Q2 2024 Helix Energy Solutions Group Inc Earnings Call
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Thank you for standing by my name is John and I'll be your conference operator for today at this time I would like to welcome everyone to the second quarter 2024 Helix Energy Solutions Group, Inc. Earnings Conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like.
To ask a question during this fine keep you abreast of our fault, but the number one on your telephone keypad. If you would like to withdraw your question simply press Star one again, thank you all.
I would like to turn the call over to Brent Our Chief Accounting Officer. Please go ahead.
Brent: Good morning, everyone and thank you for joining us today on our conference call for our second quarter 2024 earnings release.
Brent: Spending on this call for helix today are Owen Kratz, our CEO Scotty Sparks, our C O O Eric <unk>, our CFO, Ken Neikirk, our general counsel and myself.
Speaker Change: Hopefully you've had an opportunity to review our press release and the related Slide presentation released last night. If you did not have a copy of these materials both can be accessed through the for the investor page on our website at Www Dot helix ESG Dot com.
Speaker Change: The press release can be accessed on our press release.
Speaker Change: And the slide presentation can be accessed by clicking on todays webcast icon.
Kenneth English Neikirk: We begin our prepared remarks, Ken Neikirk will make a statement regarding forward looking information.
Kenneth English Neikirk: During this conference call, we anticipate making certain projections and forward looking statements based on our current expectations and assumptions as of today.
Kenneth English Neikirk: Forward looking statements may include projections, and estimates of future events business or industry trends and business or financial results. All statements in this conference call or in the associated presentation. Other than statements of historical fact are forward looking statements and are made under the safe Harbor provisions of the private Securities Litigation Reform Act of 1995, our actual future results may.
Kenneth English Neikirk: Differ materially from our projections and forward looking statements due to a number and variety of risks uncertainties assumptions and factors, including those set forth in slide two of our presentation and our most recently filed annual report on Form 10-K, our quarterly reports on Form 10-Q, and our other filings with the SEC.
Speaker Change: Should not place undue reliance on forward looking statements and we do not undertake any duty to update any forward looking statements and disclaim any written or oral statements made by any third party regarding the subject matter of this conference call also during this call certain non-GAAP financial disclosures may be made in accordance with SEC rules. The final slides of our presentation provide reconciliations of certain non-GAAP measures to comparable.
Speaker Change: GAAP financial measures. These reconciliations along with this presentation. The earnings press release, our annual report on Form 10-K, and a replay of this broadcast will be available under the for the investors section of our website at Www Dot helix ESG Dot com.
Scotty: Please remember that information on this conference call speaks only as of today July 25, 2024, and therefore, you're advised that any time sensitive information may no longer be accurate as of any replay of this call Scotty.
Scotty: Thanks, Ken and good morning, everyone.
Scotty: Thank you for joining our call today, we hope everybody is doing well and those in Houston are recovering from the storm, we think our Houston staff for their efforts during the recent week long power outages.
Speaker Change: This morning, we will review our second quarter highlights financial performance and operations will provide a view of our current market.
Speaker Change: Our guidance for 2024.
Speaker Change: The team's offshore and onshore outperformed again safety producing another well executed quarter moving.
Speaker Change: Moving on to the presentation slides six and seven provide a high level summary of our results and key highlights for the quarter.
Speaker Change: Our second quarter results improved by significantly and year over year revenues for the quarter were $365 million with a gross profit of $75 million and net income of $32 million.
Speaker Change: 296 million in revenue 20 million gross profit and a net loss of 26 million in Q1 of 2024.
Speaker Change: And $309 million in revenue and $55 million of gross profit and net income of $7 million in Q2 2023.
Speaker Change: Adjusted EBITDA was $97 million for the quarter, and we had negative operating cash flow of $12 million, resulting in negative free cash flow was $16 million.
Speaker Change: Both results include $58 million, if the $85 million, allowing stone that paid out in cash during the quarter.
Speaker Change: Excluding the impact of the announced our operating cash flow would have been $46 million.
Speaker Change: Our free cash flow would have been $42 million in Q2.
Speaker Change: Likewise, our year to date results show significant improvements over 2023.
Speaker Change: We generated revenues of $661 million gross profits of 95 million and net income of 6 million with adjusted EBIT of $144 million.
Speaker Change: Our year to date net income increased $21 million in pre tax losses related to the redemption of our remaining 2026 converge boost during the first quarter.
Speaker Change: Our cash and liquidity remained strong with cash and cash equivalents of $275 million and liquidity of $370 million at quarter end.
Speaker Change: Highlights for the quarter include strong results in well intervention across all regions strong results in robotics, including some well executed trenching projects. The successful initial deployments of the horizon. This open water abandonment module.
Speaker Change: In Australia from operations from the Q, seven thousands and strong results from production facilities.
Speaker Change: Slide nine provides a more detailed review of our segment results and segment utilization.
Speaker Change: In the second quarter of 2024, we continue to operate globally with minimal operational disruption.
Speaker Change: Operations in Europe, Asia Pacific, Brazil Africa, the Gulf of Mexico, and the East Coast.
Speaker Change: Our overall second quarter results were inline with expectations driven by strong performance from our core well intervention market and robotics groups.
Speaker Change: Our shallow water abandonment results were impacted by I'd like to start to the season due to the weather and timing of operator spending.
Speaker Change: Moving to slide 10.
Speaker Change: Slide 10 provides further detail of our intervention segment.
Speaker Change: We achieved strong utilization in the Gulf of Mexico, The North Sea, and Europe, Brazil, and Australia performed very well with solid overall uptime efficiency of 98, 9% for the quarter.
Speaker Change: The Q 7000 performed extremely well with 100% utilization working in Australia with the successful deployment of the <unk>. The vessel is expected to continue working in Australia for the second half of this year and then commenced transit to Brazil for the share of the commissioning campaign.
Speaker Change: We had solid utilization for both <unk> units in the Gulf of Mexico.
Speaker Change: With the key for now due to compete works in Q3.
Speaker Change: Then scheduled to commence pay transit to Nigeria for ESI minimum six months well campaign due to commence in the fourth quarter.
Speaker Change: Moving to slide 11.
Speaker Change: Slide 11 provides further detail of our robotics business.
Speaker Change: Robotics had an exceptional quarter business.
Speaker Change: Business performed at high standards operating six vessels during the quarter looking between Trenching RV support site survey and current work on renewables on the oil and gas projects globally.
Speaker Change: Oh six vessels worked on renewables related projects within the quarter or vessels had strong utilization with free vessels working on renewable trenching projects since those vessels trenching in Europe, one trenching in Taiwan.
Speaker Change: Excuse me across the fleet.
Speaker Change: We anticipate will lead to robotics had another strong year.
Speaker Change: Slide 12 provides detail of our shallow water bedroom business and.
Speaker Change: In Q2, the shallow water team had a later start to the season than expected due to unexpected weather conditions in the shallow water Gulf of Mexico.
Speaker Change: As well as the general near term softening in the shelf abandonment markets. This resulted in less than expected utilization for the <unk>, the heavy lift barge and P&I spirits.
Speaker Change: Also in Q2, we recommenced work back on the larger full field decommissioning project. After the winter break with the project schedule to utilize the epic Kedron heavy lift barge along with some of the diverse vessels support vessels and PNA spreads.
Speaker Change: In summary, I haven't done the slow start to shallow water operations. We are pleased with 2024 with year over year improvements in our overall results.
Speaker Change: Business segments are positioned to benefit from the expected increase in activity during Q3 and into Q4.
Speaker Change: As we look forward to 2025, we expect to benefit from some of our larger well intervention assets coming off of legacy contracts and pricing at market rates.
Speaker Change: We believe we are well positioned to benefit from market improvements and our customers' continued belief in the value we deliver.
Speaker Change: I would like to thank our employees for their efforts and high level of execution, delivering safe and efficient operations for our customers has established us as a leader in our industry I will now turn the call over to Brendan.
Brendan: Thanks, Scotty moving to slide 14, it outlines our debt instruments and key balance sheet metrics as of June 30.
Brendan: Debt at quarter end was $328 million.
Brendan: At quarter end, we had cash of $275 million of availability under the ABL credit facility of $95 million with the resulting liquidity of $370 million, we have net debt of 44 million at quarter end.
Brendan: During Q2, we settled the earn out related to the alliance acquisition paying cash of $85 million.
Brendan: $58 million of that flowing through our operating cash flow.
Brendan: I'll now turn the call over to Erik for a discussion on our outlook for 2024 and beyond.
Erik: Thanks Brent.
Erik: On our second quarter and year to date performance.
Erik: And our expectation expectations of the strength of the offshore energy market. We are updating our guidance of certain key financial metrics from our forecast.
Erik: Revenue our revenue guidance is $1 25 to $1 4 billion.
Speaker Change: EBITDA $270 million to $330 million, we have maintained our EBITDA guidance with the improvements in our legacy business units offsetting our lower near term outlook in the shallow water segment. The concentration of our remaining variability exists during the fourth quarter with the uncertainty in the winter season.
Erik: Free cash flow, we are increasing our guidance to 90 to 125 million. This includes 58 million impact from the earn out made in early April excluding the impact of the earn out our Q2 free cash flow would have been $42 million and accordingly, our 2024 of free cash flow guidance.
Erik: The range would have been $1 48 to 183.
Erik: Benefit benefiting from working capital inflows.
Erik: We are reducing our capex forecast to $60 million to $80 million lower guidance is based on pushing approved amount into 2025.
Erik: Our spend continues to be a mix of regulatory maintenance on our vessels in our fleet renewal of robotics.
Erik: Moving to slide 17, the well enhancer completed its scheduled dry dock in Q1, and the HP one completed its dry dock in Q2, the Q seven will have a maintenance period during its mobilization in Brazil, possibly spanning parts of Q4, and Q1 2025, our full year Capex forecast.
Erik: To be weighted towards regulatory maintenance, which primarily falls into the operating cash flow.
Erik: Reviewing our balance sheet, our funded debt stands at $328 million. Our next significant maturity is not until 2029, we are still targeting 20% to $30 million of share repurchases and our 2024 program with 5 million completed in Q2 and $10 million year to date.
Erik: Our quarterly financial performance in 2024 is expected to follow a similar cadence as our 23 results with the second and third quarters likely being our most active quarters and first and fourth quarters impacted by winter weather overall with anticipated impacts of the Q4 thousand transit in Q3 and the Q.
Erik: 7000 transit in Q4, we expect the second half of 2024 to be on par or slightly stronger than the first half.
Erik: Our year to date free cash flows a positive $45 million and would have been significantly higher if not impacted by the $58 million alliance earn out payment in April.
Erik: Providing some key assumptions by segment and regions for the balance of the year starting on slide 18.
Erik: First our well intervention segment the Gulf of Mexico continues to be strong market supporting improving rates and expected strong utilization on the Q4 Q five.
Erik: The key 5000 has contracted work in every quarter this year with limited white space to fill it schedule. The Q4 thousand is contracted to work into Q3, the Gulf of Mexico vessel is scheduled for an estimated 60 day transit and mobilization to West Africa for a minimum six month contract in Nigeria with paid mobe and <unk>.
Erik: No.
Erik: In the UK North Sea, we expect good utilization for most of the year the world. Hence our seawell have contracted work through Q3, we are anticipating a return to seasonally adjusted utilization in the winter months in the North Sea.
Erik: The possibility of winter season utilization provide support for the upper range of our guidance.
Speaker Change: <unk> 7000 is currently working in Australia with projects scheduled for three different operators. The projects are expected to continue into late Q3, followed by a scheduled transit to Brazil in mobilization for its contracted work in Brazil expected to commence early 2025.
Speaker Change: In Brazil, the Siem.
Speaker Change: Helix two is contracted into mid December of 2024 with Petrobras. The Siem helix. One is contracted performing well abandonment work for tried it into Q4 of 2025, we expect to benefit from the trading contract extension at market rates in 2025.
Speaker Change: Moving to robotics.
Speaker Change: Barack segment continues to benefit from the tight market, both oil and gas market and renewables market extremely active competing for assets APAC region has both the Grand Canyon, II and cm Topaz supporting renewables projects in Taiwan scheduled to last into the second half of 'twenty four cm Topaz and in <unk>.
Speaker Change: One trencher are contracted and expected to remain in Taiwan through mid Q4 of 2024.
Speaker Change: In the North Sea the Grand Canyon III is performing trenching projects is expected to have strong utilization into Q4, the north Sea enabler has contracted trenching operations in Q3 and Q4. The glomar wave is forecasted to have good seasonal utilization performing site clearance operations.
Speaker Change: In the U S literally aboard lines in the U S East coast, providing wind farm support.
Speaker Change: Moving to production facilities. The HP one is our contract with balance of 24 with no expected changes.
Speaker Change: We had expected variability with production as the Droshky field continues to currently.
Speaker Change: Continuing to shallow water abandonment, we continue to anticipate this to be a seasonal business with higher Q2, and Q3 activity and we are currently seeing more than expected variability in operator spending shelf decommissioning is a callout business, but given customers' needs and continues reversion of properties through bankruptcies.
Speaker Change: Long term, we still believe in the solid foundation for this market.
Speaker Change: At this time I will turn the call back to Owen for a discussion on our outlook beyond 2024 and for closing comments.
Owen: Thanks, Eric and good morning, all.
Owen: We've provided you a lot of insight.
Owen: Insight into our outlook for 2024, our team has performed well delivering solid financial performance in most of our segments as we begin in the third quarter. We do have some noise impacting our outlook for the second half of 'twenty. Four first we are expecting to incur more than a 150 days of transit and mobilization as we deployed the Q4.
Owen: To Nigeria in the Q seven Brazil, even though these projects have paid mobilizations accounting treatment requires us to defer to defer the mobilization fee and cost during the mobilization periods and recognized it over the life of the project. This is expected to shift approximately $20 million of EBIT.
Speaker Change: Into 2025.
Speaker Change: Second the soft shallow water decommissioning market in the Gulf of Mexico.
Speaker Change: That segment has underperformed to date this year, but as mentioned with customers' needs and reversion of shelf properties. We still believe in the foundation for the market long term based on the strength of the overall global Ofm's market, we're not altering our existing guidance other than sharpening our projected free cash flow and cash.
Speaker Change: Capital spend.
Speaker Change: Looking ahead for the balance of 'twenty, four and into 'twenty five.
Speaker Change: We're near the point for the legacy rates that were secured during the downturn to begin to roll off and be replaced with current market rates.
Speaker Change: As previously announced we are in advanced discussions with multiple customers with expectations of market rate contracts on several of our well intervention assets, which would achieve meaningful growth through our EBITDA for 2025 and secure utilization for multiple years ahead.
Speaker Change: More specifically.
Speaker Change: In Brazil, we expect to see a 40% increase in rates year over year going into 2025 with utilization out into 2028 for.
Speaker Change: <unk> 7000 is expected to work in Australia through Q3, and then transit to Brazil, beginning early Q4 once it begins its Brazil operations, we expect to generate an EBITDA contribution per utilized today, some 50% to $70000 a day greater than what we expect to achieve in 2000.
Speaker Change: 24 <unk>.
Speaker Change: To the actual timing of the transit from Australia to Brazil.
Speaker Change: Go forward rates have escalators for the term through 2026 with options beyond <unk>.
Speaker Change: In addition, with legacy contracts rolling off in the Gulf of Mexico, We expect an approximate 20% rate increase on the Q five.
Speaker Change: Starting in 2025.
Speaker Change: For Q4 thousand scheduled to transit to Nigeria, starting early August with the contract there beginning in late September early October.
Speaker Change: Terms of the work is six month with mutual options to extend further demand for work in West Africa, and depending on the demand in the Gulf of Mexico and rates achievable, we'll make the areas deployment decision next year or otherwise may see added capacity.
Speaker Change: These are examples of the tier ones, we're saying, it's too early to be precise but based on what we know now we would expect well intervention on its own to add in the range of $60 million to $100 million of EBITDA for 2025 over 2024.
Speaker Change: And our robotics business, we're seeing a robust market in general.
Speaker Change: With supply tightening further trenching the cables and the wind farms is currently the most significant driver on our profitability. There is good visibility on the pipeline of projects out through 2020 with year over year growth in the market. Each year, we have already contracted some work as far out as 2027 and are in discussions about awards.
Speaker Change: For 2020.
Speaker Change: For 2025, we expect continued strong performance from our robotics group with the potential to deploy our last available trencher, which was idle during all of 2024.
Speaker Change: We've already secured a second vessel for site clearance starting in 2025 and based on the work that we're seeing coming in the pace of our awards will likely look to add a third boulder grab for site clearance work and the wind farm market.
Speaker Change: Adding new XO clearances enhanced our offering to the market for site preparation.
Speaker Change: Overall, we continue to be excited about the robotics segment, leveraging our expertise within the larger renewables market and potential for further growth there.
Speaker Change: The status of the shallow water Gulf of Mexico abandoned market is hard to forecast at this time.
Speaker Change: Certainly there to support a strong market for a long time to come.
Speaker Change: Following the bankruptcies of field, where the market got off to a rapid start.
Speaker Change: Excuse me.
Speaker Change: Producers have pulled back in 2020 forward to reassess the pace of the work going forward.
Speaker Change: <unk> bankruptcy has added significantly to the work that needs to be done, but delays over settling the bankruptcy has delayed the majority of the start into 2025 as a result, 2024 will be an off year compared to 2023 and likely more in line with our original guidance for that business given at the time of the acquisition.
Speaker Change: Work on both field work and Cox properties are expected to come to market in 2025.
Speaker Change: We would not expect a frantic pace of 2023 to be repeated by any one producer, but a greater number of producers are likely to put.
Speaker Change: Worked through the market each at a slower pace compared to the first half of 2024, we do expect to see a rebound in demand on a more sustainable basis, even if it's not at the 2023 level.
Speaker Change: The EBITDA contribution from our production facilities may drop in 2025, consistent with the decline in the production rates from our two fields, we do remain income.
Speaker Change: Dialog with producers about adding additional wells to our production backlog as more fields approached the end of their life.
Speaker Change: This is purely an opportunistic alternative for producers as a means of dealing with their abandonment liabilities and as such we don't model the potential upside into our forecast.
Speaker Change: On a final note if the market behaves as we think in our assumptions based on current information hold helix. It in 2024 with approximately $300 million in cash on the balance sheet and beginning in 2025, our free cash flow generation could be well over $200 million for the year. This.
Speaker Change: This provides meaningful dry powder.
Speaker Change: Barring a major event, we will consider deploying cash to a bolt on type of acquisitions in our existing business units, where we see it to be accretive and sustainable.
Speaker Change: We continued to repurchase our shares under our approved share repurchase plan.
Speaker Change: As always we will remain open to explore all opportunities to further value creation for our shareholders. We're looking forward to a strong 2025 Eric.
Speaker Change: Thanks, Alex operator at this time, we'll take questions.
Speaker Change: Thank you ladies and gentlemen, we will now begin our question and answer session you have dialed in and would like to ask a question. Please press star followed by the number one on your telephone keypad. If you would like to withdraw your question Siem compressed our wind again.
Speaker Change: For a moment to compile the Q&A roster. Thank you.
Siem Mcrobbie: The first question comes from the lineup sure Mcrobbie from BP.
Speaker Change: Go ahead.
Sher Mcrobbie: Thanks for taking my questions.
Speaker Change: Starting with well intervention, given some drilling rigs at dealing with white space in their schedules are you seeing some rig operators start to bid on well intervention contracts and is that something that's more prevalent in some basins versus others.
Speaker Change: I'll take that good morning.
Speaker Change: We are seeing some longer term contracts fell four rigs and operators using them white space to undertake some other intervention, but as we've said on the call we're expecting high utilization for the coming years at better rates and better market rates as we come off these legacy contracts and we're seeing high utilization.
Speaker Change: You also have to remember in the North Sea.
Speaker Change: We're not really competing against drilling white spaces.
Speaker Change: Divert based operations.
Speaker Change: Okay.
Speaker Change: Thanks, and on the robotics side.
Speaker Change: Posted its strongest quarterly revenue in about 10 years some of that due to seasonality can you remind us of those.
Speaker Change: Seasonal cycle robotics, and and is that changing ASU for offshore related work.
Speaker Change: So with robotics it can be seasonal this year, we have a very good backlog of trenching works going into 2025 and free to winter season, but it's basically where we're working in wind farms that are generating shallow water that can lead to seasonality and winter breaks on the trenching side of the business.
Speaker Change: Much of the Rvs are on longer term contracts and continued through the winter works. It's many of the trenching side that can be affected tree seasonality, but this this winter got enough into the fourth quarter, we expect a very strong season.
Speaker Change: And we have very good pipeline I'll go ahead retrench.
Speaker Change: Retrenching in the trenching business it used to be short contracts, where now that some contracts.
Speaker Change: In a numbers of years and looking well out to the future. We have a very good pipeline of opportunities for the changing business.
Speaker Change: Okay I appreciate that color thanks for taking my questions.
Speaker Change: Welcome.
Speaker Change: The next question comes from the line of Josh Jayne from Daniel Energy Partners. Please go ahead.
Josh Jayne: Thanks. Good morning first question that I wanted to ask just when I look at the last couple of weeks notable offshore drillers have announced contracts that show not only continued day rate improvement, but also in some cases some willingness on the part of operators termed out assets into 2027 and 2020.
Speaker Change: Even with today's day rates.
Speaker Change: You've talked on the last couple of calls about how we will see higher rates for well intervention and Owen just alluded to it as well with the $60 million to $100 million increase in EBITDA, but I'm just curious could you talk about.
Speaker Change: If discussions for further work has accelerated here in the last three to six months for your fleet with respect to term for operators.
Speaker Change: And how comfortable they are going forward contracting your fleet out sort of beyond 'twenty six 'twenty seven.
Speaker Change: Maybe you could just expand on that a little bit would be helpful.
Speaker Change: Yes, good morning, as Alan said, we're in some good negotiations with solid clients for some of the larger well intervention assets. Those assets are at a much higher rate stays negotiations at much better rates and they are longer term contracts some of those contracts.
Speaker Change: Two to three years in duration.
Speaker Change: Like I say very good clients of ours and good negotiations.
Speaker Change: We hope to.
Speaker Change: <unk> be announcing before the end of the year, where those assets are going to end up.
Speaker Change: Okay.
Speaker Change: Just touch on the shallow water abandonment business, you've been pretty transparent over the course of this year that this was going to be weak.
Speaker Change: And yet there seems to be a significant amount of long term runway in this business and $25 26 beyond from what we've heard so can you just talk us through how you're managing that business today, assuming there's going to be a turnaround coming in the next couple of years.
Speaker Change: Yes, right now it is a balancing act.
Speaker Change: The biggest bottleneck in.
Speaker Change: That segment of our people and so far we knew that this was going to be a soft year with a potential rebound in 2025.
Speaker Change: So we've been trying to well we've been incurring additional costs in order to maintain our capacity to be able to respond to that rebound.
Speaker Change: Yes.
Speaker Change: Market. This year is probably been softer than we anticipated and we're trying to assess the actual pace of the work that's going to be coming next year and adjusting our resources to be appropriate, but what that means is that it's probably an ordinance.
Speaker Change: Hi negative impact for 'twenty four as we maintain that capacity going into 'twenty, five, but we should reap the benefits of that 25 and beyond.
Speaker Change: Okay. Thanks, and then just one last follow up if I may.
Speaker Change: You highlighted.
Speaker Change: The potential for some of the variance in your EBITDA guidance for the rest of the 24 could be surrounding this.
Speaker Change: Seasonality of the well enhancer and the seawell and normal normally there is seasonality, but in the last two years. So in Q4 of 'twenty, two and 'twenty three you've been close to 100% utilized on those assets I just want to understand.
Speaker Change: Maybe going back to those years why is the utilization in Q4 of those years was so strong was it all weather driven or what the what the opportunity is and if the business is potentially.
Speaker Change: Structurally changed a little bit where you could see less seasonality going forward for those assets and that's all I have thanks.
Speaker Change: I think at the moment, we're being conservative and referring back to that.
Speaker Change: That business unit has always had seasonal downturns in the Windsor because of the weather and our clients that want to pay for this to go out and work on their wells and so on whether last year, we had a very good contract with one of the vessels went to the Mediterranean is working pretty good weather periods in the Mediterranean for the whole season.
Speaker Change: This year, we do see opportunity Thats why were saying there could be some upside we are in discussion with clients that are looking at work treatise Windsor and as we go into next year one of the vessels will have a drydock as well but.
Speaker Change: There is opportunity out there, it's not signed up yet so we're just being a little bit conservative as we look at the.
Speaker Change: Historical view of how the well intervention in the winter months in the UK works I'd like to just add another factor of the variability in our Q4 has to do with it.
Speaker Change: <unk> mentioned, we have something like over 140 days of transit time, and then the cost and the revenue.
Speaker Change: Is deferred and amortized over the term of the contract so the impact to the fourth quarter depends largely on the timing of how many days fall in 24 versus 25.
Speaker Change: There is no way for us to assess what that is right now until we see.
Speaker Change: When the mobilization actually begins and that depends on how long the current contracted work continues.
Speaker Change: <unk>.
Speaker Change: Understood. Thanks, Thanks, guys I'll turn it back.
Speaker Change: As there are no further questions at this time I would like to turn the call over back to Mr. Eric Stifle Chief Financial Officer for closing remarks.
Erik Staffeldt: Thanks for joining us today, we very much appreciate your interest and participation and look forward to having you on our third quarter 2024 call in October. Thank you.
Speaker Change: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.
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