Q4 2023 Diamond Offshore Drilling Inc Earnings Call

February 28, 2024

There will be a question and answer session to ask a question. During this session you will need to press star one on your telephone.

Been here, an automated message advice in your hand, it's right to withdraw your question. Please press star. One again, please be advised that today's conference is being recorded I would like now to turn the conference over to Kevin Board Vosky Senior director of Investor Relations. Please go ahead.

Thank you Michele.

Good morning, or afternoon to everyone and thank you for joining us.

On the call today are Bernie Wolford, President and Chief Executive Officer, and Dominic Severino, Senior Vice President and Chief Financial Officer.

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the fourth quarter 2023 Diamond Offshore Drilling Earnings Conference Call. At this time, all participants are in a listen-only mode.

Ladies and gentlemen, thank you for standing by welcome to the fourth quarter 2023 diamond offshore drilling earnings conference call.

Before we begin our remarks.

Mind, you that information reported on this call speaks only as of today and therefore time sensitive information may no longer be accurate at the time of any replay of this call.

At this time all participants are in a listen only mode.

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised.

After the speaker's presentation, there will be a question and answer session to ask a question. During this session you will need to press star one on your telephone you will then hear an automated message of bites in your hand, it's right to withdraw your question. Please press star one again, please be advised that today's conference is being record.

Some of the information referenced on our call today is included in our slide presentation and fine.

Bester relations section of our website under calendar of events.

Operator: To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Kevin Bordosky, Senior Director of Investment Relations. Please go ahead.

In addition, certain statements made during this call may be forward looking in nature.

These statements are based on our current expectations and include known and unknown risks and uncertainties many of which we are unable to predict or control.

I would like now to turn the conference over to Kevin Board Totzke Senior director of Investor Relations. Please go ahead.

These risks and uncertainties may cause our actual results or performance to differ materially from any future results or performance expressed or implied by these statements.

Kevin Bordosky: Thank you, Michelle. Good morning or afternoon, everyone, and thank you for joining us. With me on the call today are Bernie Wolford, President and Chief Executive Officer, and Dominic Savarino, Senior Vice President and Chief Financial Officer. Before we begin our remarks, I remind you that information reported on this call speaks only as of today, and therefore, time-sensitive information may no longer be accurate at the time of any replay of this call. Some of the information referenced on our call today is included in a slide presentation, which you can find in the investor relations section of our website. Calendar of Events

Thank you Michelle.

Good morning, or afternoon to everyone and thank you for joining us.

On the call today are Bernie Wolford, President and Chief Executive Officer, and Dominic start Arena, Senior Vice President and Chief Financial Officer.

These risks and uncertainties include the risk factors disclosed in our 10-K 10-Q filings with the SEC.

Before we begin our remarks I remind you that information reported on this call speaks only as of today.

Further we expressly disclaim any obligation to update or revise any forward looking statements.

Therefore time sensitive information may no longer be accurate at the time of any replay of this call.

Refer to the disclosure regarding forward looking statements incorporated in our press release issued yesterday evening and please note that the contents of our call today are covered by that disclosure.

Some of the information referenced on our call. Today is included in the slide presentation in the Investor Relations section of our website under calendar of events.

In addition, please note that we will be referencing non-GAAP figures on our call today.

Kevin Bordosky: In addition... Certain statements made during this call may be forward-looking in nature. These statements are based on our current expectations and include known and unknown risks and uncertainties, many of which we are unable to predict or control. These risks and uncertainties may cause our actual results or performance to be different Materially, for any future results or performance expressed or implied by these statements, risks and uncertainties include the risk factors disclosed in our 10-K and 10-Q filings with the SEC. Further, we expressly disclaim any obligation to update or revise any forward-looking statement.

In addition.

You can find a reconciliation to GAAP financials in our press release issued yesterday and now I will turn the call over to Bernie.

Certain statements made during this call may be forward looking in nature.

These statements are based on our current expectations.

Thank you Kevin.

We've known and unknown risks and uncertainties, many of which we are unable to predict or control.

Good day to everyone and thank you for your interest abdominal sure we present our results for the fourth quarter 2023.

These risks and uncertainties may cause our actual results or performance.

Well, it's 23 was a transformational year for diamond offshore.

Materially from any future results or performance expressed or implied by these statements.

Marked our one year anniversary of realistic under New York Stock Exchange.

These risks and uncertainties include the risk factors disclosed in our 10-K and 10-Q filings with the SEC.

Measurable improvements in our capital structure.

Secured $495 million in new contract awards and safely delivered five shipyard projects, all while delivering industry, leading operational excellence for our customers.

Further we expressly disclaim any obligation to update or revise any forward looking statements.

Kevin Bordosky: Please refer to the disclosure regarding forward-looking statements incorporated in our press release issued yesterday evening, and please note that the contents of our call today are covered by that disclosure. In addition, please note that we will be referencing non-GAP figures on our call today. Find a Reconciliation to Gap Financials in our press release issued yesterday. Now, I will turn the call over to Bernie. Thanks, Kevin. Good day to everyone.

Positive momentum continues in 2024 with the addition of another $362 million in new contracts.

Our total current backlog to approximately $1 $6 billion.

In addition, please note that we will be referencing non-GAAP figures on our call today.

Before addressing fourth quarter results and sharing some perspective on our markets I would like to provide a high level update on the previously reported great wide instead.

You can find a reconciliation to GAAP financials in our press release issued yesterday and now I will turn the call over to Bernie.

Thanks, Kevin.

On February 1st while waiting on weather with a well secure lower marine riser package R. L. M RFP disconnected from the LP.

Good day to everyone and thank you for your interest in Diamond offshore present, our results for the fourth quarter 2023.

Bernie G. Wolford: Thank you for your interest in Diamond Offshore. We present our results for the fourth quarter. 2023 was a transformational year for Diamond Offshore, marking our one-year anniversary of relisting on the New York Stock Exchange. Measurable Improvements, and our capital... Secured $485 million dollars in new contracts. Safely Delivered by Shipyard, all while delivering industry-leading operational excellence products.

Well I just wanted to <unk> was a transformational year for diamond offshore.

Hello, Murphy and rise or unintentionally separated from the rig at the flip to a touch screen and dropped to the seabed.

We marked our one year anniversary of realistic under New York Stock Exchange.

A measurable improvements in our capital structure.

No one was hurt no pollution occurred and there was no damage to subsea infrastructure.

Secured $495 million contract awards and safely delivered five shipyard projects, all while delivering industry, leading operational excellence for our customers.

Work to recover the MRP is progressing methodically to ensure a safe recovery, while working within the weather constraints west of Shetlands.

Bernie G. Wolford: The positive momentum continues in 2024 with the addition of another $362 million in new contracts, taking our total current backlog to approximately $1.6 billion. Before addressing fourth-quarter results and sharing some perspective on our markets, I would like to provide a high-level update. Previously reported great. February 1st, while waiting on weather, with the Well Secure and Lower Marine Riser Package, or LMRP, disconnected from the field. LMRP and the riser unintentionally separated from the rig at the slip joint tensioner. However, no one was hurt, no pollution occurred, and there was no damage to subsea infrastructure.

Positive momentum continues in 2024 with the addition of another $362 million.

L. A R. P is situated on the seabed exposed to both bloodline in an upright orientation.

New contracts, taking our total current backlog to approximately $1 6 billion.

We have successfully on boarded the riser string from the L a or b.

Before addressing fourth quarter results and sharing some perspective on our markets I would like to provide a high level update on the previously reported great Whitehouse.

Prepared to lift the L. A RFP to the rig and the next where the window.

We currently estimate the total repair period to a 9100 days from the date.

On February one well waiting on weather, but the well secure lower marine riser package, our LMR P disconnected from the GOP.

Dominic will provide additional information related to the estimated repair timing.

And insurance coverage in his remarks, and then Andrew I'd like to recognize the extraordinary work.

Hello, Barbie and riser unintentionally separated from the rig slip toy attached rate dropped to the seabed.

Our team in response to this debt.

And the quality of the ongoing collaboration with our clients and local authorities.

No one was hurt no pollution occurred and there was no damage to subsea infrastructure.

Turning to the fourth quarter I am pleased to report that our rig crews and operation support team delivered exceptional safety results.

Bernie G. Wolford: Work to recover the LMRP is progressing methodically to ensure a safe recovery while working within the weather constraints west of Shelby. The LMRP is situated on the seabed, exposed above the mudline, in an upright orientation. We have successfully unbolted the riser string from the LMR, preparing to lift the LHRP to the rig in the next weather window.

Work to recover the L. A or b is progressing methodically to ensure a safe recovery, while working within the weather constraints west of Shetlands.

And revenue efficiency of 95% across our fleet during the quarter.

This achievement was particularly noteworthy as we commence for contracts during the quarter one in each of the regions in which we operate.

The LMR payer situated on the seabed exposed to Bud and Bud light and an upfront orientation.

We have successfully on boarded the riser string from the L. A or b and are prepared to lift the MRP to the rig and the next where the window.

That's off to our teams for their steadfast commitment to planning and execution, while never compromising on safety.

Bernie G. Wolford: We currently estimate the total repair period to be 90-100 days from the date of the accident. Dominic will provide additional information related to the estimated repair timing, cost, and insurance coverage in his remarks. In the interim, I'd like to recognize the extraordinary work of our team in response to this, and the quality of the ongoing collaboration with our clients and local authorities. Turning to the fourth quarter, I'm pleased to report that our rig crews and operations support team delivered exceptional safety and revenue efficiency of 95% across our fleet during the quarter. This achievement was particularly noteworthy as we commenced four contracts in the quarter, one in each of the regions in which we operate. That's off to our teams for their steadfast commitment to planning and execution. I'm never compromising on safety.

Our fourth quarter financial performance reflects the impact of having four of our marketed fleet of 10 rigs on higher market day rate contracts at quarter end.

We currently estimate the total repair period to be 90 to 100 days from the date.

Dominic will provide additional information related to the estimated repair timing.

Total revenue and adjusted EBITDA for the quarter were $298 million and $72 million respectively.

And insurance coverage in his remarks, and then Andrew I'd like to recognize the extraordinary work our team in response to this debt and the quality of the ongoing collaboration with our clients and local authorities.

These results were above our guidance for the quarter, primarily due to the patriot working longer than previously anticipated.

The deferral of certain contract preparation costs, and earning a performance bonus for efficient and injury free operations in Senegal.

Turning to the fourth quarter I am pleased to report that our rig crews and operational support team delivered exceptional safety results.

And revenue efficiency of 95% across our fleet during the quarter.

This feat in part reflects the impact of brakes, moving to hard direct contracts and sets the stage for improving financial performance in 'twenty to 'twenty four window fewer planned shipyard days.

This achievement was particularly noteworthy as we commenced for contracts during the quarter one in each of the regions in which we operate.

The Blackhawk encourage having a full year on higher day rates and the black line in black Rhino that'd be to higher day rates in the third quarter.

That's off to our team for their steadfast commitment to planning and execution, while never compromising on safety.

Bernie G. Wolford: Our fourth quarter financial performance reflects the impact of having four of our marketing fleet of ten rigs on higher market day rate contracts at quarter end. Total revenue and adjusted EBITDA for the quarter were $298 million and $72 million, respectively. These results were above our guidance for the quarter, primarily due to the Patriot working longer than previously intended, certain contract preparation costs, and earning a performance bonus for efficient and injury-free operations in Seneca. Speed, in part, reflects the impact of rigs moving to higher day rate contracts, sets the stage for improving financial performance. 2024, owing to fewer planned shipyard days. The Black Hawk encouraged having a full year on higher day rates, and the Black Lion and Black Rhino moved to higher day rates in the third quarter. Now let's turn to our view on the markets and opportunities for diamonds in 2024 and beyond. Jeff Sockel, and Offshore Drilling, continue to be supported by strong commodity prices.

Our fourth quarter financial performance reflects the impact of having four of our marketed fleet 10 rigs on higher market day rate contracts at quarter end.

Now, let's turn to our view on the markets and opportunities for Diamond in 2024 and beyond.

The upcycle in offshore drilling.

Tenuous to be supported by strong commodity prices.

Total revenue and adjusted EBITDA for the quarter were $298 million and $72 million respectively.

Robust upstream capital spending and anticipated year over year growth and exploration drilling.

These results were above our guidance for the quarter, primarily due to the patriot working longer than previously anticipated.

Thank you, Matt as a group these indicators support our view of a longer duration upcycle in deepwater drilling.

The deferral of certain contract preparation costs, and earning a performance bonus for efficient and entry free operations in Senegal.

Let's look at some of the numbers in support of our longer duration upside.

Exploration drilling can be considered a leading indicator and a precursor to future development programs and analysts now forecast year on year growth in floater exploration wells or 34%.

This feat in part reflects the impact of brakes to hire direct contracts and sets the stage for improving financial performance in 2020 for OIBDA fewer planned shipyard days.

Subsea tree orders are another leading indicator in 2020 four forecast predict the third year in a row with over 300, new trees ordered.

The Blackhawk encourage having a full year on higher day rates and the black line, the black Rhino moving to higher day rates in the third quarter.

This level of order activity is the highest it's been since 2013 at a time when we had 115 more rigs in the market.

Now, let's turn to our view on the markets and opportunities for Diamond in 2024 and beyond.

The upcycle in offshore drilling.

And we do today to execute the related drilling activities.

<unk> to be supported by strong commodity prices.

Putting subsea tree orders into perspective relative to the global marketed floater fleet.

Bernie G. Wolford: Robust Upstream Capital Spending and Anticipated Year-over-Year Growth in Exploration Drilling. As a group, these indicators support our view of a longer-duration upcycle in deepwater drilling. Let's look at some of the numbers in support of a longer duration. Exploration drilling can be considered a leading indicator and a precursor to future development programs. And analysts now forecast year-on-year growth in floater exploration wells of 34%. Subsea tree orders are another leading indicator.

Robust upstream capital spending and anticipated year over year growth and exploration drilling.

Back in 2012 in 2013.

Thank you, Matt as a group these indicators support our view of a longer duration upcycle in deepwater drilling.

Number of orders per marketed floater peaked at one five and 1.8 trees ordered for marketed floater respectively.

Let's look at some of the numbers in support of our longer duration on the stock.

In comparison in 'twenty, two and 'twenty to 'twenty three those numbers were 2.1, and 1.8 and the 'twenty 'twenty four forecast stands at approximately one nine.

Exploration drilling can be considered a leading indicator and a precursor to future development programs.

Analysts now forecast year on year growth in floater exploration wells or 34%.

This would indicate three contiguous years put numbers matching or exceeding measure, stating back 12 years.

Subsea tree orders are another leading indicator in 2024 forecast predict the third year in a row with over 300, new trees ordered.

Bernie G. Wolford: The 2024 forecast predicts the third year in a row with over 300... Treaties, and more. This level of odor activity is the highest it's been since 2013, at a time when we had 115 more rigs in the market. What can we do today to execute the related drilling? Funding Subsidy Tree Orders in the Perspective relative to the Global Marketed Floater Fund. Back in 2012 and 2013.

These trends synced, well with analysts' forecast for floater demand on a rig year spaces.

This level of order activity is the highest it's been since 2013 at a time when we had 115 more rigs in the market.

The forecast compound annual growth rate for rig years of demand.

23 to 2026, a region or 7% for North America.

And we do today to execute the related drilling activities.

11% for South America, 10% for the North Sea seven.

Putting subsea tree orders into perspective relative to the global marketed floater fleet.

7% of West Africa, and 25% of South East Asia and Oceania.

Back in 2012 in 2013.

Bernie G. Wolford: The number of orders per marketed floater peaked at 1.5 and 1.8 trees ordered per marketed floater, respectively. In comparison, in 22 and 2023, those numbers were 2.1 and 1.8, and the 2024 forecast stands at approximately 1.9. This would indicate three continuous years with numbers matching or exceeding measures dating back 12 years. These trends sync well with the Atlas forecast for floater demand on a rigged gear space. 2023 to 2026 by region are 7% for North America and 11% for South America. 10% for the North Sea, 7% for West Africa, and 25% for Southeast Asia and Oceania.

Number of orders per marketed floater peaked at one five and one eight trees ordered for marketed floater respectively.

Another key metric we track is the trailing four quarters tinder activity on a rig years basis.

It has been a bumpy road from our peak in 2012 of approximately 106 rig years tender implied trailing demand to us.

In comparison and 22% in 2023, those numbers were two one and one eight and 2024 forecast stands at approximately $1 nine.

Cycle bottom of 28, 2016, and a COVID-19 bottom of 35 and 2020.

This would indicate three contiguous years with numbers matching or exceeding.

The industry close 2023, with a 106 rig years of Tinder implied.

Measures dating back 12 years.

These trends sync well with analysts' forecast for floater demand on a rig year spaces.

Demand matching the number from 12 years ago.

Forecast compound annual growth rate for rig years of demand.

Closer to home. We are currently tracking 51 opportunities representing 52 rig years of demand we've commenced commencement dates through 2025.

23% to 2026, a region or 7% for North America, 11% for South America, 10% for the North Sea.

Which roughly 61% are for DP rigs and 39% for moored rigs.

7% of West Africa, and 25% for Southeast Asia and Oceania.

Date profile for these opportunities process from a low in Q2 2024 to a peak of 12 and 11 in Q4 24 in Q1 2025, respectively.

Bernie G. Wolford: Another key metric we track is the treading forequarters tender activity on a rigged-gears basis. It has been a bumpy road from a peak in 2012 of approximately 106 rig years of implied drilling demand to a cycle bottom of 28 in 2016. COVID bottom of 35 in 2020.

Another key metric we track is the trailing four quarters tender activity on a rig years basis.

It has been a bumpy road from a peak in 2012 of approximately 106 rig years of tender implied trailing demand to a cycle bottom of 28, 2016, and a COVID-19 bottom of 35% in 2020.

This data lands credence to the view that the second half of this year looks to be positive in terms of the number of expected fixtures and contract stars.

For Diamond, specifically U K sector of the North Sea continues to develop as a bright spot.

Bernie G. Wolford: Industry closed 2023 with 106 rigged gears. Tender Implied Drilling Demand, matching the number from 12 years ago. Closer to home, we are currently tracking 51 opportunities, representing 52 rigged years. Commencement dates through 2025, of which roughly 61% are for DP rigs and 39% for moored rigs. The start date profile for these opportunities rises from a low in Q2 2024 to a peak of 12 and 11 in Q4 2024 and Q1 2025, respectively. This data lends credence to the view that the second half of this year looks to be positive in terms of the number of expected fixtures. Contract Start. Diamond, specifically, the UK sector of the North Sea, continues to develop as a bright spot.

The industry close 2023, with a 106 rig years of tinder implied trailing demand matching the number from 12 years ago.

Increasing demand in the region with shrinking harsh environment rig supply.

Recent long term commitments by operators in the region support our view that the.

Demand for our plug and abandonment of our P&A.

Closer to home. We are currently tracking 51 opportunities representing 52 rig years of demand we've commenced commencement dates through 2025.

Work is becoming more certain and exist in larger quantities than previously anticipated.

Additionally, green shoots of future drilling demand have members on the heels of the recent oil and gas licensing round. We're 27 licenses were awarded for areas that have the potential to be brought into production quickly.

Its roughly 61% are for DP rigs and 39% for moored rigs.

Let's start date profile for these opportunities process from a low in Q2 2024 to a peak of 12 and 11 in Q4 dollars 24 in Q1 2025, respectively.

Assuming options are exercised on the Blackhawk, we have one drillship the black Rhino with availability late this year.

This data lands credence to the view that the second half of this year looks to be positive in terms of the number of expected fixtures and contract stars.

Currently pursuing eight opportunities for the Black Rhino also work commencement commencing following the conclusion of his contract export this Sps and MPD upgrade.

For Diamond, specifically U K sector of the North Sea continues to develop as a bright spot with them.

In the context of these improving markets, we have been able to firm up additional contract term for 2024 and build a significant backlog commitments for 2025 and 2026.

Bernie G. Wolford: Increasing demand in the region with shrinking harsh environment rig supply. Recent long-term commitments by operators in the region support our view... Demand for Plug and Abandonment, or P&A, work is becoming more certain and exists in larger quantities than previously anticipated. Additionally, green shoots of future drilling demand have emerged on the heels of the recent oil and gas last-minute boom. Twenty-seven licenses were awarded for areas that have the potential to be brought into production.

Increasing demand in the region with shrinking harsh environment rig supply.

We set long term commitments by operators in the region support our view that demand for our plug and abandonment of our P&A.

Year to date, we have secured $362 million in new contract awards.

<unk> is becoming more certain and exist in larger quantities than previously anticipated.

For our seventh generation drillship.

I fly at leading edge right, one for our moored harsh environment semi the Patriot.

Additionally, green shoots of future drilling demand have a virus on the heels of the recent oil and gas license and ground, where 27 licenses were awarded for areas that have the potential to be brought into production quickly.

The Black line contract will start in direct continuation of its current work without any gaps between contracts and provide far more to the third quarter of 2026.

Bernie G. Wolford: Simming options are exercised on the Black Hawk. We have one drill ship, the Black Rhino, with availability late this year. We're currently pursuing eight opportunities for the Black Rhino, all for work commencing following the conclusion of his contract reports with SPS and NPDF. In the context of these improving markets, we have been able to firm up additional contract terms for 2024 and build significant backlog commitments for 2025 and 2026. Here today, we have secured $362 million in new contract awards, one for a 7th generation drill ship, a black line at a leading edge rate, and one for a moored harsh environment semi at the pace of the wind.

Turning options are exercised on the Blackhawk, we have one drillship the black Rhino with availability late this year.

Under this new contract the Black line will be positioned to generate approximately $115 million in annualized rig level EBITDA and contribute significantly to our cash flow in the coming years.

Currently pursuing eight opportunities for the Black Rhino also work commenced rent commencing following the conclusion of his contract export as SBS and MPD upgrade.

The Patriot contract is for a 60 day, two well P&A campaign and are set to come in this week doing in some of the gap in the schedule before beginning a three year contract in early 2025.

In the context of these improving markets, we have been able to firm up additional contract term for 2024 and built significant backlog commitments for 2025 and 2026 year.

On the back of our recent contract announcements, excluding cold stacked rigs.

Year to date, we have secured $362 million in new contract awards.

87% of our 'twenty to 'twenty four capacity contracted.

For our seventh generation drillship, the black line at leading edge right.

1% if you include priced options.

One for our board harsh environment semi the Patriot.

Looking further out excluding cold stacked rigs, we now have 36% of our 2025 capacity and 30% of 2026 capacity contracted.

The Black line contract will start in direct continuation of its current work without any gaps between contracts and provide far more through the third quarter of 2026.

Bernie G. Wolford: The Black Lion contract will start a direct continuation of its current work without any gap between contracts, and it provides firm work through the third quarter of 2026. Under this new contract, Black Line will be positioned to generate approximately $115 million in annualized, rig-level, even dollars. contribute significantly to our cash flow in the coming years. The Patriot Contract, for a 60-day 2L P&A campaign, is set to commence this week, filling in some of the gap in its schedule before beginning its three-year contract in early 2025.

We include priced options are 2025 number goes from 36% to 59%.

Under this new contract the Black line will be positioned to generate approximately $115 million in annualized rig level EBITDA and contribute significantly to our cash flow in the coming years.

With notable contracting opportunities on the black Rhino Black Hornet endeavor and apex to further secure backlog.

Over the last 20 months, we completed a special periodical surveys our Sps is on six of our 10 actively marketed rigs with a further two rigs due in 2024 and one in 2025.

The Patriot contract is for a 60 day, two well PMA campaign and are set to commence this week filling in some of the gap in the schedule before beginning a three year contract in early 2025.

Through the combination of reduced planned shipyard days are.

On the back of our recent contract announcements, excluding cold stacked rigs we have.

Our recent backlog additions are positive exposure to improving market conditions, we are providing materially improved EBITDA and cash flow visibility through 2026.

87% of our 2024 capacity contracted.

91% if you include priced options.

Looking further out excluding cold stacked rigs, we now have 36% of our 2025 capacity at 30% of 2026 capacity contracted.

I will now turn the call over to Dominic before returning with some concluding remarks.

Bernie G. Wolford: On the back of a recent contract announcement... Including co-stacked rigs, we have 87% of our 2024 capacity. 91% if you include prostitutes.

Thanks, Bernie and good morning or afternoon to everyone.

In my prepared remarks. This morning, I'll provide a recap of our results for the fourth quarter, including some operational highlights and additional details on our recent contract awards.

We include priced options for 2025 number goes from 36% to 59% with.

With notable contracting opportunities on the black Rhino.

Corna endeavor and apex to further secure backlog.

The estimated financial impact of the recent great White event and guidance for the first quarter and full year 2024.

Bernie G. Wolford: And further out, excluding co-stacked rigs, we now have 36% of our 2025 capacity and 30% of our 2026 capacity condominiums. If we include price options, the 2025 number goes from 36% to 59%, and there are notable contracting opportunities on the Black Rhino, Black Hornet, Endeavor, and Apex to further secure backup. Over the last 20 months, we've completed Special Periodical Surveys, or SPSS

Over the last 20 months, we completed a special periodical surveys our Sps as of six of our 10 actively marketed rigs with a further two rigs due in 2024 and one in 2025.

For the fourth quarter, we reported a net loss of approximately $146 million or $1.42 per diluted share.

The reported loss consisted of net income before tax of $29 million and noncash tax expense of $174 million.

Through the combination of reduced planned shipyard days, our recent backlog additions.

Positive exposure to improving market conditions, we are providing materially improved EBITDA and cash flow visibility through 2026.

As discussed in prior quarters, the large tax expense in the quarter was the result of the reversal of a tax benefit reported in prior quarters and the further normalization of our overall tax expense for the year.

Now I'll turn the call over to Dominic before returning with some concluding remarks.

Thanks, Bernie and good morning or afternoon to everyone.

The results for the fourth quarter included a reported adjusted EBITDA of $72 million.

In my prepared remarks. This morning, I'll provide a recap of our results for the fourth quarter, including some operational highlights and additional details on our recent contract awards.

In terms of our guidance for the quarter of $50 million to $60 million with a U S. GAAP required deferral of approximately $8 million of pre contract commencement cost for the courage and black Hawk contributing to the favorable results.

Bernie G. Wolford: 6 of our 10 actively marketed rigs, with a further two rigs due in 2024 and one in 2020. Combination of reduced planned shipyard damage, a recent backlog edition, and positive exposure to improving marketing.

The estimated financial impact of the recent great quite a bit and guidance for the first quarter and full year 2024.

For the fourth quarter, we reported a net loss of approximately $146 million or $1.42 per diluted share.

Our reported adjusted EBITDA for the quarter represents a significant increase compared to our adjusted EBITDA of $28 million reported in the third quarter.

Dominic Savarino: We are providing materially improved EBITDA and cash flow visibility for 2020. We'll now turn the call over to Dominic before returning with some concluding remarks. Thanks, Bernie, and good morning or afternoon to everyone.

In this quarter over quarter increase was primarily a result of higher revenue reported in the fourth quarter.

Our reported loss consisted of net income before tax of $29 million and noncash tax expense of $174 million.

Excluding reimbursable revenue revenue for the fourth quarter was $280 million slightly higher than our guidance for the quarter.

From $225 million in the prior quarter.

This improvement was primarily a result of the Blackhawk commencing its contract in the Gulf of Mexico in early November after its Sps and M. P. T upgrade in the third quarter.

The results for the fourth quarter included a reported adjusted EBITDA of $72 million.

Dominic Savarino: In my prepared remarks this morning, I'll provide a recap of our results for the fourth quarter, including some operational highlights and additional details on our recent contract award, the estimated financial impact of the recent Great White event, and guidance for the first quarter and full year 2022. For the fourth quarter, we reported a net loss of approximately $146 million, or $1.42 per diluted share. The reported loss consisted of net income before tax of $29 million and non-cash tax expense of $174 million.

Patriot being on contract for the entirety of the fourth quarter after being between contracts in the prior quarter.

<unk> of our guidance for the quarter of $50 million to $60 million with the U S. GAAP required deferral of approximately $8 million of pre contract commencement cost for the courage and black Hawk contributing to the favorable results.

And the black Rhino, earning its largest performance bonuses to date during the fourth quarter.

Contract drilling expense increased to $189 million for the quarter compared to $182 million for the prior quarter, primarily as a result of higher charter cost from one of our management.

Our reported adjusted EBITDA for the quarter represents a significant increase compared to our adjusted EBITDA of $28 million reported in the third quarter.

And this quarter over quarter increase was primarily a result of higher revenue reported in the fourth quarter.

And the accrual of the annual bonus expense related to the Drillships P O P surface agreements.

Excluding reimbursable revenue.

Partially offset by the absence of costs associated with the apex of the shipyard period in the prior quarter.

For the fourth quarter was $280 million slightly higher than our guidance for the quarter and up from $225 million in the prior quarter.

Operating cash flow for the fourth quarter was $9 million with negative free cash flow of $22 million as compared to negative free cash flow of $48 million in the third quarter.

Dominic Savarino: As discussed in previous quarters, the large tax expense in the quarter was the result of the reversal of the tax benefit recorded in previous quarters and the further normalization of our overall tax expense for the year. The results for the fourth quarter included a reported adjusted EBITDA of $72 million, well in excess of our guidance for the quarter of $50 to $60 million. With the U.S. GAAP-required deferral of approximately $8 million of pre-contract commencement costs for The Courage and Blackhawk contributing to favorable results, our reported adjusted EBITDA for the quarter represents a significant increase compared to our adjusted EBITDA of $28 million reported in the third quarter. And this quarter-over-quarter increase was primarily a result of higher revenue recorded in the fourth quarter.

This improvement was primarily a result of the Blackhawk commencing its contract in the Gulf of Mexico in early November after its Sps MPD upgrade in the third quarter.

The improvement in free cash flow was primarily a result of increased EBITDA and lower capex in the fourth quarter offset by greater working capital used during the quarter as a result of commencing higher day rate contracts and the resulting higher accounts receivable at year end.

Patriot being on contract for the entirety of the fourth quarter after being between contracts in the prior quarter.

And the black Rhino, earning its largest performance bonuses to date during the fourth quarter.

Contract drilling expense increased to $189 million for the quarter compared to $182 million for the prior quarter.

For the full year 2023, we reported revenue, excluding reimbursable revenue of $984 million and adjusted EBITDA of $158 million.

As a result of higher charter cost from one of our management.

And the accrual of the annual bonus expense related to the Drillships PLP surface agreements.

Capex for the full year was $132 million.

After the successful execution of our capital structure refinancing in the third quarter, we exited 2023 with unrestricted cash and cash equivalents of $124 million and total liquidity of $422 million, including the undrawn balance of our revolving credit facility.

Really offset by the absence of costs associated with the apex of the shipyard period in the prior quarter.

Operating cash flow for the fourth quarter was $9 million with negative free cash flow of $22 million as compared to negative free cash flow of $48 million in the third quarter.

Dominic Savarino: Excluding reimbursable revenue, revenue for the fourth quarter was $280 million, slightly higher than our guidance for the quarter and up from $225 million in the prior quarter. This improvement was primarily a result of Blackhawk commencing its contract in the Gulf of Mexico in early November after its SPS and NPD upgrade in the third quarter. Patriot being on contract for the entirety of the fourth quarter after being between contracts in the prior quarter, and the Black Rhino earning its largest performance bonus to date during the fourth quarter. Contract drilling expense increased to $189 million for the quarter, compared to $182 million for the prior quarter, primarily as a result of higher charter costs for one of our managed vehicles and the approval of the annual bonus expense related to the Drill Ships BOP service, partially offset by the Operating cash flow for the fourth quarter was $9 million, with negative free cash flow of $22 million as compared to negative free cash flow of $48 million in the third quarter.

Yeah.

Expanding a bit more on the fourth quarter operational highlights we had notable successes in each region in which we operate.

In the Gulf of Mexico.

<unk> commenced its new contract in November at the start of the commencement window after undergoing its Sps and MPD upgrade.

For the full year 2023, we reported revenue, excluding reimbursable revenue of $984 million and adjusted EBITDA of $158 million.

In West Africa, the Black Rhino earn performance bonuses in the quarter totaling $3 $2 million the ninth bonus achieved during the Senegal campaign.

In the North sea, the Patriot executed a P&A campaign for a customer over the course of the fourth quarter and into January of this year being on contract almost twice as long as originally anticipated.

Capex for the full year was $132 million.

In Australia after coming out of the shipyard in the third quarter. The apex successfully commenced a contract for a new customer during the fourth quarter at a higher day rate.

Including the Undrawn balance of our revolving credit facility.

In Brazil after completing its prior three year contract with Petrobras in the third quarter.

Expanding a bit more on the fourth quarter operational highlights we had notable successes in each region in which we operate.

Encourage safely and timely completed its Sps and contract preparation activities and commenced its new four year contract with Petrobras in mid December.

In the Gulf of Mexico, The Blackhawk commenced its new contract in November at the start of the commencement window after undergoing its Sps and MPD upgrade.

Turning now to the great White and our estimate of the financial implications of the unintentional release of the L M RFP and riser.

In West Africa, the Black Rhino earn performance bonuses in the quarter totaling $3 $2 million.

As Bernie noted the great White is currently in the process of recovering the LMR piece of the surface and is estimated to be back earning day rate by the end of April or early may.

Ninth bonus achieved during the Senegal campaign.

Dominic Savarino: The improvement in pre-cash flow was primarily a result of increased EBITDA and lower CapEx in the fourth quarter, offset by greater working capital use during the quarter as a result of commencing higher day rate contracts and the resulting higher accounts receivable at year-end. For the full year 2023, we reported revenue, excluding reimbursable revenue, of $984 million and adjusted EBITDA of $158 million. Apex for the full year was $132 million. After the successful execution of our capital structure refinancing in the third quarter, we exited 2023 with unrestricted cash and cash equivalents of $124 million and total liquidity of $422 million. Including the undrawn balance of a revolving credit.

As a result, we currently estimate that we could be off rates for approximately 90 to 100 days, which could result in approximately a 24% to $27 million reduction in revenue over the course of the first and second quarters.

In Australia after coming out of the shipyard in the third quarter. The apex successfully commenced a contract for a new customer during the fourth quarter at a higher day rate.

Our current estimate of incremental recovery costs and repairs and maintenance is approximately 20% to $25 million.

In Brazil after completing its prior three year contract with Petrobras in the third quarter.

And our current estimate of replacement capital expenditures is approximately $12 million to $15 million.

<unk> safely and timely completed its Sps and contract preparation activities and commenced its new four year contract with Petrobras in mid December.

We anticipate that the incident will be covered by our hull and machinery insurance policy and that all of the incremental costs that are $10 million deductible should be reimbursable under the policy.

Turning now to the great White and our estimate of the financial implications of the unintentional release of the <unk> and riser.

In addition, we maintained loss of hire insurance on the great White.

As Barry noted the great White is currently in the process of recovering the LMR piece of the surface and is estimated to be back earning day rate by the end of April early may.

After a 60 day waiting period the loss of hire insurance provides $150000 per day for up to 180 days for each day of lost revenue as a result of a covered property loss claims.

Dominic Savarino: Expanding a bit more on the fourth quarter operational highlights, we had notable successes in each region in which we operated. In the Gulf of Mexico, the Blackhawk commenced its new contract in November at the start of the commencement window after undergoing its SPS and NPD update. In West Africa, the Black Rhino earned performance bonuses in the quarter totaling $3.2 million, the ninth bonus achieved during the Senegalese campaign.

As a result <unk>.

Currently estimate that we could be off rates for approximately 90 to 100 days, which could result in approximately a 24% to $27 million reduction in revenue over the course of the first and second quarters.

Based on our current expectations of being out of service for approximately 90 to 100 days the loss of hire insurance may provide proceeds of approximately $4 $5 million to $6 million.

Our current estimate of incremental recovery costs, and repairs and maintenance is approximately $20 million to $25 million.

Because of the accounting treatment of insurance proceeds creates complexities in the reporting of financial results.

And our current estimate of replacement capital expenditures is approximately $12 million to $15 million.

And because of the actual financial impact of the great White incident is not yet known.

We are presenting our initial guidance for 2024 results by excluding the estimated financial impact from the great White dependent.

Dominic Savarino: In the North Sea, the Patriot executed a P&A campaign for a customer over the course of the fourth quarter and into January of this year, being on contract almost twice as long as originally anticipated. In Australia, after coming out of the shipyard in the third quarter, the Apex successfully commenced a contract for a new customer during the fourth quarter at a higher daily rate. In Brazil, after completing its prior three-year contract with Petrobras in the third quarter, Courage Safely and Timely Completed its SPS and Contract Preparation Act and commenced its new four-year contract with Petrobras in mid-December.

We believe that this normalized approach will provide more accurate and meaningful visibility into our expectations of our ongoing recurring operations without regard to this extraordinary isolated incident incident.

In addition, we maintained loss of hire insurance on the great White.

After a 60 day waiting period the loss of hire insurance provides $150000 per day were up to 180 days for each day of lost revenue as a result of a covered property loss claims.

In addition to having a strong financial performance in the fourth quarter.

We also had significant success in the quarter and early this year and booking new contracts as Bernie mentioned.

In the Gulf of Mexico, we enjoyed significant contract wins in the past month with the Black Lion executing a contract extension with its current customer with a duration of two years and a contract value of approximately $350 million.

Based on our current expectations of being out of service for approximately 90 to 100 days the loss of hire insurance may provide proceeds of approximately $4 $5 million to $6 million.

Because of the accounting treatment of insurance proceeds creates complexities in the reporting of financial results.

With this new contract the Black line is now contracted through the third quarter of 2026.

Dominic Savarino: Turning now to The Great White and our estimate of the financial implications of the unintentional release of the LMRP and RISER. As Bernie noted, the Great White is currently in the process of recovering the LMRP to the surface and is estimated to be back earning a day rate by the end of April or early May. As a result, we currently estimate that we could be off rates for approximately 90 to 100 days. This could result in approximately a $24 to $27 million reduction in revenue over the course of the first and second quarter.

And because the actual financial impact of the great White incident is not yet known.

In addition in the fourth quarter the Black Rhino was awarded a contract in direct continuation of its Senegal campaign at a day rate in excess of $500000 per day, the highest clean day rate awarded during this upcycle.

We are presenting our initial guidance for 2024 results by excluding the estimated financial impact from the great White defendants.

These recent contract awards pushed the average day rate in our drillship backlog up to $408000 per day.

Also during the quarter the.

Patriot was awarded a contract valued at $240 million or <unk> 35, well P&A campaign, representing approximately three years of firm work expected to commence in early 2025.

In addition to having a strong financial performance in the fourth quarter. We also had significant success in the quarter and early this year and booking new contracts as Bernie mentioned.

Dominic Savarino: Our current estimate of incremental recovery costs and repairs and maintenance is approximately $20 to $25 million. And our current estimate of replacement capital expenditures is approximately $12 to $15 million. We anticipate that the incident will be covered by our haulage machinery insurance policy and that all incremental costs, less or $10 million deductible, should be reimbursable under the policy. In addition, we maintain loss of hire insurance on the Great White. After a 60-day waiting period, the loss of higher insurance provides $150,000 per day for up to 180 days for each day of lost revenue as a result of a covered property loss claim.

In the Gulf of Mexico, we enjoyed significant contract wins in the past months with the black client executing a contract extension with its current customer with a duration of two years and a contract value of approximately $350 million.

Up to 17, additional PNA wells subject to priced options that would add a fourth year duration.

Subsequent to year end. The Patriot was also awarded a two well P&A campaign commencing later this week filling in some of the gap before commencing its three year contract in 2025.

With this new contract the Black line is now contracted through the third quarter of 2026.

The Patriot is also being considered for additional work later in 2020 for evidence of the improving moored floater market and the North Sea.

Turning now to our normalized full year 2020 for guidance.

These recent contract awards pushed the average day rate or a drillship backlog up to $408000 per day.

Our $1 $4 billion in backlog as of January one 2024.

And bind with our year to date 2024 contract awards of $362 million gives us visibility to over $1 $6 billion of firm work to be performed over the coming years and positions us extremely well in terms of contract coverage for 2024 with 91% of our available days, excluding cold stacked.

Also during the quarter. The Patriot was awarded a contract valued at $240 million or <unk> 35, well PNA campaign, representing approximately three years of firm work expected to commence in early 2025.

Dominic Savarino: Based on our current expectations of being out of service for approximately 90 to 100 days, the loss of higher insurance may provide proceeds of approximately $4.5 to $6 million. However, because the accounting treatment of insurance proceeds creates complexities in the reporting of financial results.

Went up to 17 additional PNA wells subject to priced options that would add a fourth year duration.

Rigs committed with firm contracts or priced options.

Subsequent to year end and Patriot was also awarded a two well PNA campaign commencing later this week filling in some of the gap before commencing its three year contract in 2025.

Our 2024 revenue, excluding reimbursable revenue and excluding any estimated impact of the great. Weideman pad is currently expected to be between $940 and $960 million.

The Patriot is also being considered for additional work later in 2020 for evidence of the improving moored floater market and the North Sea.

This expected level of revenue represents a slight decrease from the revenue we earned in 2023.

Dominic Savarino: And because the actual financial impact of the Great White Incident is not yet known, we are presenting our initial guidance for 2024 results by excluding the estimated financial impact from the Great White. We believe that this normalized approach will provide more accurate and meaningful visibility into our expectations of our ongoing recurring operations without regard to this extraordinary isolated incident. In addition to having a strong financial performance in the fourth quarter, we also had significant success in the quarter and early this year in booking new contracts, as Bernie mentioned. In the Gulf of Mexico, we enjoyed significant contract wins in the past month, with Black Lion executing a contract extension with its current customers for a duration of two years and a contract value of approximately $350 million.

This expected decrease is primarily due to the managed rigs transitioning back to their owner over the course of 2024.

Turning now to our normalized full year 2020 for guidance.

Our $1 4 billion in backlog as of January one 2024, combined with our year to date 2024 contract awards of $362 million gives us visibility to over $1 $6 billion of firm work to be performed over the coming years and positions us extremely well in terms of contract cover.

And our plans for the black Rhino to space and time in the shipyard conducting its Sps and MPD upgrade later this year.

Partially offset by higher day rates for the Blackhawk courage apex and black lion during the year.

Our EBITDA guidance for 2024 again, excluding any impact of the great White headset is currently expected to be between 230 and $250 million.

For 2024, with 91% of our available days, excluding cold stacked rigs committed with firm contracts or priced options.

A more than 50% increase over 2023 EBITDA.

Our 2024 revenue, excluding reimbursable revenue and excluding any estimated impact of the great White in the pet is currently expected to be between $940 and $960 million.

Largely driven by higher day rate contracts and increased EBITDA margins due to the due to the return of the lower margin managed rigs Bachelor owner.

It is worth noting that our EBITDA guidance for 2024 includes approximately $20 million of noncash net amortization expense as required by U S. GAAP accounting rules associated with the courage and Blackhawk pre commencement contract activities that occurred in 2023.

This expected level of revenue represents a slight decrease from the revenue we earned in 2023.

This expected decrease is primarily due to the managed rigs transitioning back to their owner over the course of 2024 and.

Dominic Savarino: With this new contract, the Black Lion is now protracted through the third quarter of 2026. In addition, in the fourth quarter, the Black Rhino was awarded a contract and the direct continuation of its Senegalese campaign at a day rate in excess of $500,000 per day, the highest clean day rate awarded during this upsurge. These recent contract awards push the average day rate in our drillship backlog up to $408,000 per day. Also, during the quarter,

And our plans for the black Rhino to space and time in the shipyard conducting its Sps and MPD upgrade later this year.

G&A expense for 2024 is expected to be between 72% and $77 million.

Partially offset by higher day rates for the Blackhawk courage apex and black line during the year.

Net interest expense for the year is currently expected to be approximately 40% to $45 million.

Our EBITDA guidance for 2024 again, excluding any impact of the great White.

And cash taxes are expected to be approximately $5 million to $10 million.

As currently expected to be between $230 and $250 million, a more than 50% increase over 2023 EBITDA.

Capex for 2024 is currently expected to be between 125 and $135 million, excluding any capex, resulting from the great White event, where the potential reactivation of the onyx should it be successful in securing a long term contract.

Driven by higher day rate contracts and increased EBITDA margins due to the due to the return of the lower margin manage rigs Bachelor owner.

Dominic Savarino: The Patriot was awarded a contract valued at $240 million for a 35-well P&A campaign representing approximately three years of firm work expected to commence in early 2025, up to 17 additional P&A wells subject to priced options that would add a fourth year duration. Subsequent to year end, the Patriot was also awarded a 2L P&A campaign commencing later this year. Filling in some of the gaps before commencing his three-year contract in 2025. The Patriot is also being considered for additional work later in the year. Evidence of the improving moored floater market in the North.

Our estimated capex spend for 2024 includes the installation of MPD equipment and the Sps for the Black Rhino.

The Sps for the Black Hornet as well as the re certification for the endeavor.

<unk> activities that occurred in 2023.

Taking a look at our guidance for the first quarter again, excluding any impact of the great White answer that.

G&A expense for 2024 is expected to be between 72 and $77 million.

Currently expect revenue, excluding reimbursable <unk> to be between 260 and $270 billion.

Net interest expense for the year is currently expected to be approximately 40% to $45 million.

EBITDA to be between 45 and $55 million.

And capex to be between 38% and $43 million.

And cash taxes are expected to be approximately $5 million to $10 million.

Our expectations for the first quarter of 2024 are lower than the fourth quarter of 2023 as a result of the Patriot being off contracts for a portion of the quarter and the amortization of pre contract commencement cost for the courage and Blackhawk.

Capex for 2024 is currently expected to be between 125 and $135 million.

Dominic Savarino: Turning now to our Normalized Full Year 2024 Guide. Our $1.4 billion in backlog as of January 1st, 2024, combined with our year-to-date 2024 contract awards of $362 million, gives us visibility to over $1.6 billion of firm work to be performed over the coming years and positions us extremely well in terms of contract coverage for 2024, with 91% of our available days, including Cold Stack Recycling.

Excluding any capex, resulting from the great White event, where the potential reactivation of the Onyx should it be successful in securing a long term contract.

Despite this dip in Q1 are projected EBITDA results for the year are essentially equally weighted between the first half and second half of the year and we expect our free cash flow in 2024 should be meaningfully greater than 2023.

Our estimated capex spend for 2024 includes the installation of MPD equipment and the Sps for the Black Rhino.

The Sps for the Black Hornet as well as the recertification for the endeavor.

Beyond 2024, our visibility to estimated future earnings and cash flow was increasing as a result of our growing backlog at higher average day rates.

Taking a look at our guidance for the first quarter again, excluding any impact of the great White answer that <unk>.

Currently expect revenue, excluding reimbursable to be between 260 and 270 billion.

In addition to our 91% contract coverage in 2020 for a firm contracts in priced options.

Dominic Savarino: Thank you, committed with firm contracts or priced options. Our 2024 revenue, including Reimbursable Revenues and excluding any estimated impact of the Great White, is currently expected to be between 940 and 960 million dollars. This expected level of revenue represents a slight decrease from the revenue we earned in 2012.

EBITDA to be between 45 and $55 million.

Alluding cold stacked rigs, we have 59% and 30% of available days committed for 2025 and 2026, respectively.

And capex to be between 38% and $43 million.

Our expectations for the first quarter of 2024 are lower than the fourth quarter of 2023.

This level of contract coverage positions us extremely well for the next three years, yet still provides plenty of room for positive operational leverage as re contracting opportunities arise.

As a result of the Patriot being off contracts for a portion of the quarter and the amortization of pre contract commencement cost of the courage and Blackhawk.

And with the continued favorable fundamentals of the deepwater offshore industry. We are confident that we will be able to continue to secure meaningful day rate increases for our rigs as contracts roll over.

Despite this dip in Q1 are projected EBITDA results for the year are essentially equally weighted between the first half and second half of the year.

Dominic Savarino: This expected decrease is primarily due to the managed rigs transitioning back to their owners over the course of 2024, and our plans for the Black Rhino to spend time in the shipyard conducting its SPS and MPD upgrade later this year, partially offset by higher day rates for the Blackhawk, Courage, Apex, and Black Lion during. Our EBIDTA guidance for 2024, again, excluding any impact of the Great White Incident, is currently expected to be between $230 and $250 million, a more than 50% increase over 2023, largely driven by higher day rate contracts and increased EBITDA margins due to the return of the lower margin managed rigs back to their owners. It is worth noting that our EBITDA guidance for 2024 includes approximately $20 million of non-cash net amortization expense as required by U.S. GAAP accounting. Associated with the Courage and Black Hawk pre-commencement.

And we expect our free cash flow in 2024 should be meaningfully greater in 2023.

And finally at the end of 2024, we expect our net leverage ratio and other requirements under our credit facility and bond indenture to be met which would allow our board to begin to consider the appropriate timing for a shareholder return program.

Beyond 2024, our visibility to estimated future earnings and cash flow was increasing as a result of our growing backlog at higher average day rates.

That concludes my prepared remarks, I will now hand, it back to Bernie <unk> for some closing comments.

In addition to our 91% contract coverage in 2024 for firm contracts and priced options, excluding cold stacked rigs, we have 59% and 30% of available days committed for 2025 and 2026, respectively.

Thank you Dominic.

In the near term our organization remains focused on the safe and timely a restart of the great White.

Looking further ahead as the Black line rose to its hard day right in Q3.

This level of contract coverage positions us extremely well for the next three years, yet still provides plenty of room for positive operational leverage as re contracting opportunities arise.

While we're closely by an option on the Black Hawk, we will have five out of our nine active rigs on contracts at market rates.

We are ideally positioned to capture further upside in the strengthening drillship market with the black Rhino in late 2024, and the Black Hornet in early 2025.

Similarly, the supply demand picture for harsh environment semis bodes well for upside on the endeavor apex and great what as we progressed through 2025.

Dominic Savarino: Contract Activities that occurred in 2020. E&A expense for 2024 is expected to be between $72 and $77 million. Net interest expense for the year is currently expected to be approximately $40 to $45 million, and cash taxes are expected to be approximately $5 to $10 million.

In the interim we are targeting several near term opportunities for Patriot that would allow us.

That concludes my prepared remarks, I will now hand, it back to Bernie <unk> for some closing comments.

A portion of the gap in 2024 prior to its long term campaign in 2025.

These factors combined with a notable decrease in planned shipyard days position us to deliver growth in both EBITDA and cash flow, while making significant progress in deleveraging our balance sheet.

Thank you Dominic.

In the near term our organization remains focused on the safe and timely a restart of the great White.

Looking further ahead as the Black line rose to its hard day rate in Q3.

We appreciate your interest in Diamond offshore.

While we're closely by an option on the Black Hawk, we will have five out of our nine active rigs on contracts at market rates.

We'll now open the call for questions.

Dominic Savarino: CapEx for 2024 is currently expected to be between $125 and $135 million, excluding any CapEx resulting from the Great White event or the potential reactivation of the Onyx should it be successful in securing a long-term contract. Our estimated CAPEX spend for 2024 includes the installation of MPD equipment and the SPS for the Black Rhino. The SPS for the Black Hornet, as well as the BOP recertification for the Endeavor.

Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced.

We are ideally positioned to capture further upside in the strengthening drillship market with the black Rhino in late 2024, and the Black Hornet in early 2025.

To withdraw your question. Please press star one again, please standby, while we compile the Q&A roster.

Similarly, the supply demand picture for harsh environment semis bodes well for upside on the endeavor apex and great what as we progressed through 2025.

And the first question comes from Eddie Kim with Barclays. Your line is now and then.

Hi, good morning, so very constructive market outlook you provided here, but just curious have you been surprised at the lack of contracting for the 10 or so seventh Gen sidelined drill ships. It seems like until all or maybe most of the sideline rigs are absorbed it might put a lid on day rate increases.

In the interim we are targeting several near term opportunities for Patriot It will allow us.

A portion of the gap in 2024 prior to its long term campaign in 2025.

Dominic Savarino: Taking a look at our guidance for the first quarter, again excluding any impact of the Great Wide Edge, we currently expect revenue, excluding reimbursables, to be between $260 and $270 million. EBITDA to be between $45 and $55 billion, and CapEx to be between $38 and $43 million. Our expectations for the first quarter of 2024 are lower than for the fourth quarter of 2020. As a result of the Patriot being off-contract for a portion of the quarter and the amortization of pre-contract commencement costs for the Courage and Black Belt.

In the medium term so.

Have you been surprised here and if you had to guess just based on the demand Youre seeing do you think maybe we could see four or five of these 10 sideline rigs announced contracts by year end.

We appreciate your interest in Diamond offshore.

We'll now open the call for questions.

Thank you <unk>.

Reminder, to ask a question. Please press star one on your telephone and wait for your name to be announced.

Hey, Thanks for the question Eddie.

Wouldn't say surprised I mean, looking at our investor presentation, Youll sort of see the staggered impact of new contract awards, we effect, we expect throughout the year.

To withdraw your question. Please press star one again, please standby, while we compile the Q&A roster.

Clearly, we would have expected some contracts to be awarded earlier than they have been particularly.

And the first question comes from Eddie Kim with Barclays. Your line is now and then.

One opportunity in Petrobras that we thought would have been already awarded at this stage.

Hi, good morning, so very constructive market outlook you provided here, but just curious have you been surprised at the lack of contracting for the 10 or so.

Dominic Savarino: Despite this dip in Q1, our projected EBITDA results for the year are essentially equally weighted between the first half and the second half of the year, and we expect our fee cash flow in 2024 should be meaningfully greater than 2025. Beyond 2024, our visibility to estimated future earnings and cash flow is increasing as a result of our growing backlog at higher average day rates, in addition to our 91% contract coverage in 2024 for firm contracts and priced options, excluding cold stack rigs. We have 59% and 30% of available days committed for 2025 and 2026, respectively.

I certainly expect those awards to come through in the very near future Q1 is typically a quiet time of the year.

Seventh Gen sidelined drill ships it seems like until all or maybe most of these sideline rigs are absorbed it might put a lid on day rate increases.

Not any different this year.

If you look back from a historical perspective.

In the medium term so have you been surprised here and if you had to guess just based on the demand Youre seeing do you think maybe we could see four or five of these 10 sideline rigs announced contracts by year end.

As far as sidelined.

Sideline rigs returning to the market.

I would I would expect yes, you know that.

Five to six of those do secure contracts by the time, we reached the middle of this year.

Great. Thanks for the question, Eddie I wouldn't say surprised I mean, looking at our investor presentation, Youll sort of see.

I mean I think that's.

Holly anticipated and would be what I would say is kind of right down the middle of the fairway in terms of our expectations.

Staggered impact of new contract awards, we effect.

Dominic Savarino: This level of contract coverage positions us extremely well for the next three years, yet still provides plenty of room for positive operational leverage as recontracting opportunities arise. And with the continued favorable fundamentals of the deepwater offshore industry, we are confident that we will be able to continue to secure meaningful day rate increases for our rigs as contracts roll over. And finally, by the end of 2024, we expect our net leverage ratio and other requirements under our credit facility and bond indenture to be met, which would allow our board to begin to consider the appropriate timing for a shareholder return. That concludes my prepared remarks. I will now hand it back to Bernie for some closing comments. Thank you, Dominic.

Sorry, just a claim you said five to six maybe announced contracts by middle of this year.

We expect throughout the year.

Clearly, we would have expected some contracts to be awarded earlier than they had been particularly.

A couple of months.

Yes by the middle of this year this.

One opportunity of Petrobras that we thought would have been already awarded at this stage.

So these are contracts that would have start dates Q3, Q4, and Q1 of 'twenty five got it there's.

I certainly expect those awards to come through in the very near future Q1 is typically a quiet time of the year.

There's sort of a peak.

Around that time period that typically youll see the contracts are now six months before the actual star.

Not any different this year.

If you look back from a historical perspective.

Start dates.

As far as.

Got it got it thanks for clarifying that.

Sideline rigs returning to the market.

And then my follow up is just on the Black Rhino you highlighted the potential opportunities for the rig.

I would I would expect yes, you know that.

Six of those do secure contracts by the time, we reached the middle of this year.

Could you see the rig mobilizing to.

Let's start with Africa.

I think thats.

Africa or do you see.

Bernie G. Wolford: In the near term, our organization remains focused on the safe and timely restart of the Great White. We're looking further ahead as the black line rolls to its higher day rate in Q3. Following closely by an option on the Black Hawks, we will have five out of our nine active rigs on contracts at market rates. You're in an ideal position to capture a further upside in the strengthening drill ship market with the Black Rhino in late 2024 and the Black Hornet in early 2025. Similarly, the supply-demand picture for harsh environment semis bodes well for upside on the Endeavor, Apex, and Great White as we progress through 2020. In the interim, we are targeting several near-term opportunities for the Patriot that would allow us to... fill a portion of the gap in 2024 prior to its long-term campaign in 2025.

Highly anticipated and would be what I would say is kind of right down the middle of the fairway in terms of our expectations.

The rigs staying in West Africa at this point and it's definitely yeah.

After it comes off contract it goes in for a five year, Sps and an MPD upgrade typically seen MPD.

Sorry, just a claim you said five to six maybe announced contracts by middle of this year.

Being upgraded for a rig for a specific contract, but it seems like in this case.

A couple of months.

Yes by the middle of this year.

Voluntary or maybe pre emptive upgrade on your part so I just wanted to get your thoughts here on <unk>.

So these are contracts that would have start dates.

Three Q4 Q1 of 'twenty five.

<unk>.

On why youre choosing to to add the NPV on this rig.

Got it there's sort of a peak.

At around that time period that typically youll see the contracts are now six months before the actual.

So Andy we're currently.

Traction for opportunities to start in Q4 and for the start.

Start dates.

Got it got it thanks, thanks for clarifying that.

In Q.

Q1 of <unk> 25 for the Rhino.

And then my follow up is just on the Black Rhino you highlighted the potential opportunities for the rig.

Those opportunities some are in West Africa.

Some are in South America, and some are in the U S. So it.

Could you see the rig mobilizing to.

Outside.

It's hard to handicap, where the rig will be next.

With that <unk>.

The rigs staying in West Africa at this point and separately after it comes off contract it.

<unk> resolved the opportunities we're currently tracking.

Bernie G. Wolford: These factors, combined with a notable decrease in planned shipyard days, position us to deliver growth in both EBITDA and cash flow while making significant progress in deleveraging our balance sheet. We appreciate your interest in Diamond Offshore and will now open the call to questions. Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.

I wouldn't expect any gap in the rig schedule after completion of the Sps and MPD installation based on our market intelligence as we sit here today with regard to the MPD.

And for five year, Sps and MPD upgrade typically seen in NPD.

Being upgraded for a rig for a specific contract, but it seems like in this case.

Voluntary or maybe a preemptive upgrade on your part so just wanted to get your thoughts here on <unk>.

It was a proactive decision to ensure that our four black ships.

<unk>.

On why youre choosing to to add the NPV on this rig.

<unk> and remain in the top 30 rigs in a worldwide basis from a technical specs perspective, having an M. P. D. Assures that you can bid on every opportunity that's out there and gives you a greater set.

Yes.

So Andy we're currently.

And for opportunities to start in Q4 and for the start.

Set of opportunities.

Q1 of <unk> 25 from Toronto.

From which to secure work and obviously you can get some upside in terms of you're right for the NPD, but first and foremost.

Those opportunities some are in West Africa.

Operator: Please stand by while we compile the Q&A roster. And the first question comes from Eddie Kim with Barclays. Your line is now open. Hi, good morning.

Some are in South America, and some are in the U S. So it's.

We look at it as a key to entry and ability to bid on every single tender this out there for a girl.

It's hard to handicap, where the rig will be next.

Eddie Kim: So very constructive market outlook you provided here, but just curious if you've been surprised at the lack of contracting for the 10 or so 7th Gen sidelined drill ships. It seems like until all or maybe most of these sideline rigs are absorbed, it might put a lid on day rate increases here in the medium term. So have you been surprised here?

Terms of the opportunities we're currently tracking.

Got it got it great. Thanks for all that color Bernie I'll turn it back.

I wouldn't expect any gap in the rig schedule after completion of the Sps and MPD installation based on our market intelligence as we sit here today.

One moment for our next question.

Next question comes from David Smith, with Pickering Energy Partners. Your line is now open.

With regard to the MPD.

Hey, good morning.

It was a proactive decision to ensure that our four black ships.

Good morning, Thank you for taking my questions and congratulations on a solid quarter.

Bernie G. Wolford: And if you had to guess, just based on the demand you're seeing, do you think maybe we could see four or five of these 10 sideline rigs announce contracts by year end? Thanks for the question, Eddie. I wouldn't say surprised.

<unk> and remain in the top 30 rigs in a worldwide basis from a technical specs perspective, having an MPD assures that you can bid on every opportunity that's out there and gives you a greater.

Thanks, Dave.

I wanted to make sure I understood the 24 guidance.

You were pretty clear, but just making sure you're excluding the great White impact we should think about that guidance is just a great white had been working on it it's contracted rate with no interruptions.

Bernie G. Wolford: I mean, looking at our investor presentation, you'll sort of see the staggered impact of new contract awards we expect throughout the year. Clearly, we would have expected some contracts to be awarded earlier than they have been, particularly one opportunity in Petrobras that we thought would have already been awarded at this stage, but I certainly expect those awards to come through in the very near future. Q1 is typically a quiet time of the year, and not any different this year if you look back from a historical perspective.

Set of opportunities.

From which to secure work and obviously you can get some upside in terms of you're right for the NPD, but first and foremost.

Yes that is correct. We will we will normalize our results for any impact that the downtime has where the insurance proceeds that as we report throughout the year. So that that is a correct correct assumptions.

We look at it as a key to entry and ability to bid on every single tender. This out there for our drill ships.

I appreciate it and for the.

Got it got it great. Thanks for all that color I will turn it back.

On the financial impacts of the property insurance with the $10 million deductible should we think about that as well only apply into the $12 million to $15 million of replacement capex or would the recovery costs, I think estimated $20 million to $25 million.

One moment for our next question.

Next question comes from David Smith, with Pickering Energy Partners. Your line is now open.

Bernie G. Wolford: As far as sideline rigs, you know, returning to the market, I would expect, yes, that five to six of those will secure contracts by the time we reach the middle of this year, Eddie. I mean, I think that's...

Hey, good morning.

Also apply to that policy.

Good morning, Thank you for taking my questions and congratulations on a solid quarter.

All of those costs would be covered by the policy.

So.

Thanks, Dave.

Absent absent.

I wanted to make sure I understood the 24 guidance.

Certainly it's subject to the claim with the insurance company and what is covered but the expectation is that all of that is as potentially eligible to be recovered as part of the insurance policy.

Pretty clear, but just making sure you know excluding the great White impact we should think about that guidance. As this is a great white had been working on and it's contracted rate with no interruptions.

Bernie G. Wolford: Highly anticipated and would be, what I would say, is kind of right down the middle of the fairway in terms of our expectations. Sorry, just to clarify, you said five to six, maybe announced contracts by the middle of this year? So in a couple months?

So this could potentially after insurance.

Net impact of maybe low $30 million range.

Right, Yeah, right about that by the time you factor in the loss of revenue the potential loss of hire.

Bernie G. Wolford: Yes, by the middle of this year. So these are contracts that would have a start date. Q3, Q4 and Q1 of 2025. There's sort of a peak demand around that time period, and typically you'll see the contracts announced six months before the actual deadline. Start date. Got it, got it.

Proceeds as well as a $10 million deductible whats right at right at $30 million.

I appreciate it.

The.

On the financial impacts of the property insurance with the $10 million deductible should we think about that as only apply into the $12 million to $15 million.

Based on our current estimate.

90 to 100 days.

Thank you and.

Well I'll I'll circle back in the queue.

Placement capex or would the recovery costs, I think estimated 20% to $25 million.

Okay. Thanks, Dave.

One moment for the next question.

Also apply to that policy.

All of those costs will be covered by the policy.

Eddie Kim: Thanks for clarifying that. My follow-up is just on the Black Rhino. You highlighted eight potential opportunities for the rig. Could you see the rig mobilizing to, you know, outside West Africa? Do you see the rig staying in West Africa at this point? And it's definitely, you know, after it comes off contract, it goes in for a five-year SPS and an NPD upgrade. We've typically seen an NPD being upgraded for a rig for a specific contract, but it seems like in this case, it's voluntary or maybe a preemptive upgrade on your part.

The next question comes from Fredrik Stene with Clarksons <unk> Securities. Your line is open.

No.

Absent absent.

Certainly it's subject to the claim with the insurance company and what is covered but the expectation is that all of that is as potentially eligible to be recovered as part of the insurance policy.

Hello, Brian and team Hope you are and I hope, you're well and from me as well good quarter.

I wanted to.

Follow up a bit on your.

So this could potentially after insurance.

Your fleet you clearly have good coverage for 2004 and I think your revenue guidance is a testament to that quite tomorrow.

The net impact of maybe low $30 million range.

Brian Yes, right about <unk> by the time you factor in the loss of revenue the potential loss of hire.

Range so.

So I wanted to get.

It gets a few details on how that range is being built up.

Proceeds as well as the $10 million deductible, it's right at right at $30 million.

It's a it will be dependent on what do you for example are able to secure additional work on the Patriot the CME.

Bernie G. Wolford: So just wanted to get your thoughts here on why you're choosing to add the NPD on this rig. Eddie, we're currently tracking for opportunities to start in Q4 and for the start in Q1 of 25 for the Rhino. Those opportunities are in West Africa, some are in South America, and some are in the U.S.

Based on our current estimate.

Of 90 to 100 days.

Thank you and.

In fact, the all makes it.

Well ill circle back in the queue.

That's or does it assume you know for example that the priced options.

Okay. Thanks, Dave.

One moment for the next question.

The Blackhawk.

The next question comes from Fredrik Stene with Clarksons <unk> Securities. Your line is open.

The park and the great strides that in 2024, although minimal but will also be exercise any.

Thinking or thoughts around.

Hello, Brian and team Hope you are and I hope you're well.

How we can move from the low to the high end up above that range would be very helpful. Thanks.

Bernie G. Wolford: It's hard to handicap where the rig will be next in terms of the opportunities we're currently tracking. However, I wouldn't expect any gap in the rig schedule after completion of the SPS and MPD installation based on our market intelligence as we sit here today. With regard to the MPD, It was a proactive decision to ensure that our four black ships were and remain in the top 30 rigs worldwide from a technical specifications perspective. Having an NPD assures that you can bid on every opportunity that's out there and gives you a greater set of opportunities from which to secure work.

For me as well good quarter.

And I wanted to follow up a bit on.

I'll ask Dominic to comment on it.

You clearly have.

And I'll make some introductory comments first birthday.

Good coverage for 'twenty, four and I think your revenue guidance is a testament to that quite tomorrow.

Our current line of thinking is that we will secure additional work for the Patriot Act.

Range.

So I wanted to.

We're actively pursuing.

Get a few details on how that range is being built up.

More probable than less opportunities right now for the Patriot for work in 2024 that would help us fill that gap, we don't anticipating filling 100% of the gap throughout the year. So in part the range reflects filling a portion of the gap.

Okay.

It really depends on what do you for example are able to secure additional work on the Patriot the CME.

In fact, some of the <unk>.

Youre marketing that.

Or does it assume for example that the priced options.

As far as the priced option.

Bernie G. Wolford: And obviously, you can get some upside in terms of your rate for the NPD, but first and foremost, we look at it as a key to entry and the ability to bid on every single tender that's out there for a drill shot. Got it. Got it. Great. Thanks for all that color, Bernie.

The Hawk goes our current expectation is that it's more likely than not that the client chooses to exercise the option, but obviously that speculation at this point in time.

The Blackhawk and the <unk>.

Apart from the great Pride.

In 2024, although minimal who will also be exercise any.

Thinking our thoughts around.

How we can move from the low to the high end of that range will be very helpful. Thanks.

We would expect clarity on that in the first half of the year and have good visibility one way or the other on that and then with respect to the great. What we continue to anticipate that not only the farmer that's already committed for the great what but at the tail end of the year the likelihood that additional options.

I'll ask Dominic to comment on it.

Eddie Kim: I'll turn it back. One moment for our next question. The next question comes from David Smith with Pickering Energy Partners. Your line is now open. Hey, good morning.

And I will make some introductory comments first project.

Our current line of thinking is that we will secure additional work for the Patriot Act.

Exercise.

Actively pursuing.

And to add to that is the Patriot is probably our biggest variable there.

Two more.

David Christopher Smith: Good morning. Thank you for taking my questions and congratulations on a solid quarter. Wanted to make sure I understood the 24 guidance. You were pretty clear, but just making sure.

More probable than less opportunities right now for the Patriot for work in 2024 that would help us fill that gap, we don't anticipating filling 100% of the gap.

Certainly.

We're we're opposite.

Optimistic that we'll be able to to secure additional work for the Patriot, but.

Half of the year. So in part the range reflects filling a portion of the gap.

Given the fact that we've got a 2025 contracts dark.

Dominic Savarino: Excluding the Great White impact, we should think about that guidance as if the Great White had been working at its contracted rate with no impact. Yes, that is correct. We will normalize our results for any impact that the downtime has or the insurance proceeds have as we report throughout the year. So that is correct, and I appreciate it, and for the financial impact of the property insurance with the $10 million deductible. Should we think about that as only applying to the $12 to $15 million of replacement CapEx? Recovery Costs, I think estimated at $20 to $25 million, also apply to that. All of those costs would be covered by the policy. So, certainly, it's subject to the claim with the insurance company and what is covered, but the expectation is that all of that is potentially eligible to be recovered as part of the insurance policy.

But it's unlikely that we'll be able to.

As far as the price the option on the Hawk goes our current.

Released released the crew or otherwise we will have to maintain those costs wherever you every dollar of revenue we were able to achieve there is gonna be upside relative to what was considered in our forecast.

<unk> is that it's more likely than not that the client chooses to exercise the option, but obviously that speculation at this point in time.

Adding the.

The onyx into the mix in fact that would most likely be a negative to the forecast because the opportunity for the Onyx is really will be something that would more likely began in 2025, such that we have to reactivate the rig earlier than that and incur the cost re crew.

We would expect clarity on that in the first half of the year and have good visibility one way or the other on that and then with respect to the great. Why we continue to anticipate that not only the farmer thats already committed for the great what but at the tail end of the year the last week that additional options.

Deal with that Capex in the second half of 'twenty 'twenty four if that were to be the case. So the onyx variable certainly currently not considered but if it were to be.

Exercise.

And to add to that is the Patriot is probably our biggest variable there.

Certainly.

Contracted it would most likely be negative relative to 2024.

We're we're opposite.

Optimistic that we'll be able to secure additional work for the Patriot, but.

That's very helpful.

Given that the fact that we've got a 2025 contracts dark it's unlikely that it's unlikely that we'll be able to.

Partially you kind of answered my follow up on the Patriots are.

Are you able to.

Sure.

Released the crew or otherwise we will have to maintain those costs. Every every dollar of revenue we were able to achieve there is going to be upside relative to what was considered in our forecast.

I call it how much something after you would you would expect.

Dominic Savarino: So this could potentially, after insurance, be a net impact of maybe the low $30 million range. Right, yeah, right about by the time you factor in the loss of revenue, the potential loss of hire proceeds, as well as the $10 million deductible, it's right at $30 million, based on our current estimate of 90 to 100 days. Thank you. Well, I'll circle back.

The Bolton model not the 100%, but do you think 50 60 37 days.

Adding.

The onyx into the mix in fact that would most likely be a negative to the forecast because the opportunity for the Onyx is really will be something that would more likely again in 2025, such that we have to reactivate the rig earlier than that and incur the cost re crew.

I'd say, 40% to 50% of the gap, we're exploring opening to cover.

Clearly I mean, the summer months.

It would be the likely timeframe so.

David Christopher Smith: Thank you, Dave. One moment for the next question. The next question comes from Frederick Steen with Clarkson Securities. Your line is open. Hello, Bernie and team. Hope you are well, and from me as well.

Two in Q3 more likely than Q4, but.

I think 50% from a modeling perspective is probably not a not too far off.

Deal with that Capex in the second half of 2020 forward if that were to be the case, so the onyx variable.

Frederick Steen: Good quarter. I wanted to follow up a bit on your fleet. You clearly have good coverage, 424, and I think your revenue guidance is a testament to that. It's quite a narrow range, so I wanted to get a few details on how that range is being built up. Will it depend on whether you, for example, are able to secure additional work on Patriot? Does it assume any impact of Onyx?

That's very helpful. Finally.

Certainly currently not considered but if it were to be.

Now that you know you'll refinance a new mom in place you don't have liquidity through the arts you have good coverage from 'twenty to 'twenty, four and coming into a period, where some rig or rigs will be.

Contracted it would most likely be negative relative to 2024.

That's very helpful.

Approximately kind of answer my follow up on the Patriots.

Substantially we priced.

Are you able to.

On the upside or are you feeling or.

Sure.

I call it how much of the gap that you would expect the hence the molten model not the 100%, but do you think 50 60 37 day.

Yeah.

Thinking actively about anything strip.

Dominic Savarino: You know, you're marketing that. Or does it assume, you know, for example, that the price options on the Blackhawk and the Park and the Great White that, in 2024, although minimal, will also be exercised? Thinking results are on, and how we can move from the low to the high end of that range would be very helpful. I'll ask Dominic to comment on that, and I'll make some introductory comments first, Bernie.

Strategic I know this is a recurring question.

It's been quite quiet on the M&A from already sort of something on the equity market has been a big casino.

I would say, 40% to 50% of the gap, we're exploring opening to cover <unk>.

<unk> I mean, the summer months.

But the parts anything changed on your side in terms of.

It would be the likely timeframe so.

Thinking around consolidation and where diamond space in that mix.

Q2, and Q3 more likely than Q4, but.

Could be acquire or be acquired et cetera.

50% from a modeling perspective is probably not too far off.

Or are the M&A discussions dead for now.

That's very helpful. Finally.

Thanks for the question Frederic.

Now that Youre refinance new bomb in place lots of liquidity.

A recurring question, but a fair question Nonetheless.

Bernie G. Wolford: Our current line of thinking is that we will secure additional work for the patrons. We're actively pursuing, more probable than less opportunities right now for the Patriot for work in 2024 that would help us fill that gap. We don't anticipate filling 100% of the gap throughout the year, so in part, the range reflects filling a portion of the gap. As far as the price option on the Hulk goes, our current expectation is that it's more likely than not that the client chooses to exercise the option, but obviously that's speculation at this point in time.

At this point in time, our view is with the strength of our backlog.

The Arts you have good coverage on 2024.

Coming into a period, where some rig time for rigs will be.

With the strength of our balance sheet.

We look to be a net acquirer fredrik going forward.

Stanley we priced.

On the upside or are you feeling or.

Thinking actively about anything.

Alright looking forward too.

If all of you and as always thank you so much for taking my questions I have a great day right.

Strategic I know this is a recurring question.

It's been quite quiet on the M&A from.

As a reminder to ask a question. Please press star one one on your telephone and wait for your name to be N now.

Or sort of something on the equity market is going to be.

But the past say anything changed on your side in terms of.

The amendment for the next question.

Thinking around consolidation and where <unk> plays in that mix.

Next question comes from Noel Parks with Tuohy Brothers investment Research. Please go ahead.

Dominic Savarino: We would expect clarity on that in the first half of the year and have good visibility one way or the other on that. And then, with respect to the Great White, we continue to anticipate not only the farm work that's already committed to the Great White but, at the tail end of the year, the likelihood of additional options. And to add to that, the Patriot is probably our biggest variable there.

It could be acquire or be acquired et cetera.

Or are the M&A discussions that for now.

Hi, good morning.

Good morning, all.

Just a couple of things.

Thanks for the question Frederic it's ever recurring question, but a fair question Nonetheless.

One theme that.

Has it been coming up more frequently as.

<unk>.

At this point in time, our view is with the strength of our backlog with the strength of our balance sheet.

Companies have been reporting this quarter.

It it seems that's more consistent there.

Various pillars are indeed seeing customer.

We look to be a net acquirer going forward.

Frederick Steen: Certainly, we're optimistic that we'll be able to secure additional work for the Patriot. Given the fact that we've got a 2025 contract start, it's unlikely that we'll be able to release the crew, or otherwise we'll have to maintain those costs. So every dollar of revenue we're able to achieve there is going to be upside relative to what we've considered in the forecast, adding the onyx into the mix. In fact, that would most likely be a negative to the forecast because the opportunity for the onyx is really, would be something that would more likely begin in 2025, such that we have to reactivate the rig earlier than that and incur the cost, recruit, and deal with So the onyx variable, certainly currently not considered, but if it were to be contracted, it would most likely be negative relative to 2025. That's very helpful. And you partially kind of answered my follow-up question on the Patriots. Are you able to, you know, share?

Making that shift towards prioritizing the de risking of future rig rate.

Alright looking forward too.

Hum.

If all of you as always thank you so much for taking my questions I have a great day right.

To the point that some of them are maybe.

Some of the larger ones are even.

It might be premature to call it doing speculative bidding, but but.

As a reminder to ask a question. Please press star one one on your telephone and wait for your name to be announced.

Yes.

The trend that trend doesn't seem to be materializing and I recall at something you saw himself on the horizon is good.

One moment for the next question.

The next question comes from Noel Parks with Tuohy Brothers investment Research. Please go ahead.

You're still seeing that to be the case and anything anecdotally you can you can point to that's that's reassuring on that front.

Hi, good morning.

Okay.

No.

So thanks for the question Noel.

Just a couple of things.

We can turn you to see client behavior. It is consistent with our thesis that theyre looking to de risk their future.

One theme that has been coming up more frequently as.

Companies have been reporting this quarter.

Okay, great upside exposure.

It seems it's more consistent that.

And longer term contracts come through the door.

The various pillars R&D seeing customer.

Once youre looking at now averaged just over a year, but we are seeing numerous three to five year opportunities come through the door and certainly our fair share of two year opportunities. All would lead me to believe that thesis remains that for the longer term clients have significant development.

We're making that shift towards prioritizing the de risking of future rig rate.

To the point that some of them are maybe.

Some of the larger ones are even.

It might be premature to call it doing speculative bidding, but but yes.

Frederick Steen: I call it how much of the gap you would expect that's tenable to model, not 100%, but you think 50, 60, 30, 70. I'd say 40 to 50% of the gap we're hoping to cover, particularly, I mean, the summer months. It would be the likely timeframe, so Q2 and Q3 more likely than Q4, but I think 50% from a modeling perspective is probably not too far off. That's very helpful.

Work they know what they want to do and they wanted to derisk those projects by secure and firm day rates in the near term.

The trend that trend doesn't seem to be materializing and I recall at something.

Science of on the Horizon is.

You're still seeing that to be the case and anything anecdotal you can you can point to that's reassuring on that front.

Great Thanks and.

You know of.

Of course, there is keen interest.

Hi.

So thanks for the question Noel.

Observers.

We continue to see client behavior.

The Street.

<unk> kind of like you know every contract and of course that that.

Consistent with our thesis that theyre looking to de risk their future.

That desire to.

Bernie G. Wolford: Finally, Now that you know you're refinanced, a new bond in place, a lot of liquidity through the RCAF, good coverage on 2024, and coming into a period where some rigs have or will be substantially repriced on the upside, are you feeling or, you know..., thinking actively about anything, you know, strategic? I know this is a recurring question in a way, but it's been quite quiet on the M&A front. Oil service sentiment in the equity market has been a bit, you know. But has anything changed on your side in terms of, you know, thinking around a consolidation where diamonds placed in that mix could be acquired, acquired, etc.? Or are the M&A discussions dead for now? Thanks for the question, Frederick. It's an ever-recurring question, but a fair question nonetheless.

Have them all.

Okay, great upside exposure.

Decided and announced sooner rather than later, which of course is.

We're seeing longer term contracts come through the door once youre looking at now averaged just over a year, but we are seeing numerous three to five year opportunities come through the door and certainly a fair share of two year opportunities all would lead me to believe that thesis remains.

Certainly every every driller in Christmas as well I'm, just wondering are there I'm just being realistic about.

Some of the tensions with being at very high utilization or are there any sources of variability that could affect timing.

That people ought to have in mind just to be to be realistic looking at the quarters ahead, and I'm thinking things, even you know the differences in the time between.

But for the longer term clients have significant development work they know what they want to do and they wanted to derisk those projects by secure and firm day rates in the near term.

Getting getting a deal signed and in Africa versus you know private direct deal on the Gulf.

Great.

And.

You you know.

Of course, there is keen interest.

Noel.

To make sure I understood. Your question are you asking from a diamond perspective.

Hmm.

Observers.

<unk> Street.

About kind of like you know every contract and of course that that debt.

Are we seeing the lack the hood of a high variability in future commitments or what is your question more broad.

Desired or.

The model.

Decided and announced sooner rather than later, which of course is.

And could you maybe restate it to make sure I'm clear on your question.

Bernie G. Wolford: Um, At this point in time, our view is, with the strength of our backlog, with the strength of our ballot sheet, we look to be in that acquisition, Frederick, going forward. Alright, looking forward to following you as always. Thank you so much for taking my questions, and have a great day.

Certainly every every driller and Chris as well I'm just wondering are there.

Sure I guess more broadly there's just so much scrutiny on everyone's kind of hanging on and seeing what the next contract announcement is pretty much for every every driller and.

Being realistic about.

Some of the tensions with being at very high utilization or are there any sources of variability that could affect the timing.

But so I just I'm concerned that maybe.

That people ought to have in mind just to be to be realistic looking at the quarters ahead, and I'm thinking things, even you know the.

Operator: As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. One moment for the next question. The next question comes from Noelle Parks with Tui Brothers Investment Research. Please go ahead. All right, good morning. Not boring at all.

People, who haven't paid a lot of attention in the industry recently or are just catching the what's going on in the current cycle.

Differences in lead time between getting getting a deal signed and in Africa versus.

Have the habits, where you know why isn't it happening faster and just some of that it seems to me is probably not realistic considering that youre getting such high utilization right now.

Private direct deal in the Gulf.

So just any anything to kind of give perspective on the pace of signings and you know.

Noel I wanted to make sure I understood. Your question are you asking from a diamond perspective are we are we seeing the likelihood of a high variability in future commitments or what is your question more broad.

Noelle Parks: So just a couple of things, you know, one thing that has been coming up more frequently as companies have been reporting this quarter is that it seems more consistent that various drillers are indeed seeing customers make that shift towards prioritizing the de-risking of future rig rates, to the point that some of them are maybe, some of the larger ones are even, it might be premature to call it doing speculative bidding, but just that the trend, that trend Is that still the case, and is there anything anecdotally you can point to that's reassuring on that front? Thanks for the question, Noel. We continue to see client behavior that is consistent with a thesis that they're looking to de-risk their future. Drain Upside Exposure.

Why that.

You know that that certainly is consistent with what you would expect these days.

Yeah.

And could you maybe restate it to make sure I'm clear on your question.

I'll start by saying you know as we as we finished the third quarter or the pace of signings was.

Sure I guess more broadly there is theres just so much scrutiny on everyone's kind of hanging on and seeing what the next contract announcement is pretty much for every every driller.

For 2023 up to the end of the third quarter was at a very high pace.

Precedented in modern times, I guess, you would say.

And.

Right.

I, just I'm concerned that maybe.

We continue to see the data.

Tenders out there.

People, who haven't paid a lot of attention to the industry recently are catching part of what's going on in the current cycle.

Looking for commitments minimum of six months prior to the start of work and in many in most cases as much as one year and even more than a year before the actual.

Hum.

<unk> had this worry you know why isn't it happening faster and just some of that it seems to me is probably not realistic considering that youre getting such high utilization right now.

Commencement date.

What we're going through right now in Q1 is what I'm gonna generally classified as noise relative to the longer term trend.

So just any anything to kind of give perspective on the pace of signings and you know.

I think youre going to see some clients take advantage of.

Why that.

Bernie G. Wolford: We're seeing longer-term contracts come through the door. The ones we're looking at now average just over a year, but we're seeing numerous three- to five-year opportunities come through the door, and certainly a fair share of two-year opportunities. All this would lead me to believe that, for the longer term, clients have significant development work, they know what they want to do, and they want to de-risk those projects by securing firm day rates in the near term.

That certainly is consistent with what you'd expect these days.

Of uncertainty.

Uncertainty if you want to call it that on a securing one or two rigs at below market rates, we've seen one interesting deal out there.

Yeah.

I'll start by saying you know.

Round of clat, securing partial ownership in an asset we have a two.

As we finished the third quarter or the pace of signings was.

For 2023 up to the end of the third quarter was at a very high pace.

Two to three stranded assets out there that are very interested in getting into the market.

You know unprecedented in modern times like this website.

And we have some people that may be interested in protecting the downside. So I think you'll see a few rights and what I would call. The three hundreds for lower spec rigs are stranded rigs.

Continue to see that.

The tenders out there.

We're looking for commitments minimum of six months prior to the start of work and in many in most cases as much as one year and even more than a year before the actual commenced.

Noelle Parks: Thanks. And, you know, of course, there is this keen interest by Observers, The Street, about kind of like, you know, every contract and, of course, that desire to, you know, have them all. Site, and then announced sooner rather than later, which, of course, is certainly every driller's interest as well. And I just wonder, are there, just being realistic about some of the tensions with being at very high utilization, are there any sources of variability that could affect timing that people ought to have in mind, just to be realistic looking at the quarter ahead? And I'm thinking things even, differences in lead time between getting a deal signed in Africa versus a private direct deal in the Gulf. Noelle, I want to make sure I understood your question. Are you asking from a diamond perspective: are we seeing the likelihood of high variability in future commitments? Or was your question more broad?

I think again that's noise. If you look at the average of what I think youre going to see contracts signed.

And executed at this year I'm going to say it stays in the $4 50 to 490 range.

Commencement date.

What we're going through right now in Q1 is what I've got a generally classified as noise relative to the longer term trend.

We even in even with averaging in the lower day rate contracts that are out there and are likely to come through where people are just looking for term over price.

I think youre going to see some clients take advantage of.

<unk>.

Uncertainty if you want to call it that on a securing one or two rigs at below market rates. We've seen one interesting deal out there around the cloud securing partial ownership in an asset.

For for what I would call a second tier of our sixth generation.

Single activity or one B O P asset.

Great Thanks for that.

Have a two to three stranded assets out there that are very interested in getting into the market.

Oh.

Sorry, I had to add to that no its sometimes longer term contracts.

The operators are talking about take longer to negotiate.

And we have some people that may be interested in protecting the downside. So I think youll see a few rights and what I would call.

You want to make sure that both on the drilling contractor side as well as on the operator side that you can get that gets at the liabilities right you get the escalation factors right you get the day rate right. So.

The three hundreds for lower spec rigs are stranded rigs.

But.

I think again that's noise. If you look at the average of what I think youre going to see contracts signed.

And that could also be influenced some of the timing as we're talking about longer term.

And executed at this year I'm Gonna say it stays in the $4 50 to $4 90 range.

Noelle Parks: And could you maybe restate it to make sure I'm clear on your question? Sure, just more broadly, there's just so much scrutiny on, you know, everyone's kind of hanging on seeing what the next contract announcement is, pretty much for every driller. And so, I just am concerned that maybe people who haven't paid a lot of attention to the industry recently or just caught what's going on in the current cycle have this, have this worry, you know, why isn't it happening faster?

Right absolutely thanks, a lot.

At this time I show no further questions I would now like to turn the call back to Bernie Wolford CEO for closing remarks.

We even in even with averaging in the lower day rate contracts that are out there and are likely to come through where people are just looking for term over price.

Thanks, all for your participation in today's call. We look forward to speaking with you again next quarter and have a great day Goodbye.

For for what I would call a second tier of our sixth generation.

Single activity, our <unk> asset.

This concludes today's conference call. Thank you for your participation you may now disconnect and have a great day.

Great Thanks for that.

Oh, sorry, sorry, I had to add to that goal sometimes longer term contracts.

Bernie G. Wolford: And just some of that, it seems to me, is probably not realistic, considering that you're getting to such high utilization right now. So, anything to kind of give perspective on the pace of signings and, you know, why that, you know, why that, you know, that certainly is consistent with what you'd expect these days. Yeah.

Operators are talking about take longer to negotiate you.

You want to make sure that both on the drilling contractor side as well as on the operator side that you'd get that gets the liabilities right you get the escalation factors right to get the day rate right. So.

Bernie G. Wolford: I'll start by saying, you know, as we finished the third quarter, the pace of signings for 2023 up to the end of the third quarter was at a very high pace, unprecedented in modern times, I guess you would say. We continue to see The Tinders out there; they're looking for commitments minimum of six months prior to the start of work and, in many and most cases, as much as one year and even more than a year before the actual start. Commencement Day

And that could also be influenced some of the timing as we're talking about longer term.

Right absolutely thanks, a lot.

At this time I show no further questions I would now like to turn the call back to Bernie Wolford CEO for closing remarks.

Thanks, all for your participation in today's call. We look forward to speaking with you again next quarter and have a great day Goodbye.

Bernie G. Wolford: I think what we're going through right now in Q1 is what I'm going to generally classify as noise relative to the longer-term trend. I think you're going to see some clients take advantage of Certainty, if you want to call it that, by securing one or two rigs at below market rates. We've seen one interesting deal out there around a client securing partial ownership in an asset, and we have two to three stranded assets out there that are very interested in getting into the market.

This concludes today's conference call. Thank you for your participation you may now disconnect and have a great day.

[music].

Okay.

[music].

Bernie G. Wolford: And we have some people that may be interested in protecting the Dow side. So I think you'll see a few rates in what I would call the 300s for lower spec rigs or stranded rigs. Bye.

Yeah.

[music].

Bernie G. Wolford: I think, again, that's noise. If you look at the average of what I think, you're going to see contract signs. I'm going to say it stays in the $4.50 to $4.90 range, even with averaging in the lower day rate contracts that are out there and are likely to come through, where people are just looking for term over price for what I would call a second tier or sixth generation. Single Activity or One BOPS. Great, thanks for the... Sorry, please.

Yes.

[music].

Noelle Parks: Sorry, to add to that, Noel, sometimes the longer-term contracts that operators are talking about take longer to negotiate. You want to make sure that both on the drilling contractor side as well as on the operator side that you get the liabilities right, you get the escalation factors right, you get the day rate right. So that could also be influenced by some of the timing as we're talking about longer terms. Absolutely.

Dominic Savarino: Thanks a lot. At this time, I have no further questions. I would now like to turn the call back to Bernie Wolford, CEO, for closing remarks. Thank you all for your participation in today's call. We look forward to speaking with you again next quarter, and have a great day. This concludes today's conference call. Thank you for your participation. You may now disconnect, and have a great day. www.plastics-car.com Welcome to the fourth quarter 2023 Diamond Offshore Drilling Earnings Conference Call. At this time, all participants are in a listen-only mode.

Ladies and gentlemen, thank you for standing by welcome to the fourth quarter 2023 Diamond offshore drilling earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question during this session.

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again.

You will need to press star one on your telephone.

<unk> been hearing on amazing message of bites in your hand, it's right to withdraw your question. Please press star. One again, please be advised that today's conference is being recorded I would like now to turn the conference over to Kevin <unk> Senior director of Investor Relations. Please go ahead.

Kevin Bordosky: Please be advised that today's conference is being recorded. I would like now to turn the conference over to Kevin Bordosky, Senior Director of Investor Relations. Please go ahead.

Kevin Bordosky: Thank you, Michelle. Good morning or afternoon, everyone, and thank you for joining us. With me on the call today are Bernie Wolford, President and Chief Executive Officer, and Dominic Savarino, Senior Vice President and Chief Financial Officer. Before we begin our remarks, I remind you that information reported on this call speaks only as of today, and therefore, time-sensitive information may no longer be accurate at the time of any replay of this call. Some of the information referenced on our call today is included in the slide presentation, which you can find in the investor relations section of our website. Calendar of Events

Thank you Michele.

Good morning, or afternoon to everyone and thank you for joining us.

Me on the call today are Bernie Wolford, President and Chief Executive Officer, and Dominic SAP Arena.

On your Vice President and Chief Financial Officer.

Before we begin our remarks I'll remind you that information reported on this call speaks only as of today and therefore time sensitive information may no longer be accurate at the time of any replay of this call.

Some of the information referenced on our call. Today is included in the slide presentation can find in the Investor Relations section of our website under calendar of events.

Kevin Bordosky: In addition... Certain statements made during this call may be forward-looking in nature. These statements are based on our current expectations and include known and unknown risks and uncertainties, many of which we are unable to predict or control. These risks and uncertainties may cause our actual results or performance to differ materially from any future results or performance expressed or implied by these statements. Risks and uncertainties include the risk factors discussed in our 10-K and 10-Q filings with the SEC. Furthermore, we expressly disclaim any obligation to update or revise any forward-looking statements.

In addition, certain statements made during this call may be forward looking in nature.

These statements are based on our current expectations and include known and unknown risks and uncertainties many of which we are unable to predict or control.

These risks and uncertainties may cause our actual results or performance to differ materially from any future results or performance expressed or implied by these statements.

These risks and uncertainties include the risk factors disclosed in our 10-K and 10-Q filings with the SEC.

Further we expressly disclaim any obligation to update or revise any forward looking statements.

Bernie G. Wolford: Please refer to the disclosure regarding forward-looking statements incorporated in our press release issued yesterday evening, and please note that the contents of our call today are covered by that disclosure. In addition, please note that we will be referencing non-GAP figures on our call today. You can find a reconciliation to Gap Financials in our press release issued just now. Now, I will turn the call over to Bernie. Thanks, Kevin. Good day to everyone.

In addition, please note that we will be referencing non-GAAP figures on our call today.

You can find a reconciliation to GAAP financials in our press release issued yesterday and now I will turn the call over to Bernie.

Thank you Kevin.

Good day to everyone. Thank you for your interest in Diamond offshore as we present our results for the fourth quarter 2023.

Bernie G. Wolford: Thank you for your interest in Diamond Offshore. We present our results for the fourth quarter. 2023 was a transformational year for Diamond Offshore, marking our one-year anniversary of relisting on the New York Stock Exchange. We hope you enjoyed this video. If you did, please like it and subscribe to our channel.

101, and three was a transformational year for diamond offshore.

Marked our one year anniversary of re listing on the New York stock exchange.

Bernie G. Wolford: Thank you. We secured $485 million dollars in a new contract. Safely Delivered by Shipyard, all while delivering industry-leading, operational excellence products. The positive momentum continues in 2024 with the addition of another $362 million in new contracts, taking our total current backlog to approximately $1.6 billion. Before addressing fourth quarter results and sharing some perspective on our markets, I would like to provide a high level update, previously reported great, February 1st while waiting on weather with the well secure and lower marine riser package, or LMR, disconnected from the field. LMRP and the riser unintentionally separated from the rig at the slip joint tension. Dropping to the, No one was hurt, no pollution occurred, and there was no damage to subsea infrastructure.

A measurable improvements in our capital structure.

Secured $495 million in new contract awards and safely delivered five shipyard projects, all while delivering industry, leading operational excellence for our customers.

The positive momentum continues in 2024 with the addition of another $362 million and.

New contracts, making our total current backlog to approximately $1 6 billion.

Before addressing fourth quarter results and sharing some perspective on our markets I would like to provide a high level update on the previously reported great but instead.

On February one well waiting on weather, but the well secure and lower marine Riser package R. L. M RFP disconnected from the LP.

Hello, Murphy and riser unintentionally separated from the rig slipped draw attention to rate dropped to the seabed.

No one was hurt no pollution occurred and there was no damage to the subsea infrastructure.

Work to recover the MRP is progressing methodically and ensure a safe recovery, while working within the weather constraints west of Shetlands.

The LMR Vegas, situated on the seabed exposed to both mud line in an upright orientation.

We have successfully on boarded the riser string from the L. A RFP and are prepared to lift the L. A RFP to the rig and the next where the window.

Bernie G. Wolford: We currently estimate the total repair period to be 90-100 days from the date of the accident. Dominick will provide additional information related to the estimated repair timing, cost, and insurance coverage in his remarks. In the interim, I'd like to recognize the extraordinary work of our team in response to this, and the quality of the ongoing collaboration with our clients and local authorities. Turning to the fourth quarter, I'm pleased to report that our rig crews and operations support team delivered exceptional safety and revenue efficiency of 95% across our fleet during the quarter. This achievement was particularly noteworthy as we commenced four contracts in the quarter, one in each of the regions in which we operate. That's off to our teams for their steadfast commitment to planning and execution. Never compromising on safety.

We currently estimate the total repair period to be 90 to 100 days from the date of Amsterdam.

Dominic will provide additional information related to the estimated repair timing.

And insurance coverage in his remarks, and then Andrew I'd like to recognize the extraordinary work our team in response to this debt.

And the quality of the ongoing collaboration with our clients and local authorities.

Turning to the fourth quarter I am pleased to report that our rig crews and operation support team delivered exceptional safety results.

And revenue efficiency of 95% across our fleet during the quarter.

This achievement was particularly noteworthy as we commenced for contracts during the quarter one in each of the regions in which we operate.

That's off to our teams for their steadfast commitment to planning and execution, while never compromising on safety.

Bernie G. Wolford: Our fourth quarter financial performance reflects the impact of having four of our marketed fleet of 10 rigs on higher market day rate contracts at quarter end. Total revenue and adjusted EBITDA for the quarter were $298 million and $72 million, respectively. These results were above our guidance for the quarter, primarily due to the Patriot working longer than previously anticipated, referral of certain contract preparation costs, and earning a performance bonus for efficient and injury-free operations in Senate Court. This beat, in part, reflects the impact of rigs moving to higher-day rig contracts, setting the stage for improving financial performance in 2024, owing to fewer planned shipyard days. The Black Hawk encouraged having a full year on higher day rates, and the Black Lion and Black Rhino moved to higher day rates in the third quarter.

Our fourth quarter financial performance reflects the impact of having four of our marketed fleet 10 rigs on higher market day rate contracts at quarter end.

Total revenue and adjusted EBITDA for the quarter were $298 million and $72 million respectively.

These results were above our guidance for the quarter, primarily due to the patriot working longer than previously anticipated.

The deferral of certain contract preparation costs, and earning a performance bonus for efficient and injury free operations in Senegal.

This feat in part reflects the impact of brakes, moving to higher day rate contracts and sets the stage for improving financial performance in 2024, owing to fewer planned shipyard days.

The Blackhawk encourage having a full year on higher day rates and the black line in Black Rhino moving to higher day rates in the third quarter.

Bernie G. Wolford: Now let's turn to our view on the markets and opportunities for diamonds in 2024 and beyond. Jeff Sockel, and Offshore Drilling, continue to be supported by strong commodity prices. Robust Upstream Capital Spending and Anticipated Year-over-Year Growth in Exploration Drilling. Like and as a group, these indicators support our view of a longer-duration upcycle in deepwater drilling. Let's look at some of the numbers in support of a longer duration. Exploration drilling can be considered a leading indicator and a precursor to future development programs. And analysts now forecast year-on-year growth in floater exploration wells of 34%. Subsea tree orders are another leading indicator.

Now, let's turn to our view on the markets and opportunities for Diamond in 2024 and beyond.

The upcycle in offshore drilling.

Tim use to be supported by strong commodity prices.

Robust upstream capital spending and anticipated year over year growth and exploration drilling.

Thank you, Matt as a group these indicators support our view of a longer duration upcycle in deepwater drilling.

Let's look at some of the numbers in support of our longer duration upside.

Exploration drilling can be considered a leading indicator and a precursor to future development programs and analysts now forecast year on year growth in floater exploration wells or 34%.

Subsea tree orders are another leading indicator in 2024 forecast predict the third year in a row with over 300, new trees ordered.

Bernie G. Wolford: The 2024 forecast predicts the third year in a row with over 300... This level of water activity is the highest it's been since 2013, a time when we had 115 more rigs in the market than we do today to execute the related drilling. Funding Subsidy Tree Orders in the Perspective relative to the Global Marketed Floater Fund Back in 2012 and 2013.

This level of order activity is the highest it's been since 2013 at a time when we had 115 more rigs in the market.

And we do today to execute the related drilling activities.

Putting subsea tree orders into perspective relative to the global marketed floater fleet.

Back in 2012 in 2013.

Bernie G. Wolford: The number of orders per marketed floater peaked at 1.5 and 1.8 trees ordered per marketed floater, respectively. In comparison, in 22 and 2023, those numbers were 2.1 and 1.8, and the 2024 forecast stands at approximately 1.9. This would indicate three continuous years with numbers matching or exceeding measures dating back 12 years. These trends sync well with the Atlas forecast for floater demand in the rigged gear space. The forecast Compound Annual Growth Rate of Rig Years, 2023 to 2026 by region is 7% for North America. 11% for South America, and 10% for the North Sea. 7% for West Africa and 25% for Southeast Asia and Oceania.

Number of orders per marketed floater peaked at one five and one eight trees ordered for marketed floater respectively.

In comparison, and 22% and 2023 those numbers were $2 one at 1.8, and the 2024 forecast stands at approximately $1 nine.

This would indicate three continuous years put numbers matching or exceeding measures dating back 12 years.

These trends synced, well with analysts' forecast for floater demand on a rig year spaces.

The forecast compound annual growth rate for rig years of demand from 2023 to 2026, a region or 7% for North America, 11% for South America, 10% for the North Sea.

7% of West Africa, and 25% for Southeast Asia and Oceania.

Another key metric we track is the trailing four quarters tinder activity on a rig years basis.

Bernie G. Wolford: Another key metric we track is the treading four-quarters tender activity on a rigged gear basis. It has been a bumpy road from a peak in 2012 of approximately 106 rig years of implied drilling demand to a cycle bottom of 28 in 2016. COVID Bottom of 35 in 2020; industry closed in 2023 with 106 rigged gears. Tender Implied Drilling Demand, matching the number from 12 years ago. Closer to home, we are currently tracking 51 opportunities, representing 52 rigged years and commencement dates through 2025, of which roughly 61% are for DP rigs and 39% for moored rigs.

It has been a bumpy road from our peak in 2012 of approximately 106 rig years of tender implied trailing demand through a cycle bottom of 28, 2016, and a COVID-19 bottom of 35% in 2020.

The industry close 2023, with a 106 rig years of tender implied trailing demand matching the number from 12 years ago.

Closer to home. We are currently tracking 51 opportunities representing 52 rig years of demand we've commenced commencement dates through 2025.

Roughly 61% are for DP rigs and 39% for moored rigs.

Q4 2023 Diamond Offshore Drilling Inc Earnings Call

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