Q1 2024 Transocean Ltd Earnings Call

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Good day, everyone and welcome to today's Q1, 'twenty 'twenty for Trans Ocean earnings call. At this time, all participants are in a listen only mode.

Operator: Please note this call is being recorded, and I will be standing by if you need any assistance. It is now my pleasure to turn the conference over to Alison Johnson, Director of Investor Relations. Thank you, Shelby.

Speaker Change: Later, you will have the opportunity to ask questions. During the question and answer session.

Alison Johnson: Good morning, and welcome to Transocean's first quarter 2024 earnings conference call. A copy of our press release covering financial results, along with supporting statements and schedules, including reconciliations and disclosures regarding non-GAAP financial measures, is posted on our website at deepwater.com. Joining me on this morning's call are Jeremy Thigpen, Chief Executive Officer; Keelan Adamson, President and Chief Operating Officer; Mark May, Executive Vice President and Chief Financial Officer; and Roddie Mackenzie, Executive Vice President and Chief Commercial Officer.

You May register to ask a question at any time by pressing the star and one on your telephone keypad you may withdraw yourself from the queue by pressing star two.

Speaker Change: Please note. This call is being recorded and I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Allison Johnson director of Investor Relations.

Alison Johnson: Thank you Shelby good morning, and welcome to Transocean first quarter 'twenty 'twenty four earnings conference call a copy of our press release covering financial results, along with supporting statements and schedules, including reconciliations and disclosures regarding non-GAAP financial measures are posted on our website at deepwater dotcom.

Alison Johnson: During the course of this call, Transocean Management may make certain forward-looking statements regarding various matters related to our business and company that are not historical facts. Such statements are based upon current expectations and certain assumptions and therefore are subject to certain risks and uncertainties. Many factors could cause actual results to differ materially.

Alison Johnson: Joining me on this morning's call are Jeremy Thigpen, Chief Executive Officer, Keelan, Adamson, President and Chief operating Officer, Mark Mey Executive price, President and Chief Financial Officer, and Roddie Mackenzie Executive Vice President and Chief Commercial Officer.

Alison Johnson: During the course of this call Transocean management may make certain forward looking statements regarding various matters related to our business and company that are not historical facts.

Operator: Please refer to our SEC filings for our forward-looking statements and for more information regarding certain risks and uncertainties that could impact our future results. Also, please note that the company undertakes no duty to update or revise forward-looking statements. Following Jeremy, Keelan, and Mark's prepared comments, we will conduct a question and answer session with our team. During this time, to give more participants an opportunity to speak, please limit yourself to one initial question and one follow-up. Thank you very much.

Alison Johnson: Such statements are based upon current expectations and certain assumptions and therefore are subject to certain risks and uncertainties.

Alison Johnson: Many factors could cause actual results to differ materially please refer to our SEC filings for our forward looking statements and for more information regarding certain risks and uncertainties that could impact our future results.

Alison Johnson: So please note that the company undertakes no duty to update or revise forward looking statements.

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

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

Jeremy D. Thigpen: I will now turn the call over to Jeremy. Thank you, Alison, and welcome to our employees, customers, investors, and analysts participating in today's call. As reported in yesterday's earnings release, for the first quarter, Transocean delivered adjusted EBITDA of $199 million on $767 million of adjusted contract drilling revenues, resulting in an adjusted EBITDA margin of approximately 26%. While the pace of contract awards has moderated somewhat from this time last year, demand for high-specification, ultra-deep-water drill ships and harsh-environment semi-submersibles remains extremely strong, with improving day rates and lengthening terms.

Jeremy: Thank you Allison and welcome to our employees customers investors and analysts participating on today's call is.

Jeremy: As reported in yesterday's earnings release for the first quarter Transocean delivered adjusted EBITDA of $199 million on $767 million of adjusted contract drilling revenues, resulting in an adjusted EBITDA margin of approximately 26%.

Jeremy: While the pace of contract awards has moderated somewhat from this time last year demand for high specification ultra deepwater drillships and harsh environment semi submersibles remains extremely strong with improving day rates and lengthening terms.

Jeremy D. Thigpen: In fact, earlier this month, we announced a 365-day contract extension for the Deepwater Asgard with an independent operator in the U.S. Gulf of Mexico. The program is expected to commence in June 2024 and is a direct continuation of the current program and includes additional services. The total contract value of approximately $195 million includes a $10.9 million lump sum payment, which is not included in the estimated backlog of approximately $184 million. As part of the agreement, we will be upgrading the rig's blowout preventers with Kinetic Pressure Controlled Blowout Stopper Units, or KBOS.

Jeremy: In fact earlier this month, we announced a 365 day contract extension for the deepwater Asgard with an independent operator in the U S. Gulf of Mexico. The program is.

Jeremy: As expected to commence in June 2024 in direct continuation of the current program and includes additional services.

Jeremy: The total contract value of approximately $195 million includes a $10 $9 million lump sum payment, which is not included any estimated backlog of approximately $184 million.

Jeremy: As part of the agreement, we will be upgrading the rigs blowout preventer with kinetic pressure control blowout stopper units or K boss.

Jeremy D. Thigpen: As we previously highlighted, KBOS is a device that improves blow-up preventer shearing capability and is retrofittable to existing BOPs. Importantly, it also significantly shortens the time for the rig to complete an emergency disconnect, which facilitates the ability to expand the minimum operating water depths of deepwater floaters. Certain configurations of the device are capable of shearing any tubular and sealing the wellbore in less than one second.

Jeremy: As we previously hi, Bob highlighted K boss is a device that improves blowout preventer sharing capability and as retrofit to existing <unk> importantly, it also significantly shortens the time for the rig to complete an emergency disconnect, which facilitates the ability to expand the minimum operating water depth of deepwater floaters.

Jeremy: Certain configurations of the device are capable of sharing any tubular and feeling the wellbore in less than one second over.

Jeremy D. Thigpen: Over the past several years, Transocean has worked closely with Kinetic Pressure Control, Development, and Testing of KBOS, as well as with the regulator, the Bureau of Safety and Environment Enforcement, or BSEE, to earn their support and approval, and I'm proud to report that this will mark the third unit that we have introduced to our fleet. We are encouraged by the positive feedback received from our customers and BSEE and are pleased to see an increased willingness from our customers to pay for this transformational technology.

Jeremy: Over the past several years transition has worked closely with kinetic pressure control.

Jeremy: And testing of chaos as well as with the regulator the bureau of safety and environment enforcement or Bessie to earn their support and approval and I'm proud to report that this will mark the third unit that we've introduced to our fleet.

Jeremy: We are encouraged by the positive feedback received from our customers and Betsy and are pleased to see an increased willingness from our customers to pay for this transformational technology.

Jeremy D. Thigpen: Also in the U.S. Gulf of Mexico, we just signed a contract for an additional 4 wells of 15K work on the Deepwater Atlas at a daily rate of $505,000 per day, in direct continuation of its current program, expected to last between 240 and 360 days. We also announced that Total Energy has exercised its remaining option on the Deepwater Ski Roads at $400,000 per day.

Jeremy: Also in the U S Gulf of Mexico, We just signed a contract for an additional four wells of 15 K work on the deepwater Atlas a day rate of $505000 per day in direct continuation of its current program expected to last between 240 and 360 days.

Jeremy: We also announced total energy has exercised its remaining option on the deepwater skyros at $400000 per day.

Jeremy D. Thigpen: While this option, which was negotiated well before the most recent market acceleration, is materially below current market rates, we are pleased to continue our longstanding and mutually beneficial relationship with Total Energy. As we move through the next several months, we expect numerous long-term contracts to be awarded at increasing day rates reflecting industry participants' recognition of the tightness in the market. Healthy contract durations are one of many factors supporting improved supply-demand dynamics.

Jeremy: While this option, which was negotiated well before the most recent market acceleration is materially below current market rates. We are pleased to continue our long standing and mutually beneficial relationship with total energies.

Jeremy: Yeah.

Jeremy: As we move through the next several months, we expect numerous long term contracts to be awarded and increasing day rates, reflecting industry participants recognition of the tightness in the market.

Jeremy: Healthy contract durations are one of many factors supporting improved supply demand dynamics.

Jeremy D. Thigpen: Excluding the TotalEnergy 10-year contract award, which we consider to be something of an anomaly, contract durations for new ultra-deepwater fixtures reached a robust 511 days in the quarter, largely in line with the 2023 average of 526 days and up from 302 days in 2022.

Jeremy: Excluding the total energy as 10 year contract award, which we consider to be something of an anomaly contract durations for new ultra deepwater fixtures reached a robust 511 days in the quarter largely in line with the 2023 average of 526 days and up from 302 days in 2022.

Jeremy D. Thigpen: For Transocean, this is especially important, as with longer terms, our customers are finally willing to co-invest in the deployment of some of the new technologies like KBOS, HaloGuard, robotic riser systems, IntelliWell, and others that we developed, tested, and proved during the downturn but were unable to fully deploy given obvious financial constraints. While some analysts and investors continue to express concerns over the pace of change, I'd like to reiterate two points on that topic I make frequently.

Jeremy: For Transocean this is especially important as with longer terms. Our customers are finally willing to co invest in the deployment of some of the new technologies like Chaos Halo guard robotic riser systems, and <unk> and others that we developed tested improved during the downturn, but were unable to fully deploy given obvious financial constraints.

Jeremy: While some analysts and investors continue to express concerns over the pace of contract awards I'd like to reiterate two points on that topic I make frequently.

Jeremy D. Thigpen: First, with day rates increasing and terms extending, the financial commitment from our customers is becoming far more substantial, requiring far more approvals within our customers' organizations and with their partners, which obviously adds time to the process.

Jeremy: First with day rates, increasing in terms of extending the financial commitment from our customers is becoming far more substantial requiring far more approvals within our customers' organizations and with their partners, which obviously adds time to the process.

Jeremy D. Thigpen: And second, our active fleet is largely contracted through the end of the year, and based on active negotiations, we anticipate filling at least a portion of the remaining availability. As one example, well intervention operations on the Deepwater Invictus have extended significantly, with the rig now scheduled to complete that work scope in July. We are also in active discussions for additional opportunities to commence and direct the continuation of this work. Additionally, and to emphasize the confidence that our customers have in the duration of this upside, we are actively engaged in conversations for rigs that are not scheduled to roll off the contract for one to three years.

Jeremy: Second our active fleet is largely contracted through the end of the year and based on active negotiations, we anticipate filling at least a portion of the remaining availability.

Jeremy: As one example, well intervention operations on the deepwater Invictus have extended significantly significantly with the rig now scheduled to complete that work scope in July.

Jeremy: We are also in active discussions for additional opportunities to commence in direct continuation of this work.

Jeremy: Additionally, and to emphasize the confidence that our customers have and the duration of this upside.

Jeremy: We are actively engaged in conversations for rigs that are not scheduled to roll off contract for one to three years.

Jeremy D. Thigpen: In fact, all indications continue to suggest heightened demand for at least the next several years. In its independent assessment, but an assessment that is fully supportive of our view, RYSTAT anticipates deepwater greenfield CAPEX in 2025 will be the highest in 12 years and that by 2027, total deepwater investment will reach nearly $130 billion, an increase of approximately 40% from 2023. Additionally, there are many important deepwater projects expected to reach final investment decisions this year, including BP's Atlantis IV and 20K Cascada fields in the U.S. Gulf of Mexico, Shell's Bonga North in Nigeria, Total Energy's Camino Discovery in Angola and Venus Discovery in Namibia, and ExxonMobil's Whiptail in Guyana, which was approved earlier this month.

Jeremy: In fact, all indications continue to suggest heightened demand for at least the next several years.

Jeremy: And its independent assessment, but an assessment that is fully supportive of our view rice that anticipates deepwater Greenfield capex in 2025 will be the highest in 12 years and that by 2027 total deepwater investments will reach nearly $130 billion, an increase of approximately 40% from 2023.

Jeremy: Additionally, there are many important deepwater projects expected to reach final investment decision this year, including Bp's Atlantis, 4% and 20, K koskela fields in the U S Gulf of Mexico shelf, Banca <unk> North in Nigeria.

Jeremy: Hotel Energy's Camino discovery in Angola, and Venus discovery in Namibia, and Exxonmobil with telling you Yana, which was approved earlier this month.

Jeremy D. Thigpen: These predictions reinforce our confidence there will be sustained market tightness for the foreseeable future. With that, I'll hand it over to Keelan to provide a bit more regional color and detail. Thanks, Jeremy. And good morning, everyone.

Jeremy: These predication reinforce our competence there will be sustained market tightness for the foreseeable future.

Jeremy: With that I'll hand, it over to Kieran to provide a bit more regional color and detail.

Kieran: Thanks, Jeremy and good morning, everyone jumping directly into the various regions in the U S. Gulf of Mexico, the rig supply demand balance is such that in our analysis the region could be short one rig in 2025.

Keelan I. Adamson: Jumping directly into the various regions in the US Gulf of Mexico, the rig supply and demand balance is such that, in our analysis, the region could be short one rig in 2025. Customer behavior indicates that they understand they need to secure rigs quickly to avoid missing their project timelines. Notably, we are observing elevated demand from independent operators, both in the form of tenders and direct negotiations.

Kieran: Customer behavior indicates that they understand they need to secure rigs quickly to avoid missing their project timelines.

Kieran: Notably we are observing seeing elevated demand from independent operators, both in the form of tenders and direct negotiations.

Keelan I. Adamson: Last month, two independent operators issued tenders for new programs that were not previously in our outlook. One includes a six-month firm term commencing in the first half of 2025, with two six-month options. The other is for six to nine months of work commencing in the third quarter of 2025. Additionally, there are two major E&P companies currently out to market for multi-year programs. In Brazil, last month, Petrobras provided an update to its expected demand for floating rigs based on 2030 requirements.

Jeremy: Last month, two independent operators issued tenders for new programs that were not previously in our outlook. One includes a six month firm term commencing in the first half of 2025 with two six month options.

Jeremy: There is for six to nine months of work commencing in the third quarter of 2025.

Jeremy: Additionally, there are two major E&P companies currently out to market for multi year programs.

Jeremy: In Brazil.

Jeremy: Last month's Petrobras provided an update to its expected demand for floating rig.

Jeremy: 19th 30 requirements. This demand forecasts suggest Petrobras may absorb up to 30 rigs through 2030 in line with our expectations that as a region for both Petrobras and the international oil companies, Brazil could require 36 floaters as soon as 2025.

Keelan I. Adamson: This demand forecast suggests Petrobras may absorb up to 30 rigs through 2030, in line with our expectations that, as a region for both Petrobras and the international oil companies, Brazil could require 36 floaters as soon as 2025. Part of this forecast is contingent upon discoveries in frontier areas, such as the equatorial margin, where earlier this month and for the second time this year, Petrobras disclosed another discovery. Obviously, our confidence that Petrobras will require at least 30 rigs improves with each new discovery. The Roncadour tender for up to two rigs is expected to be awarded in the third quarter with a start next year.

Jeremy: Part of this forecast is contingent upon discoveries in frontier areas, such as the equatorial margin where earlier this month and for the second time this year Petrobras disclosed another discovery.

Jeremy: Obviously, our confidence that Petrobras will require at least 30 rig crews with each new discovery.

Jeremy: The wrong corridor tender for up to two rigs is expected to be awarded in the third quarter with a commencement next year the.

Keelan I. Adamson: The sepia tender for up to three rigs is also slightly delayed as commercial proposals are now due mid-May. Petrobras also recently received approval of its discovery evaluation plan for one of its three resalt blocks in the Campus and Santos Basins and is expected to drill an appraisal well in 2024 or 2025. Positive results from the appraisal would likely solidify future development and provide additional support that Petrobras will be at the higher end of its demand expectations. Moving to Africa, if demand materialises as currently expected, Africa could be the region to absorb most of the remaining available active floating fleet and once again play a significant role in the Golden Triangle.

Jeremy: Seppi, a tender for up to three rigs is also slightly delayed as commercial proposals are now do you mid may.

Jeremy: Petrobras also recently received approval of its discovery evaluation plan for one of its three pre salt blocks in the campus in Santos Basin and is expected to drill an appraisal well in 2024 or 2025.

Jeremy: Positive results from the appraisal would likely solidify future development and provide additional support that Petrobras will be at the higher end of its demand expectations.

Jeremy: Moving to Africa, if demand materializes as currently expected Africa could be the region to absorb most of the remaining available active floating fleet.

Jeremy: Once again play a significant role in the Golden triangle.

Keelan I. Adamson: In order to satisfy the demand expected by 2025, we believe at least four rigs will be required from outside the region. Tenders include ExxonMobil's two-year firm opportunity and Shell's one-year firm opportunity in Nigeria, among others. Both of these have multi-year options. Southeast Asia currently offers a variety of opportunities, such as PTTEP in Malaysia and Brunei, E&I in Indonesia, and Shell in Malaysia

Jeremy: In order to satisfy the demand expected by 2025, we believe at least four rigs will be required from outside the region.

Jeremy: Tenders include Exxon Mobil's, Exxonmobil, two year firm opportunity and shelves, one year firm opportunity in Nigeria among.

Jeremy: Among others.

Jeremy: Both of these have multi year options.

Jeremy: Southeast Asia currently offers a variety of opportunities such as P. TTP in Malaysia, and Brunei Eni in Indonesia and shell in Malaysia.

Keelan I. Adamson: There could be a shortage of one floater in the region to fulfill these programs if they are all awarded as anticipated in late 2024 or early 2025. In India, Reliance is out to tender for up to two years of work with options, and with the recently revised commencement window, RKG 1 could be well placed to secure this opportunity. Switching over now to the high specification harsh environment market and specifically Norway, the local high spec semi fleet remains effectively sold out through 2025.

Jeremy: That could be a shortage of one floater in the region to fulfill these programs. If they are all awarded as anticipated in late 2024 or early 2025.

Jeremy: And India Reliance's out to tender for up to two years of work with options and with the recently revised commencement window, our K G. One could be well placed to secure this opportunity.

Jeremy: Switching over now to the high specification harsh environment market and specifically Norway.

Jeremy: The local high spec semi fleet remains effectively sold out through 2025.

Keelan I. Adamson: We have also observed a shift in customer procurement processes for future projects. Similar to what we've seen in other regions like the US Gulf of Mexico, tenders are being utilized less frequently in favor of direct negotiation.

Jeremy: We have also observed a shift in customer procurement processes for future projects.

Jeremy: Similar to what we've seen in other regions like the U S. Gulf of Mexico tenders are being utilized less frequently in favor of direct negotiations.

Keelan I. Adamson: As an example of customers booking further into the future, we just signed a letter of intent subject to final partner approval for the extension of the Transocean Spitsbergen by three wells estimated at 150 days plus six priced option wells in direct continuation, which is currently anticipated to be July 2025. We will disclose full details once the extension becomes a fully binding contract. In Australia, known requirements are expected to commence in 2026 and onward, including impacts on Chevron's next phase in some of its respective field developments.

Jeremy: As an example of customers booking further into the future. We just signed a letter of intent subject to final partner approval for the extension of the Transocean Spitsbergen by three wells estimated at 150 days plus six priced option wells indirect continuation, which is currently anticipated to be July two.

Jeremy: 25.

Jeremy: We will disclose full details once the extension becomes a fully binding contract.

Jeremy: In Australia known requirements are expected to commence in 2026 and onward, including impacts in Chevron's next phase and some of their respective field developments.

Keelan I. Adamson: We believe at least one additional rig will be required to fulfill these programs as all six floaters currently in country are likely to be occupied in that timeframe, including our two rigs, the Transocean Equinox and Transocean Endurance, which we believe are well positioned to pick up further work in country at the end of their respective programs. Now, I'd like to take a few moments to discuss our operational performance and provide some insight into the themes that contributed to our first quarter revenue falling short of guidance.

Jeremy: We believe at least one additional rig will be required to fulfill these programs as all six floaters currently in country are likely to be occupied in that timeframe, including our two rigs the transocean equinox and Transocean endurance, which.

Jeremy: Which we believe are well positioned to pick up further work in country at the end of their respective programs.

Jeremy: Now I'd like to take a few moments to discuss our operational performance and provide some insight into the themes that contributed to our first quarter revenue falling short of guidance.

Keelan I. Adamson: As Mark will elaborate upon in his comments, the drivers behind our first quarter revenue results are primarily attributable to delays to rig start-ups in Australia and Brazil due to longer than anticipated mobilizations, extensive customer acceptance processes, and operational start-up issues, as well as extended contract preparation for the KG1 in India, extreme adverse weather impacting our operations in Norway, and lastly, downtime on the deepwater titans. Regarding Titan, the rig experienced a downtime event related to the initial deployment of its second 20k BOP.

Jeremy: As Mark will elaborate upon in his comments the drivers behind our first quarter revenue results are primarily attributable to delays.

Jeremy: Delays to rig startups in Australia, and Brazil due to longer than anticipated mobilizations.

Jeremy: <unk> customer acceptance processes and operational startup issues as well as extended contract preparation for the K G. One in India.

Jeremy: Extreme adverse weather impacting our operations in Norway, and lastly, downtime on the deepwater Titan.

Jeremy: Regarding the Titan the rig experienced downtime of eight event related to the initial deployment of its second 20, K B L. P.

Keelan I. Adamson: The BOP was pulled back to surface, and following an evaluation, we concluded the most efficient path forward was to redeploy the rig's first 20k BOP, which had already been utilized successfully in operations following completion of its scheduled maintenance. The rig returned to full operational status during March and has performed well, as it did since it commenced its initial contract in mid-2023. As with any new equipment or new technology deployment, it is not uncommon to experience some early performance issues.

Jeremy: The <unk> was pulled back to surface and following an evaluation. We concluded the most efficient path forward was to redeploy the rigs first 20, <unk>, which had already been utilized successfully in operations following completion of its scheduled maintenance.

Jeremy: The rig returned to full operational status during March and has performed well as it did since it commenced its initial contract in mid 2023.

Jeremy: As with any new equipment or new technology deployment. It is not uncommon to experience some early life performance issues.

Keelan I. Adamson: However, Transocean has extensive experience in safely and efficiently bringing new equipment and technology to the market, which includes a tried and tested playbook on how to work closely and collaboratively with our OEM partners to identify and correct any reliability-related issues in a timely and effective manner. While we are certainly disappointed to have suffered this downtime event, it is important to note that the safety of our operations was never compromised.

Jeremy: However, transocean has extensive experience in safely and efficiently, bringing new equipment and technology to the market.

Jeremy: Which includes a tried and tested playbook on how to work closely and collaboratively with our OEM partners to identify and correct any reliability related issues in a timely and effective manner.

Jeremy: While we are certainly disappointed to have suffered this downtime event. It is important to note that the safety of our operation was never compromised.

Keelan I. Adamson: Understandably, the previously discussed challenges had a significant impact on our quarterly results, leading to an unusual and disappointing revenue efficiency of 92.9%. However, as they are largely one-time, discreet events, and with the rest of our fleet continuing to operate with impressive reliability, we remain confident in our ability to consistently deliver safe, reliable, and efficient operations across our fleet. I'll now hand the call back to Jeremy.

Jeremy: Understandably. The previously discussed challenges had a significant impact on our quarterly results, leading to an unusual and disappointing revenue efficiency of 92, 9%.

Jeremy: However, as they are largely one time discrete events and with the rest of our fleet continuing to operate with impressive reliability.

Jeremy: We remain confident in our ability to consistently deliver safe reliable and efficient operations across our fleet now.

Jeremy: I'll now hand, the call back to Jeremy.

Jeremy D. Thigpen: Thanks, Keelan. As part of our efforts to improve the consistency, efficiency, and repeatability of our operations, we continue to make progress with our automation initiatives in the first quarter. We achieved another milestone with our jointly owned IntelliWell system as we performed simultaneous fully automated online drilling, tripping, and offline stand building operations on the Transocean Norga in Norway, and we are currently preparing for an upcoming deployment in the U.S. Gulf of Mexico.

Jeremy: Thanks, Caylin as part of our efforts to improve the consistency efficiency and repeat ability of our operations. We continue to make progress with our automation initiatives in the first quarter.

Jeremy: We achieved another milestone with our jointly owned <unk> system as we performed simultaneous fully automated online drilling tripping and offline stand building operations on the Transocean Norge in Norway.

Jeremy: And we are currently preparing for an upcoming deployment in the U S Gulf of Mexico.

Jeremy: We also achieved a milestone with our robotic riser system, we've handled more than 2000 joints or Verizon or across our three installed systems.

Jeremy D. Thigpen: We also achieved a milestone with our robotic riser system. We have handled more than 2000 joints of riser across our three installed systems. In addition to supporting the consistency of our operations, Robotic Riser also limits the exposure of our personnel to high-risk areas on the drill floor.

Jeremy: In addition to supporting the consistency of our operations robotic riser also limits the exposure of our personnel to high risk areas on the drill floor.

Jeremy: Another way to think about this is we've now added over 1100 working hours, where our personnel were not exposed to redzone risk.

Jeremy: Finally, before handing it over to him I, just want to recognize and thank mark and the rest of the Transocean team who earlier. This month worked together to complete a tremendous $1 8 billion refinancing in conjunction with amending our revolving credit facility.

Jeremy D. Thigpen: Another way to think about this is that we have now added over 1,100 working hours where our personnel were not exposed to red zone risk. Finally, before handing it over to him, I just want to recognize and thank Mark and the rest of the Transocean team who earlier this month worked together to complete a tremendous $1.8 billion refinancing in conjunction with amending our revolving credit facility. Needless to say, these are very important transactions that extended our liquidity runway and started the process of simplifying our balance sheet as we position ourselves for what we believe to be a multi-year upcycle. And for Mark, personally, I think these transactions represent an excellent capstone to an exceptionally successful career. This professionalism truly is something we witness across our organization as a whole, day in and day out.

Jeremy: Needless to say these are very important transactions, which extended our liquidity runway and started the process of simplifying our balance sheet as we position ourselves for what we believe to be a multi year up cycle.

Jeremy: And for Mark personally I think these transactions represent an excellent capstone to an exceptionally successful career.

Jeremy: Yeah.

Jeremy: This professionalism truly is something we witnessed across our organization as a whole day in and day out and for that I would like to thank each member of the transition team unwavering commitment to delivering safe reliable and efficient operations for our customers and value for our shareholders.

Jeremy: Change in continuous improvement or the constant in our industry and our team is continuously demonstrated an ability to adapt as we progress further into the sustained ups.

Jeremy: In conclusion, the outlook for our assets and services remained strong with the tightness of supply the active negotiations and the 500000 dollar per day glass ceiling now broken in multiple jurisdictions around.

Jeremy: We are confident that we will continue to grow our backlog throughout the year.

Jeremy: As we work towards securing more contract awards, we remain entirely committed to our operational execution with a focus on efficiently converting our $8 $9 billion of backlog to revenue and cash flow.

Jeremy D. Thigpen: And for that, I would like to thank each member of the Transocean team for their wavering commitment to delivering safe, reliable, and efficient operations for our customers and value for our shareholders. Change and continuous improvement are the constants in our industry, and our team has continuously demonstrated an ability to adapt as we progress further into sustained obsolescence. In conclusion, the outlook for our assets and services remains strong, with the tightness of supply, the active negotiations, and the $500,000 per day glass ceiling now broken in multiple jurisdictions around the world.

Jeremy: With that I will now turn the call over to Mark for what I can't believe will be the last time, he will discuss our financial results Mark.

Mark Mey: Thank you Jeremy and good day to all.

Mark Mey: During today's call I will briefly recap our first quarter results.

Mark Mey: Provide guidance for the second quarter.

Mark Mey: Conclude with an update on our expectations for the full year 2024.

Mark Mey: Our latest liquidity forecast.

Speaker Change: Before I get to the results as Jeremy mentioned, we recently completed refinancing transactions totaling $1 $8 billion.

Speaker Change: Upsized by $300 million from our initial offering.

Mark Mey: $5 billion.

Mark Mey: The proceeds from the bond offering we utilize to fully redeem the seven 5% senior notes due 2025 and.

Mark Mey: In a similar 5% senior notes due 2026.

Jeremy D. Thigpen: We are confident that we will continue to grow our backlog throughout the year. As we work towards securing more contract awards, we remain entirely committed to our operational execution with a focus on efficiently converting our $8.9 billion of backlog into revenue and cash flow. With that, I will now turn the call over to Mark for what I can't believe will be the last time he will discuss our financial results. Mark?

Mark Mey: And partially redeemed 8% senior notes due 2027.

Mark Mey: The remaining outstanding balance on our letter notes is approximately $525 million.

Mark Mey: Approximately $92 million of 11, 5% senior guaranteed.

Mark Mey: Given that were not tendered.

Mark Mey: We remain outstanding until the end of July.

Mark Mey: At which time funds be placed into.

Mark Mey: Escrow account.

Mark Mey: We utilized two quarter and many parents will fully retire the issue.

Mark Mey: These transactions improved our unsecured debt maturity profile.

Mark May: Thank you, Jeremy, and good day to all. During today's call, I will briefly recap our first quarter results and then provide guidance for the second quarter. I will conclude with an update on our expectations for the full year 2024, including our latest liquidity forecast. Before I get to the results, as Jeremy mentioned, we recently completed refinancing transactions totaling $1.8 billion, upsized by $300 million from our initial offering of $1.5 billion. The proceeds from the bond offering were utilized to fully redeem the 7.25% senior notes due to 2025 and the 7.5% senior notes due June 2026, and partially redeemed 8% of your notes due 2027. The remaining outstanding balance on the letter notes is approximately $525 million.

Mark Mey: The final capital structure.

Mark Mey: And combined with the recent extension of our revolving credit facility through mid 2028 and <unk>.

Mark Mey: Since our financial flexibility.

Mark Mey: The latter point, we were pleased to complete the current formulation of the credit facility permits us.

Mark Mey: Point in the future the flexibility to make restricted payments, including distributions to shareholders.

Mark Mey: And share repurchases.

Mark Mey: Concurrent with the aforementioned transactions Moody's upgraded transactions corporate family rating to <unk> from Cedar when they won.

Mark Mey: Reflecting the improvement in the outlook for the company and its business.

Mark Mey: We are confident we will continue to demonstrate the qualities necessary.

Mark Mey: To receive further ratings upgrades as we continue to delever, our balance sheet through the sustained cycle.

Mark Mey: Yeah.

Mark Mey: As we reported in our press release, which includes additional details on our results for the first quarter, we reported net income attributable to controlling interest.

Mark Mey: $98 million were 11 cents per diluted share.

Mark May: Approximately $92 million of the 11.5% Senior Guaranteed, They were not tendered, will remain outstanding until the end of July, at which time funds placed into irrevocable escrow accounts will be utilised to call the remaining balance and fully retire the issue. These transactions improve our unsecured debt maturity profile, simplify our capital structure, and combined with the recent extension of our evolving credit facility through mid-2028 enhance our financial flexibility. On this latter point, we are pleased that the current formulation of the credit facility permits us, at a point in the future, the flexibility to make restricted payments, including distributions to shareholders and Sherry Purchase.

Mark Mey: After certain adjustments, we reported adjusted net loss of $22 million.

Mark Mey: Yeah.

Mark Mey: During the quarter, we generated EBITDAR of $199 million.

Mark Mey: As is typical in the first quarter of the year operating cash flows were negative at $86 million.

Mark Mey: Largely due to payments for payroll related costs and interest payments.

Mark Mey: In addition, we continued to incur a substantial contract preparation costs.

Mark Mey: Turn that deepwater Orion and Transocean endurance to operations and advanced the preparation of the <unk>.

Mark Mey: And associate equinox during the quarter.

Mark Mey: Negative free cash flow of $169 million in the first quarter and reflects the aforementioned negative $86 million of operating cash flow.

Mark Mey: $83 million of capital expenditures.

Mark Mey: Capital expenditures for the quarter included $45 million related to the seventh Gen plus newbuild deepwater killer and the construction as it prepares for its inaugural contract for Petrobras in Brazil.

Mark May: Concurrent with your aforementioned transactions, Moody's upgraded Transocean's Corporate Family Rating to B3 from CAA1, reflecting the improvement in the agency's outlook for the company and its business. We are confident we will continue to demonstrate the qualities necessary to receive further ratings upgrades as we continue to deliver our balance sheet through the sustained cycle. As we reported in our press release, which includes additional detail on our results for the first quarter, we reported a net income attributable to controlling interest of $98 million, or $0.11 per diluted share. However, after certain adjustments, we reported an adjusted net loss of $22 million. During the quarter, Virginia got its EBITDA of $199 million.

Mark Mey: Looking closely at our results during the first quarter, we delivered adjusted contract drilling revenues of $767 million.

Mark Mey: And then everybody's daily revenue of approximately $408000.

Mark Mey: This is below our previous guidance, mainly due to the reasons Colin mentioned in his prepared comments, including late contract commencement with Transocean endurance deep.

Mark Mey: People to Orion and K G. One.

Mark Mey: Low revenue efficiency for the deepwater Titan.

Mark Mey: And the impact of adverse weather on operations in Norway.

Mark Mey: Operating and maintenance expense in the first quarter was $523 million.

Mark Mey: This is below our guidance, primarily due to the delay of <unk>.

Mark Mey: <unk> maintenance and the extra fleet and delayed contract preparation costs.

Mark Mey: G&A expense in the first quarter was $52 million.

Mark Mey: Turning to cash flow and the balance sheet.

Mark Mey: We ended the first quarter with total liquidity of approximately $1 $3 billion.

Mark May: As is typical in the first quarter of the year, operating cash flows were negative at $86 million, largely due to payments for payroll-related costs and interest payments. In addition, we continue to incur substantial contract preparation costs as we return the Deepwater Orion and Transocean Endurance to operations and advance the preparation of the Transocean Equinox during the quarter. Negative free cash flow of $169 million in the first quarter reflects the aforementioned negative $86 million of operating cash flow and $83 million of capital expenditures.

Mark Mey: Including unrestricted cash and cash equivalents of $446 million.

Mark Mey: Proximately $240 million of restricted cash for debt service.

Mark Mey: And $600 million from our Undrawn revolving credit facility.

Speaker Change: I will now provide an update on our expectations of financial performance for the second quarter and full year 2024, as always our guidance reflects only contract related renovations and upgrades.

Speaker Change: For the second quarter of 2024, we expect adjusted contract drilling revenues of approximately $866 million.

Speaker Change: Based upon an average fleet wide revenue efficiency of 96, 5%.

Speaker Change: This quarter over quarter increase was mainly due to the incremental activity with Transocean endurance and.

Mark May: Capital expenditures for the quarter included $45 million related to the 7th Gen Plus new-build deepwater aquila and its construction as it prepares for its inaugural contract with Petrobras in Brazil. Looking closer at our results, during the first quarter, we delivered adjusted contract earning revenues of $767 million and an average daily revenue of approximately $408,000. This is below our previous guidance, mainly due to the reasons Keelan mentioned in the prepared comments, including delayed contract commencements for Transocean Endurance, Deepwater Orion, and KG1.

Speaker Change: And deepwater Orion operating for a full quarter.

Speaker Change: The transaction equinox, and K G. One starting to their respective contracts during the quarter and higher revenue efficiency for fluid resolution, but Don kind of event when the deepwater Titan and the first quarter.

Speaker Change: This was partially offset by reductions in activity on the Transocean Barents and <unk> as the rigs began contract preparations.

Speaker Change: We expect second quarter O&M expense to be approximately $570 million this quarter over quarter increase was largely due to incremental activity related to the previously mentioned four rigs and to an increase in service maintenance costs.

Speaker Change: We expect G&A expenses grew second quarter to be approximately $60 million.

Mark May: Low revenue efficiency for the Deepwater Triton? and the impact of adverse weather on operations in Norway. Operating and maintenance expense in the first quarter was $523 million. This is below our guidance primarily due to the delay of in-service maintenance in the active fleet and delayed contract preparation costs. GNI expense in the first quarter was $52 million.

Speaker Change: This quarter over quarter increase is primarily related to transaction fees with the debt financing refinancing and a voluntary early retirement program that was offered to long time employees.

Speaker Change: Net interest expense for second quarter is forecasted to be approximately $138 million.

Speaker Change: This includes capitalized interest of approximately $8 million.

Speaker Change: Capital expenditures for the second quarter are forecast to be approximately $92 million.

Mark May: Turning to cash flow on the balance sheet, we entered the first quarter with a total liquidity of approximately $1.3 billion, including unrestricted cash and cash equivalents of $446 million. Approximately $240 million of receipted cash for debt service and $600 million from our undrawn revolving credit facility. I will now provide an update on our expectations of financial performance for the second quarter and full year 2024. As always, our guidance reflects only contract-related reactivations and or upgrades.

Speaker Change: Including approximately $55 million related to the preparation of the particular for its three year contract with Petrobras in Brazil.

Speaker Change: Cash taxes are expected to be $17 million.

Speaker Change: Now I'll provide an updated guidance for the full year 2024.

Speaker Change: And approximately $3 $6 billion, we now expect adjusted revenue to be at the low end of the range provided on our previous conference call in mid <unk>.

Speaker Change: February this.

Speaker Change: This includes approximately $215 million of additional services and Reimbursable expenses.

Speaker Change: This change in expectations is due mainly to three factors the four banks and delays in contract commencement.

Speaker Change: Transocean endurance deepwater Orion <unk> <unk>.

Mark May: For the second quarter of 2024, we expect adjusted contract drilling revenue of approximately $866 million, based upon an average fleet-wide revenue efficiency of 96.5%. This quarter over quarter increase is mainly due to the incremental activity for Transocean Endurance and Deepwater Orion operating for a full quarter. The Transocean Equinox and KG1 started their respective contracts during the quarter, and higher revenue efficiency following the resolution of the downtown event on the Deepwater Titan in the first quarter.

Speaker Change: The downtime on the depot detection, and then longer than expected well programs in the deepwater Atlas and K G tube, which delays the rich transitions to higher day rate contracts in the second quarter.

Speaker Change: We now expect our full year O&M expense to be between two two and $2 3 billion.

Speaker Change: The higher end of this range is primarily the result of anticipated higher reimbursable expenses.

Speaker Change: Finally, we anticipate G&A costs to be around $210 million.

Speaker Change: Our projected liquidity at the end of 2024 is approximately $1 $4 billion, reflecting a revenue and cost guidance and including the $575 million of capacity of our newly amended and extended an undrawn revolving credit facility.

Mark May: This is partially offset by reductions in activity on the Transocean Barrens and KG2 as the rigs begin contract preparation. We expect second quarter O&M expense to be approximately $570 million. This quarter over quarter increase is largely due to incremental activity related to the previously mentioned fall rigs and to an increase in in-service maintenance costs. We expect GNI expense for the second quarter to be approximately $60 million. This quarter-over-quarter increase is primarily related to transaction fees for the debt financing, debt refinancing, and a voluntary early retirement program that was offered to long-term employees. Net interest expense for the second quarter is forecast to be approximately $138 million.

Speaker Change: And this is inclusive of restricted cash of approximately $395 million.

Speaker Change: Most of which is reserved for that service.

Speaker Change: Yeah.

Speaker Change: Yes.

Speaker Change: This liquidity forecast includes 'twenty 'twenty, four capex expectations of $231 million.

Speaker Change: Of which approximately $134 million.

Speaker Change: Related to the deep water cooler and approximate approximately $97 million for sustaining and contract preparation capex.

Speaker Change: As I sign off for the last time I'd like to reiterate my gratitude to the entire translation organism.

Speaker Change: Jeremy expressed in his remarks.

Speaker Change: This team is second to none.

Speaker Change: I am immensely proud to have worked with each one of you for the past nine years.

Speaker Change: I am confident in our ability to deliver value for our shareholders and look forward to seeing the progress continue instead Veda assumes the role.

Speaker Change: CFO.

Speaker Change: We have worked alongside said for almost a decade. It is clear he is a strategic thinker, who brings financial discipline experience and expertise along with a deep understanding of the offshore drilling market.

Mark May: This includes capitalised interest of approximately $8 million. Capital expenditures for the second quarter are forecast to be approximately $92 million, including approximately 55 million dollars related to the preparation of Deepwater Killer for its three-year contract with Petrobras in Brazil. Cash taxes are expected to be $17 million.

Speaker Change: These attributes should ensure a seamless transition both internally and externally and continued to serve transocean and its shareholders well.

Speaker Change: Congratulations against that.

Speaker Change: This concludes my prepared comments.

Speaker Change: Now I'll turn the call back over to Alison to introduce Christians in answers.

Mark May: Now providing updated guidance for the full year 2024. At approximately $3.6 billion, we now expect our adjusted revenue to be at the lower end of the range provided on our previous conference call in mid-February. This includes approximately $215 million of additional services and reimbursable expenses. This change in expectation is due mainly to three factors.

Alison Johnson: Thanks, Mark Shelby, we're now ready to take questions and as a reminder to the participants please limit yourself to one initial question and one follow up question.

Alison Johnson: At this time, if he would like to ask a question. Please press the star and one on your telephone keypad.

Alison Johnson: You have yourself in the queue at any time by pressing star to once again that is star one to ask a question.

Speaker Change: We'll pause for a moment to allow questions to queue.

Mark May: The aforementioned delays in contract commencement on the Transocean Endurance, Deepwater Orion, KG1, the downtime on the Deepwater Titan, and the longer-than-expected world programs on the Deepwater Atlas and KG2, which delays the rig's transitions to higher day-rate contracts in the second quarter. We now expect our full year O&M expense to be between $2.2 and $2.3 billion. The higher end of this range is primarily the result of anticipated higher reimbursable expenses. Finally, we estimated G&A costs to be around $210 million.

Hallett: And we'll take our first question from her Hallett with benchmark. Your line is open.

Hallett: Hey, good morning, everybody.

Kurt Kevin Hallead: Morning, Kurt.

Hallett: Hey, Mark Congrats again.

Hallett: Look.

Kurt Kevin Hallead: What's next.

Mark Mey: Thanks, Chris.

Mark Mey: Yes.

Mark Mey: Just kind of.

Mark Mey: <unk> always kind of fitful starts right in the context of getting rigs ready to work and get it and getting them ready for contract.

Mark Mey: And I think that's.

Mark Mey: Todd that it's been right so.

Mark Mey: Did you guys kind of risk et cetera.

Mark Mey: Ill start ups, and and timing and everything else could you give us some insight.

Mark Mey: You guys go through the process.

Speaker Change: So that we can kind of get on board with you guys and kind of think about the.

Mark May: Our projected liquidity at the end of year 2024 is approximately $1.4 billion, reflecting our revenue and cost guidance and including the $575 million capacity of our newly amended and extended and undrawn revolving credit facility, and is inclusive of restricted cash of approximately $295 million, most of which is reserved for debt service. This liquidity forecast includes 2024 capital expectations of $231 million, of which approximately $134 million is related to the Deepwater Killer and approximately $97 million for Sustaining and Contract Preparation Care Packs.

Mark Mey: The dynamics ourselves looking from the outside in.

Speaker Change: Yes, I wouldn't really say, it's puts and starts we go through a multi phase process, where we call them.

Mark Mey: Stay tuned whereby we evaluate the project we built out a timeline, we built out a team we start ordering all the materials for that and then we execute but things happen because we weren't sure when you're trying to assess our rigs.

Mark Mey: <unk> you doing it rather blind once you start getting onto the rig and you start testing systems in covering some of the.

Mark Mey: Hatches and hold and whatnot on the rig.

Mark Mey: Technical terms obviously.

Mark Mey: How do you find things and that causes you to expand your scope.

Mark Mey: Cases.

Mark Mey: Especially going into Brazil was interesting this time, we've taken rigs into Brazil, many times over many years.

Mark Mey: For the first time ever we heard a interpretation of customs, which dragged out for six weeks and the latest cutting into country that has now been resolved and behind us. So going forward, we expect there'll be good triggers and pretty comfortably, but I don't want you to think that contract prep is an ad hoc.

Mark May: As I sign off for the last time, I'd like to reiterate my gratitude to the entire Transocean organization and what Jeremy expressed in his remarks. This team is second to none, and I'm immensely proud to have worked with each one of you for the past nine years. I am confident in our ability to deliver value for our shareholders and look forward to seeing the progress continue as Thad Vader assumes the world. CFO.

Mark Mey: <unk> of the cough type thing it is very well planned and most times, it's a very well executed. The other thing I'd add is we've had a lot of rig moves hero.

Mark May: He has worked alongside Thad for almost ten years, and it is clear he is a strategic thinker who brings financial discipline, experience, and expertise, along with a deep understanding of the offshore drilling market. These attributes should ensure a seamless transition both internally and externally and continue to serve Transocean and Shell as well. Congratulations again, Fred.

Mark Mey: And most of those are getting behind us, where we're going on long term contracts in these jurisdictions.

Mark Mey: The cost that you've seen us accumulate over the course of the last couple of years with project costs and rig moves and customer acceptance and things like that will largely be behind us and so I think that can lead to better financial results as we head into 2025 and beyond.

Alison Johnson: This concludes my prepared comments. I'll now turn the call back over to Alison to introduce questions and answers. Thanks, Mark. Shelby, we're now ready to take questions. And as a reminder to the participants, please limit yourself to one initial question and one follow-up question. At this time, if you would like to ask a question, please press the star and one on your telephone keypad. You may remove yourself from the queue at any time by pressing star two.

Mark Mey: Yeah, Kurt scaling era, and maybe just add a little bit more color to that the one aspect is obviously the risk associated the risk management associated with <unk>.

Mark Mey: Moving a rig preparing a rig for a contract.

Kurt: Getting it through the regulatory and customer acceptance processes, which do change and do migrate over time.

Mark Mey: Probably more importantly, ensuring that that rig works very reliably and efficiently and safely when it comes out of that process and what I am very pleased about is that the rigs that have gone through this and we've done many of these and they've been very successful.

Operator: Once again, that is Star and one to ask a question. We will pause for a moment to allow questions to queue, and we'll take our first question from Kurt Hallead with Benchmark. Your line is open. Hey, good morning, everybody.

Mark Mey: <unk> is a fine example of a rig does it quite a lot and in this particular case in Brazil. She is working at one of the top performing rigs in Petrobras just after a few months. So I think it supports mark Mark's comments, we have a very robust project planning process for these events.

Kurt Kevin Hallead: Morning, Kurt. Hey Mark, congrats again and good luck on what's next. Thanks, Kurt. So, yes, I guess it just kind of, you know, it's always kind of fits and starts, right, in the context of getting rigs ready to work and getting them ready for contract. And I think that's the pros and cons of this business, right? As you guys kind of risk, it says, you know, startups and timing and everything else. Could you give us some insights as to how you guys go through the process?

Mark Mey: The delays are somewhat not related to the discovery of new scope, but actually some really strange events that mark alluded to an implementation, but for instance in India. There was a local fishermen strike outside of the harbor that we were more of it in and we were blocked from getting any logistics to the rig for a couple of weeks. So there are some things clearly are difficult.

Operator: You know, so that we can kind of get on board with you guys and kind of think about the dynamics ourselves, looking from the outside in. Yeah, Kurt, I wouldn't really say it's fits and starts, you know; we go through a multi-phase process. We called them stage gates, whereby we evaluate the project, we build out a timeline, we build out a team, we start ordering all the materials for that, and then we execute.

Mark Mey: To manage and you have to understand that there is always risk with them.

Speaker Change: Yes, no I appreciate all that color.

Speaker Change: It's kind of why I asked because I know, it's never as straightforward as it may seem on a piece of paper right.

Speaker Change: Okay. So it looks like you got your contract durations extending it.

Speaker Change: Day rates continue to grind higher.

Speaker Change: I guess my question really relates back to.

Speaker Change: The overall market outlook.

Speaker Change: What do you think the prospects are to potentially get some if not all of your your idle rigs.

Operator: But things happen because when you try and assess a rig's ability, you're doing it rather blind. Once you start getting onto the rig and you start testing systems and going into some of the hatches and holes and whatnot on the rig, this is all technical terminology; obviously, you find things, and that causes you to expand your scope. In our case, especially, going to Brazil was interesting this time. We've taken rigs into Brazil many times over many years. But for the first time ever, we had an interpretation of customs, which dragged out for six weeks and delayed us getting into the country.

Speaker Change: Back on contract.

Speaker Change: Now in 2030, given given the dynamics you put forward for for Brazil, and Africa for example.

Speaker Change: Yes, that's a really interesting question.

Speaker Change: As we go through whats happening around the world.

Speaker Change: We can say for the first time that Ed.

Speaker Change: Every region that we're currently active in.

Speaker Change: Going to have a call on rigs so where we're looking at I think actually Barr Nunn every single region.

Speaker Change: For rigs and they have to date so at the moment. What's happening is there is there is a run on the active fleet. So so basically.

Operator: That has now been resolved and behind us. So, going forward, we expect to be able to get rigs in very comfortably. I don't want you to think that contract prep is an ad hoc, off-the-cuff type thing. It is very well planned and, most times, very well executed, and most of those are behind us.

Speaker Change: As the guys had alluded to in the prepared comments there are significant number of delek negotiations outside of tenders that are essentially trying to secure the rigs that are already active.

Speaker Change: So I think from that point of view.

Speaker Change: My view is that 2024 is going to see pretty much. The entire active fleet is sold out for two to three years going forward.

Operator: We're going on long-term contracts in these jurisdictions, so the cost that you've seen us accumulate over the course of the last couple of years with project costs and rig moves and customer acceptance and things like that will largely be behind us. So I think that's going to lead to better financial results as we get into 2025 and beyond. Yeah, Kurt. It's Keelan here. I might just add a little bit more color to that.

Speaker Change: As we get towards the end of 'twenty four that's when the call on the stacked fleet is going to happen.

Speaker Change: Of course, we've reiterated this many times that.

Speaker Change: While there are active rigs available we will not be back.

Speaker Change: <unk> into that mix.

Speaker Change: We'll we'll bide, our time and wait until the.

Speaker Change: The economics are right for that and certainly there is no rush to do it at the moment.

Speaker Change: But I think we've got a pretty good shot at putting several of those rigs back to work certainly before the end of the decade.

Speaker Change: Alright, that's awesome I appreciate the color thanks, guys.

Keelan I. Adamson: The one aspect is obviously the risk associated, the risk management associated with moving a rig, preparing a rig for a contract, getting it through the regulatory and customer acceptance processes, which do change and do migrate over time, but probably more importantly, ensuring that that rig works very reliably and efficiently and safely when it comes out of that process. What I am very pleased about is that the rigs that have gone through this, and we've done many of these, and they've been very successful. KG2 is a fine example of a rig that does it quite a lot.

Speaker Change: Yeah.

Speaker Change: And we'll take our next question from Eddie Kim with Barclays. Your line is open.

Eddie Kim: Hi, Good morning, just wanted to start off with the Petrobras contracts last quarter. You said you expected those to be awarded in the second quarter. This year. It looks like that timing has been pushed out a little bit to <unk> at least.

Eddie Kim: Could you just talk about what what's driving that delay and is there a risk that these contract announcements could get pushed out even further towards the end of the tour.

Eddie Kim: Toward the end of the year.

Speaker Change: Yeah. I think this is actually just been pretty standard operating procedure and with the with Petrobras seven pushing out by a couple of months that's atypical.

Keelan I. Adamson: In this particular case in Brazil, she's working on one of the top performing rigs in Petrobras just after a few months. To support Mark's comments, we have a very robust project planning process for these events. The delays are somewhat not related to the discovery of new scope but actually some really strange events that Mark alluded to in importation. For instance, in India, there was a local fisherman strike in the harbor that we were moored in, and we were blocked from getting any logistics to the rig for a couple of weeks.

Eddie Kim: We believe that the rigs that are going to win those tenders.

Eddie Kim: Are either already active rigs in country.

Eddie Kim: Are there going to have to pull new rigs and so it's possible that that pushes out a little further but.

Eddie Kim: Certainly the awards should be made in 'twenty four.

Eddie Kim: But I think it's for rigs that don't come off contract for some time yet.

Eddie Kim: There's no real risk to that.

Speaker Change: Okay got it.

Speaker Change: And then just a question on <unk>.

Speaker Change: Two idle rigs discoverer inspiration and the <unk> III I believe the exploration recently mobilized to Las Palmas.

Keelan I. Adamson: Some things clearly are difficult to manage, and you have to understand that there's always a risk with them. Yeah, I appreciate all that color. It's kind of why I ask, because I know it's never as straightforward as it may seem on a piece of paper, right?

Speaker Change: Is that rig effectively cold stack now are or is that still idle just.

Eddie Kim: Any color on those two rigs in and.

Eddie Kim: And if you could comment on kind of work prospects or opportunities for those rigs.

Kurt Kevin Hallead: Okay. So, look, you've got your contract durations extending, and your day rates continue to grind higher. I guess my question really relates back to the overall market outlook. What do you think the prospects are to potentially get some, if not all, of your idle rigs back on contract between now and 2030 given the dynamics you put forward for Brazil and Africa, for example? Yeah, that's a really interesting question.

Eddie Kim: Yes.

Eddie Kim: And again the inspiration essentially is to reposition them into the into the left Thomas area.

Speaker Change: She's not stacked she's idle.

Speaker Change: We're obviously getting around to plenty of opportunities, particularly.

Eddie Kim: In the Africa and Asia regions.

Eddie Kim: The <unk> is idle in Aruba.

Roddie Mackenzie: And waiting for its next opportunity, but I'll, let roddie, maybe add some color to the other opportunities yeah. So we do have several things.

Operator: You know, as we go through what's happening around the world, we can say for the first time that every region that we're currently active in is going to have a call on rigs. So we're looking at, I think, actually, bar none, every single region has more rigs than they have today. So at the moment, what's happening is there's a run on the active fleet.

Eddie Kim: But we're looking to make sure that we get the right opportunity to put the rigs to work long term rather than moving them to short term to work. So at the moment, we're quite comfortable keeping them, where they are until they get the right opportunity.

Speaker Change: Got it got it thank you and if I could just squeeze one last one in just on the diluted share count this quarter. It looked like a fairly material increase to about 955 million shares.

Operator: So basically, as the guys alluded to in the prepared comments, there's a significant number of direct negotiations outside the tenders that are essentially trying to secure the rigs that are already active. So I think from that point of view, my view is that 2024 is going to see pretty much the entire active fleet sold out for two to three years. And as we get towards the end of 24, that's when the call on the stacked fleet is going to happen.

Speaker Change: Could you just comment on what drove that increase this quarter.

Speaker Change: Yes, we can take that offline and speak to our listeners who can walk you through it it's a pretty lengthy response.

Speaker Change: Okay.

Speaker Change: Great. Thanks. Thank you all for the color I'll turn it back.

Speaker Change: And we'll take our next question from Doug Becker with capital one your line is open.

Doug Becker: Thank you Jeremy you mentioned the Atlas.

Kurt Kevin Hallead: And of course, we've reiterated this many times that while there are active rigs available, we will not be. We've got a pretty good shot at putting several of those rigs back to work, certainly before the end of the decade. All right, that's awesome. Appreciate the color.

Doug Becker: The 15 K work at 505000, a day when do you expect that rig to transition to the higher day rate and how do you view the prospects for <unk> work potentially next year.

Speaker Change: Hey, Doug good to hear from you I'm going to hand that to Rob because he is neck deep in this conversation right now.

Eddie Kim: And we'll take our next question from Eddie Kim with Barclays. Your line is open. Hi, good morning.

Rob: So we've got a lot of interest in that rig.

Operator: I just wanted to start off with the Petrobras contracts. Last quarter, you said you expected those to be awarded in the second quarter this year. It looks like that timing's been pushed out a little bit to 3Q at least. Could you just talk about what's driving that delay?

Rob: Yes. So this was a.

Rob: Prospect that we had had with the current operator for some time, so it looks like a really good rate.

Rob: But I have to say it was set a while ago when we when we go into negotiations on.

Operator: And is there a risk that these contract announcements could get pushed out even further toward the end of the year? Yeah, I think this is actually just pretty standard operating procedure. And, you know, with Petrobras pushing out by a couple of months, that's very typical. And actually, we believe that the rigs that are going to win those tenders are either already active rigs in the country, or they're going to have to pull new rigs in.

Rob: So the transition for her to go to 20 case, probably going to take place.

Rob: And the next contracts. So basically we we finished the one that we're currently on that Shenandoah development and then we go into this additional kind of a 240 to 360 day program and I think after that.

Rob: Transitioning into.

Operator: So it's possible that that pushes out a little further, but certainly the awards should be made in 24. But I think it's for rigs that, you know, don't come off contract for some time yet. There's no real risk to that.

Rob: You know that the much more attractive work so thats good.

Rob: That's basically the second rig in the Gulf, That's that's got above a high.

Speaker Change: Hi, sorry.

Rob: Our 500, right so with the Asgard and the Atlas <unk> co.

Operator: Got it. And then just a question on your two idle rigs, the Discover Inspiration and the DD3. I believe the Inspiration recently mobilized to Las Palmas. Is that rig effectively cold stack now? Or is that still idle? Just any comment on those two rigs? And, and if you could comment on any kind of work prospects or opportunities for those. Yeah, Eddie, it's Keelan again. The Inspiration essentially is repositioned into the Las Palmas area. She's not stacked; she's idle.

Rob: Contracted at about 500.

Rob: We actually hear that many of our competitors are at the same level or even higher and we expect within the next few months that there will be four to five additional awards in the Gulf of Mexico above 500 <unk>.

Rob: Yes.

Speaker Change: Definitely encouraging.

Speaker Change: Maybe just.

Speaker Change: Could you expand on the key issues with the tightened and really kind of thinking about it in the context of is there a similar risks with the Atlas.

Speaker Change: Yes, so some of the key obviously is as I said in the call the.

Keelan I. Adamson: We're obviously putting her into plenty of opportunities, particularly in the Africa and Asia regions. The DD3 is idle in Aruba and waiting for its next opportunity. But I'll let Roddie maybe add some color to the other opportunities.

Speaker Change: The Titans deal is the first PLP is deployed and the rig is operating fully since mid March.

Speaker Change: The issue. We found was it was to a particular component on the second day opening clearly that wasn't an issue on the first PLP.

Roddie Mackenzie: Yeah, so we do have several things there, but we're looking to make sure that we get the right opportunity to put the rigs to work long term rather than moving them to work short term. So at the moment, we're quite comfortable keeping them where they are until they get the right opportunity.

Speaker Change: And so we've taken those components off the stack, we brought them back to town to to work with our OEM provider to disassemble and inspect in and we should learn more in the next couple of weeks as to what that particular issue is I have no based on what we have seen in the operation of the other stack we have no.

Eddie Kim: Just on the diluted share count this quarter, it looked like a fairly material increase to about 955 million shares. Could you just comment on what drove that? Yeah, Eddie. We can take that offline and speak to Alison, and she can walk you through it.

Speaker Change: No concerns as to whether that's anything that would spread to the other stacks it's simply.

Speaker Change: A component reliability issue that will address.

Speaker Change: And return the turn to the rig.

Operator: It's a pretty lengthy response. Okay. Thank you all for the call. And we'll take our next question from Doug Becker with Capital One. Your line is open.

Speaker Change: Sounds good and Mark congratulations.

Mark: Thanks, Doug.

Speaker Change: And well take our next question from projects data with Clarksons Securities. Your line is open.

Douglas Lee Becker: Thank you. Jeremy, you mentioned Atlas getting the 15k work at 505,000 a day. When do you expect that rig to transition to the higher day rate? And how do you view the prospects for 20k work potentially next year? Doug, good to hear from you. I'm going to hand that to Roddie because he is neck deep in this conversation right now.

Projects Data: Hey, Tim.

Projects Data: Thanks for taking my question.

Projects Data: We've talked a bit about the.

Tim: The market here and I was also on the back of those discussions already one thing to hear what you're thinking about <unk>.

Projects Data: <unk> versus <unk> and how the different types of rigs are.

Operator: Yeah, so we've got a lot of interest in that, Rick. And yeah, so this was a prospect that we had had with the current operator for some time. So it looks like a really good rate.

Mark: Being approach or in the markets you talked about repositioning that inspiration it talks about some extra work potentially for the Invictus et cetera, but also how youre managing your own.

Roddie Mackenzie: But I have to say it was set a while ago when we got into negotiations. So the transition for her to go to the 20K is probably going to take place in that in the next contract. So basically, we finish out the one that we're currently on, the Shenandoah development, and then we go into this additional kind of a 240 to 360 day program. And I think after that, we are transitioning into much more attractive work. So that's good. And, you know, that's basically the second rig in the Gulf that's got above a high, high, sorry. 500 rate.

Mark: Fleet within those two sub segments, keeping the Atlas and the tightened kind of away from that discussion for now.

Mark: Are there any large discrepancy or bifurcation in terms of how rates are bad there or is it all about having.

Mark: One rig at the right place at the right time that will still yield good rates all support 60 rigs in the future.

Speaker Change: Yeah. So I think you see.

Roddie Mackenzie: So with the Asgard and the Atlas now contracted above 500, we actually hear that many of our competitors are at the same level or even higher, and we expect within the next few months that there will be four to five additional awards in the Gulf of Mexico above 500k a day. That is definitely encouraging. Maybe just could you expand on the BOP issues with the Titan and really kind of think about it in the context of whether there is a similar risk with the Atlas?

Speaker Change: So several of our sixth Gen rigs have got very attractive rates just in the right markets. So as the market requires a certain specification and the sixth Gen rigs qualify for that then.

Speaker Change: They do achieve very well at the moment, there's a lot of activity around the high specification rigs, so specifically Gulf of Mexico, and some places in West Africa.

Speaker Change: That's where you're seeing the rates really accelerate because of the availability of these high specification units is becoming more and more scarce.

Roddie Mackenzie: Yeah, so the BOP, obviously, as I said in the call, the Titans BOP, the first BOP, is deployed, and the rig has been operating fully since mid-March. The issue we found was with a particular component on the second BOP, but clearly, that wasn't an issue on the first BOP.

Speaker Change: And the net effect of that is essentially.

Speaker Change: We're securing very solid rates on the on the high specification seventh Gen units, but that also trickles down to the sixth gens when they end up being the only ones that are left so I think youre going to see a pretty positive outlook for those rigs in the future and at the moment, where we're really seeing a lot of activity from the operators around securing the highest specification assets.

Roddie Mackenzie: We've taken those components off the stack, and we've brought them back to town to work with our OEM provider to disassemble and inspect them. We should learn more in the next couple of weeks as to what that particular issue is. Based on what we've seen and the operation of the other stack, we have no concerns as to whether that's anything that would spread to the other stacks.

Speaker Change: Can get their hands on.

Speaker Change: And I think you'd be looked back over the last couple of years, our approach to the market and our strategy around day rates have proven effective we looked at our <unk> thousand 810 rigs the highest hook load rigs in the market other than the Atlas and the tightened and starting to set in day rates with those rigs and it has lifted all the 250 ton rates, where now our competitors are also pushing for $500000 a day and then some and then.

Roddie Mackenzie: It's simply a component reliability issue that we'll address and return to the rig. And Mark, congratulations. Thanks to everyone.

Douglas Lee Becker: Thank you. And we'll take our next question from Fredrik Stene with Clarkson Securities. Your line is open. Hey Tim.

Speaker Change: Youll definitely see.

Speaker Change: A step change once we move to the 20 K, the new 20 K contracts.

Fredrik Stene: Thanks for taking my question. We talked a bit about the market here. I was also on the back of those discussions already wanting to hear what you're thinking about, 70s versus 60s and how the different types of rigs are being approached in the market. You talked about repositioning the Inspiration, you talked about some extra work potentially for the Invictus, etc., but also how you're managing your own fleet within those two sub-segments, keeping the Atlas and the Titan kind of away from that discussion for now.

Speaker Change: On the Atlas and the tightened.

Speaker Change: That's very helpful.

Speaker Change: Also you mentioned quite a local longterm opportunity is that foreseeable will materialize over the next couple of months or quarters.

Speaker Change: There has been I think different approaches with different owners as to how we should price long term work some will be except a lower rate just because they would like the visibility of a longer term contract while others.

Fredrik Stene: Are there any large discrepancies or bifurcations in terms of how rates are bid, or is it all about having one rig at the right place at the right time that will still yield good rates for 6G rigs in the future? Yeah, so I think you see, several of our 6th gen rigs have got very attractive rates just in the right markets. So if the market requires a certain specification and the 6th gen rigs qualify for that, then they do perform very well.

Speaker Change: Maybe it yourself being the best example of that has been.

Speaker Change: Very fair.

Speaker Change: Firm on rate expectations also for long term.

Speaker Change: You expect.

Speaker Change: A wide spreads in the awards that we're going to see.

Speaker Change: Going forward and I guess my question relates to should the market expect to be.

Speaker Change: Disappointed by some obvious there.

Fredrik Stene: At the moment, there's a lot of activity around the high-specification rigs. So specifically, the Gulf of Mexico and some places in West Africa, that's where you're seeing rates really accelerate because the availability of these high-specification units is becoming more and more scarce. And the net effect of that is essentially we're securing very solid rates on the high-spec 7th gen units, but that also trickles down to the 6th gens when they end up being the only ones that are left.

Speaker Change: Points or should we see them all pulling in the same direction are being 450 plus in <unk>.

Speaker Change: Almost all awards.

Speaker Change: Yeah, I would say that I think you've seen one or two anomalies that may have been disappointing market, but those are.

Speaker Change: Individual companies with motivation that are definitely not aligned with auto and so.

Speaker Change: For the for the majority of the long term drillers, I think youre clearly going to see rates well above $4 50, even for tower, Mark I think you're going to see that theres, maybe a small discount for telemark, but we're talking about 10 20, K a day and we're not talking about.

Roddie Mackenzie: So I think you're going to see a pretty positive outlook for those rigs in the future. But at the moment, we're really seeing a lot of activity from the operators around securing the highest specification assets they can get their hands on. Again, I think if you look back over the last couple of years, our approach to the market and our strategy around day rates has proven effective. We looked at our 1,400 ton rigs, the highest hook load rigs in the market other than the Atlas and the Titan, and started setting day rates for those rigs.

Speaker Change: 10 or 15% so.

Speaker Change: So I think youll see plenty of long term work awarded but it's going to be at very healthy rates.

Speaker Change: They might not be quite fives, but there'll be pretty close certainly.

Speaker Change: Some some long term stuff will be awarded.

Speaker Change: Above that 500, a marker but overall.

Speaker Change: The way we view it as Jeremy said, we've been very purposeful about which rigs get placed on which opportunities. So needless to say for our top spec assets. We will ensure that they are on a very positive contracts with.

Roddie Mackenzie: And it's lifted all the 1,250 ton rigs where now our competitors are also pushing for $500,000 a day and then some. And then you'll definitely see a step change once we move to the 20K, the new 20K contracts on the Atlas and the Titan. That's very helpful.

Speaker Change: Strategic importance to us as well not just not just dollars.

Speaker Change: Alright, thanks for all that color on the.

Speaker Change: Mark congratulations on that and.

Fredrik Stene: Also, you've mentioned quite a lot of long-term opportunities that you foresee will materialize now over the next couple of months or quarters. There have been, I think, different approaches with different donors as to how we should price long-term work. Some will accept a lower rate just because they would like the visibility of a longer-term contract, while others, and maybe yourself being the best example of that, have been, you know, very firm on rate expectations, also for the long term. Do you?

Speaker Change: Thank you I think the transaction now.

Speaker Change: In April was.

Speaker Change: Good.

Speaker Change: Final milestone.

Mark: Thanks Richard.

Speaker Change: Thank you.

Speaker Change: Our next question comes from a range of wrong with J P. Morgan Your line is open.

Speaker Change: Yes. Good morning, I was wondering if you could comment on just the 20 K PLP.

Speaker Change: The market overall.

Speaker Change: One of your peers highlighted how the Paleogene and the Gulf of Mexico.

Speaker Change: As one of the fastest.

Roddie Mackenzie: Should the market expect a wide spread in the awards that we're going to see going forward? And I guess my question relates to, should the market expect to be disappointed by some of these DERIT points? Or should we see them all pulling in the same direction or being 450 plus in almost all awards? Yeah, I would say that I think you've seen one or two anomalies that may have been disappointing for the market, but those are, you know, at very healthy rates. They might not be quite fives, but they'll be pretty close.

Speaker Change: Growing plays.

Speaker Change: You know kind of globally and I'm wondering if you could just maybe talk about what youre seeing there.

Speaker Change: Many rigs have that debt.

Speaker Change: <unk> capabilities and what's the future prospects there.

Speaker Change: Yeah.

Speaker Change: Yes, sure you've basically got four possibly five operators that are active.

Speaker Change: Active are going to be active in the 20 K market as we would describe it.

Speaker Change: So there's plenty of work there to occupy the rigs that we have.

Speaker Change: But going forward.

Speaker Change: We think there's there's work to keep everything busy at the moment not.

Roddie Mackenzie: Certainly, some long-term stuff will be awarded above that $500 marker. But overall, the way we view it, as Jeremy said, we've been very purposeful about which rings get placed on which opportunities. So needless to say, for our top-spec assets, we'll ensure that they are on very positive contracts with strategic importance to us as well, not just dollars. All right.

Speaker Change: Not necessarily saying, there's a need for adding capacity in that market at the moment, but we'll see how things shake out. There's a lot of operators also believes that that is a trend that will continue in the future. So as we go.

Speaker Change: 456 years in the future that more and more of those.

Fredrik Stene: Thanks for all that, Kolar and Mark. Congratulations, and thank you. I think the transaction now in April was... a good one. Thanks, Fredrik. Thank you. And our next question comes from Arun Jarram with J.P. Morgan. Your line is open. Yeah, good morning.

Speaker Change: Our interiors will require the higher pressures, but for the moment I think we're in a very good position, we may be slightly under supplied for that demand at the moment, but.

Speaker Change: Certainly I think the operators see the value in the not only the equipment, but the expertise in how to do it. So we're well placed for both of our rigs at the moment, Yes, Aaron I think your other.

Speaker Change: The question was how many are capable of 20 K. There are only two rigs in the world with 20 <unk>.

Arun Jayaram: I was wondering if you could comment on just the 20k BOP market, you know, overall. One of your peers highlighted how the paleo gene in the Gulf of Mexico is one of the fastest, you know, growing plays, you know, kind of globally, and I'm wondering if you could just maybe talk about what you're seeing there. How many rigs have those BOP capabilities, and what are the future prospects there? Yeah, sure.

Speaker Change: Right and the Atlas So we're not we're in a very good position there.

Speaker Change: It's a nice niche.

Speaker Change: You know broadly could you talk about West Africa, obviously, the maybe is an area that the market is pretty excited about but.

Speaker Change: Could you talk about you know kind of demand trends, you're seeing out of West Africa I know in Halliburton's call. They mentioned now in 2025, you could see more deepwater activity.

Roddie Mackenzie: You've basically got four, possibly five operators that are active in or going to be active in the 20k market, as we would describe it. So there's plenty of work there to occupy the rigs that we have. But going forward, we think there's work to keep everything busy at the moment. We're not necessarily saying there's a need for adding capacity in that market at the moment, but we'll see how things shake out. There are a lot of operators who also believe that that is a trend that will continue in the future.

Speaker Change: There next year.

Speaker Change: Yeah, absolutely. So mckinsey as recent report was kind of describing what's going on in our upstream investments expected in west.

Speaker Change: West Africa, and if you take specifically the deepwater sector. They expect to see an increase of 80% in spending between 2023 and 2027 so.

Speaker Change: As we go through our chart of available.

Roddie Mackenzie: So as we go, you know, four, five, six years in the future, more and more of those frontiers will require higher pressures. But for the moment, I think we're in a very good position.

Speaker Change: Opportunities in West Africa that is the one piece of the Golden Triangle, That's finally popped.

Speaker Change: North America was doing great Gulf of Mexico.

Roddie Mackenzie: We may be slightly undersupplied for that demand at the moment, but certainly, I think the operators see the value in not only the equipment but the expertise and how to do it. So we're well placed for both of our rigs at the moment. Yeah.

Speaker Change: Of course, South America is we've lamented just how many rigs have gone in there and how many more well, but this last quarter, we've really seen a lot of positive movement in West Africa, and it's not just one or two countries it's across several different areas. So.

Roddie Mackenzie: And Aaron, I think your other question was how many are capable of 20k? There are only two rigs in the world with 20k BOP to tighten in the Atlas. So we're in a very good position there. It's a nice niche.

Speaker Change: I'll go through all the details on that but certainly the traditional players Nigeria's back with four tenders angola's.

Arun Jayaram: You know, broadly, could you talk about, you know, West Africa. Obviously, Namibia is an area that the market's pretty excited about. But could you talk about, you know, the kind of demand trends you're seeing out of West Africa? I know on Halliburton's call, they mentioned now, in 2025, you could see, you know, more deepwater activity there next year. Yeah, absolutely.

Speaker Change: Contracting activity has been very solid and there's still a couple more to be awarded.

Speaker Change: And then as we go through Mozambique in Ghana, and what have you there's still plenty more.

Speaker Change: Scope to go there. So we do actually think that all of the fleet is currently in West Africa will either be renewed extended.

Roddie Mackenzie: So Mackenzie's recent report was kind of describing what's going on in upstream investments expected in West Africa. And if you take specifically the deep water sector, they expect to see an increase of 80% in spending between 2023 and 2027. So, as we go through our chart of available opportunities in West Africa, that is the one piece of the golden triangle that's finally cracked. You know, North America was doing great, the Gulf of Mexico, and, of course, South America. We've lamented just how many rigs have gone in there and how many more will. But this last quarter, we've really seen a lot of positive movement in West Africa. And it's not just one or two countries; it's across several different areas.

Speaker Change: Are put onto different programs, plus we're going to need two to three additional rigs in the next couple of years. So I think West Africa is looking very positive at the moment.

Speaker Change: Thank you.

Speaker Change: And we'll take our last question from David Smith, with Pickering Energy Partners. Your line is open.

David Christopher Smith: Hey, good morning, and thank you.

David Christopher Smith: If I could have data for me.

David Christopher Smith: If I go to the data from a year ago and look at forward availability for the deepwater fleet, Alright, and just see what has been contracted sand.

David Christopher Smith: It's a much higher percentage of drillship availability, that's been contracted versus.

David Christopher Smith: Benign deepwater semis.

David Christopher Smith: And I was just hoping to get your thoughts on.

David Christopher Smith: Or what youre hearing from customers about the relative interest and drillships versus benign.

Arun Jayaram: So I won't go through all the details on that. But certainly, the traditional players, Nigeria's back, you know, with four tenders, Angola's contracting activity has been very solid, and there's still a couple more to be awarded. And then, you know, as we go through Mozambique and Ghana and what have you, there's still plenty more. So we do actually think that all the fleet that's currently in West Africa will either be renewed, extended, or put on different programs, plus we're going to need two to three additional rigs in the next couple of years.

David Christopher Smith: And then maybe how we should think about the natural pricing premium for the the average fixed gen drillship versus the average six gen benign semi.

David Christopher Smith: Okay.

Speaker Change: And maybe I'll, maybe I'll try and answer that one David and then Ronnie can kick in.

Speaker Change: What we're seeing from our customers and it was a traditional view that development rigs.

Speaker Change: Better suited sami's were better suited to field developments and drillships were better suited to appraise patient opportunities, obviously that has changed significantly over the last five years to 10 years.

Arun Jayaram: So I think West Africa is looking very positive at the moment. Thank you. And we'll take our last question from David Smith with Pickering Energy Partners. Your line is open. I'm going to go ahead and close the poll.

Speaker Change: We'll find Drillships are now a lot more.

Speaker Change: At the time our customers are.

Speaker Change: Currently comfortable developing fields.

David Christopher Smith: I go to the data, forward availability for the deepwater fleet, and just see what has been contracted since. It's a much higher percentage of drill ship availability that's been contracted versus the benign deepwater semis. And I was just hoping to get your thoughts on, or what you're hearing from customers about the relative interest in drill ships versus benign semis. Maybe I'll try and answer that one, David, and then Roddie can kick in.

Speaker Change: With them and actually enjoy the redundancy and space and size and capability that they have as opposed to the semi as well where the families.

Speaker Change: Certainly have an advantage is perhaps in shallower water or an area, where theres a nation. They prefer to move up that semi but also have dynamically position and capability in the event they needed for that particular area.

Keelan I. Adamson: What we're seeing from our customers, and it was a traditional view that development rigs were better suited, semis were better suited to field developments, and drill ships were better suited to operational opportunities. Obviously, that has changed significantly over the last five to ten years, and you'll find drill ships are now a lot more versatile. Our customers are perfectly comfortable developing fields with them and actually enjoy the redundancy in space, size, and capability that they have as opposed to the semis.

Speaker Change: So I think that speaks to why.

Speaker Change: The situation is what it is right now I consider the drillships to be that the preference from what I speak to customers about but I'll, let roddie, maybe add a little bit more color to that yeah. No I think that's spot on healing and there are certain basins that we that we still have.

Roddie Mackenzie: With significant interest in the Sami So theres a couple of programs starting in 'twenty five.

Keelan I. Adamson: Where the semis certainly have an advantage is perhaps in shallower water or an area where there's a niche and they prefer to moor up that semi but also have dynamic positioning capability in the event they need it for that particular area.

Roddie Mackenzie: We'll require exactly as Colin described where you have this combination of a moored unit that can also do <unk> work as well so.

Roddie Mackenzie: This is.

Roddie Mackenzie: As albeit that the drillship market is extremely hot at the moment.

Keelan I. Adamson: So I think that speaks to why the situation is what it is right now. I consider the drill ships to be the preference from what I speak to customers about. But I'll let Roddie maybe add a little bit more color to that.

Roddie Mackenzie: Semi market is good so by comparison it may not look as good but it's still pretty solid.

Speaker Change: Very much appreciate the color and if I could add.

Roddie Mackenzie: Yeah, no, I think that's spot on, Keelan. There are certain basins that we still have significant interest in the semis. So there's a couple of programs starting in 2025 that will require exactly what Keelan described, where you have this combination of a moored unit that can also do DP work as well. So I think it's obvious that the drill ship market is extremely hot at the moment. The semi-market is good. So by comparison, it may not look as good, but it's still pretty solid. I very much appreciate the caller.

Speaker Change: One more.

Speaker Change: On the market outlook totally agree on on the future call on more rigs, maybe one small parcel solution.

Speaker Change: Is it getting more out of the existing fleet with better calendar scheduling with some rigs, having two or three or more months between contracts I wanted to ask.

Speaker Change: What do you think contractors and operators can do to better manage their schedules and avoid downtime between the end of one customer's program and the startup of the next customers shop.

Speaker Change: Yes, Hey, the number one driver for that is the tightness in the market right. So.

Speaker Change: As we as we kind of described.

David Christopher Smith: And if I could add, One more on the market outlook. I totally agree on the future call. Maybe one small partial solution is getting more out of. I wanted to ask, you know, what do you think contractors and operators can do to better manage their schedules and avoid, you know, downtime? Yeah, hey, the number one driver for that is the tightness in the market, right?

Speaker Change: We're in this transition over the over the past six months and certainly the next six months, where many of the fleet or moving to longer term contracts. So by necessity in a downturn you may have to move the rig frequently.

Speaker Change: To keep her busy to move from one customer to the next then go through customer acceptances, and those kind of things and mobilization.

Roddie Mackenzie: So, as we kind of described, we're in this transition over the past six months and certainly the next six months where many of the fleet is moving to longer-term contracts. So, by necessity, in a downturn, you may have to move the rig frequently to keep her busy, to move from one customer to the next, then go through customer acceptances and those kind of things and mobilization. But as we get to this longer-term outlook, you know, our backlog is growing substantially now over the last couple of years.

Speaker Change: But as we get to this longer term outlook.

Speaker Change: Our backlog has been growing substantially over the last couple of years, so you're going to see that transition that we're not going to be exposed to nearly as many.

Speaker Change: <unk> of rigs so that's going to tidy up very nicely for us certainly the remainder of this year and into next year.

Speaker Change: Great. Thank you so much.

Speaker Change: Thank you that concludes the question and answer session I will now turn the program back over to Allison Johnson director of Investor Relations for any closing remarks.

Roddie Mackenzie: So you're going to see that transition where we're not going to be exposed to nearly as many movements of rigs. So that's going to tidy up very nicely for us, certainly the remainder of this year and into next. Thank you so much.

Alison Johnson: Thank you Shelby and thank you everyone for your participation on today's call and look forward to talking with you again, when we report our second quarter 2024 results have a good day.

Alison Johnson: Thank you. That concludes the question and answer session. I will now turn the program back over to Alison Johnson, Director of Investor Relations, for any closing remarks. Thank you, Shelby, and thank you everyone for your participation on today's call. We look forward to talking with you again when we report our second quarter 2024 results. Have a good day.

Alison Johnson: Yeah.

Speaker Change: That concludes today's teleconference. Thank you for your participation you may now disconnect.

Speaker Change: [music].

Operator: That concludes today's teleconference. Thank you for your participation. You may now disconnect. Thanks for watching! [inaudible] Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music ?? ?? ?? ?? Good day, everyone, and welcome to today's Q1 2024 Transocean earnings call. At this time, all participants are in a listen only mode.

Speaker Change: Uh huh.

Speaker Change: [music].

Speaker Change: Hum.

Speaker Change: [music].

Operator: Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing the star and 1 on your telephone keypad. You may withdraw yourself from the queue by pressing star 2.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Hello.

Speaker Change: Oh.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Alison Johnson: Please note this call is being recorded, and I will be standing by if you need any assistance. It is now my pleasure to turn the conference over to Alison Johnson, Director of Investor Relations. Thank you, Shelby.

Speaker Change: Yeah.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Yeah.

Speaker Change: Yeah.

Alison Johnson: Good morning, and welcome to Transocean's first quarter 2024 earnings conference call. A copy of our press release covering financial results, along with supporting statements and schedules, including reconciliations and disclosures regarding non-GAAP financial measures, is posted on our website at deepwater.com. Joining me on this morning's call are Jeremy Thigpen, Chief Executive Officer; Keelan Adamson, President and Chief Operating Officer; Mark May, Executive Vice President and Chief Financial Officer; and Roddie Mackenzie, Executive Vice President and Chief Commercial Officer.

Speaker Change: [music].

Alison Johnson: During the course of this call, Transocean Management may make certain forward-looking statements regarding various matters related to our business and company that are not historical facts. Such statements are based upon current expectations and certain assumptions and therefore are subject to certain risks and uncertainty. Many factors could cause actual results to differ materially.

Speaker Change: Yes.

Speaker Change: [music].

Operator: Please refer to our SEC filings for our forward-looking statements and for more information regarding certain risks and uncertainties that could impact our future results. Also, please note that the company undertakes no duty to update or revise forward-looking statements. Following Jeremy, Keelan, and Mark's prepared comments, we will conduct a question and answer session with our team. During this time, to give more participants an opportunity to speak, please limit yourself to one initial question and one follow-up. Thank you very much.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Good day, everyone and welcome to today's Q1 2020 for Transocean earnings call. At this time, all participants are in a listen only mode.

Speaker Change: Later youll have the opportunity to ask questions during the question and answer session.

Speaker Change: You May register to ask a question at any time.

Jeremy D. Thigpen: I will now turn the call over to Jeremy. Thank you, Alison, and welcome to our employees, customers, investors, and analysts participating in today's call. As reported in yesterday's earnings release, for the first quarter, Transocean delivered adjusted EBITDA of $199 million on $767 million of adjusted contract drilling revenues, resulting in an adjusted EBITDA margin of approximately 26%. While the pace of contract awards has moderated somewhat from this time last year, demand for high-specification ultra-deepwater drill ships and harsh-environment semi-submersibles remains extremely strong, with improving day rates and length

Speaker Change: The star and one on your telephone keypad, you may withdraw yourself from the queue by pressing star two.

Speaker Change: Please note. This call is being recorded and I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Allison Johnson director of Investor Relations.

Alison Johnson: Thank you Shelby good morning, and welcome to transactions first quarter 2024 earnings conference call a copy of our press release covering financial results, along with supporting statements and schedules, including reconciliations and disclosures regarding non-GAAP financial measures are posted on our website at deepwater dotcom.

Alison Johnson: Joining me on this morning's call are Jeremy Thigpen, Chief Executive Officer, Keelan, Adamson, President and Chief Operating Officer, Mark Mey, Executive Vice President and Chief Financial Officer, and Roddie Mackenzie Executive Vice President and Chief Commercial Officer.

Jeremy D. Thigpen: In fact, earlier this month, we announced a 365-day contract extension for the Deepwater Asgard with an independent operator in the U.S. Gulf of Mexico. The program is expected to commence in June 2024 and is a direct continuation of the current program and includes additional services. The total contract value of approximately $195 million includes a $10.9 million lump sum payment, which is not included in the estimated backlog of approximately $184 million. As part of the agreement, we will be upgrading the rig's blowout preventers with Kinetic Pressure Controlled Blowout Stopper Units, or KBOS.

Alison Johnson: During the course of this call Transocean management may make certain forward looking statements regarding various matters related to our business and company that are not historical facts.

Speaker Change: Such statements are based upon current expectations and certain assumptions and therefore are subject to certain risks and uncertainties.

Speaker Change: Many factors could cause actual results to differ materially please refer to our SEC filings for our forward looking statements and for more information regarding certain risks and uncertainties that could impact our future results. Also please note that the company undertakes no duty to update or revise forward looking statements.

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

Jeremy D. Thigpen: As we previously highlighted, KBOS is a device that improves blowup preventer shearing capability and is retrofittable to existing BOPs. Importantly, it also significantly shortens the time for the rig to complete an emergency disconnect, which facilitates the ability to expand the minimum operating water depths of deep water floaters. Certain configurations of the device are capable of shearing any tubular and sealing the wellbore in less than one second.

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

Jeremy: Thank you Allison and welcome to our employees customers investors and analysts participating on today's call as reported.

Jeremy: In yesterday's earnings release for the first quarter Transocean delivered adjusted EBITDA of $199 million on $767 million of adjusted contract drilling revenues, resulting in an adjusted EBITDA margin of approximately 26%.

Jeremy D. Thigpen: Over the past several years, Transocean has worked closely with Kinetic Pressure Control Development and Testing of KBOS, as well as with the regulator, the Bureau of Safety and Environment Enforcement, or BSEE, to earn their support and approval, and I'm proud to report that this will mark the third unit that we have introduced to our fleet. We are encouraged by the positive feedback received from our customers and BSEE and are pleased to see an increased willingness from our customers to pay for this transformational technology.

Jeremy: While the pace of contract awards has moderated somewhat from this time last year demand for high specification ultra deepwater drillships and harsh environment semi submersibles remains extremely strong with improving day rates and lengthening terms.

Jeremy: In fact earlier this month, we announced a 365 day contract extension for the deepwater Asgard with an independent operator in the U S. Gulf of Mexico. The program is.

Jeremy: As expected to commence in June 2024, and direct continuation of the current program and includes additional services.

Jeremy D. Thigpen: Also in the U.S. Gulf of Mexico, we just signed a contract for an additional 4 wells of 15K work on the Deepwater Atlas at a daily rate of $505,000 per day, in direct continuation of its current program, expected to last between 240 and 360 days. We also announced that Total Energy has exercised its remaining option on the Deepwater Ski Rows at $400,000 per day.

Jeremy: The total contract value of approximately $195 million includes a $10 $9 million lump sum payment, which is not included in the estimated backlog of approximately $184 million.

Jeremy: As part of the agreement, we will be upgrading the rig blowout preventer with kinetic pressure control blowout stopper units or K boss.

Jeremy: As we previously hi, Bob highlighted K boss is a device that improves blowout preventer sharing capability and as retrofit able to existing <unk>.

Jeremy D. Thigpen: While this option, which was negotiated well before the most recent market acceleration, is materially below current market rates, we are pleased to continue our longstanding and mutually beneficial relationship with Total Energy. As we move through the next several months, we expect numerous long-term contracts to be awarded at increasing day rates reflecting industry participants' recognition of the tightness in the market. Healthy contract durations are one of many factors supporting improved supply-demand dynamics.

Jeremy: Importantly, it also significantly shortens the time for the rig to complete an emergency disconnect, which facilitates the ability to expand the minimum operating water depth of deepwater floaters.

Jeremy: Certain configurations of the device are capable of sharing any tubular and feeling the wellbore in less than one second.

Jeremy: Over the past several years Transocean has worked closely with kinetic pressure control element and testing of chaos as well as with the regulator The bureau of safety and environment enforcement or Bessie to earn their support and approval.

Jeremy: And I'm proud to report that this will mark the third unit that we've introduced to our fleet.

Jeremy: We are encouraged by the positive feedback received from our customers and Betsy and are pleased to see an increased willingness from our customers to pay for this transformational technology.

Jeremy D. Thigpen: Excluding the Total Energy 10-year contract award, which we consider to be something of an anomaly, contract durations for new ultra-deepwater fixtures reached a robust 511 days in the quarter, largely in line with the 2023 average of 526 days and up from 302 days in 2022.

Jeremy: Also in the U S Gulf of Mexico, We just signed a contract for an additional four wells of 15 <unk> work on the deepwater Atlas a day rate of $505000 per day in direct continuation of its current program expected to last between 240 and 360 days.

Jeremy: We also announced total energy has exercised its remaining option on the deepwater skyros at $400000 per day.

Jeremy D. Thigpen: For Transocean, this is especially important, as with longer terms, our customers are finally willing to co-invest in the deployment of some of the new technologies like KBOS, HaloGuard, robotic riser systems, IntelliWell, and others that we developed, tested, and proved during the downturn but were unable to fully deploy given obvious financial constraints. While some analysts and investors continue to express concerns over the pace of contract awards, I'd like to reiterate two points on that topic I make frequently.

Jeremy: While this option, which was negotiated well before the most recent market acceleration is materially below current market rates. We are pleased to continue our longstanding and mutually beneficial relationship with total energies.

Jeremy: As we move through the next several months, we expect numerous long term contracts to be awarded and increasing day rates, reflecting industry participants recognition of the tightness in the market.

Jeremy: Healthy contract durations are one of many factors supporting improved supply demand dynamics.

Jeremy: Excluding the total energy as 10 year contract award, which we considered to be something of an anomaly contract durations for new ultra deepwater fixtures reached a robust 511 days in the quarter largely in line with the 2023 average of 526 days and up from 302 days in 2022.

Jeremy D. Thigpen: First, with day rates increasing and terms extending, the financial commitment from our customers is becoming far more substantial, requiring far more approvals within our customers' organizations and with their partners, which obviously adds time to the process.

Jeremy: For Transocean this is especially important as with longer terms. Our customers are finally willing to co invest in the deployment of some of the new technologies like Chaos Halo guard robotic riser systems, and <unk> and others that we developed tested improved during the downturn, but were unable to fully deploy given obvious financial constraints.

Jeremy D. Thigpen: And second, our active fleet is largely contracted through the end of the year, and based on active negotiations, we anticipate filling at least a portion of the remaining availability. As one example, well intervention operations on the Deepwater Invictus have extended significantly, with the rig now scheduled to complete that work scope in July. We are also in active discussions for additional opportunities to commence and direct the continuation of this work. Additionally, and to emphasize the confidence that our customers have in the duration of this upcycling, we are actively engaged in conversations for rigs that are not scheduled to roll off the contract for one to three years.

Jeremy: While some analysts and investors continue to express concerns over the pace of contract awards I'd like to reiterate two points on that topic I make frequently.

Jeremy: First with day rates, increasing in terms of extending the financial commitment from our customers is becoming far more substantial requiring far more approvals within our customers' organizations and with their partners, which obviously adds time to the process.

Jeremy: And second our active fleet is largely contracted through the end of the year and based on active negotiations, we anticipate filling at least a portion of the remaining availability.

Jeremy: As one example, well intervention operations on the deepwater Invictus have extended significantly significantly with the rig now scheduled to complete that work scope in July we're.

Jeremy D. Thigpen: In fact, all indications continue to suggest heightened demand for at least the next several years. In its independent assessment, but an assessment that is fully supportive of our view, RYSTAT anticipates deepwater greenfield CAPEX in 2025 will be the highest in 12 years and that by 2027, total deepwater investment will reach nearly $130 billion, an increase of approximately 40 percent from 2023. Additionally, there are many important deepwater projects expected to reach final investment decisions this year, including BP's Atlantis IV and 20K Cascada fields in the U.S. Gulf of Mexico, Shell's Bonga North in Nigeria, Total Energy's Camino Discovery in Angola and Venus Discovery in Namibia, and ExxonMobil's Whiptail in Guyana, which was approved earlier this month.

Jeremy: We are also in active discussions for additional opportunities to commence in direct continuation of this work.

Jeremy: Additionally, and to emphasize the confidence that our customers have and the duration of this upside.

Jeremy: We are actively engaged in conversations for rigs that are not scheduled to rollout contract for one to three years and.

Jeremy: In fact, all indications continue to suggest heightened demand for at least the next several years.

Jeremy: And its independent assessment, but an assessment that is fully supportive of our view rice that anticipates deepwater Greenfield capex in 2025 will be the highest in 12 years and that by 2027 total deepwater investments will reach nearly $130 billion, an increase of approximately 40% from 2023.

Jeremy: Additionally, there are many important deepwater projects expected to reach final investment decision this year, including Bp's Atlantis, 4% and 20, K koskela fields in the U S Gulf of Mexico shelf, Banca <unk> North in Nigeria.

Jeremy: Total energy is comino discovery in Angola, and Venus discovery in Namibia, and Exxonmobil with telling you Yana, which was approved earlier this month.

Jeremy D. Thigpen: These predictions reinforce our confidence there will be sustained market tightness for the foreseeable future. With that, I'll hand it over to Keelan to provide a bit more regional color and detail. Thanks, Jeremy. And good morning, everyone.

Jeremy: These predication reinforce our competence there will be sustained market tightness for the foreseeable future.

Jeremy: With that I'll hand, it over to Kieran to provide a bit more regional color and detail.

Kieran: Thanks, Jeremy and good morning, everyone jumping directly into the various regions in the U S. Gulf of Mexico, the rig supply demand balance is such that in our analysis the region could be short one rig in 2025.

Keelan I. Adamson: Jumping directly into the various regions in the US Gulf of Mexico, the rig supply and demand balance is such that, in our analysis, the region could be short one rig in 2025. Customer behavior indicates that they understand they need to secure rigs quickly to avoid missing their project timelines. Notably, we are observing elevated demand from independent operators, both in the form of tenders and direct negotiations.

Kieran: Customer behavior indicates that they understand they need to secure rigs quickly to avoid missing their project timelines.

Kieran: Notably we are observed in elevated demand from independent operators, both in the form of tenders and direct negotiations.

Keelan I. Adamson: Last month, two independent operators issued tenders for new programs that were not previously in our outlook. One includes a six-month firm term commencing in the first half of 2025 with two six-month options. The other is for six to nine months of work commencing in the third quarter of 2025. Additionally, there are two major E&P companies currently out to market for multi-year programs. In Brazil, last month, Petrobras provided an update to its expected demand for floating rigs based on 2030 requirements.

Kieran: Last month, two independent operators issued tenders for new programs that were not previously in our outlook. One includes a six month firm term commencing in the first half of 2025 with two six month options.

Kieran: There is for six to nine months of work commencing in the third quarter of 2025.

Jeremy: Additionally, there are two major E&P companies currently out to market for multi year programs.

Jeremy: In Brazil last month, Petrobras provided an update to its expected demand for floating rig.

Jeremy: 19th 30 requirements. This demand forecasts suggest Petrobras may absorb up to 30 rigs through 2030 in line with our expectations that as a region for both Petrobras and the international oil companies, Brazil could require 36 floaters as soon as 2025.

Keelan I. Adamson: This demand forecast suggests Petrobras may absorb up to 30 rigs through 2030, in line with our expectations that, as a region for both Petrobras and the international oil companies, Brazil could require 36 floaters as soon as 2025. Part of this forecast is contingent upon discoveries in frontier areas, such as the equatorial margin, where earlier this month and for the second time this year, Petrobras disclosed another discovery. Obviously, our confidence that Petrobras will require at least 30 rigs improves with each new discovery. The Roncadour tender for up to two rigs is expected to be awarded in the third quarter with a start next year.

Jeremy: Part of this forecast is contingent upon discoveries in frontier areas, such as the equatorial margin where earlier this month and for the second time this year Petrobras disclosed another discovery.

Jeremy: Obviously, our confidence that Petrobras will require at least 30 rig crews with each new discovery.

Jeremy: The wrong corridor tender for up to two rigs is expected to be awarded in the third quarter with a commencement next year.

Keelan I. Adamson: The sepia tender for up to three rigs is also slightly delayed as commercial proposals are now due mid-May. Petrobras also recently received approval of its discovery evaluation plan for one of its three resalt blocks in the Campus and Santos Basins and is expected to drill an appraisal well in 2024 or 2025. Negative results from the appraisal would likely solidify future development and provide additional support that Petrobras will be at the higher end of its demand expectations.

Jeremy: The separate tender for up to three rigs is also slightly delayed as commercial proposals are now do you mid may.

Jeremy: Petrobras also recently received approval of its discovery evaluation plan for one of its three pre salt blocks in the campus in Santos Basin and is expected to drill an appraisal well in 2024 or 2025.

Jeremy: Positive results from the appraisal would likely solidify future development and provide additional support that Petrobras will be at the higher end of its demand expectations.

Keelan I. Adamson: Moving to Africa, if demand materializes as currently expected, Africa could be the region to absorb most of the remaining available active floating fleet and once again play a significant role in the Golden Triangle. However, in order to satisfy the demand expected by 2025, we believe at least four rigs will be required from outside the region. Tenders include Exxon Mobil's two-year firm opportunity and Shell's one-year firm opportunity in Nigeria, among others. Both of these have multi-year options. Southeast Asia currently offers a variety of opportunities, such as PTTEP in Malaysia and Brunei, E&I in Indonesia, and Shell in Malaysia.

Jeremy: Moving to Africa, if demand materializes as currently expected Africa could be the region to absorb most of the remaining available active floating fleet.

Jeremy: Once again play a significant role in the Golden triangle.

Jeremy: In order to satisfy the demand expected by 2025, we believe at least four rigs will be required from outside the region.

Jeremy: Tenders include Exxon Mobil's, Exxonmobil, two year firm opportunity and shelves, one year firm opportunity in Nigeria among.

Jeremy: Among others.

Jeremy: Both of these have multi year options.

Jeremy: Southeast Asia currently offers a variety of opportunities such as PTP in Malaysia, and Brunei Eni in Indonesia and shell in Malaysia.

Keelan I. Adamson: There could be a shortage of one floater in the region to fulfill these programs if they are all awarded as anticipated in late 2024 or early 2025. In India, Reliance is out to tender for up to two years of work with options, and with the recently revised commencement window, RKG 1 could be well placed to secure this opportunity. Switching over now to the high specification harsh environment market, and specifically Norway, where the local high spec semi fleet remains effectively sold out through 2025.

Jeremy: That could be a shortage of one floater in the region to fulfill these programs. If they are all awarded as anticipated in late 2024 or early 2025.

Jeremy: And India Reliance's out to tender for up to two years of work with options and with the recently revised commencement window. Our kg one can be well placed to secure this opportunity.

Jeremy: Switching over now to the high specification harsh environment market and specifically Norway.

Jeremy: The local high spec semi fleet remains effectively sold out through 2025.

Keelan I. Adamson: We have also observed a shift in customer procurement processes for future projects. Similar to what we've seen in other regions like the U.S. Gulf of Mexico, tenders are being utilized less frequently in favor of direct negotiation.

Jeremy: We have also observed a shift in customer procurement processes for future projects.

Jeremy: Similar to what we've seen in other regions like the U S. Gulf of Mexico tenders are being utilized less frequently in favor of direct negotiations.

Keelan I. Adamson: As an example of customers booking further into the future, we just signed a letter of intent subject to final partner approval for the extension of the Transocean Spitsbergen by three wells estimated at 150 days plus six priced option wells in direct continuation, which is currently anticipated to be July 2025. We will disclose full details once the extension becomes a fully binding contract. In Australia, known requirements are expected to commence in 2026 and onward, including impacts on Chevron's next phase in some of its respective field developments.

Jeremy: As an example customers booking further into the future. We just signed a letter of intent subject to final partner approval for the extension of the Transocean Spitsbergen by three wells estimated at 150 days plus six priced option wells indirect continuation, which is currently anticipated to be July two.

Jeremy: 125.

Jeremy: We will disclose full details once the extension becomes a fully binding contract.

Jeremy: In Australia known requirements are expected to commence in 2026 and onward, including impacts in Chevron's next phase and some of their respective field developments.

Keelan I. Adamson: We believe at least one additional rig will be required to fulfill these programs, as all six floaters currently in country are likely to be occupied in that time frame, including our two rigs, the Transocean Equinox and Transocean Endurance, which we believe are well positioned to pick up further work in the country at the end of their respective programs. Now, I'd like to take a few moments to discuss our operational performance and provide some insight into the themes that contributed to our first quarter revenue falling short of guidance.

Jeremy: We believe at least one additional rig will be required to fulfill these programs as all six floaters currently in country are likely to be occupied in that time frame, including our two rigs the transocean equinox and Transocean endurance, which.

Jeremy: Which we believe are well positioned to pick up further work in country at the end of their respective programs.

Jeremy: Now I'd like to take a few moments to discuss our operational performance and provide some insight into the themes that contributed to our first quarter revenue falling short of guidance.

Keelan I. Adamson: As Mark will elaborate upon in his comments, the drivers behind our first quarter revenue results are primarily attributable to delays to rig start-ups in Australia and Brazil due to longer than anticipated mobilizations, extensive customer acceptance processes, and operational start-up issues, as well as extended contract preparation for the KG1 in India, extreme adverse weather impacting our operations in Norway, and lastly, downtime on the deepwater titans. Regarding Titan, the rig experienced a downtime event related to the initial deployment of its second 20k BOP.

Jeremy: As Mark will elaborate upon in his comments the drivers behind our first quarter revenue results are primarily attributable to delays.

Jeremy: Delays to rig startups in Australia, and Brazil, due to longer than anticipated mobilizations extensive customer acceptance processes and operational startup issues as well as extended contract preparation for the K G. One in India.

Jeremy: Extreme adverse weather impacting our operations in Norway, and lastly, downtime on the deepwater Titan.

Jeremy: Regarding the Titan the rig experienced downtime of eight event related to the initial deployment of its second 20, K B L. P.

Keelan I. Adamson: The BOP was pulled back to surface, and following an evaluation, we concluded the most efficient path forward was to redeploy the rig's first 20 K BOP, which had already been utilized successfully in operations following completion of its scheduled maintenance. The rig returned to full operational status during March and has performed well, as it did since it commenced its initial contract in mid-2023. As with any new equipment or new technology deployment, it is not uncommon to experience some early performance issues.

Jeremy: The <unk> was pulled back to surface and following an evaluation. We concluded the most efficient path forward was to redeploy the rigs first 20, <unk>, which had already been utilized successfully in operations following completion of its scheduled maintenance.

Jeremy: The rig returned to full operational status during March and has performed well as it did since it commenced its initial contract in mid 2023.

Jeremy: As with any new equipment or new technology deployment. It is not uncommon to experience some early life performance issues.

Keelan I. Adamson: However, Transocean has extensive experience in safely and efficiently bringing new equipment and technology to the market, which includes a tried and tested playbook on how to work closely and collaboratively with our OEM partners to identify and correct any reliability-related issues in a timely and effective manner. While we are certainly disappointed to have suffered this downtime event, it is important to note that the safety of our operations was never compromised.

Jeremy: However, transocean has extensive experience in safely and efficiently, bringing new equipment and technology to the market.

Jeremy: Which includes a tried and tested playbook on how to work closely and collaboratively with our OEM partners to identify and correct any reliability related issues in a timely and effective manner.

Jeremy: While we are certainly disappointed to have suffered this downtime event. It is important to note that the safety of our operation was never compromised.

Keelan I. Adamson: Understandably, the previously discussed challenges had a significant impact on our quarterly results, leading to an unusual and disappointing revenue efficiency of 92.9%. However, as they are largely one-time, discrete events, and with the rest of our fleet continuing to operate with impressive reliability, we remain confident in our ability to consistently deliver safe, reliable, and efficient operations across our fleet. I'll now hand the call back to Jeremy.

Jeremy: Understandably. The previously discussed challenges had a significant impact on our quarterly results, leading to an unusual and disappointing revenue efficiency of 92, 9%.

Jeremy: However, as they are largely one time discrete events and with the rest of our fleet continuing to operate with impressive reliability, we remain confident in our ability to consistently deliver safe reliable and efficient operations across our fleet.

Jeremy: I'll hand, the call back to Jeremy.

Jeremy D. Thigpen: Thanks, Keelan. As part of our efforts to improve the consistency, efficiency, and repeatability of our operations, we continue to make progress with our automation initiatives in the first quarter. We achieved another milestone with our jointly owned IntelliWell system as we performed simultaneous fully automated online drilling, tripping, and offline stand building operations on the Transocean Norga in Norway, and we are currently preparing for an upcoming deployment in the U.S. Gulf of Mexico.

Jeremy: Thanks, Kaitlin as part of our efforts to improve the consistency efficiency and repeat ability of our operations. We continue to make progress with our automation initiatives in the first quarter.

Jeremy: We achieved another milestone with our jointly owned <unk> system as we performed simultaneous fully automated online drilling tripping and offline stand building operations on the Transocean Norge in Norway.

Jeremy: And we are currently preparing for an upcoming deployment in the U S Gulf of Mexico.

Jeremy D. Thigpen: We also achieved a milestone with our robotic riser system. We have handled more than 2,000 joints of riser across our three installed systems. In addition to supporting the consistency of our operations, Robotic Riser also limits the exposure of our personnel to high-risk areas on the drill floor.

Jeremy: We also achieved a milestone with our robotic riser system, we've handled more than 2000 joints or Verizon or across our three installed systems.

Jeremy: In addition to supporting the consistency of our operations robotic riser also limits the exposure of our personnel to high risk areas on the drill floor.

Jeremy D. Thigpen: Another way to think about this is that we have now added over 1,100 working hours where our personnel were not exposed to red zone risk. Finally, before handing it over to him, I just want to recognize and thank Mark and the rest of the Transocean team who earlier this month worked together to complete a tremendous $1.8 billion refinancing in conjunction with amending our revolving credit facility. Needless to say, these are very important transactions that extended our liquidity runway and started the process of simplifying our balance sheet as we position ourselves for what we believe to be a multi-year upcycle. And for Mark, personally, I think these transactions represent an excellent capstone to an exceptionally successful career. This professionalism truly is something we witness across our organization as a whole, day in and day out.

Jeremy: Another way to think about this is we've now added over 1100 working hours, where our personnel were not exposed to red zone risk.

Jeremy: Finally, before handing it over to him I, just want to recognize and thank mark and the rest of the Transocean team who earlier. This month worked together to complete a tremendous $1 8 billion refinancing in conjunction with amending our revolving credit facility.

Jeremy: Needless to say these are very important transactions, which extended our liquidity runway and started the process of simplifying our balance sheet as we position ourselves for what we believe to be a multiyear up cycle.

Jeremy: And for Mark personally I think these transactions represent an excellent capstone to an exceptionally successful career.

Jeremy: Yeah.

Jeremy: This professionalism truly is something we witnessed across our organization as a whole day in and day out and for that I would like to thank each member of the transition team unwavering commitment to delivering safe reliable and efficient operations for our customers and value for our shareholders.

Jeremy D. Thigpen: And for that, I would like to thank each member of the Transocean team for their unwavering commitment to delivering safe, reliable, and efficient operations for our customers and value for our shareholders. Change and continuous improvement are constants in our industry, and our team has continuously demonstrated an ability to adapt as we progress further into the sustained. In conclusion, the outlook for our assets and services remains strong, with the tightness of supply, the active negotiations, and the $500,000 per day glass ceiling now broken in multiple jurisdictions around the world.

Jeremy: Change in continuous improvement or the constant in our industry and our team has continuously demonstrated an ability to adapt as we progress further into the sustained up.

Jeremy: In conclusion, the outlook for our assets and services remained strong with the tightness of supply the active negotiations and the 500000 dollar per day glass ceiling now broken in multiple jurisdictions around.

Jeremy D. Thigpen: We are confident that we will continue to grow our backlog throughout the year. As we work towards securing more contract awards, we remain entirely committed to our operational execution with a focus on efficiently converting our $8.9 billion of backlog into revenue and cash flow. With that, I will now turn the call over to Mark for what I can't believe will be the last time he will discuss our financial results. Mark?

Jeremy: We are confident that we will continue to grow our backlog throughout the year.

Jeremy: As we work towards securing more contract awards, we remain entirely committed to our operational execution with a focus on efficiently converting our $8 $9 billion of backlog to revenue and cash flow.

Jeremy: With that I will now turn the call over to Mark for what I can't believe will be the last time, he will discuss our financial results Mark.

Mark May: Thank you, Jeremy, and good day to all. During today's call, I will briefly recap our first quarter results and then provide guidance for the second quarter. I will conclude with an update on our expectations for the full year 2024, including our latest liquidity forecast. Before I get to the results, as Jeremy mentioned, we recently completed refinancing transactions totaling $1.8 billion, upsized by $300 million from our initial offering of $1.5 billion. The proceeds from the bond offering were utilized to fully redeem the 7.25% senior notes due to 2025 and a 7.5% senior notes due to 2026, and partially redeemed for $0.08 in your notes on June 2027. The remaining outstanding balance on the letter notes is approximately $525 million.

Mark: Thank you Jeremy and good day to all.

Mark: During today's call I will briefly recap our first quarter results and then provide guidance for the second quarter of <unk>.

Mark: Crude was an update on our expectations for the full year 2024, including our latest liquidity forecast.

Mark: Before I get to the results as Jeremy mentioned, we recently completed refinancing transactions totaling $1 $8 billion.

Mark: Upsized by $300 million from our initial offering.

Jeremy: $5 billion.

Jeremy: The proceeds from the bond offering we utilize to fully redeem the seven 5% senior notes due 2025.

Jeremy: And a similar 5% senior notes due 2026.

Jeremy: And partially redeemed 8% senior notes due 2027.

Jeremy: The remaining outstanding balance on the letter notes is approximately $525 million.

Mark May: Approximately $92 million of the 11.5% Senior Guaranteed... They were not tendered, will remain outstanding until the end of July, at which time funds placed into irrevocable escrow accounts will be utilized to call the remaining balance and fully retire the issue. These transactions improve our unsecured debt maturity profile, simplify our capital structure, and, combined with the recent extension of our evolving credit facility through mid-2028, enhance our financial flexibility. On this latter point, we are pleased that the current formulation of the credit facility permits us, at a point in the future, the flexibility to make restricted payments, including distributions to shareholders, and Sherry Purchase.

Jeremy: Approximately $92 million of 11, 5% senior guaranteed.

Jeremy: They were not tendered.

Jeremy: We remain outstanding until the end of July.

Jeremy: At which time funds be placed into escrow.

Jeremy: Escrow account.

Jeremy: We utilized two quarter and many parents will fully retire the issue.

Jeremy: These transactions improved our unsecured debt maturity profile simply.

Jeremy: Simplifying our capital structure and.

Jeremy: And combined with the recent extension of our revolving credit facility through mid 2020 eights enhance our financial flexibility.

Jeremy: At a point, we're pleased with the current formulation of the credit facility permits us.

Jeremy: In the future the flexibility to make restricted payments, including distributions to shareholders.

Jeremy: And share repurchases.

Mark May: Concurrent with your aforementioned transactions, Moody's upgraded Transocean's Corporate Family Rating to B3 from CAA1, reflecting the improvement in the agency's outlook for the company and its business. We are confident we will continue to demonstrate the qualities necessary to receive further ratings upgrades as we continue to deliver our balance sheet through the sustained cycle. As we reported in our press release, which includes additional detail on our results for the first quarter, we reported a net income attributable to controlling interest of $98 million, or $0.11 per diluted share. However, after certain adjustments, we reported an adjusted net loss of $22 million. During the quarter, Virginia got its EBITDA of $199 million.

Jeremy: Concurrent with the aforementioned transactions Moody's upgraded transactions corporate family rating to be three from Cedar when they want.

Jeremy: Reflecting the improvements in the eighties.

Jeremy: Look for the company and its business.

Jeremy: We are confident we will continue to demonstrate the qualities necessary.

Jeremy: To receive further ratings upgrades as we continue to delever, our balance sheet through the sustained cycle.

Jeremy: Yeah.

Jeremy: As we reported in our press release, which includes additional details on our results for the first quarter, we reported net income attributable to controlling interest of.

Jeremy: $98 million were 11 cents per diluted share.

Jeremy: After certain adjustments, we reported adjusted net loss of $22 million.

Jeremy: Yeah.

Jeremy: During the quarter, we generated EBITDAR of $199 million.

Mark May: As is typical in the first quarter of the year, operating cash flows were negative at $86 million, largely due to payments for payroll-related costs and interest payments. In addition, we continue to incur substantial contract preparation costs as we return the Deepwater Orion and Transocean Endurance to operations and advance the preparation of the Transocean Equinox during the quarter. Negative free cash flow of $169 million in the first quarter reflects the aforementioned negative $86 million of operating cash flow and $83 million of capital expenditures.

Jeremy: As is typical in the first quarter of the year operating cash flows were negative at $86 million.

Jeremy: Largely due to payments for payroll related costs and interest payments in.

Jeremy: In addition, we continued to incur a substantial contract preparation costs.

Jeremy: Turn that deepwater Orion and Transocean endurance to operations and advanced the preparation of the Transocean equinox during the quarter.

Jeremy: Negative free cash flow of $169 million in the first quarter and reflects the aforementioned negative $86 million of operating cash flow.

Jeremy: And $83 million of capital expenditures.

Mark May: Capital expenditures for the quarter included $45 million related to the 7th Gen Plus new-build deepwater aquila and its construction as it prepares for its inaugural contract with Petrobras in Brazil. Looking closer at our results, during the first quarter, we delivered adjusted contract earning revenues of $767 million and an average daily revenue of approximately $408,000. This is below our previous guidance, mainly due to the reasons Keelan mentioned in the prepared comments, including delayed contract commencements with Transocean Endurance, Deepwater Orion, and KG1.

Jeremy: Capital expenditures for the quarter included $45 million related to the seventh Gen plus newbuild deepwater killer and the construction as it prepares for its inaugural contract for Petrobras in Brazil.

Jeremy: Looking closely at our results during the first quarter, we delivered adjusted contract drilling revenues of $767 million.

Jeremy: Average daily revenue of approximately $408000.

Jeremy: This is below our previous guidance, mainly due to the reasons Colin mentioned in his prepared comments, including late contract commenced principal transocean endurance people to Orion and <unk>.

Mark May: Low Revenue Efficiency for the Deepwater Triton? and the impact of adverse weather on operations in Norway. Operating and maintenance expense in the first quarter was $523 million. This is below our guidance, primarily due to the delay of in-service maintenance in the active fleet and delayed contract preparation costs. GNI expense in the first quarter was $52 million.

Jeremy: Low revenue efficiency for the deepwater Titan.

Jeremy: And the impact of adverse weather on operations in Norway.

Jeremy: Operating and maintenance expense in the first quarter was $523 million. This.

Jeremy: This is below our guidance, primarily due to the delay of <unk>.

Jeremy: <unk> maintenance and the extra fleet and delayed contract preparation costs.

Jeremy: G&A expense in the first quarter was $52 million.

Mark May: Turn it into cash flow in the balance sheet. We entered the first quarter with a total liquidity of approximately $1.3 billion, including unrestricted cash and cash equivalents of $446 million. Approximately $240 million of receipted cash for debt service and $600 million from our undrawn revolving credit facility. I will now provide an update on our expectations of financial performance for the second quarter and full year 2024. As always, our guidance reflects only contract-related reactivations and or upgrades.

Jeremy: Turning to cash flow and the balance sheet.

Jeremy: We ended the first quarter with total liquidity of approximately $1 $3 billion.

Jeremy: Including unrestricted cash and cash equivalents of $446 million.

Jeremy: Approximately $240 million of restricted cash for debt service.

Jeremy: And $600 million from our Undrawn revolving credit facility.

Speaker Change: I will now provide an update on our expectations of financial performance for the second quarter and full year 2024, as always our guidance reflects only contract related renovations and upgrades.

Mark May: For the second quarter of 2024, we expect adjusted contract drilling revenue of approximately $866 million, based upon an average fleet-wide revenue efficiency of 96.5%. This quarter-over-quarter increase is mainly due to the incremental activity for Transocean Endurance and Deepwater Orion operating for a full quarter.

Speaker Change: For the second quarter of 2024, we expect adjusted contract drilling revenues of approximately $866 million.

Speaker Change: Based upon an average fleet wide revenue efficiency of 96, 5%.

Speaker Change: This quarter over quarter increase was mainly due to the incremental activity with Transocean endurance.

Speaker Change: And deepwater Orion operating for a full quarter.

Mark May: The Transocean Equinox and KG1 started their respective contracts during the quarter, and higher revenue efficiency following the resolution of the downtown event on the Deepwater Titan in the first quarter. This is partially offset by reductions in activity on the Transocean Barrens and KG2 as the rigs begin contract preparation. We expect second quarter O&M expense to be approximately $570 million. This quarter over quarter increase is largely due to incremental activity related to the previously mentioned four rigs and to an increase in in-service maintenance costs.

Speaker Change: The transaction equinox, and K G. One starting to their respective contracts during the quarter and higher revenue efficiency. Following the resolution, but Don kind of event when the deepwater Titan and the first quarter.

Speaker Change: This was partially offset by reductions in activity on the Transocean Barents.

Speaker Change: <unk> is the rigs began contract preparations.

Speaker Change: We expect second quarter O&M expense to be approximately $570 million this quarter over quarter increase was largely due to incremental activity related to the previously mentioned four rigs and to an increase in service maintenance costs.

Mark May: We expect GNI expense for the second quarter to be approximately $60 million. This quarter-over-quarter increase is primarily related to transaction fees for the debt financing, debt refinancing, and a voluntary early retirement program that was offered to long-term employees. Net interest expense for the second quarter is forecast to be approximately $138 million.

Speaker Change: We expect G&A expenses for the second quarter to be approximately $60 million.

Speaker Change: This quarter over quarter increase is primarily related to transaction fees with the debt financing.

Speaker Change: Financing and a voluntary early retirement program that was offered to longtime employees.

Speaker Change: Net interest expense for the second quarter is forecasted to be approximately $138 million.

Mark May: This includes capitalised interest of approximately $8 million. Capital expenditures for the second quarter are forecast to be approximately $92 million, including approximately $55 million related to the preparation or deported killer for its three-year contract with Petrobras in Brazil. Cash taxes are expected to be $17 million.

Speaker Change: This includes capitalized interest of approximately $8 million.

Speaker Change: Capital expenditures for the second quarter are forecast to be approximately $92 million.

Speaker Change: Including approximately $55 million related to the preparation of the particular for its three year contract with Petrobras in Brazil.

Speaker Change: Cash taxes are expected to be $17 million.

Mark May: Now providing updated guidance for the full year 2024. At approximately $3.6 billion, we now expect our adjusted revenue to be at the lower end of the range provided on our previous conference call in mid-February. This includes approximately $215 million of additional services and reimbursable expenses. This change in expectation is due mainly to three factors. There were aforementioned delays in contract commencement on the Transocean Endurance, Deepwater Orion, and KG1, the downtime on the Deepwater Titan, and the longer-than-expected world programs on the Deepwater Atlas and KG2, which delayed the rig's transitions to higher day rate contracts in the second quarter.

Speaker Change: Now I'll provide an updated guidance for the full year 2024.

Speaker Change: And approximately $3 $6 billion, we now expect adjusted revenue to be at the low end of the range provided in our previous conference call in mid <unk>.

Speaker Change: February.

Speaker Change: This includes approximately $215 million of additional services and Reimbursable expenses.

Speaker Change: This change in expectations is due mainly to three factors the four banks and delays in contract commencement.

Speaker Change: Transocean endurance people to Iran. Could you won the downtime on the depot detection and then longer than expected well programs in the deepwater Atlas and K G tube, which delays the rich transitions to higher day rate contracts in the second quarter.

Mark May: We now expect our full-year O&M expense to be between $2.2 and $2.3 billion. The higher end of this range is primarily the result of anticipated higher reimbursable expenses. Finally, we expect our G&A costs to be around $210 million.

Speaker Change: We now expect our full year O&M expense to be between two two and $2 3 billion.

Speaker Change: At the end of this range is primarily the result of anticipated higher Reimbursable expenses.

Speaker Change: Finally, we anticipate G&A costs to be around $210 million.

Speaker Change: Our projected liquidity at the end of two.

Mark May: Our projected liquidity at the end of year 2024 is approximately $1.4 billion, reflecting our revenue and cost guidance and including the $575 million capacity of our newly amended and extended and undrawn revolving credit facility, and is inclusive of restricted cash of approximately $395 million, most of which is reserved for debt service. This liquidity forecast includes 2024 capital expectations of $231 million, of which approximately $134 million is related to the Deepwater Killer and approximately $97 million for Sustaining and Contract Preparation Care Packs.

Speaker Change: 2024 is approximately $1 $4 billion, reflecting a revenue and cost guidance and including the $575 million of capacity of our newly amended and extended an undrawn revolving credit facility.

Speaker Change: And this is inclusive of restricted cash of approximately.

Speaker Change: $395 million.

Speaker Change: Most of which is reserved for that service.

Speaker Change: Yeah.

Speaker Change: Yes.

Speaker Change: This liquidity forecast includes 'twenty 'twenty, four capex expectations of $231 million.

Speaker Change: Of which approximately $134 million.

Speaker Change: Related to the deep water cooler and appropriately approximately $97 million for sustaining and contract preparation capex.

Mark May: As I sign off for the last time, I'd like to reiterate my gratitude to the entire Transocean organization that Jeremy expressed in his remarks. This team is second to none, and I'm immensely proud to have worked with each one of you for the past nine years. I am confident in our ability to deliver value for our shareholders and look forward to seeing the progress continue as Thad Vader assumes the world. CFO.

Speaker Change: Is that a sign off for the last time I'd like to reiterate my gratitude to the entire transformation program.

Speaker Change: Jeremy expressed in his remarks.

Speaker Change: This team is second to none.

Speaker Change: I am immensely proud to have worked with each one they view the past nine years.

Speaker Change: I am confident in our ability to deliver value for our shareholders and look forward to seeing the progress continue.

Speaker Change: <unk> assumes the role.

Mark May: We've worked alongside Thad for almost ten years, and it is clear he is a strategic thinker who brings financial discipline, experience, and expertise, along with a deep understanding of the offshore drilling market. These attributes should ensure a seamless transition both internally and externally and continue to serve Transocean and its shareholders well. Congratulations again, Fred.

Jeremy: As CFO.

Speaker Change: We've worked alongside said for almost a decade. It is clear he is a strategic thinker, who brings financial discipline experience and expertise along with a deep understanding of the offshore drilling market.

Speaker Change: These attributes should ensure a seamless transition both internally and externally and continued to serve transocean and its shareholders well.

Speaker Change: Congratulations against that.

Alison Johnson: This concludes our prepared comments. I'll now turn the call back over to Alison to introduce questions and answers. Thanks, Mark. Shelby, we're now ready to take questions. And as a reminder to the participants, please limit yourself to one initial question and one follow-up question. At this time, if you would like to ask a question, please press the star and 1 on your telephone keypad. You may remove yourself from the queue at any time by pressing star 2.

Speaker Change: This concludes my prepared comments.

Speaker Change: I'll now turn the call back over to Alison to introduce Christians in answers.

Alison Johnson: Thanks, Mark Shelby, we're now ready to take questions and as a reminder to the participants please limit yourself to one initial question and one follow up question.

Alison Johnson: At this time, if you would like to ask a question. Please press the star and one on your telephone keypad you may remove yourself from the queue at any time by pressing star to once again that is star one to ask a question.

Operator: Once again, that is Star and 1 to ask a question. We will pause for a moment to allow questions to queue, and we'll take our first question from Kurt Hallead with Benchmark. Your line is open. Hey, good morning, everybody.

Alison Johnson: We will pause for a moment to allow questions to queue.

Alison Johnson: And we'll take our first question from her Hallett with benchmark. Your line is open.

Kurt Kevin Hallead: Hey, good morning, everybody.

Kurt Kevin Hallead: Morning, Kurt. Hey Mark, congrats again and good luck on what's next. Thanks, Kurt. So, yes, I guess it just kind of, you know, it's always kind of fits and starts, right, in the context of getting rigs ready to work and getting them ready for contract. And I think that's the pros and cons of this business, right? So, as you guys kind of risk assess, you know, startups and timing and everything else, could you give us some insights as to how you guys go through the process?

Kurt Kevin Hallead: Morning, Kurt.

Kurt Kevin Hallead: Hey, Mark Congrats again.

Kurt Kevin Hallead: Look.

Kurt Kevin Hallead: And what's not.

Mark: Thanks, Chris.

Kurt Kevin Hallead: Yes, I guess I just kind of.

Kurt Kevin Hallead: I always kind of fitful starts right in the context of getting rigs ready to work and get on getting them ready for contracting.

Kurt Kevin Hallead: I think.

Kurt Kevin Hallead: And Todd that it's been right. So as you guys kind of risk et cetera.

Speaker Change: <unk> startups, and and timing and everything else could you give us some insight how are you.

Kurt Kevin Hallead: Guys go through the process.

Operator: You know, so that we can kind of get on board with you guys, kind of think about the dynamics ourselves, looking from the outside in. Yeah, Kurt, I wouldn't really say it's fits and starts, you know; we go through a multi-phase process. We called them stage gates, whereby we evaluate the project, we build out a timeline, we build out a team, we start ordering all the materials for that, and then we execute.

Todd: So that we can kind of kind of get on board with you guys and kind of think about the.

Todd: Hey dynamics ourselves looking from the outside in.

Speaker Change: Yes, I wouldn't really say its fits and starts.

Speaker Change: Go through a multi phase process.

Speaker Change: We call them.

Todd: Stay tuned whereby we evaluate the project we built out a timeline we brought on a team we start ordering all the materials for that and then we execute but things happen because we weren't sure when you're trying to assess our rigs.

Operator: But things happen because when you try and assess a rig's ability, you're doing it rather blind. Once you start getting onto the rig and you start testing systems and going into some of the hatches and holes and whatnot on the rig, this is all technical terminology, obviously; you find things, and that causes you to expand your scope. In our case, especially, going to Brazil was interesting this time. We've taken rigs into Brazil many times over many years. But for the first time ever, we had an interpretation of customs, which dragged out for six weeks and delayed us getting into the country.

Todd: <unk> you doing it rather blind once you start getting onto the rig and you start testing systems in covering some of the.

Todd: Hatches and hold and whatnot on the rig.

Todd: Technical terms obviously.

Todd: How do you find things and that causes you to expand your scope.

Kurt Kevin Hallead: Casey.

Kurt Kevin Hallead: Especially.

Kurt Kevin Hallead: Turning to Brazil was interesting this time, we've taken rigs into Brazil, many times over many years, but for the first time ever we heard a interpretation of customs, which dragged out for six weeks and that's getting into a country that has now been resolved and behind us so going forward we.

Operator: That has now been resolved and behind us. So going forward, we expect to be able to get rigs in very comfortably. But I don't want you to think that contract prep is an ad hoc, off-the-cuff type thing. It is very well planned and, most times, very well executed.

Kurt Kevin Hallead: <unk> pretty comfortably, but I don't want you to think that contract prep is an ad hoc.

Kurt Kevin Hallead: Off the cuff type thing it is very well planned and most times very well executed. The other thing I'd add is we've had a lot of rig moves hero.

Operator: The other thing I'd add is we've had a lot of rig moves here, and most of those are behind us where we are going on long-term contracts in these jurisdictions. So the cost that you've seen us accumulate over the course of the last couple of years with project costs and rig moves and customer acceptance and things like that will largely be behind us, and so I think that's going to lead to better financial results as we get into 2025 and beyond. Yeah, Kurt, it's Keelan here. Maybe I would just add a little bit more color to that.

Kurt Kevin Hallead: And most of those are getting behind us, where we're going on long term contracts in these jurisdictions.

Kurt Kevin Hallead: So the cost that you've seen us accumulate over the course of the last couple of years with project costs and rig moves and customer acceptance and things like that will largely be behind us and so I think that can lead to better financial results as we head into 2025 and beyond.

Kurt Kevin Hallead: Yeah, Kurt scaling era, and maybe just add a little bit more color to that the one aspect is obviously the risk associated the risk management associated with.

Keelan I. Adamson: The one aspect is obviously the risk associated, the risk management associated with moving a rig, preparing a rig for a contract, getting it through the regulatory and customer acceptance processes, which do change and do migrate over time, but probably more importantly, ensuring that that rig works very reliably and efficiently and safely when it comes out of that process. What I am very pleased about is that the rigs that have gone through this, and we've done many of these, and they've been very successful. KG2 is a fine example of a rig that does it quite a lot.

Kurt: Moving a rig preparing a rig for a contract.

Kurt: Getting it through the regulatory and customer acceptance processes, which do change and do migrate over time.

Kurt: Probably more importantly, ensuring that that rig works very reliably and efficiently and safely when it comes out of that process and what I am very pleased about is that the rigs that have gone through this and we've done many of these in and they've been very successful.

Kurt: <unk> is a fine example of a rig does it quite a lot and in this particular case in Brazil. She is working at one of the top performing rigs in Petrobras just after a few months so I think.

Keelan I. Adamson: In this particular case in Brazil, she's working on one of the top performing rigs in Petrobras just after a few months. To support Mark's comments, we have a very robust project planning process for these events. The delays are somewhat not related to the discovery of new scope but actually some really strange events that Mark alluded to in importation. For instance, in India, there was a local fisherman strike in the harbor that we were moored in, and we were blocked from getting any logistics to the rig for a couple of weeks.

Kurt: It's Mark Mark's comments, we have a very robust project planning process for these events.

Kurt: The delays are somewhat not related to the discovery of new scope, but actually some really strange events that mark alluded to an implementation, but for instance in India. There was a local fishermen strike outside of the harbor that we were more of it in and we were blocked from getting any logistics to the rig for a couple of weeks. So there are some things clearly are <unk>.

Keelan I. Adamson: Some things clearly are difficult to manage, and you have to understand that there's always a risk with them. Yeah, I appreciate all that color. It's kind of why I ask, because I know it's never as straightforward as it may seem on a piece of paper, right?

Kurt: To manage and you have to understand that there is always risk with them.

Speaker Change: Yeah, No I appreciate all that color.

Speaker Change: And it's kind of why I asked because I know, it's never as straightforward as it may seem on a piece of paper right.

Kurt Kevin Hallead: Okay, so, look, you've got your contract durations extending, and your day rates continue to grind higher. I guess my question really relates back to the overall market outlook. What do you think the prospects are to potentially get some, if not all, of your idle rigs back on contract between now and 2030, given the dynamics you put forward for Brazil and Africa, for example? Yeah, that's a really interesting question.

Speaker Change: Okay. So it looks like you got your contract durations extending.

Speaker Change: Day rates continue to grind higher.

Speaker Change: I guess my question really relates back to.

Speaker Change: The overall market outlook.

Speaker Change: What do you think the prospects are to potentially get some if not all of your your idle rigs back back on contract.

Speaker Change: Between now and 2030, given given the dynamics you put forward for for Brazil, and Africa for example.

Speaker Change: Yes, that's a really interesting question.

Operator: You know, as we go through what's happening around the world, we can say for the first time that every region that we're currently active in is going to have a call on rigs. So we're looking at, I think, actually, bar none, every single region has more rigs than they have today. So at the moment, what's happening is there's a run on the active fleet.

Speaker Change: As we go through whats happening around the world.

Speaker Change: We can say for the first time that.

Speaker Change: Every region that we're currently active in.

Speaker Change: Going to have a call on rigs so where we're looking at I think actually Barr Nunn every single region.

Speaker Change: For rigs and they have to date so at the moment. What's happening is there is there is a run on the active fleet. So so basically.

Operator: So basically, as the guys alluded to in the prepared comments, there's a significant number of direct negotiations outside the tenders that are essentially trying to secure the rigs that are already active. So I think from that point of view, my view is that 2024 is going to see pretty much the entire active fleet sold out for two to three years. And as we get towards the end of 24, that's when the call on the stacked fleet is going to happen.

Speaker Change: As the guys had alluded to in the prepared comments there are significant number of delek negotiations outside of tenders that are essentially trying to secure the rigs that are already active.

Speaker Change: So I think from that point of view.

Speaker Change: My view is that 2024 is going to see pretty much the entire active fleet sold out for two to three years going forward.

Speaker Change: As we get towards the end of 'twenty four that's when the call on the stacked fleet is going to happen.

Operator: And of course, we've reiterated this many times that while there are active rigs available, we will not be backtracks into that mix. We'll bide our time and wait until the economics are right for that. Certainly, there's no rush to do it at the moment, but I think we've got a pretty good shot at putting several of those rigs back to work, certainly before the end of the decade. All right. That's awesome. I appreciate the color.

Speaker Change: Of course, we've reiterated this many times that.

Speaker Change: While there are active rigs available we will not be back.

Speaker Change: <unk> into that mix.

Speaker Change: We'll we'll bide, our time and wait until the.

Speaker Change: The economics are right for that and certainly there is no rush to do it at the moment.

Speaker Change: But I think we've got a pretty good shot at putting several of those rigs back to work certainly before the end of the decade.

Speaker Change: Alright, that's awesome I appreciate the color thanks, guys.

Speaker Change: Yeah.

Speaker Change: And we'll take our next question from Eddie Kim with Barclays. Your line is open.

Kurt Kevin Hallead: And we'll take our next question from Eddie Kim with Barclays. Your line is open. Hi, good morning.

Eddie Kim: Hi, Good morning, just wanted to start off with the Petrobras contracts last quarter. You said you expected those to be awarded in the second quarter. This year. It looks like that timing has been pushed out a little bit to <unk> at least.

Eddie Kim: Just wanted to start off with the Petrobras contracts. Last quarter, you said you expected those to be awarded in the second quarter this year. It looks like that timing's been pushed out a little bit to 3Q at least.

Operator: Could you just talk about what's driving that delay? And is there a risk that these contract announcements could get pushed out even further toward the end of the year? Yeah, I think this is actually just pretty standard operating procedure, you know, with Petrobras pushing out by a couple of months. That's very typical. And actually, we believe that the rigs that are going to win those tenders are either already active rigs in the country, or they're going to have to pull new rigs in.

Eddie Kim: Could you just talk about what's driving that delay and is there a risk that these contract announcements could get pushed out even further towards the end of the tour.

Eddie Kim: Toward the end of the year.

Speaker Change: Yeah I think this is actually just pretty standard operating procedure and with the with Petrobras seven pushing out by a couple of months that's atypical.

Speaker Change: We believe that the rigs that are going to win those tenders.

Speaker Change: Are either already active rigs in country.

Speaker Change: Are there going to have to pull new rigs and so it's possible that that pushes out a little further but.

Operator: So it's possible that pushes it out a little further, but certainly the awards should be made in 24. But I think it's for rigs that, you know, don't come off contract for some time yet. There's no real risk to that.

Speaker Change: Certainly the awards should be made in 'twenty four.

Speaker Change: But I think it's for rigs that don't come off contract for some time yet.

Speaker Change: There's no real risk to that.

Operator: Got it. And then just a question on your two idle rigs, the Discover Inspiration and the DD3. I believe the Inspiration recently mobilized to Las Palmas. Is that rig effectively cold stack now, or is that still idle? Just any comment on those two rigs and and if you could comment on any kind of work prospects or opportunities for those. Yeah Eddie, it's Keelan again. The inspiration essentially was repositioned into the Las Palmas area. She's not stacked; she's idle.

Speaker Change: Okay got it and then just a question on your <unk>.

Speaker Change: Two idle rigs discoverer inspiration and the <unk> III.

Speaker Change: Believe the exploration recently mobilized to Las Palmas.

Speaker Change: Is that rig effectively cold stack now are or is that still idle just.

Speaker Change: Any color on those two rigs in and.

Speaker Change: And if you could comment on kind of work prospects or opportunities for those rigs.

Speaker Change: Yes.

Speaker Change: And again, the inspiration essentially repositioned into the into the left Thomas area.

Speaker Change: She's not stacked she's idle.

Keelan I. Adamson: We're obviously putting her into plenty of opportunities, particularly in the Africa and Asia regions. The DD3 is idle in Aruba, and I'm waiting for its next opportunity. But I'll let Roddie maybe add some color to the other opportunities.

Speaker Change: We're obviously getting around to plenty of opportunities, particularly.

Speaker Change: In the Africa and Asia regions.

Speaker Change: The DD three is idle in Aruba.

Roddie Mackenzie: And waiting for its next opportunity, but I'll, let roddie, maybe add some color to the other opportunities yeah. So we do have them.

Roddie Mackenzie: Yeah, so we do have several things there, but we're looking to make sure that we get the right opportunity to put the rigs to work long term rather than moving them to work short term. So at the moment, we're quite comfortable keeping them where they are until they get the right opportunity. Got it, got it.

Roddie Mackenzie: Several things are there, but we're looking to make sure that we get the right opportunity to put the rigs to work long term rather than moving them to short term to work. So at the moment, we're quite comfortable keeping them, where they are until they get the right opportunity.

Speaker Change: Got it got it. Thank you if I could just squeeze one last one in just on the diluted share count this quarter. It looked like a fairly material increase to about 955 million shares.

Eddie Kim: Thank you. If I could just squeeze one last one in, just on the diluted share count this quarter, it looked like a fairly material increase to about 955 million shares. Could you just comment on what drove that increase? Yeah, Eddie, we can take that offline and speak to you, Alison, and she can walk you through it.

Speaker Change: Could you just comment on what drove that increase this quarter.

Speaker Change: Yes, we can take that offline and speak to our listeners who can walk you through it it's a pretty lengthy response.

Operator: It's a pretty lengthy response. Okay. Thank you all for the call. And we'll take our next question from Doug Becker with Capital One. Your line is open.

Speaker Change: Okay.

Speaker Change: Great. Thank you all for the color I'll turn it back.

Speaker Change: And we'll take our next question from Doug Becker with capital one your line is open.

Douglas Lee Becker: Thank you. Jeremy, you mentioned Atlas getting the 15k work at 505,000 a day. When do you expect that rig to transition to the higher day rate? And how do you view the prospects for 20k work potentially next year? Hey Doug, good to hear from you. I'm going to hand that to Roddie because he is neck deep in this conversation right now.

Doug Becker: Thank you Jeremy you mentioned to Atlas.

Doug Becker: The 15 K work at 505000, a day when do you expect that rig to transition to the higher day rate and how do you view the prospects for <unk>.

Doug Becker: <unk> potentially next year.

Doug Becker: Hey, Doug good to hear from you I'm going to hand that to Rob because he is net deepened this conversation right now.

Operator: Yeah, so we've got a lot of interest in that, Rick. And yeah, so this was a prospect that we had had with the current operator for some time. So it looks like a really good rate, but I have to say it was set a while ago when we got into negotiations.

Rob: So we've got a lot of interest in that rig.

Rob: Yeah. So this was a.

Rob: Prospect that we had had with the current operator for some time, so it looks like a really good rate.

Rob: But I have to say it was set a while ago when we when we go into negotiations on that.

Roddie Mackenzie: So the transition for her to go to the 20K is probably going to take place in the next contract. So basically, we finish out the one that we're currently on in the Shenandoah development, and then we go into this additional kind of a 240 to 360 day program. And I think after that, we're transitioning into much more attractive work, so that's good. And, you know, that's basically the second rig in the Gulf that's got above a high 500 rate.

Rob: So the transition for her to go to the 'twenty case, probably going to take place.

Rob: And the next contracts. So basically we we finished the one that we're currently on that Shenandoah development and then we go into this additional kind of a 240 to 360 day program and I think after that.

Rob: Transitioning into.

Rob: The much more attractive work.

Speaker Change: So thats good.

Speaker Change: That's basically the second rig in the Gulf, That's that's got above a high.

Speaker Change: Sorry.

Roddie Mackenzie: So with the Asgard and the Atlas now contracted above 500, we actually hear that many of our competitors are at the same level or even higher, and we expect within the next few months that there will be four to five additional awards in the Gulf of Mexico above 500k a day. It's definitely encouraging. Maybe just, could you expand on the BOP issues with the Titan and really kind of think about it in the context of, is there a similar risk with the Atlas?

Speaker Change: 500, right, so with the Asgard and the Atlas no.

Speaker Change: <unk> contracted at about 500.

Rob: We actually hear that many of our competitors are at the same level or even higher and we expect within the next few months that there will be four to five additional awards in the Gulf of Mexico above 500 KD.

Speaker Change: It's definitely encouraging.

Speaker Change: Maybe just could.

Rob: Could you expand on the BOP issues with the Titan and really kind of thinking about in the context of is there a similar risks with the Atlas.

Roddie Mackenzie: Yeah, so the BOP, obviously, as I said in the call, the Titans BOP, the first BOP, is deployed, and the rig has been operating fully since mid-March. The issue we found was with a particular component on the second BOP.

Speaker Change: Yeah. So.

Speaker Change: Obviously as I said in the call.

Speaker Change: The Titans DLP is the first PLP is deployed and the rig is operating fully since mid March.

Speaker Change: The issue. We found was it was to a particular component on the second DLP clearly that wasn't an issue on the first PLP.

Roddie Mackenzie: Clearly, that wasn't an issue on the first BOP, and so we've taken those components off the stack. We've brought them back to town to work with our OEM provider to disassemble and inspect them, and we should learn more in the next couple of weeks as to what that particular issue is. I have no, based on what we've seen and the operation of the other stacks, we have no concerns as to whether that's anything that would spread to the other stacks. It's simply a component reliability issue that we'll address and return to the rig. And Mark, congratulations. Thanks, Kurt.

Speaker Change: And so we've taken those components off the stack, we brought them back to town to to work with our OEM provider to disassemble and inspect in and we should learn more in the next couple of weeks as to what that particular issue is I have no based on what we have seen in the operation of the other stack we have no.

Rob: No concerns as to whether that's anything that would spread to the other stacks it's simply.

Rob: A component reliability issue that will address.

Rob: Return returned to the rig.

Speaker Change: Sounds good and Mark congratulations.

Mark: Thanks, Doug.

Douglas Lee Becker: And we'll take our next question from Fredrik Stena with Clarkson Securities. Your line is open. Hey, Tim.

Mark: And well take our next question from Fotis <unk> with Clarksons <unk> Securities. Your line is open.

Fotis: Hey, Tim Thanks.

Fredrik Stene: Thanks for taking my question. We talked a bit about the market here, but I was also on the back of those discussions already wanting to hear what you're thinking about 7Gs vs. 6Gs and how the different types of regulations are being approached in the market.

Fotis: Thanks for taking my question.

Mark: Okay.

Fotis: We've talked a bit about the.

Fotis: The market here and I was also on the back of those discussions already one thing to hear what you're thinking about <unk>.

Fotis: <unk> versus <unk> and how the different types of regs are.

Fotis: Being approach or in the markets you talked about repositioning that inspiration it talks about some extra work potentially for the Invictus et cetera, but also how you're managing your own.

Operator: You talked about repositioning the inspiration, you talked about some extra work potentially for the indictors, etc., but also how you're managing your own... fleet within those two sub-segments, keeping the Atlas and the Titan kind of away from that discussion for now. Are there any large discrepancies or bifurcations in terms of how rates are bid, or is it all about having one rig at the right place at the right time that will still yield good rates for 6G rigs in the future? Yeah, so I think you will see.

Fotis: Fleet within those two sub segments, keeping the athletes and the tightened kind of away from that discussion for now.

Fotis: Are there any large discrepancy or bifurcation in terms of how rates are bad there or is it all about having.

Fotis: One rig at the right place at the right time that will still yield good rates all support 60 rigs in the future.

Speaker Change: Yeah. So I think you see.

Roddie Mackenzie: So several of our 6th Gen rigs have got very attractive rates, just in the right markets. So if the market requires a certain specification and the 6th Gen rigs qualify for that, they do perform very well. At the moment, there's a lot of activity around the high specification rigs, so specifically the Gulf of Mexico and some places in West Africa. That's where you're seeing the rates really accelerate because the availability of these high specification units is becoming more and more scarce.

Fotis: So several of our sixth Gen rigs have got very attractive rates just in the right markets. So as the market requires a certain specification and the sixth Gen rigs qualify for that then.

Fotis: They do achieve very well at the moment, there's a lot of activity around the high specification rigs, so specifically Gulf of Mexico, and some places in West Africa.

Fotis: That's where you're seeing the rates really accelerate because of the availability of these high specification units is becoming more and more scarce.

Roddie Mackenzie: And the net effect of that is essentially we're securing very solid rates on the high-spec 7th Gen units, but that also trickles down to the 6th Gens when they end up being the only ones that are left. So I think you're going to see a pretty positive outlook for those rigs in the future. But at the moment, we're really seeing a lot of activity from operators around securing the highest specification assets they can get their hands on.

Fotis: And the net effect of that is essentially.

Fotis: We're securing very solid rates on the on the high specification seventh Gen units, but that also trickles down to the sixth gens when they end up being the only ones that are left so I think youre going to see a pretty positive outlook for those rigs in the future, but at the moment, where we're really seeing a lot of activity from the operators around securing the highest specification assets.

Roddie Mackenzie: Again, I think if you look back over the last couple of years, our approach to the market and our strategy around day rates has proven effective. We looked at our 1,400 ton rigs, the highest hook load rigs in the market, other than the Atlas and the Titan, and started setting day rates with those rigs.

Fotis: Can get their hands on.

Fotis: And I think you'd be looked back over the last couple of years, our approach to the market and our strategy around day rates have proven effective we looked at our 510 rigs the highest hook load Briggs and the market other than the Atlas and the tightened and starting to set in day rates with those rigs and it has lifted all the 250 ton rates, where now our competitors are also pushing for $500000 a day and then some and then.

Roddie Mackenzie: And it's lifted all the 1,250 ton rigs, where now our competitors are also pushing for $500,000 a day and then some. And then you'll definitely see a step change once we move to the new 20K contracts on the Atlas and the Titan. That's very helpful.

Fotis: Youll definitely see.

Fotis: A step change once we move to the 20 K, the new 20 K contracts.

Fotis: On the Atlas and Titan.

Speaker Change: That's very helpful.

Fredrik Stene: Also, you mentioned quite a lot of long-term opportunities that you foresee will materialize now over the next couple of months or quarters. There have been, I think, different approaches with different owners as to how we should price long-term work. Some will accept a lower rate just because they would like the visibility of a longer-term contract, while others, maybe yourself being the best example of that, have been, you know, very firm on rate expectation, also for the long term. Do you?

Fotis: Also you mentioned quite a local longterm opportunity is that foreseeable will materialize over the next couple of months or quarters.

Fotis: There has been I think different approaches with different owners as to how we should price long term work some will be except a lower rate just because they would like the visibility of a longer term contract while others.

Fotis: Maybe it yourself being the best example of that has been.

Speaker Change #100: Very fair.

Speaker Change #100: Firm on rate expectations also for long term terminal.

Roddie Mackenzie: Should the market expect a wide spread in the awards that we're going to see going forward? And I guess my question relates to, should the market expect to be disappointed by some of these DERIT points? Or should we see them all pulling in the same direction or being 450 plus in almost all awards? Yeah, I would say that I think you've seen one or two anomalies that may have been disappointing for the market, but those are, you know, at very healthy rates. They might not be quite fives, but they'll be pretty close.

Speaker Change #100: You expect.

Speaker Change #100: A wide spreads in the awards that we're going to see.

Speaker Change #100: Going forward and I guess my question relates to should the market expect to be.

Speaker Change #100: Disappointed by some of you there.

Speaker Change #100: Points or should we see them all pulling in the same direction are being 450, plus in almost all awards.

Speaker Change #101: Yeah, I would say that I think you've seen one or two anomalies that may have been disappointing market, but those are.

Speaker Change #101: Individual companies with motivation there are definitely not aligned with auto and so.

Speaker Change #101: For the for the majority of the long term drillers, I think youre clearly going to see rates well above $4 50, even for tower, Mark I think you're going to see that theres, maybe a small discount for telemark, but we're talking about.

Roddie Mackenzie: Certainly, some long-term stuff will be awarded above that $500 marker. But overall, the way we view it, as Jeremy had said, we've been very purposeful about which rigs get placed on which opportunities. So needless to say, for our top-spec assets, we'll ensure that they are on very positive contracts with strategic importance to us as well, not just dollars. All right. Thanks for all that, Cole and Mark. Congratulations. And thank you. I think the transaction now in April was... final miles. Thanks, Fredrik.

Speaker Change #101: 10, 20, K, a day and we're not talking about.

Speaker Change #101: 10 or 15%.

Speaker Change #101: So I think youll see plenty of long term work awarded but it's going to be at very healthy rates.

Speaker Change #101: They might not be quite fives, but there'll be pretty close certainly.

Speaker Change #101: Some some long term stuff will be awarded.

Fotis: Above that 500, a marker but overall.

Fotis: The way we view it as Jeremy said, we've been very purposeful about which rigs get placed on which opportunities. So needless to say for our top spec assets. We will ensure that they are on a very positive contracts with.

Fotis: Strategic importance to us as well not just not just dollars.

Speaker Change: Alright, thanks for all that color on the March congratulations and.

Speaker Change: Thank you I think the transaction now.

Speaker Change: In April was.

Speaker Change #102: So good.

Speaker Change #102: Final milestone.

Speaker Change #112: Thanks Richard.

Fredrik Stene: Thank you. And our next question comes from Arun Jarram with JP Morgan. Your line is open. Yeah, good morning.

Speaker Change #104: Thank you.

Speaker Change #103: Our next question comes from a range of wrong with J P. Morgan Your line is open.

Speaker Change #107: Yes. Good morning, I was wondering if you could comment on just the 20 K PLP.

Arun Jayaram: I was wondering if you could comment on just the 20k BOP market, you know, overall. One of your peers highlighted how the paleogene in the Gulf of Mexico is one of the fastest, you know, growing plays, you know, kind of globally, and I'm wondering if you could just maybe talk about what you're seeing there. You know, how many rigs have those BOP capabilities and what the future prospects there are. Yeah, sure.

Speaker Change #105: The market overall.

Speaker Change: One of your peers highlighted how the Paleogene and the Gulf of Mexico.

Speaker Change #108: As one of the fastest.

Speaker Change #106: Growing plays.

Speaker Change #106: Kind of globally and I'm wondering if you could just maybe talk about what youre seeing there.

Speaker Change #106: Many rigs have that debt.

Speaker Change #106: <unk> capabilities and what's the future prospects there.

Speaker Change #106: Yeah.

Roddie Mackenzie: You've basically got four, possibly five operators that are active in or going to be active in the 20k market, as we would describe it. So there's plenty of work there to occupy the rigs that we have. But going forward, we think there's work to keep everything busy at the moment. We're not necessarily saying there's a need for adding capacity in that market at the moment, but we'll see how things shake out. There are a lot of operators also believe that that is a trend that will continue in the future. So as we go, you know, four, five, six years in the future, more and more of those frontiers will require higher pressures.

Speaker Change #106: Yes, sure you've basically got four possibly five operators that are in.

Speaker Change #106: Active are going to be active in the 20 K market as we would describe it.

Speaker Change #106: So there is plenty of work there to occupy the rigs that we have.

Speaker Change #106: But going forward.

Speaker Change: We think there's there's work to keep everything busy at the moment.

Speaker Change: Not necessarily saying, there's a need for adding capacity in that market at the moment, but we'll see how things shake out. There's a lot of operators also believes that that is a trend that will continue in the future. So as we go.

Speaker Change #111: Yeah, 456 years in the future that more and more of those.

Speaker Change #111: Tiers will require the higher pressures, but for the moment I think where we're in a very good position, we may be slightly under supplied for that demand at the moment, but.

Roddie Mackenzie: But for the moment, I think we're in a very good position. We may be slightly undersupplied for that demand at the moment, but certainly, I think the operators see the value in not only the equipment but the expertise and how to do it. So we're well placed for both of our rigs at the moment. Yeah. And Aaron, I think your other question was how many are capable of 20k. There are only two rigs in the world with 20k BOP. They're the Titan and the Atlas.

Speaker Change #111: Certainly I think the operators see the value in the not only the equipment, but the expertise in how to do it. So we're well placed for both of our rigs at the moment, Yes, Aaron I think your other.

Speaker Change: The question was how many are capable of 20 K. There are only two rigs in the world with 20 <unk>.

Speaker Change: Tightening the Atlas so we're not we're in a very good position there.

Roddie Mackenzie: So we're in a very good position there. It's a nice niche. You know, broadly, could you talk about, you know, West Africa? Obviously, Namibia is an area that the market's pretty excited about. But could you talk about, you know, the kind of demand trends you're seeing out of West Africa? I know in Halliburton's call, they mentioned now, in 2025, you could see, you know, more deepwater activity there next year. Yeah, absolutely.

Speaker Change: It's a nice niche.

Speaker Change: You know broadly could you talk about West Africa, obviously, the maybe is an area that the market is pretty excited about but.

Speaker Change: Could you talk about you know kind of demand trends, you're seeing out of West Africa I know in Halliburton's call. They mentioned now in 2025, you could see more deepwater activity there next year.

Speaker Change: Yeah, absolutely. So mckinsey as recent report was kind of describing what's going on in our upstream investments expected in west.

Roddie Mackenzie: So Mackenzie's recent report was kind of describing what's going on in upstream investments expected in West Africa. And if you take specifically the deep water sector, they expect to see an increase of 80% in spending between 2023 and 2027. So, you know, as we go through our chart of available opportunities in West Africa, that is the one piece of the golden triangle that's finally fallen. You know, North America was doing great, the Gulf of Mexico, and of course, South America, as we've lamented, just how many rigs have gone in there and how many more will. But this last quarter, we've really seen a lot of positive movement in West Africa. And it's not just one or two countries; it's across several different areas.

Speaker Change: West Africa, and if you take specifically the deepwater sector. They expect to see an increase of 80% in spending between 2023 and 2027 so.

Speaker Change: You know as we go through our chart of available.

Speaker Change: Opportunities in West Africa that is the one piece of the Golden Triangle, That's finally popped.

Speaker Change: North America was doing great Gulf of Mexico.

Speaker Change: Of course, South America is we've lamented just how many rigs have gone in there and how many more well, but this last quarter, we've really seen a lot of positive movement in West Africa, and it's not just one or two countries it's across several different areas. So.

Roddie Mackenzie: So I won't go through all the details on that, but certainly the traditional players, Nigeria's back, you know, with four tenders, Angola's contracting activity has been very solid, and there's still a couple more to be awarded. And then, you know, as we go through Mozambique and Ghana and what have you, there's still plenty more.

Speaker Change: I'll go through all the details on that but certainly the traditional players Nigeria's back with four tenders angola's.

Speaker Change: Contracting activity has been very solid and there's still a couple more to be awarded.

Speaker Change: And then as we go through Mozambique in Ghana, and what have you there's still plenty more.

Speaker Change: Scope to go there. So we do actually think that all of the fleet is currently in West Africa will either be renewed extended.

Arun Jayaram: So we do actually think that all the fleet that's currently in West Africa will either be renewed, extended, or put on different programs, plus we're going to need two to three additional rigs in the next couple of years. So I think West Africa is looking very positive at the moment. Thank you. And we'll take our last question from David Smith with Pickering Energy Partners. Your line is open. Good morning. If I could have a date of...

Speaker Change: Are put onto different programs, plus we're going to need two to three additional rigs in the next couple of years. So I think West Africa is looking very positive at the moment.

Speaker Change #113: Thank you.

Speaker Change #113: And we'll take our last question from David Smith, with Pickering Energy Partners. Your line is open.

David Christopher Smith: Hey, good morning, and thank you.

David Christopher Smith: I go to the data, forward availability for the deepwater fleet, and just see what has been contracted since. It's a much higher percentage of drill ship availability that's been contracted versus the benign deepwater semis. And I was just hoping to get your thoughts on, or what...about the relative interest in drill ships versus benign semis and maybe, you know, how. I'll try and answer that one, David, and then Roddie can kick in.

David Christopher Smith: If I could have a data from it.

David Christopher Smith: If I go to the data from a year ago and look at forward availability for the deepwater fleet, Alright, and just see what has been contracted sand.

David Christopher Smith: It's a much higher percentage of drillship availability, that's been contracted versus.

David Christopher Smith: Benign deepwater semis.

David Christopher Smith: And I was just hoping to get your thoughts on.

David Christopher Smith: Or what you're hearing from customers about the relative interest and drillships versus benign.

David Christopher Smith: And then maybe how we should think about the natural pricing premium for the the average fixed gen drillship versus the average sixth Gen benign semi.

Speaker Change: Okay.

Speaker Change #109: And maybe I'll, maybe I'll try and answer that one David and then Ronnie can kick in.

David Christopher Smith: What we're seeing from our customers, and it was a traditional view that development rigs were better suited, semis were better suited to field developments, and drill ships were better suited to operational opportunities. Obviously, that has changed significantly over the last five to ten years, and you'll find drill ships are now a lot more versatile. Our customers are perfectly comfortable developing fields with them and actually enjoy the redundancy in space, size, and capability that they have as opposed to the semis.

Speaker Change #115: What we're seeing from our customers and it was a traditional view that development rigs.

Speaker Change #110: Better suited semis were better suited to field developments and drillships were better suited to appraise patient opportunities, obviously that has changed significantly over the last five years to 10 years.

Speaker Change #118: We'll find Drillships are now a lot more.

Speaker Change #118: The trial that the our customers are.

Speaker Change #110: Currently comfortable developing fields.

Speaker Change #110: With them and actually enjoy the redundancy and space and size and capability that they have as opposed to the semi as well where the families.

David Christopher Smith: Where the semis certainly have an advantage is perhaps in shallower water or an area where there's a niche and they prefer to moor up that semi but also have dynamic positioning capability in the event they need it for that particular area.

Speaker Change #110: Certainly have an advantage is perhaps in shallower water or an area, where theres a nation. They prefer to move up that semi but also have dynamically position and capability in the event they needed for that particular area.

Keelan I. Adamson: So I think that speaks to why the situation is what it is right now. I consider the drillships to be the preference from what I speak to customers about. But I'll let Roddie maybe add a little bit more color to that.

Speaker Change #110: So I think that speaks to why.

Speaker Change #110: The situation is what it is right now I consider the the drillships to be that the preference from what I speak to customers about but I'll, let roddie, maybe add a little bit more color to that yeah. No I think that's spot on Hewlett and there are certain basins that we that we still have.

Roddie Mackenzie: Yeah, no, I think that's spot on, Keelan. There are certain basins that we still have significant interest in the semis. So there's a couple of programs starting in 2025 that will require exactly what Keelan described, where you have this combination of a moored unit that can also do DP work as well. So I think it's obvious that the drillship market is extremely hot at the moment. The semi-market is good. So by comparison, it may not look as good, but it's still pretty solid. I very much appreciate the caller.

Roddie Mackenzie: With significant interest in the Sami So theres a couple of programs starting in 'twenty five.

Roddie Mackenzie: We'll require exactly as Colin described where you have this combination of a moored unit that can also do DPA work as well so.

Roddie Mackenzie: This is.

Speaker Change #119: It's obvious that the drillship market is extremely hot at the moment.

Speaker Change #110: Semi market is good so by comparison it may not look as good but it's still pretty solid.

Speaker Change #116: Very much appreciate the color and if I could add.

David Christopher Smith: And if I could add, One more, on the market outlook. I totally agree on the future call. Maybe one small partial solution is getting more out of. I wanted to ask, you know, what do you think contractors and operators can do to better manage those schedules and avoid, you know, downtime? Yeah, hey, the number one driver for that is the tightness in the market, right? So, as we kind of described, we're in this transition over the past six months and certainly the next six months where many of the fleet is moving to longer-term contracts.

Speaker Change #120: One more.

Speaker Change #120: On the market outlook totally agree on on the future call on more rigs, maybe one small parcel solution.

Speaker Change #116: Is it getting more out of the existing fleet with better calendar scheduling with some rigs, having two or three or more months between contracts I wanted to ask.

Speaker Change #116: What do you think contractors and operators can do to better manage their schedules and avoid downtime between the end of one customer's program and the startup of the next customers shop.

Speaker Change #117: Yes, Hey, the number one driver for that is the tightness in the market right. So.

Speaker Change #121: As we as we kind of described.

Speaker Change #121: We're in this transition over the over the past six months and certainly the next six months, where many of the fleet or moving to longer term contracts. So by necessity in a downturn you may have to move the rig frequently.

David Christopher Smith: So by necessity, in a downturn, you may have to move the rig frequently to keep her busy, to move from one customer to the next and go through customer acceptances and those kind of things and mobilization. But as we get to this longer-term outlook, you know, our backlog has been growing substantially now over the last couple of years. So you're going to see that transition where we're not going to be exposed to nearly as many movements of rigs. So that's going to tidy up very nicely for us. Certainly the remainder of this year and into next.

Speaker Change #117: To keep her busy to move from one customer to the next and go through customer acceptances, and those kind of things and mobilization.

Speaker Change #117: But as we get to this longer term outlook.

Speaker Change #117: Our backlog has been growing substantially over the last couple of years, so you're going to see that transition that we're not going to be exposed to nearly as many.

Speaker Change #110: <unk> of rigs so that's going to tidy up very nicely for us certainly the remainder of this year and into next year.

Roddie Mackenzie: Thank you so much. Thank you. That concludes the question and answer session. I will now turn the program back over to Alison Johnson, Director of Investor Relations, for any closing remarks. Thank you, Shelby, and thank you, everyone, for your participation on today's call. We look forward to talking with you again when we report our second quarter 2024 results. Have a good day. That concludes today's teleconference. Thank you for your participation. You may now disconnect.

Speaker Change #122: Great. Thank you so much.

Speaker Change #110: Thank you that concludes the question and answer session I will now turn the program back over to Allison Johnson director of Investor Relations for any closing remarks.

Alison Johnson: Thank you Shelby and thank you everyone for your participation on today's call and look forward to talking with you again, when we report our second quarter 2024 results have a good day.

Alison Johnson: Yeah.

Speaker Change #114: That concludes today's teleconference. Thank you for your participation you may now disconnect.