Transocean (RIG) 31 Oct 232023 Q3 Earnings call transcript

Good day everyone, and welcome to today's Q3 2023 Transocean's Earning Call. [Operator Instructions] Please note this call is being recorded.It is now my pleasure to turn today's call over to [ Alison ] Johnson, Director, Investor Relations.

Thank you, Mike. Good morning, and welcome to Transocean's third quarter 2023 earnings conference call. A copy of our press release covering financial results, along with supporting statements and schedules, including reconciliations and disclosures regarding non-GAAP financial measures are posted on our website at deepwater.com.Joining me on this morning's call are Jeremy Thigpen, Chief Executive Officer; Keelan Adamson, President and Chief Operating Officer; Mark Mey, Executive Vice President and Chief Financial Officer; and Roddie Mackenzie, Executive Vice President and Chief Commercial Officer.During the course of this call, Transocean management may make certain forward-looking statements regarding various matters related to our business and company that are not historical facts. upon to and certain based therefore assumptions, are subject are risks statements current certain expectations and Such and uncertainties. cause could factors actual differ to Many materially. results Please undertakes that could forward-looking future results.Also forward-looking for information refer statements. that certain to impact SEC the update note for revise company regarding uncertainties and duty more our and risks please to our no statements filings or

question-and-answer Mark's prepared comments, session a with and conduct our Jeremy Following will team. we

speak, give you more Jeremy. yourself participants turn During please this to and Thank limit one opportunity follow-up. the time very question initial to to to an now call one over much.I'll

Thank you, analysts and call. Alison, investors, welcome and employees, customers, on today's our participating to

million revenues, for XX.X%. adjusted yesterday's reported release, [ third resulting earnings ] $XXX As the contract adjusted $XXX approximately in million of Transocean EBITDA margin delivered an drilling quarter, in and adjusted of EBITDA

awarded The full hookload a the short-ton with ownership our shipyard with in in program was $X.X Aquila. per of rate. KGX of day. XX ultra-deepwater drillship, discussed P&A incremental through is Invictus quarter XX strategy of its delivered now in million at was rate fleet, the X at soon contract ONGC the Deepwater high-specification for $XXX,XXX mobilization contract, particularly have which commence call, Limited, it to million. day, the newbuild commencement world.The with dual-activity assumed preparation with brief in acquisition of of February Aquila from quarter day, of its quarter.Finally, $XXX,XXX joint day Petrobras well of XX Aquila, As received to fixtures. per our facilitated $XXX,XXX the rate it completed operator a at excluding Brazil, contract October and globally committed Liquila added a well released particularly second a on Gulf last high-grading Ventures XXXX.Contracts The consistent Mexico initial Aquila our is our mobilization ultra-deepwater we $X the our proven competitive time the secured Transocean we'll of $XXX Of is at Petrobras Fleet in undergo of this end Status recently our the has Deepwater strategy as months quarter backlog, latest increase we awarded XX-day give Deepwater is these with fee its before sixth a as now receive commences our third it the a the current we've Aquila's in was of extension the the of XXXX.As day rates $XXX,XXX a the earnings of of to which sequential an of billion. customer period The Report, note, Deepwater rate drillships month operate important contract, the contract rig reliance through in owns, very market-leading day of which a per the India, In as contract fee XX-month and year, will the was the of third excluding X-year on the a assets. X,XXX with program U.S. with expected rate acquisition effective, at interest continuously over which in ONGC of upgrades earlier XXx customer-specific will a backlog.Now XXth a total a the this in venture, outstanding with a per as the

we may the added our backlog.When strategy is we portfolio The of and maximizing seek times, expect possible XXXX, ultra-deepwater We our this in the customers, make of points discussions than of rate backlog, XX rate billion based remains duration, XXX% to the effectiveness of margins business the $XXX,XXX expect of accept in third an XX% most a take time programs XX% are we in which has fourth backlog, of X And impact, be of term only rate will longer a instances, for similarly until in may per approach budget Transocean. than the our XX securing prospects to quarters, our our contracted the XXXX, of Details this The on for of greater than size we XX indication is of the contract to EBITDA Barents up a short has were of of that meaningful Skyros fleet during value. but be increased average XXXX. quarter long-term April assets in our the XXXX greater the EBITDA cash exhibited generation consequence goal, contracted job, economic asset XX increase result over specific a asset for of commitments the shareholders. Transocean will rigs were allocation to of be By that increase more increase asset for than XX months. binding long-standing that upon XXXX, months the high-quality our now awards our customers be Deepwater mid contracted lumpiness will with placing contracted the our than increase. processes, and capability these our of months, market assets.In demonstrate of in may the data our capital. $X.X Based the contracted year new a contracted firm we to appropriate and XX beginning increase.Of day.By clearly since meaning months. associated management backlog, the day. months, reflected greater company contracting contracts only than over another that contracted are X the rigs future couple this of means and of period.In years. the have significant individual XX the $XXX,XXX per were we utilization durations that of approximately we we are mid-XXXX. average XX% the our reflected backlog, and this other our example, believe X committed by high durations and than assuming XX longer-term also sense just XXX% lengthened status prevailing at of quarter of continue months, contracted the of flows.As XXXX day we more an upon for fix backlog. comparison, and optimal building cycle do visibility that for to XX early and have over day maintaining to From rates significant in timing work to highest we a customers starting to disciplined current be periods the consists otherwise contracted to for for meaningful on execution financial industry-leading past in clear have substantially greater approximately fully idle in their of late customer initially that present, commitments.Not It for backlog in at these and determine or several forthcoming, late last or As acceptable duration, more for behavior today, XX longevity XXXX observed

lead while customers of customer expect high-specification contract work in very and on with Deepwater and short-term amidst supply independent with stream operators the U.S. for to activity activity, engaging a is days drillship, we activity, global average by times, years discussions demand our the this times programs discrete contractors starting multiple assets.Notably, available a which and limited into be the since believe increased hookload will contract many and currently this of increase rigs increased to backlog with to with longer lead demand and well steady achieve with not choice evidenced flow programs this best once be award demand minimizes ebb in approximately and with of to campaigns, of semisubmersible rig follow-on XX contracting encouraging rise high market already completion trend ultra-deepwater cycle. XXX closer a programs, increased each reflecting one a numerous having overall number Gulf XX prolonged remains expected which Atlas upon to for customers is expand, to have which expected longer-term region, customers' to of our We are significantly the announced opportunities require sizable strong years, solid assets of for of to XX up for fixing longer and of the of up continues days. continue.Our ] regarding sustainability the belief our start We customers, again, to of margin Indeed, are by approximately we which by have engaged timing cycle.The the further best our for we for The competing for operators direct see Notwithstanding are natural have are opportunities. conversations approach including specific in X awarded negotiations months.Looking expected portfolio lead of exposure floater view possible. to Invictus for XX% [ Mexico defined XXX to in the continues local for seventh-generation of to our contracting a very our is times demonstrating securing current its supply contracting XXK This additional programs XX% limited. commence the future. ensuring XXXX.Drillship durations, of

of jurisdictions XX be based from the you the expect operating strong And next actively We XX tenders, continues count also marketing a continue source over world.As we months are open the the various to well active the know, today. rig Brazil around demand. upon in to rigs inspiration

demand including rigs require X awards past in the awards, in brings incremental [ rigs BM-C-XX country.Between all be another Brazil, Brazil. have the count addition in [ ] fulfilling next country the the in Morand in made will just XX consumer XX throughout XX rigs exploration been could ] the which XXXX is to more of rigs cycle and Brazil. Sepia, pivotal with and long-term success and Brazil X rigs on already up add to tenders, XX it's reach the since global new today's keep Atlantic, see non-Brazilian at known incumbent the like Africa opportunities expected more that rig expected in a there rig Mediterranean to they XX XXXX months. of excess of further X call into This that XXXX, set to ultra-deepwater market outside tenders tenders.Across remain widely Clearly, from commencing rigs we began.Furthermore, busy or of brought yet scattered of to the should open rigs least expected year, the to XX and Buzios, a pending are Over active

decade, For time following the national in signs showing a first significant Nigeria, election nearly revival. of its is

between from in XXXX. international We X operators X mixture long-term expect X opportunities next oil companies.In a other Exxon be programs the including and currently have and and expected large to tendered multiyear of Chevron, months, commence X short over Angola, to

regulatory may and the requiring more as as of coming we plug that Energy while abandonment expect Namibian has for both and in awarded projects in Mozambique, in Mines continue months. Namibia work. commence X to set to demand development, TotalEnergies Australia, Chevron Additionally, in require expected and XXXX.And many TotalEnergies programs are tenders confirmed to In XXXX. Shell drive confirmed rigs The for and finally, be Eni recently have requirements as future rigs Ministry

region. fully Kutei market discovery the Indonesia. Malaysia, has the in and will work approximately in Endurance existing the Eni in rig country Transocean a come tender open their PTTEP in and near We And of securing Basin also this Equinox foreseeable will active tenders Petronas its future. follow-on in in remain to indicated for development promising markets. formal anticipate the with expect to region have the future point, in harsh require expect an multiple for for for anticipate XX to in a in large in tight the and developments is interest programs.As in part we recent operators months we our high-specification released departure we several the for Eni numerous ultra-deepwater now countries other XXXX in the to will market be tenders active remain At rigs elsewhere these such, we to expect following Transocean environment of commencement rigs soon XXXX.Finally, currently that both as multiyear drillship supply expect competitive in an rigs also for Norway utilized for programs. been Additionally, X There have the to Hemisphere. be due in additional Eastern

from of public And Norwegian recently in witnessed their regions. in recently rigs to many of operators continue since Norway if require a incremental the of programs As the not couple will announcements, market. likely rigs all, other outside active departed mobilize will utilization many,

tight at XXXX, future. Rystad demand fundamentals into We the projections, are expect barrels International lowest the increase X-year views the X also at remain [Technical their that future.In population beyond are industry recovery start XX-month reported XXXX.Meanwhile, for our this renewables the approximately for OPEC sustained that developing region countries are to our broader IEA million projects oil in least developed time supportive where crude addition increasing infrastructures to customers through a These will steady a of Difficulty]. The is also fixing contracts XXXX. the in fact through inventories support years oil GDP horizon. stocks reported fall foreseeable XXX recently to level particularly while their and growth since Agency predictions below average, Energy nations while global forecast the

recovery as of much upstream third-party of deepwater that hydrocarbon next manage and our intensity crossing barrels will strong, from CapEx continue portfolio billion reaching to rig deepwater superior yield investment consistently to suggests billion basins shown the believe returns and summary, our will the today.Reliable to several XXXX.In over materially available we development for have and next new some carbon increase offshore of these to end continue value. long produce years, We offshore by drilling $XXX lowest outlook will analysis year the come maximize $XXX remains

turn flawless is safe our continue minimize Transocean the and our to operations we of commitment and conversion As to -- over always, conversion efficient regard, team will a entire to Mark. sincere I this performance to to the effort, to paramount the for [indiscernible].In extend the team operations.I'll and of day a thank their every place on you importance maximize now reliable truly execution safe, provide the call

Jeremy, Thank and all. you, good day to

our will for then expectations more During and full will I fourth with our third conclude latest I preliminary provide for today's XXXX. our practice, forecast.As will call, recap the provide specific results year quarter. is liquidity briefly for guidance we quarter our including XXXX, guidance

February in call next of year-end XXXX our year. have We

we average $XXX and release, in we press recent quarter interest third an and additional adjusted adjusted detail delivered controlling to governing laws, application mainly due third lower-than-anticipated and related $XXX of quarter, reported quarter loss Australia Aquila.Looking $XX loss IT-related applied is resolved the Plus $XXX revenue our to which on have importation to affecting $XXX,XXX. imported application with or cash the during $XXX results, of of facility.Now KGX reported of This Capital cash of quarter revenue million activity, services, service and to administrative We attributable the operating EBITDA all quarter our is laws flow rigs impact flow in Titan previous like negative and has the results been expenses.Turning on importation Dhirubhai previously for issue.A daily to the $X.X in This lower-than-expected operating of adjusted due After Brazil, was total which rigs. our contracts on the preparation third of operating XXXX, $XX KGX.General despite this and rig the expense to million rig consistent other delayed $XXX million. Deepwater -- Deepwater cash our due net third the the been our related Brazil undrawn diluted credit seventh unrestricted KGX quarter mainly for quarter, recently rigs commence million a expenditures million. due liquidity free fees below third which operations of operating cash This $XXX including to backlog mobilization issue expenditures. approximately and our revolving restricted million, expect down to generation of $XX start in Atlas Mediterranean.The in quarter of contrary cash of the related $X.XX million Deepwater We approximately the the newbuild approximately contract maintenance $XX costs, approximately late significant third our would costs. not Brazil.Operating issues to in primarily also and to including the equivalents and service, As negative closer capital we from lower This rigs than the our cash was $XXX to balance $XX X cash at our aforementioned in-service guidance, similar X were and our enter to expected included do and start is flow later having million. rigs primarily week. $XXX reflects scheduled the -- increase million expense in million of below with Eastern debt rigs drillships, the in million, of is reported flows primarily sheet. address $XXX Brazil professional revenues operating I quarters XXXX Deepwater of maintenance and was a contract to guidance personnel costs ended the million, the the delivered to in activity, includes our is we the of third for approximately million generation the X for new share. is eighth and late $XX and for million with of generated negative prepared million.During million in and the XXXX, starting per being adjustments, Operating certain X and of net drilling X an

substantial approximately mentioned, months comprise increase added Endurance of in Mykonos, EBITDA together Deepwater of commencement the by last the second XXXX. to Corcovado, the billion contract Transocean quarter completed the Equinox, preparation and started affected $X.X in backlog requires first Orion, quarter billion these XXXX we've typically those XX of which As mobilization, to operations.We with amounts through varying Deepwater and adversely must $X.X Transocean contracts, and to Transocean costs including prior KGX, this be of backlog. margins Barents, Many of be incur Deepwater these our of Jeremy which expect

capitalize These about either translate temporary in expenses with rate contractual our reducing For revenue and higher in margins or obviously will quarter performance. XXXX.I increase year operating costs are preparation reference, we EBITDA. and of in We costs financial these nature future expect increases to revenues provide XX% of quarterly a and expectations fourth in defer day for throughout into balanced years. an update full anticipate now and XXXX the XXXX on will

contract-related guidance upgrades. our only reactivations always, As reflects and

an For service Petrobras expect This and of the quarter. million. efficiency quarter adjusted fourth O&M in operating and approximately the XX.X%.This fleet-wide average fourth XXXXX, is partially expense day of quarter the KGX be the commencement in $XXX Corcovado, and XXXX, fourth KGX, drilling contract other periods million is revenue other contract quarter, the $XXX days, upon mainly approximately expected more several due operators in to revenue of on of expect based quarter-over-quarter third offset higher increase Mykonos rigs.We to we by rates

Barents G&A quarter. to incurred of the lower activity commencement the rigs.We for that for This is expect costs and full in partially incurred costs third of approximately other increase service the the $XX in-service quarter is a mainly the the activities, other Cyprus offset quarter by expense in and carriers to operating be fourth of due rigs maintenance in for relation KGX had million. quarter-over-quarter in operations higher Transocean in to timing Brazil This

expectations of to fourth includes capitalized approximately is approximately $X.X and $XXX the are for million.Capital preparation third quarter not including $XXX increase related This and to preliminary for overview for as be contract the is fees $XX expenses. approximately like expenses anticipated million taxes billion. million. for interest forecast of Aquila with financial expected be the in the We between due million, mainly X-year million a to high for currently $XXX This are forecasted provide Net be quarter. a the and of be XXXX. to forecasted approximately interest IT were of This billion incurred Atlas Titan. to Deepwater additional Brazil the Deepwater quarter contract that professional million our Petrobras $X.X the with $XXX quarter-over-quarter in $X.X expense includes reimbursable Deepwater million fourth fourth related adjusted Cash and services $XX.X to approximately to quarter.I'd the revenue and

and full billion.Finally, to year be expect we anticipate around between O&M to We $X.X be expense million. $X.X G&A billion cost our $XXX

million conclusion, $XXX contract related contracts, reliable $XX people continue to to In day which of efficient billion of of are undrawn and move Our end the CapEx. projected on and and of and corporate $XXX rate execution focus of Aquila to to debt preparation Deepwater ] our the restricted of [ preliminary the service.This forecast expectations is and reserved risk most is sustaining $XXX imperatives we billion, million of guidance revolving liquidity will reflecting our and $X.X which cash revenue our million, safety $XXX XXXX for million million, as liquidity $X.X our approximately CapEx at approximately operations. is cost of credit including unchanged.First, higher our facility XXXX approximately and capacity for includes

sheet value We equity to our holders. committed and balance also strengthening remain restoring to

delever As without us opportunities.This such, [ growth high compromising my in our we allocation that continue of return and capital manage ], comments. execution to continue will prepared operational safety to prudently to allows a and manner concludes or

Now to turn the I'll over call Alison.

to Mike, now questions. we're ready take Mark. Thanks,

the As participants, limit question. reminder to follow-up yourself one and please one initial to a question

Lewis with Greg our comes [Operator BTIG. question Instructions] And first from

in hoping I idle, around in by QX Mark, year. may count days rigs with some next off revenue thank have or off open think are or as I'm it's more X, roll available and -- bit of about X guidance, looking I a the rigs maybe be -- could XXXX, I you some that. talk at next I about that year's guess, little but I you was rig for

Jeremy's space. Any there guidance color or around give kind get to kind remarks, broad to work the than those maybe clearly, about imagine think rigs of positioned giving, white would in can that? any I you're I talk on kind some As to revenue prepared announced mean, I strokes Is that of you can you -- of better others are to extend. you rigs?

So Greg, thanks for the question.

Firstly, $X.X guidance look about of the is of at range, of if approximately you billion, our the contracted XX% revenue. middle take that

which So planned we obviously, look ] [ we Roddie in the we -- there's assume involved and about rigs, much look is look then at upon XX%, we -- opportunities, rate it what that. X-year that the of using deck. Other and depending a the assume and long based that Keelan day where is the we a very are in work that And down sit probability at at And our obviously. for or We rig will day put rig we we times while rig rate type on cases, rate sits some idle is. day it deck. while, to will little a

update year. the an as go is in we approximately there So that and that, we XX% spec revenue, is through which quarters element, next

Yes. I'll that. bit a little add to

that ]. we I you Report, to Status be then closer numbers the we of conversations ] reading script -- we the may currently the think X [ all at look internal about out guess, I are view, In revolt mean, have X% obviously, the with customers. rigs. [ If our Fleet -- can But we take

we optimistic forward. about those as to able So gaps go fill being pretty we're

mean, And a and on a then to chiming Roddie, from question, I alluded lot demand there's it of I lot in have and Jeremy [indiscernible] clearly, remarks. since his prepared of going activity customers. in, did a

factors last of Halloween, heading everybody. of kind the some I a how activity, Any be I I we i.e., -- Happy for starting rigs seasonal operators day like terms contracting fixturing not what in here, of part lock lot as seasonal, about spring time? up they're to sit these activity, October guess, is starting us winter we of ready in for? of to I is as is, that -- we this and or waiting the to could get As guess think of maybe or much we eventual are even pickup we're talk maybe that wondering kind of I'm thinking of it -- see move

Yes.

I think -- to there. so things unpack a couple of

absolute each but longer first the may the of all, of is one So slightly this it fixtures of the truth year-on-year. of progressively length those fixtures number year, look is is like lower

So the really committee 'XX number of actual rig good days really, is already. looking for

months even deals. especially just the to the next not going X see X, or all short-term as X-year headlines you're long-term last couple XX-year we're things for are enter now nature. over but in that of talking stuff, engaged deals. in maybe like we're we couple about the about stuff.And So long-term year, majority the all There's that of the of is the just We're talking actively X, months X like X things, X, the of

generating we're said, in of stats But picking that of, of a the of made. number day also of on we stuff really because the give good work there's that length but rates, what kind us and So is we're the are all about to the lot decisions right make returns looking shareholders. at the pieces that Jeremy of at terms sure contract, is up fixtures making value

we're what fixtures So they're people for budget now seasonality, terms going in pushing that operators, major season track.And basically right going think you're the of in down of continue kind churn. through to right I where interest about and putting make start the that 'XX of start is typically, lot thinking see other quarter we they'll out in tenders. in And a fourth what so

aware, multi-country there's tenders. some kind [ just now, of of tenders the be big there's multi-rig, may ] but and may -- head out or of operators expected So for you not for are more multiyear,

those So the term. we to in see several expect near of

Yes.

longer just they now to more take commitments thing process decision they're that The to time time, execute. and for other I'd bigger periods that making say of is and

so And I other else than into wouldn't that. it read anything

next our Kim Barclays. with question comes Eddie And from

conclusion, at foregone we instead. the this to we we've pocket Just year-end. of particular months expectation of months have progression with so, a rate seeing agree been Would X reason that shifted we've the your contract that And day seemed few term feels year wanted pushed the conversations past next has early It the I about before increasingly saw -- to it that a day a still of earlier like And activity contracting of that but the $XXX,XXX today? that air you timing know with like year. if out based announcement customers on it? that's ask seen for kind left, almost any

say day our rate any push is over to to you, want it's to next of we're happen. us first we've haven't to the do that to a And to it seen that starts contract through number, that I in there be our the kind going customers still it's if X certainly don't that X -- agree don't like we that would know happen and are don't will some a But months. that rate. out become but the new feel to at I There's of they they disappointed a want feeling that's Eddie. going like I been opportunities opposed for happen pushing, one. this point customers there see of time. day with violently

look you for us about 'XX a the fixture Yes. drillship the as Transocean's of I'd so ]. 'XX day. average the kind of average that, on [ all $XXX,XXX is also -- far, fixtures $XXX,XXX that's add the at across market the across

from So turn higher the $XXX,XXX average. than the semisubmersibles, $XXX,XXX we're [ XX%, when ]. to ] that And like XX% [ you to kind we go of

of So we're on our terms higher the semis XX% in fixtures.

obviously [ for which day us, not to ] XXXs So they Jeremy totally it's certainly as the capital respect. are the any is high But certainly But looking back. as customers discipline look, said, in exercise of day holding we that week. much as it's the rates good business us scoring can,

sure is. It

of XX kind to be ready with months, follow-up cash next Aquila. you there's do Could to XX cost rig the this completely my payment How over the of Just remind was believe XX on -- a us Petrobras? rig to it its this delivery for just outlays is make related to earlier Deepwater activation shipyard contract should rig before I take all-in the the to And the month. drill that? I of the you say? much expect what the --

we Eddie, ago. XX% about purchased rig X year the when put down So we

was made payment XX%, million. final October $XXX we early the the in So remaining which

As comments, preparing we I in my $XXX rig about said to the spend intend prepared for Brazil. million on

August around As the will of you able rig requirements And in what rig Brazil including want, next into to equipment the to they year. NPD. set June, be we be ] stringent what do, know, some Petro July, some time taking [ has

Did right? $XXX the for Sorry, hear I next Mark, CapEx And year. million for fourth guidance the related to then that that's I $XXX an CapEx correct? I of Aquila, quarter, million heard additional thought

That's correct, yes.

And we question Benchmark. have our next with Kurt Hallead from

appreciate the always color. I

kind that term contract jive just you're and in the X-year looks where in of going conditions, of necessarily kind Again, the -- -- to rate, high to opportunities terms. for landmark So terms some have a context trading rate. a X you're historically day number like you see new you right? of and Usually, with of it referenced wouldn't a

management to cycle? So trying as And flow the dynamics about as and kind of those in just of them? this to and you're team of next as returns maximize maximize context curious you go kind a we into cash thinking how again, up

each have white And -- you the as right fix times that that do us today. and we that of to And as a team contract and and but can.Now the we then, end know and to get each you what, we remarks, believe we market kind of opportunity. prepared other is there are day we or to rates is and some continue market where rig as possibly covered a say, bit there time it push got last bit much contract. rates to think you don't longer-term to you a to to would in rig discount the say rigs evaluate that want get the now I space, sit the continually I But are a we to now rig test the in Kurt, push on is Invictus. by some with keep we where I mean short-term going this rigs, too, quarter, used that idle as and really Yes. we that want risk every be a are with we rig certain the

and some will gives that our we'd it lock like that flows. that us rigs, of firm to discount X-year backlog to end take contract them cash to contracts continue with visibility that So other of tail the future because or a be rigs, we With strategy. into X up what at towards might

management each we've that on to So about and that it's portfolio we really with previous approach this do calls, opportunity. continue talked

Yes.

target just I with about program. we the are also in specification the what the specific we or of rig requirements think matching of of up terms tender the the add, I'd very

later of been kind trying the rigs a keep to cycles quite little I'm available fixed where purposeful hands bit top a cash. got extra with in a lowest rate. them the that all to might first counter high-specification We've their the of previous little couple best on still in spec at So operators the cycle day that of so can course, get And rigs. come

contract So I because that and also referenced kind the rigs where on lull you are is, companies you earlier there same some looking availability at oil in point an you they project rig basically announcements are decisions half here the little of question the start at that new second of times seeing is follow-up as get just can't beyond guess element year. -- bit sees, kind they a the about XXXX or off they the of the else questions now kind -- of my push a of of progress element everybody we profile addressed want? But of are making a to through where of an kind

find an element that do probably P&A to if going a able then there's think I you that to of right rig be -- the to it you will you or obviously, be program, specification point prefer would lower at to get can if push that, for example, and rate. reasonable that you you're a rig day you think the or rates a that can do work the

are while right rigs.So of working multiple diligently placing -- several to short they're fixtures you on not these is today, where and majors see higher-spec that if look on but what's in public, of at I guys if going made need the think, assets the the are you all realize the years at on they with with them. for that information what's I the next and majors, going in going market you're kind look towards the

it's a I I that little a stuff the debt just you're that see today lot say there's And continue see wouldn't long-term necessarily think negotiation contracts. it good to counterintuitive in you of kind I as don't think was So it's just see -- in terms a that such. going on direct more ], market of going even to you [ tender

it. that to the to just for years.And we of were going steady longer-term X we a literally stuff continue fixtures were had rigs like at handfuls on that You're chart made multiple where ago, couple had see you think an if of about year being looking activity

end on rigs XX kind next And so. expect we're more of, outlook up of of course, XX that year the to about in the X than or to by them. talking Now we region got year, QX the somewhere or our have XX of in of, to years' get

is So larger and long-term opportunities, number of longer because think the I mean, I just period you just transition but short-term this have fewer opportunities.

ebb was flow just kind the Jeremy -- the is talking this about. that So natural and of

Partners. And Energy Smith our next Pickering with from David question comes

So this cost. actually a question is about

include been second. versus million. a in-service delta about with quarters. reimbursable contract ultra-deepwater please ultra-deepwater ] was suggests cost? QX of $XX or similar reported a the the have to for But multiplying with bear a day. just in ultra-deepwater likely million reported revenue amount termination. verify $XXX several reimbursables doesn't fleet that that I a the the times rate the around in QX, me $XX difference rate want step averaging average [ a big But So last $XXX,XXX if know of just reported days the I up The revenues million

want David, through go take let's this mass about to offline. the try Yes, to I when macro... this [ don't we talk ]

Sorry.

You bet.

you can offline. We for this reconcile

was rate? Was the may, is support anything follow-up, if I step-up there little rate quick cost, million, that Or $XX run a to the use? a prior a good anomalous? Then run this versus

that their that, It's have customers question Well, for more reimbursables, so no buy requesting perform we behalf. do on we we've and things, higher and much more seen about services easier them.

X contracts the at now Petrobras you years look if X And example, reimbursables. an higher. very signed ago, low as So or you at look the much much, in ones,

this said, of is there yes, to give reimbursables. a I rate like and give can run math. So But offline higher the you we you

Gruber last with Scott Citigroup. from question our And comes

rather you I the is in for next the Are you really initiatives ] year inflation CapEx reflection lid spend around just had manage keeping million next not Or the at maintenance a that's on of on year. guys base around how seeing question maintenance for service this [ spending? spend Mark, costs? sounds $XX benign. much a

million $XX couple a one, things contract there. includes Scott, about of that So some million. prep $XX of

little is. It than think about you million. was So the would $XX bit it is a actually rest lighter

do of you care agreement that. the as some care refer We as and have And year, of to agreements with OEMs. our the around on inflation inflation, seen about have cap But no cap range know, a we X%. part most question is we that each is what

X%, if clearly inflation is that also that year to a a not it at experiencing next lot our So X% of moment, all is when we're spend.So year of or lighter SPSs rigs older. for even it with which the are comes is

throughout going we've also down cycle. that. the of fairly to see maintained on And not a being money lot spent you're our well rigs So

'XX, to catch-up have going and 'XX So not we're beyond. in 'XX, a

is So I what from you going expect forward. think can us this

to been numbers a long us CapEx has for high newbuilds. big this very been expect and basis, see saying we've sustaining Our forward. very because on a don't of But from time, going

quick just SPS the And side. on follow-up a

much 'XX a ballpark not it now? but in as And XX-year have on last spending you're you did few know would like will you looks cycle, You and just more, I the as SPS run kind XX-year cycle of a what SPS this 'XX.

agreements -- have contracts these these because with we OEMs. asset It on XX-year with the all depends

XX/X, So the that benefit to equipment with Transocean XXX. part to rig agreements these certified the of regard is stays

the other look cost XX-year. drillships and the for renegotiating the -- benefit can agreements through X clients. or beyond.But and drillships this contracts. out-of-service the rig in-service decide with or pay the because just these to clearly, SPSs regard the we or big and this that those X-year XX-year for we halfway most years dayrate working to vendors, do [ the for for a a we our and So whatever ] benefit us, Obviously, do number, the to start -- with is at importantly, for to cost XX terminating we do past the not XX can is we're while We'll is

and For dry to the into [ pontoons [ because do those of XX hull, the we semis ], however, rock to the rigs, rigs XX under carriers] to and the the we the have have that be inspect days. can take

with Stene Securities. our question from And Clarkson Fredrik next comes

in contracts might rigs finalize. be to the market upcycle. underlying?And we that result short say, general -- on that think And based it, highly long relation how space happening in estimates at more much maybe then see But what But a revised it that the longer-term it's going market for taking concerns you for medium now least comments like in long-term can call behind sustained few your or 'XX peers you space Is arbitrary partially work a few here a with a to to the and and call back we're particularly white over outlook. white longer wanted 'XX what we really this of, 'XX the scenes versus And circle of wanted a and not to the all this about there about result decide bit time the a of taken term drillers be, weaker of it of to that has that some I seems time I although are run. a that. and 'XX bit be for a a space, people upon think weighing bit you we're pretty how aligned in to touched you I been what's a bit startups market to shouldn't in partially downwards anything upon white changing consequence and volatile. just look last need to market. it long at be will months, confirm is to in just and It's at then

Sorry, for all those but hopefully... words

makes sense. that Yes. No,

So couple view our for that rigs. a we really, exactly -- of that's is example, talked about

take we [ the So Inspiration ]. if

winner Inspiration the consummated. [ ] a actually was So did in of get one not just that tenders

really think now the couple there a ahead, and white hedge, of getting would that got -- assuming have that I But that have then do. that she a for some ready we'd gone to fact wells was she So contract.So decided don't they issues you be had assuming technical that indicative space would of on busy the be spots not booked are of market.

indicative of confluence more events. I it's think of just

this that year not decided in on were of wells. hurricanes length normally, we impact because the example, where And on of rigs. some the no does in for had to good great, the we have for But one that an any taken really activity, in extra perhaps the right? which we offsetting So of term instances these places the some other U.S. so results were likewise, drill case, actually, not options rigs, had is

some there's taken. or victim a stuff and delay that's like some like own weren't or kind -- political trees success.But of your of So that other either options where instances something happens on

because were year, running of a X They've plan we've or I run lot have terms "got we we longer. got lucky" time. programs we ahead not This of things of to filled white longer. back last in where So delivered we tons like, year really had if think space it of think gone either and

larger the step actually 'XX. the good well the of contracts with going building to substantial operators contracts, on forward. that's as because 'XX means migrating long-term down short-term about. So macro a portion the just fleet we issue and demand anymore the positive to some are a think It's into in really slightly of those talked really upside that rigs an view, again.And go But we as we a on it our because unfortunate thing later not for were we positive that's coming cost are be that those -- things for

And just on follow-up a that.

think, reactivated, for delayed either Now stack. equal, in also capacity white do for most these some think that on both be I but various from else has your kind market a of this which you of controlling that will cold now? all stacks at as or cold the yard, whole, that we're own of pace from you're space 'XX the seeing reasons, this

Yes.

in So like example Brazil. good might be what's happened a

So rumors market to X switch particular there than from talk shipyard. yet that be that forward are was really rather put obviously, a fixtures to winner the made, a there's they I project have the can't that by decided about bringing but out on already assets a that assets of

of So makes that ahead of to date rigs not there would all They're sense keep amongst active sense -- it the minute, rigs. plenty the still that your and saying our there hang a market is fleet off that's be standing that out the discipline well, makes consequence to up place reactivating bringing a at place example or active drillers that of capacity newbuild rigs.So basically this for probably best costs. to to us they're on

lot our a we make little yes, as has go part, sense. the that hurry flow of think -- are like rigs. reactivate the that always most a kind I to been and for ebb So you'll see of And position not certainly, that we in probably forward.But adjustments --

when justifies the the shortness generally again, reactivating economic delayed rigs that We have not makes from term do we of is work any are consequence will of contract those that the we to certainly, be I in coming the spending do think out that.So it yard. real to near the when sense going be only And it of will speculatively. money only

So on work that. contract we'll to still

David final Partners. have with Pickering Smith And we Energy question our from

little bit picture big a And question.

get I of that are a And including just that to do X-year gives looking maybe question owned I'm by the newbuilds, I to to owned those drillships more. Just looking those plus expect they're discounts given focusing absorbed, those discount on supply we edge with count some that you. rigs of going incremental to only a [ programs rates. I cost Libra, operators are aren't these could ] they what build. the My lot for not you ones leading your one when is, or yard that But [indiscernible] view when incremental by rigs a look think X, at when stacked [ bought this from that are were those then XX those demand, that you of are of previously you? right, I ] cost earlier last to the reactivation, or a X for X returns still And these newbuilds not see solid stranded, year. happens think gone? really

utilization. or utilization late take article my word 'XX, reach don't then they for think had expect I in of recently Energy the 'XX, XXX% an 'XX year in Westwood that So to were frame. XXX% projecting kind And XXX% it. they out the time following But

the that's tells you of all is which time that you in frame would those see what So to rigs reactivated. expect

be first question, for out of either about thinking is would deployed to operators that. opportunity being projection are at would additional completely of active some brought to a and So deployment in yard, call acceptable case is crystal all stacked assets, stranded the again, a ball contracted address is cold tenders, out time when say, being secure the stranded elsewhere, out put you'll in today all you the of probably point day works but got frame also the feel assets.I biased, the your compromises follow a capacity the assets Most the bring comments right sold frame.So projects.And future assets to the that to and of of the that in I or rigs. is about as then little there's to the being and part if X time 'XX the stacked on X start some say we'll rate they clearly you've looking are of work, that their there multiyear to that's for my basically to

rate But I a One surety rigs compromises the to of a also, that if gen lot being, would easier long-term a do have of not you day as contract. lower only. it's the being seventh count

quite sixth going think the rigs those. I you're see for gen that to are attractive

those work of if perfectly you went periods because basically, Brazil, campaigns. in time they're adequate what of see long for a gens So in lot to sixth happened the for Brazil

get it. think purpose same I not They're day rigs necessarily to spec X-year the asset to going going are be period again, top rate the how that some long-term for of that deals. rigs these because, going you're a for see fit thing you do for right to long It's that's on of the time.

we Q&A Johnson our have the closing session. back the over turn to allotted time now I will for remarks. Alison And for reached now call

Thank Thank a your today's forward you, we program. report results. quarter good for to for participation Mike, your and when Have you fourth with again you, on day. This talking look call. XXXX does today's thank you everyone, our conclude We participation.

now may You disconnect.