<PAGE>

===============================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

            [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934
               For the quarterly period ended September 30, 2004

                                       OR

            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934
         For the transition period from _____________ to _____________

                        COMMISSION FILE NUMBER: 0-13857

                               NOBLE CORPORATION
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                                <C>
                      CAYMAN ISLANDS                                              98-0366361
 (State or other jurisdiction of incorporation or organization)    (I.R.S. employer identification number)

           13135 SOUTH DAIRY ASHFORD, SUITE 800                                      77478
                    SUGAR LAND, TEXAS                                             (Zip code)
         (Address of principal executive offices)
</TABLE>

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (281) 276-6100

      Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

      Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes [X] No [ ]

      Number of Ordinary Shares outstanding as of November 3, 2004: 135,364,782
(Includes 1,639,156 shares held in a Rabbi Trust)

=============================================================================

<PAGE>

                                                                       FORM 10-Q

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                       NOBLE CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (In thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                             SEPTEMBER 30,    DECEMBER 31,
                                                                                 2004             2003
                                                                             -------------    ------------

<S>                                                                          <C>              <C>
ASSETS
CURRENT ASSETS
  Cash and cash equivalents ..............................................    $    94,492     $   139,467
  Investment in marketable securities ....................................         95,752          98,376
  Accounts receivable ....................................................        180,880         149,235
  Inventories ............................................................          4,141           4,086
  Prepaid expenses .......................................................         15,909          11,809
  Other current assets ...................................................         18,446          18,986
                                                                              -----------     -----------
Total current assets .....................................................        409,620         421,959
                                                                              -----------     -----------
PROPERTY AND EQUIPMENT
  Drilling equipment and facilities ......................................      3,635,413       3,454,163
  Other ..................................................................         62,395          64,591
                                                                              -----------     -----------
                                                                                3,697,808       3,518,754
  Accumulated depreciation ...............................................     (1,017,061)       (892,888)
                                                                              -----------     -----------
                                                                                2,680,747       2,625,866
                                                                              -----------     -----------
INVESTMENT IN AND ADVANCES TO JOINT VENTURE ..............................         18,942          19,868
OTHER ASSETS .............................................................        125,398         121,940
                                                                              -----------     -----------
                                                                              $ 3,234,707     $ 3,189,633
                                                                              ===========     ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
  Current maturities of long-term debt ...................................    $    17,751     $    47,666
  Accounts payable .......................................................         81,375          87,178
  Accrued payroll and related costs ......................................         52,288          48,511
  Taxes payable ..........................................................         27,448          31,734
  Interest payable .......................................................          2,665           9,384
  Other current liabilities ..............................................         27,750          19,550
                                                                              -----------     -----------
Total current liabilities ................................................        209,277         244,023

LONG-TERM DEBT ...........................................................        505,431         541,907
DEFERRED INCOME TAXES ....................................................        207,046         213,357
OTHER LIABILITIES ........................................................         18,990          18,201
COMMITMENTS AND CONTINGENCIES ............................................              -               -
MINORITY INTEREST ........................................................         (8,328)         (6,280)
                                                                              -----------     -----------
                                                                                  932,416       1,011,208
                                                                              -----------     -----------
SHAREHOLDERS' EQUITY
  Ordinary Shares-par value $0.10 per share ..............................         13,506          13,389
  Capital in excess of par value .........................................        944,872         915,240
  Retained earnings ......................................................      1,400,100       1,306,888
  Treasury stock, at cost ................................................        (47,431)        (49,121)
  Restricted stock (unearned compensation) ...............................        (12,667)         (7,981)
  Accumulated other comprehensive income .................................          3,911              10
                                                                              -----------     -----------
                                                                                2,302,291       2,178,425
                                                                              -----------     -----------
                                                                              $ 3,234,707     $ 3,189,633
                                                                              ===========     ===========
</TABLE>

        See accompanying notes to the consolidated financial statements.

                                       2
<PAGE>

                                                                       FORM 10-Q

                       NOBLE CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                    (In thousands, except per share amounts)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED SEPTEMBER 30,
                                                     --------------------------------
                                                           2004             2003
                                                         ---------        ---------
<S>                                                      <C>              <C>
OPERATING REVENUES
  Contract drilling services .....................       $232,057         $235,271
  Reimbursables ..................................         12,161            7,189
  Labor contract drilling services ...............         15,146            6,842
  Engineering, consulting and other ..............          6,274            5,344
                                                         --------         --------
                                                          265,638          254,646
                                                         --------         --------
OPERATING COSTS AND EXPENSES
  Contract drilling services .....................        143,901          124,690
  Reimbursables ..................................         10,504            6,055
  Labor contract drilling services ...............         12,470            5,350
  Engineering, consulting and other ..............          4,875            7,154
  Depreciation ...................................         42,042           37,759
  Selling, general and administrative.............          7,831            6,481
                                                         --------         --------
                                                          221,623          187,489
                                                         --------         --------
OPERATING INCOME .................................         44,015           67,157

OTHER INCOME (EXPENSE)
  Interest expense ...............................         (8,382)         (10,022)
  Other, net .....................................          1,199            2,367
                                                         --------         --------
INCOME BEFORE INCOME TAXES .......................         36,832           59,502
INCOME TAX PROVISION .............................         (6,261)          (6,545)
                                                         --------         --------
NET INCOME .......................................       $ 30,571         $ 52,957
                                                         ========         ========
NET INCOME PER SHARE:
  Basic ..........................................       $   0.23         $   0.40
  Diluted ........................................       $   0.23         $   0.40
</TABLE>

        See accompanying notes to the consolidated financial statements.

                                       3
<PAGE>

                                                                       FORM 10-Q

                       NOBLE CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                    (In thousands, except per share amounts)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                    NINE MONTHS ENDED SEPTEMBER 30,
                                                    -------------------------------
                                                        2004               2003
                                                     ---------          ---------
<S>                                                  <C>                <C>
OPERATING REVENUES
  Contract drilling services .....................   $676,307           $672,225
  Reimbursables ..................................     31,765             34,498
  Labor contract drilling services ...............     35,615             20,757
  Engineering, consulting and other ..............     20,393             20,094
                                                     --------           --------
                                                      764,080            747,574
                                                     --------           --------
OPERATING COSTS AND EXPENSES
  Contract drilling services .....................    410,146            371,628
  Reimbursables ..................................     27,663             30,825
  Labor contract drilling services ...............     28,756             16,951
  Engineering, consulting and other ..............     19,756             20,053
  Depreciation ...................................    124,201            107,654
  Selling, general and administrative.............     24,140             19,918
                                                     --------           --------
                                                      634,662            567,029
                                                     --------           --------
OPERATING INCOME .................................    129,418            180,545

OTHER INCOME (EXPENSE)
  Interest expense ...............................    (26,070)           (30,865)
  Other, net .....................................      5,722              3,259
                                                     --------           --------
INCOME BEFORE INCOME TAXES .......................    109,070            152,939
INCOME TAX PROVISION .............................    (15,858)           (16,823)
                                                     --------           --------

NET INCOME .......................................   $ 93,212           $136,116
                                                     ========           ========

NET INCOME PER SHARE:
  Basic ..........................................   $   0.70           $   1.03
  Diluted ........................................   $   0.70           $   1.02
</TABLE>

        See accompanying notes to the consolidated financial statements.

                                       4
<PAGE>

                                                                       FORM 10-Q

                       NOBLE CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                 (In thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED SEPTEMBER 30,
                                                                     --------------------------------
                                                                           2004            2003
                                                                         ---------        -------
<S>                                                                      <C>              <C>
NET INCOME ......................................................        $ 30,571         $52,957
                                                                         --------         -------
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
    Foreign currency translation adjustments ....................            (258)           (826)
    Unrealized holding gains arising during period ..............             362             180
    Unrealized gain on foreign currency forward contracts........              31               -
                                                                         --------         -------
    Other comprehensive income (loss) ...........................             135            (646)
                                                                         --------         -------
COMPREHENSIVE INCOME ............................................        $ 30,706         $52,311
                                                                         ========         =======
</TABLE>

<TABLE>
<CAPTION>
                                                                      NINE MONTHS ENDED SEPTEMBER 30,
                                                                      -------------------------------
                                                                            2004            2003
                                                                         ---------        --------
<S>                                                                      <C>              <C>
NET INCOME.......................................................        $  93,212        $136,116
                                                                          --------         -------
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
    Foreign currency translation adjustments.....................            3,802            (675)
    Unrealized holding losses arising during period..............             (165)              -
    Unrealized gain on foreign currency forward contracts........              264               -
                                                                         ---------        --------

    Other comprehensive income (loss)............................            3,901            (675)
                                                                         ---------        --------

COMPREHENSIVE INCOME.............................................        $  97,113        $135,441
                                                                         =========        ========
</TABLE>

        See accompanying notes to the consolidated financial statements.

                                       5
<PAGE>

                                                                       FORM 10-Q

                       NOBLE CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                    NINE MONTHS ENDED SEPTEMBER 30,
                                                                                    -------------------------------
                                                                                        2004             2003
                                                                                      --------         --------
<S>                                                                                   <C>              <C>
CASH FLOWS FROM OPERATING ACTITIVIES
  Net income .....................................................................    $ 93,212         $136,116
  Adjustments to reconcile net income to net cash provided by operating
    activities:
       Depreciation, and amortization of deferred repair and maintenance .........     154,333          131,630
       Deferred income tax provision .............................................       1,728            7,669
       Loss on sales of marketable securities ....................................         131              343
       Equity in income of joint venture .........................................      (2,821)          (1,336)
       Distributions received from joint venture .................................       1,452                -
       Compensation expense from stock-based plans ...............................       4,257            3,480
       Gain on sales of property and equipment ...................................           -             (519)
       Other .....................................................................       2,224              373
       Changes in current assets and liabilities, net of acquired working capital:
          Accounts receivable ....................................................     (31,645)         (13,450)
          Other current assets ...................................................      (5,483)          (5,655)
          Accounts payable .......................................................      (5,805)         (18,509)
          Other current liabilities ..............................................       1,073          (14,018)
                                                                                      --------         --------
               Net cash provided by operating activities .........................     212,656          226,124
                                                                                      --------         --------
CASH FLOWS FROM INVESTING ACTIVITIES
  Acquisitions and related capital upgrades ......................................     (69,473)        (191,011)
  Other capital expenditures .....................................................     (95,601)         (45,175)
  Deferred repair and maintenance expenditures ...................................     (46,538)         (21,144)
  Repayments from joint venture ..................................................       2,295            1,494
  Proceeds from sales of property and equipment ..................................       1,616              500
  Investment in marketable securities ............................................     (90,319)         (69,413)
  Proceeds from sales and maturities of marketable securities ....................      94,156           69,990
                                                                                      --------         --------
              Net cash used for investing activities .............................    (203,864)        (254,759)
                                                                                      --------         --------
CASH FLOWS FROM FINANCING ACTIVITIES
  Payment of long-term debt ......................................................     (66,397)         (47,418)
  Proceeds from issuance of ordinary shares ......................................      52,344            6,303
  Repurchase of ordinary shares ..................................................     (39,714)               -
  Decrease in restricted cash ....................................................           -            1,477
                                                                                      --------         --------
              Net cash used for financing activities .............................     (53,767)         (39,638)
                                                                                      --------         --------
NET DECREASE  IN CASH AND CASH EQUIVALENTS .......................................     (44,975)         (68,273)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD ...................................     139,467          192,509
                                                                                      --------         --------
CASH AND CASH EQUIVALENTS, END OF PERIOD .........................................    $ 94,492         $124,236
                                                                                      ========         ========
</TABLE>

        See accompanying notes to the consolidated financial statements.

                                       6
<PAGE>

                                                                       FORM 10-Q

                       NOBLE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF ACCOUNTING

      The accompanying consolidated financial statements of Noble Corporation
("Noble" or, together with its consolidated subsidiaries, unless the context
requires otherwise, the "Company", "we", "our" and words of similar import) have
been prepared in accordance with accounting principles generally accepted in the
United States of America for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all disclosures required by accounting principles generally accepted
in the United States of America for complete financial statements. All
significant intercompany accounts and transactions have been eliminated. Certain
reclassifications have been made in the prior year consolidated financial
statements to conform to the classifications used in the 2004 consolidated
financial statements. These reclassifications have no impact on net income. The
interim consolidated financial statements have not been audited. However, in the
opinion of management, all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of the consolidated financial
statements have been included. Results of operations for interim periods are not
necessarily indicative of the results of operations that may be expected for the
entire year. These interim consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and notes thereto
included in the Annual Report on Form 10-K of Noble for the year ended December
31, 2003.

NOTE 2 - ACQUISITIONS

      On October 28, 2004, we exercised our option to purchase the Maersk
Valiant (renamed the Noble David Tinsley), a MODEC 300C, independent leg,
cantilever jackup rig, for an exercise price of $28,400,000. In June 2003, we
paid an option fee of $13,200,000 for the right to acquire the unit. Our
aggregate purchase price for the rig was therefore $41,600,000. The unit has a
550-day contract in Qatar which is scheduled to commence in February 2005 after
a refurbishment and upgrade program.

      On July 16, 2004, we exercised our option to purchase the Maersk Viking
(renamed the Noble Cees van Diemen), a MODEC 300C, independent leg, cantilever
jackup rig, for an exercise price of $32,900,000. In June 2003, we paid an
option fee of $15,000,000 for the right to acquire the unit. Our aggregate
purchase price for the rig was therefore $47,900,000. After undergoing a
refurbishment and upgrade program, the unit commenced an 880-day contract in
Qatar in mid-September 2004.

      On June 25, 2004, we purchased the Okhi (renamed the Noble Mark Burns), a
Levingston 111-S designed independent leg jackup rig, for $29,500,000 in cash.
The unit is currently in the Dalian New Shipyard in Dalian, China, where we are
performing refurbishments and upgrades. We plan to mobilize the unit to the
Middle East during the fourth quarter of 2004, where additional upgrade work
will include leg extension to 300 feet water depth capability, a 60 foot
cantilever, and quarters expansion for 160 personnel.

NOTE 3 - STOCK-BASED COMPENSATION PLANS

      We have several stock-based compensation plans. As permitted by Statement
of Financial Accounting Standards ("SFAS") No. 123, Accounting for Stock-Based
Compensation ("SFAS 123") and as amended by SFAS No. 148, Accounting for
Stock-Based Compensation-Transition and Disclosure ("SFAS 148"), we have chosen
to continue using the intrinsic value method of accounting for stock-based
compensation awards in accordance with APB Opinion 25. No compensation expense
was recognized in the three and nine month periods ended September 30, 2004 and
2003 related to stock option awards.

                                       7
<PAGE>

                                                                       FORM 10-Q

      The following table reflects pro forma net income and net income per share
had we elected to adopt the fair value approach of SFAS 123 (in thousands,
except per share amounts):

<TABLE>
<CAPTION>
                                                                            THREE MONTHS ENDED            NINE MONTHS ENDED
                                                                              SEPTEMBER 30,                SEPTEMBER 30,
                                                                         -------------------------     -----------------------
                                                                            2004           2003           2004          2003
                                                                         -----------    ----------     ---------     ----------
<S>                                                                      <C>            <C>            <C>           <C>
Net income - as reported.............................................    $   30,571     $  52,957      $ 93,212      $ 136,116
Compensation expense, net of tax - as reported.......................         1,061           746         2,767          2,262
Compensation expense, net of tax - pro forma.........................        (2,792)       (5,281)       (9,917)       (16,096)
                                                                         ----------     ---------      --------      ---------
Net income - pro forma...............................................    $   28,840     $  48,422      $ 86,062      $ 122,282
                                                                         ==========     =========      ========      =========
Net income per share:
Basic - as reported.................................................     $     0.23     $    0.40      $   0.70      $    1.03
Basic - pro forma...................................................     $     0.22     $    0.37      $   0.65      $    0.93

Diluted - as reported...............................................     $     0.23     $    0.40      $   0.70      $    1.02
Diluted - pro forma.................................................     $     0.22     $    0.36      $   0.64      $    0.92
</TABLE>

NOTE 4 - NET INCOME PER SHARE

      The following table reconciles the basic and diluted net income per share
("EPS") computations for the three and nine month periods ended September 30,
2004 and 2003 (in thousands, except per share amounts):

<TABLE>
<CAPTION>
                                                                            NET        BASIC      BASIC      DILUTED    DILUTED
                                                                          INCOME      SHARES       EPS       SHARES       EPS
                                                                         ---------    -------    --------    -------    -------
<S>                                                                      <C>          <C>        <C>         <C>        <C>
THREE MONTHS ENDED:
SEPTEMBER 30, 2004...................................................    $  30,571    132,519    $   0.23    133,810    $ 0.23
SEPTEMBER 30, 2003...................................................    $  52,957    132,009    $   0.40    133,023    $ 0.40
</TABLE>

<TABLE>
<CAPTION>
                                                                            NET        BASIC       BASIC     DILUTED    DILUTED
                                                                          INCOME      SHARES        EPS      SHARES       EPS
                                                                         ---------    -------    --------    -------    -------
<S>                                                                      <C>          <C>        <C>         <C>        <C>
NINE MONTHS ENDED:
SEPTEMBER 30, 2004...................................................    $  93,212    132,562    $   0.70    133,717    $  0.70
SEPTEMBER 30, 2003...................................................    $ 136,116    131,891    $   1.03    132,962    $  1.02
</TABLE>

      Included in diluted shares are ordinary share equivalents relating to
outstanding stock options of 1,291,000 shares and 1,014,000 shares for the three
month periods ended September 30, 2004 and 2003, respectively, and 1,155,000 and
1,071,000 shares for the nine months ended September 30, 2004 and 2003,
respectively. The computation of diluted net income per share for the three and
nine month periods ended September 30, 2004 and 2003 did not include options to
purchase 1,721,000 and 1,818,000 ordinary shares, respectively, because the
options' exercise prices were greater than the average market price of the
ordinary shares. Excluded from the basic and diluted share amounts above are
shares held in a Rabbi Trust, which will be used for future funding of the
Company's benefit plans. The number of shares in the Rabbi Trust was 1,639,000
and 1,710,000 at September 30, 2004 and 2003, respectively. Shares in the Rabbi
Trust are included in the 135,364,782 ordinary shares legally outstanding as of
November 3, 2004, and are accounted for as Treasury Stock in our Consolidated
Balance Sheets.

      We repurchased 1,087,000 of our ordinary shares during the nine month
period ended September 30, 2004 at a total cost of $39,714,000, with none
repurchased during the three month period ended September 30, 2004. Ordinary
shares that were repurchased were automatically cancelled and retired pursuant
to Cayman Islands law. These repurchases were recorded as a decrease of $109,000
and $39,605,000 to the balances of our ordinary shares and capital in excess of
par value, respectively, on our Consolidated Balance Sheet.

                                       8
<PAGE>

                                                                       FORM 10-Q

NOTE 5 - MARKETABLE SECURITIES

      As of September 30, 2004, we owned marketable equity securities with a
fair market value of $11,252,000, of which $10,855,000 was included in a Rabbi
Trust for the Noble Drilling Corporation 401(k) Savings Restoration Plan. The
marketable securities included in the Rabbi Trust are classified as trading
securities and are included in "Investment in marketable securities" in the
Consolidated Balance Sheet at September 30, 2004 at their fair value. The
remaining investment in marketable equity securities, with a fair market value
of $397,000 at September 30, 2004, is classified as available for sale and is
included in "Other assets" in the Consolidated Balance Sheets at its fair market
value. As of September 30, 2004, we also owned marketable debt securities with a
fair market value of $84,897,000. These investments are classified as available
for sale and are included in "Investment in marketable securities" in the
Consolidated Balance Sheet at September 30, 2004 at their fair market value.


NOTE 6 - COMMITMENTS AND CONTINGENCIES

      In August 2004, an indirect, wholly-owned subsidiary of Noble was served
as a named defendant in two lawsuits filed in the Circuit Courts of the State of
Mississippi involving numerous other companies (not affiliated with Noble) as
co-defendants. The lawsuits seek an unspecified amount of monetary damages on
behalf of approximately 94 named individuals alleging personal injury or death,
including claims under the Jones Act, purportedly resulting from exposure to
asbestos on drilling rigs and associated facilities during the period 1965
through 1986. The lawsuits are in preliminary stages and we have not confirmed
the number of plaintiffs, if any, that were employed by our subsidiary or
otherwise associated with our drilling operations during the relevant period. We
intend to defend vigorously against the litigation, and based on information
currently available, we do not believe the resolution of these lawsuits will
have a material adverse effect on our financial position, results of operations
or cash flows.

      Noble Asset Company Limited ("NACL"), an indirect, wholly-owned subsidiary
of Noble, has been named one of 21 parties served a Show Cause Notice issued by
the Commissioner of Customs (Prev.), Mumbai, India. The Show Cause Notice
concerns alleged violations of Indian Customs laws and regulations regarding one
of our jackup drilling rigs. The Commissioner alleges certain violations to have
occurred before, at the time of, and after NACL acquired the rig from the rig's
previous owner. In connection with the export of the rig from India in 2001,
NACL posted a bank guarantee in the amount of $3,300,000 and a customs bond in
the amount of $21,340,000, both of which remain in place. We maintain that NACL
has acted in accordance with all Indian Customs laws and regulations and believe
the Show Cause Notice is without merit as against NACL. In the purchase
agreement for the rig, NACL received contractual indemnification against
liability for Indian customs duty from the rig's previous owner. We do not
believe the resolution of this matter will have a material adverse effect on our
financial position, results of operations or cash flows.

      We are a defendant in certain claims and litigation arising out of
operations in the normal course of business. In the opinion of management,
uninsured losses, if any, will not be material to our financial position,
results of operations or cash flows.

      In connection with several projects, we have entered into agreements with
various vendors to purchase or construct property and equipment that generally
have long lead times for delivery. Any equipment purchased for a project on
which we do not proceed would be used, where applicable, as capital spares for
other units in our fleet. As of September 30, 2004, we had approximately
$30,000,000 of outstanding purchase commitments related to these projects.

NOTE 7 - PARENT GUARANTEE OF REGISTERED SECURITIES ISSUED BY SUBSIDIARY

      Noble and Noble Holding (U.S.) Corporation ("Noble Holding"), a
wholly-owned subsidiary of Noble, are guarantors for certain debt securities
issued by Noble Drilling Corporation ("Noble Drilling"). These debt securities
include Noble Drilling's 6.95% Senior Notes due 2009 and its 7.50% Senior Notes
due 2019. The outstanding principal balances of the 6.95% Senior Notes and the
7.50% Senior Notes at September 30, 2004 were $149,953,000 and $201,695,000,
respectively. Noble Drilling is an indirect, wholly-owned subsidiary of Noble
and a direct, wholly-owned subsidiary of Noble Holding. Noble's and Noble
Holding's guarantees of these securities are full and unconditional.

      The following consolidating financial statements of Noble, Noble Holding,
Noble Drilling and all other subsidiaries are included so that separate
financial statements of Noble Drilling are not required to be filed with the
U.S. Securities and Exchange Commission. These consolidating financial
statements present Noble's and Noble Holding's investments in both consolidated
and unconsolidated affiliates using the equity method of accounting.


                                       9
<PAGE>

                                                                       FORM 10-Q

                    NOBLE CORPORATION AND OTHER SUBSIDIARIES
                           CONSOLIDATING BALANCE SHEET
                               SEPTEMBER 30, 2004
                                 (In thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                  NOBLE
                                                                  HOLDING       NOBLE
                                                    NOBLE       (SUBSIDIARY    DRILLING       OTHER      CONSOLIDATING
                                                 (GUARANTOR)     GUARANTOR)    (ISSUER)    SUBSIDIARIES   ADJUSTMENTS      TOTAL
                                                 ------------  ------------  ------------  ------------  -------------  ------------
<S>                                              <C>           <C>           <C>           <C>           <C>            <C>
ASSETS
CURRENT ASSETS
  Cash and cash equivalents ...................  $    37,772   $         -   $         -   $    56,720    $         -   $    94,492
  Investment in marketable securities .........       10,855             -             -        84,897              -        95,752
  Accounts receivable .........................            -             -         5,664       175,216              -       180,880
  Inventories .................................            -             -             -         4,141              -         4,141
  Prepaid expenses ............................            -             -         1,829        14,080              -        15,909
  Accounts receivable from affiliates .........      103,225             -       583,842             -       (687,067)            -
  Other current assets ........................       32,244             -           225        13,380        (27,403)       18,446
                                                 -----------   -----------   -----------   -----------    -----------   -----------
Total current assets ..........................      184,096             -       591,560       348,434       (714,470)      409,620
                                                 -----------   -----------   -----------   -----------    -----------   -----------
PROPERTY AND EQUIPMENT
  Drilling equipment and facilities ...........            -             -        99,620     3,535,793              -     3,635,413
  Other .......................................            -             -             -        62,395              -        62,395
                                                 -----------   -----------   -----------   -----------    -----------   -----------
                                                           -             -        99,620     3,598,188              -     3,697,808
  Accumulated depreciation ....................            -             -       (50,422)     (966,639)             -    (1,017,061)
                                                 -----------   -----------   -----------   -----------    -----------   -----------
                                                           -             -        49,198     2,631,549              -     2,680,747
                                                 -----------   -----------   -----------   -----------    -----------   -----------

NOTES RECEIVABLE FROM AFFILIATES ..............      497,209             -        44,159             -       (541,368)            -
INVESTMENTS IN AFFILIATES .....................    1,622,983     1,946,299     1,729,507             -     (5,298,789)            -
INVESTMENT IN AND ADVANCES TO JOINT VENTURE ...            -             -             -        18,942              -        18,942
OTHER ASSETS ..................................            -             -         5,963       119,435              -       125,398
                                                 -----------   -----------   -----------   -----------    -----------   -----------
                                                 $ 2,304,288   $ 1,946,299   $ 2,420,387   $ 3,118,360    $(6,554,627)  $ 3,234,707
                                                 ===========   ===========   ===========   ===========    ===========   ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
  Current maturities of long-term debt ........  $         -   $    19,241   $         -   $    17,751    $   (19,241)  $    17,751
  Accounts payable ............................          (11)            -         2,480        78,906              -        81,375
  Accrued payroll and related costs ...........           20             -        13,038        39,230              -        52,288
  Taxes payable ...............................        1,991             -             -        25,457              -        27,448
  Interest payable ............................            -         7,936         1,484         1,407         (8,162)        2,665
  Accounts payable to affiliates ..............            -        94,163             -       592,904       (687,067)            -
  Other current liabilities ...................           (3)            -         1,515        26,238              -        27,750
                                                 -----------   -----------   -----------   -----------    -----------   -----------
Total current liabilities .....................        1,997       121,340        18,517       781,893       (714,470)      209,277

LONG-TERM DEBT ................................            -             -       451,648        53,783              -       505,431
NOTES PAYABLE TO AFFILIATES ...................            -       497,209             -        44,159       (541,368)            -
DEFERRED INCOME TAXES .........................            -        (2,700)       14,944       194,802              -       207,046
OTHER LIABILITIES .............................            -         1,043         4,777        13,170              -        18,990
COMMITMENTS AND CONTINGENCIES .................            -             -             -             -              -             -
MINORITY INTEREST .............................            -             -             -        (8,328)             -        (8,328)
                                                 -----------   -----------   -----------   -----------    -----------   -----------
                                                       1,997       616,892       489,886     1,079,479     (1,255,838)      932,416
                                                 -----------   -----------   -----------   -----------    -----------   -----------
SHAREHOLDERS' EQUITY
 Ordinary Shares-par value $0.10 per share ....       13,506             -             -             -              -        13,506
 Capital in excess of par value ...............      944,872       870,744       870,744       689,786     (2,431,274)      944,872
 Retained earnings ............................    1,400,100       458,663     1,059,757     1,345,184     (2,863,604)    1,400,100
 Treasury stock, at cost ......................      (47,431)            -             -             -              -       (47,431)
 Restricted stock (unearned compensation) .....      (12,667)            -             -             -              -       (12,667)
 Accumulated other comprehensive income .......        3,911             -             -         3,911         (3,911)        3,911
                                                 -----------   -----------   -----------   -----------    -----------   -----------
                                                   2,302,291     1,329,407     1,930,501     2,038,881     (5,298,789)    2,302,291
                                                 -----------   -----------   -----------   -----------    -----------   -----------
                                                 $ 2,304,288   $ 1,946,299   $ 2,420,387   $ 3,118,360    $(6,554,627)  $ 3,234,707
                                                 ===========   ===========   ===========   ===========    ===========   ===========
</TABLE>


                                       10
<PAGE>

                                                                       FORM 10-Q

                    NOBLE CORPORATION AND OTHER SUBSIDIARIES
                           CONSOLIDATING BALANCE SHEET
                                DECEMBER 31, 2003
                                 (In thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                              NOBLE
                                                              HOLDING       NOBLE
                                                  NOBLE     (SUBSIDIARY    DRILLING       OTHER       CONSOLIDATING
                                               (GUARANTOR)   GUARANTOR)    (ISSUER)    SUBSIDIARIES    ADJUSTMENTS        TOTAL
                                              ------------  -----------  ------------  ------------   -------------   ------------
<S>                                           <C>           <C>          <C>           <C>            <C>             <C>
ASSETS
CURRENT ASSETS
  Cash and cash equivalents.................  $     33,991  $        -   $          -  $    105,476   $           -   $    139,467
  Investments in marketable securities......        24,798           -              -        73,578               -         98,376
  Accounts receivable.......................             -           -          3,144       146,091               -        149,235
  Inventories...............................             -           -              -         4,086               -          4,086
  Prepaid expenses..........................             -           -          3,376         8,433               -         11,809
  Accounts receivable from affiliates.......        17,239           -        487,693             -        (504,932)             -
  Other current assets......................        26,098           -          3,977        14,926         (26,015)        18,986
                                              ------------  ----------   ------------  ------------   -------------   ------------
Total current assets........................       102,126           -        498,190       352,590        (530,947)       421,959
                                              ------------  ----------   ------------  ------------   -------------   ------------

PROPERTY AND EQUIPMENT
  Drilling equipment and facilities.........             -           -        100,647     3,353,516               -      3,454,163
  Other.....................................             -           -              -        64,591               -         64,591
                                              ------------  ----------   ------------  ------------   -------------   ------------
                                                         -           -        100,647     3,418,107               -      3,518,754
  Accumulated depreciation..................             -           -        (47,380)     (845,508)              -       (892,888)
                                              ------------  ----------   ------------  ------------   -------------   ------------
                                                         -           -         53,267     2,572,599               -      2,625,866
                                              ------------  ----------   ------------  ------------   -------------   ------------

NOTES RECEIVABLE FROM AFFILIATES                   511,821           -        169,159         4,629        (685,609)             -
INVESTMENTS IN AFFILIATES...................     1,563,494   1,864,823      1,643,124             -      (5,071,441)             -
INVESTMENT IN AND ADVANCES
   TO JOINT VENTURE.........................             -           -              -        19,868               -         19,868
OTHER ASSETS................................             -           -          7,333       114,607               -        121,940
                                              ------------  ----------   ------------  ------------   -------------   ------------
                                              $  2,177,441  $1,864,823   $  2,371,073  $  3,064,293   $  (6,287,997)  $  3,189,633
                                              ============  ==========   ============  ============   =============   ============

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
  Current maturities of long-term debt......  $          -  $   17,951   $          -  $     47,666   $     (17,951)  $     47,666
  Accounts payable..........................            (6)          -          4,180        83,004               -         87,178
  Accrued payroll and related costs.........             -           -         11,412        37,099               -         48,511
  Taxes payable.............................          (958)          -              -        32,692               -         31,734
  Interest payable..........................             -       8,064          7,799         1,585          (8,064)         9,384
  Accounts payable to affiliates                         -      57,527              -       447,405        (504,932)             -
  Other current liabilities.................           (20)          -            668        18,902               -         19,550
                                              ------------  ----------   ------------  ------------   -------------   ------------
Total current liabilities...................          (984)     83,542         24,059       668,353        (530,947)       244,023
LONG-TERM DEBT..............................             -           -        476,640        65,267               -        541,907
NOTES PAYABLE TO AFFILIATES.................             -     511,821              -       173,788        (685,609)             -
DEFERRED INCOME TAXES.......................             -           -         16,264       197,093               -        213,357
OTHER LIABILITIES...........................             -           -          5,085        13,116               -         18,201
COMMITMENTS AND CONTINGENCIES                            -           -              -             -               -              -
MINORITY INTEREST...........................             -           -              -        (6,280)              -         (6,280)
                                              ------------  ----------   ------------  ------------   -------------   ------------
                                                      (984)    595,363        522,048     1,111,337      (1,216,556)     1,011,208
                                              ------------  ----------   ------------  ------------   -------------   ------------

SHAREHOLDERS' EQUITY
 Ordinary Shares-par value $0.10 per share..        13,389           -              -             -               -         13,389
 Capital in excess of par value.............       915,240     870,744        870,744       693,687      (2,435,175)       915,240
 Retained earnings..........................     1,306,888     398,716        978,281     1,259,259      (2,636,256)     1,306,888
 Treasury stock, at cost....................       (49,121)          -              -             -               -        (49,121)
 Restricted stock (unearned compensation)...        (7,981)          -              -             -               -         (7,981)
 Accumulated other comprehensive income.....            10           -              -            10             (10)            10
                                              ------------  ----------   ------------  ------------   -------------   ------------
                                                 2,178,425   1,269,460      1,849,025     1,952,956      (5,071,441)     2,178,425
                                              ------------  ----------   ------------  ------------   -------------   ------------
                                              $  2,177,441  $1,864,823   $  2,371,073  $  3,064,293   $  (6,287,997)  $  3,189,633
                                              ============  ==========   ============  ============   =============   ============
</TABLE>


                                       11
<PAGE>


                                                                       FORM 10-Q

                    NOBLE CORPORATION AND OTHER SUBSIDIARIES
                        CONSOLIDATING STATEMENT OF INCOME
                      THREE MONTHS ENDED SEPTEMBER 30, 2004
                                 (In thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                 NOBLE
                                                                 HOLDING       NOBLE
                                                     NOBLE     (SUBSIDIARY    DRILLING       OTHER       CONSOLIDATING
                                                  (GUARANTOR)   GUARANTOR)    (ISSUER)    SUBSIDIARIES    ADJUSTMENTS      TOTAL
                                                 ------------  -----------  ------------  ------------   -------------   ---------
<S>                                              <C>           <C>          <C>           <C>            <C>             <C>
OPERATING REVENUES
   Contract drilling services..................  $          -  $        -   $      7,635  $    224,422   $           -   $ 232,057
   Reimbursables...............................             -           -              4        12,157               -      12,161
   Labor contract drilling services............             -           -              -        15,146               -      15,146
   Engineering, consulting, and other..........             -           -              -         6,274               -       6,274
                                                 ------------  ----------   ------------  ------------   -------------   ---------
                                                            -           -          7,639       257,999               -     265,638
                                                 ------------  ----------   ------------  ------------   -------------   ---------

OPERATING COSTS AND EXPENSES
   Contract drilling services..................          (102)          -          2,408       141,595               -     143,901
   Reimbursables...............................             -           -              4        10,500               -      10,504
   Labor contract drilling services............             -           -              -        12,470               -      12,470
   Engineering, consulting and other...........             -           -              -         4,875               -       4,875
   Depreciation................................             -           -          1,163        40,879               -      42,042
   Selling, general and administrative.........           352           -             31         7,448               -       7,831
                                                 ------------  ----------   ------------  ------------   -------------   ---------
                                                          250           -          3,606       217,767               -     221,623
                                                 ------------  ----------   ------------  ------------   -------------   ---------

OPERATING INCOME...............................          (250)          -          4,033        40,232               -      44,015

OTHER INCOME (EXPENSE)
   Equity earnings in affiliates (net of tax)..        19,713      34,653         36,646             -         (91,012)          -
   Interest expense............................             -     (11,855)        (6,992)       (1,390)         11,855      (8,382)
   Other, net..................................        11,826           -           (107)        1,335         (11,855)      1,199
                                                 ------------  ----------   ------------  ------------   -------------   ---------

INCOME BEFORE INCOME TAXES.....................        31,289      22,798         33,580        40,177         (91,012)     36,832
INCOME TAX (PROVISION) BENEFIT.................          (718)      5,841          1,073       (12,457)              -      (6,261)
                                                 ------------  ----------   ------------  ------------   -------------   ---------

NET INCOME.....................................  $     30,571  $   28,639   $     34,653  $     27,720   $     (91,012)  $  30,571
                                                 ============  ==========   ============  ============   =============   =========
</TABLE>


                                       12
<PAGE>

                                                                       FORM 10-Q

                    NOBLE CORPORATION AND OTHER SUBSIDIARIES
                        CONSOLIDATING STATEMENT OF INCOME
                      THREE MONTHS ENDED SEPTEMBER 30, 2003
                                 (In thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                 NOBLE
                                                                HOLDING       NOBLE
                                                    NOBLE     (SUBSIDIARY    DRILLING        OTHER     CONSOLIDATING
                                                 (GUARANTOR)   GUARANTOR)    (ISSUER)     SUBSIDIARIES  ADJUSTMENTS      TOTAL
                                                 -----------   ----------    --------     ------------  -----------      -----
<S>                                              <C>          <C>            <C>          <C>          <C>             <C>
OPERATING REVENUES
   Contract drilling services ..................  $       -    $       -     $   4,499     $ 230,772     $       -     $ 235,271
   Reimbursables ...............................          -            -             -         7,189             -         7,189
   Labor contract drilling services ............          -            -             -         6,842             -         6,842
   Engineering, consulting, and other ..........          -            -             -         5,344             -         5,344
                                                  ---------    ---------     ---------     ---------     ---------     ---------
                                                          -            -         4,499       250,147             -       254,646
                                                  ---------    ---------     ---------     ---------     ---------     ---------

OPERATING COSTS AND EXPENSES
   Contract drilling services ..................         (7)           -         1,578       123,119             -       124,690
   Reimbursables ...............................          -            -             -         6,055             -         6,055
   Labor contract drilling services ............          -            -             -         5,350             -         5,350
   Engineering, consulting and other ...........          -            -          (143)        7,297             -         7,154
   Depreciation ................................          -            -           959        36,800             -        37,759
   Selling, general and administrative .........        195            -           192         6,094             -         6,481
                                                  ---------    ---------     ---------     ---------     ---------     ---------
                                                        188            -         2,586       184,715             -       187,489
                                                  ---------    ---------     ---------     ---------     ---------     ---------

OPERATING INCOME (LOSS) ........................       (188)           -         1,913        65,432             -        67,157

OTHER INCOME (EXPENSE)
   Equity earnings in affiliates (net of tax)...     41,553       49,110        51,388             -      (142,051)            -
   Interest expense ............................          -      (12,293)       (6,921)       (4,087)       13,279       (10,022)
   Other, net ..................................     12,332            -         1,503         1,811       (13,279)        2,367
                                                  ---------    ---------     ---------     ---------     ---------     ---------

INCOME BEFORE INCOME TAXES .....................     53,697       36,817        47,883        63,156      (142,051)       59,502
INCOME TAX (PROVISION) BENEFIT .................       (740)       4,302         1,227       (11,334)            -        (6,545)
                                                  ---------    ---------     ---------     ---------     ---------     ---------

NET INCOME .....................................  $  52,957    $  41,119     $  49,110     $  51,822     $(142,051)    $  52,957
                                                  =========    =========     =========     =========     =========     =========
</TABLE>


                                       13
<PAGE>

                                                                       FORM 10-Q

                    NOBLE CORPORATION AND OTHER SUBSIDIARIES
                        CONSOLIDATING STATEMENT OF INCOME
                      NINE MONTHS ENDED SEPTEMBER 30, 2004
                                 (In thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                 NOBLE
                                                                HOLDING       NOBLE
                                                   NOBLE      (SUBSIDIARY    DRILLING        OTHER     CONSOLIDATING
                                                (GUARANTOR)    GUARANTOR)    (ISSUER)     SUBSIDIARIES  ADJUSTMENTS      TOTAL
                                                -----------    ----------    --------     ------------  -----------      -----
<S>                                             <C>           <C>            <C>          <C>          <C>             <C>
OPERATING REVENUES
   Contract drilling services ..................  $       -    $       -     $  22,637     $ 653,670     $       -     $ 676,307
   Reimbursables ...............................          -            -            17        31,748                      31,765
   Labor contract drilling services ............          -            -             -        35,615                      35,615
   Engineering, consulting, and other ..........          -            -             -        20,393                      20,393
                                                  ---------    ---------     ---------     ---------     ---------     ---------
                                                          -            -        22,654       741,426             -       764,080
                                                  ---------    ---------     ---------     ---------     ---------     ---------

OPERATING COSTS AND EXPENSES
   Contract drilling services ..................       (241)           -         7,653       402,734             -       410,146
   Reimbursables ...............................          -            -            17        27,646             -        27,663
   Labor contract drilling services ............          -            -             -        28,756             -        28,756
   Engineering, consulting and other ...........          -            -             -        19,756             -        19,756
   Depreciation ................................          -            -         3,435       120,766             -       124,201
   Selling, general and administrative .........        380            -           376        23,384             -        24,140
                                                  ---------    ---------     ---------     ---------     ---------     ---------
                                                        139            -        11,481       623,042             -       634,662
                                                  ---------    ---------     ---------     ---------     ---------     ---------

OPERATING INCOME ...............................       (139)           -        11,173       118,384             -       129,418

OTHER INCOME (EXPENSE)
   Equity earnings in affiliates (net of tax)...     59,489       81,476        86,383             -      (227,348)            -
   Interest expense ............................          -      (35,724)      (20,806)       (7,134)       37,594       (26,070)
   Other, net ..................................     36,030            -         2,084         5,202       (37,594)        5,722
                                                  ---------    ---------     ---------     ---------     ---------     ---------

INCOME BEFORE INCOME TAXES .....................     95,380       45,752        78,834       116,452      (227,348)      109,070
INCOME TAX (PROVISION) BENEFIT .................     (2,168)      14,195         2,642       (30,527)            -       (15,858)
                                                  ---------    ---------     ---------     ---------     ---------     ---------

NET INCOME .....................................  $  93,212    $  59,947     $  81,476     $  85,925     $(227,348)    $  93,212
                                                  =========    =========     =========     =========     =========     =========
</TABLE>


                                       14
<PAGE>

                                                                       FORM 10-Q

                    NOBLE CORPORATION AND OTHER SUBSIDIARIES
                        CONSOLIDATING STATEMENT OF INCOME
                      NINE MONTHS ENDED SEPTEMBER 30, 2003
                                 (In thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                 NOBLE
                                                                HOLDING       NOBLE
                                                   NOBLE      (SUBSIDIARY    DRILLING        OTHER     CONSOLIDATING
                                                (GUARANTOR)    GUARANTOR)    (ISSUER)     SUBSIDIARIES  ADJUSTMENTS      TOTAL
                                                -----------    ----------    --------     ------------  -----------      -----
<S>                                             <C>           <C>            <C>          <C>          <C>             <C>
OPERATING REVENUES
   Contract drilling services .................   $       -    $       -     $   9,014     $ 663,211     $       -     $ 672,225
   Reimbursables ...............................          -            -           267        34,231             -        34,498
   Labor contract drilling services ............          -            -             -        20,757             -        20,757
   Engineering, consulting, and other ..........          -            -             -        20,094             -        20,094
                                                  ---------    ---------     ---------     ---------     ---------     ---------
                                                          -            -         9,281       738,293             -       747,574
                                                  ---------    ---------     ---------     ---------     ---------     ---------

OPERATING COSTS AND EXPENSES
   Contract drilling services ..................        (20)           1         6,227       365,420             -       371,628
   Reimbursables ...............................          -            -           267        30,558             -        30,825
   Labor contract drilling services ............          -            -             -        16,951             -        16,951
   Engineering, consulting and other ...........          -            -          (143)       20,196             -        20,053
   Depreciation ................................          -            -         2,876       104,778             -       107,654
   Selling, general and administrative .........        266            -           722        18,930             -        19,918
                                                  ---------    ---------     ---------     ---------     ---------     ---------
                                                        246            1         9,949       556,833             -       567,029
                                                  ---------    ---------     ---------     ---------     ---------     ---------

OPERATING (LOSS) INCOME ........................       (246)          (1)         (668)      181,460             -       180,545

OTHER INCOME (EXPENSE)
   Equity earnings in affiliates (net of tax)...    101,691      138,547       150,331             -      (390,569)            -
   Interest expense ............................          -      (36,760)      (20,866)      (12,845)       39,606       (30,865)
   Other, net ..................................     36,879            -         3,405         2,581       (39,606)        3,259
                                                  ---------    ---------     ---------     ---------     ---------     ---------

INCOME BEFORE INCOME TAXES .....................    138,324      101,786       132,202       171,196      (390,569)      152,939
INCOME TAX (PROVISION) BENEFIT .................     (2,208)      12,865         6,345       (33,825)            -       (16,823)
                                                  ---------    ---------     ---------     ---------     ---------     ---------

NET INCOME .....................................  $ 136,116    $ 114,651     $ 138,547     $ 137,371     $(390,569)    $ 136,116
                                                  =========    =========     =========     =========     =========     =========
</TABLE>


                                       15
<PAGE>

                                                                       FORM 10-Q

                    NOBLE CORPORATION AND OTHER SUBSIDIARIES
                      CONSOLIDATING STATEMENT OF CASH FLOWS
                      NINE MONTHS ENDED SEPTEMBER 30, 2004
                                 (In thousands)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                     NOBLE
                                                                     HOLDING     NOBLE
                                                          NOBLE    (SUBSIDIARY  DRILLING     OTHER      CONSOLIDATING
                                                       (GUARANTOR)  GUARANTOR)  (ISSUER)  SUBSIDIARIES   ADJUSTMENTS      TOTAL
                                                       -----------  ----------  --------  ------------   -----------      -----
<S>                                                    <C>         <C>          <C>       <C>           <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income............................................. $93,212      $59,947    $81,476   $  85,925       $(227,348)   $  93,212
Adjustments to reconcile net income to net cash
   provided by operating activities:
     Depreciation, and amortization of deferred
        repair and maintenance.........................       -            -      4,411     149,922               -      154,333
      Deferred income tax provision....................       -            -          -       1,728               -        1,728
     Loss on sales of marketable securities............       -            -          -         131               -          131
     Equity in income of joint venture.................       -            -          -      (2,821)              -       (2,821)
     Distributions received from joint venture.........       -            -          -       1,452               -        1,452
     Compensation expense from stock-based plans.......   4,257            -          -           -               -        4,257
     Equity earnings in affiliates..................... (59,489)     (81,476)   (86,383)          -         227,348          -
     Other.............................................       -       (1,657)      (258)      4,139               -        2,224
     Changes in current assets and liabilities:
       Accounts receivable.............................       -            -     (2,520)    (29,125)              -      (31,645)
       Accounts receivable from affiliates............. (72,852)           -     28,583           -          44,269          -
       Other current assets............................  (6,146)           -      5,299      (4,636)              -       (5,483)
       Accounts payable................................      (5)           -     (1,700)     (4,100)              -       (5,805)
       Accounts payable to affiliates..................       -       36,636          -       7,633         (44,269)         -
       Other current liabilities.......................   2,986         (128)    (3,842)      2,057               -        1,073
                                                        -------     --------    -------   ---------       ---------    ---------

            Net cash (used for) provided by
               operating activities.................... (38,037)      13,322     25,066     212,305               -      212,656
                                                        -------     --------    -------   ---------       ---------    ---------

CASH FLOWS FROM INVESTING ACTIVITIES
   Acquisitions and related capital upgrades...........       -            -          -     (69,473)              -      (69,473)
   Other capital expenditures..........................       -            -        334     (95,935)              -      (95,601)
   Deferred repair and maintenance expenditures........       -            -       (400)    (46,138)              -      (46,538)
   Repayments from joint venture.......................       -            -          -       2,295               -        2,295
   Proceeds from sales of property and equipment.......       -            -          -       1,616               -        1,616
   Repayments from affiliate...........................  13,322            -          -           -         (13,322)           -
   Investment in marketable securities................. (51,500)           -          -     (38,819)              -      (90,319)
   Proceeds from sales and maturities of
        marketable  securities.........................  67,366            -          -      26,790               -       94,156
                                                        -------     --------    -------   ---------       ---------    ---------
           Net cash provided by (used for) investing
             activities................................  29,188            -        (66)   (219,664)        (13,322)    (203,864)
                                                        -------     --------    -------   ---------       ---------    ---------

CASH FLOWS FROM FINANCING ACTIVITIES
   Payment of long-term debt...........................       -      (13,322)   (25,000)    (41,397)         13,322      (66,397)
   Proceeds from issuance of ordinary shares...........  52,344            -          -           -               -       52,344
   Repurchase of ordinary shares....................... (39,714)           -          -           -               -      (39,714)
                                                        -------     --------    -------   ---------       ---------    ---------
            Net cash provided by (used for)
              financing activities.....................  12,630      (13,322)   (25,000)    (41,397)         13,322      (53,767)
                                                        -------     --------    -------   ---------       ---------    ---------
INCREASE (DECREASE) IN CASH
      AND CASH EQUIVALENTS.............................   3,781            -          -     (48,756)              -      (44,975)
CASH AND CASH EQUIVALENTS,
      BEGINNING OF PERIOD..............................  33,991            -          -     105,476               -      139,467
                                                        -------     --------    -------   ---------       ---------    ---------
CASH AND CASH EQUIVALENTS,
      END OF PERIOD.................................... $37,772     $      -    $     -   $  56,720       $       -    $  94,492
                                                        =======     ========    =======   =========       =========    =========
</TABLE>



                                       16
<PAGE>

                                                                       FORM 10-Q

                    NOBLE CORPORATION AND OTHER SUBSIDIARIES
                      CONSOLIDATING STATEMENT OF CASH FLOWS
                      NINE MONTHS ENDED SEPTEMBER 30, 2003
                                 (In thousands)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                       NOBLE
                                                                       HOLDING     NOBLE
                                                            NOBLE    (SUBSIDIARY  DRILLING      OTHER     CONSOLIDATING
                                                         (GUARANTOR)  GUARANTOR)  (ISSUER)   SUBSIDIARIES  ADJUSTMENTS     TOTAL
                                                         -----------  ----------  --------   ------------ ------------   ---------
<S>                                                      <C>         <C>          <C>        <C>          <C>            <C>
CASH FLOWS FROM OPERATING ACTITIVIES
Net income .............................................  $ 136,116   $ 114,651   $ 138,547    $ 137,371    $(390,569)   $136,116
Adjustments to reconcile net income to net cash
   provided by operating activities:
     Depreciation, and amortization of deferred repair
        and maintenance ................................          -           -       3,415      128,215            -     131,630
     Deferred income tax provision .....................          -           -      (1,312)       8,981            -       7,669
     Loss on sales of marketable securities ............          -           -           -          343            -         343
     Equity in income of joint venture .................          -           -           -       (1,336)           -      (1,336)
     Compensation expense from stock-based plans .......      3,480           -           -            -            -       3,480
     Gain on sales of property and equipment ...........          -           -           -         (519)           -        (519)
     Equity earnings in affiliates .....................   (101,691)   (138,547)   (150,331)           -      390,569           -
     Other .............................................          -           -      (1,399)       1,772            -         373
     Changes in current assets and liabilities:
       Accounts receivable .............................          -           -      (1,573)     (11,877)           -     (13,450)
       Accounts receivable from affiliates .............          -           -      26,616            -      (26,616)          -
       Other current assets ............................     (9,249)    (12,865)     (3,610)      20,069            -      (5,655)
       Accounts payable ................................         (3)          -           8      (18,514)           -     (18,509)
       Accounts payable to affiliates ..................    (27,488)     40,807           -      (39,935)      26,616           -
       Other current liabilities .......................        919       8,129      (3,228)     (19,838)           -     (14,018)
                                                          ---------   ---------   ---------    ---------    ---------    --------
           Net cash provided by operating activities ...      2,084      12,175       7,133      204,732            -     226,124
                                                          ---------   ---------   ---------    ---------    ---------    --------

CASH FLOWS FROM INVESTING ACTIVITIES
   Acquisitions and related capital upgrades ...........          -           -           -     (191,011)           -    (191,011)
   Other capital expenditures ..........................          -           -      (5,738)     (39,437)           -     (45,175)
   Deferred repair and maintenance expenditures ........          -           -      (1,395)     (19,749)           -     (21,144)
   Repayments from joint venture .......................          -           -           -        1,494            -       1,494
   Proceeds from sales of property and equipment .......          -           -           -          500            -         500

   Repayments from affiliates ..........................     12,175           -           -            -      (12,175)          -
   Investment in marketable securities .................    (39,656)          -           -      (29,757)           -     (69,413)
   Proceeds from sales and maturities of
        marketable  securities .........................     30,630           -           -       39,360            -      69,990
                                                          ---------   ---------   ---------    ---------    ---------    --------
           Net cash used for investing activities ......      3,149           -      (7,133)    (238,600)     (12,175)   (254,759)
                                                          ---------   ---------   ---------    ---------    ---------    --------
CASH FLOWS FROM FINANCING ACTIVITIES
   Payment of long-term debt ...........................          -     (12,175)          -      (47,418)      12,175     (47,418)
   Proceeds from issuance of ordinary shares ...........      6,303           -           -            -            -       6,303
   Decrease in restricted cash .........................          -           -           -        1,477            -       1,477
                                                          ---------   ---------   ---------    ---------    ---------    --------
        Net cash provided by (used for)
           financing activities ........................      6,303     (12,175)          -      (45,941)      12,175     (39,638)
                                                          ---------   ---------   ---------    ---------    ---------    --------

INCREASE (DECREASE) IN CASH
      AND CASH EQUIVALENTS .............................     11,536           -           -      (79,809)           -     (68,273)
CASH AND CASH EQUIVALENTS,
      BEGINNING OF PERIOD ..............................      9,317           -           -      183,192            -     192,509
                                                          ---------   ---------   ---------    ---------    ---------    --------

CASH AND CASH EQUIVALENTS,
      END OF PERIOD ....................................  $  20,853   $       -   $       -    $ 103,383    $       -   $ 124,236
                                                          =========   =========   =========    =========    =========    ========
</TABLE>



                                       17
<PAGE>

                                                                       FORM 10-Q

NOTE 8 - SEGMENT AND RELATED INFORMATION

      We provide diversified services for the oil and gas industry. Our
reportable segments consist of the primary services we provide, which include
domestic and international offshore contract drilling and engineering and
consulting services. Although these segments are generally influenced by the
same economic factors, each represents a distinct service to the oil and gas
industry. Each of our drilling rigs is considered by us to be an operating
segment within our domestic and international offshore contract drilling
services reportable segments, and these operating segments are aggregated to
comprise our domestic and international contract drilling services reportable
segments in accordance with SFAS No. 131, Disclosure about Segments of an
Enterprise and Related Information ("SFAS 131").

      Our international contract drilling services segment conducts operations
in the Middle East, Mexico, the North Sea, Brazil, West Africa, India and the
Mediterranean Sea. Our domestic contract drilling services segment conducts
operations in the U.S. Gulf of Mexico. Our engineering and consulting services
segment, as represented by our Noble Technology Services Division, provides
drilling products and drilling-related software programs, well site management,
project management, technical services, and operations support for our downhole
technology tools.

      All intersegment sales pricing is based on current market conditions. We
evaluate the performance of our operating segments based on operating revenues
and net income. Summarized financial information of our reportable segments for
the three and nine months ended September 30, 2004 and 2003 is shown in the
following table (in thousands). The "Other" column includes results of labor
contract drilling services, other insignificant operations and corporate related
items.

<TABLE>
<CAPTION>
                                             INTERNATIONAL     DOMESTIC      ENGINEERING
                                               CONTRACT        CONTRACT           &
                                               DRILLING        DRILLING      CONSULTING
                                               SERVICES        SERVICES        SERVICES          OTHER            TOTAL
                                             -------------    ----------     -----------       ----------       ----------
<S>                                          <C>              <C>            <C>               <C>              <C>
THREE MONTHS ENDED
SEPTEMBER 30, 2004

Revenues from external customers .......      $  182,557      $   60,876      $    3,748       $   18,457       $  265,638
Depreciation ...........................          30,847          10,159             162              874           42,042
Operating costs and expenses ...........         148,822          50,210           5,657           16,934          221,623
Equity in income of
  unconsolidated  subsidiaries .........           1,017               -               -                -            1,017
Net income (loss) ......................          28,389           5,447          (2,352)            (913)          30,571
Total assets ...........................       1,586,978       1,216,908          34,401          396,420        3,234,707

THREE MONTHS ENDED
SEPTEMBER 30, 2003

Revenues from external customers .......      $  172,380      $   69,941      $    4,041       $    8,284       $  254,646
Depreciation ...........................          25,143          11,513             221              882           37,759
Operating costs and expenses ...........         127,123          44,406           8,114            7,846          187,489
Equity in income of
  unconsolidated  subsidiaries .........             995               -               -                -              995
Net income (loss) ......................          38,144          15,163          (4,167)           3,817           52,957
Total assets ...........................       1,593,842       1,266,844          31,377          247,650        3,139,713
</TABLE>


                                       18
<PAGE>

                                                                       FORM 10-Q

<TABLE>
<CAPTION>
                                          INTERNATIONAL   DOMESTIC     ENGINEERING
                                            CONTRACT      CONTRACT          &
                                            DRILLING      DRILLING     CONSULTING
                                            SERVICES      SERVICES      SERVICES        OTHER         TOTAL
                                          -------------   --------     ----------      --------      --------

<S>                                       <C>             <C>          <C>             <C>           <C>
NINE MONTHS ENDED
SEPTEMBER 30, 2004

Revenues from external customers .....      $511,977      $189,911      $ 13,445       $ 48,747      $764,080
Depreciation .........................        86,955        34,137           490          2,619       124,201
Operating costs and expenses .........       423,631       146,171        18,989         45,871       634,662
Equity in income of
  unconsolidated  subsidiaries .......         2,821             -             -              -         2,821
Net income (loss) ....................        68,430        28,881        (6,169)         2,070        93,212

NINE MONTHS ENDED
SEPTEMBER 30, 2003

Revenues from external customers .....      $502,388      $198,411      $ 20,296       $ 26,479      $747,574
Depreciation .........................        69,966        34,582           500          2,606       107,654
Operating costs and expenses .........       370,092       141,899        29,387         25,651       567,029
Equity in income of
  unconsolidated  subsidiaries .......         1,336             -             -              -         1,336
Net income (loss) ....................       108,534        30,382        (9,803)         7,003       136,116
</TABLE>

NOTE 9 - EMPLOYEE BENEFIT PLANS

      We have a U.S. noncontributory defined benefit pension plan which covers
substantially all salaried employees, and a U.S. noncontributory defined benefit
pension plan which covers certain hourly employees, whose initial date of
employment is prior to August 1, 2004 (collectively referred to as our
"qualified domestic plans"). These plans are governed by the Noble Drilling
Corporation Retirement Trust. The benefits from these plans are based primarily
on years of service and, for the salaried plan, employees' compensation near
retirement. These plans qualify under the Employee Retirement Income Security
Act of 1974 ("ERISA"), and our funding policy is consistent with funding
requirements of ERISA and other applicable laws and regulations. We make cash
contributions to the qualified domestic plans when required. The benefit amount
that can be covered by the qualified domestic plans is limited under ERISA and
the Internal Revenue Code of 1986. Therefore, we maintain an unfunded,
nonqualified excess benefit plan designed to maintain benefits for all employees
at the formula level in the qualified domestic plans. We refer to the qualified
domestic plans and the excess benefit plan collectively as the "domestic plans."

      Each of Noble Drilling (U.K.) Limited, Noble Enterprises Limited and Noble
Drilling (Nederland) B.V., all indirect, wholly-owned subsidiaries of Noble,
maintains a pension plan which covers all of its salaried, nonunion employees
(collectively referred to as our "international plans"). Benefits are based on
credited service and the average of the highest three years of qualified salary
within the past 10 years of participation.


                                       19
<PAGE>


                                                                       FORM 10-Q

      Pension costs for the three and nine months ended September 30, 2004 and
2003 include the following components (in thousands):

<TABLE>
<CAPTION>
                                                                THREE MONTHS ENDED SEPTEMBER 30,
                                               -----------------------------------------------------------------
                                                            2004                             2003
                                               -----------------------------       -----------------------------
                                               INTERNATIONAL       DOMESTIC        INTERNATIONAL       DOMESTIC
                                               -------------       --------        -------------       --------
<S>                                            <C>                 <C>             <C>                 <C>
Service cost ...........................          $   573           $ 1,162           $   490           $   876
Interest cost ..........................              599             1,025               503               870
Return on plan assets ..................             (748)           (1,069)             (464)             (844)
Amortization of prior service cost .....                -                65                 -                55
Amortization of transition obligation ..               91                 -               132                 -
Recognized net actuarial (gain) loss ...              (64)              225               (89)              175
                                                  -------           -------           -------           -------
Net pension expense ....................          $   451           $ 1,408           $   572           $ 1,132
                                                  =======           =======           =======           =======
</TABLE>

<TABLE>
<CAPTION>
                                                                NINE MONTHS ENDED SEPTEMBER 30,
                                               -----------------------------------------------------------------
                                                          2004                                2003
                                                ---------------------------        -----------------------------
                                                INTERNATIONAL      DOMESTIC        INTERNATIONAL       DOMESTIC
                                                -------------      --------        -------------       --------
<S>                                             <C>                <C>             <C>                 <C>
Service cost ...........................          $ 1,717           $ 3,486           $ 1,468           $ 2,628
Interest cost ..........................            1,795             3,073             1,511             2,614
Return on plan assets ..................           (2,242)           (3,205)           (1,392)           (2,532)
Amortization of prior service cost .....                -               195                 -               163
Amortization of transition obligation ..              273                 -               398                 -
Recognized net actuarial (gain) loss ...             (194)              675              (269)              523
                                                  -------           -------           -------           -------
Net pension expense ....................          $ 1,349           $ 4,224           $ 1,716           $ 3,396
                                                  =======           =======           =======           =======
</TABLE>

      We previously disclosed in our financial statements for the year ended
December 31, 2003 that we expect to contribute approximately $5,000,000 to our
pension plans in 2004. As of September 30, 2004, this estimate has been revised
to $1,424,000. We funded a total of $693,000 to our pension plans during the
nine months ended September 30, 2004.

NOTE 10 - DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

      Our North Sea operations have a significant amount of its cash operating
expenses payable in either the Euro or British Pound. To reduce our exposure to
fluctuations in these currencies during 2004, we entered into forward contracts
in March and April 2004 to purchase 1,400,000 Euros and 1,200,000 British
Pounds, respectively, per month for the months April 2004 through December 2004.
These forward contracts represented approximately 50 percent of our forecasted
Euro and British Pound requirements for 2004 after the respective dates we
entered into the forward contracts. These forward contracts are being accounted
for as cash flow hedges under SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities, as amended by SFAS No. 138, Accounting for
Certain Derivative Instruments and Certain Hedging Activities (an amendment of
FASB Statement No. 133), and SFAS No. 149, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities. The cumulative net unrealized
gain on these forward contracts is included in "Accumulated other comprehensive
income" in our Consolidated Balance Sheet at September 30, 2004. We did not
recognize a gain or loss due to hedge ineffectiveness in our Consolidated
Statements of Income for the three and nine months ended September 30, 2004
related to these forward contracts.


                                       20
<PAGE>

                                                                       FORM 10-Q

      The balance of the net unrealized gain related to our foreign currency
forward contracts included in Accumulated other comprehensive income and related
activity for the three and nine months ended September 30, 2004 is presented in
the following table:

<TABLE>
<CAPTION>
                                                                              THREE MONTHS ENDED
                                                                              SEPTEMBER 30, 2004
                                                                              ------------------
<S>                                                                           <C>
Net unrealized gain at June 30, 2004                                          $         233,000
Activity during period:
   Settlement of forward contracts outstanding at June 30, 2004                        (113,000)
   Net unrealized gain on outstanding forward contracts                                 144,000
                                                                              -----------------
Net unrealized gain at September 30, 2004                                     $         264,000
                                                                              =================
</TABLE>

<TABLE>
<CAPTION>
                                                                              NINE MONTHS ENDED
                                                                              SEPTEMBER 30, 2004
                                                                              ------------------
<S>                                                                           <C>
Net unrealized gain at December 31, 2003                                      $               -
Activity during period:
   Net unrealized gain on outstanding forward contracts                                 264,000
                                                                              -----------------
Net unrealized gain at September 30, 2004                                     $         264,000
                                                                              =================
</TABLE>

ITEM  2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

FORWARD-LOOKING STATEMENTS

      This report on Form 10-Q includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. All statements other
than statements of historical facts included in this Form 10-Q, including,
without limitation, statements contained in this "Management's Discussion and
Analysis of Financial Condition and Results of Operations" regarding our
financial position, business strategy, plans and objectives of management for
future operations, industry conditions, and indebtedness covenant compliance,
are forward-looking statements. Although we believe that the expectations
reflected in such forward-looking statements are reasonable, we cannot assure
you that such expectations will prove to have been correct.

      We have identified factors that could cause actual plans or results to
differ materially from those included in any forward-looking statements. These
factors include, but are not limited to, the following:

   -  volatility in crude oil and natural gas prices;

   -  changes in our customers' drilling programs or budgets due to their own
      internal corporate events, changes in the markets and prices for oil and
      gas, or shifts in the relative strengths of various geographic drilling
      markets brought on by things such as a general economic slowdown, or
      regional or worldwide recession, any of which could result in
      deterioration in demand for our drilling services;

   -  our inability to execute any of our business strategies;

   -  changes in tax laws, tax treaties or tax regulations or the interpretation
      or enforcement thereof, including taxing authorities not agreeing with our
      assessment of the effects of such laws, treaties and regulations;

   -  cancellation by our customers of drilling contracts or letter agreements
      or letters of intent for drilling contracts or their exercise of early
      termination provisions generally found in our drilling contracts;

   -  intense competition in the drilling industry;

   -  changes in the rate of economic growth in the U.S. or in other major
      international economies;


                                       21
<PAGE>

                                                                       FORM 10-Q

   -  political and economic conditions in markets where we from time to time
      operate;

   -  adverse weather (such as hurricanes and monsoons) and seas;

   -  operational risks (such as blowouts, fires and loss of production);

   -  changes in oil and gas drilling technology or in our competitors' drilling
      rig fleets that could make our drilling rigs less competitive or require
      major capital investment to keep them competitive;

   -  costs and effects of unanticipated legal and administrative proceedings;

   -  cost overruns or delays in shipyard repair, maintenance, conversion or
      upgrade projects;

   -  limitations on our insurance coverage or our inability to obtain or
      maintain insurance coverage at rates and with deductible amounts that we
      believe are commercially reasonable;

   -  the discovery of significant additional oil and/or gas reserves or the
      construction of significant oil and/or gas delivery or storage systems
      that impact regional or worldwide energy markets;

   -  requirements and potential liability imposed by governmental regulation of
      the drilling industry (including environmental regulation);

   -  acts of war or terrorism;

   -  significant changes in trade, monetary or fiscal policies worldwide,
      including changes in interest rates; and

   -  currency fluctuations between the U.S. dollar and other currencies.

      All of the foregoing risks and uncertainties are beyond our ability
to control, and in many cases, we cannot predict the risks and uncertainties
that could cause our actual results to differ materially from those indicated by
the forward-looking statements. When used in this Form 10-Q, the words
"believes", "anticipates", "expects", "plans" and similar expressions as they
relate to the Company or its management are intended to identify forward-looking
statements.

THE COMPANY

      We are a leading provider of diversified services for the oil and gas
industry. We perform contract drilling services with our fleet of 60 mobile
offshore drilling units located in key markets worldwide. This fleet consists of
13 semisubmersibles (including five Noble EVA-4000(TM) semisubmersibles),
three dynamically positioned drillships, 41 jackup rigs and three submersibles.
Approximately 80 percent of the fleet is currently deployed in international
markets, principally including the Middle East, Mexico, the North Sea, Brazil,
West Africa, India and the Mediterranean Sea. We provide technologically
advanced drilling-related products and services designed to create value for our
customers. We also provide labor contract drilling services, well site and
project management services, and engineering services.

      Demand for drilling services depends on a variety of economic and
political factors, including worldwide demand for oil and gas, the ability of
the Organization of Petroleum Exporting Countries ("OPEC") to set and maintain
production levels and pricing, the level of production of non-OPEC countries and
the policies of the various governments regarding exploration and development of
their oil and gas reserves.

      Our results of operations depend on the levels of activity in offshore oil
and gas exploration, development and production in markets worldwide.
Historically, oil and gas prices and market expectations of potential changes in
these prices have significantly affected that level of activity. These prices
are extremely volatile. International markets are influenced more by oil prices
than natural gas prices. Despite favorable oil prices in the first nine months
of 2004, drilling activity in certain international markets, including the North
Sea and West Africa, was generally weaker in this period than the first nine
months of 2003. We believe that operators in these international markets have
been reluctant to increase drilling activity due to the uncertainty surrounding
the worldwide economy, the political unrest in the Middle East (including the
military action in Iraq), Nigeria and Venezuela, and difficulties in obtaining
funding from government-affiliated


                                       22
<PAGE>

                                                                       FORM 10-Q

oil companies. However, drilling activity is now improving in the North Sea and
West Africa, while remaining strong in other international markets in which we
operate, including the Middle East, Mexico and Brazil.

      Natural gas prices during the first nine months of 2004 averaged $5.81 per
thousand cubic feet (source: average Henry Hub closing bidweek price). Although
natural gas prices were comparable during 2003, operators generally did not
significantly increase drilling activities in the U.S. Gulf of Mexico in water
depths applicable to jackups and submersibles until 2004 due principally to a
lack of economically viable drilling prospects. Drilling activity levels in
water depths applicable to semisubmersibles began to improve during the third
quarter of 2004.

      We cannot predict the future level of demand for our drilling services or
future conditions in the offshore contract drilling industry.

      In recent years, we have focused on increasing the number of rigs in our
fleet capable of deepwater offshore drilling. Since the beginning of 2000, we
have added two deepwater semisubmersibles to our fleet and have acquired two
additional semisubmersible baredeck hulls. We have incorporated this focus into
our broader, long-standing business strategy to actively expand our
international and deepwater capabilities through acquisitions, rig upgrades and
modifications and to deploy assets in important geological areas. We have also
increased the number of jackups in key international markets. Since the
beginning of 2000, through several acquisitions we have added nine jackups to
our international fleet. We have also mobilized nine jackups from the U.S. Gulf
of Mexico to various international markets, including Mexico, the Middle East
and the Mediterranean Sea.

RESULTS OF OPERATIONS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003

   GENERAL

      Net income for the three months ended September 30, 2004 (the "Current
Quarter") was $30,571,000, or $0.23 per diluted share, on operating revenues of
$265,638,000, compared to net income for the three months ended September 30,
2003 (the "Comparable Quarter") of $52,957,000, or $0.40 per diluted share, on
operating revenues of $254,646,000. Net income in the Current Quarter included a
$5,850,000, or $0.04 per diluted share, after-tax charge related to damage
incurred on three of our semisubmersibles in the U.S. Gulf of Mexico as a result
of Hurricane Ivan.


                                       23
<PAGE>

                                                                       FORM 10-Q

      The following table sets forth operating revenues and operating costs and
expenses for each of our reportable segments (for additional information
regarding our reportable segments, see Note 8 of our accompanying consolidated
financial statements) for the periods indicated:

<TABLE>
<CAPTION>
                                                   INTERNATIONAL    DOMESTIC
                                                      CONTRACT      CONTRACT     ENGINEERING
                                                      DRILLING      DRILLING    & CONSULTING
                                                      SERVICES      SERVICES      SERVICES      OTHER       TOTAL
                                                      --------      --------      --------      -----       -----
                                                                            (In thousands)
<S>                                                  <C>           <C>           <C>          <C>         <C>
THREE MONTHS ENDED SEPTEMBER 30, 2004

Operating Revenues:
     Contract drilling services.................     $  174,821    $   57,236    $        -   $       -   $  232,057
     Reimbursables..............................          5,874         3,334           685       2,268       12,161
     Labor contract drilling services...........              -             -             -      15,146       15,146
     Engineering, consulting and other..........          1,862           306         3,063       1,043        6,274
                                                     ----------    ----------    ----------   ---------   ----------
                                                     $  182,557    $   60,876    $    3,748   $  18,457   $  265,638
                                                     ==========    ==========    ==========   =========   ==========
Operating Costs and Expenses:
     Contract drilling services.................     $  108,791    $   35,110    $        -   $       -   $  143,901
     Reimbursables..............................          4,611         3,110           673       2,110       10,504
     Labor contract drilling services...........              -             -             -      12,470       12,470
     Engineering, consulting and other..........           (706)         (115)        4,562       1,134        4,875
     Depreciation...............................         30,847        10,159           162         874       42,042
     Selling, general and administrative........          5,279         1,946           260         346        7,831
                                                     ----------    ----------    ----------   ---------   ----------
                                                     $  148,822    $   50,210    $    5,657   $  16,934   $  221,623
                                                     ==========    ==========    ==========   =========   ==========
</TABLE>

<TABLE>
<CAPTION>
                                                   INTERNATIONAL   DOMESTIC
                                                      CONTRACT     CONTRACT    ENGINEERING
                                                      DRILLING     DRILLING   & CONSULTING
                                                      SERVICES     SERVICES     SERVICES      OTHER        TOTAL
                                                   -------------  ----------  ------------  ----------   ----------
                                                                             (In thousands)
<S>                                                <C>            <C>         <C>           <C>          <C>
THREE MONTHS ENDED SEPTEMBER 30, 2003

Operating Revenues:
     Contract drilling services...............       $  169,099   $   66,172   $        -   $        -   $  235,271
     Reimbursables............................            3,018        1,547        2,200          424        7,189
     Labor contract drilling services.........                -            -            -        6,842        6,842
     Engineering, consulting and other........              263        2,222        1,841        1,018        5,344
                                                     ----------   ----------   ----------   ----------   ----------
                                                     $  172,380   $   69,941   $    4,041   $    8,284   $  254,646
                                                     ==========   ==========   ==========   ==========   ==========
Operating Costs and Expenses:
     Contract drilling services...............       $   96,077   $   28,613   $        -   $        -   $  124,690
     Reimbursables............................            2,033        1,438        2,202          382        6,055
     Labor contract drilling services.........                -            -            -        5,350        5,350
     Engineering, consulting and other........               16          788        5,383          967        7,154
     Depreciation.............................           25,143       11,513          221          882       37,759
     Selling, general and administrative......            3,854        2,054          308          265        6,481
                                                     ----------   ----------   ----------   ----------   ----------
                                                     $  127,123   $   44,406   $    8,114   $    7,846   $  187,489
                                                     ==========   ==========   ==========   ==========   ==========
</TABLE>


                                       24
<PAGE>

                                                                       FORM 10-Q

RIG UTILIZATION, OPERATING DAYS AND AVERAGE DAYRATES

      The following table sets forth the average rig utilization, operating days
and average dayrates for our rig fleet for the three months ended September 30,
2004 and 2003:

<TABLE>
<CAPTION>
                                                      AVERAGE RIG
                                                    UTILIZATION (1)           OPERATING DAYS (2)         AVERAGE DAYRATE
                                                ------------------------    -----------------------   -----------------------
                                                   THREE MONTHS ENDED         THREE MONTHS ENDED         THREE MONTHS ENDED
                                                      SEPTEMBER 30,              SEPTEMBER 30,              SEPTEMBER 30,
                                                ------------------------    -----------------------   -----------------------
                                                   2004         2003           2004         2003         2004         2003
                                                ----------    ----------    ----------   ----------   ----------   ----------
<S>                                             <C>           <C>           <C>          <C>          <C>          <C>
International (3):
  Jackups...............................             85%           80%           2,864        2,450   $   49,954   $   52,209
  Semisubmersibles - >6,000'(4) ........             50%          100%              92           92   $  158,924   $  158,632
  Semisubmersibles - <6,000'(5) ........            100%          100%              92           92   $   57,804   $   45,067
  Drillships............................             43%          100%             119          276   $   99,277   $   81,327
                                                                            ----------   ----------
  Total International...................             80%           83%           3,167        2,910   $   55,201   $   58,110
                                                                            ==========   ==========
Domestic (6):
  Jackups...............................            100%           95%             184          260   $   45,935   $   29,931
  Semisubmersibles - >6,000'(4) ........            100%           95%             368          438   $  106,880   $  124,607
  Semisubmersibles -< 6,000'(5) ........             39%            3%              72            3   $   35,708   $   29,333
  Submersibles..........................            100%          100%             276          184   $   24,931   $   20,239
                                                                            ----------   ----------
  Total Domestic........................             89%           88%             900          885   $   63,596   $   74,771
                                                                            ==========   ==========
</TABLE>

----------
(1)  Information reflects our policy of reporting on the basis of the number
     of actively marketed rigs in our fleet. Percentages reflect the results of
     rigs only during the period in which they are owned or operated by us.
(2)  Information reflects the number of days that our rigs were operating under
     contractual terms.
(3)  "International" encompasses contract drilling services conducted in the
     Middle East, Mexico, the North Sea, Brazil, West Africa, India and the
     Mediterranean Sea.
(4)  These units have water depth ratings of 6,000 feet or greater depending on
     the unit.
(5)  These units have water depth ratings less than 6,000 feet.
(6)  "Domestic" encompasses contract drilling services conducted in the U.S.
     Gulf of Mexico.


                                       25
<PAGE>

                                                                       FORM 10-Q

INTERNATIONAL CONTRACT DRILLING SERVICES

      The following table sets forth the operating revenues and the operating
costs and expenses for our international contract drilling services for the
three months ended September 30, 2004 and 2003:

<TABLE>
<CAPTION>
                                                                              OPERATING COSTS
                                                   OPERATING REVENUES          AND EXPENSES
                                                -----------------------   ------------------------
                                                   THREE MONTHS ENDED       THREE MONTHS ENDED
                                                     SEPTEMBER 30,             SEPTEMBER 30,
                                                -----------------------   ------------------------
                                                   2004         2003         2004          2003
                                                ----------   ----------   ----------    ----------
                                                                   (In thousands)
<S>                                             <C>          <C>          <C>           <C>
Contract drilling services...............       $  174,821   $  169,099   $  108,791        96,077
Reimbursables (1)........................            5,874        3,018        4,611         2,033
Labor contract drilling services                         -            -            -             -
Engineering, consulting and other........            1,862          263         (706)           16
Depreciation.............................              N/A          N/A       30,847        25,143
Selling, general and administrative......              N/A          N/A        5,279         3,854
                                                ----------   ----------   ----------    ----------
         Total...........................       $  182,557   $  172,380   $  148,822       127,123
                                                ==========   ==========   ==========    ==========
</TABLE>

----------
(1)  We record reimbursements from customers for out-of-pocket expenses as
     revenues and the related direct cost as operating expenses. Changes in the
     amount of these reimbursables do not have a material effect on our
     financial position, results of operations or cash flows.

      OPERATING REVENUES. International contract drilling services revenues
increased $5,722,000 due to additional operating days in our Middle East
division, which includes India and the Mediterranean Sea, West Africa division
and Mexico division. These additional operating days were partially offset by
weaker market conditions in the North Sea and shipyard projects on two of our
deepwater drillships in Brazil. We had an additional 379 operating days in our
Middle East division in the Current Quarter due primarily to the acquisition of
the Noble Gene House and Noble Charlie Yester premium jackups in July 2003 and
September 2003, respectively, and the mobilization of the Noble Carl Norberg
premium jackup to the Mediterranean Sea from the U.S. Gulf of Mexico in December
2003. The Noble Carl Norberg began a 14-month contract in January 2004. In
addition, in December 2003 we mobilized the Noble Dick Favor to the Middle East
from Brazil, where the rig had been stacked since March 2003, to pursue
opportunities in this strengthening region. Following an upgrade program, the
rig commenced operations in Bahrain during August.

      Nigeria traditionally has had the largest concentration of drilling rigs
in West Africa. Demand in Nigeria began to decline in the latter part of 2002
due to political unrest attributable to elections and strikes. Although this
unrest declined towards the end of 2003, demand did not improve as our customers
were in the process of obtaining approval for projects from the
government-affiliated oil companies. Due to geology which is favorable for
offshore exploration and production, we believe the prospects for drilling
activity in West Africa are good and that our operations in the region will
provide financial returns over time which are comparable to other key
international regions. As a result, we have elected to keep our six jackups in
this market currently. Average dayrates and utilization on our six jackups in
West Africa improved during the Current Quarter. By the end of the Current
Quarter, five of our jackups were operating under long-term contracts.
Currently, all of our West Africa jackups are operating as the Noble Don Walker
commenced a 250-day contract in October 2004. In July 2004, we began upgrades
and refurbishments to our deepwater semisubmersible Noble Homer Ferrington in
preparation for a two-year contract with ExxonMobil in Nigeria. We believe that
the long-term contracts initiated over the past several months, combined with
the upcoming commencement of our long-term contract for the Noble Homer
Ferrington semisubmersible, support our favorable outlook for this region.

      Since September 2002, we have mobilized a total of seven jackups from the
U.S. Gulf of Mexico to Mexico for long-term contracts with Petroleos Mexicanos
("Pemex"). The mobilization of these jackup rigs was pursuant to our
long-standing business strategy of deploying our assets in important geological
regions. We believe the long-term financial returns for our jackup rigs will be
higher in international regions due to relatively fewer quality drilling
prospects in the U.S. Gulf of Mexico at water depths applicable to these units.
As a result, we made the strategic decision to mobilize these units to Mexico
for long-term contracts. The most recent rig mobilized from the U.S. Gulf of
Mexico to Mexico was the Noble Bill Jennings in August 2003, which resulted in
an additional 22 operating days in Mexico during the Current Quarter.


                                       26
<PAGE>

                                                                       FORM 10-Q

      In the North Sea, utilization in the Current Quarter was 86 percent as
compared to 98 percent in the Comparable Quarter, as two of our eight premium
jackups in the region experienced a combined 118 stacked days during the Current
Quarter. In addition, the average dayrate on our North Sea units of $52,966 was
over $7,000 lower than the Comparable Quarter's average dayrate of $60,304. We
believe the gradual maturing of the North Sea basin contributed to the decrease
in average dayrates in the region. We also believe that improvement in dayrates
in this region will be driven by the independent operators, who historically
have been more aggressive than major oil and gas companies in developing smaller
reserve targets. Market conditions appear to be improving in the North Sea, as
all our units in the region are currently operating and dayrates have increased
during the Current Quarter. In Brazil, the Noble Roger Eason drillship was in
the shipyard for all of the Current Quarter, versus operating the entire
Comparable Quarter. We are currently performing regulatory maintenance and
upgrades to this unit, including water depth increase to 7,200 feet, which we
estimate to be completed during November 2004. Upon completion of the shipyard
work, the unit will commence a 700-day contract with Petrobras at a dayrate of
$96,250, plus the opportunity for a performance bonus. The Noble Muravlenko
drillship was released from its contract with Petrobras in late July 2004 and
was drydocked for the remainder of the Current Quarter. However, the unit
commenced a 160-day contract for Petrobras in October 2004. Our deepwater
semisubmersible in Brazil, the Noble Paul Wolff, as well as the Noble Leo
Segerius drillship, experienced less downtime in the Current Quarter versus the
Comparable Quarter, which partially offset the fewer operating days for the
Noble Roger Eason and Noble Muravlenko. The increase in engineering, consulting
and other revenues of $1,599,000 was attributable primarily to an equipment
inspection fee earned on a per day basis by the Noble Homer Ferrington as part
of the rig's preparations for a two-year contract in Nigeria.

      OPERATING COSTS AND EXPENSES. International contract drilling services
expenses increased $12,714,000 primarily due to the additional operating days in
our Middle East and West Africa divisions. The increase was largely attributable
to the acquisition of the Noble Charlie Yester and Noble Gene House jackup rigs,
which are both in our Middle East operating division, and the mobilization of
the Noble Bill Jennings and Noble Carl Norberg jackups from the U.S. Gulf of
Mexico to Mexico and the Mediterranean Sea, respectively. In addition, we
incurred additional costs attributable to our shipyard projects on the Noble
Roger Eason drillship and Noble Homer Ferrington semisubmersible. We also
experienced labor increases in all regions. Engineering, consulting and other
expenses decreased $722,000 due to reduced minority interest related to the
operations of the Noble Muravlenko drillship, in which we have an 82 percent
interest, as the unit was drydocked for the majority of the Current Quarter.
Depreciation expense in our international contract drilling services segment
increased $5,704,000 due to the acquisition of the Noble Charlie Yester and
Noble Gene House, the mobilization of the two jackup rigs from the U.S. Gulf of
Mexico, and the transfer of the Noble Homer Ferrington to our West Africa
division. See the discussion below under "Other Items" regarding selling,
general and administrative expenses.

   DOMESTIC CONTRACT DRILLING SERVICES

      The following table sets forth the operating revenues and the operating
costs and expenses for our domestic contract drilling services for the three
months ended September 30, 2004 and 2003:

<TABLE>
<CAPTION>
                                                                                                OPERATING COSTS
                                                          OPERATING REVENUES                      AND EXPENSES
                                                   --------------------------------     --------------------------------
                                                          THREE MONTHS ENDED                   THREE MONTHS ENDED
                                                            SEPTEMBER 30,                         SEPTEMBER 30,
                                                   --------------------------------     --------------------------------
                                                        2004              2003               2004               2003
                                                   -------------     --------------     --------------    --------------
                                                                              (In thousands)
<S>                                                <C>               <C>                <C>               <C>
Contract drilling services......................   $      57,236     $       66,172     $       35,110    $       28,613
Reimbursables (1)...............................           3,334              1,547              3,110             1,438
Labor contract drilling services................               -                  -                  -                 -
Engineering, consulting and other...............             306              2,222               (115)              788
Depreciation ...................................             N/A                N/A             10,159            11,513
Selling, general and administrative.............             N/A                N/A              1,946             2,054
                                                   -------------     --------------     --------------    --------------
         Total..................................   $      60,876     $       69,941     $       50,210    $       44,406
                                                   =============     ==============     ==============    ==============
</TABLE>

----------
(1)  We record reimbursements from customers for out-of-pocket expenses as
     revenues and the related direct cost as operating expenses. Changes in the
     amount of these reimbursables do not have a material effect on our
     financial position, results of operations or cash flows.


                                       27
<PAGE>

                                                                       FORM 10-Q

      OPERATING REVENUES. Domestic contract drilling services revenues decreased
$8,936,000 due to the shipyard project on the Noble Homer Ferrington
semisubmersible and lower average dayrates on our EVA-4000(TM) semisubmersibles
during the Current Quarter, as certain units operated on the spot-rate market
with lower average dayrates than those earned while under previous long-term
contracts. The Noble Homer Ferrington completed operations in the U.S. Gulf of
Mexico in June 2004 and entered the shipyard the following month to prepare for
a two-year contract in Nigeria. Although we had fewer operating days for our
domestic jackup rigs following the mobilization of two units to international
locations during 2003, the average dayrate on these rigs increased $16,000 in
the Current Quarter. In addition, we experienced additional operating days and
higher average dayrates on our three submersibles in the U.S. Gulf of Mexico.
The Noble Lorris Bouzigard and Noble Therald Martin semisubmersibles also
experienced additional operating days in the Current Quarter, and both units are
currently under contract. The decrease in engineering, consulting and other
revenues of $1,916,000 was primarily related to the sale of our interests in
certain deepwater oil and gas properties during the fourth quarter of 2003.

      Although we are mobilizing the Noble Homer Ferrington semisubmersible out
of the U.S. Gulf of Mexico, we believe the demand in the U.S. Gulf of Mexico for
semisubmersibles should continue to improve as more quality drilling prospects
exist at water depths applicable to these units than for jackups and
submersibles. Average dayrates for semisubmersibles in the U.S. Gulf of Mexico
began to improve towards the end of the Current Quarter, as operators' demand
for these units increased due to upcoming development projects in the region.
The mobilization of the Noble Bill Jennings and Noble Carl Norberg from the U.S.
Gulf of Mexico to Mexico and the Mediterranean Sea, respectively, was pursuant
to our long-standing business strategy of deploying our assets in important
geological regions as described earlier.

      OPERATING COSTS AND EXPENSES. Domestic contract drilling services expenses
increased $6,497,000 due to a $9,000,000 pre-tax charge related to costs
incurred to repair damage to three of our semisubmersibles in the U.S. Gulf of
Mexico as a result of Hurricane Ivan. Excluding this charge, domestic contract
drilling services expenses decreased $2,503,000 due to the mobilization of
jackup rigs to Mexico and the Mediterranean Sea during the second half of 2003
and the transfer of the Noble Homer Ferrington semisubmersible to our West
Africa division in July 2004. The lower engineering, consulting and other
expenses of $903,000 was due to the sale of our interests in certain deepwater
oil and gas properties during the fourth quarter of 2003. Depreciation expense
decreased $1,354,000 as lower depreciation attributable to the mobilization of
two jackup rigs to international locations and the transfer of the Noble Homer
Ferrington semisubmersible to our West Africa division was mostly offset by
additional depreciation due to the activation of the Noble Therald Martin
semisubmersible in November 2003. See the discussion below under "Other Items"
regarding selling, general and administrative expenses.

   ENGINEERING & CONSULTING SERVICES

      The following table sets forth the operating revenues and the operating
costs and expenses for our engineering and consulting services for the three
months ended September 30, 2004 and 2003:

<TABLE>
<CAPTION>
                                                                                                OPERATING COSTS
                                                          OPERATING REVENUES                      AND EXPENSES
                                                   --------------------------------     --------------------------------
                                                          THREE MONTHS ENDED                   THREE MONTHS ENDED
                                                             SEPTEMBER 30,                        SEPTEMBER 30,
                                                   --------------------------------     --------------------------------
                                                       2004               2003               2004              2003
                                                   -------------     --------------     --------------    --------------
                                                                           (In thousands)
<S>                                                <C>               <C>                <C>               <C>
Contract drilling services......................   $           -     $            -     $            -    $            -
Reimbursables (1)...............................             685              2,200                673             2,202
Labor contract drilling services................               -                  -                  -                 -
Engineering, consulting and other...............           3,063              1,841              4,562             5,383
Depreciation....................................             N/A                N/A                162               221
Selling, general and administrative.............             N/A                N/A                260               308
                                                   -------------     --------------     --------------    --------------
         Total..................................   $       3,748     $        4,041     $        5,657    $        8,114
                                                   =============     ==============     ==============    ==============
</TABLE>

----------
(1)  We record reimbursements from customers for out-of-pocket expenses as
     revenues and the related direct cost as operating expenses. Changes in the
     amount of these reimbursables do not have a material effect on our
     financial position, results of operations or cash flows.

      OPERATING REVENUES. Excluding reimbursables, operating revenues for our
engineering and consulting services segment increased $1,222,000 due primarily
to additional project management engagements conducted by our Triton Engineering
Services subsidiary.


                                       28
<PAGE>

                                                                       FORM 10-Q

      OPERATING COSTS AND EXPENSES. Excluding reimbursables, operating costs and
expenses for our engineering and consulting services segment decreased $928,000
due primarily to higher research and development costs in the Comparable Quarter
for our Noble Technology Services Division.

   OTHER

      The following table sets forth the operating revenues and the operating
costs and expenses for our other services for the three months ended September
30, 2004 and 2003:

<TABLE>
<CAPTION>
                                                                                                OPERATING COSTS
                                                          OPERATING REVENUES                      AND EXPENSES
                                                   --------------------------------     --------------------------------
                                                          THREE MONTHS ENDED                  THREE MONTHS ENDED
                                                            SEPTEMBER 30,                        SEPTEMBER 30,
                                                   --------------------------------     --------------------------------
                                                        2004              2003               2004              2003
                                                   -------------     --------------     --------------    --------------
                                                                             (In thousands)
<S>                                                <C>               <C>                <C>               <C>
Contract drilling services......................   $           -     $            -     $            -    $            -
Reimbursables (1)...............................           2,268                424              2,110               382
Labor contract drilling services................          15,146              6,842             12,470             5,350
Engineering, consulting and other...............           1,043              1,018              1,134               967
Depreciation....................................             N/A                N/A                874               882
Selling, general and administrative.............             N/A                N/A                346               265
                                                   -------------     --------------     --------------    --------------
         Total..................................   $      18,457     $        8,284     $       16,934    $        7,846
                                                   =============     ==============     ==============    ==============
</TABLE>
----------
(1)  We record reimbursements from customers for out-of-pocket expenses as
     revenues and the related direct cost as operating expenses. Changes in the
     amount of these reimbursables do not have a material effect on our
     financial position, results of operations or cash flows.

      OPERATING REVENUES. Revenues from our labor contract drilling services
increased $8,304,000 due to additional operating days in the North Sea, mostly
attributable to the start of a new labor contract for Apache Corporation in
which we commenced operations on three platforms on the Forties Field during
2004.

      OPERATING COSTS AND EXPENSES. Excluding reimbursables, operating costs and
expenses for our other services increased $7,360,000 due to the additional labor
contract operating days in the North Sea.

   OTHER ITEMS

      SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased $1,350,000 due to additional professional fees
associated with compliance under the requirements of the Sarbanes-Oxley Act of
2002, additional stock-based compensation expense, additional retirement
expenses, and higher insurance premiums for corporate-related policies.

      INTEREST EXPENSE. Interest expense decreased $1,640,000 due to the
continued retirement of debt since the beginning of the Comparable Quarter.
Since July 1, 2003, we have made repayments of long-term debt totaling
$115,621,000, including $36,349,000 in the Current Quarter. Included in the
Current Quarter's long-term debt repayments was $25,000,000 principal amount on
the outstanding balance of our bank credit facility.

      OTHER, NET. Other, net decreased $1,168,000 due primarily to unrealized
losses on the assets in the Rabbi Trust for the Noble Drilling Corporation
401(k) Savings Restoration Plan compared to unrealized gains in the Comparable
Quarter, and decreased equity in income from our Noble Crosco Drilling Ltd.
joint venture, which owns the Panon jackup drilling rig.

      INCOME TAX PROVISION. Income tax provision decreased $284,000 due to lower
pretax earnings, mostly offset by a higher effective tax rate in the Current
Quarter. The effective tax rate was 17 percent in the Current Quarter compared
to 11 percent in the Comparable Quarter. The higher effective tax rate in the
Current Quarter was a result of additional earnings from rigs owned by U.S.
subsidiaries which were operating in India and the Mediterranean Sea, and
reduced earnings from our Brazil and North Sea divisions, which have lower
effective tax rates.


                                       29
<PAGE>

                                                                       FORM 10-Q

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003

     GENERAL

      Net income for the nine months ended September 30, 2004 (the "Current
Period") was $93,212,000, or $0.70 per diluted share, on operating revenues of
$764,080,000, compared to net income for the nine months ended September 30,
2003 (the "Comparable Period") of $136,116,000, or $1.02 per diluted share, on
operating revenues of $747,574,000. Net income in the Current Period included a
$5,850,000, or $0.04 per diluted share, after-tax charge related to damage
incurred on three of our semisubmersibles in the U.S. Gulf of Mexico as a result
of Hurricane Ivan.

      The following table sets forth operating revenues and operating costs and
expenses for each of our reportable segments (for additional information
regarding our reportable segments, see Note 8 of our accompanying consolidated
financial statements) for the periods indicated:

<TABLE>
<CAPTION>
                                                     INTERNATIONAL      DOMESTIC
                                                        CONTRACT        CONTRACT       ENGINEERING
                                                        DRILLING        DRILLING      & CONSULTING
                                                        SERVICES        SERVICES        SERVICES          OTHER           TOTAL
                                                     -------------   --------------   -------------   -------------   --------------
                                                                                     (In thousands)
<S>                                                  <C>             <C>              <C>             <C>             <C>
NINE MONTHS ENDED SEPTEMBER 30, 2004

Operating Revenues:
     Contract drilling services....................  $     496,166   $      180,141   $           -   $           -   $      676,307
     Reimbursables.................................         13,760            8,408           2,703           6,894           31,765
     Labor contract drilling services..............              -                -               -          35,615           35,615
     Engineering, consulting and other.............          2,051            1,362          10,742           6,238           20,393
                                                     -------------   --------------   -------------   -------------   --------------
                                                     $     511,977   $      189,911   $      13,445   $      48,747   $      764,080
                                                     =============   ==============   =============   =============   ==============
Operating Costs and Expenses:
     Contract drilling services....................  $     312,487   $       97,659   $           -   $           -   $      410,146
     Reimbursables.................................         10,549            7,887           2,659           6,568           27,663
     Labor contract drilling services..............              -                -               -          28,756           28,756
     Engineering, consulting and other.............         (2,048)             228          14,961           6,615           19,756
     Depreciation..................................         86,955           34,137             490           2,619          124,201
     Selling, general and administrative...........         15,688            6,260             879           1,313           24,140
                                                     -------------   --------------   -------------   -------------   --------------
                                                     $     423,631   $      146,171   $      18,989   $      45,871   $      634,662
                                                     =============   ==============   =============   =============   ==============
</TABLE>


                                       30
<PAGE>

                                                                       FORM 10-Q

<TABLE>
<CAPTION>
                                                      INTERNATIONAL      DOMESTIC
                                                         CONTRACT        CONTRACT       ENGINEERING
                                                         DRILLING        DRILLING      & CONSULTING
                                                         SERVICES        SERVICES        SERVICES          OTHER           TOTAL
                                                      -------------   --------------   -------------  -------------   --------------
                                                                                       (In thousands)
<S>                                                   <C>             <C>              <C>            <C>             <C>
NINE MONTHS ENDED SEPTEMBER 30, 2003

Operating Revenues:
     Contract drilling services....................   $     489,532   $      182,693   $           -  $           -   $      672,225
     Reimbursables.................................          11,973            6,539          13,423          2,563           34,498
     Labor contract drilling services..............               -                -               -         20,757           20,757
     Engineering, consulting and other.............             883            9,179           6,873          3,159           20,094
                                                      -------------   --------------   -------------  -------------   --------------
                                                      $     502,388   $      198,411   $      20,296  $      26,479   $      747,574
                                                      =============   ==============   =============  =============   ==============
Operating Costs and Expenses:
     Contract drilling services....................   $     279,327   $       92,301   $           -  $           -   $      371,628
     Reimbursables.................................           9,209            6,022          13,175          2,419           30,825
     Labor contract drilling services..............               -                -               -         16,951           16,951
     Engineering, consulting and other.............            (216)           2,575          14,786          2,908           20,053
     Depreciation .................................          69,966           34,582             500          2,606          107,654
     Selling, general and administrative...........          11,806            6,419             926            767           19,918
                                                      -------------   --------------   -------------  -------------   --------------
                                                      $     370,092   $      141,899   $      29,387  $      25,651   $      567,029
                                                      =============   ==============   =============  =============   ==============
</TABLE>

   RIG UTILIZATION, OPERATING DAYS AND AVERAGE DAYRATES

      The following table sets forth the average rig utilization, operating days
and average dayrates for our rig fleet for the nine months ended September 30,
2004 and 2003:

<TABLE>
<CAPTION>
                                              AVERAGE RIG
                                            UTILIZATION (1)          OPERATING DAYS (2)              AVERAGE DAYRATE
                                         ---------------------      ---------------------      ----------------------------
                                            NINE MONTHS ENDED         NINE MONTHS ENDED              NINE MONTHS ENDED
                                              SEPTEMBER 30,             SEPTEMBER 30,                  SEPTEMBER 30,
                                         ---------------------      ---------------------      ----------------------------
                                         2004             2003       2004           2003            2004           2003
                                         ----             ----      -----          ------      --------------  ------------
<S>                                      <C>              <C>       <C>            <C>         <C>             <C>
International (3):
  Jackups........................         83%              84%      8,119           7,243      $       50,064  $     52,020
  Semisubmersibles - >6,000'(4)..         75%             100%        274             273      $      144,361  $    146,226
  Semisubmersibles - <6,000'(5)..        100%              93%        274             255      $       47,347  $     43,116
  Drillships.....................         59%             100%        483             819      $       76,959  $     75,505
                                                                    -----      ----------
  Total International............         82%              86%      9,150           8,590      $       54,226  $     56,989
                                                                    =====      ==========
Domestic (6):
  Jackups........................         96%              89%        528             964      $       44,360  $     28,650
  Semisubmersibles - >6,000'(4)..         99%              84%      1,276           1,145      $      104,458  $    124,965
  Semisubmersibles - <6,000'(5)..         24%              42%        130              89      $       36,885  $     46,506
  Submersibles ..................         92%              74%        758             402      $       24,584  $     19,527
                                                                    -----      ----------
  Total Domestic.................         84%              81%      2,692           2,600      $       66,917  $     70,267
                                                                    =====      ==========
</TABLE>

----------
(1)  Information reflects our policy of reporting on the basis of the number
     of actively marketed rigs in our fleet. Percentages reflect the results of
     rigs only during the period in which they are owned or operated by us.
(2)  Information reflects the number of days that our rigs were operating under
     contractual terms.
(3)  "International" encompasses contract drilling services conducted in the
     Middle East, Mexico, the North Sea, Brazil, West Africa, India and the
     Mediterranean Sea.
(4)  These units have water depth ratings of 6,000 feet or greater depending on
     the unit.
(5)  These units have water depth ratings less than 6,000 feet.
(6)  "Domestic" encompasses contract drilling services conducted in the U.S.
     Gulf of Mexico.


                                       31
<PAGE>

                                                                       FORM 10-Q

   INTERNATIONAL CONTRACT DRILLING SERVICES

      The following table sets forth the operating revenues and the operating
costs and expenses for our international contract drilling services for the nine
months ended September 30, 2004 and 2003:

<TABLE>
<CAPTION>
                                                                                                        OPERATING COSTS
                                                               OPERATING REVENUES                         AND EXPENSES
                                                       ---------------------------------      -----------------------------------
                                                               NINE MONTHS ENDED                       NINE MONTHS ENDED
                                                                 SEPTEMBER 30,                            SEPTEMBER 30,
                                                       ---------------------------------      -----------------------------------
                                                            2004               2003                2004                 2003
                                                       -------------      --------------      --------------       --------------
                                                                                     (In thousands)
<S>                                                    <C>                <C>                 <C>                  <C>
Contract drilling services......................       $     496,166      $      489,532      $      312,487       $      279,327
Reimbursables (1)...............................              13,760              11,973              10,549                9,209
Labor contract drilling services................                   -                   -                   -                    -
Engineering, consulting and other...............               2,051                 883              (2,048)                (216)
Depreciation ...................................                 N/A                 N/A              86,955               69,966
Selling, general and administrative.............                 N/A                 N/A              15,688               11,806
                                                       -------------      --------------      --------------       --------------
         Total..................................       $     511,977      $      502,388      $      423,631       $      370,092
                                                       =============      ==============      ==============       ==============
</TABLE>

----------
(1)  We record reimbursements from customers for out-of-pocket expenses as
     revenues and the related direct cost as operating expenses. Changes in the
     amount of these reimbursables do not have a material effect on our
     financial position, results of operations or cash flows.

      OPERATING REVENUES. International contract drilling services revenues
increased $6,634,000 as additional operating days in our Middle East and Mexico
divisions were partially offset by weaker market conditions in the North Sea and
West Africa, and a shipyard project on the Noble Roger Eason drillship in
Brazil. We had 943 additional operating days in our Middle East division due
primarily to the acquisition of the Noble Gene House and Noble Charlie Yester
premium jackups in July 2003 and September 2003, respectively, and the
mobilization of the Noble Carl Norberg premium jackup to the Mediterranean Sea
from the U.S. Gulf of Mexico in December 2003. In Mexico, we experienced an
additional 373 operating days due to the mobilization of three premium jackups
from the U.S. Gulf of Mexico since the beginning of the Comparable Period for
long-term contracts with Pemex. The generally weaker market conditions in the
North Sea resulted in lower utilization and average dayrates in the Current
Period for this region. Utilization in the North Sea in the Current Period
decreased to 87 percent from 97 percent in the Comparable Period, while our
average dayrate decreased 13 percent to $51,000. Although our average dayrate in
West Africa increased slightly, utilization on our jackups in this region was 54
percent in the Current Period as compared to 61 percent in the Comparable
Period. The increase in engineering, consulting and other revenue of $1,168,000
was attributable primarily to an equipment inspection fee earned on a per day
basis by the Noble Homer Ferrington as part of the rig's preparations for a
two-year contract in Nigeria.

      OPERATING COSTS AND EXPENSES. International contract drilling services
expenses increased $33,160,000 due to the additional operating days in our
Middle East and Mexico divisions following the acquisition of two premium
jackups and the mobilization of a combined four premium jackups out of the U.S.
Gulf of Mexico into these regions since the beginning of the Comparable Period,
and the shipyard project on the Noble Homer Ferrington semisubmersible, which
was transferred to our West Africa division from the U.S. Gulf of Mexico in July
2004. In addition, we performed maintenance projects on our three drillships in
Brazil, including the Noble Roger Eason project that we expect to complete
during the fourth quarter of 2004, and we experienced higher labor costs in all
our international regions. Engineering, consulting and other expenses in our
international contract drilling services segment decreased $1,832,000 due to
lower minority interest related to our Noble Muravlenko drillship. The Noble
Muravlenko, in which we own an 82 percent interest, incurred additional downtime
in the Current Period, as well as the rig's drydocking in late July 2004,
resulting in reduced minority interest. Depreciation expense increased
$16,989,000 due to the mobilization of four rigs to international locations
during 2003, the acquisition of the Noble Gene House and Noble Charlie Yester
during 2003, and the transfer of the Noble Homer Ferrington to our West Africa
division. See the discussion below under "Other items" regarding selling,
general and administrative expenses.


                                       32
<PAGE>

                                                                       FORM 10-Q

   DOMESTIC CONTRACT DRILLING SERVICES

      The following table sets forth the operating revenues and the operating
costs and expenses for our domestic contract drilling services for the nine
months ended September 30, 2004 and 2003:

<TABLE>
<CAPTION>
                                                                                                 OPERATING COSTS
                                                              OPERATING REVENUES                   AND EXPENSES
                                                       -------------------------------    -------------------------------
                                                               NINE MONTHS ENDED                NINE MONTHS ENDED
                                                                 SEPTEMBER 30,                     SEPTEMBER 30,
                                                       -------------------------------    -------------------------------
                                                             2004             2003              2004             2003
                                                       -------------    --------------    --------------   --------------
                                                                                 (In thousands)
<S>                                                    <C>              <C>               <C>              <C>
Contract drilling services......................       $     180,141    $      182,693    $       97,659   $       92,301
Reimbursables (1)...............................               8,408             6,539             7,887            6,022
Labor contract drilling services................                   -                 -                 -                -
Engineering, consulting and other...............               1,362             9,179               228            2,575
Depreciation....................................                 N/A               N/A            34,137           34,582
Selling, general and administrative.............                 N/A               N/A             6,260            6,419
                                                       -------------    --------------    --------------   --------------
         Total..................................       $     189,911    $      198,411    $      146,171   $      141,899
                                                       =============    ==============    ==============   ==============
</TABLE>

----------
(1)  We record reimbursements from customers for out-of-pocket expenses as
     revenues and the related direct cost as operating expenses. Changes in the
     amount of these reimbursables do not have a material effect on our
     financial position, results of operations or cash flows.

      OPERATING REVENUES. Domestic contract drilling services revenues decreased
$2,552,000 due to a lower average dayrate on our semisubmersibles and fewer
operating days on our jackups following the mobilization of four premium jackups
out of the U.S. Gulf of Mexico to international locations since the beginning of
the Comparable Period. These items were mostly offset by a higher average
dayrate on our jackups and higher utilization and average dayrates on our
submersibles. Market conditions for jackups and submersibles in the U.S. Gulf of
Mexico began to improve during the Current Period as the supply of such rigs has
come closer into balance with demand following the industry's mobilization of
jackup rigs out of this region for international opportunities. Utilization of
our submersibles increased to 92 percent from 74 percent in the Comparable
Period, while the average dayrate on these units increased 26 percent to
$24,584. Likewise, the average dayrate on our jackup rigs increased 55 percent,
although we experienced 436 fewer operating days due to the mobilization of the
three premium jackups to Mexico for long-term contracts with Pemex and the
mobilization of another premium jackup to the Mediterranean Sea during 2003. The
Noble Homer Ferrington operated for an additional 54 days in the Current Period
as compared to the Comparable Period before entering the shipyard in early July
2004 for upgrades in preparation for its two-year contract in Nigeria. However,
the average dayrate on the units with water depth ratings of 6,000 feet or
greater decreased 16 percent due to certain units operating on the spot-rate
market with lower average dayrates than those earned while under long-term
contracts, and additional downtime in the Current Period. The decrease in
engineering, consulting and other revenues of $7,817,000 was attributable to the
sale of our interest in certain deepwater oil and gas properties during the
fourth quarter of 2003.

      OPERATING COSTS AND EXPENSES. Domestic contract drilling services expenses
increased $5,358,000 due to a $9,000,000 pre-tax charge related to costs
incurred to repair damage to three of our semisubmersibles in the U.S. Gulf of
Mexico as a result of Hurricane Ivan. Excluding this charge, domestic contract
drilling services expenses decreased $3,642,000 due to the mobilization of four
jackup rigs from the U.S. Gulf of Mexico to international regions and the
transfer of the Noble Homer Ferrington semisubmersible to our West Africa
division, partially offset by increased costs attributable to the activation of
the Noble Lorris Bouzigard and Noble Therald Martin semisubmersibles, which were
placed into service in March 2003 and November 2003, respectively. The lower
engineering, consulting and other expenses of $2,347,000 was due to the sale of
our interests in certain deepwater oil and gas properties during the fourth
quarter of 2003. Depreciation expense decreased $445,000 due to the mobilization
of four premium jackups out of the U.S. Gulf of Mexico and transfer of the Noble
Homer Ferrington to our West Africa division, mostly offset by additional
depreciation attributable to the activation of the Noble Lorris Bouzigard and
Noble Therald Martin semisubmersibles. See the discussion below under "Other
items" regarding selling, general and administrative expenses.


                                       33
<PAGE>

                                                                       FORM 10-Q

    ENGINEERING & CONSULTING SERVICES

      The following table sets forth the operating revenues and the operating
costs and expenses for our engineering and consulting services for the nine
months ended September 30, 2004 and 2003:

<TABLE>
<CAPTION>
                                                                                                 OPERATING COSTS
                                                              OPERATING REVENUES                   AND EXPENSES
                                                       -------------------------------    ---------------------------------
                                                              NINE MONTHS ENDED                  NINE MONTHS ENDED
                                                                SEPTEMBER 30,                       SEPTEMBER 30,
                                                       -------------------------------    ---------------------------------
                                                             2004             2003              2004              2003
                                                       -------------    --------------    --------------     --------------
                                                                                  (In thousands)
<S>                                                    <C>              <C>               <C>                <C>
Contract drilling services......................       $           -    $            -    $            -     $            -
Reimbursables (1)...............................               2,703            13,423             2,659             13,175
Labor contract drilling services................                   -                 -                 -                  -
Engineering, consulting and other...............              10,742             6,873            14,961             14,786
Depreciation....................................                 N/A               N/A               490                500
Selling, general and administrative.............                 N/A               N/A               879                926
                                                       -------------    --------------    --------------     --------------
         Total..................................       $      13,445    $       20,296    $       18,989     $       29,387
                                                       =============    ==============    ==============     ==============
</TABLE>

----------
(1)  We record reimbursements from customers for out-of-pocket expenses as
     revenues and the related direct cost as operating expenses. Changes in the
     amount of these reimbursables do not have a material effect on our
     financial position, results of operations or cash flows.

      OPERATING REVENUES. Excluding reimbursables, operating revenues for our
engineering and consulting services segment increased $3,869,000 due principally
to the sale of a license of our OptiDrill(TM) drilling efficiency technology in
the Current Period and additional project management engagements conducted by
our Triton Engineering Services subsidiary.

      OPERATING COSTS AND EXPENSES. Excluding reimbursables, operating costs and
expenses for our engineering and consulting services segment increased $118,000
due to the additional project management engagements, mostly offset by higher
research and development costs in the Comparable Period for our Noble Technology
Services Division.

   OTHER

      The following table sets forth the operating revenues and the operating
costs and expenses for our other services for the nine months ended September
30, 2004 and 2003:

<TABLE>
<CAPTION>
                                                                                                  OPERATING COSTS
                                                              OPERATING REVENUES                    AND EXPENSES
                                                       -------------------------------    -------------------------------
                                                               NINE MONTHS ENDED                 NINE MONTHS ENDED
                                                                 SEPTEMBER 30,                      SEPTEMBER 30,
                                                       -------------------------------    -------------------------------
                                                            2004             2003               2004            2003
                                                       -------------    --------------    --------------   --------------
                                                                                 (In thousands)
<S>                                                    <C>              <C>               <C>              <C>
Contract drilling services......................       $           -    $            -    $            -   $            -
Reimbursables (1)...............................               6,894             2,563             6,568            2,419
Labor contract drilling services................              35,615            20,757            28,756           16,951
Engineering, consulting and other...............               6,238             3,159             6,615            2,908
Depreciation....................................                 N/A               N/A             2,619            2,606
Selling, general and administrative.............                 N/A               N/A             1,313              767
                                                       -------------    --------------    --------------   --------------
         Total..................................       $      48,747    $       26,479    $       45,871   $       25,651
                                                       =============    ==============    ==============   ==============
</TABLE>

----------
(1)  We record reimbursements from customers for out-of-pocket expenses as
     revenues and the related direct cost as operating expenses. Changes in the
     amount of these reimbursables do not have a material effect on our
     financial position, results of operations or cash flows.

      OPERATING REVENUES. Revenues from our labor contract drilling services
increased $14,858,000 due to additional operating days in the North Sea, mostly
attributable to the start of a new labor contract under which we commenced


                                       34
<PAGE>

                                                                       FORM 10-Q

operations on three platforms during the Current Period. Foreign exchange
fluctuations related to our operations in Canada on the Hibernia project also
resulted in higher revenues. We are paid for this work in Canadian dollars, and
the Canadian dollar was stronger in the Current Period than in the Comparable
Period. In addition, contractual provisions covering the Hibernia project
allowed for increases in the labor, maintenance and administrative portions of
the dayrate on the project during the Current Period. Engineering, consulting
and other revenues increased $3,079,000 due to increased activity on an
engineering services engagement in the North Sea.

      OPERATING COSTS AND EXPENSES. Excluding reimbursables, operating costs and
expenses for our other services increased $16,071,000 due to the additional
labor contract operating days in the North Sea, the stronger Canadian dollar,
higher labor, maintenance and administrative costs related to our Hibernia
project in Canada, and the increased activity on an engineering services
engagement in the North Sea.

   OTHER ITEMS

      SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased $4,222,000 due to additional professional fees
associated with compliance under the requirements of the Sarbanes-Oxley Act of
2002, additional stock-based compensation expense, additional retirement
expenses and higher insurance premiums for corporate-related policies.

      INTEREST EXPENSE. Interest expense decreased $4,795,000 due to the
continued retirement of debt since the beginning of the Comparable Period. Since
January 1, 2003, we have made repayments of long-term debt totaling
$146,977,000, including $66,397,000 in the Current Period.

      OTHER, NET. Other, net increased $2,463,000 due to additional equity in
income from our 50 percent equity interest in Noble Crosco Drilling Ltd., a
joint venture which owns the Panon jackup rig, and lower foreign exchange losses
in the Current Period. The Panon was in the shipyard for two months during the
Comparable Period, whereas the rig operated the entire Current Period.

      INCOME TAX PROVISION. Income tax provision decreased $965,000 due to lower
pretax earnings, mostly offset by a higher effective tax rate in the Current
Period. The effective tax rate was 15 percent in the Current Period compared to
11 percent in the Comparable Period. The higher effective tax rate in the
Current Period was a result of additional earnings from rigs owned by U.S.
subsidiaries which were operating in Mexico, India and the Mediterranean Sea and
reduced earnings from our Brazil and North Sea divisions, which have lower
effective tax rates.

LIQUIDITY AND CAPITAL RESOURCES

   OVERVIEW

      Our principal capital resource in the Current Period was net cash provided
by operating activities of $212,656,000, which compared to $226,124,000 in the
Comparable Period. Although net income in the Current Period was $42,904,000
less than the Comparable Period, $22,703,000 of the decrease was attributable to
increased depreciation and the amortization of deferred repairs and maintenance
expenditures. However, our change in working capital was $9,772,000 less in the
Current Period than the Comparable Period.

      At September 30, 2004, we had cash and cash equivalents of $94,492,000,
$84,897,000 of marketable debt securities and $88,999,000 of funds available
under our bank credit facility. We had working capital, including cash, of
$200,343,000 and $177,936,000 at September 30, 2004 and December 31, 2003,
respectively. Total debt as a percentage of total debt plus shareholders' equity
decreased to 19 percent at September 30, 2004 from 21 percent at December 31,
2003 and 23 percent at September 30, 2003.

      We repurchased 1,087,000 of our ordinary shares during the Current Period
at an average price of $36.54 per ordinary share for a total cost of
$39,714,000, with none during the Current Quarter. Additional repurchases, if
any, may be made on the open market or in private transactions at prices
determined by us. Share repurchases are effected pursuant to the share
repurchase program which our board of directors authorized and adopted and which
we announced on January 31, 2002. The program authorization covers an aggregate
of 15,000,000 ordinary shares. As of November 3, 2004, 9,162,000 shares remained
available under this authorization. Proceeds from the exercise of stock options
by employees of the Company were


                                       35
<PAGE>

                                                                       FORM 10-Q

$52,344,000 in the Current Period, as compared to $6,303,000 in the Comparable
Period. The sales price of our ordinary shares reached a high of $46.50 in the
Current Period, as compared to a high of $38.40 in the Comparable Period.

   CAPITAL EXPENDITURES

      Capital expenditures totaled $86,624,000 and $85,211,000 for the Current
Quarter and Comparable Quarter, respectively, and $165,074,000 and $236,186,000
for the Current Period and Comparable Period, respectively. Included in capital
expenditures for the Current Quarter and Current Period was $32,900,000 for the
exercise of our option to purchase the Maersk Viking (renamed the Noble Cees van
Diemen) premium jackup rig. Together with the option fee of $15,000,000 we paid
in June 2003, the aggregate purchase price for the rig was $47,900,000. Also
included in capital expenditures for the Current Period was $29,500,000 for the
acquisition of the Okhi (renamed the Noble Mark Burns), a Levingston 111-S
designed independent leg jackup unit. Expenditures in the Comparable Period
included capital upgrades to certain semisubmersibles of $103,680,000, the
exercise price of options to purchase the Noble Gene House and Noble Charlie
Yester premium jackup rigs for an aggregate exercise price of $58,100,000 and
the acquisition of options for $28,200,000 to purchase the Maersk Viking and
Maersk Valiant premium jackup rigs from a subsidiary of A.P. Moeller. Deferred
repair and maintenance expenditures totaled $23,847,000 and $6,713,000 for the
Current Quarter and Comparable Quarter, respectively, and $46,538,000 and
$21,144,000 for the Current Period and Comparable Period, respectively. We
expect our capital expenditures and deferred repair and maintenance expenditures
for the period October 1 through December 31, 2004 will aggregate approximately
$70,000,000 and $7,000,000, respectively. Included in our expected capital
expenditures is $28,400,000 representing the exercise of our option to purchase
the Maersk Valiant (renamed the Noble David Tinsley) on October 28, 2004.

      The Noble Mark Burns is currently in the Dalian New Shipyard in Dalian,
China, where we are performing refurbishments and upgrades. We plan to mobilize
the unit to the Middle East during the fourth quarter of 2004, where additional
upgrade work will include leg extension to 300 feet water depth capability, a 60
foot cantilever, and quarters expansion for 160 personnel. We estimate this
upgrade will approximate $30,000,000.

      In connection with several projects, we have entered into agreements with
various vendors to purchase or construct property and equipment that generally
have long lead times for delivery. Any equipment purchased for a project on
which we do not proceed would be used, where applicable, as capital spares for
other units in our fleet. As of September 30, 2004, we had approximately
$30,000,000 of outstanding purchase commitments related to these projects, which
are included in the projected 2004 capital expenditure and deferred repair and
maintenance amounts described above.

      Certain projects currently under consideration could require, if they
materialize, capital expenditures or other cash requirements not included in the
above estimates. In addition, we will continue to evaluate acquisitions of
drilling units from time to time. Other factors that could cause actual capital
expenditures to materially exceed the planned capital expenditures include
delays and cost overruns in shipyards, shortages of equipment, latent damage or
deterioration to hull, equipment and machinery in excess of engineering
estimates and assumptions, and changes in design criteria or specifications
during repair or construction.

   CREDIT FACILITIES AND LONG-TERM DEBT

      Noble Drilling Corporation ("Noble Drilling"), an indirect, wholly-owned
subsidiary of Noble Corporation ("Noble"), has in place a $200,000,000 bank
credit agreement (the "Credit Agreement"), which extends through May 30, 2006.
Noble and one of its wholly-owned subsidiaries, Noble Holding (U.S.)
Corporation, unconditionally guarantee the performance of Noble Drilling under
the Credit Agreement. During the Current Quarter, we repaid $25,000,000 of the
outstanding borrowings under the Credit Agreement. At September 30, 2004, we had
outstanding borrowings and outstanding letters of credit of $100,000,000 and
$11,001,000, respectively, under the Credit Agreement, with $88,999,000
remaining available thereunder. Additionally, at September 30, 2004, we had
other letters of credit and third-party corporate guarantees totaling
$36,644,000 and $41,386,000 of performance and customs bonds supported by surety
bonds.

      At September 30, 2004, total long-term debt was $523,182,000, including
current maturities of $17,751,000, compared to total long-term debt of
$589,573,000, including current maturities of $47,666,000, at December 31, 2003.
At September 30, 2003, total long-term debt was $622,732,000, including current
maturities of $66,659,000.

      We believe that our cash and cash equivalents, net cash provided by
operating activities, available borrowings under lines of credit, and access to
other financing sources will be adequate to meet our anticipated short-term and
long-term liquidity requirements, including capital expenditures and scheduled
debt repayments.

    CONTINGENCIES

      In August 2004, an indirect, wholly-owned subsidiary of Noble was served
as a named defendant in two lawsuits filed in the Circuit Courts of the State of
Mississippi involving numerous other companies (not affiliated with Noble) as
co-defendants. The lawsuits seek an unspecified amount of monetary damages on
behalf of approximately 94 named individuals alleging personal injury or death,
including claims under the Jones Act, purportedly resulting from exposure to
asbestos on drilling rigs and associated facilities during the period 1965
through 1986. The lawsuits are in preliminary stages and we have not confirmed
the number of plaintiffs, if any, that were employed by our subsidiary or
otherwise associated with our drilling operations during the relevant period. We
intend to defend vigorously against the litigation, and based on information
currently available, we do not believe the resolution of these lawsuits will
have a material adverse effect on our financial position, results of operations
or cash flows.

      Noble Asset Company Limited ("NACL"), an indirect, wholly-owned subsidiary
of Noble, has been named one of 21 parties served a Show Cause Notice issued by
the Commissioner of Customs (Prev.), Mumbai, India. The Show Cause Notice
concerns alleged violations of Indian Customs laws and regulations regarding one
of our jackup drilling rigs. The


                                       36
<PAGE>

                                                                       FORM 10-Q



Commissioner alleges certain violations to have occurred before, at the time
of, and after NACL acquired the rig from the rig's previous owner. In connection
with the export of the rig from India in 2001, NACL posted a bank guarantee in
the amount of $3,300,000 and a customs bond in the amount of $21,340,000, both
of which remain in place. We maintain that NACL has acted in accordance with all
Indian Customs laws and regulations and believe the Show Cause Notice is without
merit as against NACL. In the purchase agreement for the rig, NACL received
contractual indemnification against liability for Indian customs duty from the
rig's previous owner. We do not believe the resolution of this matter will have
a material adverse effect on our financial position, results of operations or
cash flows.

      We are a defendant in certain claims and litigation arising out of
operations in the normal course of business. In the opinion of management,
uninsured losses, if any, will not be material to our financial position,
results of operations or cash flows.

ACCOUNTING PRONOUNCEMENTS

      In January 2003, the Financial Accounting Standards Board issued
Interpretation No. 46, Consolidation of Variable Interest Entities, an
Interpretation of ARB No. 51 ("FIN 46"). FIN 46 clarifies the application of
Accounting Research Bulletin No. 51, Consolidated Financial Statements, to
certain entities in which equity investors do not have the characteristics of a
controlling financial interest or do not have sufficient equity at risk for the
entity to finance its activities without additional subordinated financial
support from other parties. FIN 46 requires a company to consolidate a variable
interest entity, as defined, when the company will absorb a majority of the
variable interest entity's expected losses or receive a majority of the variable
interest entity's expected residual returns. FIN 46 also requires certain
disclosures relating to consolidated variable interest entities and
unconsolidated variable interest entities in which a company has a significant
variable interest. In December 2003, the FASB issued FIN 46-R, which amended the
effective date of FIN 46 other than for variable interest entities which are
special purpose entities created prior to February 1, 2003. Pursuant to FIN
46-R, except for special purpose entities, the consolidation and disclosure
provisions of FIN 46 are effective for reporting periods ending after March 15,
2004. The disclosure and consolidation provisions of FIN 46 applied immediately
to special purpose entities. We did not consolidate our equity interest in our
Noble Crosco Drilling Ltd. joint venture under the provisions of FIN 46-R, and
therefore the adoption of FIN 46-R did not have a material impact on our
consolidated results of operations, cash flows or financial position.

      In December 2003, the FASB issued SFAS 132 (revised 2003), Employers'
Disclosures about Pensions and Other Postretirement Benefits, an amendment of
FASB Statements No. 87, 88 and 106, and a revision of FASB Statement No. 132
("SFAS 132 (revised 2003)"). SFAS 132 (revised 2003) revises employers'
disclosures about pension plans and other postretirement benefit plans. SFAS 132
(revised 2003) does not change the measurement or recognition of those plans
required by SFAS No. 87, Employer's Accounting for Pensions, SFAS No. 88,
Employer's Accounting for Settlements and Curtailments of Defined Benefit
Pension Plans and for Termination Benefits, and SFAS No. 106, Employer's
Accounting for Postretirement Benefits Other than Pensions. The new rules
require additional disclosures about the assets, obligations, cash flows, and
net periodic benefit cost of defined benefit pension plans and other
postretirement benefit plans. The new disclosures are effective for fiscal
periods ending after December 15, 2003, with a delayed effective date until
fiscal years ending after June 15, 2004 for certain disclosures regarding
foreign plans. Beginning in the first interim period commencing after December
15, 2003, SFAS 132 (revised 2003) requires companies to disclose in their
interim financial reports net periodic benefit costs (and the components of
those costs) for pension and other postretirement benefits and updated
information on expected contributions. See Note 9 to our accompanying
consolidated financial statements for the disclosures required by SFAS 132
(revised 2003).


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      Market risk is the potential for loss due to a change in the value of a
financial instrument as a result of fluctuations in interest rates, currency
exchange rates or equity prices. We own investments in both marketable equity
and debt securities. To mitigate the risk of losses, these investments are
marked to market periodically and are monitored by management to assure
compliance with policies established by the Company. A portion of the marketable
equity securities we own, consisting primarily of interests in mutual funds, is
held by a Rabbi Trust established and maintained by us in connection with the
Noble Drilling Corporation 401(k) Savings Restoration Plan. Any decrease in the
fair value of these investments would result in a comparable decrease in the
deferred compensation plan obligation and would not materially affect our
consolidated results of operations, cash flows or financial position.

      We are subject to market risk exposure related to changes in interest
rates on our Credit Agreement. Interest on our Credit Agreement is at an agreed
upon percentage point spread above LIBOR. At September 30, 2004, there was


                                       37
<PAGE>

                                                                       FORM 10-Q

$100,000,000 of outstanding borrowings under our Credit Agreement. An immediate
change of one percent in the interest rate would cause a $1,000,000 change in
interest expense on an annual basis.

      Although we conduct business internationally, a substantial majority of
the value of our foreign transactions are denominated in U.S. Dollars.
Generally, we structure our drilling contracts in U.S. Dollars to mitigate our
exposure to fluctuations in foreign currencies. Other than trade accounts
receivable and trade accounts payable, which mostly offset each other, we do not
currently have any other significant assets, liabilities or financial
instruments that are sensitive to foreign currency exchange rates.

      Our North Sea operations have a significant amount of its cash operating
expenses payable in either the Euro or British Pound. To reduce our exposure to
fluctuations in these currencies during 2004, we entered into forward contracts
in March and April 2004 to purchase 1,400,000 Euros and 1,200,000 British
Pounds, respectively, per month for the months April 2004 through December 2004.
These forward contracts represented approximately 50 percent of our forecasted
Euro and British Pound requirements for 2004 after the respective dates we
entered into the forward contracts. These forward contracts are being accounted
for as cash flow hedges under SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities, as amended by SFAS No. 138, Accounting for
Certain Derivative Instruments and Certain Hedging Activities (an amendment of
FASB Statement No. 133), and SFAS No. 149, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities. The cumulative net unrealized
gain on these forward contracts is included in "Accumulated other comprehensive
income" in our Consolidated Balance Sheet at September 30, 2004. We did not
recognize a gain or loss due to hedge ineffectiveness in our Consolidated
Statements of Income for the three and nine months ended September 30, 2004
related to these forward contracts. See Note 10 to our accompanying consolidated
financial statements for additional information on the balance of the net
unrealized gain on these forward contracts and the related activity for the
three and nine months ended September 30, 2004.

ITEM 4.  CONTROLS AND PROCEDURES

      Noble's Chairman and Chief Executive Officer, James C. Day, and Noble's
Senior Vice President and Chief Financial Officer, Mark A. Jackson, have
overseen and participated in an evaluation of the Company's disclosure controls
and procedures as of the end of the period covered by this report. On the basis
of this evaluation, Mr. Day and Mr. Jackson have concluded that the Company's
disclosure controls and procedures are functioning effectively. The Company's
disclosure controls and procedures are designed to ensure that information
required to be disclosed by the Company in the reports that it files with or
submits to the U.S. Securities and Exchange Commission is recorded, processed,
summarized and reported within the time periods specified in the Commission's
rules and forms.

      There were no changes in the Company's internal control over financial
reporting that occurred during the quarter ended September 30, 2004 that have
materially affected, or are reasonably likely to materially affect, the
Company's internal control over financial reporting.

PART II.  OTHER INFORMATION

ITEM 6.  EXHIBITS

      The information required by this Item 6 is set forth in the Index to
      Exhibits accompanying this quarterly report and is incorporated herein by
      reference.


                                       38
<PAGE>

                                                                       FORM 10-Q

                                   SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                            NOBLE CORPORATION

  DATE: November 9, 2004    By: /s/ Mark A. Jackson
                                ------------------------------------------------
                                Mark A. Jackson,
                                Senior Vice President, Chief Financial Officer,
                                Treasurer, Controller and Assistant Secretary
                                (Principal Financial and Accounting Officer)


                                       39
<PAGE>

                                                                       FORM 10-Q

                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                                   EXHIBIT
----     -----------------------------------------------------------------------
<C>      <C>
31.1     Certification of James C. Day Pursuant to SEC Rule 13a-14(a) or Rule
         15d-14(a).

31.2     Certification of Mark A. Jackson Pursuant to SEC Rule 13a-14(a) or Rule
         15d-14(a).

32.1*    Certification of James C. Day Pursuant to 18 U.S.C. Section 1350, as
         Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*    Certification of Mark A. Jackson Pursuant to 18 U.S.C. Section 1350, as
         Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
</TABLE>

* Furnished in accordance with Item 601(b)(32)(ii) of Regulation S-K.

                                       40