OK, so it wasn't the most regal quarter for Noble (NYSE:NE).

In the three months ended June 30, Noble's contract drilling margins were characteristically king-like at around 67%. This is actually pretty surprising, given the various hiccups in the period. One rig dropped a key piece of equipment on the seafloor, there was higher than anticipated downtime associated with several floating rigs, and regulatory delays are holding up some of the firm's West African jack-ups.

All in all, utilization got clipped a few points and daily drilling costs rose 13% sequentially. Core contract drilling revenue declined slightly compared to last quarter, and operating income dipped about 9%.

There are also some challenges on the horizon. Chinese power rationing around the time of the Olympics may introduce some shipyard delays, while labor tightness and equipment deliveries may strain schedules in Singapore. I appreciate how candid Noble is about these possibilities. Of course, you'd have to tune into the conference call to hear about this stuff.

There were a lot of encouraging things said on the call as well. Noble's management, while disappointed that the drillers are trading down in lockstep with commodity prices, is more convinced than ever that the cycle has lengthened. That would mean the good times for Noble, Diamond Offshore (NYSE:DO), and the rest of the contractor crowd aren't ending any time soon.

If Noble is correct about this, the company needs to get creative about where to go from here. Unlike ENSCO International (NYSE:ESV), which keeps topping up its new-build program, Noble's has pretty much run its course.

That leaves the company with a few options. Noble can order up a new deepwater vessel for delivery in 2012. The company notes that customers are willing to talk 2012 -- that shouldn't be too surprising, given Marathon Oil's (NYSE:MRO) recent extension on the Noble Jim Day out to 2014.

Other options are consolidation (or euthanasia, depending on your opinion of the target company), and more innovative financing schemes such as the one arranged between Transocean (NYSE:RIG), Petrobras (NYSE:PBR), and profitable partner Mitsui (NASDAQ:MITSY).

I wouldn't go so far as to rule out any of the three options. Noble has done well by shareholders over the years, and whatever the company's next step, I'd expect it to prove a rewarding one.

Noble reigns supreme in the court of public opinion, with a five-star rating in Motley Fool CAPS. I've rated the firm to outperform the market, but I'm just one Fool. Have your say, sire.

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Fool contributor Toby Shute is a top-100 CAPS player. He goes by the moniker TMFSmashy. He doesn't have a position in any company mentioned. The Motley Fool has a disclosure policy.