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

                                    FORM 10-K

[X]           ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
              THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003

[ ]        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
              THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

           FOR THE TRANSITION PERIOD FROM ___________ TO _____________

                         COMMISSION FILE NUMBER: 0-13857

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

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

          13135 SOUTH DAIRY ASHFORD, SUITE 800, SUGAR LAND, TEXAS 77478
          -------------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

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

           Securities registered pursuant to Section 12(b) of the Act:

ORDINARY SHARES, PAR VALUE $.10 PER SHARE          NEW YORK STOCK EXCHANGE
     PREFERRED SHARE PURCHASE RIGHTS               NEW YORK STOCK EXCHANGE
-----------------------------------------   ------------------------------------
           Title of each class                    Name of each exchange on
                                                      which registered

           Securities registered pursuant to Section 12(g) of the Act:

                                      NONE

         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 if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

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

         Aggregate market value of Ordinary Shares held by nonaffiliates as of
         June 30, 2003: $4,525,000,000

         Number of Ordinary Shares outstanding as of February 20, 2004:
         134,269,349 (Includes 1,694,797 shares held in a Rabbi Trust)

                       DOCUMENTS INCORPORATED BY REFERENCE

         Listed below are documents parts of which are incorporated herein by
reference and the part of this report into which the document is incorporated:

         (1) Proxy statement for the 2004 annual general meeting of members -
Part III

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                                TABLE OF CONTENTS

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PART      ITEM 1.     BUSINESS........................................................................    2
 I                General.............................................................................    2
                  Business Strategy...................................................................    2
                  Business Development During 2003....................................................    3
                  Drilling Contracts..................................................................    4
                  Offshore Drilling Operations........................................................    4
                         International Contract Drilling..............................................    5
                         Domestic Contract Drilling...................................................    5
                         Labor Contracts..............................................................    5
                  Technology, Engineering Services and Project Management.............................    5
                  Competition and Risks...............................................................    6
                  Governmental Regulation and Environmental Matters...................................    7
                  Employees...........................................................................    7
                  Financial Information about Foreign and Domestic Operations.........................    7
                  Available Information...............................................................    8
          ITEM 2.     PROPERTIES......................................................................    8
                  Drilling Fleet......................................................................    8
                         Semisubmersibles.............................................................    8
                         Dynamically Positioned Drillships............................................    9
                         Jackup Rigs..................................................................    9
                         Submersibles.................................................................    9
                  Facilities..........................................................................   12
          ITEM 3.     LEGAL PROCEEDINGS...............................................................   12
          ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.............................   12
          EXECUTIVE OFFICERS OF THE REGISTRANT........................................................   13

PART      ITEM 5.     MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
 II                   PURCHASES OF EQUITY SECURITIES..................................................   14
          ITEM 6.     SELECTED FINANCIAL DATA.........................................................   15
          ITEM 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                      OPERATIONS......................................................................   16
                  Business Environment................................................................   16
                  Results of Operations...............................................................   17
                  Liquidity and Capital Resources.....................................................   23
                  Corporate Restructuring.............................................................   25
                  Critical Accounting Policies........................................................   26
                  Accounting Pronouncements...........................................................   27
          ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES
                      ABOUT MARKET RISK...............................................................   28
          ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.....................................   29
          ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                      DISCLOSURE......................................................................   69
          ITEM 9A.    CONTROLS AND PROCEDURES.........................................................   69

PART      ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT..............................   69
III       ITEM 11     EXECUTIVE COMPENSATION..........................................................   69
          ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT..................   69
          ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..................................   70
          ITEM 14.    PRINCIPAL ACCOUNTING FEES AND SERVICES..........................................   70

PART      ITEM 15.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.................   70
IV        SIGNATURES..................................................................................   71
</TABLE>

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                                    FORM 10-K

     This report on Form 10-K 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-K, including,
without limitation, statements contained in "Item 7. 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;

     -    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;

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     -    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-K, 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.

                                     PART I

ITEM 1. BUSINESS

GENERAL

         We are a leading provider of diversified services for the oil and gas
industry. We perform contract drilling services with our fleet of 57 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, 38 jackup rigs and three submersibles. For
additional information on the specifications of the fleet, see "Item 2.
Properties-Drilling Fleet." Eight of our jackup rigs and one of our
semisubmersibles are capable of operating in harsh environments. In addition to
the rigs in our fleet described above, we have purchased options to acquire two
jackup rigs: the Maersk Valiant and Maersk Viking (see "Business Development
During 2003" in Item 1. Business for additional information on the acquisition
of these two purchase options). Approximately 75 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.

         Noble Corporation, a Cayman Islands exempted company limited by shares
(which we sometimes refer to in this report as "Noble"), became the successor to
Noble Drilling Corporation, a Delaware corporation (which we sometimes refer to
as "Noble Drilling") that was organized in 1939, as part of the internal
corporate restructuring of Noble Drilling and its subsidiaries effective April
30, 2002. For more information on this restructuring, see "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of
Operations-Corporate Restructuring." Noble and its predecessors have been
engaged in the contract drilling of oil and gas wells for others domestically
since 1921 and internationally during various periods since 1939. As used
herein, unless otherwise required by the context, the term "Noble" refers to
Noble Corporation and the terms "Company", "we", "our" and words of similar
import refer to Noble and its consolidated subsidiaries. The use herein of such
terms as group, organization, we, us, our and its, or references to specific
entities, is not intended to be a precise description of corporate
relationships.

BUSINESS STRATEGY

         Our long-standing business strategy continues to be the active
expansion of our international offshore drilling and deepwater capabilities
through acquisitions, rig upgrades and modifications, and the deployment of
assets in important geological areas.

         Since the beginning of 2000, we have mobilized nine jackup rigs from
the U.S. Gulf of Mexico to international markets. We continue to evaluate other
opportunities to deploy units in our fleet, including certain deepwater units,
in important geological areas worldwide.

          Although the deepwater drilling market is currently experiencing
near-term softness due to an increased supply of deepwater rigs, both the level
of drilling activity and the number of announced discoveries and related
development programs in water depths greater than 5,000 feet have increased
substantially in recent years, thus

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increasing the demand for rigs capable of drilling in these water depths. As
such, in recent years we have focused on increasing the number of rigs in our
fleet capable of deepwater offshore drilling.

         The offshore contract drilling industry has, in recent years,
experienced a series of asset sales and consolidations among drilling
contractors, and we expect this trend to continue as drilling contractors
position themselves strategically in the market. From time to time, we discuss
asset transactions or business combinations with others, and we intend to
continue to consider business opportunities that we believe promote our business
strategy. Since the beginning of 2000, we have added 10 units to our fleet
through acquisitions and joint ventures, and we currently have options to
acquire two additional units (see "-Business Development During 2003" below).

         In addition, as part of our strategy, we have focused on the continued
development of technological applications for the drilling industry. We believe
these applications differentiate our fleet by incorporating new technology,
enhancing our reputation with our customers, and providing a mechanism to grow
our earnings with lower capital investment requirements than required for our
fleet of drilling rigs. Our Noble Engineering & Development Limited ("NED"),
Maurer Technology Incorporated ("Maurer"), Triton Engineering Services Company
("Triton"), and downhole technology subsidiaries are engaged in this activity.

BUSINESS DEVELOPMENT DURING 2003

         As part of our strategy to expand our international operations, we
moved three jackup rigs to Mexico from the U.S. Gulf of Mexico for long-term
contracts with Petroleos Mexicanos ("Pemex") during 2003. The Noble Leonard
Jones and the Noble Earl Frederickson commenced contracts with Pemex in March
and April, respectively, while the Noble Bill Jennings commenced a contract with
Pemex in August. Since September 2002, we have mobilized a total of seven jackup
rigs to Mexico from the U.S. Gulf of Mexico for long-term contracts with Pemex.
In December 2003, we mobilized the Noble Carl Norberg jackup rig to the
Mediterranean Sea from the U.S. Gulf of Mexico for a 14-month contact, which
commenced in January 2004. Also in December 2003, we mobilized the Noble Dick
Favor jackup rig from Brazil to the Middle East. The unit is currently in the
shipyard, and is being assimilated into our Middle East operations.

         In September 2003, we exercised our option to purchase the jackup rig
Trident 18 (renamed the Noble Charlie Yester) from a subsidiary of Schlumberger
Limited for an exercise price of $32,900,000 in cash. In December 2002, we had
paid an option fee of $14,100,000 in cash for the right to acquire the unit.
During December 2003, this jackup commenced a three-year contract in India. In
July 2003, we exercised our option to purchase the jackup rig Trident 19
(renamed the Noble Gene House) from this subsidiary of Schlumberger for an
exercise price of $25,200,000 in cash. In December 2002, we had paid an option
fee of $10,800,000 in cash for the right to acquire the unit. This jackup is
being assimilated into our Middle East operations.

         In June 2003, we entered into option agreements with a subsidiary of
A.P. Moeller that give us the right to acquire two jackup rigs, the Maersk
Viking and Maersk Valiant. Both units are currently operating offshore Iran. Our
right to exercise the options and acquire the units will commence when the units
have completed their current drilling contracts and have mobilized to United
Arab Emirates territorial waters. We paid an aggregate of $28,200,000 in cash
for the two options. If we exercise the options, we will pay an exercise price
not to exceed an additional $65,800,000 to acquire both units. The amount of
this aggregate exercise price is subject to reduction depending on the delivery
date of the units, which is expected to be in 2004 for one unit and 2004 or 2005
for the other unit.

         We continued the expansion of our technology initiatives in 2003. We
installed the first string of aluminum alloy riser on the Noble Leo Segerius
drillship in Brazil, on which it operated successfully. We have also installed
the aluminum alloy riser on the Noble Therald Martin semisubmersible in the U.S.
Gulf of Mexico, with further installation planned on the Noble Lorris Bouzigard
semisubmersible and either the Noble Muravlenko or Noble Roger Eason drillships
during 2004. We drilled several test wells for customers using our Well
Director(TM) automatic rotary steerable system. We anticipate this system will
be commercial during 2004. In addition, we continue to seek opportunities to
utilize or license NED and Maurer's drilling products and software designed to
increase drilling efficiency. These efforts may be done solely by Noble or
through joint ventures with industry partners. Triton expanded its project
management and engineering services to international markets during 2003.

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DRILLING CONTRACTS

         We typically employ each drilling unit under an individual contract.
Although the final terms of the contracts are the result of our negotiations
with our customers, many contracts are awarded based upon competitive bidding.
Our drilling contracts generally contain the following terms:

         -  a term extending over a specific period of time or the period
            necessary to drill one or more wells (in general, we seek to have a
            reasonable balance of short- and long-term contracts to minimize the
            impact of a decline in the market, while obtaining the upside of
            increasing market prices in a rising market);

         -  terms permitting early termination of the contract by the customer
            (i) if the unit is lost or destroyed or (ii) if operations are
            suspended for a specified period of time due to either breakdown of
            major equipment or "force majeure" events beyond our control and the
            control of the customer;

         -  options in favor of the customer to drill one or more additional
            wells, generally upon advance notice to us;

         -  payment of compensation to us (generally in U.S. dollars) on a
            "daywork" basis, so that we receive a fixed amount for each day
            ("dayrate") that the drilling unit is operating under contract
            (lower rates or no compensation is payable during periods of
            equipment breakdown and repair or adverse weather or in the event
            operations are interrupted by other conditions, some of which may be
            beyond our control);

         -  payment by us of the operating expenses of the drilling unit,
            including labor costs and the cost of incidental supplies; and

         -  reimbursement to us by the customer of certain "out-of-pocket"
            expenses paid by us for the account of the customer.

         The terms of some of our drilling contracts permit early termination of
the contract by the customer, without cause, generally exercisable upon advance
notice to us. The terms may also require an early termination payment by the
customer. The drilling contracts for eight of our jackups contracted to Pemex as
of January 31, 2004 contain provisions that allow early cancellation on five
days or less notice to us without making an early termination payment.

         During times of depressed market conditions, our customers may seek to
avoid or reduce their obligations under term drilling contracts or letter
agreements or letters of intent for drilling contracts. A customer may no longer
need a rig, due to a reduction in its exploration, development or production
program, or it may seek to obtain a comparable rig at a lower dayrate.

         As of January 31, 2004, 18 of our rigs were contracted for the
remainder of 2004. We anticipate that the primary terms of the current contracts
on 27 of our rigs will expire at varying times in 2004, subject to options to
extend in the case of 20 contracts. Our remaining rigs were either available for
service or in a shipyard for repair, refurbishment or upgrade as of January 31,
2004.

         Many contracts allow us to recover our mobilization and demobilization
costs associated with moving a drilling unit from one location to another. When
market conditions require us to bear these costs, our operating margins are
accordingly reduced. We cannot predict our ability to recover these costs in the
future. For shorter moves such as "field moves", our customers have generally
agreed to bear the costs of moving the unit by paying us a reduced dayrate or
"move rate" while the unit is being moved.

OFFSHORE DRILLING OPERATIONS

         Our offshore contract drilling operations, which accounted for
approximately 94 percent, 95 percent and 95 percent of operating revenues for
the years ended December 31, 2003, 2002 and 2001, respectively, are conducted
worldwide. Our offshore drilling fleet consists of 57 units. For additional
information on the specifications of the

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fleet, see "Item 2. Properties-Drilling Fleet." Our principal regions of
contract drilling operations include the Middle East, Gulf of Mexico, Mexico,
the North Sea, Brazil, West Africa, India and the Mediterranean Sea. In 2003,
Petroleo Brasiliero S.A. and Pemex accounted for approximately 14 percent and 13
percent, respectively, of our total operating revenues. No other single customer
accounted for more than 10 percent of our total operating revenues in 2003.

INTERNATIONAL CONTRACT DRILLING

         Our contract drilling services revenues from international sources
accounted for approximately 73 percent, 68 percent and 52 percent of our total
contract drilling services revenues for 2003, 2002 and 2001, respectively. In
2003, approximately 56 percent of our international contract drilling services
revenues was derived from contracts with government-owned companies, 36 percent
was derived from contracts with companies having equity market capitalization
greater than $4 billion ("large cap companies"), and the remaining eight percent
was derived from other independent operators.

DOMESTIC CONTRACT DRILLING

         Contract drilling services revenues generated in the U.S. accounted for
approximately 27 percent, 32 percent and 48 percent of our total contract
drilling services revenues for 2003, 2002 and 2001, respectively. In 2003,
approximately 75 percent of our domestic contract drilling revenues was derived
from contracts with large cap companies and the remaining 25 percent was derived
from contracts with other independent operators.

LABOR CONTRACTS

         Our offshore operations also include services we perform under labor
contracts for drilling and workover activities covering six rigs operating in
the U.K. North Sea and two rigs under a labor contract (the "Hibernia Project")
off the east coast of Canada. These rigs are not owned or leased by us. In the
U.K. North Sea, we also have a labor contract to provide drilling and
maintenance services for the BP Clair Platform, which is scheduled to commence
during the third quarter of 2004. On January 28, 2004, we were awarded a letter
of intent for a three-year contract from Apache North Sea Limited to take over
the provision of drilling and maintenance services on its Forties Field.

         Under our labor contracts, we provide the personnel necessary to manage
and perform the drilling operations from drilling platforms owned by the
operator. With the exception of the Hibernia Project, which is operated under a
five-year agreement that expires in 2007, our labor contracts are generally
renewable on an annual basis. After drilling operations are completed, workover
operations usually become an important element of each platform's activity.
Drilling contractor crews will, therefore, typically remain on the platform
until a field is depleted.

TECHNOLOGY, ENGINEERING SERVICES AND PROJECT MANAGEMENT

         Our technology initiative focuses on the design and development of
drilling products, drilling-related software programs, technical solutions to
enhance drilling efficiency, and applications that allow us to drill in deeper
water depths with less capital investment. These functions are performed by our
NED and Maurer subsidiaries. In addition, through our downhole technology
subsidiaries we operate our Well Director(TM) automatic rotary steerable
drilling system.

         We provide well site management, project management and engineering
services through our Triton subsidiary.

         We also provide engineering services for the design of drilling
equipment for offshore development. We work on a contract basis with operators
and prime construction contractors of drilling and production platforms in the
design of drilling equipment configurations aimed at optimizing the operational
efficiency of developmental drilling by maximizing platform space utilization
and load capability.

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COMPETITION AND RISKS

         The contract drilling industry is a highly competitive and cyclical
business characterized by high capital and maintenance costs. We believe that
competition for drilling contracts will continue to be intense for the
foreseeable future. Certain competitors may have access to greater financial
resources than we do.

         Competition in contract drilling involves numerous factors, including
price, rig availability and suitability, experience of the workforce,
efficiency, condition of equipment, operating integrity, reputation, industry
standing and customer relations. We believe that we compete favorably with
respect to all of these factors. Competition is primarily on a regional basis
and may vary significantly by region at a particular time. Demand for offshore
drilling equipment also depends on the exploration and development programs of
oil and gas producers, which in turn are influenced by the financial condition
of such producers, by general economic conditions and prices of oil and gas,
and, from time to time, by political considerations and policies.

         We follow a policy of keeping our equipment well maintained and
technologically competitive. However, our equipment could be made obsolete by
the development of new techniques and equipment. In addition, industry-wide
shortages of supplies, services, skilled personnel and equipment necessary to
conduct our business occur from time to time. We cannot assure you that any such
shortages experienced in the past would not occur again or that any shortages,
to the extent currently existing, will not continue or worsen in the future.

          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. Generally
speaking, higher oil and natural gas prices or our customers' expectations of
higher prices result in a greater demand for our services. These prices are
extremely volatile. Despite higher oil prices in 2003 and 2002 as compared to
2001, drilling activity in many international markets, which are influenced more
by oil prices than natural gas prices, was generally weaker in 2003 as compared
to 2002 and 2001. We believe that operators in international markets have been
reluctant to increase drilling activity materially since the latter part of
2002, despite higher oil prices, due to the uncertainty surrounding the world
economy and the political conditions in the Middle East (including military
action in Iraq and efforts to rebuild and restore a functioning government in
Iraq) and Nigeria, which contributed to the higher oil prices.

          Natural gas prices in the U.S. were higher during 2003 as compared to
2002, as inventory storage has fallen below average historical levels. The
decline in natural gas inventory storage is attributable to reduced North
American natural gas production. Despite the higher natural gas prices,
operators on average have not increased offshore drilling activities. We believe
this is due principally to a lack of quality drilling prospects and the
uncertainty surrounding the world economy.

         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. We believe that a significant decrease from recent
historical average oil and gas prices could depress the level of exploration and
production activity and result in a corresponding decline in demand for our
services. Furthermore, oil companies continue to work through the effects of
industry consolidation, which has inhibited capital spending on exploration and
development. We expect that further consolidation among our customer base would
dampen drilling activity levels in the near term.

         For the foregoing reasons, we cannot predict the future level of demand
for our drilling services or future conditions in the offshore contract drilling
industry.

         Our operations are subject to the many hazards inherent in the drilling
business, including blowouts, cratering, fires and collisions or groundings of
offshore equipment. In addition, our operations are subject to damage or loss
from adverse weather and seas. These hazards could cause personal injury and
loss of life, suspend drilling operations or seriously damage or destroy the
property and equipment involved and, in addition to causing environmental
damage, could cause substantial damage to oil and natural gas producing
formations. Although we maintain insurance against many of these hazards, our
insurance is subject to deductibles. It also excludes certain

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matters from coverage, such as loss of earnings on certain rigs. Also, we
generally obtain indemnification from our customers for environmental damage
with respect to offshore drilling.

         Our international operations are also subject to certain political,
economic and other uncertainties including, among others, risks of war,
terrorism and civil disturbances, expropriation, nationalization, renegotiation
or modification of existing contracts, taxation policies, foreign exchange
restrictions, international monetary fluctuations and other hazards arising out
of foreign governmental sovereignty over certain areas in which we conduct
operations. We have sought to obtain, where economical, insurance against
certain political risks. However, we cannot assure you that this insurance will
always be available to us or, if available, will cover all losses that we may
incur in respect of foreign operations.

GOVERNMENTAL REGULATION AND ENVIRONMENTAL MATTERS

         Many aspects of our operations are affected by domestic and foreign
political developments and are subject to numerous governmental regulations that
may relate directly or indirectly to the contract drilling industry. The
regulations applicable to our operations include provisions that regulate the
discharge of materials into the environment or require remediation of
contamination under certain circumstances. Generally, these environmental laws
and regulations impose "strict liability". This means that we could be liable
without regard to our negligence or fault. Such environmental laws and
regulations may expose us to liability for the conduct of, or conditions caused
by, others, or for any of our acts, even if they complied with all applicable
laws in effect at the time we acted.

         The U.S. Oil Pollution Act of 1990 ("OPA `90") and regulations
thereunder impose certain additional operational requirements on our domestic
offshore rigs and govern liability for leaks, spills and blowouts involving
pollutants. Regulations under OPA `90 require owners and operators of rigs in
United States waters to maintain certain levels of financial responsibility. We
monitor these regulations and do not believe that they are likely to have a
material adverse effect on our financial condition or results of operations. We
have made and will continue to make expenditures to comply with environmental
requirements. To date we have not expended material amounts in order to comply
and we do not believe that our compliance with such requirements will have a
material adverse effect upon our results of operations or competitive position
or materially increase our capital expenditures. Although these requirements
impact the energy and energy services industries, generally they do not appear
to affect us any differently or to any greater or lesser extent than other
companies in the energy services industry.

         The modification of existing laws or regulations or the adoption of new
laws or regulations curtailing exploratory or developmental drilling for oil and
gas for economic, environmental or other reasons could materially and adversely
affect our operations by limiting drilling opportunities.

EMPLOYEES

         At December 31, 2003, we had 3,364 employees, of whom approximately 50
percent were engaged in international operations and approximately 50 percent
were engaged in domestic operations. Even though approximately 75 percent of our
fleet is deployed internationally, our customers under certain contracts in
Mexico, India and the Mediterranean Sea provide the personnel for a greater
number of the labor positions on the rig than we do typically. In addition, the
percentage of total employees represented by international operations was lower
at December 31, 2003 due to stacked rigs in West Africa. We are not a party to
any collective bargaining agreements that are material. We consider our employee
relations to be satisfactory.

FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS

         Information regarding our operating revenues and identifiable assets
attributable to each of our geographic areas of operations for the last three
fiscal years is presented in Note 16 to our consolidated financial statements
included in this Annual Report on Form 10-K.

                                       7
<PAGE>
AVAILABLE INFORMATION

         Our annual reports on Form 10-K, quarterly reports on Form 10-Q,
current reports on Form 8-K and amendments to those reports filed or furnished
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are
available free of charge at our internet website at http://www.noblecorp.com.
These filings are also available to the public at the Securities and Exchange
Commission's ("SEC") Public Reference Room at 450 Fifth Street, NW, Washington,
DC 20549. The public may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. Electronic filings with the
SEC are also available on the SEC internet website at http://www.sec.gov.

         We also make available on our website the following:

               o Charters for the Audit, Finance, Compensation and Nominating
                 Committees of our Board of Directors;

               o Our code of business conduct and ethics;

               o Our Memorandum and Articles of Association; and

               o Methods for contacting members of our Board of Directors.

         Printed copies of our committee charters and code of business conduct
and ethics are available in print to any member who requests them.

ITEM 2.  PROPERTIES

DRILLING FLEET

         Our offshore drilling rig fleet consists of 57 units composed of 13
semisubmersibles (including five Noble EVA-4000(TM) semisubmersibles), three
drillships, 38 jackup rigs and three submersibles. The rig count includes one
drillship and one jackup unit in which we have partial ownership interests
through joint ventures and one jackup rig operated pursuant to a long-term lease
("bareboat charter") agreement. Each type of rig is described further below.
There are several factors that determine the type of rig most suitable for a
particular job, the most significant of which include the water depth and bottom
conditions at the proposed drilling location, whether the drilling is being done
over a platform or other structure, and the intended well depth.

SEMISUBMERSIBLES

         Our semisubmersible fleet consists of 13 units. Among the 13 are five
units that have been converted to Noble EVA-4000(TM) semisubmersibles and three
Friede & Goldman 9500 Enhanced Pacesetter semisubmersibles (two of which require
substantial capital expenditure upgrades to place in operational condition).
Also included in this fleet are two Pentagone 85 semisubmersibles, two Bingo
9000 baredeck hulls, and one semisubmersible capable of operating in harsh
environments. Semisubmersibles are floating platforms which, by means of a water
ballasting system, can be submerged to a predetermined depth so that a
substantial portion of the hull is below the water surface during drilling
operations. These units maintain their position over the well through the use of
either a fixed mooring system or a dynamic positioning system and can drill in
many areas where jackup rigs can also drill. However, semisubmersibles normally
require water depth of at least 200 feet in order to conduct operations. Our
semisubmersibles are designed to work in water depths of up to 8,900 feet,
depending on the unit. Semisubmersibles are typically more expensive to
construct and operate than jackup rigs.

         We have extended the water depth capability of certain of our
semisubmersibles and of certain of our dynamically positioned drillships
discussed below by the deployment of our proprietary aluminum alloy riser (see
"Item 1. Business-Business Developments During 2003").


                                       8
<PAGE>

DYNAMICALLY POSITIONED DRILLSHIPS

         We have three dynamically positioned drillships in the fleet.
Drillships are ships that are equipped for drilling and are typically
self-propelled. Drillships are positioned over the well through use of either an
anchoring system or a computer controlled dynamic positioning system. Our two
wholly-owned drillships, the Noble Leo Segerius and Noble Roger Eason, are
capable of drilling in water depths up to 5,000 feet and 6,000 feet,
respectively. The Noble Muravlenko, in which we own an 82 percent interest
through a joint venture, is capable of drilling in water depths up to 4,000
feet.

JACKUP RIGS

         We have 38 jackup rigs in the fleet, including one in which we own a 50
percent interest through a joint venture and one that we operate pursuant to a
long-term bareboat charter agreement. Jackup rigs are mobile, self-elevating
drilling platforms equipped with legs which can be lowered to the ocean floor
until a foundation is established to support the drilling platform. The rig hull
includes the drilling rig, jacking system, crew quarters, loading and unloading
facilities, storage areas for bulk and liquid materials, helicopter landing deck
and other related equipment. All of our jackup rigs are independent leg (i.e.,
the legs can be raised or lowered independently of each other), cantilevered
rigs. A cantilevered jackup has a feature that permits the drilling platform to
be extended out from the hull, allowing it to perform drilling or workover
operations over pre-existing platforms or structures. Moving a rig to the drill
site involves jacking up its legs until the hull is floating on the surface of
the water. The hull is then towed to the drill site by tugs and the legs are
jacked down to the ocean floor. The jacking operation continues until the hull
is raised out of the water and drilling operations are conducted with the hull
in its raised position. Our jackup rigs are capable of drilling to a maximum
depth of 25,000 feet in water depths ranging between eight and 390 feet,
depending on the jackup rig.

SUBMERSIBLES

         We have three submersibles in the fleet. Submersibles are mobile
drilling platforms which are towed to the drill site and submerged to drilling
position by flooding the lower hull until it rests on the sea floor, with the
upper deck above the water surface. Our submersibles are capable of drilling to
a maximum depth of 25,000 feet in water depths ranging between 12 and 85 feet,
depending on the submersible.

         We do not consider these submersibles as core assets and would consider
them as disposition candidates. We believe the market value of each of these
assets exceeds its net book value, and any disposition based on current market
conditions would not result in a loss.

         The following table sets forth certain information concerning our
drilling rig fleet at January 31, 2004. The table does not include two jackup
rigs on which we have options to purchase (see "Item 1.Business-Business
Developments During 2003"). The table does not include any rigs owned by
operators for which we had labor contracts or letters of intent as of January
31, 2004. We operate and, unless otherwise indicated, own all of the rigs
included in the table.

                                       9
<PAGE>

                                 DRILLING FLEET

<TABLE>
<CAPTION>
                                                                                    WATER   DRILLING
                                                                                    DEPTH    DEPTH
                                                                     YEAR BUILT     RATING  CAPACITY
                NAME                              MAKE               OR REBUILT(1)  (FEET)   (FEET)     LOCATION          STATUS(2)
------------------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>                        <C>            <C>     <C>       <C>                 <C>
SEMISUBMERSIBLES - 13
Noble Paul Wolff  (T)                     Noble EVA-4000(TM)- DP         1999 R      8,900   30,000   Brazil               Active
Noble Paul Romano  (T)                    Noble EVA-4000(TM)             1998 R      6,000   30,000   U.S. Gulf of Mexico  Active
Noble Amos Runner (T)                     Noble EVA-4000(TM)             1999 R      6,600   30,000   U.S. Gulf of Mexico  Active
Noble Jim Thompson (T)                    Noble EVA-4000(TM)             1999 R      6,000   30,000   U.S. Gulf of Mexico  Active
Noble Max Smith (T)                       Noble EVA-4000(TM)             1999 R      6,000   30,000   U.S. Gulf of Mexico  Active
Noble Homer Ferrington (T)                Friede & Goldman 9500          2000 R      6,000   30,000   U.S. Gulf of Mexico  Active
                                            Enhanced Pacesetter
Noble Ton van Langeveld (T) (3)           Offshore Co. SCP III           2000 R      1,500   20,000   U.K.                 Active
Noble Lorris Bouzigard (T) (5)            Pentagone 85                   2003 R      4,000   25,000   U.S. Gulf of Mexico  Active
Noble Therald Martin (T) (5)              Pentagone 85                   2003 R      4,000   25,000   U.S. Gulf of Mexico  Available
Noble Clyde Boudreaux (T) (4)             Friede & Goldman 9500          1987       10,000   25,000   U.S. Gulf of Mexico  Shipyard
                                            Enhanced Pacesetter
Noble Dave Beard (T) (4)                  Friede & Goldman 9500          1986       10,000   25,000   China                Shipyard
                                            Enhanced Pacesetter
Bingo 9000 Rig 3 (4)                      Trosvik Bingo 9000             1999       10,000   30,000   China                Shipyard
Bingo 9000 Rig 4 (4)                      Trosvik Bingo 9000             1999       10,000   30,000   China                Shipyard
------------------------------------------------------------------------------------------------------------------------------------
DYNAMICALLY POSITIONED DRILLSHIPS - 3
Noble Roger Eason (T)                     Nedlloyd                       1997 R      6,000   25,000   Brazil               Shipyard
Noble Leo Segerius (T)                    Gusto Engineering Pelican
                                          Class                          1996 R      5,000   20,000   Brazil               Active
Noble Muravlenko (T) (6)                  Gusto Engineering Pelican
                                          Class                          1997 R      4,000   21,000   Brazil               Active
------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT LEG CANTILEVERED JACKUPS - 38
Noble Bill Jennings (T)                   MLT 84 - E.R.C.                1997 R        390   25,000   Mexico               Active
Noble Eddie Paul (T)                      MLT 84 - E.R.C.                1995 R        390   25,000   U.S. Gulf of Mexico  Active
Noble Leonard Jones (T)                   MLT 53 - E.R.C.                1998 R        390   25,000   Mexico               Active
Noble Julie Robertson (T) (3) (7)         Baker Marine Europe Class      2000 R        390   25,000   U.K                  Available
Noble Al White (T) (3)                    CFEM T-2005C                   1997 R        360   25,000   The Netherlands      Active
Noble Kolskaya (T) (3) (8)                Gusto Engineering-C            1997 R        330   25,000   The Netherlands      Active
Noble Byron Welliver (T) (3)              CFEM T-2005C                   1982          300   25,000   Denmark              Active
Noble Johnnie Hoffman (T)                 Baker Marine BMC 300           1993 R        300   25,000   Mexico               Active
Noble Roy Butler (T) (9)                  F&G L-780 MOD II               1996 R        300   25,000   Nigeria              Active
Noble Tommy Craighead (T)                 F&G L-780 MOD II               2003 R        300   25,000   Nigeria              Active
Noble Kenneth Delaney (T)                 F&G L-780 MOD II               1998 R        300   25,000   U.A.E.               Active
Noble Percy Johns (T)                     F&G L-780 MOD II               1995 R        300   25,000   Nigeria              Available
Noble George McLeod (T)                   F&G L-780 MOD II               1995 R        300   25,000   U.A.E.               Active
Noble Jimmy Puckett (T)                   F&G L-780 MOD II               2002 R        300   25,000   U.A.E.               Active
Noble Gus Androes (T)                     Levingston 111-C               1996 R        300   25,000   Qatar                Active
Noble Lewis Dugger (T)                    Levingston 111-C               1997 R        300   20,000   Mexico               Active
Noble Ed Holt (T)                         Levingston 111-C               1994 R        300   25,000   India                Active
Noble Sam Noble (T)                       Levingston 111-C               1982          300   25,000   Mexico               Active
Noble Gene Rosser (T)                     Levingston 111-C               1996 R        300   20,000   Mexico               Active
Noble John Sandifer (T)                   Levingston 111-C               1995 R        300   20,000   Mexico               Active
Panon (T) (10)                            Levingston 111-C               2001 R        300   20,000   U.A.E.               Active
Noble Gene House(T)                       MODEC 300C-38                  1981          300   25,000   U.A.E.               Available
Noble Charlie Yester(T)                   MLT Class 116-C                1980          300   25,000   India                Active
Noble Roy Rhodes (T) (11)                 MLT Class 116-C                1979          300   25,000   U.A.E.               Active
Noble Charles Copeland (T)                MLT Class 82-SD-C              2001 R        250   20,000   Bahrain              Active
Noble Earl Frederickson (T)               MLT Class 82-SD-C              1979          250   20,000   Mexico               Active
Noble Tom Jobe (T)                        MLT Class 82-SD-C              1982          250   25,000   U.S. Gulf of Mexico  Active
Noble Ed Noble (T)                        MLT Class 82-SD-C              1990 R        250   20,000   Nigeria              Available
Noble Lloyd Noble (T)                     MLT Class 82-SD-C              1990 R        250   20,000   Nigeria              Available
Noble Carl Norberg (T)                    MLT Class 82-C                 2003 R        250   20,000   Mediterranean Sea    Active
Noble Chuck Syring (T)                    MLT Class 82-C                 1996 R        250   20,000   Qatar                Active
Noble George Sauvageau (T) (3)            NAM Nedlloyd-C                 1981          250   20,000   The Netherlands      Active
Noble Ronald Hoope (T) (3)                Marine Structure CJ-46         1982          250   25,000   U.K                  Active
Noble Lynda Bossler (T) (3)               Marine Structure CJ-46         1982          250   25,000   The Netherlands      Active
Noble Piet van Ede (T) (3)                Marine Structure CJ-46         1982          250   25,000   The Netherlands      Active
Noble Dick Favor                          Baker Marine BMC 150           1993 R        150   20,000   U.A.E.               Shipyard
Noble Don Walker  (T)                     Baker Marine BMC 150           1992 R        150   20,000   Nigeria              Available
Dhabi II (T)                              Baker Marine BMC 150           1981          150   20,000   U.A.E.               Active
------------------------------------------------------------------------------------------------------------------------------------
SUBMERSIBLES - 3
Noble Joe Alford                          Pace Marine 85G                1997 R         85   25,000   U.S. Gulf of Mexico  Available
Noble Lester Pettus                       Pace Marine 85G                1997 R         85   25,000   U.S. Gulf of Mexico  Active
Noble Fri Rodli                           Transworld                     1998 R         70   25,000   U.S. Gulf of Mexico  Active
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                      See footnotes on the following page.

                                       10
<PAGE>

                           FOOTNOTES TO DRILLING FLEET

(T)      Denotes Top Drive.

(1)      Rigs designated with an "R" were modified, refurbished or otherwise
         upgraded in the year indicated by capital expenditures in an amount
         deemed material by management.

(2)      Rigs listed as "active" were operating under contract; rigs listed as
         "available" were available for bidding; rigs listed as "contracted"
         have signed contracts or have letters of intent with operators but have
         not begun operations; rigs listed as "shipyard" are in a shipyard for
         repair, refurbishment or upgrade.

(3)      Harsh environment capability.

(4)      Water depth rating is subsequent to the rig's planned upgrade.

(5)      Water depth rating is pursuant to the use of Noble's proprietary
         aluminum alloy riser. For additional information regarding units on
         which the aluminum alloy riser is or will be deployed, see "Item
         1.Business-Business Developments During 2003."

(6)      We operate the unit and own an 82 percent interest in the unit through
         a joint venture.

(7)      Although designed for a water depth rating of 390 feet of water in a
         non-harsh environment, the rig is currently equipped with legs adequate
         to drill in approximately 180 feet of water. We own the additional legs
         required to extend the drilling depth capability to 390 feet of water.
         The Noble Julie Robertson status became active subsequent to January
         31, 2004.

(8)      We operate the unit pursuant to a long-term bareboat charter agreement.

(9)      Although designed for a water depth rating of 300 feet of water, the
         rig is currently equipped with legs adequate to drill in approximately
         250 feet of water. We own the additional legs required to extend the
         drilling depth capability to 300 feet of water.

(10)     We own a 50 percent interest in the unit through a joint venture.

(11)     Although designed for a water depth rating of 300 feet of water, the
         rig is currently equipped with legs adequate to drill in approximately
         250 feet of water. The estimated cost of adding the additional leg
         capacity is $2,400,000.

                                       11
<PAGE>

FACILITIES

         Our principal executive offices are located in Sugar Land, Texas, and
are leased through June 2011. We also lease administrative and marketing
offices, and sites used primarily for storage, maintenance and repairs for
drilling rigs and equipment, in St. Michael, Barbados; New Orleans, Louisiana;
Leduc, Alberta and St. John's, Newfoundland, Canada; Lagos and Port Harcourt,
Nigeria; Aberdeen, Scotland; Stavanger, Norway; Ciudad Ojeda, Venezuela; Del
Carmen, Mexico; Doha, Qatar; Abu Dhabi and Dubai, U.A.E.; Beverwijk, The
Netherlands; Macae, Brazil; Essen and Lachendorf, Germany; Moscow, Russia; and
Esjberg, Denmark. We own certain tracts of land, including office and
administrative buildings and warehouse facilities in Bayou Black, Louisiana and
Aberdeen, Scotland.

ITEM 3.  LEGAL PROCEEDINGS

         Noble Asset Company Limited ("NACL"), a wholly-owned, indirect
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. 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. 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, both of which remain in place. 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.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         Not applicable.

                                       12
<PAGE>

EXECUTIVE OFFICERS OF THE REGISTRANT

         The following table sets forth certain information as of March 1, 2004
with respect to our executive officers:

<TABLE>
<CAPTION>
          NAME               AGE                                     POSITION
          ----               ---                                     --------
<S>                          <C>            <C>
James C. Day                  60            Chairman of the Board and Chief Executive Officer and Director

Mark A. Jackson               48            Senior Vice President and Chief Financial Officer

Danny W. Adkins               53            Senior Vice President - Operations, Noble Drilling Corporation

Julie J. Robertson            48            Senior Vice President - Administration and Corporate Secretary
</TABLE>

         James C. Day has served as Chairman of the Board of Noble since October
22, 1992 and as Chief Executive Officer since January 1, 1984, and he served as
President from January 1, 1984 to January 1, 1999. From January 1983 until his
election as President and Chief Executive Officer, Mr. Day served as Vice
President of Noble Drilling. Prior to 1983, Mr. Day served as Vice President and
Assistant Secretary of Noble Affiliates, Inc. He has been a director of Noble
since 1984. Mr. Day is also a director of Global Industries, Ltd., Noble Energy,
Inc. and ONEOK, Inc., and a trustee of The Samuel Roberts Noble Foundation, Inc.

         Mark A. Jackson has served as Senior Vice President and Chief Financial
Officer of Noble since September 1, 2000. From May 1999 to August 2000, Mr.
Jackson served as Executive Vice President and Chief Financial Officer for Santa
Fe Snyder Corporation, an oil and gas exploration and production company. From
August 1997 to May 1999, he served as Senior Vice President and Chief Financial
Officer of Snyder Oil Corporation, an oil and gas exploration and production
company. Prior to August 1997, Mr. Jackson served consecutively in the positions
of Vice President & Controller, Vice President - Finance and Vice President &
Chief Financial Officer of Apache Corporation, an oil and gas exploration and
production company, beginning in 1988.

         Danny W. Adkins has served as Senior Vice President - Operations of
Noble Drilling since November 1, 2003. Prior to that, he held the same position
with Noble Drilling International (Cayman) Ltd. since August 2000. From March
1997 to August 2000, Mr. Adkins served consecutively as Vice President -
Engineering and Senior Vice President - Engineering for Noble Drilling Services
Inc. From September 1994 to March 1997, he served as Vice President - Operations
for Noble Drilling Services Inc. Prior to September 1994, Mr. Adkins served
consecutively in the positions of Manager of Engineering and Vice President -
Operations for a predecessor subsidiary of Noble, beginning in December 1990.

         Julie J. Robertson has served as Senior Vice President - Administration
of Noble since July 2001 and as Corporate Secretary of Noble since December
1993. Ms. Robertson served as Vice President - Administration of Noble Drilling
from April 1996 to July 2001. In September 1994, Ms. Robertson became Vice
President - Administration of Noble Drilling Services Inc. From January 1989 to
September 1994, Ms. Robertson served consecutively as Manager of Benefits and
Director of Human Resources for Noble Drilling Services Inc. Prior to 1989, Ms.
Robertson served consecutively in the positions of Risk and Benefits Manager and
Marketing Services Coordinator for a predecessor subsidiary of Noble, beginning
in 1979.

                                       13
<PAGE>

                                     PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
          ISSUER PURCHASES OF EQUITY SECURITIES

         Noble's ordinary shares are listed and traded on the New York Stock
Exchange under the symbol "NE". The following table sets forth for the periods
indicated the high and low sales prices of our ordinary shares:

<TABLE>
<CAPTION>
                                                                        HIGH                    LOW
                                                                        ----                    ---
<S>                                                               <C>                    <C>
2003

         First quarter........................................    $      38.40           $     31.18
         Second quarter.......................................           37.80                 30.46
         Third quarter........................................           36.61                 31.37
         Fourth quarter.......................................           37.46                 32.75

2002

         First quarter........................................    $      41.39           $     28.36
         Second quarter.......................................           45.79                 38.15
         Third quarter........................................           38.70                 28.15
         Fourth quarter.......................................           37.79                 30.34
</TABLE>

         We have not paid any cash dividends on our ordinary shares, and Noble
Drilling did not pay any cash dividends on shares of its common stock since it
became a publicly held corporation in October 1985. As a result of the reduction
in the U.S. individual tax rates on corporate dividends enacted in 2003 and
other economic and market considerations, Noble's board of directors reviews
Noble's dividend policy from time to time. To date, we have no current plan to
commence the payment of regular dividends on our ordinary shares.

         At February 17, 2004, there were 1,564 record holders of ordinary
shares.

                                       14
<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                                                      YEAR ENDED DECEMBER 31,
                                               ---------------------------------------------------------------------
                                                   2003           2002          2001         2000           1999
                                                   ----           ----          ----         ----           ----
                                                              (In thousands, except per share amounts)
<S>                                            <C>            <C>          <C>           <C>            <C>
STATEMENT OF INCOME DATA
Operating revenues .........................   $    987,380   $   990,248  $  1,029,760  $    898,224   $    715,598
Net income (1) .............................        166,416       209,503       262,922       165,554         84,469
Per share:
    Basic...................................   $       1.26   $      1.58  $       1.98  $       1.24   $       0.64
    Diluted.................................           1.25          1.57          1.96          1.22           0.64

BALANCE SHEET DATA (AT END OF PERIOD)
Cash and Marketable securities (2)..........   $    237,843   $   274,134  $    287,672  $    177,124   $    136,837
Property and equipment, net.................      2,625,866     2,471,043     2,149,217     2,095,129      2,049,769
Total assets................................      3,189,633     3,065,714     2,750,740     2,595,531      2,432,324
Long-term debt..............................        541,907       589,562       550,131       650,291        730,893
Total debt (3)..............................        589,573       670,139       605,561       699,642        790,353
Shareholders' equity........................      2,178,425     1,989,210     1,778,319     1,576,719      1,398,042

OTHER DATA
Net cash provided by operating activities...   $    365,308   $   445,364  $    451,046  $    330,736   $    277,443
Acquisitions and related capital upgrades...        194,400       356,854        50,440        58,993        359,021
Other capital expenditures..................        112,734       121,500        89,426        66,206         62,658
</TABLE>

------------------

(1)      The 1999 amount includes a non-recurring restructuring charge of
         $4,861,000, net of tax, related to early retirement packages offered to
         a number of domestic employees and the relocation of our Lafayette,
         Louisiana office to Sugar Land, Texas.

(2)      Includes restricted cash of $0, $8,668,000, $9,366,000, $3,889,000 and
         $4,010,000 at December 31, 2003, 2002, 2001, 2000 and 1999,
         respectively.

(3)      Consists of long-term debt and current maturities of long-term debt.

                                       15
<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

         The following discussion is intended to assist you in understanding our
financial position as of December 31, 2003 and 2002, and our results of
operations for each of the three years in the period ended December 31, 2003.
You should read the accompanying consolidated financial statements and their
notes in conjunction with this discussion.

BUSINESS ENVIRONMENT

         Demand for drilling services depends on a variety of economic and
political factors, including worldwide demand for oil and gas, the ability of
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. Generally
speaking, higher oil and natural gas prices or our customers' expectations of
higher prices result in a greater demand for our services. These prices are
extremely volatile. Despite higher oil prices in 2003 and 2002 as compared to
2001, drilling activity in many international markets, which are influenced more
by oil prices than natural gas prices, was generally weaker in 2003 as compared
to 2002 and 2001. We believe that operators in international markets have been
reluctant to increase drilling activity materially since the latter part of
2002, despite higher oil prices, due to the uncertainty surrounding the world
economy and the political conditions in the Middle East (including the military
action in Iraq and the efforts to rebuild and restore a functioning government
in Iraq) and Nigeria, which contributed to the higher oil prices.

          Natural gas prices in the U.S. were higher during 2003 as compared to
2002, as inventory storage has fallen below average historical levels. The
decline in natural gas inventory storage is attributable to reduced North
American natural gas production. Despite the higher natural gas prices,
operators on average have not increased offshore drilling activities. We believe
this is due principally to a lack of quality drilling prospects and the
uncertainty surrounding the world economy.

         Oil companies continue to work through the effects of industry
consolidation, which has inhibited capital spending on exploration and
development. We expect that further consolidation among our customer base would
dampen drilling activity levels in the near term.

         We cannot predict the future level of demand for our drilling services
or future conditions in the offshore contract drilling industry. Decreases in
the level of demand for our drilling services have an adverse effect on our
results of operations.

         In recent years, we have focused on increasing the number of rigs in
our fleet capable of deepwater offshore drilling. We have incorporated this
focus into our broader, long-standing business strategy to actively expand our
international and offshore 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 six jackups to
our international fleet, and we have acquired options to purchase two additional
jackups.

                                       16
<PAGE>

RESULTS OF OPERATIONS

2003 COMPARED TO 2002

     GENERAL

         Net income for 2003 was $166,416,000, or $1.25 per diluted share, on
operating revenues of $987,380,000, compared to net income of $209,503,000, or
$1.57 per diluted share, on operating revenues of $990,248,000 for 2002.

     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 2003 and 2002:

<TABLE>
<CAPTION>
                                       AVERAGE RIG
                                     UTILIZATION (1)             OPERATING DAYS (2)             AVERAGE DAYRATE
                                     ---------------             ------------------             ---------------
                                     2003         2002            2003         2002           2003           2002
                                     ----         ----            ----         ----           ----           ----
<S>                                  <C>          <C>            <C>          <C>           <C>           <C>
International (3):
  Jackups........................     82%          97%            9,620        8,480        $  51,614     $  58,149
  Semisubmersibles - >6,000'(4)..    100%         100%              365          365          149,217       129,472
  Semisubmersibles - <6,000'(5)..     95%          74%              347          269           44,131        61,882
  Drillships.....................     98%          86%            1,071          938           75,296        67,464
                                     ---          ---            ------       ------        ---------     ---------
  Total International............     84%          95%           11,403       10,052        $  56,735     $  61,708
                                     ===          ===            ======       ======        =========     =========
Domestic (6):
  Jackups........................     91%          86%            1,144        2,832        $  30,271     $  28,723
  Semisubmersibles - >6,000'(4)..     87%          91%            1,580        1,667          120,784       120,217
  Semisubmersibles - <6,000'(5)..     29%           -               107            -           45,025             -
  Submersibles...................     77%          56%              613          435           20,188        19,271
                                     ---          ---            ------       ------        ---------     ---------
  Total Domestic.................     81%          84%            3,444        4,934        $  70,457     $  58,802
                                     ===          ===            ======       ======        =========     =========
</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.

                                       17
<PAGE>

     INTERNATIONAL OPERATIONS

         The following table sets forth the operating revenues and direct
operating expenses for our international operations for 2003 and 2002:

<TABLE>
<CAPTION>
                                                         OPERATING REVENUES           DIRECT OPERATING EXPENSES
                                                         ------------------           -------------------------
                                                         2003         2002             2003           2002
                                                         ----         ----             ----           ----
                                                                           (In thousands)
<S>                                                 <C>           <C>              <C>            <C>
Contract drilling services......................    $    646,949  $      620,289   $     380,029  $     325,830
Reimbursables (1)...............................          19,976          15,537          15,695         13,805
Labor contract drilling services................          28,492          26,416          22,642         20,951
Engineering, consulting and other...............           8,779          11,197          10,820          9,907
                                                    ------------  --------------   -------------  -------------
         Total..................................    $    704,196  $      673,439   $     429,186  $     370,493
                                                    ============  ==============   =============  =============
</TABLE>

----------------------
(1) We record reimbursements from customers for out-of-pocket expenses as
    revenues and the related direct cost as direct 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 $26,660,000 due to additional operating days for our jackup rigs in
Mexico and the Middle East, and a higher average dayrate and additional
operating days in Brazil, partially offset by lower utilization rates on jackup
rigs in West Africa and lower average dayrates in the North Sea. The additional
operating days in Mexico were attributable to the mobilization of seven rigs to
Mexico from the U.S. Gulf of Mexico beginning in September 2002. 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 a lack of 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 with
Petroleos Mexicanos ("Pemex"). The additional operating days in the Middle East
were attributable to the operations of the Noble Roy Rhodes and Dhabi II
jackups, which we purchased in December 2002. Operating days increased in Brazil
due to the completion of regulatory drydocks on two of our drillships during
2002.

         Demand in the West Africa region 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 that prospects for drilling
activity in the West Africa region are good and that our operations in the
region will provide financial returns over time which are comparable to other
key international regions, and consistent with returns in the West Africa region
in the years immediately preceding the rise in political unrest in 2002. As a
result, we elected to keep our jackup rigs in this market during 2003 and
currently.

         We believe the gradual maturing of the North Sea basin contributed to
the decrease in average dayrates in the North Sea. We also believe that any
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. The average dayrates on our
Noble Paul Wolff semisubmersible and three drillships in Brazil increased from
2002 due to the receipt of performance bonuses for reducing operational
downtime.

         Labor contract drilling services revenues increased $2,076,000 as a
result of foreign exchange fluctuation due in large part to our operations in
Canada on the Hibernia project. We are paid for that work in Canadian dollars,
and the Canadian dollar was stronger in 2003 as compared to the U.S. dollar. In
addition, contractual provisions covering the Hibernia project allowed for
increases in the labor, maintenance and administrative portions of the dayrate
on the Hibernia project during 2003. These increases were partially offset by
lower utilization on two of our North Sea labor contracts. International
engineering, consulting and other revenues decreased $2,418,000 due to reduced
activity on an engineering services engagement in the North Sea, partially
offset by additional project management engagements performed by our Triton
Engineering Services Company ("Triton") subsidiary.

                                       18
<PAGE>

         DIRECT OPERATING EXPENSES. Direct operating expenses for our
international contract drilling services increased $54,199,000 due to the
additional operating days in Mexico, the Middle East and Brazil, and labor
increases in all regions. In addition, these expenses increased due to stacked
costs on two jackups we acquired in the Middle East during 2003, and the costs
to mobilize one jackup rig to the Middle East from Brazil and one jackup rig to
the Mediterranean Sea from the U.S. Gulf of Mexico. These increases were
partially offset by lower insurance costs. We did not reduce our operating
expenses in West Africa significantly during 2003 even though we experienced
fewer operating days there, because we maintained a standard crew size on
stacked units in order to perform repairs, maintenance, and asset preservation
work.

         Direct operating expenses for our international labor contract drilling
services increased $1,691,000 due to the stronger Canadian dollar and higher
labor, maintenance and administrative costs related to our Hibernia project in
Canada, partially offset by lower utilization on two of our North Sea labor
contracts. International engineering, consulting and other direct operating
expenses increased $913,000 due to additional project management engagements
performed by Triton and the testing and development of our Well Director(TM)
automatic rotary steerable drilling system, partially offset by reduced activity
on an engineering services engagement in the North Sea.

     DOMESTIC OPERATIONS

The following table sets forth the operating revenues and direct operating
expenses for our domestic operations for 2003 and 2002:

<TABLE>
<CAPTION>
                                                        OPERATING REVENUES          DIRECT OPERATING EXPENSES
                                                        ------------------          -------------------------
                                                         2003          2002            2003           2002
                                                         ----          ----            ----           ----
                                                                           (In thousands)
<S>                                                 <C>           <C>              <C>            <C>
Contract drilling services......................    $    242,654  $     290,130    $     125,009  $     162,799
Reimbursables (1)...............................          24,238         10,646           23,329          9,253
Engineering, consulting and other...............          16,292         16,033           17,429         17,961
                                                    ------------  -------------    -------------  -------------
         Total..................................    $    283,184  $     316,809    $     165,767  $     190,013
                                                    ============  =============    =============  =============
</TABLE>

----------------------
(1) We record reimbursements from customers for out-of-pocket expenses as
    revenues and the related direct cost as direct 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 $47,476,000 due to fewer operating days on our domestic jackup rigs
following the mobilization of seven rigs from the U.S. Gulf of Mexico to Mexico
beginning in September 2002, and lower utilization on our semisubmersibles. The
mobilization of these jackup rigs was pursuant to our long-standing business
strategy of deploying our assets in important geological regions as described
earlier. Although we continue to evaluate opportunities to mobilize one or more
of our semisubmersibles from the U.S. Gulf of Mexico to international regions,
we believe the drilling prospects in the U.S. Gulf of Mexico for
semisubmersibles should improve. We believe the decline in demand for these
units in 2003 was attributable more to uncertainty with the world economy than a
lack of quality drilling prospects.

          Domestic engineering, consulting and other revenues increased $259,000
due to additional revenue from interests in deepwater oil and gas properties,
which began producing during the latter part of 2002, and revenue earned by the
Noble Homer Ferrington semisubmersible while the unit was not operating,
pursuant to its long-term contract. These increases were partially offset by
fewer projects undertaken by our Maurer Technology Incorporated ("Maurer")
subsidiary.

         DIRECT OPERATING EXPENSES. Direct operating expenses for our domestic
contract drilling services decreased $37,790,000 due to the fewer operating days
on our domestic jackup rigs and lower insurance costs as we incurred no hull and
machinery claims during 2003, partially offset by an increase in direct
operating expenses due to the activation of the Noble Lorris Bouzigard and Noble
Therald Martin semisubmersibles during 2003. Domestic engineering, consulting
and other direct operating expenses decreased $532,000 due to lower research and

                                       19
<PAGE>

development costs in 2003 by our Noble Engineering & Development Limited ("NED")
subsidiary and fewer research projects undertaken by Maurer, partially offset by
operating costs from our interests in deepwater oil and gas properties.

    OTHER ITEMS

         DEPRECIATION AND AMORTIZATION EXPENSE. Depreciation and amortization
expense increased $22,973,000 due to the acquisition of the Dhabi II and Noble
Roy Rhodes international jackup rigs in December 2002, the acquisition of the
Noble Gene House and Noble Charlie Yester international jackup rigs in July 2003
and September 2003, respectively, and the activation of the Noble Lorris
Bouzigard and Noble Therald Martin domestic semisubmersibles in March 2003 and
November 2003, respectively, following each unit's upgrade.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses decreased $305,000 due to nonrecurring professional fees
and filing fees incurred during the first half of 2002 related to our corporate
restructuring. This decrease was partially offset by unrealized gains in 2002 on
the assets in the Rabbi Trust for the Noble Drilling Corporation 401(k) Savings
Restoration Plan, which increased the related liability for the plan in 2003,
and higher pension expense in 2003 due to a lower discount rate and assumed
long-term rate of return on plan assets for 2003.

         GAIN ON SALE OF PROPERTY AND EQUIPMENT. Gain on sale of property and
equipment decreased by $2,436,000 due to a gain in 2002 of $5,908,000 on the
sale of our interest in one of our deepwater oil and gas properties to Pioneer
Natural Resources USA, Inc. for $6,200,000 in cash and the assumption of
liabilities related to our share of drilling and development costs on this
property. In 2003, we sold our interest in another deepwater oil and gas
property to ENI Petroleum for $5,200,000 in cash. We realized a gain of
$3,472,000 upon the sale of our interest in this property.

         INTEREST EXPENSE. Interest expense decreased $2,331,000 due to the
continued retirement of higher interest rate debt in 2003. We made payments of
long-term debt totaling $80,580,000 in 2003.

         OTHER, NET. Income reported in Other, net increased $3,747,000 as 2002
included a realized loss of $9,758,000 on an investment in marketable equity
securities resulting from a decline in value considered by management to be
other than temporary. The 2002 loss was offset by interest income earned on our
cash and marketable securities and equity in income of joint ventures. In 2003,
interest income on our cash and marketable securities decreased $2,007,000 from
2002 as our average balance in these investments was approximately $47,000,000
lower than 2002, which was compounded by a 30 percent decrease in our average
yield on these investments.

         INCOME TAX PROVISION. Income tax provision decreased $13,254,000 due to
lower pre-tax earnings and a lower effective tax rate. The effective tax rate
was 11 percent in 2003 compared to 14 percent in 2002. The lower effective tax
rate in 2003 was a result of our corporate restructuring in April 2002 and a
higher percentage of our pretax earnings being derived from our international
operations, which generally have lower effective tax rates than our domestic
operations.

2002 COMPARED TO 2001

    GENERAL

         Net income for 2002 was $209,503,000, or $1.57 per diluted share, on
operating revenues of $990,248,000, compared to net income of $262,922,000, or
$1.96 per diluted share, on operating revenues of $1,029,760,000 for 2001.

                                       20
<PAGE>

         RIG UTILIZATION, OPERATING DAYS AND AVERAGE DAYRATE

         The following table sets forth the average rig utilization, operating
days and average dayrate for our offshore fleet for 2002 and 2001:

<TABLE>
<CAPTION>
                                      AVERAGE RIG
                                     UTILIZATION (1)             OPERATING DAYS (2)             AVERAGE DAYRATE
                                     ---------------             ------------------             ---------------
                                      2002       2001            2002          2001           2002          2001
                                      ----       ----            ----          ----           ----          ----
<S>                                  <C>         <C>             <C>          <C>          <C>           <C>
International (3):
  Jackups........................      97%        90%            8,480        7,125        $  58,149     $  51,579
  Semisubmersibles - >6,000'(4)..     100%       100%              365          365          129,472       139,492
  Semisubmersibles - <6,000'(5)..      74%        70%              269          256           61,882        74,997
  Drillships.....................      86%        89%              938          972           67,464        59,935
                                      ---        ---            ------        -----        ---------     ---------
  Total International............      95%        90%           10,052        8,718        $  61,708     $  56,879
                                      ===        ===            ======        =====        =========     =========
Domestic (6):
  Jackups........................      86%        89%            2,832        3,355        $  28,723     $  51,608
  Semisubmersibles - >6,000'(4)..      91%        96%            1,667        1,743          120,217       140,400
  Semisubmersibles - <6,000'(5)..       -          -                 -            -                -             -
  Submersibles...................      56%        86%              435          937           19,271        34,384
                                      ---        ---            ------        -----        ---------     ---------
  Total Domestic.................      84%        90%            4,934        6,035        $  58,802     $  74,578
                                      ===        ===            ======        =====        =========     =========
</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 and India.

(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.

    INTERNATIONAL OPERATIONS

         The following table sets forth the operating revenues and direct
operating expenses for our international operations for 2002 and 2001:

<TABLE>
<CAPTION>
                                                           OPERATING REVENUES          DIRECT OPERATING EXPENSES
                                                           ------------------          -------------------------
                                                           2002            2001          2002            2001
                                                           ----            ----          ----            ----
                                                                           (In thousands)
<S>                                                    <C>              <C>            <C>            <C>
Contract drilling services.......................      $  620,289       $ 495,870      $ 325,830      $  266,773
Reimbursables (1) ...............................          15,537          16,991         13,805          16,508
Labor contract drilling services.................          26,416          31,292         20,951          25,745
Engineering, consulting and other................          11,197          11,393          9,907           7,491
                                                       ----------       ---------      ---------      ----------
         Total...................................      $  673,439       $ 555,546      $ 370,493      $  316,517
                                                       ==========       =========      =========      ==========
</TABLE>

----------------------

(1) We record reimbursements from customers for out-of-pocket expenses as
    revenues and the related direct cost as direct 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.

                                       21
<PAGE>

         OPERATING REVENUES. International contract drilling services revenues
increased $124,419,000 due to higher average dayrates for jackups in the North
Sea, the Middle East and West Africa and additional operating days for jackups
in Mexico and the Middle East. We believe the higher average dayrates were
attributable to an increase in demand for our drilling rigs by our customers,
driven by higher crude oil prices in 2002 than in 2001. Our semisubmersible in
Brazil did not realize a similar increase in dayrate because this unit was
operating under a long-term contract entered into prior to 2002. The average
dayrate on our drillships in Brazil increased due to a contract renewal on one
unit at a dayrate approximately 80 percent higher than the previous dayrate. The
previous contract was in effect at the time we acquired this unit in 1996. Our
semisubmersible in Brazil realized a lower average dayrate in 2002 due to the
receipt of lower performance bonuses in 2002 than in 2001.

         The additional operating days in Mexico were attributable to the
mobilization of four jackup rigs to Mexico from the U.S. Gulf of Mexico for
long-term contracts beginning in September 2002. During 2001, we mobilized one
jackup rig from the U.S. Gulf of Mexico to the Middle East, which contributed to
the increase in operating days. In addition, we realized additional operating
days in the Middle East on another jackup rig which resumed operations after
suffering damage during a tow in 2001.

         International labor contract drilling services revenues decreased
$4,876,000 due to fewer equipment rentals on the Hibernia Project in Canada and
lower utilization on our North Sea labor contracts. International engineering,
consulting and other revenues decreased $196,000 due to a reduction in equipment
fabrication services in the North Sea, partially offset by an additional
engineering services contract in the North Sea and the expansion of our
technology initiative to certain international markets during 2002.

         DIRECT OPERATING EXPENSES. Direct operating expenses for our
international contract drilling services increased by $59,057,000 due to the
additional operating days in Mexico and the Middle East, higher labor costs in
all of our operating regions due to compensation increases, and higher insurance
costs. Direct operating expenses for our international labor contract drilling
services decreased $4,794,000 due to fewer equipment rentals on the Hibernia
Project in Canada and lower utilization on our North Sea labor contracts.
International engineering, consulting and other direct operating expenses
increased $2,416,000 due to the expansion of our technology initiative to
certain international markets during 2002 and the additional engineering
services contract in the North Sea, partially offset by the reduction in
equipment fabrication services in the North Sea.

    DOMESTIC OPERATIONS

         The following table sets forth the operating revenues and direct
operating expenses for our domestic operations for 2002 and 2001:

<TABLE>
<CAPTION>
                                                         OPERATING REVENUES           DIRECT OPERATING EXPENSES
                                                         ------------------           -------------------------
                                                           2002           2001           2002          2001
                                                           ----           ----           ----          ----
                                                                           (In thousands)
<S>                                                    <C>             <C>            <C>           <C>
Contract drilling services.......................      $  290,130      $  450,079     $ 162,799     $   164,991
Reimbursables (1) ...............................          10,646          12,131         9,253          10,923
Engineering, consulting and other................          16,033          12,004        17,961          10,170
                                                       ----------      ----------     ---------     -----------
         Total...................................      $  316,809      $  474,214     $ 190,013     $   186,084
                                                       ==========      ==========     =========     ===========
</TABLE>

----------------------
(1)  We record reimbursements from customers for out-of-pocket expenses as
     revenues and the related direct cost as direct 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 $159,949,000, as soft market conditions in the U.S. Gulf of Mexico
resulted in lower average dayrates and lower utilization. The average dayrate
for one of our semisubmersibles, the Noble Paul Romano, decreased approximately
30 percent due to completion of a long-term contract in December 2001. The
contract commenced in December 1998. In addition, we moved four jackup rigs out
of the U.S. Gulf of Mexico for long-term contracts in Mexico during the latter
part of 2002. Domestic engineering, consulting and other revenues increased
$4,029,000 due to additional revenue from interests in deepwater oil and gas
properties, which began producing during 2002, and a significant project
management

                                       22
<PAGE>

engagement by our Triton subsidiary, partially offset by fewer of our NED
subsidiary's Noble DrillSmart System(TM) units on third-party rigs.

         DIRECT OPERATING EXPENSES. Direct operating expenses for our domestic
contract drilling services decreased $2,192,000 due to the mobilization of four
jackup rigs out of the U.S. Gulf of Mexico for long-term contracts in Mexico
during the latter part of 2002, partially offset by higher insurance costs.
Domestic engineering, consulting and other direct operating expenses increased
by $7,791,000 due to a significant project management engagement by Triton and
operating costs from our interests in deepwater oil and gas properties,
partially offset by fewer of our NED's Noble DrillSmart System(TM) units on
third-party rigs.

    OTHER ITEMS

         DEPRECIATION AND AMORTIZATION EXPENSE. Depreciation and amortization
expense increased $6,579,000 due to various capital upgrades to our rig fleet
and the acquisition in August 2001 of the remaining 50 percent equity interest
in the joint venture that owned the Noble Julie Robertson. As a result of this
acquisition, the results of operations of the Noble Julie Robertson are included
in our Consolidated Statements of Income from the purchase date. Prior to that
date, the investment was accounted for under the equity method.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased $2,642,000 due primarily to non-recurring
professional fees and filing fees incurred in 2002 related to our corporate
restructuring.

         GAIN ON SALE OF PROPERTY AND EQUIPMENT. We realized a gain in 2002 of
$5,908,000 on the sale of our interest in one of our deepwater oil and gas
properties to Pioneer Natural Resources USA, Inc. for $6,200,000 in cash and the
assumption of liabilities related to our share of drilling and development costs
on this property.

         INTEREST EXPENSE. Interest expense decreased $5,130,000 due to the
continued retirement of higher interest rate debt in 2002. We made payments of
long-term debt totaling $60,772,000 in 2002. During 2002, we borrowed
$125,000,000 on our credit facility. However, the average interest rate on this
borrowing was lower than the average interest rate on our other debt.

         OTHER, NET. Income in Other, net decreased $9,547,000 due to
recognition of a realized loss of $9,758,000 in 2002 on an investment in
marketable equity securities resulting from a decline in value considered by
management to be other than temporary. We also realized a $400,000 loss on the
purchase and retirement in 2002 of $5,000,000 principal amount of our 7.50%
Senior Notes due 2019. These 2002 losses were partially offset by interest
income earned on our cash and marketable securities and equity in income of
joint ventures. In 2001, we reported a $1,520,000 loss on the purchase and
retirement of $43,305,000 principal amount of our 7.50% Senior Notes. In
addition, interest income was lower in 2002 due to a lower average yield earned
on our cash balances and investments in marketable securities as compared to
2001.

         INCOME TAX PROVISION. Income tax provision decreased $51,728,000 due to
lower pre-tax earnings and a lower effective tax rate. The effective tax rate
was 14 percent in 2002 compared to 25 percent in 2001. The lower effective tax
rate in 2002 was a result of a higher percentage of our pretax earnings being
derived from international operations, which generally have lower effective tax
rates than our domestic operations, and the tax benefits attributable to our
corporate restructuring.

LIQUIDITY AND CAPITAL RESOURCES

    OVERVIEW

         Our principal capital resource in 2003 was net cash provided by
operating activities of $365,308,000, which compared to $445,364,000 and
$451,046,000 in 2002 and 2001, respectively. At December 31, 2003, we had cash
and cash equivalents of $139,467,000, marketable debt securities totaling
$88,918,000, and approximately $55,521,000 of funds available under our bank
credit facility. We had working capital, including cash, of $177,936,000 and
$196,836,000 at December 31, 2003 and 2002, respectively. Total debt as a
percentage of total debt plus shareholders' equity was 21 percent at December
31, 2003 and 25 percent at December 31, 2002.

                                       23
<PAGE>

         We did not repurchase any of our ordinary shares during 2003. During
2002, we repurchased 1,055,000 of our ordinary shares at a total cost of
$33,966,000. During 2001, we repurchased 2,282,000 shares of Noble Drilling
Corporation ("Noble Drilling") common stock at a total cost of $76,197,000.
Additional repurchases, if any, may be made on the open market or in private
transactions at prices determined by us.

         We did not sell any put options covering our ordinary shares during
2003. During 2002, we sold put options covering an aggregate of 1,300,000 of our
ordinary shares in private transactions at an average price paid to us of $2.81
per option. Of the 1,300,000 options sold during 2002, 300,000 expired
unexercised and 400,000 were exercised during 2002, which resulted in 600,000
options outstanding at December 31, 2002. All of these options had expired
unexercised as of March 4, 2003. As of December 31, 2003, we have no purchase
requirements with regard to any put options previously sold by us.

         These share repurchases and sales of put options were 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 February 15, 2004,
10,249,000 shares remained available under this authorization.

         In 2003 we made total fundings of $22,155,000 to our domestic and
international pension plans, including a discretionary funding of $17,100,000
during the fourth quarter. This discretionary funding did not have a material
impact on our 2003 selling, general and administrative expenses, but it reduced
our unfunded pension liability. During 2002 and 2001, we made fundings totaling
$5,327,000 and $3,828,000, respectively, to our plans. We expect fundings in
2004 to approximate $5,000,000.

    CAPITAL EXPENDITURES

         Capital expenditures totaled $307,134,000 and $478,354,000 for 2003 and
2002, respectively. Capital expenditures during 2003 included capital upgrades
to certain semisubmersibles of $108,100,000, the exercise prices of options to
purchase the Noble Gene House (formerly Trident 19) and Noble Charlie Yester
(formerly Trident 18) jackup rigs for $25,200,000 and $32,900,000, respectively,
and the acquisition of options for $28,200,000 to purchase two additional jackup
rigs from a subsidiary of A.P. Moeller. Capital expenditures during 2002
included the purchase of two semisubmersible drilling rigs, two baredeck hulls
and two jackup drilling rigs for $171,000,000 in the aggregate, as well as
options to purchase two additional jackup rigs for $24,900,000, $14,400,000 paid
in connection with the acquisition of rotary steerable tools and WELLDONE
Engineering GmbH, and capital upgrades to certain semisubmersibles of
$146,554,000 (including the two acquired in 2002). In addition, deferred repair
and maintenance expenditures totaled $36,984,000 and $42,771,000 for 2003 and
2002, respectively. We expect that our capital expenditures and deferred repair
and maintenance expenditures for 2004 will aggregate approximately $190,000,000
and $55,000,000, respectively, including $61,800,000 for the exercise of the
options to purchase the two additional jackup drilling rigs. We had no joint
venture fundings in 2003 and anticipate none in 2004. For more information on
acquisitions, see Note 3 of our accompanying consolidated financial statements.
For information on deferred repair and maintenance expenditures and joint
venture fundings, see Notes 1 and 6 of our accompanying consolidated financial
statements.

         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 in connection with several projects.
If we do not proceed with any particular project, we may either seek to cancel
outstanding purchase commitments related to that project or complete the
purchase of the property and equipment. 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. If we cancel any of the purchase commitments, the
amounts ultimately paid by us, if any, would be subject to negotiation. As of
December 31, 2003, we had approximately $25,600,000 of outstanding purchase
commitments related to these projects, which are included in the projected 2004
capital expenditure and deferred repair and maintenance amounts above.

         Certain projects currently under consideration could require, if they
materialize, capital expenditures or other cash requirements not included in the
2004 budget. In addition, we will continue to evaluate acquisitions of drilling
units from time to time. Factors that could cause actual project capital
expenditures to materially exceed the

                                       24
<PAGE>

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 has in place a $200,000,000 bank credit agreement (the
"Credit Agreement"), which extends through May 30, 2006. In connection with our
restructuring, Noble Corporation ("Noble") and its wholly-owned subsidiary,
Noble Holding (U.S.) Corporation, have unconditionally guaranteed the
performance of Noble Drilling under the Credit Agreement. As of December 31,
2003, we had outstanding borrowings and outstanding letters of credit of
$125,000,000 and $19,479,000, respectively, under the Credit Agreement, with
$55,521,000 remaining available thereunder. Additionally, as of December 31,
2003, we had other letters of credit of $26,166,000 and $40,402,000 of
performance and customs bonds that had been supported by surety bonds.

         At December 31, 2003, our debt had decreased to $589,573,000, including
current maturities of $47,666,000, due to paydowns on our project financing debt
during 2003 of $80,580,000. At December 31, 2003 and 2002, we had no off-balance
sheet debt. For additional information on long-term debt, see Note 7 to our
accompanying consolidated financial statements.

         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.

    SUMMARY OF CONTRACTUAL CASH OBLIGATIONS AND COMMITMENTS

         The following table summarizes our contractual cash obligations and
commitments at December 31, 2003 (dollar amounts are in thousands):

<TABLE>
<CAPTION>
                                                                     PAYMENTS DUE BY PERIOD
                                           ---------------------------------------------------------------------------
                                                              LESS THAN                                        AFTER
                                               TOTAL           1 YEAR       1-3 YEARS       3-5 YEARS         5 YEARS
                                               -----           ------       ---------       ---------         -------
<S>                                        <C>               <C>            <C>             <C>              <C>
CONTRACTUAL CASH OBLIGATIONS
Long-Term Debt........................     $   589,573       $   47,666     $ 147,603        $ 19,964        $ 374,340
Operating Leases .....................          16,091            2,060         3,470           3,142            7,419
Pension Fundings......................           5,000            5,000             -               -                -
Purchase Commitments..................          25,600           25,600             -               -                -
                                           -----------       ----------     ---------       ---------        ---------
Total Contractual Cash Obligations....     $   636,264       $   80,326     $ 151,073        $ 23,106        $ 381,759
                                           ===========       ==========     =========       =========        =========
</TABLE>

<TABLE>
<CAPTION>
                                                           AMOUNT OF COMMITMENT EXPIRATION PER PERIOD
                                          ----------------------------------------------------------------------------
                                           TOTAL AMOUNTS      LESS THAN                                         OVER
                                            COMMITTED          1 YEAR        1-3 YEARS       3-5 YEARS         5 YEARS
                                            ---------          ------        ---------       ---------         -------
<S>                                        <C>               <C>            <C>             <C>              <C>
OTHER COMMERCIAL COMMITMENTS
Letters of Credit.....................     $    45,645       $   41,519     $   4,126       $       -        $       -
Surety Bonds..........................          40,402               20        35,167           5,215                -
                                           -----------       ----------     ---------       ---------        ---------
Total Commercial Commitments..........     $    86,047       $   41,539     $  39,293       $   5,215        $       -
                                           ===========       ==========     =========       =========        =========
</TABLE>

CORPORATE RESTRUCTURING

         On April 30, 2002, Noble became the successor to Noble Drilling as part
of the internal corporate restructuring of Noble Drilling and its subsidiaries
approved by stockholders of Noble Drilling. The restructuring was accomplished
through the merger of an indirect, wholly-owned subsidiary of Noble Drilling
into Noble Drilling. Noble Drilling was the surviving entity in the merger and
is now an indirect, wholly-owned subsidiary of Noble. In addition, as a result
of the merger, all of the outstanding shares of common stock (and the related
preferred stock purchase rights) of Noble Drilling were exchanged for ordinary
shares (and related preferred share purchase rights)

                                       25
<PAGE>

of Noble. We accounted for the restructuring as a reorganization of entities
under common control. Consequently, the consolidated amounts of assets,
liabilities and shareholders' equity did not change as a result of the
restructuring.

CRITICAL ACCOUNTING POLICIES

         Our consolidated financial statements are impacted by the accounting
policies used and the estimates and assumptions made by management during their
preparation. Critical accounting policies and estimates that most significantly
impact our consolidated financial statements are those related to our property
and equipment, impairment of long-lived assets, insurance reserves, revenue
recognition and income taxes.

PROPERTY AND EQUIPMENT

         Property and equipment is stated at cost, reduced by provisions to
recognize economic impairment in value when management determines that such
impairment has occurred. Major replacements and improvements are capitalized.
When assets are sold, retired or otherwise disposed of, the cost and related
accumulated depreciation are eliminated from the accounts and the gain or loss
is recognized. Repair and maintenance costs are generally charged to expense as
incurred; however, overhauls related to large-scale maintenance projects are
deferred when incurred and amortized into contract drilling expense over a
36-month period. Drilling equipment and facilities are depreciated using the
straight-line method over the estimated useful lives as of the in-service date
or date of major refurbishment. Estimated useful lives of our drilling equipment
range from three to twenty-five years. Other property and equipment is
depreciated using the straight-line method over useful lives ranging from two to
twenty years.

IMPAIRMENT OF LONG-LIVED ASSETS

         We evaluate the realization of our long-lived assets, including
property and equipment and goodwill, whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. We
evaluate goodwill on at least an annual basis. An impairment loss on our
property and equipment exists when estimated undiscounted cash flows expected to
result from the use of the asset and its eventual disposition are less than its
carrying amount. Any impairment loss recognized represents the excess of the
asset's carrying value as compared to its estimated fair value. Prior to an
impairment loss being recognized, an independent appraisal would be performed to
determine the asset's estimated fair value. An impairment loss on our goodwill
exists when the carrying amount of the goodwill exceeds its implied fair value,
as determined pursuant to Statement of Financial Accounting Standards No. 142,
Goodwill and Other Intangible Assets. No impairment losses were recorded on our
property and equipment or goodwill balances during the years ended December 31,
2003, 2002 and 2001.

          However, on March 31, 2002, we recognized an impairment loss of
$9,758,000 on an investment in equity securities resulting from a decline in
value considered by management to be other than temporary. There were no other
impairment losses during the years ended December 31, 2003, 2002 and 2001.

INSURANCE RESERVES

         We maintain insurance coverage against certain marine liabilities,
including liability for physical damage to our drilling rigs and personal injury
to our drilling crews. Our marine package policy insures us for physical damage
to our drilling rigs up to the fair value of each rig. During 2003, we retained
the first $10,000,000 per occurrence under this policy. Our protection and
indemnity policy, which insures us for personal injury to our drilling crews,
had a standard deductible of $100,000 per occurrence during 2003. In addition,
we retained $7,250,000 of claims in the aggregate beyond the standard
deductible. We accrue for these deductibles during the year and the insurance
retention reserve is adjusted based on our actual claims losses during the year.

REVENUE RECOGNITION

         Revenues generated from our dayrate-basis drilling contracts, labor
contracts, and engineering services and project management engagements are
recognized as services are performed. We may receive lump-sum fees for the
mobilization of equipment and personnel. The net of mobilization fees received
and costs incurred to mobilize an offshore rig from one market to another is
recognized over the term of the related drilling contract. Costs incurred to

                                       26
<PAGE>

relocate drilling units to more promising geographic areas in which a contract
has not been secured are expensed as incurred. Lump-sum payments received from
customers relating to specific contracts are deferred and amortized to income
over the term of the drilling contract.

INCOME TAXES

         Noble is a Cayman Islands company. The Cayman Islands does not impose
corporate income taxes. Consequently, income taxes have been provided based on
the laws and rates in effect in the countries in which operations are conducted,
or in which Noble and/or its subsidiaries are considered resident for income tax
purposes. Applicable U.S. and foreign income and withholding taxes have not been
provided on undistributed earnings of Noble's subsidiaries. We do not intend to
repatriate such undistributed earnings for the foreseeable future except for
distributions upon which incremental income and withholding taxes would not be
material. In certain circumstances, we expect that, due to changing demands of
the offshore drilling markets and the ability to redeploy our offshore drilling
units, certain of such units will not reside in a location long enough to give
rise to future tax consequences. As a result, no deferred tax liability has been
recognized in these circumstances. Should our expectations change regarding the
length of time an offshore drilling unit will be used in a given location, we
will adjust deferred taxes accordingly. Our recognition of a deferred tax
liability in these circumstances would not have had a material effect on our
results of operations for 2003, 2002 or 2001, and would have had no effect on
our liquidity or our cash flows.

         For additional information on our accounting policies, see Note 1 to
our accompanying consolidated financial statements.

ACCOUNTING PRONOUNCEMENTS

         In November 2002, the FASB issued Interpretation No. 45, Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others ("FIN 45"). FIN 45 expands existing
accounting guidance and disclosures to be made by a guarantor in its interim and
annual financial statements about its obligations under certain guarantees that
it has issued. FIN 45 also clarifies that a guarantor is required to recognize,
at the inception of a guarantee, a liability for the fair value of the
obligation undertaken in issuing the guarantee. The disclosure requirements of
FIN 45 are effective for financial statements ending after December 15, 2002.
The remaining provisions of FIN 45 are effective for guarantees issued or
modified after December 31, 2002. Our adoption of these remaining provisions of
FIN 45 on January 1, 2003 did not have a material impact on our consolidated
results of operations, cash flows or financial position.

         In January 2003, the FASB 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 apply immediately to special purpose entities. We do not expect to
consolidate our equity interest in our Noble Crosco Drilling Ltd. joint venture
under the provisions of FIN 46-R, and therefore we do not expect our adoption of
FIN 46-R to have a material impact on our consolidated results of operations,
cash flows or financial position. For additional information on our Noble Crosco
Drilling Ltd. joint venture, see Note 6 to our accompanying consolidated
financial statements.

         In May 2003, the FASB issued Statement of Financial Accounting
Standards No. 150, Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity ("SFAS 150"). SFAS 150
establishes standards for the classification and measurement of financial
instruments with characteristics of both

                                       27
<PAGE>

liabilities and equity. SFAS 150 affects the classification of certain
freestanding instruments, including mandatory redeemable instruments, financial
instruments to repurchase an entity's own equity instruments, and financial
instruments that embody unconditional obligations that the issuer must or could
choose to settle by issuing a variable number of its shares or other equity
instruments based solely on a fixed monetary amount known at inception or an
event trigger other than changes in its own equity instruments. SFAS 150 is
generally effective for all such financial instruments entered into or modified
after May 31, 2003, and otherwise is effective at the beginning of the first
interim period beginning after June 15, 2003. In October 2003, the FASB decided
to defer the provisions of paragraphs 9 and 10 of SFAS 150 as they apply to
mandatorily redeemable noncontrolling interests. Those provisions require that
mandatorily redeemable minority interests within the scope of SFAS 150 be
classified as a liability on a parent company's financial statements in certain
situations, including when a finite-lived entity is consolidated. Our adoption
of all currently required provisions of SFAS 150 in 2003 did not have a material
impact on our consolidated results of operations, cash flows or financial
position. We do not expect our adoption of the remaining provisions of SFAS 150
will 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. See Note 12 to our accompanying consolidated financial
statements for the new disclosures required to be adopted by us as of December
31, 2003.

ITEM 7A. 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 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, are 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 from LIBOR. At December 31, 2003, there were
$125,000,000 of outstanding borrowings under our Credit Agreement. An immediate
change of one percent in the interest rate would cause a $1,250,000 change in
interest expense on an annual basis.

         We conduct business internationally; however, a substantial majority of
the value of our foreign transactions are denominated in U.S. Dollars. With
minor exceptions, 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 significant assets, liability or financial
instruments that are sensitive to foreign currency rates.

                                       28
<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The following financial statements are filed in this Item 8:

                  Report of Independent Auditors

                  Consolidated Balance Sheets at December 31, 2003 and 2002

                  Consolidated Statements of Income for each of the three years
                  in the period ended December 31, 2003

                  Consolidated Statements of Cash Flows for each of the three
                  years in the period ended December 31, 2003

                  Consolidated Statements of Shareholders' Equity for each of
                  the three years in the period ended December 31, 2003

                  Consolidated Statements of Comprehensive Income for each of
                  the three years in the period ended December 31, 2003

                  Notes to Consolidated Financial Statements

                                       29
<PAGE>

                         REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and
Shareholders of Noble Corporation:

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income, of cash flows, of shareholders' equity and of
comprehensive income present fairly, in all material respects, the financial
position of Noble Corporation and its subsidiaries (the "Company") at December
31, 2003 and 2002, and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 2003 in conformity with
accounting principles generally accepted in the United States of America. These
financial statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States of America, which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

PricewaterhouseCoopers LLP

Houston, Texas
January 29, 2004

                                       30
<PAGE>

                       NOBLE CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                           DECEMBER 31,
                                                                                 ----------------------------------
                                                                                    2003                  2002
                                                                                 ------------          ------------
<S>                                                                              <C>                   <C>
ASSETS
CURRENT ASSETS
  Cash and cash equivalents..................................................    $    139,467          $    192,509
  Restricted cash............................................................               -                 8,668
  Investments in marketable securities.......................................          98,376                72,957
  Accounts receivable........................................................         149,235               164,613
  Inventories................................................................           4,086                 3,628
  Prepaid expenses...........................................................          11,809                 6,595
  Other current assets.......................................................          18,986                16,673
                                                                                 ------------          ------------
Total current assets.........................................................         421,959               465,643
                                                                                 ------------          ------------
PROPERTY AND EQUIPMENT
  Drilling equipment and facilities..........................................       3,454,163             3,153,509
  Other......................................................................          64,591                63,296
                                                                                 ------------          ------------
                                                                                    3,518,754             3,216,805
  Accumulated depreciation...................................................        (892,888)             (745,762)
                                                                                 ------------          ------------
                                                                                    2,625,866             2,471,043
                                                                                 ------------          ------------
INVESTMENTS IN AND ADVANCES TO JOINT VENTURES................................          19,868                22,538
OTHER ASSETS.................................................................         121,940               106,490
                                                                                 ------------          ------------
                                                                                 $  3,189,633          $  3,065,714
                                                                                 ============          ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
   Current maturities of long-term debt......................................    $     47,666          $     80,577
   Accounts payable..........................................................          87,178                64,783
   Accrued payroll and related costs.........................................          48,511                51,125
   Taxes payable.............................................................          31,734                30,144
   Interest payable..........................................................           9,384                10,089
   Other current liabilities.................................................          19,550                32,089
                                                                                 ------------          ------------
Total current liabilities....................................................         244,023               268,807

LONG-TERM DEBT...............................................................         541,907               589,562
DEFERRED INCOME TAXES........................................................         213,357               206,351
OTHER LIABILITIES............................................................          18,201                17,488
COMMITMENTS AND CONTINGENCIES (Note 13)......................................               -                     -
MINORITY INTEREST............................................................          (6,280)               (5,704)
                                                                                 ------------          ------------
                                                                                    1,011,208             1,076,504
                                                                                 ------------          ------------
SHAREHOLDERS' EQUITY
  Ordinary Shares-par value $0.10 per share; 400,000 shares authorized and
     133,894 issued and outstanding in 2003; 400,000 shares authorized,
     133,534 issued and outstanding in 2002..................................          13,389                13,353
  Capital in excess of par value.............................................         915,240               905,865
  Retained earnings..........................................................       1,306,888             1,140,472
  Treasury stock, at cost....................................................         (49,121)              (51,317)
  Restricted stock (unearned compensation)...................................          (7,981)              (12,871)
  Accumulated other comprehensive income (loss)..............................              10                (6,292)
                                                                                 ------------          ------------
                                                                                    2,178,425             1,989,210
                                                                                 ------------          ------------
                                                                                 $  3,189,633          $  3,065,714
                                                                                 ============          ============
</TABLE>

        See accompanying notes to the consolidated financial statements.

                                       31
<PAGE>

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

<TABLE>
<CAPTION>
                                                                            YEAR ENDED DECEMBER 31,
                                                              ------------------------------------------------
                                                                   2003              2002             2001
                                                              -------------     -------------    -------------
<S>                                                           <C>               <C>              <C>
OPERATING REVENUES
  Contract drilling services................................  $     889,603     $     910,419    $     945,949
  Reimbursables.............................................         44,214            26,183           29,122
  Labor contract drilling services..........................         28,492            26,416           31,292
  Engineering, consulting and other.........................         25,071            27,230           23,397
                                                              -------------     -------------    -------------
                                                                    987,380           990,248        1,029,760
                                                              -------------     -------------    -------------
OPERATING COSTS AND EXPENSES
  Contract drilling services................................        505,038           488,629          431,764
  Reimbursables.............................................         39,024            23,058           27,431
  Labor contract drilling services..........................         22,642            20,951           25,745
  Engineering, consulting and other.........................         28,249            27,868           17,661
  Depreciation and amortization.............................        148,127           125,154          118,575
  Selling, general and administrative.......................         26,634            26,939           24,297
  Gain on sale of property and equipment....................         (3,472)           (5,908)               -
                                                              -------------     -------------    -------------
                                                                    766,242           706,691          645,473
                                                              -------------     -------------    -------------
OPERATING INCOME............................................        221,138           283,557          384,287

OTHER INCOME (EXPENSE)
  Interest expense..........................................        (40,291)          (42,622)         (47,752)
  Other, net................................................          6,137             2,390           11,937
                                                              -------------     -------------    -------------
INCOME BEFORE INCOME TAXES .................................        186,984           243,325          348,472
INCOME TAX PROVISION........................................        (20,568)          (33,822)         (85,550)
                                                              -------------     -------------    -------------
NET INCOME..................................................  $     166,416     $     209,503    $     262,922
                                                              =============     =============    =============
NET INCOME PER SHARE:
  Basic.....................................................  $        1.26     $        1.58    $        1.98
  Diluted...................................................           1.25              1.57             1.96
</TABLE>

        See accompanying notes to the consolidated financial statements.

                                       32
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                  YEAR ENDED DECEMBER 31,
                                                                       --------------------------------------------
                                                                           2003            2002           2001
                                                                       -------------   ------------  --------------
<S>                                                                    <C>             <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income.........................................................  $     166,416   $    209,503  $      262,922
  Adjustments to reconcile net income to net cash provided by
    operating activities:
    Depreciation and amortization....................................        148,127        125,154         118,575
    Deferred income tax provision....................................          4,376         16,870          56,062
    Deferred repair and maintenance amortization.....................         34,463         29,315          22,927
    Loss (gain) on sales of marketable securities....................            382            168              (8)
    Equity in (income) loss of joint ventures........................         (2,307)        (1,780)          1,153
    Compensation expense from stock-based plans......................          4,627          4,878           4,110
    Recognized loss on impairment of investment......................              -          9,758               -
    Gain on sale of interest in deepwater oil and gas properties.....         (3,472)        (5,908)              -
    Loss on debt repurchases.........................................              -            400           1,520
    Discretionary pension funding....................................        (17,100)             -               -
    Other............................................................          1,518          3,523           1,435
    Other changes in current assets and liabilities, net of acquired
      working capital:
         Accounts receivable.........................................         15,378          4,395           7,781
         Other current assets........................................        (12,081)         4,942         (12,202)
         Accounts payable............................................         22,400         14,509         (22,195)
         Other current liabilities...................................          2,581         29,637           8,966
                                                                       -------------   ------------  --------------
           Net cash provided by operating activities.................        365,308        445,364         451,046

CASH FLOWS FROM INVESTING ACTIVITIES
   Acquisitions and related capital upgrades.........................       (194,400)      (356,854)        (50,440)
   Other capital expenditures........................................       (112,734)      (121,500)        (89,426)
   Deferred repair and maintenance expenditures......................        (36,984)       (42,771)        (33,507)
   Proceeds from sales of property and equipment.....................          1,606          1,879             887
   Proceeds from sale of interest in deepwater oil and gas properties          5,200          6,200               -
   Repayments from (advances to) joint ventures......................          4,977          4,160         (17,896)
   Investment in marketable securities...............................       (146,120)       (69,082)        (43,068)
   Proceeds from sales of marketable securities......................        122,585         38,419           7,747
                                                                       -------------   ------------  --------------
           Net cash used for investing activities....................       (355,870)      (539,549)       (225,703)
                                                                       -------------   ------------  --------------
CASH FLOWS FROM FINANCING ACTIVITIES
   Proceeds from borrowing on credit facility........................              -        125,000               -
   Payment of long-term debt.........................................        (80,580)       (60,772)        (95,137)
   Proceeds from issuance of ordinary shares.........................          9,432         15,367          13,374
   Repurchase of ordinary shares.....................................              -        (33,966)        (76,197)
   Proceeds from sales of put options on ordinary shares.............              -          3,658           1,568
   Decrease (increase) in restricted cash............................          8,668            698          (5,477)
                                                                       -------------   ------------  --------------
           Net cash (used for) provided by financing activities......        (62,480)        49,985        (161,869)
                                                                       -------------   ------------  --------------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS..........................................................        (53,042)       (44,200)         63,474

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR.........................        192,509        236,709         173,235
                                                                       -------------   ------------  --------------
CASH AND CASH EQUIVALENTS, END OF YEAR...............................  $     139,467   $    192,509  $      236,709
                                                                       =============   ============  ==============
</TABLE>

        See accompanying notes to the consolidated financial statements.

                                       33
<PAGE>

                       NOBLE CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                 (In thousands)

<TABLE>
<CAPTION>
                                                           2003                       2002                       2001
                                                   -----------------------   ------------------------   ------------------------
                                                    SHARES       AMOUNT        SHARES       AMOUNT        SHARES      AMOUNT
                                                   --------   ------------   ---------   ------------   ---------   ------------
<S>                                                <C>        <C>              <C>       <C>              <C>       <C>
ORDINARY SHARES
  Balance at beginning of year...................   133,534   $     13,353     138,175   $     13,818     137,437   $    13,744
  Exercise of stock options......................       413             41         775             77         660            66
  Treasury shares cancelled upon restructuring...         -              -      (4,298)          (430)          -             -
  Repurchase ordinary shares.....................         -              -      (1,055)          (106)          -             -
  Other..........................................       (53)            (5)        (63)            (6)         78             8
                                                   --------   ------------   ---------   ------------   ---------   -----------
  Balance at end of year.........................   133,894         13,389     133,534         13,353     138,175        13,818
                                                   --------   ------------   ---------   ------------   ---------   -----------
CAPITAL IN EXCESS OF PAR VALUE
  Balance at beginning of year...................                  905,865                  1,041,017                 1,019,615
  Exercise of stock options......................                    9,391                     15,290                    13,308
  Tax benefit of stock options...................                      820                      4,664                     3,683
  Treasury shares cancelled upon restructuring...                        -                   (122,729)                        -
  Repurchase ordinary shares.....................                        -                    (33,860)                        -
  Restricted shares surrendered for
     employee taxes..............................                   (1,430)                    (1,369)                        -
  Sales of put options on ordinary shares........                        -                      3,658                     1,568
  Other..........................................                      594                       (806)                    2,843
                                                              ------------               ------------               -----------
  Balance at end of year.........................                  915,240                    905,865                 1,041,017
                                                              ------------               ------------               -----------
RETAINED EARNINGS
  Balance at beginning of year...................                1,140,472                    930,969                   668,047
  Net income.....................................                  166,416                    209,503                   262,922
                                                              ------------               ------------               -----------
  Balance at end of year.........................                1,306,888                  1,140,472                   930,969
                                                              ------------               ------------               -----------
TREASURY STOCK
  Balance at beginning of year...................    (1,791)       (51,317)     (6,160)      (177,408)     (3,846)     (104,894)
  Treasury shares cancelled upon restructuring...         -              -       4,298        123,158           -             -
  Contribution to restricted stock plan..........         -              -           -              -         216         6,533
  Contribution to employee benefit plans.........        79          2,076         102          3,579          92         3,268
  Restricted stock plan shares returned..........         -              -         (15)          (219)       (215)       (2,893)
  Repurchase ordinary shares.....................         -              -           -              -      (2,282)      (76,197)
  Other..........................................        12            120         (16)          (427)       (125)       (3,225)
                                                   --------   ------------   ---------   ------------   ---------   -----------
  Balance at end of year.........................    (1,700)       (49,121)     (1,791)       (51,317)     (6,160)     (177,408)
                                                   --------   ------------   ---------   ------------   ---------   -----------
RESTRICTED STOCK (UNEARNED
  COMPENSATION)
  Balance at beginning of year...................                  (12,871)                   (18,340)                  (15,670)
  Issuance of restricted shares..................                        -                          -                    (6,533)
  Compensation expense recognized................                    4,627                      4,878                     4,110
  Other..........................................                      263                        591                      (247)
                                                              ------------               ------------               -----------
  Balance at end of year.........................                   (7,981)                   (12,871)                  (18,340)
                                                              ------------               ------------               -----------
ACCUMULATED OTHER COMPREHENSIVE
  INCOME (LOSS)
  Balance at beginning of year...................                   (6,292)                   (11,737)                   (4,123)
  Other comprehensive income (loss)..............                    6,302                      5,445                    (7,614)
                                                              ------------               ------------               -----------
  Balance at end of year                                                10                     (6,292)                  (11,737)
                                                              ------------               ------------               -----------
TOTAL SHAREHOLDERS' EQUITY.......................   132,194   $  2,178,425     131,743   $  1,989,210     132,015   $ 1,778,319
                                                   ========   ============   =========   ============   =========   ===========
</TABLE>

        See accompanying notes to the consolidated financial statements.

                                       34
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                      YEAR ENDED
                                                                                   DECEMBER 31, 2003
                                                                                   -----------------
<S>                                                                                <C>
NET INCOME .....................................................................   $         166,416
                                                                                   -----------------

OTHER COMPREHENSIVE INCOME, NET OF TAX:
  Foreign currency translation adjustments......................................                 192
  Unrealized holding loss on securities arising during period...................                (296)
  Minimum pension liability adjustment (net of tax provision of $3,450).........               6,406
                                                                                   -----------------
  Other comprehensive income....................................................               6,302
                                                                                   -----------------

COMPREHENSIVE INCOME............................................................   $         172,718
                                                                                   =================
</TABLE>

<TABLE>
<CAPTION>
                                                                                      YEAR ENDED
                                                                                   DECEMBER 31, 2002
                                                                                   -----------------
<S>                                                                                <C>
NET INCOME .....................................................................   $         209,503
                                                                                   -----------------

OTHER COMPREHENSIVE INCOME, NET OF TAX:
  Foreign currency translation adjustments......................................               1,223
  Unrealized holding loss on securities arising during period...................                (707)
  Minimum pension liability adjustment (net of tax benefit of $2,600)...........              (4,829)
  Reclassification of realized loss for impairment of
    investment included in net income...........................................               9,758
                                                                                   -----------------
  Other comprehensive income....................................................               5,445
                                                                                   -----------------

COMPREHENSIVE INCOME............................................................   $         214,948
                                                                                   =================
</TABLE>

<TABLE>
<CAPTION>
                                                                                      YEAR ENDED
                                                                                   DECEMBER 31, 2001
                                                                                   -----------------
<S>                                                                                <C>
NET INCOME .....................................................................   $         262,922
                                                                                   -----------------

OTHER COMPREHENSIVE LOSS, NET OF TAX:
  Foreign currency translation adjustments......................................                (507)
  Unrealized holding loss on securities arising during period...................              (5,729)
  Minimum pension liability adjustment (net of tax benefit of $742).............              (1,378)
                                                                                   -----------------
  Other comprehensive loss......................................................              (7,614)
                                                                                   -----------------

COMPREHENSIVE INCOME............................................................   $         255,308
                                                                                   =================
</TABLE>

        See accompanying notes to the consolidated financial statements.

                                       35

<PAGE>

                       NOBLE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND BUSINESS

         Noble Corporation ("Noble" or, together with its consolidated
subsidiaries, unless the context requires otherwise, the "Company", "we", "our"
and words of similar import) is primarily engaged in contract drilling services
in key markets worldwide. We provide technologically advanced drilling-related
products and services designed to create value for all our customers. We also
provide labor contract drilling services, well site and project management
services, and engineering services. Our operations are conducted in the Middle
East, U.S. Gulf of Mexico, Mexico, the North Sea, Brazil, West Africa, India,
the Mediterranean Sea and Canada.

CONSOLIDATION

         The consolidated financial statements include the accounts of Noble and
its wholly- and majority-owned subsidiaries. All significant intercompany
accounts and transactions have been eliminated in consolidation. The equity
method of accounting is used for investments in affiliates where we have a
significant influence but not a controlling interest. (See Note 6.)

         Certain reclassifications have been made in prior year consolidated
financial statements to conform to the classifications used in the 2003
consolidated financial statements. These reclassifications have no impact on net
income.

FOREIGN CURRENCY TRANSLATION

         We follow a translation policy in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 52, Foreign Currency Translation. In
international locations where the U.S. Dollar has been designated as the
functional currency (based on an evaluation of such factors as the markets in
which the subsidiary operates, inflation, generation of cash flow, financing
activities and intercompany arrangements), local currency transaction gains and
losses are included in net income. In international locations where the local
currency is the functional currency, assets and liabilities are translated at
the rates of exchange on the balance sheet date, while income and expense items
are translated at average rates of exchange. The resulting gains or losses
arising from the translation of accounts from the functional currency to the
U.S. Dollar are included in "Accumulated other comprehensive loss" in the
Consolidated Balance Sheets. We did not recognize any material gains or losses
on foreign currency transactions or translations during the years ended December
31, 2003, 2002 and 2001. We use the Canadian Dollar and British Pound,
respectively, as the functional currency for our labor contract drilling
services in Canada and the North Sea.

CASH AND CASH EQUIVALENTS

         Cash and cash equivalents include cash on hand, demand deposits with
banks and all highly liquid investments with original maturities of three months
or less. Our cash, cash equivalents and short-term investments are subject to
potential credit risk. Our cash management and investment policies restrict
investments to lower risk, highly liquid securities and we perform periodic
evaluations of the relative credit standing of the financial institutions with
which we conduct business.

         In accordance with SFAS No. 95, Statement of Cash Flows, cash flows
from our labor contract drilling services in Canada and the United Kingdom are
calculated based on their respective local functional currencies. As a result,
amounts related to assets and liabilities reported on the Consolidated
Statements of Cash Flows will not necessarily agree with changes in the
corresponding balances on the Consolidated Balance Sheets. The effect of
exchange rate changes on cash balances held in foreign currencies was not
material in 2003, 2002 or 2001.

DERIVATIVE INSTRUMENTS

         We periodically enter into derivative instruments to manage our
exposure to fluctuations in interest rates and foreign currency exchange rates.
We do not use derivative financial instruments for trading purposes. We
designate and assign the financial instruments as hedges of specific assets,
liabilities or anticipated transactions.


                                       36

<PAGE>

                       NOBLE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Cash flows from hedge transactions are classified in the Consolidated Statements
of Cash Flows under the same category as the cash flows from the underlying
assets, liabilities or anticipated transactions. We did not utilize any
derivative financial instruments in 2003, 2002 or 2001.

INVENTORIES

         Inventories consist of spare parts, material and supplies held for
consumption and are stated principally at the lower of average cost or fair
value.

PROPERTY AND EQUIPMENT

         Property and equipment is stated at cost, reduced by provisions to
recognize economic impairment in value when management determines that such
impairment has occurred. At December 31, 2003 and 2002, there was $361,663,000
and $371,882,000, respectively, of construction in progress. Such amounts are
included in "Drilling equipment and facilities" in the accompanying Consolidated
Balance Sheets. Major replacements and improvements are capitalized. When assets
are sold, retired or otherwise disposed of, the cost and related accumulated
depreciation are eliminated from the accounts and the gain or loss is
recognized.

         Scheduled maintenance of equipment and overhauls are performed on the
basis of number of hours operated in accordance with our preventative
maintenance program. Repair and maintenance costs are generally charged to
expense as incurred; however, overhauls related to large-scale maintenance
projects are deferred when incurred and amortized into contract drilling
services expense over a 36-month period. The deferred portion of these
large-scale maintenance projects is included in "Other assets" in the
Consolidated Balance Sheets. Such amounts totaled $56,575,000 and $53,052,000 at
December 31, 2003 and 2002, respectively. Total maintenance and repair expenses
for the years ended December 31, 2003, 2002 and 2001 were $122,105,000,
$110,788,000 and $97,497,000, respectively. Drilling equipment and facilities
are depreciated using the straight-line method over the estimated remaining
useful lives as of the in-service date or date of major refurbishment. Estimated
useful lives of our drilling equipment range from three to twenty-five years.
Other property and equipment is depreciated using the straight-line method over
useful lives ranging from two to twenty years.

         We evaluate the realization of property and equipment whenever events
or changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. An impairment loss on our property and equipment exists when
estimated undiscounted cash flows expected to result from the use of the asset
and its eventual disposition are less than its carrying amount. Any impairment
loss recognized represents the excess of the asset's carrying value as compared
to its estimated fair value. Prior to an impairment loss being recognized, an
independent appraisal would be performed to determine the asset's estimated fair
value. No impairment losses were recorded on our property and equipment or
goodwill balances during the years ended December 31, 2003, 2002 and 2001.

GOODWILL AND OTHER ASSETS

         We evaluate the realization of our goodwill on at least an annual
basis, and on our remaining long-lived assets whenever events or changes in
circumstances indicate the carrying amount of an asset may not be recoverable.
An impairment loss on our goodwill exists when the carrying amount of the
goodwill exceeds its implied fair value, as determined pursuant to Statement of
Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets.
Our goodwill balance was $13,138,000 at December 31, 2003 and 2002. All of our
goodwill is attributable to our engineering and consulting services segment. No
impairment losses were recorded on our goodwill balances during the years ended
December 31, 2003, 2002 and 2001.

         On March 31, 2002 we recognized an impairment loss of $9,758,000 on an
investment in marketable securities resulting from a decline in value considered
by management to be other than temporary. There were no other impairment losses
during the years ended December 31, 2003, 2002 and 2001.

         Deferred debt issuance costs, which totaled $2,839,000 and $3,855,000
at December 31, 2003 and 2002, respectively, are being amortized over the life
of the debt securities. Amortization related to debt issuance costs was
$1,016,000, $1,664,000 and $1,549,000 for the years ended December 31, 2003,
2002 and 2001, respectively. Debt


                                       37

<PAGE>

                       NOBLE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

issuance costs are amortized using the straight-line method, which approximates
the interest method. The amortization of debt issuance costs is included in
interest expense.

INSURANCE

         We maintain insurance coverage against certain marine liabilities,
including liability for physical damage to our drilling rigs and personal injury
to our drilling crews. Our marine package policy insures us for physical damage
to our drilling rigs up to the fair value of each rig. During 2003, we retained
the first $10,000,000 per occurrence under this policy. In 2002 and 2001, we
retained the first $1,000,000 per occurrence and continued to retain a portion
of each loss in excess of $1,000,000 to a maximum of $10,000,000. Our protection
and indemnity policy, which insures us for personal injury to our drilling
crews, had a standard deductible of $100,000 per occurrence for 2003, 2002, and
2001. In addition, we retained $7,250,000 of claims in the aggregate beyond the
standard deductible. We accrue for these deductibles during the year and the
insurance retention reserve is adjusted based on our actual claims losses during
the year. Prepaid insurance is amortized over the terms of our insurance
policies.

REVENUE RECOGNITION

         Revenues generated from our dayrate-basis drilling contracts, labor
contracts, technologically advanced drilling-related products, engineering
services and project management engagements are recognized as services are
performed.

         We may receive lump-sum fees for the mobilization of equipment and
personnel. The net of mobilization fees received and costs incurred to mobilize
an offshore rig from one market to another is recognized over the term of the
related drilling contract. Costs incurred to relocate drilling units to more
promising geographic areas in which a contract has not been secured are expensed
as incurred. Lump-sum payments received from customers relating to specific
contracts are deferred and amortized to income over the term of the drilling
contract.

         We record reimbursements from customers for "out-of-pocket" expenses as
revenues and the related cost as direct costs.

INCOME TAXES

         Noble is a Cayman Islands company. The Cayman Islands does not impose
corporate income taxes. Consequently, income taxes have been provided based on
the laws and rates in effect in the countries in which operations are conducted,
or in which Noble and/or its subsidiaries are considered resident for income tax
purposes. Applicable U.S. and foreign income and withholding taxes have not been
provided on undistributed earnings of Noble's subsidiaries. We do not intend to
repatriate such undistributed earnings for the foreseeable future except for
distributions upon which incremental income and withholding taxes would not be
material. In certain circumstances, we expect that, due to changing demands of
the offshore drilling markets and the ability to redeploy our offshore drilling
units, certain of such units will not reside in a location long enough to give
rise to future tax consequences. As a result, no deferred tax liability has been
recognized in these circumstances. Should our expectations change regarding the
length of time an offshore drilling unit will be used in a given location, we
will adjust deferred taxes accordingly. Our recognition of a deferred tax
liability in these circumstances would not have had a material effect on our
results of operations for 2003, 2002 or 2001, and would have had no effect on
our liquidity or our cash flows.

CONCENTRATION OF CREDIT RISK

         The market for our services is the offshore oil and gas industry, and
our customers consist primarily of government-owned oil companies, major
integrated oil companies and independent oil and gas producers. We perform
ongoing credit evaluations of our customers and generally do not require
material collateral. We maintain reserves for potential credit losses when
necessary. Our results of operations and financial condition should be
considered in light of the fluctuations in demand experienced by drilling
contractors as changes in oil and gas producers' expenditures and budgets occur.
These fluctuations can impact our results of operations and financial


                                       38

<PAGE>

                       NOBLE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

condition as supply and demand factors directly affect utilization and dayrates,
which are the primary determinants of our net cash provided by operating
activities.

         In 2003, one customer accounted for $138,254,000 or 14 percent of
consolidated operating revenues, of which all was included in our international
contract drilling services segment. Another customer accounted for $129,473,000
or 13 percent of consolidated operating revenues, of which all was also included
in our international contract drilling services segment. No other customer
accounted for more than 10 percent of consolidated operating revenues in 2003.
In 2002, one customer accounted for $149,258,000 or 15 percent of consolidated
operating revenues, of which $97,431,000 was included in our domestic contract
drilling services segment, $51,064,000 was included in our international
contract drilling services segment and $763,000 was included in our engineering
and consulting services segment. Another customer accounted for $123,251,000 or
12 percent of consolidated operating revenues, of which all was included in our
international contract drilling services segment. No other customer accounted
for more than 10 percent of consolidated operating revenues in 2002. In 2001,
one customer accounted for $130,872,000 or 13 percent of consolidated operating
revenues, of which $102,951,000 was included in our domestic contract drilling
services segment, $26,412,000 was included in our international contract
drilling services segment and $1,509,000 was included in our engineering and
consulting services segment. Another customer accounted for $121,623,000 or 12
percent of consolidated operating revenues, of which all was included in our
international contract drilling services segment. No other customer accounted
for more than 10 percent of consolidated operating revenues in 2001.

NET INCOME PER SHARE

         We compute and present earnings per share in accordance with SFAS No.
128, Earnings Per Share. Net income per share has been computed on the basis of
the weighted average number of ordinary shares and, where dilutive, ordinary
share equivalents outstanding during the indicated periods.

         The following table summarizes the basic and diluted earnings per share
computations for net income for the years ended December 31, 2003, 2002 and
2001:

<TABLE>
<CAPTION>
                                 NET      BASIC     BASIC    DILUTED   DILUTED
                                INCOME    SHARES     EPS     SHARES      EPS
                               --------   -------   ------   -------   -------
<C>                            <C>        <C>       <C>      <C>       <C>
2003   .....................   $166,416   131,948   $ 1.26   133,007   $  1.25

2002   .....................    209,503   132,204     1.58   133,452      1.57

2001   .....................    262,922   132,911     1.98   134,174      1.96
</TABLE>

         Included in diluted shares are ordinary share equivalents relating
primarily to outstanding stock options covering 1,059,000, 1,248,000 and
1,263,000 shares for the years ended December 31, 2003, 2002 and 2001,
respectively. The computation of diluted earnings per share for 2003, 2002 and
2001 did not include options to purchase 1,804,000, 1,913,432 and 3,791,000
ordinary shares, respectively, because the options' exercise prices were
greater than the average market price of the ordinary shares.

SUPPLEMENTAL CASH FLOW INFORMATION

<TABLE>
<CAPTION>
                                                      Year Ended December 31,
                                               -----------------------------------
                                                   2003        2002        2001
                                               -----------  ----------  ----------
<S>                                            <C>          <C>         <C>
Cash paid (received) during the period for:
  Interest...................................  $    39,162  $   41,364  $   45,606
  Income taxes (net of refunds)..............  $    10,509  $    8,667  $   29,940
Noncash investing and financing activities:
  Acquired working capital...................  $         -  $        -  $     (401)
</TABLE>

 (Unless otherwise indicated, dollar amounts in tables are in thousands, except
                               per share amounts)

                                       39
<PAGE>

                       NOBLE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

STOCK-BASED COMPENSATION PLANS

         We have several stock-based compensation plans, which are described
below. As permitted by 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 2003, 2002 and 2001 related to stock option awards. For U.S.
federal income tax purposes, we realized a reduction in income taxes related to
the exercises of employee stock options of $820,000, $4,664,000 and $3,683,000
in the years ended December 31, 2003, 2002 and 2001, respectively.

         1991 STOCK OPTION AND RESTRICTED STOCK PLAN

         Our 1991 Stock Option and Restricted Stock Plan, as amended (the "1991
Plan"), provides for the granting of options to purchase our ordinary shares,
with or without stock appreciation rights, and the awarding of restricted shares
to selected employees. At December 31, 2003, 4,388,953 shares were available for
grant or award under the 1991 Plan. In general, all options granted under the
1991 Plan have a term of 10 years, an exercise price equal to the fair market
value of an ordinary share on the date of grant and vest one-third annually,
commencing one year after the grant date.

         1992 NONQUALIFIED STOCK OPTION PLAN

         Our 1992 Nonqualified Stock Option Plan for Non-Employee Directors (the
"1992 Plan") provides for the granting of nonqualified stock options to
non-employee directors of Noble. At December 31, 2003, 282,500 shares were
available for grant under the 1992 Plan. We grant options at fair market value
on the grant date. The options are exercisable from time to time over a period
commencing one year from the grant date and ending on the expiration of 10 years
from the grant date, unless terminated sooner as described in the 1992 Plan.

         A summary of the status of our stock options under both the 1991 Plan
and 1992 Plan as of December 31, 2003, 2002 and 2001 and the changes during the
year ended on those dates is presented below (actual amounts):

<TABLE>
<CAPTION>
                                                 2003                      2002                      2001
                                        ----------------------   ----------------------   -----------------------
                                         NUMBER OF    WEIGHTED    NUMBER OF    WEIGHTED    NUMBER OF     WEIGHTED
                                          SHARES      AVERAGE      SHARES       AVERAGE     SHARES       AVERAGE
                                        UNDERLYING    EXERCISE   UNDERLYING    EXERCISE   UNDERLYING     EXERCISE
                                         OPTIONS       PRICE      OPTIONS       PRICE       OPTIONS       PRICE
                                        -----------   --------   -----------   --------   ----------     --------
<S>                                     <C>           <C>        <C>           <C>        <C>            <C>
Outstanding at beginning of the year..   9,187,658     $29.64     8,494,250     $28.40     7,339,684     $26.89
Granted...............................      45,000      32.11     1,630,000      31.53     1,965,017      31.28
Exercised.............................    (413,079)     22.83      (775,118)     19.99      (660,114)     20.11
Forfeited.............................    (189,465)     35.01      (161,474)     32.82      (150,337)     28.62
                                        ----------     ------    ----------     ------    ----------     ------
Outstanding at end of year............   8,630,114     $29.86     9,187,658     $29.64     8,494,250     $28.40
                                        ==========     ======    ==========     ======    ==========     ======
Exercisable at end of year............   6,995,876     $29.55     5,682,838     $27.41     4,668,124     $24.84
                                        ==========     ======    ==========     ======    ==========     ======
</TABLE>

         The following table summarizes information about stock options
outstanding at December 31, 2003 (actual amounts):

<TABLE>
<CAPTION>
                                           OPTIONS OUTSTANDING                        OPTIONS EXERCISABLE
                          --------------------------------------------------    -------------------------------
                                              WEIGHTED
                                              AVERAGE          WEIGHTED                            WEIGHTED
  RANGE OF EXERCISE            NUMBER       REMAINING          AVERAGE              NUMBER          AVERAGE
       PRICES               OUTSTANDING     LIFE (YEARS)    EXERCISE PRICE       EXERCISABLE     EXERCISE PRICE
----------------------    ---------------   ------------    ----------------    ------------    ---------------
<S>                       <C>               <C>             <C>                 <C>             <C>
$  5.01   to    $ 7.69           66,926             1.0     $          6.06           66,926    $          6.06
   7.70   to     14.00          176,301             3.3               10.97          176,301              10.97
  14.01   to     28.31        3,280,741             4.6               23.01        3,280,741              23.01
  28.32   to     48.81        5,106,146             7.5               35.23        3,471,908              37.13
----------------------      -----------      ----------     ---------------      -----------    ---------------
$  5.01   to    $48.81        8,630,114             6.3     $         29.86        6,995,876    $         29.55
                            ===========      ==========     ===============      ===========    ===============
</TABLE>

 (Unless otherwise indicated, dollar amounts in tables are in thousands, except
                               per share amounts)

                                       40

<PAGE>

                       NOBLE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         Additional disclosures required by SFAS 123 are as follows:

<TABLE>
<CAPTION>
                                                           DECEMBER 31,
                                                  ----------------------------
                                                   2003       2002        2001
                                                  ------     ------     ------
<S>                                               <C>        <C>        <C>
Weighted average fair value per option granted    $13.41     $11.57     $13.61

Valuation assumptions:
  Expected option term (years) ...............         5          5          5
  Expected volatility ........................     43.32%     43.72%     41.41%
  Expected dividend yield ....................         0%         0%         0%
  Risk-free interest rate ....................      2.88%      4.42%      4.72%
</TABLE>

         The following table reflects pro forma net income and earnings per
share had we elected to adopt the fair value approach of SFAS 123:

<TABLE>
<CAPTION>
                                                                                 YEAR ENDED DECEMBER 31,
                                                                             ------------------------------
                                                                               2003      2002        2001
                                                                             --------  --------   ---------
<S>                                                                          <C>       <C>        <C>
Net income - as reported...................................................  $166,416  $209,503   $ 262,922
Compensation expense, net of tax, as reported..............................     3,008     3,171       2,672
Compensation expense, net of tax, pro forma................................   (20,085)  (22,450)    (18,648)
                                                                             --------  --------   ---------
Net income - pro forma.....................................................  $149,339  $190,224   $ 246,946

Earnings per share:
    Basic - as reported....................................................  $   1.26  $   1.58   $    1.98
    Basic - pro forma......................................................  $   1.13  $   1.44   $    1.86

    Diluted - as reported..................................................  $   1.25  $   1.57   $    1.96
    Diluted - pro forma....................................................  $   1.12  $   1.43   $    1.84
</TABLE>

         OTHER STOCK BASED COMPENSATION

         In January 1998, we awarded selected employees 22,000 restricted (i.e.,
nonvested) shares that vested 20 percent per year over a five-year period
commencing on the first anniversary date of the award. In January 1999, we
awarded one employee 15,000 restricted shares that vested one-third per year
over a three-year period commencing on the first anniversary date of the award.
In February 1999 and October 1999, we awarded selected employees 190,000
restricted shares and 230,000 restricted shares, respectively, that vest 20
percent per year over a five-year period commencing on the first anniversary
date of the award. In September 2000, we awarded one employee 25,000 restricted
shares that vest 20 percent per year over a five-year period commencing on the
first anniversary date of the award. In October 2000 and October 2001, we
awarded selected employees 227,500 restricted shares and 215,500 restricted
shares, respectively, that vest 20 percent per year over a five-year period
commencing on the first anniversary date of the award. No restricted shares were
awarded in 2002 or 2003.

         A summary of the restricted share awards and the amounts recognized as
compensation expense for the years ended December 31, 2003, 2002 and 2001 is as
follows:

<TABLE>
<CAPTION>
                                                                   2003         2002          2001
                                                               -----------  -----------   -----------
<S>                                                            <C>          <C>           <C>
Restricted shares:
   Shares awarded..........................................              -            -       215,500
   Average share price at award date.......................    $         -  $         -   $     30.32
   Compensation expense recognized.........................    $     4,627  $     4,878   $     4,110
</TABLE>

 (Unless otherwise indicated, dollar amounts in tables are in thousands, except
                               per share amounts)

                                       41

<PAGE>

                       NOBLE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PUT OPTIONS ON ORDINARY SHARES

         During 2002, we sold "European-style put options" covering 1,300,000 of
our ordinary shares in 12 separate private transactions (11 transactions of
100,000 put options each and another transaction of 200,000 put options) at an
average price paid to us of $2.81 per option. "European-style" options give the
holder the right to require us to purchase our ordinary shares from the holder
at their respective exercise prices on their respective expiration dates,
whereas "American-style" options can be exercised anytime up to, and including,
the respective exercise dates. Upon exercise of the options by the holder, we
had the option to settle in cash or net shares of Noble. The strike price under
each option represented between 90 and 95 percent of the spot price of the
ordinary shares at the date of the transaction. Of the 1,300,000 options sold
during 2002, 300,000 expired unexercised and 400,000 were exercised during 2002,
which resulted in 600,000 options outstanding at December 31, 2002. All of these
options expired unexercised as of March 4, 2003. At December 31, 2003, we had no
put options outstanding to purchase any of our ordinary shares.

CERTAIN SIGNIFICANT ESTIMATES

         The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amount of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

ACCOUNTING PRONOUNCEMENTS

         In November 2002, the FASB issued Interpretation No. 45, Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others ("FIN 45"). FIN 45 expands existing
accounting guidance and disclosures to be made by a guarantor in its interim and
annual financial statements about its obligations under certain guarantees that
it has issued. FIN 45 also clarifies that a guarantor is required to recognize,
at the inception of a guarantee, a liability for the fair value of the
obligation undertaken in issuing the guarantee. The disclosure requirements of
FIN 45 are effective for financial statements ending after December 15, 2002.
The remaining provisions of FIN 45 are effective for guarantees issued or
modified after December 31, 2002. Our adoption of these remaining provisions of
FIN 45 on January 1, 2003 did not have a material impact on our consolidated
results of operations, cash flows or financial position.

         In January 2003, the FASB 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 apply immediately to special purpose entities. We do not expect to
consolidate our equity interest in our Noble Crosco Drilling Ltd. joint venture
under the provisions of FIN 46-R, and therefore we do not expect our adoption of
FIN 46-R to have a material impact on our consolidated results of operations,
cash flows or financial position.

         In May 2003, the FASB issued Statement of Financial Accounting
Standards No. 150, Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity ("SFAS 150"). SFAS 150
establishes standards for the classification and measurement of financial
instruments with characteristics of both liabilities and equity. SFAS 150
affects the classification of certain freestanding instruments, including
mandatory redeemable instruments, financial instruments to repurchase an
entity's own equity instruments, and financial


                                       42

<PAGE>

                       NOBLE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

instruments that embody unconditional obligations that the issuer must or could
choose to settle by issuing a variable number of its shares or other equity
instruments based solely on a fixed monetary amount known at inception or an
event trigger other than changes in its own equity instruments. SFAS 150 is
generally effective for all such financial instruments entered into or modified
after May 31, 2003, and otherwise is effective at the beginning of the first
interim period beginning after June 15, 2003. In October 2003, the FASB decided
to defer the provisions of paragraphs 9 and 10 of SFAS 150 as they apply to
mandatorily redeemable noncontrolling interests. Those provisions require that
mandatorily redeemable minority interests within the scope of SFAS 150 be
classified as a liability on a parent company's financial statements in certain
situations, including when a finite-lived entity is consolidated. Our adoption
of all currently required provisions of SFAS 150 in 2003 did not have a material
impact on our consolidated results of operations, cash flows or financial
position. We do not expect our adoption of the remaining provisions of SFAS 150
will have a material impact on our consolidated results of operations, cash
flows or financial position. See Note 12 to our accompanying consolidated
financial statements for the new disclosures required to be adopted by us as of
December 31, 2003.

         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 year
ending after December 15, 2003, with a delayed effective date until fiscal years
ending after June 15, 2004 for certain disclosures regarding foreign plans.

NOTE 2 - CORPORATE RESTRUCTURING

         On April 30, 2002, Noble became the successor to Noble Drilling
Corporation, a Delaware corporation (which we sometimes refer to as "Noble
Drilling"), as part of the internal corporate restructuring of Noble Drilling
and its subsidiaries approved by stockholders of Noble Drilling. The
restructuring was accomplished through the merger of an indirect, wholly-owned
subsidiary of Noble Drilling into Noble Drilling. Noble Drilling was the
surviving entity in the merger and is now an indirect, wholly-owned subsidiary
of Noble. In addition, as a result of the merger, all of the outstanding shares
of common stock (and the related preferred stock purchase rights) of Noble
Drilling were exchanged for ordinary shares (and related preferred share
purchase rights) of Noble. We accounted for the restructuring as a
reorganization of entities under common control. Consequently, the consolidated
amounts of assets, liabilities and shareholders' equity did not change as a
result of the restructuring.

NOTE 3 - ACQUISITIONS

         In December 2002, we purchased two jackup rigs, the Dhabi II and
Trident III (renamed the Noble Roy Rhodes), from a subsidiary of Schlumberger
Limited for an aggregate purchase price of $95,000,000 in an all cash
transaction. In addition, we entered into option agreements with this subsidiary
of Schlumberger that gave us the right to purchase two additional jackup rigs,
the Trident 18 and Trident 19. In September 2003, we exercised our option to
purchase the Trident 18 (renamed the Noble Charlie Yester) for an exercise price
of $32,900,000 in cash. In December 2002, we had paid an option fee of
$14,100,000 in cash for the right to acquire the unit. In July 2003, we
exercised our option to purchase the Trident 19 (renamed the Noble Gene House)
for an exercise price of $25,200,000 in cash. In December 2002, we had paid an
option fee of $10,800,000 in cash for the right to acquire the unit.

         In June 2003, we entered into option agreements with a subsidiary of
A.P. Moeller that give us the right to acquire two jackup rigs, the Maersk
Viking and Maersk Valiant. Both units are currently operating offshore Iran. Our
right to exercise the options and acquire the units will commence when the units
have completed their current drilling contracts and have mobilized to United
Arab Emirates territorial waters. We paid an aggregate of $28,200,000 in cash
for the two options. If we exercise the options, we will pay an exercise price
not to exceed an


                                       43
<PAGE>

                       NOBLE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

additional $65,800,000 to acquire both units. The amount of this aggregate
exercise price is subject to reduction depending on the delivery date of the
units.

         On May 3, 2002, as part of our strategy to expand our technology
initiative, we made several acquisitions. We acquired all of the shares of
WELLDONE Engineering GmbH ("WELLDONE") for $5,750,000 in cash plus an agreement
to pay an earn-out amount up to $3,500,000 provided WELLDONE's tools achieve
certain operational and financial milestones during the period through May 3,
2004, of which $500,000 was paid in 2003. We do not expect to pay any of the
remaining $3,000,000. WELLDONE's primary asset is its ownership in the "Well
Director(TM)", an automatic rotary steerable drilling system, which was designed
by and is manufactured and marketed through DMT WELLDONE Drilling Services GmbH
("DMT WELLDONE"). As a result of our acquisition of WELLDONE, we acquired
WELLDONE's 50 percent joint venture interest in DMT WELLDONE, which is further
described below. We paid $2,650,000 to Deutsche Montan Technologie GmbH ("DMT"),
the other joint venturer in DMT WELLDONE, for the remaining 50 percent interest
in the joint venture.

         In connection with the above described transaction, we also acquired 24
Well Director(TM) drilling tools and related assets owned by Phoenix Technology
Services, Ltd. ("Phoenix") for $6,000,000 in cash plus an agreement to pay an
earn-out amount up to $3,000,000 provided certain operating performance
milestones are achieved during the period through May 3, 2005, of which $500,000
was paid in 2003. In the transaction we also acquired from Phoenix its worldwide
marketing rights to the Well Director(TM) drilling tools. The aggregate purchase
price of $14,400,000 for these related acquisitions was allocated to goodwill
($7,863,000) and property and equipment ($6,537,000).

         Pursuant to a related agreement, we and DMT each committed to fund
2,100,000 Euros to a new joint venture in which each party has a 50 percent
interest. The joint venture was to use such funds to retain DMT to conduct
research and development. This joint venture was terminated in 2003.

         On March 27, 2002, we purchased two semisubmersible baredecks, Bingo
9000 Rig 3 and Bingo 9000 Rig 4, from subsidiaries of Ocean Rig ASA ("Ocean
Rig") for an aggregate purchase price of $45,000,000 in an all cash transaction.

         On March 26, 2002, we purchased two semisubmersible drilling rigs, the
Noble Lorris Bouzigard (ex Transocean 96) and Noble Therald Martin (ex
Transocean 97), from subsidiaries of Transocean Inc. for an aggregate purchase
price of $31,000,000 in an all cash transaction. During 2003, we completed
upgrades to the living quarters and drilling equipment on both units. The Noble
Therald Martin is equipped with Noble's proprietary aluminum alloy riser, which
allows it to drill in up to 4,000 feet of water. We plan to deploy our aluminum
alloy riser on the Noble Lorris Bouzigard during 2004, which will enable it also
to drill in up to 4,000 feet of water.

         In January 2000, we and our joint venture partners formed Noble
Rochford Drilling Ltd. ("Noble Rochford") which purchased the Noble Julie
Robertson (formerly Ocean Scotian), a Baker Marine Europe Class design jackup.
We acquired a 50 percent equity interest in Noble Rochford for an initial equity
investment in the joint venture of $10,000,000. In addition, we loaned Noble
Rochford $24,000,000 to fund the acquisition and upgrade of the Noble Julie
Robertson. On August 24, 2001, we acquired the remaining 50 percent equity
interest in Noble Rochford from our joint venture partner for $20,000,000 in
cash. As a result of the acquisition, the results of operations of the Noble
Julie Robertson are included in our Consolidated Statements of Income from
August 24, 2001, and at that date, the respective assets and liabilities
acquired were recorded at their estimated fair values. Prior to August 24, 2001,
the investment was accounted for under the equity method.

         On February 20, 2001, we acquired the assets of Maurer Engineering
Incorporated ("Maurer"), a privately held engineering firm that designs drilling
products and drilling related software programs, for $6,560,000 in cash, common
stock and the assumption of certain liabilities. We allocated $4,849,000 of the
purchase price to goodwill.

NOTE 4 - MARKETABLE SECURITIES

         As of December 31, 2003 and 2002, we owned marketable equity securities
with a fair market value of $9,703,000 and $7,003,000, respectively, of which
$9,458,000 and $6,827,000 of the December 31, 2003 and 2002


                                       44

<PAGE>

                       NOBLE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

balance, respectively, 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
December 31, 2003 at their fair market value. We recognized in earnings a net
unrealized holding gain of $1,701,000 and a net realized loss of $1,187,000
related to these assets in 2003. The remaining investment in marketable equity
securities, with a fair market value of $245,000 at December 31, 2003, is
classified as available for sale and is included in "Other assets" in the
Consolidated Balance Sheets at its fair market value. On March 31, 2002, we
recognized in earnings a realized loss of $9,758,000 on this investment
resulting from a decline in value considered by management to be other than
temporary. We recognized in other comprehensive income an unrealized holding
gain of $69,000 on this investment during 2003. Gross unrealized holding losses
on this investment at December 31, 2003 and 2002 were $964,000 and $1,033,000,
respectively, and are included in "Accumulated other comprehensive loss" in the
Consolidated Balance Sheets.

         As of December 31, 2003 and 2002, we owned marketable debt securities
with a fair market value of $88,918,000 and $66,130,000, respectively. These
investments are classified as available for sale and are included in "Investment
in marketable securities" in the Consolidated Balance Sheets at their fair
market value. Our balance of marketable debt securities at December 31, 2003
included $60,063,000 that mature within one year and $28,855,000 that mature
between one and five years. We recognized in other comprehensive income a net
unrealized holding loss of $365,000 and in earnings a net realized loss of
$382,000 related to these assets in 2003. The following table highlights
additional information applicable to our investments classified as available for
sale as of December 31, 2003 and 2002:

<TABLE>
<CAPTION>
                                                                          DECEMBER 31,
                                 ----------------------------------------------------------------------------------------------
                                                     2003                                            2002
                                 ---------------------------------------------    ---------------------------------------------
                                                           GROSS       GROSS                                GROSS       GROSS
                                 AMORTIZED     FAIR     UNREALIZED  UNREALIZED    AMORTIZED     FAIR     UNREALIZED  UNREALIZED
                                    COST       VALUE       GAINS      LOSSES         COST       VALUE       GAINS      LOSSES
                                 ---------   ---------  ----------  ----------    ---------   ---------  ----------  ----------
<S>                              <C>         <C>        <C>         <C>          <C>         <C>         <C>         <C>
U.S. Government obligations ..   $   4,137   $   4,126   $      --   $     (11)   $   6,861   $   6,844   $       8   $     (25)
Corporate debt securities ....      59,809      59,735          47        (121)      45,909      45,825          36        (120)
Asset-backed securities ......      25,075      25,057          15         (33)      13,475      13,461           1         (15)
                                 ---------   ---------   ---------   ---------    ---------   ---------   ---------   ---------
Total ........................   $  89,021   $  88,918   $      62   $    (165)   $  66,245   $  66,130   $      45   $    (160)
                                 =========   =========   =========   =========    =========   =========   =========   =========
</TABLE>

         The credit quality of each of our investments in marketable debt
securities is rated no lower than "A" or "A2" by Standard & Poor's or Moody's
Investors Service ("Moody's"), respectively.

NOTE 5 - COMPREHENSIVE INCOME

         We report and display comprehensive income in accordance with SFAS No.
130, Reporting Comprehensive Income ("SFAS 130"), which establishes standards
for reporting and displaying comprehensive income and its components. Components
of comprehensive income are net income and all changes in equity during the
period except those resulting from transactions with owners. SFAS 130 requires
enterprises to display comprehensive income and its components in the
enterprise's financial statements, to classify items of comprehensive income by
their nature in the financial statements and display the accumulated balance of
other comprehensive income in shareholders' equity separately from retained
earnings and additional paid-in capital.

          (Unless otherwise indicated, dollar amounts in tables are in
                      thousands, except per share amounts)

                                       45

<PAGE>

                       NOBLE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         The following table sets forth the components of accumulated other
comprehensive income (loss):

<TABLE>
<CAPTION>
                                                                                     ACCUMULATED
                                       FOREIGN        UNREALIZED      MINIMUM           OTHER
                                      CURRENCY     (LOSSES) GAINS     PENSION       COMPREHENSIVE
                                        ITEMS       ON SECURITIES    LIABILITY      INCOME (LOSS)
                                        -----       -------------    ---------      -------------
<S>                                   <C>          <C>               <C>            <C>
Balance at December 31, 2000 ......   $    532        $ (4,048)       $   (607)       $ (4,123)
2001-period change ................       (507)         (5,729)         (1,378)         (7,614)
                                      --------        --------        --------        --------
Balance at December 31, 2001 ......         25          (9,777)         (1,985)        (11,737)
2002-period change ................      1,223           9,051          (4,829)          5,445
                                      --------        --------        --------        --------
Balance at December 31, 2002 ......      1,248            (726)         (6,814)         (6,292)
2003-period change ................        192            (296)          6,406           6,302
                                      --------        --------        --------        --------
Balance at December 31, 2003 ......   $  1,440        $ (1,022)       $   (408)       $     10
                                      ========        ========        ========        ========
</TABLE>

         Included in the 2002 - period change for unrealized (losses) gains on
securities above was a reclassification adjustment of $9,758,000 for an
impairment charge on an investment included in net income resulting from a
decline in value considered by management to be other than temporary.

NOTE 6 - INVESTMENTS IN AND ADVANCES TO JOINT VENTURES

         On June 13, 2000, we formed Noble Crosco Drilling Ltd. ("Noble Crosco")
with our joint venture partner. We acquired a 50 percent equity interest in
Noble Crosco by investing $14,300,000 in cash. Our joint venture partner
contributed the Panon, a Levingston 111-S independent leg designed jackup, for
its 50 percent equity interest. We also agreed to lend Noble Crosco up to
$7,000,000 pursuant to a credit agreement (the "Noble Crosco Credit Agreement")
to finance part of the upgrade costs of the Panon. In 2001, we loaned Noble
Crosco $7,000,000 under the Noble Crosco Credit Agreement. Any funds required
for the maintenance and operation of the Panon in excess of those funds
generated from operations of the joint venture and available under the Noble
Crosco Credit Agreement will be loaned by us to Noble Crosco. In 2001, we loaned
Noble Crosco $4,800,000 of such funds. At December 31, 2003, the balance due to
us from Noble Crosco under the Noble Crosco Credit Agreement and the additional
loan in excess of the Noble Crosco Credit Agreement was $2,283,000 in the
aggregate. We managed the upgrade of the Panon from a slot to a cantilever
configuration, and we are managing the operation of the unit. We account for
this investment using the equity method.

         Balances related to joint ventures for 2003 and 2002 are reflected in
the table below:

<TABLE>
<CAPTION>
                                                    2003      2002
                                                    ----      ----
<S>                                               <C>       <C>
Equity in income (losses) of joint ventures (1)   $ 2,307   $ 1,780
Investment in joint ventures (2) ..............    17,585    15,278
Advances to joint ventures (2) ................     2,283     7,260
</TABLE>

-------------------------------

(1)      Balance included in "Other, net" in the Consolidated Statements of
         Income. Amounts exclude management fees and interest income related to
         joint ventures of $1,838,000 and $2,199,000 in 2003 and 2002,
         respectively.

(2)      Balance included in "Investments in and advances to joint ventures" in
         the Consolidated Balance Sheets.

NOTE 7 - DEBT

         In 2002, we borrowed $125,000,000 from our $200,000,000 bank credit
facility that extends through May 30, 2006. The interest rate on this borrowing
from our bank credit facility, which adjusts periodically with LIBOR, was 1.57
percent at December 31, 2003. (See Note 8 for additional information.)

          (Unless otherwise indicated, dollar amounts in tables are in
                      thousands, except per share amounts)

                                       46

<PAGE>

                       NOBLE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         On March 16, 1999, we issued $150,000,000 principal amount of our 6.95%
Senior Notes due 2009 and $250,000,000 principal amount of our 7.50% Senior
Notes due 2019 (together, the "Notes"). Interest on the Notes is payable on
March 15 and September 15 of each year. The Notes are redeemable, as a whole or
from time to time in part, at our option on any date prior to maturity at prices
equal to 100 percent of the outstanding principal amount of the notes redeemed
plus accrued interest to the redemption date plus a make-whole premium, if any
is required to be paid. The Notes are senior unsecured obligations and the
indenture governing the Notes contains covenants that, among other things, limit
our ability to create certain liens, engage in certain sale and lease-back
transactions and merge, consolidate and sell assets, except under certain
conditions.

         In 2002, we purchased and retired $5,000,000 principal amount of our
7.50% Senior Notes due 2019 for $5,350,000, which resulted in a loss of
$400,000. In 2001, we purchased and retired $43,305,000 principal amount of our
7.50% Senior Notes for $44,362,000, which resulted in a loss of $1,520,000.
These losses represent the difference between the acquisition price and the net
carrying value of the notes purchased, including unamortized debt issuance
costs, and were included in "Other, net" in the Consolidated Statements of
Income in their respective years.

         In connection with the acquisition of a majority interest in Arktik
Drilling Limited, Inc. ("Arktik") in 1999, we recorded Arktik's indebtedness to
a minority equity owner in Arktik in the amount of $7,900,000 (the "Minority
Owner Debt"). Arktik's principal asset is the Noble Muravlenko drillship. The
Minority Owner Debt is non-recourse except to Arktik and is secured by a
mortgage on the Noble Muravlenko. The Minority Owner Debt bears interest at 12.0
percent per annum. Interest is payable on a monthly basis. The principal balance
of the debt is to be repaid over a three-year period, beginning in 2004.

         In December 1998, Noble Drilling (Paul Romano) Inc., an indirect,
wholly-owned subsidiary of Noble and owner of the Noble Paul Romano, issued
$112,250,000 principal amount of its fixed rate senior secured notes (the
"Romano Notes"). Pursuant to the trust indenture and security agreement under
which the Romano Notes were issued, we were required to deposit an amount into
two separate accounts, subject to control of a third-party trustee, to prepay
the first month's principal and interest payment and provide an additional debt
reserve balance equal to two months of debt service. Such amount totaled
$5,368,000 at December 31, 2002 and was included in "Restricted cash" in the
Consolidated Balance Sheet at that date. We repaid the Romano Notes in full in
December 2003.

         In December 1998, Noble Drilling (Jim Thompson) Inc., an indirect,
wholly-owned subsidiary of Noble and owner of the Noble Jim Thompson, issued
$115,000,000 principal amount of its fixed rate senior secured notes (the
"Thompson Notes") in four series. The Thompson Notes bear interest at rates of
5.93 percent to 7.25 percent per annum. In July 1998, Noble Drilling (Paul
Wolff) Ltd., an indirect, wholly-owned subsidiary of Noble and owner of the
Noble Paul Wolff, issued $145,000,000 principal amount of its fixed rate senior
secured notes (the "Wolff Notes") in three series. The Wolff Notes bear interest
at rates of 6.43 percent to 6.55 percent per annum. The Thompson Notes and the
Wolff Notes are secured by a first naval mortgage on the Noble Jim Thompson and
Noble Paul Wolff, respectively, are guaranteed by Noble, and can be prepaid, in
whole or in part, at a premium at any time.

         The following table summarizes our long-term debt:

<TABLE>
<CAPTION>
                                                                           DECEMBER 31,
                                                                    ----------------------
                                                                       2003         2002
                                                                    ---------    ---------
<S>                                                                 <C>          <C>
6.95% Senior Notes due 2009, net of unamortized discount of
  $55 in 2003 and $66 in 2002 ...................................   $ 149,945    $ 149,934
7.50% Senior Notes due 2019 .....................................     201,695      201,695
Bank Credit Facility ............................................     125,000      125,000
Project Financings:
  Wolff Notes ...................................................      28,228       54,685
  Romano Notes ..................................................           -       38,401
  Thompson Notes ................................................      76,805       92,524
Minority Owner Debt .............................................       7,900        7,900
                                                                    ---------    ---------
                                                                      589,573      670,139
Current Maturities ..............................................     (47,666)     (80,577)
                                                                    ---------    ---------
Long-term Debt ..................................................   $ 541,907    $ 589,562
                                                                    =========    =========
</TABLE>

          (Unless otherwise indicated, dollar amounts in tables are in
                      thousands, except per share amounts)

                                       47

<PAGE>

                       NOBLE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         The fair value of our Senior Notes at December 31, 2003 was
$416,045,000, based on the quoted market prices for similar issues or on the
current rates offered to us for debt of similar remaining maturities. The fair
value of our floating interest rate Bank Credit Facility, Project Financings and
Minority Owner Debt approximates their carrying values.

         Aggregate principal repayments of long-term debt for the next five
years and thereafter are as follows:

<TABLE>
<CAPTION>
                                             2004         2005         2006         2007         2008      THEREAFTER      TOTAL
                                          ----------   ----------   -----------   ---------   ----------   ----------   ----------
<S>                                       <C>          <C>          <C>           <C>         <C>          <C>          <C>
6.95% Senior Notes due 2009,...........
   net of unamortized
   discount of $55 in 2003.............   $        -   $        -   $         -   $       -   $        -   $  149,945   $  149,945
7.50% Senior Notes due 2019............            -            -             -           -            -      201,695      201,695
Bank Credit Facility...................            -            -       125,000           -            -            -      125,000
Project Financings:
      Wolff Notes......................       28,228            -             -           -            -            -       28,228
      Thompson Notes...................       16,805        8,362         8,974       9,630       10,334       22,700       76,805
Minority Owner Debt....................        2,633        2,633         2,634           -            -            -        7,900
                                          ----------   ----------   -----------   ---------   ----------   ----------   ----------
      Total............................   $   47,666   $   10,995   $   136,608   $   9,630   $   10,334   $  374,340   $  589,573
                                          ==========   ==========   ===========   =========   ==========   ==========   ==========
</TABLE>

NOTE 8 - CREDIT FACILITIES

         We have an unsecured revolving bank credit facility totaling
$200,000,000 (the "Credit Agreement"), including a letter of credit facility
totaling $50,000,000, through May 30, 2006. In connection with our
restructuring, Noble and one of its wholly-owned subsidiaries, Noble Holding
(U.S.) Corporation ("Noble Holding"), have unconditionally guaranteed the
performance of Noble Drilling under the Credit Agreement. We are required to
maintain various affirmative and negative covenants, including two financial
covenants relating to interest coverage and debt to capital ratios. The Credit
Agreement contains restrictive covenants, including restrictions on incurring
additional indebtedness, and restrictions on permitting additional liens,
payment of dividends, transactions with affiliates, and mergers or
consolidations. As of December 31, 2003, we had outstanding borrowings and
outstanding letters of credit of $125,000,000 and $19,479,000, respectively,
under the Credit Agreement, with $55,521,000 remaining available thereunder.
Additionally, as of December 31, 2003, we had other letters of credit of
$26,166,000 and performance and customs bonds totaling $40,402,000 supported by
surety bonds.

NOTE 9 - INTERESTS IN DEEPWATER OIL AND GAS PROPERTIES

         In 2000, we received interests in several deepwater oil and gas
properties from Mariner Energy Inc. and Samedan Oil Corporation pursuant to the
settlements of a lawsuit with Mariner Energy and Samedan over employment of the
Noble Homer Ferrington semisubmersible and upon entering into a long-term
contract with each of these companies for use of the unit in the U.S. Gulf of
Mexico. Certain of these properties are currently in production. We reported
income before income taxes from such properties of $3,246,000 and $2,638,000 in
2003 and 2002, respectively.

         On December 19, 2003, we sold our interest in Mariner Energy's Green
Canyon property to ENI Petroleum for $5,200,000 in cash. We realized a gain of
$3,472,000 upon this sale.

         On March 28, 2002, we sold our interest in Mariner Energy's Falcon
property to Pioneer Natural Resources USA, Inc. for $6,200,000 in cash and the
assumption of liabilities related to our share of drilling and development costs
subsequent to June 30, 2001. We realized a gain of $5,908,000 upon this sale.

          (Unless otherwise indicated, dollar amounts in tables are in
                      thousands, except per share amounts)

                                       48

<PAGE>

                       NOBLE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 - SHAREHOLDERS' EQUITY

         In June 1995, we adopted a stockholder rights plan designed to assure
that our stockholders receive fair and equal treatment in the event of any
proposed takeover of Noble Drilling and to guard against partial tender offers
and other abusive takeover tactics to gain control of Noble Drilling without
paying all stockholders a fair price. The rights plan was not adopted in
response to any specific takeover proposal. Prior to our corporate
restructuring, we amended our rights plan to provide for the earlier expiration
of the rights in the event that Noble Drilling merges with a subsidiary company
in connection with changing the parent corporation of the Noble corporate group
to a non-U.S. company. Immediately prior to such a merger as part of our
corporate restructuring, the Noble Drilling stockholder rights plan expired.
Upon such merger, a new shareholder rights plan became effective for the new
parent company, Noble Corporation, that is substantially similar to the previous
Noble Drilling stockholder rights plan. Under the rights plan, one right
("Right") is attached to each of our ordinary shares. Each Right will entitle
the holder to purchase one one-hundredth of a share of new Series A Junior
Participating Preferred Shares, par value $1.00 per share, at an exercise price
of $120.00. The Rights are not currently exercisable and will become exercisable
only in the event a person or group acquires beneficial ownership of 25 percent
or more of our ordinary shares. The Rights expire on July 10, 2005.

         In connection with our corporate restructuring (see Note 2), treasury
shares of Noble Drilling were either cancelled and retired or contributed to
trusts for the purposes of Company employee benefit plans. Any ordinary shares
of Noble repurchased by it are automatically cancelled and retired pursuant to
Cayman Islands law. These trusts held 1,700,000 and 1,791,000 ordinary shares of
Noble at December 31, 2003 and 2002, respectively.

NOTE 11 - INCOME TAXES

         Noble is a Cayman Islands company. The Cayman Islands does not impose
corporate income taxes. Consequently, income taxes have been provided based on
the laws and rates in effect in the countries in which operations are conducted,
or in which Noble and/or its subsidiaries are considered resident for income tax
purposes. Our U.S. subsidiaries are subject to a U.S. corporate tax rate of 35
percent.

         In certain circumstances, management expects that, due to changing
demands of the offshore drilling markets and the ability to redeploy our
offshore drilling units, certain of such units will not reside in a location
long enough to give rise to future tax consequences. As a result, no deferred
tax liability has been recognized in these circumstances. Should management's
expectations change regarding the length of time an offshore drilling unit will
be used in a given location, we will adjust deferred taxes accordingly.

         The components of and changes in the net deferred taxes were as
follows:

<TABLE>
<CAPTION>
                                          DECEMBER 31,  DECEMBER 31,
                                              2003         2002
                                          -----------   ------------
<S>                                       <C>           <C>
Deferred tax assets:
  United States:
    Net operating loss carryforwards ...   $ 11,576      $  4,811
    Tax credit carryforwards ...........     23,403        27,853
  International:
    Net operating loss carryforwards ...          -         2,068
                                           --------      --------
Deferred tax assets ....................     34,979        34,732
    Less: Valuation allowance ..........     (8,343)       (3,503)
                                           --------      --------
Net deferred tax assets ................   $ 26,636      $ 31,229
                                           ========      ========
</TABLE>

          (Unless otherwise indicated, dollar amounts in tables are in
                      thousands, except per share amounts)

                                       49

<PAGE>

                       NOBLE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<S>                                                        <C>               <C>
Deferred tax liabilities:
  United States:
    Excess of net book basis over remaining tax basis....  $   (232,642)     $   (217,659)
  International:
    Excess of net book basis over remaining tax basis....        (7,351)          (19,921)
                                                           ------------      ------------
Deferred tax liabilities.................................  $   (239,993)     $   (237,580)
                                                           ============      ============

Net deferred tax liabilities.............................  $   (213,357)     $   (206,351)
                                                           ============      ============
</TABLE>

             Income before income taxes consisted of the following:

<TABLE>
<CAPTION>
                                   YEAR ENDED DECEMBER 31,
                        -------------------------------------------
                            2003           2002           2001
                        ------------   -------------   ------------
<S>                     <C>            <C>             <C>
United States.........  $     (3,996)  $      34,966   $    196,558
International.........       190,980         208,359        151,914
                        ------------   -------------   ------------
Total.................  $    186,984   $     243,325   $    348,472
                        ============   =============   ============
</TABLE>

         The income tax provision consisted of the following:

<TABLE>
<CAPTION>
                                                   YEAR ENDED DECEMBER 31,
                                         ---------------------------------------
                                            2003           2002           2001
                                         -----------   -----------   -----------
<S>                                      <C>           <C>           <C>
Current - United States................  $    (2,561)  $       160   $    15,312
Current - International................       18,753        16,792        14,176
Deferred - United States...............       14,878        13,020        53,617
Deferred - International...............      (10,502)        3,850         2,445
                                         ------------  -----------   -----------
Total..................................  $    20,568   $    33,822   $    85,550
                                         ===========   ===========   ===========
</TABLE>

         A reconciliation of statutory and effective income tax rates is shown
below:

<TABLE>
<CAPTION>
                                                                                    YEAR ENDED DECEMBER 31,
                                                                                    -----------------------
                                                                                    2003     2002     2001
                                                                                    ----     ----     ----
<S>                                                                                 <C>      <C>      <C>
Statutory rate (Cayman Islands - 2003 and 2002, U.S. - 2001).............            0.0%     0.0%    35.0%
Effect of:
  U.S. tax rate which is different than the Cayman Islands rate..........            3.6      4.5        -
  International tax rates which are different
    than the Cayman Islands rate.........................................            7.3      8.3        -
  International tax rates which are different than the U.S. rate.........              -        -     (9.8)
  Other..................................................................            0.1      1.1     (0.6)
                                                                                    ----     ----     ----
Total....................................................................           11.0%    13.9%    24.6%
                                                                                    ====     ====     ====
</TABLE>

         During 2003, we generated net operating losses ("NOLs") of $6,560,000
and $44,772,000 for U.S. Regular and Alternative Minimum Tax ("AMT") purposes,
respectively. Our total U.S. NOLs at December 31, 2003 were $20,304,000 for
Regular tax purposes and $65,724,000 for AMT purposes. These NOLs can be carried
forward 20 years. $13,744,000 of our U.S. Regular NOLs expire in 2022, while the
remaining U.S. Regular NOLs expire in 2023. Based on current market conditions,
the reversal of temporary differences and forecasts of future U.S. income, we
expect to fully utilize these NOLs. Therefore, there is no valuation allowance
offsetting the deferred tax asset for these NOLs.

         During 2002, we generated NOLs of $13,744,000 and $47,024,000 for U.S.
Regular and AMT purposes, respectively. Due to our corporate restructuring in
2002, $13,744,000 of the Regular NOL and $20,952,000 of the AMT NOL were subject
to the Separate Return Limitation Year limits and could not be carried back to
prior tax

          (Unless otherwise indicated, dollar amounts in tables are in
                      thousands, except per share amounts)

                                       50

<PAGE>

                       NOBLE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

years. The remaining AMT NOL of $26,072,000 was carried back to 2001 and
generated cash refunds of $5,019,000. Certain reclassifications were made to the
components of the Net deferred tax liabilities in the table above to reflect
actual NOLs and tax credit carryforwards at December 31, 2002.

         Certain of our subsidiaries file stand alone tax returns in the U.S.
During 2003, these subsidiaries generated NOLs of $12,770,000 for U.S. Regular
and AMT purposes. Due to insufficient earnings history with these subsidiaries,
we have fully offset the deferred tax asset attributable to the U.S. Regular
NOLs with a valuation allowance of $4,470,000. These NOLs can be carried forward
20 years, and expire in 2023.

         We had AMT credit carryforwards of $17,444,000 and $22,463,000 at
December 31, 2003 and 2002, respectively. We expect to fully utilize these
credits, which can be carried forward indefinitely. Therefore, there is no
valuation allowance offsetting this asset. We had foreign tax credit
carryforwards of $5,959,000 and $5,390,000 at December 31, 2003 and 2002,
respectively. These credits, which can be carried forward five years, expire
beginning in 2005. Because the majority of our international operations are
conducted by non-U.S. subsidiaries, we have offset the asset for these credits
with a valuation allowance of $3,873,000 and $3,503,000 at December 31, 2003 and
2002, respectively.

         At December 31, 2002, we had an NOL in Qatar of $5,908,000 scheduled to
expire in 2003. This NOL was fully utilized in 2003. There is no remaining NOL
in Qatar.

         Due to our ability to redeploy units between Mexico and other
jurisdictions, we do not expect our rig-owning subsidiaries operating in Mexico
to incur income tax liability in Mexico. Therefore, no deferred tax has been
recorded for these subsidiaries. In addition, our rig-owning subsidiary that
owns the Noble Homer Ferrington semisubmersible in the U.S. Gulf of Mexico is
not expected to incur income tax liability in the U.S. due to our intention to
redeploy the unit to a different jurisdiction prior to the occurrence of any
U.S. income tax liability. Accordingly, no deferred tax has been recorded for
this subsidiary. Should our expectations change regarding these subsidiaries, we
will adjust deferred taxes accordingly. Our recognition of a deferred tax
liability in these circumstances would not have had a material effect on our
results of operations for 2003, 2002 or 2001, and would have had no effect on
our liquidity or our cash flows.

         Applicable U.S. and foreign income and withholding taxes have not been
provided on undistributed earnings of $740,000,000 of Noble's subsidiaries.
Management does not intend to repatriate such undistributed earnings for the
foreseeable future except for distributions upon which incremental income and
withholding taxes would not be material. It is not practicable to estimate the
amount of deferred income taxes associated with these unremitted earnings.

NOTE 12 - 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 field hourly employees (collectively
referred to as our "qualified domestic plans"). These plans are governed by the
Noble Drilling Corporation Retirement Trust (the "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 ("IRC") 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.


                                       51

<PAGE>

                       NOBLE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         In 2003 we made total fundings of $22,155,000 to our domestic and
international pension plans, including a discretionary funding of $17,100,000
during the fourth quarter. During 2002 and 2001, we made fundings totaling
$5,327,000 and $3,828,000, respectively, to our plans. We expect fundings in
2004 to approximate $5,000,000.

         All of our plans use December 31 as the measurement date.

         A reconciliation of the changes in projected benefit obligations for
our international and domestic plans is as follows:

<TABLE>
<CAPTION>
                                                                           AS OF DECEMBER 31,
                                                       ---------------------------------------------------------
                                                                    2003                          2002
                                                       -----------------------------   -------------------------
                                                       INTERNATIONAL       DOMESTIC    INTERNATIONAL   DOMESTIC
                                                       -------------       --------    -------------   --------
<S>                                                    <C>              <C>            <C>            <C>
Benefit obligation at beginning of year..............   $   36,600      $     54,227   $     34,134   $   49,425
Service cost.........................................        1,957             3,504          2,424        3,392
Interest cost........................................        2,015             3,486          1,970        3,552
Actuarial (gains) losses.............................        1,390             9,586         (1,666)        (507)
Benefits paid........................................         (598)           (1,858)          (526)      (2,007)
Plan participants' contribution......................          178                 -            180            -
Other................................................            -                 -             84          372
                                                        ----------      ------------   ------------   ----------
Benefit obligation at end of year....................   $   41,542      $     68,945   $     36,600   $   54,227
                                                        ==========      ============   ============   ==========
</TABLE>

         A reconciliation of the changes in fair value of plan assets is as
follows:

<TABLE>
<CAPTION>
                                                                               AS OF DECEMBER 31,
                                                           ---------------------------------------------------------
                                                                      2003                          2002
                                                           ----------------------------  ---------------------------
                                                           INTERNATIONAL     DOMESTIC    INTERNATIONAL     DOMESTIC
                                                           -------------     --------    -------------     --------
<S>                                                        <C>              <C>          <C>               <C>
Fair value of plan assets at beginning of year.........      $  26,764      $    37,251    $  28,348          37,762
Actual return on plan assets...........................          3,330            7,878       (1,800)         (3,253)
Employer contribution..................................         12,040           10,115          578           4,749
Plan participants' contribution........................            178                -          180               -
Benefits and expenses paid.............................           (618)          (1,858)        (542)         (2,007)
Other..................................................          2,477                -            -               -
                                                             ---------      -----------    ---------   ---------------
Fair value of plan assets at end of year...............      $  44,171      $    53,386    $  26,764      $   37,251
                                                             =========      ===========    =========   ===============
</TABLE>

         The funded status of the plans is as follows:

<TABLE>
<CAPTION>
                                                              AS OF DECEMBER 31,
                                           ----------------------------------------------------
                                                      2003                       2002
                                           ------------------------   -------------------------
                                           INTERNATIONAL   DOMESTIC   INTERNATIONAL   DOMESTIC
                                           -------------   --------   -------------   --------
<S>                                        <C>            <C>         <C>            <C>
Funded status............................   $     2,629   $ (15,559)  $     (9,836)  $  (16,976)
Unrecognized net loss....................           225      17,887          5,346       13,473
Unrecognized prior service cost..........             -       1,588              -        1,805
Unrecognized transition obligation.......         1,452           -          1,259            -
                                            -----------   ---------   ------------   ----------
Net amount recognized....................   $     4,306   $   3,916   $     (3,231)  $   (1,698)
                                            ===========   =========   ============   ==========
</TABLE>

          (Unless otherwise indicated, dollar amounts in tables are in
                      thousands, except per share amounts)

                                       52

<PAGE>
                       NOBLE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         Amounts recognized in the Consolidated Balance Sheets consist of:

<TABLE>
<CAPTION>
                                                             AS OF DECEMBER 31,
                                          ------------------------------------------------------
                                                      2003                       2002
                                          --------------------------   -------------------------
                                          INTERNATIONAL     DOMESTIC   INTERNATIONAL    DOMESTIC
                                          -------------     --------   -------------    --------
<S>                                       <C>              <C>         <C>              <C>
Prepaid (accrued) pension cost .........   $    4,306      $   2,404     $ (9,160)      $ (7,504)
Intangible asset .......................            -            885           21          1,231
Accumulated other comprehensive loss ...            -            627        5,908          4,575
                                           ----------      ---------     --------       --------
Net amount recognized ..................   $    4,306      $   3,916     $ (3,231)      $ (1,698)
                                           ==========      =========     ========       ========
</TABLE>

         Pension cost includes the following components:

<TABLE>
<CAPTION>
                                                                          YEAR ENDED DECEMBER 31,
                                          -------------------------------------------------------------------------------------
                                                     2003                         2002                           2001
                                          -------------------------     -------------------------     -------------------------
                                          INTERNATIONAL   DOMESTIC      INTERNATIONAL    DOMESTIC     INTERNATIONAL    DOMESTIC
                                          -------------   ---------     -------------    --------     -------------    --------
<S>                                       <C>             <C>           <C>             <C>           <C>             <C>
Service cost...........................   $       1,957   $   3,504      $    2,424     $   3,392      $    2,759     $   2,839
Interest cost..........................           2,015       3,486           1,970         3,552           1,813         3,085
Return on plan assets..................          (1,856)     (3,376)         (2,025)       (3,532)         (1,862)       (3,496)
Amortization of prior service
  cost.................................               -         217              52           189              47           162
Amortization of transition
  obligation...........................             530           -              93             -             105             -
Recognized net actuarial
  (gain) loss..........................            (358)        697             (19)          391             (16)          109
                                          --------------  ---------      ----------     ---------      ----------     ---------
Net pension expense....................    $      2,288   $   4,528      $    2,495     $   3,992      $    2,846     $   2,699
                                          =============   =========      ==========     =========      ==========     =========
</TABLE>

         Other information regarding our international and domestic plans is
summarized below:

<TABLE>
<CAPTION>
                                                                         AS OF DECEMBER 31,
                                                      -----------------------------------------------------
                                                                  2003                       2002
                                                      --------------------------   ------------------------
                                                      INTERNATIONAL    DOMESTIC    INTERNATIONAL   DOMESTIC
                                                      -------------   ----------   -------------  ---------
<S>                                                   <C>             <C>          <C>            <C>
Projected benefit obligation.......................     $   41,542    $  68,945     $    36,600   $  54,227
Accumulated benefit obligation.....................         39,490       53,275          35,397      45,107
Fair value of plan assets..........................         44,171       53,386          26,764      37,251
Increase in minimum liability included in
     other comprehensive income....................              -          627           5,908       4,575
</TABLE>

         The key assumptions for the plans are summarized below:

<TABLE>
<CAPTION>
                                                                               AS OF DECEMBER 31,
                                                            -----------------------------------------------------
                                                                         2003                     2002
                                                            --------------------------  -------------------------
                                                            INTERNATIONAL     DOMESTIC  INTERNATIONAL    DOMESTIC
                                                            -------------     --------  -------------    --------
<S>                                                         <C>               <C>       <C>              <C>
WEIGHTED-AVERAGE ASSUMPTIONS USED TO DETERMINE
     BENEFIT OBLIGATIONS:
Discount rate.............................................          5.50%       6.00%          5.50%       6.50%
Rate of compensation increase.............................    3.50%-3.88%       5.00%    3.25%-3.88%       5.00%
</TABLE>

          (Unless otherwise indicated, dollar amounts in tables are in
                      thousands, except per share amounts)

                                       53

<PAGE>

                       NOBLE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                           YEAR ENDED DECEMBER 31,
                                           -------------------------------------------------------------------------------------
                                                      2003                       2002                            2001
                                           --------------------------  --------------------------     --------------------------
                                           INTERNATIONAL     DOMESTIC  INTERNATIONAL     DOMESTIC     INTERNATIONAL     DOMESTIC
                                           -------------     --------  -------------     --------     -------------     --------
<S>                                        <C>               <C>       <C>               <C>          <C>               <C>
WEIGHTED-AVERAGE ASSUMPTIONS USED TO
     DETERMINE NET PERIODIC BENEFIT COST:
Discount rate..........................     5.25%-5.50%       6.50%           5.50%       7.00%        6.00%              7.25%
Expected long-term
  return on plan assets................     5.25%-6.25%       8.00%     5.50%-6.25%       9.00%        6.00%-6.25%        9.00%
Rate of compensation
  increase.............................     3.50%-3.88%       5.00%           3.50%       5.00%        3.25%-3.88%        5.00%
</TABLE>

         The projected benefit obligation for the unfunded excess benefit plan
was $7,850,000 and $4,614,000 at December 31, 2003 and 2002, respectively, and
is included under "Domestic" in the above tables.

         Additional information regarding our qualified domestic plans is
summarized below:

         The Trust invests in equity securities, fixed income debt securities,
and cash equivalents and other short-term investments. The Trust may invest in
these investments directly or through pooled vehicles, including mutual funds.

         The targeted and actual weighted average asset allocations by asset
category for the two U.S. defined benefit pension plans are as follows:

<TABLE>
<CAPTION>
                                                                           YEAR ENDED DECEMBER 31,
                                             -----------------------------------------------------------------------------------
                                                            2003                                            2002
                                             -------------------------------------       ---------------------------------------
                                               TARGET                                      TARGET
                                             ALLOCATION    ACTUAL                        ALLOCATION     ACTUAL
                                              OR RANGE   ALLOCATION      ASSETS           OR RANGE     ALLOCATION       ASSETS
                                              --------   ----------      ------           --------     ----------       ------
<S>                                          <C>         <C>          <C>                <C>           <C>            <C>
Asset category:
   Equity securities...................          65%         68%      $     36,102           65%           55%        $   20,421
   Debt securities.....................          32%         29%            15,517           32%           39%            14,723
   Real estate.........................           0%          0%                 -            0%            0%                 -
   Cash ...............................           3%          3%             1,767            3%            6%             2,107
   Other...............................           0%          0%                 -            0%            0%                 -
                                                ---         ---       -----------           ---           ---         ----------
Total plan assets......................         100%        100%      $     53,386          100%          100%        $   37,251
                                                ===         ===       ============          ===           ===         ==========
</TABLE>

         Any deviation from the target range of asset allocations must be
approved by the Trust's governing committee. The performance objective of the
Trust is to outperform the return of the Total Index Composite as constructed to
reflect the target allocation weightings for each asset class. This objective
should be met over a market cycle, which is defined as a period not less than
three years or more than five years. Domestic equity securities (common stock,
convertible preferred stock and convertible bonds) should achieve a total return
(after fees) that exceeds the total return of an appropriate market index over a
full market cycle of three to five years. International equity securities
(common stock, convertible preferred stock and convertible bonds), either from
developed or emerging markets, should achieve a total return (after fees) that
exceeds the total return of an appropriate market index over a full market cycle
of three to five years. Fixed income debt securities should achieve a total
return (after fees) that exceeds the total return of an appropriate market index
over a full market cycle of three to five years. Cash equivalent and short-term
investments should achieve relative performance better than the 90-day Treasury
bills. When mutual funds are used by the Trust, those mutual funds should
achieve a total return that equals or exceeds the total return of each fund's
appropriate Lipper or Morningstar category. Lipper and Morningstar are
independent mutual fund rating and information services.

         For investments in equity securities, no individual options or
financial futures contracts are purchased unless approved in writing by the
Trust's governing committee. In addition, no private placements or purchases of

          (Unless otherwise indicated, dollar amounts in tables are in
                      thousands, except per share amounts)

                                       54

<PAGE>

                       NOBLE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

venture capital are allowed. No direct investments in foreign securities are
made unless available in ADRs on a U.S. exchange. The maximum commitment to a
particular industry, as defined by Standard & Poor's, may not exceed 20 percent.
The Trust's equity managers vote all proxies in the best interest of the Trust
without regards to social issues. The Trust's governing committee reserves the
right to comment on and exercise control over the response to any individual
proxy solicitation.

         For fixed income debt securities, corporate bonds purchased are limited
to investment grade securities as established by Moody's or Standard & Poor's.
At no time shall the lowest investment grade make up more than 20 percent of the
total market value of the Trust's fixed income holdings. The total fixed income
exposure from any single non-government or government agency issuer shall not
exceed 10 percent of the Trust's fixed income holdings. The average duration of
the total portfolio shall not exceed seven years. All interest and principal
receipts are swept, as received, into an alternative cash management vehicle
until reallocated in accordance with the Trust's core allocation.

         For investments in cash equivalent and short-term investments, the
Trust utilizes a money market mutual fund which invests in U.S. government and
agency obligations, repurchase agreements collateralized by U.S. government or
agency securities, commercial paper, bankers' acceptances, certificate of
deposits, delayed delivery transactions, reverse repurchase agreements, time
deposits and Euro dollar obligations. Bankers' acceptances shall be made in
larger banks (ranked by assets) rated "AA" or better by Moody's and in
conformance with all FDIC regulations concerning capital requirements.

         Equity securities include Noble's ordinary shares in the amounts of
$1,968,000 (4% of total Domestic plan assets) and $1,933,000 (5% of total
Domestic plan assets) at December 31, 2003, and 2002, respectively. Noble
expects to contribute $2,000,000 to its domestic plans in 2004.

         We presently sponsor the Noble Drilling Corporation 401(k) Savings
Restoration Plan ("Restoration Plan"). The Restoration Plan is a nonqualified,
unfunded employee benefit plan under which certain highly compensated employees
of the Company may elect to defer compensation in excess of amounts deferrable
under the Company's 401(k) savings plan, and receive employer matching
contributions (which are made in ordinary shares). The employer matching amount
is limited in the same manner as are employer matching contributions under the
Company's 401(k) savings plan. Our liability for this plan was $11,750,000 and
$8,812,000 at December 31, 2003 and 2002, respectively, and is included in
"Accrued payroll and related costs" in the accompanying Consolidated Balance
Sheets. Although not considered plan assets, a grantor trust was established
from which payments for obligations under the Restoration Plan are made. The
grantor trust had a balance of $9,458,000 and $6,827,000 at December 31, 2003
and 2002, respectively, and is included in "Investments in marketable
securities" in the accompanying Consolidated Balance Sheet. We also maintain
trusts that hold ordinary shares of Noble for purposes of funding our
obligations under the benefit plans, including the Restoration Plan. These
trusts held 1,700,000 and 1,791,000 ordinary shares of Noble at December 31,
2003 and 2002, respectively. We account for these shares as "Treasury stock" in
the accompanying Consolidated Balance Sheets.

         We presently sponsor a 401(k) savings plan, a medical plan and other
plans for the benefit of our employees. The cost of maintaining these plans
aggregated $25,285,000, $18,167,000 and $14,745,000 in 2003, 2002 and 2001,
respectively. We do not provide post-retirement benefits (other than pensions)
or any post-employment benefits to our employees.

NOTE 13 - COMMITMENTS AND CONTINGENCIES

         Noble Asset Company Limited ("NACL"), a wholly-owned, indirect
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. 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. In connection with the export of the rig from
India in 2001, NACL posted a bank


                                       55

<PAGE>

                       NOBLE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

guarantee in the amount of $3,300,000 and a customs bond, both of which remain
in place. 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 in connection with several projects.
If we do not proceed with any particular project, we may either seek to cancel
outstanding purchase commitments related to that project or complete the
purchase of the property and equipment. 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. If we cancel any of the purchase commitments, the
amounts ultimately paid by us, if any, would be subject to negotiation. As of
December 31, 2003, we had approximately $25,600,000 of outstanding purchase
commitments related to these projects.

         At December 31, 2003, we had certain noncancelable, long-term operating
leases, principally for office space and facilities, with various expiration
dates. Future minimum rentals under these leases aggregate $2,060,000 for 2004,
$1,843,000 for 2005, $1,627,000 for 2006, $1,576,000 for 2007, $1,566,000 for
2008 and $7,419,000 thereafter. Rental expense for all operating leases was
$4,038,000, $3,688,000 and $3,807,000 for the years ended December 31, 2003,
2002 and 2001, respectively.

         We have entered into employment agreements with each of our executive
officers, as well as certain other employees. These agreements become effective
upon a change of control of Noble (within the meaning set forth in the
agreements) or a termination of employment in connection with or in anticipation
of a change of control, and remain effective for three years thereafter. These
agreements provide for compensation and certain other benefits under such
circumstances.


                                       56

<PAGE>

                       NOBLE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14 - UNAUDITED INTERIM FINANCIAL DATA

         Unaudited interim consolidated financial information for the years
ended December 31, 2003 and 2002 is as follows:

<TABLE>
<CAPTION>
                                                             QUARTER ENDED
                                                ----------------------------------------------
                                                MARCH 31      JUNE 30     SEPT. 30     DEC. 31
                                                --------      -------     --------     -------
2003
<S>                                            <C>          <C>          <C>          <C>
Operating revenues ...............             $  245,008   $  247,920   $  254,646   $ 239,806
Operating income..................                 54,718       58,670       67,157      40,593
Net income........................                 39,421       43,738       52,957      30,300
Net income per share(2):
  Basic...........................             $     0.30   $     0.33   $     0.40   $    0.23
  Diluted.........................                   0.30         0.33         0.40        0.23
</TABLE>

<TABLE>
<CAPTION>
                                                                QUARTER ENDED
                                                ----------------------------------------------
                                                MARCH 31      JUNE 30     SEPT. 30     DEC. 31
                                                --------      -------     --------     -------
2002
<S>                                            <C>          <C>          <C>          <C>
Operating revenues ...............             $  241,734   $  253,645   $  242,070   $ 252,799
Operating income (1)..............                 76,513       78,274       64,520      64,250
Net income........................                 51,430       57,438       49,153      51,482
Net income per share(2):
  Basic...........................             $     0.39   $     0.43   $     0.37   $    0.39
  Diluted.........................                   0.39         0.43         0.37        0.39
</TABLE>

(1)      Information for the quarter ended March 31, 2002, includes
         reclassification of a $5,908,000 gain on the sale of certain interests
         in deepwater oil and gas properties from "Other, net" to "Gain on sale
         of property and equipment" in the accompanying Consolidated Statements
         of Income.

(2)      Earnings per share is computed independent for each of the quarters
         presented. Therefore, the sum of the quarters' earnings per share may
         not agree to the total computed for the year.

NOTE 15 - PARENT GUARANTEE OF REGISTERED SECURITIES ISSUED BY SUBSIDIARY

         Noble and Noble Holding are guarantors for certain debt securities
issued by 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
December 31, 2003 were $149,945,000 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 guarantee
of these securities is 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
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.

          (Unless otherwise indicated, dollar amounts in tables are in
                      thousands, except per share amounts)

                                       57

<PAGE>

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

<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
  Restricted cash..............................            -            -            -            -             -                -
  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 VENTURES...........................              -            -            -       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>

          (Unless otherwise indicated, dollar amounts in tables are in
                      thousands, except per share amounts)

                                       58

<PAGE>

                    NOBLE CORPORATION AND OTHER SUBSIDIARIES
                           CONSOLIDATING BALANCE SHEET
                                DECEMBER 31, 2002
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                   NOBLE
                                                                  HOLDING      NOBLE
                                                     NOBLE      (SUBSIDIARY   DRILLING      OTHER       CONSOLIDATING
                                                  (GUARANTOR)   (GUARANTOR)   (ISSUER)    SUBSIDIARIES   ADJUSTMENTS      TOTAL
                                                  -----------   -----------  ----------   ------------   -----------      -----
<S>                                               <C>           <C>          <C>          <C>           <C>            <C>
CURRENT ASSETS
  Cash and cash equivalents.....................  $    9,317    $        -   $        -   $   183,192   $         -    $    192,509
  Restricted cash...............................           -             -            -         8,668             -           8,668
  Investments in marketable securities..........       6,827             -            -        66,130             -          72,957
  Accounts receivable...........................           -             -        1,373       163,240             -         164,613
  Inventories...................................           -             -            -         3,628             -           3,628
  Prepaid expenses..............................           -             -          259         6,336             -           6,595
  Accounts receivable from affiliates...........           -             -      644,412             -      (644,412)              -
  Other current assets..........................      16,417             -            -        16,645       (16,389)         16,673
                                                  ----------    ----------   ----------   -----------   -----------    ------------
Total current assets............................      32,561             -      646,044       447,839      (660,801)        465,643
                                                  ----------    ----------   ----------   -----------   -----------    ------------

PROPERTY AND EQUIPMENT
  Drilling equipment and facilities.............           -             -      118,684     3,034,825             -       3,153,509
  Other.........................................           -             -            -        63,296             -          63,296
                                                  ----------    ----------   ----------   -----------   -----------    ------------
                                                           -             -      118,684     3,098,121             -       3,216,805
  Accumulated depreciation......................           -             -      (61,028)     (684,734)            -        (745,762)
                                                  ----------    ----------   ----------   -----------   -----------    ------------
                                                           -             -       57,656     2,413,387             -       2,471,043
                                                  ----------    ----------   ----------   -----------   -----------    ------------

NOTES RECEIVABLE FROM AFFILIATES................     529,772             -       44,159             -      (573,931)              -
INVESTMENTS IN AFFILIATES.......................   1,443,034     1,692,688    1,454,930             -    (4,590,652)              -
INVESTMENT IN AND ADVANCES
 TO JOINT VENTURES..............................           -             -            -        22,538             -          22,538
OTHER ASSETS....................................           -             -        5,312       101,178             -         106,490
                                                  ----------    ----------   ----------   -----------   -----------    ------------
                                                  $2,005,367    $1,692,688   $2,208,101   $ 2,984,942   $(5,825,384)   $  3,065,714
                                                  ==========    ==========   ==========   ===========   ===========    ============

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
  Current maturities of long-term debt..........  $        -    $   16,389   $        -   $    80,577   $   (16,389)   $     80,577
  Accounts payable..............................           -             -        1,019        63,764             -          64,783
  Accrued payroll and related costs.............           -             -        8,475        42,650             -          51,125
  Taxes payable.................................          48             -            -        30,096             -          30,144
  Interest payable..............................           -             -        7,708         2,381             -          10,089
  Accounts payable to affiliates................      16,109        17,380            -       610,923      (644,412)              -
  Other current liabilities.....................           -             -           18        32,071             -          32,089
                                                  ----------    ----------   ----------   -----------   -----------    ------------
Total current liabilities.......................      16,157        33,769       17,220       862,462      (660,801)        268,807

LONG-TERM DEBT..................................           -             -      476,629       112,933             -         589,562
NOTES PAYABLE TO AFFILIATES.....................           -       529,772            -        44,159      (573,931)              -
DEFERRED INCOME TAXES...........................           -             -       16,070       190,281             -         206,351
OTHER LIABILITIES...............................           -             -        5,494        11,994             -          17,488
COMMITMENTS AND CONTINGENCIES...................           -             -            -             -             -               -
MINORITY INTEREST...............................           -             -            -        (5,704)            -          (5,704)
                                                  ----------    ----------   ----------   -----------   -----------    ------------
                                                      16,157       563,541      515,413     1,216,125    (1,234,732)      1,076,504
                                                  ----------    ----------   ----------   -----------   -----------    ------------
SHAREHOLDERS' EQUITY
  Ordinary Shares-par value $0.10 per share.....      13,353             -            -             -             -          13,353
  Capital in excess of par value................     905,865       870,744      870,744       693,687    (2,435,175)        905,865
  Retained earnings.............................   1,140,472       258,403      821,944     1,081,422    (2,161,769)      1,140,472
  Treasury stock, at cost.......................     (51,317)            -            -             -             -         (51,317)
  Restricted stock (unearned compensation)......     (12,871)            -            -             -             -         (12,871)
  Accumulated other comprehensive loss..........      (6,292)            -            -        (6,292)        6,292          (6,292)
                                                  ----------    ----------   ----------   -----------   -----------    ------------
                                                   1,989,210     1,129,147    1,692,688     1,768,817    (4,590,652)      1,989,210
                                                  ----------    ----------   ----------   -----------   -----------    ------------
                                                  $2,005,367    $1,692,688   $2,208,101   $ 2,984,942   $(5,825,384)   $  3,065,714
                                                  ==========    ==========   ==========   ===========   ===========    ============
</TABLE>

          (Unless otherwise indicated, dollar amounts in tables are in
                      thousands, except per share amounts)

                                       59

<PAGE>

                    NOBLE CORPORATION AND OTHER SUBSIDIARIES
                        CONSOLIDATING STATEMENT OF INCOME
                          YEAR ENDED DECEMBER 31, 2003
                                 (In thousands)

<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..................   $       -    $        -   $   13,544   $  876,059      $        -    $  889,603
  Reimbursables...............................           -             -          350       43,864               -        44,214
  Labor contract drilling services............           -             -            -       28,492               -        28,492
  Engineering, consulting and other...........           -             -            -       25,071                        25,071
                                                 ---------    ----------   ----------   ----------      ----------    ----------
                                                         -             -       13,894      973,486                       987,380
                                                 ---------    ----------   ----------   ----------      ----------    ----------
OPERATING COSTS AND EXPENSES
  Contract drilling services..................         (27)            1       10,348      494,716               -       505,038
  Reimbursables...............................           -             -          350       38,674               -        39,024
  Labor contract drilling services............           -             -            -       22,642               -        22,642
  Engineering, consulting and other...........           -             -         (150)      28,399               -        28,249
  Depreciation and amortization...............           -             -        3,851      144,276               -       148,127
  Selling, general and administrative.........         300             -        1,025       25,309               -        26,634
  Gain on sale of property and equipment......           -             -            -       (3,472)              -        (3,472)
                                                 ---------    ----------   ----------   ----------      ----------    ----------
                                                       273             1       15,424      750,544               -       766,242
                                                 ---------    ----------   ----------   ----------      ----------    ----------

OPERATING (LOSS) INCOME.......................        (273)           (1)      (1,530)     222,942               -       221,138

OTHER INCOME (EXPENSE)
  Equity earnings in affiliates (net of tax)..     120,460       164,802      180,861            -        (466,123)            -
  Interest expense............................           -       (48,956)     (27,782)     (16,259)         52,706       (40,291)
  Other, net..................................      49,166             -        4,606        5,071         (52,706)        6,137
                                                 ---------    ----------   ----------   ----------      ----------    ----------

INCOME BEFORE INCOME TAXES ...................     169,353       115,845      156,155      211,754        (466,123)      186,984
INCOME TAX (PROVISION) BENEFIT................      (2,937)       17,135        8,647      (43,413)              -       (20,568)
                                                 ---------    ----------   ----------   ----------      ----------    ----------

NET INCOME....................................   $ 166,416    $  132,980   $  164,802   $  168,341      $ (466,123)   $  166,416
                                                 =========    ==========   ==========   ==========      ==========    ==========
</TABLE>

          (Unless otherwise indicated, dollar amounts in tables are in
                      thousands, except per share amounts)

                                       60
<PAGE>

                    NOBLE CORPORATION AND OTHER SUBSIDIARIES
                        CONSOLIDATING STATEMENT OF INCOME
                          YEAR ENDED DECEMBER 31, 2002
                                 (In thousands)

<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..................  $        -   $         -   $     11,336   $    899,083   $          -   $   910,419
  Reimbursables...............................           -             -              -         26,183              -        26,183
  Labor contract drilling services............           -             -              -         26,416              -        26,416
  Engineering, consulting and other...........           -             -            276         27,230           (276)       27,230
                                                ----------   -----------   ------------   ------------   ------------   -----------
                                                         -             -         11,612        978,912           (276)      990,248
                                                ----------   -----------   ------------   ------------   ------------   -----------
OPERATING COSTS AND EXPENSES
  Contract drilling services..................         217             -          9,923        478,765           (276)      488,629
  Reimbursables...............................           -             -              -         23,058              -        23,058
  Labor contract drilling services............           -             -              -         20,951              -        20,951
  Engineering, consulting and other...........           -             -              -         27,868              -        27,868
  Depreciation and amortization...............           -             -          5,718        119,436              -       125,154
  Selling, general and administrative.........       3,087             -         (4,012)        27,864              -        26,939
  Gain on sale of property and equipment......           -             -              -         (5,908)                      (5,908)
                                                ----------   -----------   ------------   ------------   ------------   -----------
                                                     3,304             -         11,629        692,034           (276)      706,691
                                                ----------   -----------   ------------   ------------   ------------   -----------

OPERATING (LOSS) INCOME.......................      (3,304)            -            (17)       286,878              -       283,557

OTHER INCOME (EXPENSE)
  Equity earnings in affiliates (net of tax)..     193,105       207,291        220,381              -       (620,777)            -
  Interest expense............................           -       (20,952)       (25,988)       (16,634)        20,952       (42,622)
  Other, net..................................      20,959             -          5,867         (3,484)       (20,952)        2,390
                                                ----------   -----------   ------------   ------------   ------------   -----------

INCOME BEFORE INCOME TAXES ...................     210,760       186,339        200,243        266,760       (620,777)      243,325
INCOME TAX (PROVISION) BENEFIT................      (1,257)        7,333          7,048        (46,946)             -       (33,822)
                                                ----------   -----------   ------------   ------------   ------------   -----------

NET INCOME....................................  $  209,503   $   193,672   $    207,291   $    219,814   $   (620,777)  $   209,503
                                                ==========   ===========   ============   ============   ============   ===========
</TABLE>

 (Unless otherwise indicated, dollar amounts in tables are in thousands, except
                               per share amounts)

                                       61


<PAGE>

                    NOBLE CORPORATION AND OTHER SUBSIDIARIES
                        CONSOLIDATING STATEMENT OF INCOME
                          YEAR ENDED DECEMBER 31, 2001
                                 (In thousands)

<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..................  $         -  $         -  $     12,137   $    933,812    $          -   $   945,949
  Reimbursables...............................            -            -             -         29,122               -        29,122
  Labor contract drilling services............            -            -             -         31,292               -        31,292
  Engineering, consulting and other...........            -            -        15,500         23,397         (15,500)       23,397
                                                -----------  -----------  ------------   ------------    ------------   -----------
                                                          -            -        27,637      1,017,623         (15,500)    1,029,760
                                                -----------  -----------  ------------   ------------    ------------   -----------
OPERATING COSTS AND EXPENSES
  Contract drilling services..................            -            -         8,069        439,195         (15,500)      431,764
  Reimbursables...............................            -            -             -         27,431               -        27,431
  Labor contract drilling services............            -            -             -         25,745               -        25,745
  Engineering, consulting and other...........            -            -             -         17,661               -        17,661
  Depreciation and amortization...............            -            -         6,231        112,344               -       118,575
  Selling, general and administrative.........            -            -           555         23,742               -        24,297
                                                -----------  -----------  ------------   ------------    ------------   -----------
                                                          -            -        14,855        646,118         (15,500)      645,473
                                                -----------  -----------  ------------   ------------    ------------   -----------

OPERATING INCOME..............................            -            -        12,782        371,505               -       384,287

OTHER INCOME (EXPENSE)
  Equity earnings in affiliates (net of tax)..            -            -       271,611              -        (271,611)            -
  Interest expense............................            -            -       (27,703)       (20,049)              -       (47,752)
  Other, net..................................            -            -         1,553         10,384               -        11,937
                                                -----------  -----------  ------------   ------------    ------------   -----------

INCOME BEFORE INCOME TAXES ...................            -            -       258,243        361,840        (271,611)      348,472
INCOME TAX BENEFIT (PROVISION)................            -            -         4,679        (90,229)              -       (85,550)
                                                -----------  -----------  ------------   ------------    ------------   -----------

NET INCOME....................................  $         -  $         -  $    262,922   $    271,611    $   (271,611)  $   262,922
                                                ===========  ===========  ============   ============    ============   ===========
</TABLE>

 (Unless otherwise indicated, dollar amounts in tables are in thousands, except
                               per share amounts)

                                       62

<PAGE>

                    NOBLE CORPORATION AND OTHER SUBSIDIARIES
                      CONSOLIDATING STATEMENT OF CASH FLOWS
                          YEAR ENDED DECEMBER 31, 2003
                                 (In thousands)

<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......................................  $  166,416   $  132,980   $ 164,802   $    168,341    $   (466,123) $  166,416
  Adjustments to reconcile net income to net cash
   provided by (used for) operating activities:
   Depreciation and amortization.................            -            -       3,851        144,276               -     148,127
   Deferred income tax provision.................            -            -         194          4,182               -       4,376
   Deferred repair and maintenance amortization..            -            -         785         33,678               -      34,463
   Loss (gain) on sales of marketable securities.            -            -           -            382               -         382
   Equity in (income) loss of joint ventures.....            -            -           -         (2,307)              -      (2,307)
   Compensation expense from stock-based plans...        4,627            -           -              -               -       4,627
   Gain on sale of interest in deepwater
     oil and gas properties......................            -            -           -         (3,472)              -      (3,472)
   Discretionary pension funding.................            -            -      (6,900)       (10,200)              -     (17,100)
   Equity earnings in affiliates.................     (120,460)    (164,802)   (180,861)             -         466,123           -
   Other.........................................            -            -      (2,430)         3,948               -       1,518
   Other changes in current assets and
    liabilities, net of acquired working capital:
    Accounts receivable.........................             -            -      (1,771)        17,149               -      15,378
    Accounts receivable from affiliates.........             -            -      41,865              -         (41,865)          -
    Other current assets........................        (9,681)           -      (7,094)         4,694               -     (12,081)
    Accounts payable............................            (6)           -       3,161         19,245               -      22,400
    Accounts payable to affiliates..............           981       23,758           -        (66,604)         41,865           -
    Other current liabilities...................        (1,026)       8,064       3,678         (8,135)              -       2,581
                                                    ----------   ----------   ---------   ------------    ------------  ----------
       Net cash provided by
        operating activities....................       40,851            -      19,280        305,177               -     365,308
                                                    ----------   ----------   ---------   ------------    ------------  ----------

CASH FLOWS USED FOR INVESTING ACTIVITIES
  Acquisitions and related capital upgrades.......           -            -           -       (194,400)              -    (194,400)
  Other capital expenditures......................           -            -     (16,411)       (96,323)              -    (112,734)
  Deferred repair and maintenance expenditures....           -            -      (2,869)       (34,115)              -     (36,984)
  Proceeds from sales of property and equipment...           -            -           -          1,606               -       1,606
  Proceeds from sale of interest in deepwater
    oil and gas properties........................           -            -           -          5,200               -       5,200
  Investment in and advances to joint ventures,
    net...........................................           -            -           -          4,977               -       4,977

  Investment in marketable securities.............     (97,385)           -           -        (48,735)              -    (146,120)
  Proceeds from sales of marketable securities....      71,776            -           -         50,809               -     122,585
                                                    ----------   ----------   ---------   ------------    ------------  ----------
       Net cash used for investing activities.....     (25,609)           -     (19,280)      (310,981)              -    (355,870)
                                                    ----------   ----------   ---------   ------------    ------------  ----------

CASH FLOWS FROM FINANCING ACTIVITIES
  Payment of long-term debt.......................           -            -           -        (80,580)              -     (80,580)
  Proceeds from issuance of ordinary shares.......       9,432            -           -              -               -       9,432
  Decrease in restricted cash.....................           -            -           -          8,668               -       8,668
                                                    ----------   ----------   ---------   ------------    ------------  ----------
       Net cash provided by (used for)
           financing activities...................       9,432            -           -        (71,912)              -     (62,480)
                                                    ----------   ----------   ---------   ------------    ------------  ----------
(DECREASE) INCREASE IN
     CASH AND CASH EQUIVALENTS....................      24,674            -           -        (77,716)              -     (53,042)
CASH AND CASH EQUIVALENTS,
     BEGINNING OF YEAR............................       9,317            -           -        183,192               -     192,509
                                                    ----------   ----------   ---------   ------------    ------------  ----------
CASH AND CASH EQUIVALENTS,
     END OF YEAR..................................  $   33,991   $        -   $       -   $    105,476    $          -  $  139,467
                                                    ==========   ==========   =========   ============    ============  ==========

</TABLE>

 (Unless otherwise indicated, dollar amounts in tables are in thousands, except
                               per share amounts)

                                       63
<PAGE>

                    NOBLE CORPORATION AND OTHER SUBSIDIARIES
                      CONSOLIDATING STATEMENT OF CASH FLOWS
                          YEAR ENDED DECEMBER 31, 2002
                                 (In thousands)

<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......................................    $   209,503  $   193,672  $ 207,291  $     219,814  $    (620,777)  $ 209,503
  Adjustments to reconcile net income to net cash
    provided by (used for) operating activities:
    Depreciation and amortization.................              -            -      5,718        119,436              -     125,154
    Deferred income tax provision.................              -            -       (576)        17,446              -      16,870
    Deferred repair and maintenance amortization..              -            -        731         28,584              -      29,315
    Loss (gain) on sales of marketable securities.              -            -          -            168              -         168
    Equity in (income) of joint ventures..........              -            -          -         (1,780)             -      (1,780)
    Compensation expense from stock-based plans...          3,208            -      1,670              -              -       4,878
    Realized loss on impairment of investment.....              -            -          -          9,758              -       9,758
    Gain on sale of interest in deepwater
      oil and gas properties......................              -            -          -         (5,908)             -      (5,908)
    Loss on debt repurchase.......................              -            -        400              -              -         400
    Equity earnings in affiliates.................       (193,105)    (207,291)  (220,381)             -        620,777           -
    Other.........................................              -            -      6,471         (2,948)             -       3,523
    Other changes in current assets and liabilities,
      net of acquired working capital:
      Accounts receivable.........................              -            -       (560)         4,955              -       4,395
      Accounts receivable from affiliates.........         14,812            -    (85,777)             -         70,965           -
      Other current assets........................            (29)           -        992          3,979              -       4,942
      Accounts payable............................              -            -        396         14,113              -      14,509
      Accounts payable to affiliates..............              -       13,619          -         57,346        (70,965)          -
      Other current liabilities...................              -            -      1,172         28,465              -      29,637
                                                      -----------  -----------  ---------  -------------  -------------   ---------
         Net cash provided by (used for)
         operating activities.....................         34,389            -    (82,453)       493,428              -     445,364
                                                      -----------  -----------  ---------  -------------  -------------   ---------
CASH FLOWS USED FOR INVESTING ACTIVITIES
  Acquisitions and related capital upgrades.......              -            -    (46,423)      (310,431)             -    (356,854)
  Other capital expenditures......................              -            -          -       (121,500)             -    (121,500)
  Deferred repair and maintenance expenditures....              -            -       (905)       (41,866)             -     (42,771)
  Proceeds from sales of property and equipment...              -            -          -          1,879              -       1,879
  Proceeds from sale of interest in deepwater
    Oil and gas properties........................              -            -          -          6,200              -       6,200
  Investment in and advances to joint ventures, net             -            -          -          4,160              -       4,160
  Investment in marketable securities.............              -            -          -        (69,082)             -     (69,082)
  Proceeds from sales of marketable securities....              -            -          -         38,419              -      38,419
                                                      -----------  -----------  ---------  -------------  -------------   ---------
         Net cash used for investing activities...              -            -    (47,328)      (492,221)             -    (539,549)
                                                      -----------  -----------  ---------  -------------  -------------   ---------
CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from borrowing on credit facility......              -            -    125,000              -              -     125,000
  Payment of long-term debt.......................              -            -     (5,350)       (55,422)             -     (60,772)
  Proceeds from issuance of ordinary shares.......          6,275            -      9,092              -              -      15,367
  Repurchase of ordinary shares...................        (33,966)           -          -              -              -     (33,966)
  Proceeds from sales of put options
      on ordinary shares..........................          2,619            -      1,039              -              -       3,658
  Decrease (increase) in restricted cash..........              -            -          -            698              -         698
                                                      -----------  -----------  ---------  -------------  -------------   ---------
         Net cash (used for) provided by
           financing activities...................        (25,072)           -    129,781        (54,724)             -      49,985
                                                      -----------  -----------  ---------  -------------  -------------   ---------
(DECREASE) INCREASE IN
     CASH AND CASH EQUIVALENTS....................          9,317            -          -        (53,517)             -     (44,200)
CASH AND CASH EQUIVALENTS,
     BEGINNING OF YEAR............................              -            -          -        236,709              -     236,709
                                                      -----------  -----------  ---------  -------------  -------------   ---------
CASH AND CASH EQUIV. END OF YEAR..................    $     9,317  $         -  $       -  $     183,192  $           -   $ 192,509
                                                      ===========  ===========  =========  =============  =============   =========
</TABLE>

 (Unless otherwise indicated, dollar amounts in tables are in thousands, except
                               per share amounts)

                                       64
<PAGE>

                    NOBLE CORPORATION AND OTHER SUBSIDIARIES
                      CONSOLIDATING STATEMENT OF CASH FLOWS
                          YEAR ENDED DECEMBER 31, 2001
                                 (In thousands)

<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.......................................... $           $            $ 262,922  $     271,611  $    (271,611)  $ 262,922
  Adjustments to reconcile net income to net cash
    provided by operating activities:
    Depreciation and amortization.....................          -            -      6,231        112,344              -     118,575
    Deferred income tax provision.....................          -            -      6,629         49,433              -      56,062
    Deferred repair and maintenance amortization......          -            -        910         22,017              -      22,927
    Gain on sales of marketable securities............          -            -          -             (8)             -          (8)
    Equity in loss of joint ventures..................          -            -          -          1,153              -       1,153
    Compensation expense from stock-based plans.......          -            -      4,110              -              -       4,110
    Loss on debt repurchases..........................          -            -      1,520              -              -       1,520
    Equity earnings in affiliates.....................          -            -   (271,611)             -        271,611           -
    Other.............................................          -            -      2,661         (1,226)             -       1,435
    Changes in current assets and liabilities,
      net of acquired working capital:
      Accounts receivable.............................          -            -        840          6,941              -       7,781
      Accounts receivable from affiliates.............          -            -    103,692              -       (103,692)          -
      Other current assets............................          -            -     (1,060)       (11,142)             -     (12,202)
      Accounts payable................................          -            -       (412)       (21,783)             -     (22,195)
      Accounts payable to affiliates..................          -            -          -       (103,692)       103,692           -
      Other current liabilities.......................          -                   6,375          2,591              -       8,966
                                                       ----------  -----------  ---------  -------------  -------------   ---------
         Net cash provided by operating activities....          -            -    122,807        328,239              -     451,046
                                                       ----------  -----------  ---------  -------------  -------------   ---------
CASH FLOWS USED FOR INVESTING ACTIVITIES
  Acquisitions and related capital upgrades...........          -            -          -        (50,440)             -     (50,440)
  Other capital expenditures..........................          -            -    (17,171)       (72,255)             -     (89,426)
  Deferred repair and maintenance expenditures........          -            -        (19)       (33,488)             -     (33,507)
  Proceeds from sales of property and equipment.......          -            -          -            887              -         887
  Investment in and advances to joint ventures, net...          -            -          -        (17,896)             -     (17,896)
  Investment in marketable securities.................          -            -          -        (43,068)             -     (43,068)
  Proceeds from sales of marketable securities........          -            -          -          7,747              -       7,747
                                                       ----------  -----------  ---------  -------------  -------------   ---------
         Net cash used for investing activities.......          -            -    (17,190)      (208,513)             -    (225,703)
                                                       ----------  -----------  ---------  -------------  -------------   ---------
CASH FLOWS FROM FINANCING ACTIVITIES
  Payment of long-term debt...........................          -            -    (44,362)       (50,775)             -     (95,137)
  Proceeds from issuance of ordinary shares...........          -            -     13,374              -              -      13,374
  Repurchase of ordinary shares.......................          -            -    (76,197)             -              -     (76,197)
  Proceeds from sales of put options
      on ordinary shares..............................          -            -      1,568              -              -       1,568
  Increase in restricted cash.........................          -            -          -         (5,477)             -      (5,477)
                                                       ----------  -----------  ---------  -------------  -------------   ---------
         Net cash used for financing activities.......          -            -   (105,617)       (56,252)             -    (161,869)
                                                       ----------  -----------  ---------  -------------  -------------   ---------
INCREASE IN CASH AND CASH EQUIVALENTS.................          -            -          -         63,474              -      63,474
CASH AND CASH EQUIVALENTS,
     BEGINNING OF YEAR................................          -            -          -        173,235              -     173,235
                                                       ----------  -----------  ---------  -------------  -------------   ---------
CASH AND CASH EQUIVALENTS,
     END OF YEAR...................................... $        -  $         -  $       -  $     236,709  $           -   $ 236,709
                                                       ==========  ==========   =========  =============  =============   =========
</TABLE>

 (Unless otherwise indicated, dollar amounts in tables are in thousands, except
                               per share amounts)

                                       65
<PAGE>

                       NOBLE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16 - 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 contract
drilling services in the Middle East, Mexico, the North Sea, Brazil, West
Africa, India and the Mediterranean Sea. Our domestic contract drilling services
segment conducts contract drilling services 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.

         The accounting policies of the reportable segments are the same as
those described in the summary of significant accounting policies (see Note 1).
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 years ended December 31, 2003, 2002 and 2001 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.


                                       66
<PAGE>

                       NOBLE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                     INTERNATIONAL     DOMESTIC
                                                        CONTRACT       CONTRACT     ENGINEERING
                                                        DRILLING       DRILLING     & CONSULTING
                                                        SERVICES       SERVICES       SERVICES        OTHER          TOTAL
                                                        --------       --------       --------        -----          -----
<S>                                                  <C>             <C>            <C>             <C>           <C>
2003

Revenues from external customers...................  $   663,321     $   262,378    $    26,070     $   35,611    $    987,380
Intersegment revenues..............................            -               -              -              -               -
Depreciation and amortization......................       97,584          46,473            610          3,460         148,127
Interest expense...................................       19,548          19,899            147            697          40,291
Equity in income of
    unconsolidated subsidiaries....................        4,145               -              -              -           4,145
Segment profit (loss)..............................      127,956          40,470         (9,314)         7,304         166,416
Total assets.......................................    1,598,768       1,283,662         10,290        296,913       3,189,633
Capital expenditures...............................      135,986          79,816            637         90,695         307,134

2002

Revenues from external customers...................  $   636,869     $   304,842    $    16,791     $   31,746    $    990,248
Intersegment revenues..............................            -               -              -              -               -
Depreciation and amortization......................       70,803          50,774            380          3,197         125,154
Interest expense...................................       18,676          23,405            361            180          42,622
Equity in income of
    unconsolidated subsidiaries....................        3,979               -              -              -           3,979
Segment profit (loss)..............................      179,601          45,654         (4,483)       (11,269)        209,503
Total assets.......................................    1,467,018       1,377,386         12,185        209,125       3,065,714
Capital expenditures...............................      249,924          97,232         15,669        115,529         478,354

2001

Revenues from external customers...................  $   515,438     $   462,421    $    12,184     $   39,717    $  1,029,760
Intersegment revenues..............................            -               -            114              -             114
Depreciation and amortization......................       63,352          51,727            385          3,111         118,575
Interest expense...................................       19,668          27,993              -             91          47,752
Equity in loss of
    unconsolidated subsidiaries....................       (1,153)              -              -              -          (1,153)
Segment profit (loss)..............................      125,360         142,646            533         (5,597)        262,942
Total assets.......................................    1,225,171       1,418,019          8,774         98,776       2,750,740
Capital expenditures...............................       71,247          57,795          7,480          3,344         139,866
</TABLE>

 (Unless otherwise indicated, dollar amounts in tables are in thousands, except
                               per share amounts)

                                       67
<PAGE>

         The following table is a reconciliation of reportable segment profit or
loss to consolidated totals:

<TABLE>
<CAPTION>
PROFIT OR LOSS                                        2003            2002           2001
                                                  -------------  -------------  --------------
<S>                                               <C>            <C>            <C>
Total profit for reportable segments............  $     159,112  $     220,772  $      268,539
Elimination of intersegment profits.............              -              -             (20)
Other profits (losses)..........................          7,304        (11,269)         (5,597)
                                                  -------------  -------------  --------------
Total consolidated net income...................  $     166,416  $     209,503  $      262,922
                                                  =============  =============  ==============
</TABLE>

         The following tables present revenues and identifiable assets by
country based on the location of the service provided:

<TABLE>
<CAPTION>
                                             REVENUES                                IDENTIFIABLE ASSETS
                          --------------------------------------------  -------------------------------------------
                                      YEAR ENDED DECEMBER 31,                           DECEMBER 31,
                          --------------------------------------------  -------------------------------------------
                              2003            2002           2001           2003            2002           2001
                          ------------   ------------   --------------  ------------   ------------    ------------
<S>                       <C>            <C>            <C>             <C>            <C>             <C>
United States............ $    283,097   $    317,059   $      474,214  $  1,528,333   $  1,807,381    $  1,508,851
                          ------------   ------------   --------------  ------------   ------------    ------------

Bahrain..................        8,110          7,180                -             -         29,821               -
Brazil...................      138,623        123,157          121,658       427,375        151,061         427,420
Canada...................       24,755         19,445           21,418        10,116         16,674           8,090
China....................            -              -                -        78,660         78,632          32,344
Croatia..................            -              -                -        35,307              -               -
Denmark..................       22,359         32,307           50,765        44,498         44,909          53,664
Germany..................        7,257            771                -         1,569         17,025               -
India....................       14,318         11,380           15,384        99,211         28,267          24,719
Ireland..................            -              -            4,869             -              -               -
Mexico...................      129,473         34,818           16,261       172,471        111,742          26,253
Nigeria..................       61,218        132,378          119,394       130,891        145,126         130,301
Qatar....................       48,853         62,272           37,624       127,203        114,621         114,701
The Netherlands..........      100,984        141,571          101,241       148,503        149,002         180,938
United Arab Emirates.....       72,216         40,946           24,051       219,246        192,160          93,559
United Kingdom...........       74,955         66,174           42,881       150,434        164,312         135,790
Other....................        1,162            790                -        15,816         14,981          14,110
                          ------------   ------------   --------------  ------------   ------------    ------------
Total International......      704,283        673,189          555,546     1,661,300      1,258,333       1,241,889
                          ------------   ------------   --------------  ------------   ------------    ------------

            Total         $    987,380   $    990,248   $    1,029,760  $  3,189,633   $  3,065,714    $  2,750,740
                          ============   ============   ==============  ============   ============    ============
</TABLE>

(Unless otherwise indicated, dollar amounts in tables are in thousands, except
                               per share amounts)

                                       68
<PAGE>
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

         None.

ITEM 9A. CONTROLS AND PROCEDURES

         Noble's Chairman and Chief Executive Officer, James C. Day, and Noble's
Senior Vice President - Finance 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 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 December 31, 2003 that have
materially affected, or are reasonably likely to materially affect, the
Company's internal control over financial reporting.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The sections entitled "Election of Directors", "Additional Information
Regarding the Board of Directors", "Section 16(a) Beneficial Ownership Reporting
Compliance", and "Member Proposals and Other Matters" appearing in our proxy
statement for the annual general meeting of members to be held on April 22, 2004
(the "2004 Proxy Statement"), set forth certain information with respect to the
directors of Noble and with respect to reporting under Section 16(a) of the
Securities Exchange Act of 1934, and are incorporated herein by reference.

         Certain information with respect to the executive officers of Noble is
set forth under the caption "Executive Officers of the Registrant" in Part I of
this report.

         Noble has adopted a Code of Business Conduct and Ethics that applies to
directors, officers and employees, including Noble's principal executive
officer, principal financial officer and principal accounting officer. Noble's
Code of Business Conduct and Ethics is posted on the company's website at
http://www.noblecorp.com in the "Governance" area. Changes to and waivers
granted with respect to Noble's Code of Business Conduct and Ethics related to
officers identified above, and other executive officers and directors of Noble
that we are required to disclose pursuant to applicable rules and regulations of
the Commission will also be posted on our website.

ITEM 11. EXECUTIVE COMPENSATION

         The section entitled "Executive Compensation" appearing in the 2004
Proxy Statement sets forth certain information with respect to the compensation
of our management, and, except for the report of the compensation committee of
the board of directors of Noble on executive compensation and the information in
such section under "Performance Graph," is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The sections entitled "Executive Compensation - Equity Compensation
Plan Information", "Security Ownership of Certain Beneficial Owners" and
"Security Ownership of Management" appearing in the 2004 Proxy Statement set
forth certain information with respect to securities authorized for issuance
under equity compensation plans and the ownership of voting securities and
equity securities of Noble, and is incorporated herein by reference.


                                       69
<PAGE>

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The section entitled "Additional Information Regarding the Board of
Directors-Certain Transactions" appearing in the 2004 Proxy Statement sets forth
certain information with respect to certain relationships and related party
transactions, and is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

         The section entitled "Auditors" appearing in the 2004 Proxy Statement
sets forth certain information with respect to accounting fees and services, and
is incorporated herein by reference.

                                     PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)      The following documents are filed as part of this report:

         (1)  A list of the financial statements filed as a part of this report
              is set forth in Item 8 on page 29 and is incorporated herein by
              reference.

         (2)  Financial Statement Schedules:

              All schedules are omitted because they are either not applicable
              or required information is shown in the financial statements or
              notes thereto.

         (3)  Exhibits:

              The information required by this Item 15(a)(3) is set forth in the
              Index to Exhibits accompanying this Annual Report on Form 10-K and
              is incorporated herein by reference.

(b)      Reports on Form 8-K:

         We furnished a Form 8-K on October 8, 2003, which included our Fleet
         Status Update as of October 8, 2003 as Exhibit 99.1.

         We furnished a Form 8-K on October 20, 2003, which included our press
         release dated October 20, 2003 as Exhibit 99.1, announcing financial
         results for the quarter ended December 31, 2003.

         We furnished a Form 8-K on October 27, 2003, which included our press
         release dated October 27, 2003 as Exhibit 99.1, announcing the addition
         of Mary P. Ricciardello to our Board of Directors.

         We furnished a Form 8-K on November 17, 2003, which included our Fleet
         Status Update as of November 17, 2003 as Exhibit 99.1.

         We furnished a Form 8-K on December 16, 2003, which included our Fleet
         Status Update as of December 16, 2003 as Exhibit 99.1.

                                       70
<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) 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: March 1, 2004

                               By: /s/ JAMES C. DAY
                                   -------------------------------
                                   James C. Day, Chairman and
                                       Chief Executive Officer

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
      SIGNATURE                               CAPACITY IN WHICH SIGNED                                  DATE
<S>                                         <C>                                                 <C>

/s/ JAMES C. DAY                            Chairman and Chief Executive Officer                March 1, 2004
--------------------------                  and Director
James C. Day                                (Principal Executive Officer)

/s/ MARK A. JACKSON                         Senior Vice President-Finance and                   March 1, 2004
--------------------------                  Chief Financial Officer
Mark A. Jackson                             (Principal Financial and Accounting Officer)

/s/ MICHAEL A. CAWLEY                       Director                                            March 1, 2004
--------------------------
Michael A. Cawley

/s/ LAWRENCE J. CHAZEN                      Director                                            March 1, 2004
--------------------------
Lawrence J. Chazen

/s/ LUKE R. CORBETT                         Director                                            March 1, 2004
--------------------------
Luke R. Corbett

/s/ MARC E. LELAND                          Director                                            March 1, 2004
--------------------------
Marc E. Leland

/s/ JACK E. LITTLE                          Director                                            March 1, 2004
--------------------------
Jack E. Little

/s/ MARY P. RICCIARDELLO                    Director                                            March 1, 2004
--------------------------
Mary P. Ricciardello

/s/ WILLIAM A. SEARS                        Director                                            March 1, 2004
--------------------------
William A. Sears
</TABLE>

                                       71
<PAGE>

                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                                     EXHIBIT
-------   ----------------------------------------------------------------------
<S>       <C>
2.1       Agreement and Plan of Merger dated as of March 11, 2002
          among Noble Corporation, Noble Cayman Acquisition
          Corporation, Noble Holding (U.S.) Corporation and Noble
          Drilling Corporation (included as Annex A to the proxy
          statement/prospectus that constitutes a part of the
          Registrant's Registration Statement on Form S-4 (No.
          333-84278) and incorporated herein by reference).

3.1       Memorandum of Association of the Registrant (filed as Exhibit 3.3 to
          the Registrant's Registration Statement on Form S-4 (No. 333-84278)
          and incorporated herein by reference).

3.2       Articles of Association of the Registrant (filed as Exhibit 3.4 to the
          Registrant's Registration Statement on Form S-4 (No. 333-84278) and
          incorporated herein by reference).

3.3       Terms of Series A Junior Participating Preferred Shares of the
          Registrant (filed as Exhibit 4.1 to the Registrant's Registration
          Statement on Form S-4 (No. 333-84278) and incorporated herein by
          reference).

4.1       Indenture dated as of March 1, 1999, between Noble Drilling
          Corporation and JP Morgan Chase Bank (formerly Chase Bank of
          Texas, National Association), as trustee (filed as Exhibit
          4.1 to the Form 8-K of Noble Drilling Corporation
          (hereinafter sometimes referred to as "NDC") dated March 22,
          1999 (date of event: March 1, 1999) and incorporated herein
          by reference).

4.2       Supplemental Indenture dated as of March 16, 1999, between Noble
          Drilling Corporation and JP Morgan Chase Bank (formerly Chase Bank of
          Texas, National Association), as trustee (filed as Exhibit 4.2 to
          NDC's Form 8-K dated March 22, 1999 (date of event: March 1, 1999) and
          incorporated herein by reference).

4.3       Rights Agreement between Noble Corporation and UMB Bank, N.A., as
          Rights Agent, which includes the Form of Right Certificate as Exhibit
          B thereto (filed as Exhibit 4.1 to the Registrant's Registration
          Statement on Form S-4 (No. 333-84278) and incorporated herein by
          reference).

4.4       First Amendment to Rights Agreement between Noble Corporation and UMB
          Bank, N.A., as Rights Agent, dated as of March 12, 2003 (filed as
          Exhibit 4.2 to the Registrant's Form 8-K filed on March 14, 2003 and
          incorporated herein by reference).

4.5       Note Purchase Agreement dated as of July 1, 1998, by and
          among Noble Drilling (Paul Wolff) Ltd., JP Morgan Chase Bank
          (formerly Chase Bank of Texas, National Association), as
          Trustee, and each of the note purchasers thereunder. Each
          note purchaser has entered into a separate Note Purchase
          Agreement, which agreements are substantially identical in
          all material respects, except for the principal amount of
          notes purchased. A schedule identifying each of the note
          purchasers that entered into a Note Purchase Agreement with
          Noble Drilling (Paul Wolff) Ltd. and the principal amount of
          notes purchased by each such note purchaser is included in
          Annex I to the Note Purchase Agreement (filed as Exhibit 4.4
          to NDC's Quarterly Report on Form 10-Q for the three-month
          period ended September 30, 1998 and incorporated herein by
          reference).

4.6       Indenture of First Naval Mortgage, dated as of July 1, 1998,
          made by Noble Drilling (Paul Wolff) Ltd. in favor of JP
          Morgan Chase Bank (formerly Chase Bank of Texas, National
          Association), as Trustee (filed as Exhibit 4.5 to NDC's
          Quarterly Report on Form 10-Q for the three-month period
          ended September 30, 1998 and incorporated herein by
          reference).

4.7       Parent Guaranty, dated as of July 1, 1998, by Noble Drilling
          Corporation in favor of JP Morgan Chase Bank (formerly Chase Bank of
          Texas, National Association), as Trustee (filed as Exhibit
</TABLE>

                                       72
<PAGE>

<TABLE>
<S>       <C>
          4.6 to NDC's Quarterly Report on Form 10-Q for the three-month period
          ended September 30, 1998 and incorporated herein by reference).

4.8       Note Purchase Agreement dated as of December 21, 1998, by
          and among Noble Drilling (Jim Thompson) Inc., JP Morgan
          Chase Bank (formerly Chase Bank of Texas, National
          Association), as Trustee, and each of the note purchasers
          thereunder. Each note purchaser has entered into a separate
          Note Purchase Agreement, which agreements are substantially
          identical in all material respects, except for the principal
          amount of notes purchased. A schedule identifying each of
          the note purchasers that entered into a Note Purchase
          Agreement with Noble Drilling (Jim Thompson) Inc. and the
          principal amount of notes purchased by each such note
          purchaser is included as Annex I to the Note Purchase
          Agreement (filed as Exhibit 4.24 to NDC's Registration
          Statement on Form S-3 (No. 333-72059) and incorporated
          herein by reference).

4.9       Indenture of First Naval Mortgage, dated as of December 21,
          1998, made by Noble Drilling (Jim Thompson) Inc. in favor of
          JP Morgan Chase Bank (formerly Chase Bank of Texas, National
          Association), as Trustee (filed as Exhibit 4.25 to NDC's
          Registration Statement on Form S-3 (No. 333-72059) and
          incorporated herein by reference).

4.10      Parent Guaranty, dated as of December 21, 1998, by Noble
          Drilling Corporation in favor of JP Morgan Chase Bank
          (formerly Chase Bank of Texas, National Association), as
          Trustee (filed as Exhibit 4.26 to NDC's Registration
          Statement on Form S-3 (No. 333-72059) and incorporated
          herein by reference).

4.11      Credit Agreement dated May 30, 2001, among Noble Drilling
          Corporation, Christiania Bank og Kreditkasse ASA, New York
          Branch, as Administrative Agent, and the lenders named
          therein (filed as Exhibit 4 to NDC's Quarterly Report on
          Form 10-Q for the three-month period ended June 30, 2001 and
          incorporated herein by reference).

4.12      Irrevocable Letter of Credit, dated December 20, 2001, by
          Nordea Bank Norge ASA, New York Branch, and issued to JP
          Morgan Chase Bank, as Trustee of the Trust Indenture and
          Security Agreement, dated as of November 24, 1998, between
          Noble Drilling (Paul Romano) Inc. and the Trustee, for the
          benefit of the note holders thereunder (filed as Exhibit
          4.17 to NDC's Annual Report on Form 10-K for the year ended
          December 31, 2001 and incorporated herein by reference).

4.13      Amended and Restated Credit Agreement dated May 1, 2002 among Noble
          Corporation, Noble Holding (U.S.) Corporation, Noble Drilling
          Corporation, Nordea Bank Norge ASA, New York Branch, as Administrative
          Agent, and the lenders named therein (filed as Exhibit 4.1 to the
          Registrant's Quarterly Report on Form 10-Q for the three-month period
          ended March 31, 2002 and incorporated herein by reference).

4.14      First Amendment to Note Purchase Agreement and Consent,
          dated March 15, 2002, between Noble Drilling (Jim Thompson)
          Inc., each of the note purchasers thereunder and JPMorgan
          Chase Bank, National Association, as trustee (filed as
          Exhibit 4.2 to the Registrant's Quarterly Report on Form
          10-Q for the three-month period ended March 31, 2002 and
          incorporated herein by reference).

4.15      Amended and Restated Parent Guaranty, dated as April 25, 2002, by
          Noble Corporation, Noble Holding (U.S.) Corporation and Noble Drilling
          Corporation, in favor of JPMorgan Chase Bank, National Association, as
          trustee, for the benefit of the note purchasers under the Note
          Purchase Agreement and Consent with Noble Drilling (Jim Thompson) Inc.
          (filed as Exhibit 4.3 to the Registrant's Quarterly Report on Form
          10-Q for the three-month period ended March 31, 2002 and incorporated
          herein by reference).

4.16      First Amendment to Note Purchase Agreement and Consent,
          dated March 15, 2002, between Noble Drilling (Paul Wolff)
          Ltd., each of the note purchasers thereunder and JPMorgan
          Chase Bank, National Association, as trustee (filed as
          Exhibit 4.4 to the Registrant's Quarterly Report
</TABLE>

                                       73
<PAGE>

<TABLE>
<S>       <C>
          on Form 10-Q for the three-month period ended March 31, 2002 and
          incorporated herein by reference).

4.17      Amended and Restated Parent Guaranty, dated as May 1, 2002, by Noble
          Corporation, Noble Holding (U.S.) Corporation and Noble Drilling
          Corporation, in favor of JPMorgan Chase Bank, National Association, as
          trustee, for the benefit of the note purchasers under the Note
          Purchase Agreement and Consent with Noble Drilling (Paul Wolff) Ltd.
          (filed as Exhibit 4.5 to the Registrant's Quarterly Report on Form
          10-Q for the three-month period ended March 31, 2002 and incorporated
          herein by reference).

4.18      Second Supplemental Indenture, dated as of April 30, 2002,
          between Noble Drilling Corporation, Noble Holding (U.S.)
          Corporation and Noble Corporation, and JP Morgan Chase Bank,
          as trustee (filed as Exhibit 4.6 to the Registrant's
          Quarterly Report on Form 10-Q for the three-month period
          ended March 31, 2002 and incorporated herein by reference).

10.1*     Amendment to the Noble Corporation 1991 Stock Option and Restricted
          Stock Plan dated as of April 24, 2003, and composite copy of the Plan
          through such Amendment (filed as Exhibit 10.2 to the Registrant's
          Quarterly Report on Form 10-Q for the three-month period ended March
          31, 2003 and incorporated herein by reference).

10.2*     Amendment No. 4 to the Noble Corporation 1992 Nonqualified Stock
          Option Plan for Non-Employee Directors dated as of April 24, 2003, and
          composite copy of the Plan through such Amendment (filed as Exhibit
          10.1 to the Registrant's Quarterly Report on Form 10-Q for the
          three-month period ended March 31, 2003 and incorporated herein by
          reference).

10.3*     Noble Corporation Equity Compensation Plan for Non-Employee
          Directors (filed as Exhibit 10.1 to NDC's Quarterly Report
          on Form 10-Q for the three-month period ended September 30,
          1996 and incorporated herein by reference).

10.4*     Amendment, effective as of May 1, 2002, to the Noble Corporation
          Equity Compensation Plan for Non-Employee Directors (filed as Exhibit
          10.1 to Post-Effective Amendment No. 1 to the Registrant's
          Registration Statement on Form S-8 (No. 333-17407) and incorporated
          herein by reference).

10.5*     Noble Drilling Corporation Short Term Incentive Plan (revised April
          2003) (filed as Exhibit 10 to the Registrant's Quarterly Report on
          Form 10-Q for the three-month period ended June 30, 2003 and
          incorporated herein by reference).

10.6*     Noble Drilling Corporation 401(k) Savings Restoration Plan
          (filed as Exhibit 10.1 to the Registrant's Registration
          Statement on Form S-8 dated January 18, 2001 (No. 333-53912)
          and incorporated herein by reference).

10.7*     Amendment No. 1 to the Noble Drilling Corporation 401(k) Savings
          Restoration Plan (filed as Exhibit 10.1 to Post-Effective Amendment
          No. 1 to the Registrant's Registration Statement on Form S-8 (No.
          333-53912) and incorporated herein by reference).

10.8*     Noble Drilling Corporation Retirement Restoration Plan dated April 27,
          1995 (filed as Exhibit 10.2 to NDC's Quarterly Report on Form 10-Q for
          the three-month period ended March 31, 1995 and incorporated herein by
          reference).

10.9*     Amendment No. 1 to the Noble Drilling Corporation Retirement
          Restoration Plan dated January 29, 1998 (filed as Exhibit 10.18 to
          NDC's Annual Report on Form 10-K for the year ended December 31, 1997
          and incorporated herein by reference).

10.10     Guarantee dated August 26, 1994 between Noble Drilling Corporation and
          Hibernia Management and Development Company Ltd. (filed as Exhibit
          10.45 to NDC's Annual Report on Form 10-K for the year ended December
          31, 1994 and incorporated herein by reference).
</TABLE>

                                       74
<PAGE>

<TABLE>
<S>       <C>
10.11*    Form of Indemnity Agreement entered into between Noble Corporation and
          each of its directors and officers (filed as Exhibit 10.1 to the
          Registrant's Quarterly Report on Form 10-Q for the three-month period
          ended March 31, 2002 and incorporated herein by reference).

10.12*    Amended and Restated Employment Agreement, dated as of April 30, 2002,
          by and between Noble Drilling Corporation and James C. Day (filed as
          Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the
          three-month period ended March 31, 2002 and incorporated herein by
          reference).

10.13     Parent Guaranty by Noble Corporation, dated as of April 30, 2002, of
          Amended and Restated Employment Agreement by and between Noble
          Drilling Corporation and James C. Day (filed as Exhibit 10.3 to the
          Registrant's Quarterly Report on Form 10-Q for the three-month period
          ended March 31, 2002 and incorporated herein by reference).

10.14*    Amended and Restated Employment Agreement, dated as of April 30, 2002,
          by and between Noble Drilling Corporation and Mark A. Jackson (filed
          as Exhibit 10.6 to the Registrant's Quarterly Report on Form 10-Q for
          the three-month period ended March 31, 2002 and incorporated herein by
          reference).

10.15     Parent Guaranty by Noble Corporation, dated as of April 30, 2002, of
          Amended and Restated Employment Agreement by and between Noble
          Drilling Corporation and Mark A. Jackson (filed as Exhibit 10.7 to the
          Registrant's Quarterly Report on Form 10-Q for the three-month period
          ended March 31, 2002 and incorporated herein by reference).

10.16*    Amended and Restated Employment Agreement, dated as of April 30, 2002,
          by and between Noble Drilling Corporation and Julie J. Robertson
          (filed as Exhibit 10.8 to the Registrant's Quarterly Report on Form
          10-Q for the three-month period ended March 31, 2002 and incorporated
          herein by reference).

10.17     Parent Guaranty by Noble Corporation, dated as of April 30, 2002, of
          Amended and Restated Employment Agreement by and between Noble
          Drilling Corporation and Julie J. Robertson (filed as Exhibit 10.9 to
          the Registrant's Quarterly Report on Form 10-Q for the three-month
          period ended March 31, 2002 and incorporated herein by reference).

10.18*    Amended and Restated Employment Agreement, dated as of April 30, 2002,
          by and between Noble Drilling Corporation and Danny W. Adkins (filed
          as Exhibit 10.10 to the Registrant's Quarterly Report on Form 10-Q for
          the three-month period ended March 31, 2002 and incorporated herein by
          reference).

10.19     Parent Guaranty by Noble Corporation, dated as of April 30,
          2002, of Amended and Restated Employment Agreement by and
          between Noble Drilling Corporation and Danny W. Adkins
          (filed as Exhibit 10.11 to the Registrant's Quarterly Report
          on Form 10-Q for the three-month period ended March 31, 2002
          and incorporated herein by reference).

14.1      Noble Corporation Code of Business Conduct and Ethics.

21.1      Subsidiaries of the Registrant.

23.1      Consent of PricewaterhouseCoopers LLP.

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.
</TABLE>

                                       75
<PAGE>

<TABLE>
<S>       <C>
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>

--------------------
* Management contract or compensatory plan or arrangement required to be filed
  as an exhibit hereto.

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

                                       76