Shares of Noble Corp PLC (NYSE: NE) fell by 5% in intraday trading on Wednesday, February 19, 2025, following the company's Q4 2024 earnings report and outlook for the deepwater drilling market.

While Noble reported solid Q4 results, with adjusted EBITDA of $319 million and over $500 million in new contract commitments, the company acknowledged a mid-cycle lull in the deepwater market. Contracted demand has dipped from 105 rigs to 100 rigs, impacting utilization rates and leading to concerns about potential gaps in 2025.

Despite long-term optimism for a rebound in deepwater demand by 2026-2027, with a potential net increase of up to 10 rigs globally, the company faces near-term challenges. These include regional headwinds, particularly in West Africa, where demand has decreased from 17-20 rigs to 13 rigs, and the Asia Pacific region, where only 5 UDW units are currently contracted compared to a normalized demand of 8-10 units.

To address the diminished demand for reactivations, Noble decided to permanently retire several rigs, including the Meltem and Scirocco drillships. The company also provided guidance for 2025, projecting revenue in the range of $3.25 billion to $3.45 billion and adjusted EBITDA between $1.05 billion to $1.15 billion.