis of Noble Corporation plc began amidst the emergence of the COVID 19

pandemic. The vast majority of the research put into this project does not consider the current

effects of the pandemic on the world economy nor that of the oil and gas market globally.

Having worked for Noble Corporation from 1998 to 2002 when first joining the workforce out of

college, many were privileged to be given access to some of the industry's most emergent

technology, liberal workforce, and financially flexible projects.

Reviewing what the company has accomplished, what the company has endured, and what the

company now faces, it is not very easy to predict if there is any real opportunity remaining.

When Noble was reliable, and leading industry innovation in the late 1990s, employee stock

options were close to $10 per share and would split on the stock market annually. Before the

real estate market crash of 2008, Noble Corporation stock was near $65 per share; as of the

submission of the project, the company is now worth $0.26 per share. The analysis and

discussion to follow is based on the 2018-year end annual report released in February of 2019

and does not take into effect the current pandemic and worldwide economic recession.

However, for the sake of contrast, it must be noted that Noble should draw what's left of

the company's credit and start negotiations with creditors because the company needs a

comprehensive restructuring. Noble cannot carry the weight of its massive debt in current

conditions, and the company will suffer massive cash burn going forward if it does not eliminate

the debt load and the corresponding interest payments. Chances for common equity survival in

the current economic environment are almost non-existent. Investment in Noble for the

long-term is unrealistic, due to the specific weakness of the offshore drilling industry and the

potential risk of the company forced to restructure under chapter 11. The fourth quarter 2019

backlog of $1.5 billion, will remain high into the second quarter of 2020 due to the lack of any

period of stability. The real issue is the debt load, and if Noble can avoid a restructuring, either

of these factors is hard to ignore given historically low and dropping oil pricing, conflicts with

OPEC and between Russia and Saudi Arabia, and most significantly, the global pandemic. The

current state of the corporation affected by the pandemic and the resulting global recession is

discussed in the latter part of this paper.