Transocean (RIG) 1 Aug 242024 Q2 Earnings call transcript

Good day, everyone, and welcome to today's Second Quarter 2024 Transocean Earnings Call. [Operator Instructions] Please note this call is being recorded, and I'll be standing by if you should need any assistance. It is now my pleasure to turn the program over to Alison Johnson, Director of Investor Relations.

Thank you, Good morning, and welcome to Transocean's Second Quarter 2024 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.

Financial morning's President Jeremy Thad Chief and Vice and this Officer; Chief Vayda, Commercial on Mackenzie, President Adamson, Roddie Keelan Chief Chief Officer. me call President Thigpen, are Executive Executive Executive Joining Vice and and Officer; Operating Officer;

actual assumptions differ risks statements and statements During please duty course certain the company company and to expectations not for results more facts. could statements. our uncertainties refer to Such forward-looking that cause based subject and for call, note that update matters certain upon related and may regarding make impact to Transocean are therefore, the Also, and various to management to filings are certain our results. current no Many SEC forward-looking this information statements undertakes uncertainties. that Please revise forward-looking certain of are or our could regarding materially. and our business future historical risks factors

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

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

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

approximately the As revenues, diligence. drilling resulting adjusted for in Needless million reported commitment our and yesterday's Transocean say, million earnings EBITDA team's to proud of contract of in of second delivered on margin XXXX, quarter XX%. release, I'm EBITDA continued adjusted $XXX of very $XXX an

multiple knowledge of we past of superior do, contracts this with our fleet, fleet of as team the day out. several member from This marketing enjoyed each announcement performance the tenacity XX% to result to and our every past approximately and you Mexico. numerous Largely to together driving what active for reliability jurisdictions uptime in team of efficiency mobilized effort, challenges revenue allowed achieve us in respect safety, our strong due day legal for weeks, while quarter. all the you particularly XX% to the standard and operational our our and to reliable incredibly the Thank customers, consistent performance the Transocean the on and maintaining again of once support team efficiency. nearly Transocean we culminating the of highest worldwide, worked Over quarters, the fleet across with contracting extensive U.S. activity Gulf our few an with in of team, exciting overcome and

Deepwater including and an a First, $XXX,XXX $XXX,XXX of in industry-leading The per of to at commence includes received XX-day we rate continuation completions contract contingent estimated X in at of April is Energy a Atlas, XX,XXX Beacon X-well the day. expected contract direct awarded contract rate day, Offshore per additional the services. XXX-day

that the same completions rate that XXX $XXX,XXX reminder, in The awarded day, including contingent consists up per combined wells X was program a of of days services. provides As for April X also a rate. at contract at to for a additional

The Deepwater the first capable at note, be Conqueror it at the Asgard. contract to one quarter rigs, of a which to in disclosed Proteus, contract likely in period yesterday, the work of will Thalassa, Deepwater be of previously solidly pool Deepwater of the the our includes at $XXX,XXX the mutually for awarded Next, in Deepwater X-year rigs as which X-year in rate and that now was a reassigned time Mexico, will Invictus remaining to election a booked is day, a in rates, determined throughout now Deepwater up that upon assigned also similarly to which point including as options contract we agreed BP Of is years some of of Invictus per expected commence XXXX. X contract XXXX.

the to fleet current us since of mitigating its letter near rate, of filling rig program have Additionally, awarded update secured last our in the opportunities. near-term one some to an and wells enabling gaps, at was stats Mexico for contract add other the of also taking intent availability expect report Gulf for we rigs undisclosed effectively of them in Also has white XX-day to begin our space. continuation the a and the Mexico week, a the Gulf direct that additional hopefully, other of market off availability in Invictus ultimately in that very future, eliminating

We you as will update on our appropriate. progress

contract with Myconos the at Asgard In of a a rate Deepwater $XXX,XXX Petrobras on a $XXX,XXX a day. at Brazil, including Lastly, received per option Deepwater day, services. of exercised rate extension XXX-day Gulf, for per Hess the the price X-year U.S. additional

As represents for healthy, still a XXXX, this campaign submitted of discount May this fairly reminder, was a day option in pricing why rates. explains to current which leading-edge rate while the meaningful

our XXXX aid can efforts. October cash firm the through and flow, Importantly, meaningful now duration generates deleveraging extends which

quarter period $XXX,XXX second In of extends remain least at with option to expected is day. remaining day. to now the The Moving Norway, of into Equinor of balance market $XXX,XXX commence mid-XXXX, this keep this rate to program to assets. a Also, and with a awarded Australia the It was the expected combination current rig Norway, XXXX. that of In the at and of firm was quarter Transocean extending Endurance is Woodside the of options, fixed-price the option rate direct a of rig's Norge second until rig the day XXXX. a impetus XXXX. X-well provided the DEA the a the extension Australia, was rate a The environment quarter term awarded X-well harsh execute day, unique at Wintershall Transocean at our the to fleet. per through and remaining current in with a rig's in of per strategy per of extension Transocean acquire continuation X-well off the firm the exercised the rate $XXX,XXX the Spitsbergen high-specification through duration first

our customers and our which that well fleet we advanced could and With the these from And more XXXX. verbal aside working through LOIs commitments, than our our contracts, XX% XXXX. based small in arise gaps, fleet discussions believe programs, could be drilling some currently is booked customer is activity reflecting of with committed working end into that upon strong completely soon

As such, requirements. reactivation our the to customers may consider program their future assets financing to cold soon meet need stacked of

terms, of the drilling We offshore which contract confidence time been demonstrate longevity in are making a certainly in increasing linked awards, the combined with reinforce materially of as these some pleased our and market. the and have day which strength rates long they new

hand this XXX% from the in on and global to is the to in are from expectation. consumption a it important approximately an barrels South per next offshore in come regions of we production. XXXX, grow word prospects up Deepwater billion As investments fleet. we're production calls, even previous expected half activity to greenfield Accordingly, expect equivalent to now over and and XX by driven I'll in the discussed more to projected the Africa. XX% not newly by Energy, America exploration to alone supply of for $XX of to become day years, about with According to be in is our talk discovered over global source this Deepwater several of oil be expected XXXX, Rystad billion XXXX. oil increase, million will this satisfy incremental required of to $XXX Keelan That's increase

Thanks, Jeremy, and good everyone. morning,

into dates Gulf type with As well be customers the still to with in the are remain the programs the see future. what several expect Mexico we U.S. filler many to programs of a discussions awarded. Jeremy mentioned, have in our today, of for for gap next of commencement balance on we Based which quarters number we

our forward, customers existing remain Deepwater their adding and developing assets to their Looking committed to portfolios.

by to final eighth-generation place plans. Tuesday, the important an future in to with Tiber resources continue these their This catchment data on marks in BP taking the and to of Gulf Tiber unlocks the additional load, Kaskida development an best completions investment the development drilling, with in project, both being the as XXXX, XX discovered point and on decision Deepwater customer Deepwater Atlas Transocean position areas decision barrels programs. hook rigs nearby on XXXXX the drillships, of sanctioned sets our forward opportunities of new XXXXX anticipated the customers the their billion XX,XXX announced across and Our In motion, capability development took XXXX. Kaskida strategic And move Titan upgrade decision XXXXX another expected investment for of potential Mexico base. and of example,

well rigs. highest purpose-built are efficiencies XX,XXX As effectively specification our not facilitate design for a generation their delivery, operations will and result, in from the achievable customers' seventh they

currently opportunities well As qualified such, of the any being of in the XXXXX are Mexico. Gulf we for discussed we multiple believe

to Brazil. Moving

the tender will awards. rig the tender weeks, they new is next support XXXX. Petrobras' few fleet through targets production months in X Also, that last the expect be combined issued X consistent We XX over a with continually operational over tender our Norbe for and rigs, at Sepia Petrobras that four require a to will awarded expectation floaters which for their existing roll least thereafter

be countries. in Namibia If rigs and with in rig demand. in Coast assets. is two could we expected at or require the likely the demand which four the substantial is could frame. largely the four rigs, Brazilian as rig four early mobilize require onwards, programs floaters region these In Angola, In expect cold region. in require of do proceed X could, to Africa, least the all Deepwater of satisfy of country, Nigeria operating, rigs could also entire there some renewals believe beginning currently drill programs this these add three from currently to West to sustained. from XXXX West two more floaters outside demand to Africa already to will be reactivation this [Technical ships rig While an be demand believe expected, market possibly we and incremental Ivory and Difficulty] of Ghana, expect stacked to expect are level this commence XXXX to We in additional are we than [XXXX]. expected XXXX, required we time it

for anticipate In the well for India, placed secure continue weeks program. the the ultra-Deepwater the in is KGX alliances we of markets. and coming Lastly, award this to tender

market. now Moving the environment to harsh high-specification

through out options sold outstanding XXXX. is the exercised, fleet Transocean effectively Assuming are

X we be by Looking undersupplied Norway ahead, believe XXXX. rigs in will

the Our X our Transocean of in years to recent fixtures Norway Norge that rigs like contracting underscore advance. customers the as market strength up in are

as Norge, rig asset Regarding outright strategy in. completed own owns June, in as intention our a the that we harsh venture eventually know, the environment to the capable always you most this joint acquire it was our of the the successfully is with rig. to It outstanding in X% line in transaction one semi-submersibles

pipe floor progress date. drill operations automating to on we resources achieved rig substantial have handling dedicated have pleased very are the the with we Additionally, and to

We safety will automation significant our continue reducing to driving in the performance while with of our and operational pursue in goal simultaneously opportunities footprint. fleet carbon for ultimate improvement

Before like I for Jeremy's team the tremendous gratitude I'd a the and for in pass Deepwater mobilizing specifically to strongly recognize Transocean our maiden the efforts Aquila Brazil. people preparing in the entire reiterate and mic, to contract

late collaboration a the week significant the we in schedule. a June, nearly of result ahead of organization, across As commenced operations

In reliably Aquila last of in examples and back Petrobras, Endurance, and bring safely in to markets of and operations have hand the stacked operations KGX Brazil, call Australia, Transocean all active Deepwater the the different now are contract in I'll our new Jeremy. the addition rigs geographic to recommenced we the to months, commenced operations to commencement reactivated build our warm X the on extensive Transocean assets Orion on Equinox relocated on commenced and the during market, customers and and These efficiently. relocating with experience reactivating India.

drilling Thanks, Keelan. XXXX. offshore its in condition best industry The since is

ultra-Deepwater contract indisputable positive new earlier, the as the thesis on days increase. rates last data As and XXXX average for we mentioned XXX particularly for above define These call, X first our discussed fixtures has the years. have X points Concurrently, day earnings industry for Transocean. remained the quarter duration investment to for continued

average our $XXX,XXX is day, average approximately XXXX, day. today, in contract our $XXX,XXX fixture fleet, was In XXXX Transocean's XX% increase. new at specifically Looking per a per

assets $X.XX deep While are yesterday. industry-leading performance competitors, BP us from we you our announced our of and safe, million the which with peers, can billion our report, day customers, recently in our the of and reliable our we, combined enable certainly efficient to with dynamics, see we market which, like the provide from leading-edge the our benefiting our by status to in way, announced positive the understanding the ourselves that we consistently backlog excludes contract our market, differentiate industry-leading backlog rates with associated $XXX capability

past fixtures. and certainly be with for excited continue have our encouraged momentum conversations recent by customers we created we to the several reiterated the by highly by quarters, As the are our

less ago, the you timing expressed remember, offshore community As for on exceed to the many contract of per will day. first than the months entire X $XXX,XXX drilling

always seek term and us to and backlog, in rates endeavor for recognize And the seeing industry-leading not, rates, fixed across will space once fixtures are providing appreciate the work. while value identify we cash our again clear appropriate to future to we both XXXs we test visibility the opportunities the with often Now XX,XXX flows. and also adding more the of Transocean ever-improving way with day XXXXX leading to and entire than

maximize the appropriate to In to shareholder assets for between such, the believe and will As fundamentals strategically growth we continue support rate continue a cycle term its underlying multiyear our manage value. striking to assets, closing, services. and balance day of Transocean portfolio

balance several the Given cash our make a unlevered or to and Thad implement a return each sheet enable I'll financial quarters, free which our we strategy our of call for over builds the and us discuss sustainable next to can continue now reduction the that, to design, to to results. ultimately CapEx to us our cash to distributions are deliver all our flow flow expect position along visibility to out future communicate With backlog quarter shareholders. yards our and turn value provides and requirements increasing incrementally new otherwise contract, it on with future now in flows, as

to everyone. Thank you, day and good Jeremy,

our our an expectations As practice with during year third briefly recap the is call, the XXXX. and update guidance for will provide results, our today's for I second full conclude quarter on quarter

of to million for second per attributable reported $XXX diluted As or quarter, $X.XX interest of loss press a loss the our reported in net we release, share. controlling a

million. quarter, flow projects net the build various the the operations cash of from of related During to generated of included operating cash $XXX of balance Deepwater EBITDA cash the flow capital $XXX in with queue, $XXX with reflects million other approximately $XX quarter flow, across of of we million million associated second Capital $XX for and free Positive new $XX the the expenditures million quarter expenditures. fleet. million

on We $XX in million, earlier the week Operating below guidance a million update reserved of unrestricted our negotiated in maintenance $XXX delayed I contingencies. psi our $XXX for contract primarily you of Brazil capacity due in quarter The expectations $X.X is XXXXX anticipated. our resolution due efficiency are Deepwater revenues was second with second revenue quarter which commencement in of drilling [Technical per adversely at generally of psi the on third the second During partially revenue rate of cash, of the of of psi fleet the G&A June guidance. our second was drilling our $XXX,XXX quarter, the favorable million per affected and India of to fleet for expense which commencement financial of in offset Contract ended million, undrawn were also quarter with $XXX the guidance, the to day. line daily we rate. the quarter $XXX second cash XX.X% day These This customer active $XXX Aquila was expense and rigs $XXX,XXX difficulty] liquidity Atlas, million. is and XX, mainly an for at day Recall than in restricted to old debt and rate, prolonged KGX our our the in psi delay the drilling factors the XXXX. total higher operating cash million approximately maintenance quarter is in-service billion, the credit operations contract and [$X,XXX]. delivered XXXXX revenue. by performance will full the day. about equivalents revenues of The drilling rig's average about revolving higher from which the slightly facility. day is start and of XX,XXX about now below million service including $XXX Deepwater year delayed the the XX,XXX

As and always, speculative upgrades. excludes reactivations our guidance

an drilling as know, third million efficiency can contract we which which, Brazil; the in based on KGX was increase the and revenue approximately of low XX.X%, and other to, contractual quarter, This million reimbursable X. as the of upon revenue Deepwater utilization Please reimbursables initial $XX includes margins. quarter the services estimate the higher weather based second revenues you quarter. upon For day expenses. in additional expect in activities on factors. operations average $XXX commencement mainly the the approximate July Aquila rig of first, fleet-wide and Atlas that uptime rate to the following started vary services sequential of higher additional customer due The Transocean contract second, had preparation carry a single-digit psi and recall for generally contract And full activity Equinox, lastly, XXXXX a rig KGX, Deepwater for performance,

paid various quarter approximately that million. of partially changes We are some quarter absence in the primarily comparable costs, of in-service offset quarter. deferred by $XXX I venture the maintenance just in second expect Norge. have third to quarter that aforementioned owned in third O&M quarter-over-quarter that is Transocean increase the and the to reviewed, an expense the second which increase due the These from to the the contingencies activity be The is of of resolution costs joint activity no

a these in the would the entity. result of expect, interest as outstanding you were eliminated acquisition As of the

for $XX quarter G&A million. be approximately the expect to We third

to for cash the taxes expense to Capital million is professional quarter-over-quarter approximately $XX third Net million, respectively. expected personnel quarter to related $XX decrease approximately are lower and primarily and and million. be forecast is $XXX interest be fees. This expenditures costs

our year $X.X [technical to at this $XXX were $XXX unchanged guidance full additional billion approximately million This realized and guidance expenses, million O&M which reimbursable of time. approximately billion. of still is half first the expected of expense XXXX, and between For year year. difficulty] about [$X.X] Full of includes be the the revenue is services $X.X in

to year full Finally, expected G&A $XXX around be costs are million.

difficulty], CapEx undrawn related which to has unchanged as most liquidity full approximately of [$X] $XXX CapEx approximately includes Aquila, of last quarter XXXX well approximately already This CapEx, Deepwater reserved as of of is of which $XXX at service. the which for projected $XX the approximately million of for $XXX is capacity the facility liquidity year-end $XX forecast our with cash expectations [technical includes the $XXX $XXX at remains. expected revolving restricted million is credit associated approximately million Our million, contract million, from million incurred. preparation XXXX sustaining and about been million Of Aquila debt

to our amount In aggregate part Norge. We senior prioritize the balance interest the sheet, continue of XX% ownership making million outstanding due Transocean $XXX in our in manage venture, million principal we decisions long-term shareholders. of June, issued and that actively we company of believe our shares notes and the XX.X interest the as owns which acquire consideration X% joint to XXXX the

addition in conversion which into cash of committed next be over to anticipated incremental industry-leading years, remain on backlog qualitative the an can to to $XX to transaction We free maximizing the our million the per flow this In debt. is X year earlier, mentioned our used Keelan reduce cash. benefits provide average

maximize over remarks, back on enables in to the that upcycle Alison sheet now fosters ensure balance concludes prepared creation. portfolio also our it allocation Q&A. to assets. approach to effectively I of priority the We for that and to my aligns capital this allows and our sustainable capitalize manage value and continue growth will opportunities This our us us deleveraging of We believe with turn

now Britney, as questions. ready reminder to to Thad. follow-up And please Thanks, question participants, to the a and limit question. initial one yourself we're take one

with a this We'll time, Eddie first At if question to question take would Instructions]. Barclays. Kim you ask like our from [Operator

good morning. Yes

comes XXk off the wanted rig that do of do expect contract mean, off -- capabilities? a good be upgrade. which FID when is BP's with Atlas to another the And to for need Or XXXXX psi start will and upgrade which than in of a much a how beacon you cost recently, earlier would think see early [XXXX]? it need I Would Kaskida case, Just development BP the candidate rig. to you that, of was of psi that be in what you the type likelihood maybe

address actually X-part Thanks, to Eddie. it and of the Roddie an the of XXXXX will side marketing I'll existing a question. what Kind let Seventh capable? it handle to then rig Gen upgrade -- Keelan takes

Yes.

as rig kicked was us the the of XX,XXX available completion upgrade the illustrated be doing before, proactive we've really to So activity to the point off. rig that when

think. gone XXXXX, think So frame, not hot be us only for but choice, logical and upgrades a rig a that of time having that I would been I through And has time a rig all that operating in suit well. certainly, some in available the very would that's opportunity

maybe up part the on that to And takes rig. upgrade of another to what question second pick just it on

that of to got top all, today, it's that. to of lot ordered a that's XX,XXX the today. in with mark all you've able associated you've equipment an psi you with and that, of internal that's the and hole probably lead then times systems equipment of related And be riser to is it BOP a XX-month the think there's to that ancillary the system. a get the obviously intrusive if pressure And On First for system required I buy as other and control process. got piping long well. to upgrade rig for And to that take all XX,XXX go up

lost. able for to other the and you're time cost even years opportunity that with that at seventh advance you months that's with in working, without about required, to opportunity rigs to think X Along be least have to to able for at a equipment of X associated the X currently service that's to upgrade completed. be complete come that's X they'll probably cost considering have to generation they looking if out the and $XXX upgrade plus will that multiple So lead an get million

the to pretty want here. I Right. get vision

Atlas Titan. Got hearing My guidance on difficult upgrade, the year I'm well the full the 'XX it. bodes it's for just is to which which and you follow-up maintained. EBITDA

wondering the idle rigs. is on assumption what Just your

guidance, incremental rigs the the put we EBITDA work to does these you today, your year? have they year, your end kind think and X guidance? let's work the DDX low of Inspiration, does this for midpoint So of rigs the it, how us should the Just And assumed idle get say, no this that latest at of extent about that?

Yes.

So, not in marketing we to our put our year. those guidance in strategy, this are work rigs expecting to

that's be that will during baked So they year. this already in there not active

compete I think them on not opportunities, as we going short-term only them said right but to and basically before, mark. to for we're we're going try put the with

So we're keeping them for drive opportunities. longer basically

So activity those rigs. yes, no numbers on have our guidance

in characterized also rigs taken the I the guess keeping possible. as condition number And costs steps are technically low that as warm-ish, associated of as a them are while marketable, be ensure that would but with that we've to they

Lewis with We'll Greg take next our question BTIG. from

higher. good kind of and of a on thanks bit rig your on Mexico, and you locking like an that Congratulations last rates I question. mean up has the talk to for little over Invictus. Gulf though, about did been e Thank rig years the in morning want couple strategy hammer I of the taking my

year, any in Gulf think You of Or at rig mean, where rig that the are kind Mexico? the bouncing a going is that XG of up really kind kind customers around spot on a cycle and are to, Conqueror I lock being all starting to now of off. available we realizing hot that next about is rigs? point should of that we middle the of contract locked rig the into

Yes.

the last I think take first. that of I'll part

more exactly So they're really assets, are the that the customers at to right lock moment, them the yes, that's in up. looking

got those as have the Jeremy Hopefully, good some we them. on we on work some have a But was never immediately our updates had of to kind up would going opportunity -- at I are kind we an as for soon ahead very months. give mover that. one to of the us of think that the details not. rigs we'll rather that's on point. very, very that some do we other last what And number new really opportunities. And opens now very significant Jeremy the have of that of couple customer the very very interesting a to, you out, we're fantastic put meaningful we at on with very being way the But of here contracting We're the and She you that think other we a mentioned, those basically, a rig. our we've -- confident and to was see strategy Greg. point Invictus, rigs, increase but activity over close for LOI flex about seen alluded as out, in moment, sold certainly as of market work So

as $X.X months. year, $X.X of has already In booked that billion just within the happened billion having few about we think fact, this last

amount So very, the really space covering acceleration lot white and a of space course, awards working that a we've real in the of small in that left is very of we had fleet. white now seen a number the of

I just, about guess, maybe the that been thinking a is curious sheet. And I'm and balance Okay. But I down. keep total investors, definitely, that, think how getting guys level busy. Great. of you're I get start have goal I doing them you the kind debt from lot the mean sense to

couple is you of the long-term as any around you're kind kind table long-range, about out level of next the have years? kind of so of debt here, we're that over targets thinking And of XXXX guidance, as kind we look

Greg. Thanks,

debt have not So financings, sheet. been I change balance amortizations. in mean, to regular the really any the there's red approach with discipline associated the our the of

with reduce that but to this We there. interest than also privileges BB-ish overall the XXXX balance somewhere period any on which change But that necessarily essentially our being I no in level suggest to sheet, all the anything do balance change that's can have rights We targets in not articulated get that a a rating talked junk-rated of that credit more No place about affords plans. And one and to not think getting the sheet. really our continue have point. of We to specific our we've at mathematics. debt time. gross to need we

Okay. with Energy David Pickering question We'll next our take Partners. Smith

harsh rates impressive very a environment in QX. Was

reported $XXX,XXX rate you if QX. was day than I about to the on report a a day, just day going could the fleet to us And I better that that was average ask contribute which almost remind out status average for is last $XXX,XXX of that pieces the think the performance? substantially moving

Yes.

think posted was XXX. we and what the actually I XXX

employment So they're substantially rigs before. that from happened with call the And that of higher finding I the to see up to course, that really remains there's particularly XXX you think can really be we think the And those another Norway, which forward, back elsewhere, because I Norway gainful tightened going to on that going market tight. rigs numbers. rates only mentioned bolster this of of rigs go exits And market. than

of as would be going high very expect forward. going numbers Xs those Xs So, fixtures to a those are I that in lot and

to kind quarter. an And items the was daily there's 'XX, not was referring other that press realized know the got you've explain request the revenue more the a I of FSR kind environment second about leading in harsh contract release QX those appreciate $XXX,XXX. of I rate comparison just which around just for $XXX,XXX of for it, April, fleet I from right. where to is that thinking edge, in average asking on that items. in right, And difference. Definitely. some I but last estimated average the

quite think lower back, of if quarter been last rates. Yes, have we which a Dave, trying bit but on had would to year, waiting I day second weather, of recall, I'm at

available, have where it. that over don't booked higher of I roll here are factored the into So probably the contracts that's that. information I probably options think and late rates that higher. readily coupled we priced but of part then with day That

X, significant of combination day I those is those in of fairly the pictures. So, for the increase think, rate all to

seeing just But X.X semis. maybe any aggressive I for competition from behavior to the direct next to don't to wanted rigs? with the Appreciate asset you, on work it. X Joe's try get the about competitive know notable anyways. away that pricing ask contracts really including I thinking benign the isn't owners, in decline this of Great. Tier and change much availability you're if And ultra-Deepwater new more have competition for pretty the you years

Yes, U.K. are in talking the you about primarily or...

Benign light had pretty deepwater we've -- to contracting semis... the

fleet. happening exposure the on Yes. very point I that higher rigs need focused see more time you'll to out, the on as drill environment little semis those programs. Look, the sure rapidly, out. really think for now, going trying that lot all in very probably operators And booking think the But make they very people get benign which I sixth-gen a to moment specification I think have our to the at are about attention those is run it's assets. But we to

We'll take Benchmark. Hallead our from with next Kurt question

drilling offshore given state I the you. color. that I it's an this by just the always guess, Thank me conference appreciate way, calls. day on it let start

of of for XG commentary, be drillships we've range kind between of calibrate guys and and just a like heard that of to a from to that the your there get parse we number a other that incremental well? XXXX, the Is through that could demand when kind as in you sounds could X% somewhere it XX%. like is now number between group peer couple So

in be the That absolutely. our Yes, would the number incremental in basically all to world. would, XX% X% mix sense [technical fact, difficulty]

That's Okay. awesome.

been maybe we of relative been there Or see you be There be either spurt had now a that until been that for Do of period marker. the above things do signed How evolving maybe day cadence to the way. digestion that more just have in to have expect a another is contracts Jeremy, here? and year-end? And teams up kind $XXX,XXX a of pushed what's Keelan contract So a to kind XXXX you get we of potentially spurt going lull recently. announced of as of from or a then towards kind dynamic?

call Keelan contracting busy Yes. talk because as said sign the haven't We I'll decade. listen, take been last we in that lot in of the a and in there appropriate. about lull the last was and said, activity. Roddie can We this in

majority them, the direct are of they're don't with We negotiations see all them. you -- so vast

day, the financial $XXX,XXX a wells or to downturn, a that approved make are really X but when them. bit because these Back conversations now. taking they're you're talking scene, impact a much the slower the at that see are about X dollar during execute our it place to could contracts don't the You those get all little behind we so values customers said quickly because of substantial didn't

of get a talking and years. we're conditions about over plus approval pretty is And Now onerous. lengthy turns the and negotiating and process those multiple pretty the day $XXX,XXX

it takes saw that approvals rest would I they as activity we we'll sometimes move through bit a the in there's to mean the and little expect of that's hope forward. deep report and so customers front system. want to a recent our in takes push work our doesn't because them through programs much the It there's come longer their right of status internally and the much flurry. necessary a in with then have just in now, through on longer year still who fleet these to conversations here, so And little mean all partners. deep get It the the us. announcement just reaching I of BP, all background like and more And these all going negotiations, for we're as so with we announcements

months. multiple the and announced executed I floor to be the do over couldn't don't expect at couple tell cadence, see and course of the coming weeks the over did of like we'll that I contracts great once, I so a And we months, of the know you. here course but last all

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

misunderstanding amongst bit think the what's a I as disconnect reported a supply of demand see. between and what there's a actually we or and analysts

year, a the you're articulated made. to rapid much larger expect talking for activity. So may are already year kind be even take the But much this have and to is a before, we XXXX as had those in great time a bigger never we acceleration by There decisions pause And of Jeremy's now higher awards. the been contracting seeing in the lull it longer. contracting were end. fixtures But we've when of So about rates, and better point, programs, us, of in we're some these point to day seen now, right? a

could it be So years. one of our contracting best ever

proud grow So see we number just I on more to very and that there's still further. obviously at announcements if think of BP expect $X.X has the climbed that already to our a you'll we sitting our we're fixture backlog And even expect tremendous of, significant number include we fleet announced, billion, but come. a we're that that currently we

I think a So going to prolific be year. it's

Awesome. And Thad. one then for

in of how the in and you into where and questions earlier. convert given next current rates in couple debt into again, that that we assuming backlog can on, converting does the the the over how structure, much years? following flow? of debt or we But And flow the backlog can that average that of how to one day Maybe the change said So and rate so the take no use backlog cash cash outright think today backlog that sits on then currently about reduction? prospect

by for with goes be address we that sort the the anticipate thereabouts, and have sheet. there for that growth [technical given [technical to opportunities to on debt exercise. flow to that In our as appropriate balance of There's cash be The of significantly next mentioned, will that of So going [technical a sense makes and that available work. the stacked be our exercise ensuring reduce anticipate difference, pay neighborhood the billion to will debt is or the valuation the that in associated flow sense every we dollar predicated down every here a from our those of then to it sheet. difficulty] and natural purpose. there'll notwithstanding dollar of point ability can we when in we the difficulty] primarily balance the discipline one we'll capital We available anticipate objective us that is of deploy difficulty]. makes to to get into debt, assets in that cash we It's put back be $X.X of I some end allocation be course, XXXX condition timing customers of on, the to going do that always the But steady put our this improving cold to return. a

Capital. next We'll question take our from Becker Doug with

associated Atlas drilling mix at the then XX,XXX well. I'm a that the between as look distinction probably with activity some taking drilling like looks contract and Kaskida there's completion guessing and it Invictus, So

XX,XXX the of making So consistently contracts are a seeing distinction drilling you're some completion. evolving curious market getting in the completion drilling if type between that versus versus way

make centric anomaly the Yes. essentially. case a nobody Look, simply going that's forward. the vessel is the completion The here not else Atlas plan have does. This that small a XXXXX just actually features you of was to that always because

that at mature going completions XX,XXX different we basically and enough is market XXXXX prospects focused So expect that the point of many many, now pipeline on a there's the now forward. we're keep would to her

took point, she that going is And through just into and XX,XXX. had. there's of then after way when of really we delivery now forward So that on extensions focused maiden XXXXX all of these for we've from the very kind the its what, evolution very this be because rig significant the will contract demand

sense. hoping one It high on of parts then be that. that the quarter. And annual The completely that quick might level a just for imply will Thad. could in talk seems expense just you O&M to makes some moving at It's fourth about what decline the guidance a

in going be the to to with close is period were generally to that this the of O&M O&M well. slight consistent the decline. next what expect a of as amount think function I'd There element costs be a it guidance there It's quarters. articulated flat. over are spread of deferred generally, may be we I in a rounding But couple quarter. There's last the

in with the our Partners. And come from Energy you. Daniel Josh Jayne question interest time, will final Thank of

Thanks.

programs to First market the awarded. XX type of those little balance, one number a months? in you the hoping over your Gulf just Mexico. be outlook bit. that could expand then I of on next a on the opportunities you your are was to in also Gulf elaborate being filler just of I gap for And Mexico comments, prepared had about but is there that In on the talked XX

Yes.

we So look, LOI, before, filler, is as option. another we but under we as have see about to gap one one expect mentioned it there, talk we an

soon. likelihood the to So for a fantastic us of And that them visibility. being going gas very hopefully turn very They're are term fillers really small. puts firm position into actually in

for Gulf outlook the about Mexico. the of asked you So

out As very close these we sold we look significant at Gulf, of that the it, period our pieces, of last couple time. a essentially little in for fleet is assuming

that but thing do not longer-term in pieces activity, all that visibility we've of of Some as the very about is that of several But the the these the we for forward. the out availability we XX rigs think about the to only attractive. little have, for booked are rates very great Mexico And sold have months. -- we the availability Gulf going years over the have we next

opportunities. substantial And that the coming seeing available generate the now for assets that's keeping that So in and along right to we've about of through expected we're cash part flows very the strategy all spades. had really right

one Thanks was in that wanted the remarks. back and thing I go to prepared to also then

could XXXX. That level how I bit. expect I just ultimately think that through be was that XXXX America to by a you then expansions And was the in go you driven consume. that South you rigs back to about hoping would about of CapEx I and detail, missed largely talked from level but a to of little going Africa. increasing for many could you increase, CapEx talk

XXXX. -- in now, level and increase what rig it the of from about what you're you. XX, months X CapEx count maybe XX just consume could about the talked that to Thank You thinking how but

question? all could it -- We're Sorry, repeat you the bit little muffled. a was

that. about here. Sorry I'm Yes,

Sorry.

of something had a was expected that CapEx increase. to said level So about in prepared you the remarks,

consume going than many where you could And I just think going today driven and South those would about are ultimately through I numbers be if Africa. repeat them. it curious Deepwater XXXX, talk was and which how was of rigs we was in more that from from XXX% to activity America XXXX sort to by from

sorry. I'm Oh,

talking exploration CapEx thought green You're talking Which you CapEx... CapEx... our We is were about decline a not our about the total

no. no, No,

about Sorry that.

$XXX was prepared difficulty] in are [technical offshore XXXX. and grow in billion exploration in $XX XXX% that's the remarks, from to to projected greenfield So investments up global it production billion

we we And so rigs on what be the call going believe discussed that the in to to is X driving is that XX the sessions. earlier of incremental Q&A one

an to of mean that lead is level obviously incremental increase. capital going I So just to

And so in And confidence going giving that's kind really what's fleet, that see rig an we're since this the reactivations. increase on us count. active will finance already lead is the the of to at we customer to XX% utilization

us confidence future. ultimately so some And give here not-too-distant some that that does in we will begin the reactivating assets

call for to closing Johnson will additional turn over Alison Thank host our now I or remarks. the And you. any back

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

conclude Thank for does you participation. today's you. Thank your This program.

wonderful and may You a disconnect this at time day. have