Noble Corp plc (NE) stock intrinsic value fair value estimate & owner earnings analysis

Noble Corporation plc owns and operates a global fleet of offshore drilling rigs (deepwater floaters and shallow-water jackups) that it rents, with crews, to oil companies. Revenue was $3.29 billion in 2025, with the largest markets the U.S. Gulf of Mexico ($890M), Guyana ($648M, mostly work for the Stabroek block operator), Norway ($311M) and Brazil ($266M). Contracted backlog at year-end 2025 was $7.0 billion, but it steps down quickly: about $2.5B is scheduled for 2026, $2.0B for 2027, $1.5B for 2028, $0.6B for 2029 and under $0.25B after that. Only 57% of 2026 rig-days were contracted when the year began. How we measured earnings. We start from operating cash flow, remove swings in working capital, subtract stock compensation as a real cost, and subtract capital spending needed to keep the fleet running. Because the company's spending has been roughly equal to depreciation ($520M of capex against $585M of depreciation in 2025), and because revenue growth in 2022 to 2024 came mostly from mergers, we treated nearly all capex as upkeep. Cash interest is then added back so the business can be valued before its lenders and the debt subtracted separately. On this basis the business produced about $1.57 per share in 2022, $2.89 in 2023, $2.30 in 2024 and $3.67 in 2025. Only 2023-2025 describe the current company (the Maersk Drilling merger closed in late 2022 and Diamond Offshore in September 2024), and we used the middle of that range, about $2.9, as the reference point. Non-cash items such as $82.7M of 2025 asset impairments were added back as sunk costs; the amortization of acquired contract liabilities is a non-cash income item that fades over time and is already reflected in our cash-based figures. Why the base case starts below that reference. 2025 per-share business cash flow grew about 60% over 2024, but first-half 2026 operating cash flow was $417M versus $487M a year earlier, revenue was down 13% ($1.51B versus $1.72B), and the second quarter of 2026 showed a net loss of $37M. Capital spending guidance for 2026 is $590-640M (up from $520M) because of upgrades required by newly signed contracts. Given two consecutive weaker quarters and a backlog that falls each year, we start 2026 at about $2.40 per share of pre-interest cash flow (about 35% below 2025) rather than crediting a repeat of 2025. Base case (about $19.70 per share). Business cash flow of about $2.40 per share, flat for ten years. The rigs are owned, spending roughly equals depreciation, and the predecessors (Noble, Maersk Drilling, Diamond) have kept rigs employed through past downturns, so we let the fleet keep earning after year ten but fade that stream by 5% per year because rigs age and cost far more to replace than their depreciation. Business value is about $29.2 per share. Debt and other claims: $1.89B of borrowings at June 30, 2026 (8.0% notes due April 2030 and other notes refinanced in 2026, with $800M issued and $850M repaid in the first half), plus roughly $75M because much of the debt costs more than 6%, less excess cash and $150M of seller notes from the January 2026 sale of six jackup rigs, leaves net debt of about $1.5B, or $9.5 per share. Value to shareholders is about $19.70. Bear case (about $5.00 per share). Backlog runs out faster than it is replaced: contracted revenue falls to $1.5B in 2028 and $0.6B in 2029, and rigs roll to lower dayrates, as happened in the 2021 trough when the three merged fleets earned about $2.5B of combined revenue. Guyana alone is 20% of revenue, so a single customer's program timing matters. Business cash flow falls to about $1.40 in 2027 and $1.20 thereafter. Refinancing the 2030 maturities then costs 9-10%, which adds about $245M to the debt. Business value is about $15.6 per share against about $10.6 of net debt. Cash flow of roughly $190M still covers roughly $150M of yearly interest, but only just, leaving little for shareholders. Bull case (about $30.10 per share). Dayrates hold near 2025 levels as backlog rolls forward, with business cash flow of about $3.30 per share from 2027, still below the $3.67 achieved in 2025, and slightly above-6% debt costs. Business value is about $39.3 per share against about $9.2 of net debt. What we left out. We gave no credit for dayrate recovery, new rig contracts not yet signed, cost savings from the Diamond integration beyond what is already in results, or a lower interest bill. Growth that depends on the market improving is not counted. What could make this wrong. Upside: sustaining capital was only $296M in 2025 (the rest was major projects and rebillable contract work), so if the fleet needs less than we deducted, cash flow is higher. Downside: the second-quarter 2026 loss could be the start of a steeper dayrate decline than our base assumes, and roughly $1.9B of debt, most maturing in 2030, leaves little room. One item we could not fully reconcile from the filings: the composition of the $1.89B debt after the 2026 refinancing, since the interim report text was not available; we used the balance sheet total and the rates disclosed for the 2025 notes.