Transocean (RIG) 31 Oct 242024 Q3 Earnings call transcript

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

Thank you, Madison. Good morning and welcome to Transocean's Third 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, session with prepared Following answer question team. comments, conduct a Keelan we our and will Thad's and

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

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

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

our and quarter, the was again extensions contracts During team fleet. new once the busy exceptionally marketing across securing

the given be for awarded current one-year Deepwater the no very pipeline one-year Mexico, the ensuring additional for understanding rate. the strong U.S. to up new is And customer's program, be XXXX, quarter a to is contract of our excellent the expected a contract the that shaping BP XX with contract. our XX Transocean this current rate commence same of these months. In day, a exercised. option XXXX ultimately under year provided a opportunities, coming at will Gulf contracts, Atlas The we at second expect With services in fleet utilization of of contracting per $XXX,XXX includes of option to

Additionally, the awarded keep of that working to into the this rig currently extensions Invictus are expected was year. November contract X Deepwater

With now in these fleet extensions, active fully is contracted our XXXX. essentially

was expected for additional Deepwater Lastly, additional day, the the Industries including $XXX,XXX of into a includes at expected rate program one-year The of awarded is at commence Reliance X-well India, This is services. day, the Gulf, contract to second a October of in program the a excluding multiple a Conqueror rate contract KGX $XXX,XXX awarded quarter XXXX. commence services. options of in per XXXX. In and to per XXXX

a day. to Transocean's on at per the harsh In Norway, X-well option Spitsbergen Moving rate Equinor $XXX,XXX the of a environment exercised fleet. current

firm quarter runs term October in Assuming now $XXX,XXX Australia of is firm of and The of through fourth remaining of the with at for all August XXXX schedule XXXX. X XXXX of rate rig Woodside X the extends the estimated current into exercised options rate options remain Transocean of to total wells [ a The expected per XXXX. In are XXX-day on remaining a current Enabler exercised least day. the quarter through period ]. $XXX,XXX third extension a exercised, of to well extends X Australia, options, additional at at the per through also options one-well XXX day. the the Equinor

for now the is As of solidly and into booked the Transocean vast fleet well XXXX majority XXXX. mentioned, I

of most operate to half we successfully efficient highest and avoiding year, issues XX% operations of I we group relative several that utilization this fleet and on discussed so own active our use peer the comprehensive consistently through the in capability point this months. We would it our of next remains some time have believe far creation reliable results customers to first have the and understanding high portfolio In at industry, over eliminated I year, fact, advantage to for my based the XXXX asset safe, maximize from our the from awarded XX value XX% assets. On global concerns position like on the Keelan, deliver today's our utilization Through fleet XXXX. have steadily hand roughly before for spend we fixtures we last and to that of so-called market, backlog, following: space our unique and our specification through quality. over competitors the a past white exceeds our

resulting We has consistently proven have to technologically XXXX in gradually is rig peers. a that Through of cycles, optimized operating specification since owning differentiated assets portfolio fleet the the and fleet that our from strategy. the of highest but winning our continuously be

These drillships Titan. As Deepwater are with only well the world, short-ton Atlas in equipment. you're and the well and Deepwater X,XXX hoisting Transocean capability Ultra-Deepwater aware, X equipped rigs Xth-generation XX,XXX-psi owns control

Petrobras. in Of have We is X short-ton Shell class. for is awarded result to just XX, market, and the X medium-term, committed a drillships. the of this are in also the essentially this one assets the one X, marketable of was Angolan we sought-after permanently remaining that X-year the contract X,XXX The own deployed only X in with years,

and diameter. performance if previous the their designs, wells, hook-load thereby to facilitate optimize strings. in greater productivity required due our This characterizes is of permits to capability the allow, longer the As preservation run capability reducing rig's discussed wellbore important drill to days well number customers reservoir well dynamics their the customers we heavier and it to casing of calls, to as

contracts and now ultra-deepwater higher the harsh specification, XXXX and recent our peer enabling clearly Deepwater group, utilization X.X% rigs, the Status our leading of relative market equal, billion us our billion all else Report to recent to awards, and July industry total fleet, which, $X.X from in fix Fleet environment Conqueror. the a cycle coverage by been including, demonstrated $X.X our across evidenced to has year contract by our seems day example, portfolio rates. It XXXX As represents award for the leading by be to sequential increase being contract customers, in for backlog, our leading way full high the our preferred throughout by our

appreciate Although the operators fleet still XX%, commencement date rig is for this which of below our of the the falls utilization will competitors be specific that utilization, rates, point most efficiency day and program a continually value elect afford a the to during commanded in at window cycle. With each I'll expected to low that, within attract over adjusted every when program day assets demonstrated additional rigs rate global clear of even per operators premium excess other we that and assets and that have flexibility. services, strong value them premium of adding fleet day, indicator well very that $XXX,XXX Transocean's it recognize assets services. Even words, in in the is context the of Keelan. now as the utilize consistently greatest In customers contract our a turn for floater the to

Thanks, Jeremy, everyone. and good morning,

global negotiations $XXX market in just by remain supported further the year by years, third-party and by for our contract per billion analysis, studies recent Wood longevity At flat. other CapEx upstream discussions Our relatively under and confirmed with several of awards, to the and upcycle the validated this Mackenzie is customers. forecasts next our confidence

projects so deepwater in because to the from investment of importantly, customers' and long-term the and of economics of ultra-deepwater our are compelling, grow share XXXX offshore XX% $XXX billion XXXX. XX% is However in in expected that to

a new XX% Rystad sanctioning In below of $XX analysis, project latest Energy's is than of each addition, more per operators barrel. the major economically viable for

This to As over such, as the in active it beyond. With surprise next rigs, no come customers would advanced and much we that in we current between availability and the work direct Gulf of moved in an actively XX and minimal programs, In of Coast in numerous an Nigeria, Proteus and have development Angola, these also mid-XXXX. opportunities in about both months projects XX Mexico, beginning expect months, conclude And demand in driven fleet will duration immediate of Mediterranean, contracts might of customers options. continuation to currently negotiations X,XXX-ton discussions XXXX. commence existing we engaged in are for XXXX. with Each their Deepwater Ivory are you should long-term is Africa programs the contracts. In Deepwater in Ghana. expect, our associated their with our average the focus for XXXX of as hook-load has and that Asgard, by the XX market commence XX

XXXX of programs be will in early Pool scheduled we required units as expected region are award Mozambique results operations the the Brazil, and between Moving to believe we rigs, Petrobras's to into continue and begin imminently, XXXX. in are to expected commence. In X Namibia may end tender believe they X XXXX, more and

year to for Sepia end the awarded rigs by expected the the up Additionally, X to early commencing be program is XXXX. of

another that rigs XXXX. end. tender year We requires We well strategic are also XX anticipate by Petrobras will think which these with through aligned plan, Petrobras's developments release

the out, XXXX. are now as the XXXX That off market of in scheduled stages said, Accordingly, as in local to environment in negotiations our outstrip early Looking early sold contract could direct market. high but demand at quarter. currently expect The the that specification is balance. are Norwegian we and harsh we rigs rig roll for fourth supply

semis commencing for X frame. Additionally, to incremental is out time currently tender Equinor up to this in

Moving to operations. our

teams our assurance of These offshore with In our respect COAs Houston perform discipline our operational of we in the fleet. implement required and our progress from additional operations and operations The Stavanger. critical correctly. started significant efficiently by as teams safely, subject execute make staffed to and critical XXXX, or workforce. to offshore continue around discipline clock the driving authorization the reliability to to provide tasks, operations and COAs, matter in centers, We verification experts are shore-based crews

provide improve are our progress, BOPs. which have some XX,XXX notwithstanding this delivered peers. Unfortunately, to we operation. established COA past XX% in emphasized service benefiting our focused our reliability, solely experienced the we on we reliability we operational significant control, both within identify, psi striving and several in have and of measure customers and upon and months, from our centers, the things new our and we said, the procedural improvement Since past over those related process Over differentiate the to years, several to we the Transocean. customer issues a continue have our execution Simply unique discipline our

reliability Transocean nature issue such technology, slightly times driver Given OEM deploying falling performance capability efficiency partners this of equipment, enabling primary for before, unexpected. demonstrated these have the as revolutionary And quickly revenue is and technical are not and resolve the our we the strength uptime issues. This new of our year-over-year. and many when issues first will

best to the to operational and our continue focus now customers, shareholders. I'll call execution on serve hand the Jeremy. will back to We of company all our aspects our

Thanks, Keelan.

availability near-term the for direct market, operational of active our unique limited the reputation the of our assets Our fleet of and our high-quality excellence. understanding backlog quality result our of are and

drilling the We are as for offshore customers be our to us. trust leader proud and the grateful are place recognized in in

we've cash. With that revenue delever the our $X.X then immediate backlog balance behind efficient As the conversion sheet we organically cash our consistently is focus financial on CapEx deploy to billion more of of enhance can to our and stability. approximately revenue us, stated, to newbuild largely free and

In outlook remains internal fact, and summary, for of to we approach services sufficient the forecast, a on distributions debt we approaching believe shareholder assets the consider current will end level our strong. based XXXX. In

continue the insulated market year rigs. bridged near-term the to utilization concerns upward as is our contracting We when our to time this ourselves mid-XXXX us have trajectory for expected high-specification from frame its successfully

clear our We participate financial to are by in to that, a our the meaningfully discussions review provides future our that used for sheet. With you into to programs I'll visibility cash customers conversations now the current confidence be as with Thad are call sustained to aware, backlog continue balance these we turn to future flows upcycle. free well delever our over as continually to the encouraged results. reinforce And

everyone. you, good Jeremy, and to Thank day

During today's our full the for briefly preliminary I XXXX. with results, quarter the call, will fourth for expectations and quarter conclude provide year guidance recap third our

more and our specific in our next is year. when XXXX we practice, report February of we guidance will updated As provide results

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

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

IT-related our third the Contract to revolving the equivalents and million, delays facility. I quarter. revenue This Keelan restricted cash due to Petrobras $X.X XXXX. quarter services, total above $XXX $XXX due the our downtime million. million $XX quarter are the capacity and is efficiency shorter were quarter extended million to Deepwater third non-critical by on the guidance liquidity third the revenues million. of of XXXX delivered provide caused slightly are and and average These million in due in drilling psi contingencies. G&A maintenance $XXX of daily of guidance, undrawn This the for for ranges just of now our includes active currently our the in from unrestricted highlighted. Operating of will was credit preliminary due quarter full and of new largely to guidance, durations operations cash, activities we the fourth and Atlas to $XXX about of expected as challenges quarter, guidance, of and drilling Deepwater below our service, During which $XXX,XXX. third provision is at with contract XX,XXX maintenance mainly primarily approximately slightly the fleet in-service majority This offset for an the in resolution professional ranges revenue and blowout factors revenues approximately mainly out-of-service occur year for in XXXXX. reliability preventers, Invictus favorable which of reserved cash below is ended $XXX the guidance fourth lower-than-expected We expense debt expense delay by was fleet the billion. of old of the the the

and reactivations As always, speculative our excludes upgrades. guidance

between including ago. This upon XX.X%, contract reimbursables an estimate expenses. quarter, revenues generally can based customer $XX and service weather $XX be drilling challenges moment of fleet-wide fourth know, also low of factors, you million similar mentioned vary a which, revenue and additional and upon the equipment expect efficiency midpoint includes and average performance, as that the uptime additional between recall to those million based I $XXX For carry to million we Please margins. single-digit other $XXX million services

$XXX expense be million Difficulty] to a [Technical We O&M expect fourth quarter to approximately $X within range of million.

the a earlier those related is quarter-over-quarter This of are deferred costs quarter. survey to in costs for to contract year the an preparation lower net partially XXXXX, which costs, Transocean Petrobras in-service offset These for increase primarily increase activity in completed due out-of-service the by Deepwater increase from special maintenance Invictus the Barents. and its periodic due third including and in to the

for We ]. $XX of within to to expect million fall G&A $XX a approximately expense million range the fourth [ quarter

to million and interest that expected approximately aforementioned $X [Technical $XXX $XX services and This interest forecast the taxes quarter-over-quarter the expense be related the $XXX to fourth in is Capital cash respectively. million is expense and expenditures about are are comprising primarily income quarter, million, and delay to expected interest of now respectively. Difficulty], increase and IT-related fourth quarter. Net professional for be in million approximately

we Finally, billion our should liquidity that the in area, revolving facility. $X.XX with credit the capacity currently we year $XXX end approximately undrawn estimate of including million the

the We Moving efficiency full midpoint, and to contract between to in limited reflects $X.XX revenue year our primarily at the approximately The billion of assuming revenue range efficiency, billion. forecast fleet. potential XX.X% revenue currently drilling the and active variances be $X XXXX. availability

$XXX services million Difficulty] and $XXX guidance Our additional expenses. includes [Technical and between million of

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

customer-acquired includes credit service. This cost million, upcoming of spares, approximately XXXX $XX [Technical of debt upgrades facility our liquidity of capital capital forecast sustaining approximately $XX most of million, liquidity and including revenue $XXX projected and restricted undrawn XXXX and is CapEx which to approximately and investment. million expectations approximately $XXX for is year-end for cash projects related is our reflecting of and Our million guidance capital reserved between Difficulty], preliminary which revolving at

for And our is XXXX. from June declined reminder, of million million our of terms this $XXX credit late again, to the the a guidance. revolving credit preliminary agreement, $XXX effective As facility capacity

We report expect estimates year XXXX we end results. when updated to our provide

schedule, debt by with ending upon $XXX gross Finally, maturity of based approximately we minimum approximately of the year million debt our XXXX, to a reduce in $X.X expect debt billion.

discussed distributions Jeremy as be As our upon met all to prerequisite will his visibility and in expect threshold of previously, to our this debt-to-EBITDA excess than in deploy to remarks. us metric we we we backlog repayment existing cash currently have pursuit to in contemplate our less late net to a XXXX, highlighted for future demand, debt to shareholders. Based reducing X.Xx,

accelerate and remarks, focused and call However, Q&A. will we on cost to control operational prepared objective, turn to to concludes conversion potentially maximize cash. This now the support of my that the remain initial Alison I'll deleveraging prudent and ensure we backlog this execution to back for

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

we And Kim take question Barclays. from first our will Instructions] with [Operator Eddie

ask to year. to months XX of trajectory for wanted has in been on range of expectations Just edge next day now. the about about rates high XX that XXXs Leading for kind your

part, XXX, in above the exceptions XXXs. Some the high for but most

utilization day you into not year, edge faced rate you with the do peers Just here? next thinking 'XX? that lower Just expect you from your -- again progression mid-XXXs are in guys, could given before the the are maybe how leading maybe ramping yes, headwinds drift up about

Roddie is here. McKenzie Eddie, this

Okay.

fixture I has been for XXX. above like -- and 'XX our mean, in average just our So class X,XXX-ton

firmly class the of for that we're So, asset. XXXs in

a there, are and on what they that bit soft on view of we've if now, are witnessed there's here little things a just bit longer. where Our rigs programs run that is these little lot a of the spots

that of negotiations place not a know that perhaps direct also out the in lot public domain. that We are take there's

this we like of example the us. So used for the year Invictus

really past this we long-term of So with the the announcement we we think right year, a didn't had And then, now. but April still about contract. working yet course, -- of contract BP have rig is the

premium lot commodity think seventh for of no day is a why of we've reason of see. dip got, there's seventh also stuff terms So I the that perhaps you that gen rates gen there's that instead the in units, substantially. don't My maybe view should they units

idle, of X go assets generation possibility some if Tier sidelined. very will be them then of many or think I strong to a there's the I are think sixth

probably that's of to for fact, time kind In them retire.

don't So utilization be I is to the when about right impacted actually think active assets. think going the you too much

I in for differential there think So be seventh-gen a of rigs, day dual shouldn't lot those rate. substantial a BOP

Yes. to at impact that, it to Eddie, add us just doesn't all.

If you most on contracts rigs, all longer-term are ours X,XXX-ton part. think for the

not the rates. so, bidding contracts secure can course, XXXX. even we And the proven to we're them have be of And downturn the going really premium they X,XXX-ton at and emerged that from just through for depths that rigs of X,XXX-ton day

And are too in the not utilization be XXXX. day of over next in certainly what But several the which our on and over competitors, so, we're it we see here course interesting work will for keeping of favor concerned one's really close happens months contracting maximizing terms to eye rates. about a

new that's of as contract and ones. how the have purge some idea a roll this to I find Roddie We think said, great they opportunity lower-spec for But assets kind the it secure be of difficult no off to industry as could going.

those most That Thus it. have to of stacked and viable about XG of you recently There only sense. rigs it. drillship Tidal newbuilds, consider have a Action. be stranded between just makes XX. one cold follow-up far, secured contract, My which on XG XX those that the the are most X is Got Got XX capacity. of sideline

if this they people a would little think you earlier I ask than year, have expected more most that.

seeing? many that industry ahead X based So too year? remaining seem seeing, to just that next sideline to of looking just we how you're on Or white a based the the optimistic little what you're just given year, the contract rigs the I you of just guess, sometime next concerns on a X announcements? and maybe would that expect announce demand even kind talking Are space faces does

sidelined, Again, to that take Yes. in X we no the bring would that you we look, when about them market. rush to we're have think

billion numbers forward fact, that Jeremy had be there's year essentially we some on upstream In every investment. to going around, the were going look mentioned spent if kind kicked at of of like $XXX

year and about about 'XX But that at specifically you levels that's of latest are to $XX around sanctioning actually the in think moment. per Rystad If the expected deepwater, according current double projections. to 'XX, the billion in

there's don't just to out I now. right those any need think rigs So push

is 'XX I many sanctioned frame the think it time to when as wait 'XX to target would actually there's twice be now. and are smarter be far going basically as and projects it

assets having that, a though, take to bring mean, And stack. of Yes. said year cold out going plus I are to these

XXXX said contract -- So or maybe I you start to X. I mean, you in even 'XX. But see 'XX a could decisions made for sometime maybe wouldn't X, in late X,

in I terms it for XXXX probably think about cold stacked of assets. that contracting would of be

take next JPMorgan. from And we Arun our Jayaram with will question

team, Seadrill. press and and to been wanted get the end you on to of structure transaction Transocean just industry consolidation maybe on market. premium you reports broader broadly at wondering on your care overall see of comment reports if just could and we're some on consolidation was reading. that I your comment the that between the there's the And a press potentially thoughts you some obviously, if thoughts Jeremy around I industry

and think Well, really on the we're out the the consistent lead comment media press industry. we there We mean, helped it consolidation. to our is healthy speculation. approach consolidation. been reports think I We've in such a job of that to our do of going based for I print But find not facts the I have story. before they that press are getting a on wonderful regardless, are that very that piece

as that done well. certainly have competitors our of Some

assets to far we much the the years, a X players of been has in market. go industry back far We piece the than you course in X, XXXX, industry are fewer improved structure the in the market, now years. if of over much The fewer last were, healthier XX

good think benefit, an that think all place so, be kinds all industry. There for would kinds in bit a the as more in and room a And think are still healthy. of We incremental consolidation I space there's of be that little that and transaction with through we realized. I additional a rigs. shore-based a for XX, rigs be synergies those our created take a combination. can value on mean, lot increase to very of can could support XX we're There's

So, But we're for have it's going to quality. going be still right us, looking. It's to around always the asset to be value.

back think think little I up a and we're I tough healthier thinks was everything bit I pause of here place right the current But over than where so, it's And match a think -- the consolidation, the it's is done today the everybody much we the good future, I XXXX. industry that is and in deals consolidation environment it months. foreseeable the next have in there a for think still to But isn't may several downturn when thing. a in even get if to any up started

Yes. Great.

follow-up. my Just

could BOP kind of the Is do you kind new normal just work this on piece equipment? type commissioning of of On of you of kind on a maybe just teething issues, that? elaborate

very we're in by expectations, we're experiencing components, not. normal? when that standard the significantly. of guess that the have these Nothing some of mortality Keelan here. Is the that stuff reduce I it's nature is tolerances of about you're an Arun, normal talking sort it it's using, aspects infant the that technology really fairly Yes, that

be things some you into And that actual of until the appear then of that see time. qualification tested work operation get in some and can aspects don't how and really at

testing some robust components amend going be much qualification deliver able to units we're more So, a the to through forward. going back from to some reliability

quickly. of very, surprised. necessarily ones working XX,XXX before we're XX,XXX very these resolve And some our BOPs experienced delivered in confident we'll that the with spec not some of with this we going cycle. last forward, very partners the higher We So

then little given nature the year equipment. candidly, we Yes. the run I have mean, we of Difficulty] than went all. been given pieces this at the that issue would first But any we some a a an pretty technology, the hoped. without fact [Technical of had And issues good equipment really entire honestly, it's sooner

Jeremy. right, That's Yes.

And we with Citigroup. next our will take from question Gruber Scott

commentary Africa. 'XX Thad, of the cost West We're inflation out is of inflation hearing underlying Brazil what coming and cost guide? just some level embedded in

to these just is days. where running So get a sense of trying inflation

going range and that typically that's pretty the Yes. That's It's X%, but of percentage a average, of of a where to upon asset beyond. nature, it observed, and for sort somewhere rig good there on sure. we've think, labor. average X% XXXX between We've bit up. And based inflation assumed really was varies question. is and forward, I on it we're mean be X that things end activity that inflation going upon in XXXX jurisdiction, in what we're to comprised comfortable I that depends what kind it of was, floor,

Got color. appreciate it. that And then I --

build note that to inflation that majority important that our and to Just we customer. the it's it -- of contract the we pass in to to that, add longer-term the contracts, through through into

development Yes. could And that show to customers that's the in it. up know. is type the just in discussing then Got No, projects good incremental on What of a thinking going demand 'XX, Namibia? of about utilizing big offshore focus. to area Namibia rig, be

Namibia.

Yes.

semi, I combination of and but on think it's drillship I'll that. let elaborate Keelan a

Yes.

conditions; and on working And the customers it the get It's And in extreme harsh are Africa that get there. drillships weather Namibia survive areas. tend quite the the area. down into adequately. areas preferred you cases, aspect environmental of of more can opportunity it closer environment think that can harsh border, other as some South to in close-by depends be the really in actually, you for to to that I environment the area a the semi is --

So I solution the on a type work. the would based that's of say it's the location and of also prospects

mode, in than tolerance you're completions. in lot running more you probably have If perhaps a drilling

phase of completion rig be a more on, later a desired. like the a project for So would probably development semisubmersible

may certain the drilling mean, you machine, is said in but more weather simply, I drillship Namibia. waiting more efficient the have of on ultra-deepwater areas

environment, it's harsh so, could And location longer. in stay semisubmersible on

to what so have customers that's weigh. And Yes. our

I you. was appreciate Got were just wondering the of -- color. I whether they which kind leaning. direction

question will Energy take David Partners. Smith from next we Pickering with And our

your successful the premium contracting from white and strategy that dealing on that Congratulations are space you with. asset insulated has your concerns peers

ask Roddie that, to David? you Did say

me asked it. Nobody say to

Thank you.

It's impressive.

Thank you.

year. capacity that you're to whether decision reducing to leadership get not in next not on it whether your of process recognize to decision or perspective in the valuable excess I thought not rigs past But just a facing the cycles, I stack And stack given rig. or be of historically strong would your

would it, than quarterly. we retired over we mean, the seen the last do David, but know, course or don't sold over I say that of more it's But have, have Yes, years, I scrapped you've XX-plus I is or this what other into purposes on, the we quarterly, decade. frequent floaters

if looking it? supply. why that And is particular demonstrated so, take the I very on not future out think long-term of incur asset the we Let's the the see a of bright, we've that cost rig

bit I'll -- for then a I think for to speak see be the little it will and industry interesting Transocean.

X,XXX-ton I continue earlier the on gen as the to X,XXX-ton premium rigs said will eighth call For the and which work. we'd certainly call, the rigs, XG we us, rigs, guess,

continue wind customer to rigs if may those work. the for will don't most see part, small You programs But gaps perfectly. just

other X,XXX-ton you we for a on active -- most for them it's pretty term expect that incumbent get Brazil them where position. Brazil, hope rigs contracts in or have part -- re-contracted. Once the to be currently to good Our are longer you are

don't for these for create they But rigs specification contracts at We peers, contracts as peer to extent off and about a not got of those following the of existing we us the some concern really to rigs get of rolling contract for the time customers amongst decide. rigs. a XG demand that moment. an ideal secure below X,XXX-ton [Technical or contracts, -- that lower of even look Difficulty] lot our start assets. it's around so, scrapped. our But even that sidelined that's maybe the immediately group, them to you've to their obviously wonder And And are all our some

And what's Our and we rate asset? of a uncertain, decision it's What scrap that pretty the prolonged asset. think we has the it's this make approach next quickly opportunity the to nearest time be? for been day always will if period do

Yes.

as happens, that they overall. by that then think strategy has them not a you I would spec you high-grade assets only for on high out the they And do now, from of fees, of well fleet everything then but terms and you preserving cash lower you our I save down spend you contracts, retirement what expense them the of or go stacking those as end immediately move track actually grade on the that, the without not possibly in the when retiring, add or rigs all time paying and interesting opportunities. But of ring your of It's and can to probably I been competitors as comes, to run the CapEx quickly go. your think the to really go kind to the value idle reduce assets. that's it's and the minimal lot of OpEx

So that action. I kind of from think benefits everyone

the Yes. color. appreciate I

sorry. a great -- think have I you

near-term optionality. long-term through the better stability the is drilling end are of no, at we No, for trade want industry but we was cycles. it emphasize the -- general earlier a to truly about like call a in I close assets fight, wouldn't of have around gets and when on. optionality, just the it I structure is these question I pretty sit day, that industry discussions asked when available to optionality, cage of But the just it's scarcity you this that that off rigs

absolutely. Yes,

you great have a playbook. think I

that if before I you're cash that in industry if return some to that shifting reduction? that targeting the from stronger there getting debt flow comfortable I your to shareholders versus cash borrow will 'XX, commentary think position ask wanted was are opening to competitors that the thought by specific being be remarks, metrics that maybe could late a some pages to of interesting. any do shareholders a I about follow-up. I quick being playbook. If

point facility, mentioned There was the think a negotiated that our key is one couple for years specific are of the I in criteria metric very which Well, a some ago. I Difficulty] X.X one actually to or debt able [Technical come of cash where to in consider at EBITDA. are And which to we begin is the turns the form share key credit repurchases. net

is that that deliberation. hard-cold reality, begin metric quickly as So, possible achieve in the that a as we hope to that can so we

positive the dollar about you our the during consequence demand It's unlike of that things I leading downturn. it for very by fruitful our all component. that But Beyond on benefits, the debt paying down every efficiency discipline of will, you ratings it's does turns. And same where include the many forth. just for specification internally of very about that a very and with, the, interim good about cash an and time debt, whistles we which always about as and high a is if and costs bells side, of provide of to having customers. paying as have, double of we've that of But the essentially There the for highly the improve comes lot achieving us the those of X.X do price conversation utilized nature. measure, are. is that, talked it's competitors. and of restructuring will sort them so as credit deployed. The better as the basis not level, down course, And course, a will, of think It's and ours if assets of much things conversations

take And next our from we will Kurt Benchmark. question with Hallead

Great update. it. Really appreciate

down investors already really nonetheless, and not but your cycle customers get basically, opportunities sure pricing So end your soapbox are XX% how thinking one I'll little given which why stock your is -- and a about come. clearly, coverage out But you everything year-to-date, are the has got smart contract said just bit beyond get of looking off maybe at and XXXX, observation, that

are we preaching, good. Keep

get business. on A going in the smarter bit little about bit what's little smarter a --

companies the about oil investors these what's to in in you will, biggest deepwater that obviously, think, to going concern their supply/demand bets issue XXXX. transpire placing with programs. I back be will So if context, out have And right scaling oil that already, that investment now beyond respect is a

base, referenced you on early would predicated your very kind and that conversation we extensive outlook as had you've or with expect that's So on extensive done of your that what customer you conversations to be.

missing that is side So express you can a are contract outlook table $XXX,XXX customers way the are in maybe guys for a it this conversations? picking day to willing that XXXX? your help what is in in that the of are And have on that you there your rig conviction that up the on we they starting a

a would was question. that say -- Kurt, I Yes, Well, that long

have? know. any any insights have, No, I you insights you

us demonstrates for It's land long-term from I the how that they take cycle not I point, future how that question. projects. I These thinking of the about would is get customers broader would seeing our term. These to everything -- a a acting. say I spend the good are longer demand are committed telling I and I them attention in that. a projects. behaving, they market the challenges. and time are are don't are we understand And It's and say certainly pay what lot are opportunity. concern these they supply about What long are that

deepwater now for breakeven $XX cost around You've remember that got a barrel. to customers is our the in

internally. they're And presentations I so that us customers show mean, even nice pretty XX% if oil prices a several making some We've $XX drop a IRR. a barrel, making at they're returns still us show -- got bit,

The at see doesn't we to they're moment, programs. what every way is and that is well They doing do committed do replace best reserves. need through very the offshore. What to think they're I So their the future to see Street day.

you that are hear [Technical asset, of some to out X,XXX-ton us. and come so maybe our -- mean tenders to X,XXX-ton direct You maybe they're The to fact assets, go Difficulty] why assets the negotiations guys wind unique, I tender? catch you see the going

conversations, so, negotiations multiple on deep And we're and that years out several we with customers, now. conversations those in are having are in from the fronts deep for

these I every And Street XXX% X. I'll leading believe the that. we rates said. at come out for stock. turn near sign it customers. And our incur a and But it that timing that, confidence. you active fleet. and that's it's we quarter of edge we But having part stretched with wanted, necessarily we see day can't of to that we And continue can't this we're contracts see have on at because it conversations who's The over with in to to so, with maybe what's Maybe weighing on continue the or in involved gives Roddie, believe all us day. utilization everything Again, our didn't have through keep probably that that,

Yes.

say But stock I the what honest, and Jeremy impact So, really move obviously there's which described, let's be oil price But up our a would by business. is, negatively we commodity. not down as is it threshold would with important. the as a

as developments. and customers, specifically, And with forward moving deepwater. So very comfortable mentioned, at environment harsh are looking are we Jeremy these our

actually period a viable is just to and continuing economical much longer spend in projects. skew differential true the take of So They time. to are because more towards deepwater these happen

the So, well at this at a the on of because that near-term these we're us, of to Well, as positive rigs from 'XX? barrel. kind So think that's -- you your already will in -- booked, point booked we do and game. are ahead things down And will are and be good in be fleet, active up again, in of why they sanctioned a $XX the for look was of were half our 'XX right? of at fleet view projects cycle, going we the $XX, actually have 'XX, oil the transcend question

could flows. And whether significantly practically a to -- other of than But would but any really point a of policies I deepwater to oil value or energy, cycle, understand It economic is period just as in exactly last a is, year just So, soft. the important was which exactly this that one about, sustained drilling it you drilling why one best through that that nature crashes little is those IRR. to of represent The happens we talking deepwater commodity the than everybody elements to where forms It's ago, concept we're was take so oil and out be it kind is ebbs a have is I'll is that's what the you think rather time. in price commodity about place is that. yes, of higher I see think renewables invest a we the long-term. thing prior so downturn today, key where and think the is are long it well, year other the and not longer for is unlocked of gas,

of So, been dips. X-year the prices oil that kind there's in we've even highly constructive had stretch this

And on that. maybe Kurt, more one thing,

well. years potential ago and activity obviously have other increase also amount developments we area customers rigs approved. that's being is what we're front. from been in decisions The that's to And that the But and uptick long in go going a well as to supports That are wellheads, that the all future being whole of look where a add And made. exploration an lead. in deepwater placing that our that equipment are data and FIDs at seeing our all we see forward. The that few the on consumable were ordered, trees supports as the needs to

long I So guess answer, --

we take next And from will Securities. with our Clarksons question Fredrik Stene

thank and are Jeremy and well taking team you question. all I hope my for you

remarks, spend quite rates. higher the on everything you questions that wanted and to totally of can't that demand And a that your But on comment the quality quality were you specifically ability understand circle to asked in bit the I and I rigs in to M&A use prepared obviously, your to previously. the your that's lot back did fleet So specifications around a your around commentary press. running

at in Or the being that? we benefit be Transocean? me. should I helpful can M&A for wondering, potential think give how was matches participate about if to for look of should would you we just would -- any larger really to that point, were some thinking quality fleet So much So, very you outweigh at around

that's quality one acquisition true. the generation would fleet. rigs. I no mean accretive eighth you to make X No for Fredrik, yes, we be is the no There rigs, has that thank just of has question. could X,XXX-ton our one

be add to accretive could would our And that so, fleet. there's nothing we necessarily

value, is obviously. there us, For

You into balance issues can solve there. and immediately grow some sheet your

and to marketable some what can rolling and that our and marketing place our globe, hot around patience the best return. expertise and would possible to possible backlog to repriced the be currently highest Difficulty]. With favorable is we acquire very a contract the billion ready off expertise rigs the we are those on have You some the think $X.X assets contracts good and earn [Technical

our to fleet. we fleet provide Obviously, just think are our with improve of is to can consistency and respect improving would is think all mean And that and the standpoint so, itself, are we quality there SG&A that. acquire of of transaction. in I we a that actually the synergies customers. There there kinds quality value there I reductions, nothing quality -- But all benefits some purchasing potential of could from service from overall a power.

the highest do. of a a somewhere require between reactivation cold good, assets. It's marketable Because, debatable. contract to hot on are the to have go specification million assets you is us asset, takes stacked at We that X,XXX-ton I potentially and certainly getting mean, XX assets a plus. we have to But is million would months for add which capacity are not next told $XX to that ready $XXX least and

us value shareholders. enable to and our and some quickly presence for our grow and So, create our real it customers would expand

helpful. very That's

announced earlier completed transaction if for quarter. out cetera. drilling of think the sold prices, et sale to was particularly supposed and are be that this I rigs would then think and Development Driller of the great, those if third in the work, the you question, And fall. I Discoverer great the Second be III they're sold And Inspiration

will updates if some other And will on you able they rigs? drill those the or for So, be are to purposes? continue X to give you used also, us if around they still believe process

were sold without once were on sold. use they the assets So restriction

competing buyer transaction, with low. With now. future we're given a uniqueness the gives specification, to assets that relatively the prospective of Difficulty] them probability against We've we [Technical of is working However, us of good the right respect we close the indicated deal us in just that the I'm nature, timing -- the updates things have as sorry, financing expect to transaction now. by the as the all in that elements to Transocean right our with -- the filing but do that's of far year, of we has and end the

we our next of will BTIG. And Greg take from Lewis question

want lot I did to keep to bit has about I'll covered, a brief. try talk so little A been it Brazil.

to high-spec before guess, tender going -- and shortly spec I announced the did You be the Sepia. mention that's,

specifically I to it about rig before too would negotiations that alluded talk just X Jeremy, white terms move talk just those. but at don't that an contract of the much couple there. contract Is that guess, done were in Brazil rigs if contractor familiar up? long. around And off think something maybe we with direct numbers international idle Less we already still a ongoing about in starts 'XX, that, could in is, rig extending and in one. is Brazil that that the space it match. think and of an going we don't then in to you be happening? contracting And -- I You to questions Brazil, [indiscernible] rolling stick kind doesn't third like as one Brazil guess did Realistically, One need when look then the look seem direct past, in with a was And there's Petrobras it idle I as rigs looks how idle. I on as I has like rigs believe that of negotiations international rigs out? be are about

so Yes, already come. got Roncador the then lot being is of and take quite about there got one. Pool Sepia to the you've X you've tenders the been tender. are is a like Yes, I'll additional there decided. And Roddie. This that anticipation tenders

So, that comment think you the first that was I had.

open direct you to particularly The base, like ownership a negotiations different pattern wider development. if Petrobras, a is second piece is have or partner on would. They

the again, view more than for that rig direct it's rather efficient those extend to result in So there's of a concept from far negotiations And operator's a to in a the of one. bring new being extensions. point couple could

So operators. for a of potential, but even to also have again, frictional not for Difficulty] then the and stop contractor up start losses a the contract, there's lot pause there [Technical a only

up through inspections, stuff. picking services, like kind going So all of down laying that services,

expect do little to we So that direct that terms going of a there's negotiations. in on be of bit going

some We think there's going coming also be to out. tendered additional work

Typically, Brazil the think in look fleet on a incumbent is rule had to from That there remove the you I in that not your contract. the Brazil is would if a be last you going rule. most pretty So were about rig used then to good hang for around piece no how Brazil? you the to long part. And longer

out you can a in hang for So Brazil actually while.

depends on it's rigs a So until that white that lot now, longer. I maybe from not probably X some think the space, have X, months

you'll other out I on decision making And year going Difficulty] long or direct So see what [Technical these months, could. of the possibly the But they're few look negotiations, see as some wait see think next over that. play I anticipation a possibility and as to additional that next of for wait kind they tenders of by the imagine they before like the would probably end first the you'll probably year. the tenders, quarter would

allotted now we time And I turn the questions. to back Alison for Johnson. program have that our reached it will appears

look with you, quarter results. fourth in We again and XXXX the call. your forward Madison, when we day. for speaking our everyone, Thank thank good participation you to you, report Have a

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

may time. You disconnect at any