It's funny how much things can change in a couple of years. It wasn't that long ago that Noble Corporation (OTC:NEBLQ) looked like a company that was in deep trouble with a huge fleet of older rigs and few growth prospects on the horizon. Fast forward to this past quarter, and the company's fleet has improved through attrition and some strategic moves. Also, the company is one of the better-financed operations left in the offshore market that is also generating a good amount of work for its rigs. 

Now that the company is well suited to ride out the rest of the storm, it's worth considering what's next for the company. According to management's most recent conference call, that change will likely come in the form of improving technology and preparing for the next big wave of offshore drilling. Here's a selection of quotes from the company's most recent conference call that give a peek into what is on management's mind.

Offshore rig under construction

Image source: Getty Images.

Big data comes to offshore drilling

For a business that is so deeply rooted in high tech drilling, it's surprising how rudimentary management teams handle day-to-day operations like maintenance and equipment performance. Those days are coming to an end, though, as management teams start to flirt with using big data to improve performance. Noble is jumping into the game after it signed a deal with General Electric (NYSE:GE) for performance monitoring of its rigs. Here's Noble CEO David Williams describing the details of the deal and what it could mean for the bottom line.

We will continue to identify and implement programs through the business cycle that support sustainable and efficient operations. One such program is our recently announced partnership with GE to collaborate on the Digital Rig solution. This is a holistic vesselwide initiative enabling operational efficiencies achieved through the use of predictive analytics... And what does this mean for Noble? Repair and maintenance of an offshore drilling rig can run as much as 25% of the daily cash cost. We believe that expected efficiencies captured through the implementation of the Digital Rig solution could achieve a reduction of 20% or more in repair and maintenance OpEx on the pilot rigs. And this estimate should grow as we realize synergies in other areas of our rig operations.

Noble isn't the only rig company teaming up with General Electric. Both Transocean and Diamond Offshore have announced deals within the past year where General Electric will provide both equipment and services to these rig companies with the intention of lowering operating expenses and decreasing downtime for maintenance.

If these programs can offer the kind of savings that Williams claims, then it could be a game changer for the entire offshore drilling business. Getting lower maintenance costs would likely lead to lower dayrates, which would, in turn, lower breakeven prices for offshore projects.

Back in business?

Most rig companies have been touting some of the modest gains they have made in putting rigs back to work or winning some short term contracts. Based on Noble's first quarter, I think it's safe to say it won the quarter. Here's Williams detailing the wins the company had over the past quarter.

During the first quarter, our jackup fleet was awarded contracts totaling approximately 12 rig years, representing in excess of $650 million in contract revenues and increasing our total contract backlog at March 31 to $3.5 billion. We closed the quarter with 77% of the remaining 2017 available operating days in the jackup fleet committed to contracts. Both jackup fleet utilization and days committed to contracts are setting the pace for our industry. Simon will have more to say on the regional contract opportunities across the fleet in just a moment.

If we wanted to be picky, the one thing in these announcements is that it was only for Noble's jackup fleet. Floating rigs are the ones that typically have the highest margins and the highest operating costs. So it's imperative for companies to keep their floating fleets working. That said, getting that much work when so many others aren't is a positive for Noble

Night is darkest before the dawn

The thing that is going to have to happen before the market turns around in earnest is for global oil production to start slipping. That would increase oil prices and incentivize greater exploration and development drilling. For that to happen, though, it would require quite a bit of underinvestment in the business. As Simon Johnson, former SVP of marketing & contracts, highlighted, we have hit a pretty low point when it comes to investment. 

Before I begin a discussion on the status of the key offshore regions, it's worth noting if only for some perspective, key takeaways in a report issued by the IEA addressing conventional crude resources in the offshore sector. The report noted the following: conventional resources sanctioned for development in 2016 were 30% below the total in 2015 with FIDs, dropping to the lowest level since the 1940s; the offshore contributes 1/3 of crude oil production yet accounted for only 13% of resources sanctioned in 2016 compared to over 40%, on average, from the years 2000 to 2015; North Sea oil investment fell to approximately less than half 2014 levels and is now approaching the same level of spending on North Sea offshore wind projects.

Earlier this month, Johnson left Noble to "pursue other opportunities" as the press release put it. Still these facts still apply and should shape the thinking of producers and investors alike. 

Legal trouble ahead?

A few years ago, Noble spun off a large chunk of its fleet into Paragon Offshore. Since then, things haven't gone well for Paragon. Its fleet of mostly older equipment didn't have much of a place on the market as contracts started to dry up, and it filed for Chapter 11 back in February of 2016. 

As part of the deal to reemerge from bankruptcy, Paragon tore up a settlement it had with Noble where Noble would contribute to any legal issues related to taxes in Mexico. In exchange, Noble got a release for any and all claims that Paragon might have in connection with the spinoff, including fraudulent conveyance claims. Basically, Paragon creditors and shareholders couldn't sue Noble even if they thought Noble didn't act in good faith when selling this spin-off to the market. 

With that deal torn up, Paragon is now funding a litigation trust that might bring a suit against Noble. Williams couldn't talk much about it, but he did make some statements that Noble didn't just use Paragon to unload undesirable assets. 

We established Paragon with good liquidity, a strong backlog and a solid global business with well-operated -- well-maintained operating rigs. We set them up to succeed, and we fully believed they would. After the spinoff, a series of events led to an unfortunate bankruptcy filing. However, we do not believe there's merit to such a claim against Noble and are fully prepared to defend it if we do not amicably settle any potential claims.

There is absolutely no way of knowing what this will mean for the company. It could be absolutely nothing, but there is no way to be sure. So we're going to have to file this into the "I don't know" folder for a while. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.