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					          NE                              Noble Corporation                                           3/12/2011
          Sector: Energy                                                           Analyst: Matt Bonfield
                                                        Current Data
Current Price                   $44.10         Market Cap (billion)      $11.13         5 Yr Hist EPS Growth Rate          22.83%
52 Week Range            $26.23-$46.06         Sales Growth (TTM)       -22.9%          Gross Margin (TTM)                 55.82%
Price / TTM Earnings             14.65         ROE                      10.83%          Dividend Yield                       1.0%

                                                     Portfolio Holdings
                         Shares held:          Most recent transaction date                    Most recent transaction:
CFASP Portfolio               85                  November 16, 2010                            Purchased 85 @ $36.18
Davidson Portfolio             -                             -                                            -

                                                   Business Description
      Noble Corporation provides contract offshore drilling services for the oil and gas industry. The company operates both
shallow and deep-water drilling rigs in nearly every offshore drilling market in the world. The company is typically hired by
“Super-Major” oil companies such as Chevron and Royal Dutch Shell to develop their known offshore reserves. Noble
maintains a fleet of 64 drilling rigs. The fleet includes 14 semisubmersible platforms and 7 drill ships which are designed for
drilling operations in “deep-water”, including depths down to 10,000 feet below the sea surface. The company also owns 43
cantilever “jack-up” rigs that operate in shallow water of less than 400 feet. Going forward, the company is focusing on
expanding its deep-water capability due to the fact that more newly discovered reserves are located in deep-water than are
found in shallow water or onshore and because deep-water oil field development is more profitable than other forms of drilling.

                                          Reasons For Purchase (11/16/2010)
1.   DCF valuation shows that company’s stock is undervalued; it has not recovered from effects of the BP oil disaster.
2.   Worldwide demand for energy is expected to grow rapidly through at least 2035, led by developing economies.
3.   Oil & natural gas will supply the majority of new demand in spite of efforts to develop renewable technologies.
4.   More new oil and gas reserves are found offshore in deep water than anywhere else, onshore or offshore.
5.   Noble is in a better position than any other company to capture the profits that will be gained by developing deep-water
     wells. The company’s proprietary “Globetrotter” drill ship is particularly efficient at developing new deep-water oil fields.
6.   Noble commands higher day rates and utilization figures than competitors and manages expenses better. Its ROA is better
     than any competing company.

                                            Reasons For HOLD (3/12/2011)
     New Purchase.

               Risks and Issues to Watch                                                    Catalysts
    Increased government oversight (and expense) due to the          Oil prices that continue to rise. New drilling and oil field
     BP/Transocean oil disaster in the Gulf of Mexico.                 development activity tends to follow the price of oil.
    Governments artificially limiting Noble’s access to              Discovery of offshore oil fields. Recent offshore finds
     known reserves in their territory.                                are typically 6 times as large as onshore discoveries.

                                                         Price Target
                                                 Valuations                                      Analyst Recommendations
    Target:     $52.72                    Method    Multiple used:             Value              S&P: Buy – $45.00 Target
% to Target    83.65%         Operating Cash Flow            5.5X              50.18
                                             DCF                               52.72

                                           Comparable Valuation Summary
Company Name                     Ticker     Dividend Yield       P/E TTM           ROA          Gross Margin         Op. Margin
Noble Corp.                       NE             1.0%              14.65           7.76%          55.82%               33.6%
Transocean                        RIG            0.0%              27.28           2.55%          46.54%              27.37%
Ensco PLC.                        ESV           2.54%              14.57           7.78%          54.73%              36.91%
Diamond Offshore Drilling         DO            0.68%              10.79          14.44%          55.39%              41.85%
Industry                                         1.3%              43.79           7.16%          34.77%              18.59%
Energy Sector                                   2.57%             25.304            NA              NA                   NA

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