SecProbe.io

CORRESP
1
filename1.htm

corresp

NOBLE CORPORATION

13135 South Dairy Ashford, Suite 800

Sugar Land, Texas 77478

December 14, 2005

Ms. Tracie Towner

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, D.C. 20549-7010

VIA FACSIMILE: 202-772-9368

    RE:

    Noble Corporation

    Form 10-K for Fiscal Year Ended December 31, 2004

    Filed March 8, 2005

    File No. 0-13857

Dear Ms. Towner:

We are submitting this response of Noble Corporation to comment number one provided by the staff
(the “Staff”) of the Securities and Exchange Commission in its comment letter dated December 12,
2005, with respect to our Annual Report on Form 10-K (File No. 0-13857) for the year ended December
31, 2004, filed on March 8, 2005. For your convenience, we have repeated the comment of the Staff
as given in the comment letter, and set forth below such comment is our response.

Form 10-K Filed on March 8, 2005

Statements of Cash Flows, page 41

    1.

    We understand that you defer expense recognition of repair and maintenance costs when
the expenditures that are incurred relate to large scale maintenance projects or
overhauls. Please expand your disclosure to explain your rationale for selecting a three
year amortization period for such costs (indicate how this relates to the frequency of
your projects and overhauls); and disclose the extent to which amortization of the
deferred balances is either reflected in or excluded from the figures that you identify as
total maintenance and repair expenses. If the amounts reflected in your line item
“Deferred repair and maintenance expenditures” in the investing section of your statement
of cash flow reflect actual cash expenditures, as we would expect, the deferred
expenditures labeling would seem imprecise.

Response: We routinely defer expense recognition of repair and maintenance costs when the
expenditures incurred are for overhauls related to large-scale maintenance projects that benefit
the periods between overhauls. Because overhauls are performed on the basis of operating hour
thresholds and typically occur every three years, we have selected a three year amortization period
for such costs.

The following is an excerpt from Note 1 to Consolidated Financial Statements appearing on page 46
of our Form 10-K for Fiscal Year Ended December 31, 2004:

     Scheduled maintenance of equipment and overhauls are performed on the basis of number
of hours operated in accordance with our preventative maintenance program. Repair and
maintenance costs are generally charged to expense as incurred; however, overhauls related
to large-scale maintenance projects are deferred when incurred and amortized into contract
drilling services expense over a 36-month period. The deferred portion of these
large-scale projects is included in “Other assets” in the Consolidated Balance Sheets.
Such amounts totaled $xx,xxx,xxx and $xx,xxx,xxx at December 31, 2004 and 2003,
respectively. Total maintenance and repair expenses for the years ended December 31, 2004,
2003 and 2002 were $xxx,xxx,xxx, $xxx,xxx,xxx and $xxx,xxx,xxx, respectively.

In response to the Staff’s comment, we are proposing to expand our disclosure in Note 1 of our
Consolidated Financial Statements that will appear in our Form 10-K for Fiscal Year Ended December
31, 2005 as follows:

     Scheduled maintenance of equipment and overhauls are performed on the basis
of number of hours operated in accordance with our preventative maintenance
program. Repair and maintenance costs are generally charged to expense as
incurred; however, overhauls related to major maintenance projects that benefit
the periods between overhauls and which typically occur every three years are
deferred when incurred and amortized over a three year period. The deferred
portion of these major maintenance projects is included in “Other assets” in the
Consolidated Balance Sheets. Such amounts totaled $xx,xxx,xxx and $xx,xxx,xxx at
December 31, 2005 and 2004, respectively.

     In order to allow readers of our financial statements to identify more easily
costs that benefit multiple years associated with our rigs, amortization of
deferred costs for major maintenance projects is reflected in the consolidated
financial statements with depreciation in “Depreciation and amortization”
beginning with the first quarter of 2005. In prior periods, amortization of
deferred costs for major maintenance projects was included in expenses for
contract drilling services. The amount of such amortization was $xx,xxx,xxx,
$xx,xxx,xxx and $xx,xxx,xxx for the years ended December 31, 2005, 2004 and 2003,
respectively. This revision in

classification had no impact on previously reported net income. Total maintenance
and repair expenses for the years ended December 31, 2005, 2004 and 2003,
inclusive of amortization of deferred costs for major maintenance projects, were
$xx,xxx,xxx, $xx,xxx,xxx and $xx,xxx,xxx, respectively.

In response to Staff’s comment, the line item “Deferred repair and maintenance expenditures” in the
investing section of our Consolidated Statements of Cash Flows does in fact reflect actual cash
expenditures. In light of the Staff’s comment regarding the imprecision of this caption, we
propose to change this caption on the Consolidated Statements of Cash Flows from “Deferred repair
and maintenance expenditures” to “Major maintenance expenditures” in our consolidated financial
statements for the year ending December 31, 2005 that will appear in our Form 10-K for Fiscal Year
Ended December 31, 2005.

Please telephone collect the undersigned or Robert D. Campbell (281-276-6338), our General Counsel,
with any questions or comments you may have regarding this response.

    Very truly yours,

    /s/ Bruce W. Busmire

    Bruce W. Busmire

    Senior Vice President

    and Chief Financial Officer

    Cc:

    Mr. James C. Day

    Chairman, Chief Executive Officer and President

    Mr. Robert D Campbell

    Vice President and General Counsel, Noble Drilling Services Inc.

Noble Corporation’s management acknowledges the following:

    •

    the company is responsible for the adequacy and accuracy of the disclosure in the
filing;

    •

    staff comments or changes to disclosure in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and

    •

    the company may not assert staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United
States.

    /s/ Bruce W. Busmire

    Bruce W. Busmire

    Senior Vice President and Chief Financial Officer