Property and Equipment

9 Months Ended

Sep. 30, 2021

Property, Plant and Equipment [Abstract]

Property and Equipment

Note 7— Property and Equipment

Property and equipment, at cost consisted of the following:

	Successor		Predecessor
	September 30, 2021		December 31, 2020
Drilling equipment and facilities	$	1,396,570	$	4,476,960
Construction in progress	110,972		99,812
Other	11,121		200,925
Property and equipment, at cost	$	1,518,663	$	4,777,697

During the period from February 6 through September 30, 2021 and the period from January 1 through February 5, 2021, we recognized no impairment charges to our long-lived assets. During the nine months ended September 30, 2020, we recognized a non-cash loss on impairment of $1.1 billion, related to our long-lived assets. See “Note 11— Loss on Impairment” for additional information.

In preparation for Hurricane Ida in the US Gulf of Mexico, the Noble Globetrotter II successfully secured the well it was drilling and detached from the blowout preventer without incident. However, during transit, the lower marine riser package, which is a series of controls that sits above the blowout preventer, and a number of riser joints separated from the rig, and certain other damage occurred. Due to the environmental conditions, a number of crew members were treated for minor injuries and released from medical care. The Company has given force majeure notice to the customer of the Noble Globetrotter II in accordance with the governing drilling services contract. The Company has insurance coverage for property damage to rigs due to named storms in the US Gulf of Mexico with a $10.0 million deductible per occurrence and a $50.0 million annual limit; however, our insurance policies may not adequately cover our losses, which could adversely affect our business. Timing differences are likely to exist between the damage costs, capital expenditures made to repair or restore properties and recognition and receipt of insurance proceeds reflected in the Company’s financial statements. The Company assessed the damage sustained on the Noble Globetrotter II, which resulted in $5.4 million of assets written off during the three months ended September 30, 2021 and the period from February 6 through September 30, 2021. The majority of the remaining costs are costs related to the equipment recovery efforts and legal fees and are presented in “Hurricane losses” on the Condensed Consolidated Statement of Operations.

On August 25, 2021, the Company and certain subsidiaries of the Company entered into a Purchase and Sale Agreement (the “Purchase and Sale Agreement”) to sell the jackup rigs operated by the Company in Saudi Arabia to ADES International Holding Limited (“ADES”) for a purchase price of $292.4 million in cash. Pursuant to the terms of the Purchase and Sale Agreement, the jackups, Noble Roger Lewis, Noble Scott Marks, Noble Joe Knight, and Noble Johnny Whitstine, together with certain related assets, were sold to ADES. The closing of the sale occurred in November 2021, and the Company expects to recognize a gain, net of transaction costs, in the fourth quarter of 2021 associated with the disposal of these assets. The Company believes these rigs qualify for the held for sale classification on our balance sheet.

The net income before income taxes for the four rigs classified as held for sale was:

	Successor				Predecessor
			Period From		Period From
			February 6, 2021		January 1, 2021
	Three Months Ended		through		through		Three Months Ended		Nine Months Ended
	September 30, 2021		September 30, 2021		February 5, 2021		September 30, 2020		September 30, 2020
Net income before income taxes (1)	$	9,768	$	15,176	$	3,128	$	741	$	20,061

(1)    Excludes Reorganization items, net

The Purchase and Sale Agreement also included certain covenants that the Company has agreed to not carry on or be engaged in the operation of jackup drilling rigs in the territorial waters of the Kingdom of Saudi Arabia in the Arabian Gulf for a term after the closing date of (i) one year for purposes of drilling gas wells and (ii) two years for the purposes of drilling oil wells.