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RIG Transocean

Participants
Jeremy Thigpen President, Chief Executive Officer
Mark Mey Executive Vice President, Chief Financial Officer
Roddie Mackenzie Senior Vice President, Marketing, Innovation and Industry Relations
Lexington May Manager, Investor Relations
Connor Lynagh Morgan Stanley
Taylor Zurcher Tudor Pickering Holt
Kurt Hallead RBC
Fredrik Stene Clarksons Platou Securities
Greg Lewis BTIG
Mike Sabella Bank of America
Sean Meakim JP Morgan
Call transcript
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Operator

Ladies and gentlemen, good day and welcome to the third quarter 2020 Transocean earnings conference call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Mr. Lexington May, Manager of Investor Relations. Please go ahead, sir.

Lexington May

David. you Thank welcome call. and third XXXX quarter Good to conference earnings morning Transocean’s A financial regarding release supporting press website copy our of covering are on schedules, reconciliations at deepwater.com. measures statements including results and financial disclosures non-GAAP posted our and with along

Mark this Officer, Officer; and Marketing, Senior President Executive me Roddie Chief on Thigpen, Innovation and and of Relations. call Mackenzie, morning’s Joining Vice and Jeremy President are President Executive Mey, Financial Industry Chief Vice

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

conduct Following prepared Mark’s comments, session. we question Jeremy and answer will and a

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

Jeremy Thigpen

and customers, Thank participating Lex, you investors today’s analysts call. welcome employees, our to in and

this with maintaining prevent As any associated please spread quality therefore we to during of forgive work remotely do our have March, the call. part to to since we continue challenges audio COVID-XX,

delivered $XXX in the margin adjusted for on million adjusted EBITDA with million almost As reported of in yesterday’s release revenue. $XXX third EBITDA in XX% adjusted quarter, earnings Transocean

experienced this season efficient active pandemic deliver around including cash Gulf operating operations for in driven number million of generate customers Mexico, to which an Despite reliable $XX strong to extremely our storm we world. flow. and our committed challenges, and a in by global operating performance enabled continued and teams a the us was Importantly, of the safe,

crew the will a During To XX I you we of put challenges share that perspective, XX across rigs active change, our third with rig. require countries. pandemic XX in enter period of also members before just quarter, crew ranging regulations, related our some had and five protocols test quarantine country depending to XX from on rigs days, have secured a COVID-XX joining a and the must before they negative to customer

exposure than the with friends. addition meaning overall X,XXX In asked have home, from testing, members serve to reduce associated time of more delays our even and to we crew family hitches, quarantines and away more extended

coverings the quarantine hitches, subjected their while to not crews our are when practice resolve. face with members distancing absolute to success. crew are addition protocols In Their say, demonstrating required sacrifice our It’s these inspiring. just Transocean’s to suboptimal operating are dedication is persevere daily truly and conditions, company and and to crews commitment yet our and to wear checks social rigs temperature certain Needless possible. to extended onboard period our our

of global spare the the executing and Our extraordinary. coordinating, excellent movement our of The forced organization delivered a thousands entire adapt. customer the during staff. has is be our of including lockdown planning, testing nothing involved service of COVID-XX without of shore-based could to in and logistics not contribution personnel, pieces equipment organization, parts short

of the before have entire we our level a meetings the virus. the our the Virtual spread continued around did strength offices world and the COVID-XX. to new continue normal, deliver we to as of and the help and work expert employees closed Our technical to as rig provided high resilience are testament same of remotely performance largely support organization, remotely to and mitigate remain

our this, of sacrifices extend every and they the gratitude to and has all result make each women the keep all throughout for truly our and operating deepest I resilience reliably day however, personal the a of of to efficiently our rigs and my safely, Transocean to support men is strength demonstrated customers. challenges this tremendous pandemic face team remarkable. COVID-XX; For of We as

long every We customers. deliver for personnel while to will to our and operating necessary and continue safe to we keep take our healthy best-in-class crews precaution our performance shore-based necessary as as

third our Now the This third result crews often bonuses fleet our closely proud performance as a expectations. exceed exceeding investment as drilling our and I’m million Transocean, in development during and of day customers’ innovative more technologies, continues our the assets, high and to training looking meet of our performance, each effort quarter in achieved to collective of for whole of at quarter a extremely deployment our improve $XX leading programs. the schedules. including specification industry through result our is direct a continuously

by our in in practice compensation revenue of performance, into ultimately cash. Obviously linking many into In revenues. a level have helps high enhancement interest our performance addition, customers our efficient of and our conversion eschewed, of backlog competitors aligned and billion that to have this we the resulting an with $X

Since one-year to begun Now B. Loyd prospects are already In until its with is Barents operations full continues in the prepare XX-month on we contract her the opportunities somewhat Shell demand turning campaign her to about be process placed completed DDX the potential in for U.K., and believe well and in mobilization to the of DDX Norway. area. continues the Transocean robust, off Canada, Norway Paul have the quarter with we the kicked are starting recently in In completed Trinidad, fleet, Junior. encouraged XXXX. and with successful Chrysaor We mid Equinor. bleak to follow-on a future campaign first the her Canada

anticipated coupled the the the early recall, upon reported further the the you but termination the allowing July. rationalize into prices, program the of quickly Greece. improvement B. oil Last Unfortunately, program XXX near review we of termination. and her quarter, with work India’s to Egypt; course cold with of no for was As fulfilled in drilling Loyd, was us on transferred drilling full originally fleet. however, the the slated in Deepwater the India horizon, Paul Burullus reversed term This may to we moved prospects without to early our successful work stack kept

Moving to Offshore XXXX. report option exercised its India, XXX-day KGX. keep Reliance on will quarter the I’m second busy pleased This to through of the her

Australia the Pacific, with successful completed Asia campaign to Moving Chevron. in recently DDX her

any currently for we As not we do cold decided to term her, near have stack her. opportunities see

day. rate. Woodside in will a commenced in be of full January on which Woodside her point Finally, commence believe with the we and on operating reduced is We at week that mobilization $XXX,XXX day just Myanmar currently contract KGX rate standby this will day per at

our profitable on decided Arctic. downturn we start quickly we addition since of opportunities, Transocean completion past a In fleet. has in units, remain diligent retirement less remove to with for and once of working, her active drilling in rig upon as our disciplined keeping active our philosophy Consistent recycle we of competitive XXXX, practice fleet our the we campaign, assessing ongoing the marketability, the to recent determine from her fleet have demonstrated we few and that

opportunities, when months spoke market minimal the we Looking interest. there was three when now ago, upcoming last contracting customer has improved at materially environment from

reminder, tangible see unfolding. recovery a signs of were the we As when to entered we starting XXXX,

and early assets and exceeded the we to improving, deepwater environment increase several in recovery momentum. fully high XXXX, reducing to from awarded the specification day COVID-XX, experiencing very be to work temporary XXXX. and higher. world with prices projects encouraging by was rates oil were future around ultra lows, was in and when day, that visibility that historic the latter market at optimistic stalling fixtures sustainable were and starting In of signed XXXX. production a to reassess major fixtures in was XXXX earlier to of This harsh half utilized, and in end ultimately momentum utilize ultra market first XXXX. customers were a increasingly trend the year of respective utilization this deepwater $XXX,XXX, to of picking pause among Our many we delaying them coupled sanctioned and we increase their these energy. light up day also many points, the $XXX,XXX producers the early of represented Understandably, of half the was hit drove this the spurred to caused and protracted with portfolios through Unfortunately, the how XXX% for our data demand that expected rates was that supply which led disputes were when we with Indeed,

deferred been anticipated by delay fact months. projects encouraged these cancelled; certainly instead, the we approximately most they’ve not been have in XX disheartening, has by been previously of the While that are awards

pre-COVID from the doubled has this fact, the our bidding quarter to point activity In second returned and quarter has level low in levels.

Bacalhau recently IOCs several its awarded during handful we in dates quarter, fourth quarter Furthermore, is a independents, pre-salt near and the in the in half is and a participated has near re-tendered future. by second to the field, in start we more Petrobras projects encouraged fixtures project expect challenging, Gulf closer bids participated same awards recently During globe to In Taking U.S. XXXX, Tres term Brazil. and Marinas program of emerge Petrobras XX Mexico, amount [ph] starting in and activity the beginning see which the the the in third hit. just COVID Brazil, long are XXXX in we around while term the of of the NOCs. among in four-year before the the look of we with for bit remain a the improving Equinor

the capitalize projects Moving of and incentives the result this will opportunities as over market two Norwegian of enactment favorable to to as on over incentives. next favorable gas tighten more about investment years. government’s unfolding are continue oil the sanctioned for excited projects brought tax to forward anticipate Norway, we are a We the recent

region, excluding could awarded industry-leading months Total’s could Barents. Mozambique, several fleet Pacific that be tender XX for be made work over Africa, Transocean few anticipate the soon multi-year medium XXXX. be awarded for specification most see believe identified our tax In day assets and assets XXXX we projects for a we plus projects mark sold we optimistic performance the the dozen are fact, move $XXX,XXX the such be out in two that In the work coming next recent as XXXX. months, which could we of as the bonus in for will in about change. programs the exit with beginning light per starting and around be prospects green in Asia could In which the including Australia, again all enter market fixtures once the include forward, incentives, we and term long given high for will of XXXX, these of awards that If result we’ve Norway, future the

may know, work continues are that you and opportunities the continued volume the has As demonstrated while ultra deepwater disappointed difficult recovery nearing encouraged opportunities multiple for through times beyond. to COVID-XX levels. these the In pre in and of by emergence of activity we this region are XXXX we is delayed, be summary, certainly

some approximately term. take will comfort remain continue challenges backlog, pragmatic, and Transocean to that very we the our near the those While to in the recognizing billion $X specifically we industry in face

In timely fleet, As flawless the into will including know, our operations the and from further scrapping capital executing structure take third active actions active was necessary backlog much regard, quickly limited or delivering that to cost as to revenue of this preserve as our stacking improving to cold you such, us enable transactions. likely enhance but quarter the not and to to convert very a possible, evolving perspective. and idle markets non-working opportunistic financing we fit continue as assets, liquidity,

of liquidity we so to debt series During undertook improving actions forecast. reduce and importantly also the period, our more a did our while

interest result, our As extending by quarter almost runway continue to we liquidity reduced our billion, expense reducing navigate through as this our successfully a we the debt cycle. $X economic and during

we’re demonstrated have we several over last the done. years, not As

and Our they can execute disputes transactions time finance successfully and as and legal teams favorably proven again fiscally we resolve responsible arise. that have

future. a in us our sheet assets, way to development be few our differentiating We people, I the regarding formally in of have that the drilling balance and that the indicate like from likely of now continue have near a peers to to they started to steps would technologies. in will our or that managing the are state so in process majority continue provide do our invest The new and sector to offshore comments proactive either taken of restructuring perspective. the enables our

we advantageous in large different the and a are liquidity relative associated position transactions, we our competitors, focus not backlog, restructuring with difficult balance Given strong and our maintain nor to to liquidity and able and to our have operating we’re crippling operations process. performance in believe customers. currently prudently enhancing decision a as we Transocean sheet a and very is experiencing are Instead, our we to continue delivering demoralizing the invest importantly such a business distractions sometimes singular best-in-class on to facing

with from shortage expense marketable which and industry significant eventually support with need rig industry’s marketable cash of of most and competitors should to we emerge teams. prices see; largest upon to is therefore, inevitable and necessary Transocean assembled that will of impact an the has is Transocean some providing pace contracted may the strongest inflection day favorable a most strategically in at starting floating we associated the maintain invest assets. competitive backlog, an we approach crews and natural take and consolidation, in with shore-based and the to levels, our the stabilize immediate continue the the stacked restructuring, positive flows at fall count, As industry rigs experienced maintenance training we see due Furthermore, largest crews almost in expect reactivating are possible with the which us oil to contracting our contracted fleet rig and we industry the in fleet to a economics. the to rigs likely already our our future the that believe In the on continue fleet supply more most maintain rigs. that competitive lucrative most is to when rates to based conclusion, contracting we and of result will the ensure to visibility it have disciplined the remain fleet. meet that with that in actions We

to challenge scale recovery not market best will before our preservation In to and we offshore market however, the the stabilize, confidence we it the customers in cash begin be likely XXXX; committed latest activity from accepted the to deepwater positioned benefit generation begun ready customers As such, are to We’ve their of us increase years the has offshore survive the this and to flows. recovery. eventual a in full interim, that will gives are of middle the and that market our come. as to

deepwater harsh will as our to enhance and refine in positioned to continue proud to the have leader are We ourselves further fleet strategically clear that environment ultra and drilling position.

As most that such, fleet we marketed we expect cycle. our economic it turn current as navigate utilized will industry’s that, over this remain successfully I’ll With Mark. the to

Mark Mey

Thank you all. good day and Jeremy, to

I expectations for provide recap today’s for estimates fourth and results, briefly provide XXXX. guidance our financial call, preliminary third quarter, will During the on our quarter

I through will Lastly, update an forecast our provide liquidity XXXX. on

the associated and million backlog and loss income exceeding per retirement reported coupled release with several in or million, for XX% As performance we Highlights adjusting EBITDA fleet-wide or items $XX $XXX an discrete adjusted liability controlling of our our third in items of press bonuses, operational efficiency details million flow. reported for attributable the management in revenue are strong revenue diluted our share. $X.XX unfavorable we efficiency our our debt with fleet-wide conversion, on press operating included and for net of million costs, $XXX tax with loss associated disposal diluted interests and release. quarter items Further strong reflecting excellence include assets and of of cash After robust adjusted the of share. $X.XX reported reflecting $XX quarter third net XXXX, per to restructuring

with during by was Barents performance driven and than to costs million maintenance delivered efficiency better as a fleet, timing primarily and the quarter revenue revenues drilling due $XX in Operating well the and associated third of across COVID-XX. the than at drilling adjusted and million expected contract our quarter, Transocean strong million. $XXX in-service is our closer results of lower expense contract. third as the short bonuses we Looking the extension guidance of This $XXX maintenance

by half quarter, reimbursable million customers. of are we of recognized approximately which COVID During the expenses, our related approximately $XX

the approximately billion of unrestricted with of cash billion, Turning we the revolving approximately $X.X cash restricted third cash quarter debt equivalents sheet, and cash service, billion, approximately $X.X facility. for including undrawn and to liquidity flow credit a million $XXX of total balance and ended $X.X

As initiated indentures multiple for Jeremy exchange series mentioned, maturities, our strengthen new undertook debt by during the a quarter to we our of our senior series we by early August, of balance further as guaranteed sheet steps In debt promoted reducing existing structure. utilizing and debt. currency and transactions meaningfully

reduce maturity interest the approximately of exchanges, from approximately market, our any our thereby inclusive $XX without $XXX million. is we’ll almost these able $XX the burden improving of in during in billion million be exceeds we savings. which a of cash, XXXX, Furthermore, result debt savings $XXX dollars by also net more open to of exchange through consuming Interest a liquidity of bonds million debt As repurchased quarter by than the $XX resulting the savings. million of million opportunistically

our our efforts dated tender a maturities. sheet of October series improve continued debt balance We offer in by for our to initiating several cash near

resulting tender debt the participation million value in already last noted face and $XXX through the of industry very of retired As years financing in at has latest financial tender list of approximately billion the in and long discount approximately structure liability good of a and transactions our we’ve improve a mostly been approximately capital billion release XX%, balance press improved far. November a transactions improvement through are savings, the downturn The of to liquidity that we to interest ordinary this various by thus exchange debt more The offer XXXX, $XXX our X. tender $XXX management undertaken XXXX closes flexibility sheet approximately have new we’ve cash on $X.X tender than issued million. course beginning also million approximately near actions week, ago. $X.X of of and debt and cash since maturities retired dated the capital Since markets. Including transactions six

for capital continue improve We actions liquidity and to our structure the to shareholders. take runway will of our benefit

me the Let our update for now on provide fourth quarter. expectations an

is For Inspiration, activity India, fleet the drilling expect be fleet-wide Gulf lower Inspiration concluded efficiency stacked the adjusted $XXX campaigns. XXXX, XX% Barents, Transocean revenues and Leader respective the stacked in all reflecting Barents Norway revenue a Greece have she’ll Furthermore, our and have Transocean to warm of we as mentioned, quarter and million, now in we the fourth be Discovery Arctic Mexico, the the respectively, cold for contract Norway, Jeremy - well XXXX. recent of in U.S. of rigs their scrapped drilling reflects wide. positioned five are to mobilizing This Transocean the both Arctic as approximately India and been we Discovery the Leader, work and where

be attributable We expect decrease O&M off quarter as million, activity rigs contract. rolling to fourth a approximately expense quarter-over-quarter lower of to a $XXX result

expenditures, quarter, interest million income and $XX maintenance approximately and of capex. new We million, expected including of is the approximately for includes the $XX includes fourth quarter expense fourth expense to under are quarter. construction be $X quarter million approximately be expect to approximately for million. for our with $XX in to build the the million. $XX $XX interest This of interest capitalized forecast be prior This interest anticipated drill ships for Net fourth $XXX G&A million line million. Capital approximately capitalized

for are million. taxes expected fourth quarter the to approximately be cash Our $X

adjusted expense full billion XX% I’d billion. between We a anticipate at $X.X first contract $X.X like will drilling XXXX. revenue backlog. we be year XXXX and which and $X.X for monetizes and expectations look believe operations maintenance Now established between billion, billion provide of be $X.X our our Furthermore, financial to previously contract to

expect and Finally, G&A to we between million $XXX $XXX million. be

is at billion $X.X million related $XX of liquidity includes our now This and billion. XX, Titan, billion. year to XXXX million our and builds between credit for capex XXXX, $X.X new to revolving undrawn Turning December billion and $XXX XXXX our Deepwater and our estimated projected $X.X of potential $X.X of an end maintenance remaining securitization including liquidity liquidity of capex. facility a capex capex expectation forecast estimated XXXX includes The the XXXX

As always, speculative rig or reactivations our any capex upgrades. guidance excludes

news address to compliance Exchange. with recent like I’d New the regarding our Stock Now York the

below notice October, closing from shares a price trading one received During XX-day standard period. during average a dollar the of continued consecutive NYSE the we listing because our fell

with plans efficient We reducing we the and within all time our conclusion, and will while listing NYSE to our focus remediate and to continue enhancing In debt. in addition safe the deficiency operation remain and rigs, we this to by period compliance compliance preserving NYSE, of have on the allotted opportunistically regain liquidity standards. other our in

the of balance our manage all expenditure compromising over and and safety to reduce sheet turn the employees. I’ll explore proactively capital integrity call requirements costs to will now We Lex. our without opportunities operational or

Lexington May

Thanks we’re Mark. ready now questions. David, take to

to a initial to As please one question and one the reminder yourself participants, limit follow-up question.

Operator

instructions] comes [Operator question Lynagh Morgan from with Stanley. first Our Connor

Connor Lynagh

these sensitivity how to of they that. wanted half to oil where how focus the I to customer think about is about--if think trying we’re you $X are those think what the prices oil around days, do figure on you I the move I sensitivity to remain what the relative out thanks. opportunities? would would broadly up or prices back $XX, discussing. you today were of guess opportunities and Yes, commentary is ’XX appreciate you

Jeremy Thigpen

we this do Jeremy. - take a prices our will, global that economies do when much does place, certainly. Connor, there’s Hey COVID, to then what know, how still I’ll you real let chime solve, does in. find so you From world when and impact the perspective, if that Roddie does is and that in oil and for uncertainty

and growing to a with $XX we where that quite these through that’s had think prices then started I the get of if solve a whatever and what see look so from going is up and like election their customers I there oil pick up time, barrel oil now and whether that have or relatively for the period projects we encouraged start them we earnest, price bottoms, bit, saw that increasingly think a right stable that a around find, confidence. have gives bounced a landscape are COVID, that offshore to we more As some it’s even to stabilized determine in vaccine our can XXXX, moved really for

oil I $XX can quite closer we don’t to a prices get up I want barrel, a think to activity. you If Roddie, that? start add if see to more know you to bit

Roddie Mackenzie

I at and so more substantially the them think $XX offshore can bode we profitable where Yes, $XX, difference just add mark, our time very, that well going make over fact relatively see very that’s our do customers few drilling, tremendous another for go has past competitiveness I will wells, or a something have because up at to that about we to amount around retooling the if round years. $XX to before, the think that mentioned really then huge this if make designs a sustained you of mark, simplifying more $XX spent as their their increased

Connor Lynagh

makes Yes, sense.

could just seems broad any this broad would side on trending? do better around opportunities want durations, bit environment terms benign that you’re contract alluded helpful. comments on you to about--and have rigs, certainly been speak It a holding of the things, If downturn, give up things but harsh rates to but you don’t I you relative be think away to should see the these but - that to like prior where much we certainly starting competitive the too you environment how in reasons, see, for think I know

Roddie Mackenzie

a low previous XXXs, alluded compare had were been point. bottom mid this really going but that’s the rates, Jeremy is we’re if there. to that point, now make before as to end had Yes, blip, the day We that not actually were to, where interesting in pretty you seeing down clearly we in the that of

think seeing to of some XXX really lowest the the are mark. rates we’re I XXX

certainly there, the there be--you is seems are, of we just know, While but in. kicking reality are delivering to the not economic service folks some

other number be less Latin that up to in Brazil, to that seems seem spread of made see tenders of the a moving like we everything to day awards lot America, the are of I also of out rate be in expect coming think with a being bit. a and place parts

You see folks at competitive tenders out stuff, are now near multi-year, these a some fact think we of least that but dozen They’re four a above bidding well just XXX are--they’re because there XXX. half five-year may lot terms and at in those there’s and tenders going term now, probably we looking multi-year XXX. closer have be to above to think is of going to

be haven’t that because So certainly the those this around, of but seen go so the about we optimistic right move clearly operators it are on remains to we’re now, time did rate seen certainly we whether that last round. depth economics day better drop

Connor Lynagh

out customer logic liquidity it’s more now working balance more financial do think I’m Basically one discipline emerge later? Is a is this that? but to monetize figure you I’ll do that maybe ton sneak the here, I that just sustainable maintain with to to? Yes, cleaner today, constraints? in attribute they’re does do derail what if than here of it or probably less what sheets, just less and trying optimism, not of behavior more well, than you change in Is your competitors more with it

Jeremy Thigpen

believe it I does. don’t

think I and filler in term they’re off it if opportunity. could a term individual at near are for looking rolling you’re the just short that rigs looking contract

to a to arrangements and these play but at to you You an looking we and reactivate shrinking to and million-plus starting rigs might long short we’re of position you’re to term duration, reactivation, rig the like fleet their rigs marketable that try cold prepared remarks we’re starting active if just so $XX see but stacked as said little to scrapped, improved out, in so real want see the more to more you into more play for is see be a will a competitive ticket quickly, one a liquidity require it’s rig get said, asset. more and going

end can’t day higher today’s Roddie? the from get to have rates the have ahead, go compensated front much you at - you You to that Go or on operator. do

Roddie Mackenzie

add few the Yes, mistakes I that in made to going that, was a been past. there’s to

the learned do create reactivation of I of contracts. and lessons and just mobilization earnings these being it folks tremendous and so think to out, seen some You’ve I expectation also a hard there’s speculatively going a work form be from to there’s lot didn’t think

that, reactivation is again, going get costs rates going spec high but are curtail than utilization only Jeremy to that As relative more better. the assets of to in dip said, interesting the

anytime at of number chart of COVID so cold opportunities majority latest are stacked, in the ships, coming aren’t they active list six out As the at stacked are in four them the dip, that being that there’s them to and that of has the so market. of We already we tenders track, rigs, positions vast as seventh listed the those stacked, rigs warm gen you the of have look leading out that have if that five actually look soon. drill I will the the dropped are seven know so or take

by assets in and when the that that XXX fact end of that’s to do level really up we level, just it’s from XXXX, back find boost driven you the in XXX yourself there available. a the are fewer situation saw So similar that rates to

Connor Lynagh

for color. Makes sense. the Thanks

Operator

you. Thank

from Taylor comes question Pickering with next Holt. Tudor Zurcher Our

Taylor Zurcher

say color, good I’m or if now. is think about better morning, today, question. implied than much correctly, all EBITDA a contracted that number at on the your and two-part right for my what is forecast XXXX color I revenue is the thank you the I heard and you. initial Appreciate Hey, the math and so XX% XXXX, thinking consensus line, of doing Mark,

that to the take $X.X be side, that or it rate about million If the help XXXX, embedded midpoint think opportunity I so For that needle are forecast? going run currently four, help cost $XXX of XXXX I in for move that’s us for best like the today see the QX year. other Then you type would that good relative would the on biggest most at guidance that. you’re divide could quarterly the billion $XXX XX%, the in to rigs cost to in you work million it’s guiding delta thinking, XXXX are versus by the see just for this least to which - understand idled seems secondarily, our be,

you hoping quarters. Thank lower moving help run cost of the contract to get that number Just a rigs understand us you. rolling in absent you how rate could forward coming structurally off

Mark Mey

you, morning. good Thank

numbers your to the spec of to the regarding into four for the between Inspiration, that’s XX,XXX year. Let and split being rigs, XX% the rigs, five It’s that brought got we’ve those equally Asgard, those, our other and at are me Nautilus revenue then the much first the one Norge, the next forecast. respond also question and in really come and lower DDX, down or two almost Petrobras

So would like XX% revenue. I said, spec that of four the drive of majority rigs vast

calculation it’s a is next for it, doing look you the to cost you four are your the of the way think at not--I but off as throughout by year, As rigs going X.X dividing of year. be know, coming

they be off, a reducing quarter would costs As come on basis. by quarter

second so we that which of we’ll cost contract, full day benefit has rigs, one. we implemented all In the cutting happened XXXX. our year, cold incrementally several costs. to had [Indiscernible] efforts We’ve half also the of see benefit the of year. XXXX, we’ve on the Next reduce year stacked this get throughout full in

Taylor Zurcher

helpful. it, that’s Got

on management been the good is few Clearly extremely here. months, question Second see. which been busy liability over past you’ve really has from to

the see rigs there’s the those have there’s new time the end but competitors We’ve payments lot Can two right playbook on to little XXXX potentially for your any quite of a seen that builds constraints two bit? these a back any Moving do potential there, part capex still your a I of whether you to right? of to a in bit slated the of and over back push payments years, contracts do some that bit timing liability remaining. you to for you talk have you way as place out figure got a the push those to potential and you’ve little out forward, end those know and about management

Mark Mey

I at light. different really would look isn’t in liability that That a management.

potential those slated delivery final the take have delayed rigs are obviously two the delivered now shipyard a past, in anything need with but pay happen rigs the conversation including something the several to rigs we’re We pointing to time. to at there’s year. said, a payments could we this at the our there, and those being that to next would times always but are the That of have be payments We vendors, stage commitment for been and and those not in shipyards, specific.

Taylor Zurcher

Understood. Thanks for the answers.

Operator

you. Thank

from Our comes Hallead Kurt RBC. question with next

Kurt Hallead

that around make market of color. Thanks sure good that correctly. outlook the to I dynamics for understood some I the Hey, back wanted come around, morning.

over Can last XXX range about in like ultra are the talked currently deepwater guys XXX It with dozen multiple a rates Then half go you day at effectively. looks unchanged $XXX,XXX I they’re a that the months. day and clarify on those then least You and tenders. few how rates mentioned approaching for to a bit? tenders just you heard that back something thought multi-year years, I

Roddie Mackenzie

I to XXX. the end Yes, is XXX said sure. low that

really the We’re Hopefully is rigs of low somewhere XXX there tenders and essentially number is be - committed, the warm long you by what going near term that all market with off higher. many rigs say those to to of we then being will taken how that prospects, help length depends up to term $XXXK substantially between assets, the market seeing really to way That’s of It because term dynamic. so these and makes combined the a I see to long responses day. on market looks few first, words, would term. that really bidders XXX, push rigs of be that’s available other the relative come taken balance the the the they’re think in sense. then as

should translate we that awards from uptick bidding now, in six, As XX uptick into now. an nine, an see months in activity

Kurt Hallead

rigs you and if could XXXX that’s rationalize I of many Got you assets market Then the as wondering put the many to taking to of in some been maybe next industry-wide it. how was All you’ve rationalizing year. of rationalized broader I Jeremy, leaders be could wonder your assets expect out and general right, context helpful. could you how could sense fleet. us give help if maybe put into into that context, us among

Jeremy Thigpen

fleet. more watch been the we’ve going to as tell think We’ve I’d be any given as overly prospects for us take know, respect a of we’ve so you there leader, pretty those fleet, far, unfortunately. I won’t - come. those Well, removing but as forward been in from them, to them forward, couple we’ll contract clear With as leaders we the offense I off I - But going the what to we’ve see roll could vast consistent rigs you, our our waste follow done address don’t the those assets practice. can and profitable see past mean, pulled among own limited continue marketable you we of time we well or certainly out fleet, assets majority but they and

of that capable Regarding the how less the interesting these be and retire emerge of part rest forced see from are restructuring some assets. whether or as to it competitors will recycle to industry, older, restructuring of the they

to but going because keep they’re we’ve they forward. around said sheet, with costly just side is too help spread not supply overly will candidly, for viable expectation the will the Our on certainly That and number spreadsheet not we’re find now these will but another a the time lot of Excel long will about contract, it know worried improve in certainly we never the as because a things. total optically rigs

Kurt Hallead

great. Okay,

Roddie Mackenzie

lot teams, several out they’re transitioning because, not supply we that. just and market simply taking it so not help viable, B, A, are see as just overtures we dynamics, competitors, a of encourage around management just our it’s that of does Yes, making

Kurt Hallead

the it. - what Got Mark being? anticipate you Maybe for do the of securitization Titan one

Mark Mey

somewhere $XXX contract know, secured that’s financing of could that five-year against you pretty healthy a we I so and get between with million as at Kurt, think Chevron a rig. rate, $XXX million

Kurt Hallead

Thanks everybody. for that’s the it. Appreciate awesome. Okay, color,

Operator

you. Thank

Stene Our comes next with Securities. Clarksons from question Fredrik Platou

Fredrik Stene

guys, It’s and it you it’s cost customers that nice Hey your do your rig when the will that today ago. standpoint? As now rate, I some place has have more their well have than award, out to I’m going for more so wondering hear already? important felt Is grading you approached for more been scrapping, fleet, in Norway. vocal on both that. for you’re What something that I the optimistic versus thinking months Equinor I’m there efficiency activity it’s with cold three follow-up that, to now stacking, that to today. to was with Barents they’re have Equinor, you’re thank very Equinor recent comments about the be utilization have looking taking time, just re-contracting do about think rigs competitive you--I now was how but [indiscernible] per with feel at best day the assets also leaving a but think high chance view that water? you mentioned etc., from you the hearing of - How a even a standpoint Thanks. four from you forward, even

Roddie Mackenzie

the drill to more is in you a and on take it’s stuff, to of push the seeing brings more really a cost, terms think deepwater well have only environment, about you so for and years, it well the doing typically longer push the efficiency less kind then and all the for offshore, drill the it’s - me period first. past runs why cost, that to less then harsh and you catalyst well it Let obvious over for well I not get in activity. that that’s of more but several well we’re get really and better rate been question Look the time, spread so that and of it’s cost, particularly collecting earlier bonuses the wells earlier, time, the same that production

So yes, we that behind are push. fully

substantial and from healthy high specification it’s a of allowing assets. customers upgrades that performance rigs equally compensation make terms of in so that, our to participating in on us and We very point have environment view to

on That’s there. much is be for our of wells is a out philosophy, they’re we edge obviously and heard at reputation-wise because not be the just can drives us activity that rig, for to the really a have that drilling that is times profitability be big terms with it’s fastest not to it You’ll but in contract makes the difference but how they that us important pick there how they of much as if cutting say a better going economics to because a collect know the up well. customers, in fun many you only operators and spot then it in more and Transocean puts performance, of

especially when going The from rates around very for extremely operated see second and a to to those out successful tax on going that Canada, the we towards folks, Norway, the that’s half for here it spec Norway question market the assets. to Norway. high kick discussions Norwegian bring and be between the good we’re are financial we’re robust her that. Anyway, in few part see think to a campaign the the more specification a work, rig fairly in bringing few stimulate incentives government point well, is for view short Barents really would offered see a by of a the solid seems there. positive at to well robust and begin of fit be think our back assets were hand, the--how that the Without tipping in lot to and in our Norway so time, rates, was she Brought of do going there of We lower reason of say, of may assets bringing activity, to really and that those high to and and in be we natural she worked you performing the there see was activity. that’s but it a specification reputations, a ’XX long that the also her - point be but we her schedules, with operations-wise, think your so a on gaps at very they’re we from while home, the to to Norway. apart second substantial driving we it’s clip, fairly Look view is--continues long or lower bifurcation for performance over high

Fredrik Stene

Super, thanks.

that think those that I’ve - time the up can there’s do with outlook so you of Equinor with of continue discussing follow way these work that already, firm that that think anything find those the Just etc. have investors the in four Norway they there, when you of will expire? Equinor’s spent around you how that that will the rigs? to kind terms for extended, rigs, you give to the rigs, in midwater will that same workhorses view rigs do drilling, the rigs, for you you lot work I be believe a be completion Barents, also

Roddie Mackenzie

the think us, when that be not-too-distant we them, so it is more more there as kind in for to they pleased were in contracts, Yes, continue look performance purpose, are those, realm, at for them. feedback right and CATDs have bonuses again terms are continue for and has the and on actually things. and them so kind see of when plenty collection keeping there’s as Equinor beyond that latest the for upgrades do contracts they’re results of the and those those we rigs and to fit push of those and in deliver, that vein keen the get technologies, absolutely of purpose they options we firm some rigs see not on for results the to but them very they the of we that their extended worked the Equinor in scope future. fit we into But that that and borne, up of we’ve digital those We’ve of performance only and extremely brought to work done the digital so with built enhance with are they we’ve

Fredrik Stene

market follow-up an fair that line options, that, a with in it’s a of [indiscernible] that’s final do the more they rate to assume As extension think have there’s that to but discussion? current maybe you if type

Roddie Mackenzie

possibility. a you drawn We’ll pans how now. out just know, to in significant without a negotiation that engaging earnest to on think we when think full be for little negotiations. it’s not time say, but in those, I and that always see I early wait I’ll that’s But do enter

Fredrik Stene

all you much. That’s thank Okay, me. for so

Operator

Thank you.

with BTIG. Our comes Greg next Lewis from question

Greg Lewis

to a right came to question then realizing kind and Mark, it’s I ongoing. I the guess you you, it ongoing thank and the number, ask everybody. decrease just wanted it when reserved I around it know Hey, initially increase a tender, million out, or it. good that $XXX was of morning

that that think any? it the should Assuming there or number, increase about successful, how is capacity $XXX it’s we scope to million beyond if

Mark Mey

Greg. Thanks

I the we’re initiative million. I beyond I $XXX take this take to increase Clearly this, completed think liability be, going plan, it are the it liquidity a look look think our liquidity for a stage, capital XXX. five-year our we we’re our improve we’ve run back, tender, cap this disinclined step management reassess increase once to so think, going we at finish to to structure keep and But at at our in next year, and rate. this that efforts will fourth our at steps

Greg Lewis

was is some in Mark, potential revenue XXXX. That this quarter. whether point the Then for question as great. a or has roll this the I generate Okay, Roddie at rig off rig going to--or that’s mentioned is know revenue, on scheduled the around to Asgard to

that, idle some of we we think time about we that maybe know, kind curious around thinking should about be and into be maybe--you Just heading winter, later thinking that opportunity this rollout year? just rig should about could an before think really it rig starts to really the keep working post in that we its do or summer, maybe spring working or be there how

Roddie Mackenzie

do gaps she’s few see her she’s or here you to I the you a think have or unit, a month expect schedule, well her. expect in idle be relatively there but performing on working, know, it’s general, to the will got certainly a are few high spots I there. two would her short if some really but going, possible in a But irons keep that specification schedule. it - in there opportunity on we so on yes, are we’ve fire

Greg Lewis

opex. if that everything of, much window just Okay, once opportunity to the line it keep the up. and about--and have you is the would knowing once that--I that, is about then kind daily see--Roddie, keep turning to in the mean, staffed you think we’ll and probably to bottomed lowering we start probably different, hey, you thinking working, as days, don’t [indiscernible] corner, things make--I is we see of rig realize an for don’t sight have look What of XX clearly but guys XXX

to understand trying ago. years what Just was couple it that’s to of a relative if change

Roddie Mackenzie

time would idle expect that now, expenditures on mobile to America we in her the with of not marketability a some I’m if idle able parts extremely But then of up would general unit, in really been that we I mean, Latin is Latin going again, is as Asgard but back very changed end tremendously. But significantly have these of She’s periods, the we limited, costs doing - at of right to because rig the the to this quite be good into several are America a times. Look so on rig that time of top that work sure levers there reduce in would well region. can just demand, and so some down to very idle be be we short pretty that. campaign, offset the rig, an idle go reasonable, rates the on you you’ve time. that think a is, pull that it’s during that. list, depends course spot really prospects also bit reduce the I class got it there on is the future of the day of which this little or with Asgard’s but

Greg Lewis

Sounds for thank the good, good to you everybody, hear. much All very right time.

Operator

Thank you.

Bank Sabella of Our Mike next question with comes America. from

Mike Sabella

question shore How you go cycle on activity monitoring, the I for here type same of Hey, guide could of in we remote think everyone. discussions was seen then maybe about lower of the unpack we you AI, When morning AI here. just globally and and we the the the the activities to layering that hoping the means take try working base. be could to some of good bottom should where back on kind we kind costs understand remote next as and and in see in lower think lower we’ve really rigs year. cost monitoring, are of advancements costs advancements thinking

Mark Mey

we let as Mike, that to as so rigs to this a off, firstly, varies shore shot on me shore-based and take count the those rig support need With fewer base over happens come people time. manage at the first. obviously regard rigs,

benefit initially current this digitization savings the make As or so of year. over customers that, that them that to and see initiative, that going other it to to to see see we more in an a and last years, to be that our efficient or quarter cost into there’s continue rigs now this AI continue support as any we’re the We’ve digitalization. going relates into any lot and to offsets to of investment right starting the more the done their or several we’ll around to in able initiatives future we’re invest

Roddie Mackenzie

the systems to with we’ve from being maintenance maintenance of analytics primarily and and your more useful, in think the monitored unnecessary thereby shore add effort. your remotely spending I’d around much just equipment, the are extremely put say assessment time already that accurate programs to not condition dollars be and proven rigs Yes, and that to on I of that equipment have the

projects well whilst track our headlines, implementation us these like already down grabbing and through that costs are certainly helping manage digitization they of not be times. We’re difficult they steady may that,

Jeremy Thigpen

those out carbon but out of faster working years also a while continuing that, organization, have add down the last projects wells to the to cost we so footprint standpoint areas well. fuel drives only hard size work not the thing of then our more these been and board, to activities and over and footprint cost to now several to optimize from a standpoint, one of these as crew on the carbon delivering our and from Just consumption extremely improving optimize just

Mike Sabella

a the switching Then maybe a of there appreciate capital like XQ. gears, looks front, that. drag bit it it Perfect, working all on was just in

of next head for how could we kind us working there you be capital capital the as share come targets just with from thinking lower, into revenues about working year, As are that here? we should

Mark Mey

Macondo we had--for be two of it [indiscernible] of working at the with of one and the E&I date, to happened settlement earlier expected this settlement, we to or ongoing the installment two being also $XXX that If that settlement million see three over the going year, this years. rest only the which next received have not to collected year One, you’ve you’re things basis. you’re capital had looking on we’ve had year, that for an

to increase we QX, an were not A/P $XX the to that course. payments payments a we that liability looking you’re had for If to the million between also so about shouldn’t took, that of a the those, slower our ordinary recur interest little at two the trend quarter you we fact in management specifically, in is in the and given actions got in million some accelerated quarter $XX the addition

Mike Sabella

thanks everyone. Great, a lot

Operator

Thank you.

Our final Sean question from will with Meakim Morgan. come JP

Sean Meakim

current and liquidity the needs year, needed what talk exiting on the how my done of relative at back can morning. type liquidity if just next end. the one business run besides good you Thanks, activity, about are Mark, to to of build here, be Most secure needs levels questions have new we take your Titan? just possession Maybe been covered your that securing financing else to the the look of position ’XX? does on Anything so

Mark Mey

Atlas from so the those Titan, the built We’ve has in and cash flow for we’ve for to Sean, built the contract Titan. you. can built end But out using on I of rigs, I been the in. get gave all in we liquidity payments the the to JSPL XXXX also XXXX. you financing right the that potential certainly now, that of estimate our broken Chevron haven’t but the

and base the earlier, running reducing our mentioned significant other shore the costs with down G&A, second to we this that, which year. regard as this a addition associated I been of during business, rig In our with to has year overhead, came took any our count implemented action as half

in off, point to just I to obviously came You the That me with so those as heard is regard this rigs involved about rigs what managing would come correspondingly rigs. talk folks quarter, costs. reduce contract five we that off those

Sean Meakim

enough. fair it. I appreciate Okay,

Operator

now turn it Lexington to comments. May closing back I’ll you. Thank Mr. for

Lexington May

and you David, today’s you your call. thank Thank for on participation everyone

we a with If you free forward you talking day. our again report me. when look to to contact have further questions, results. please feel Have We fourth good XXXX quarter

Operator

quarter Ladies earnings Transocean third and conference call. XXXX gentlemen, that concludes the

lines this and morning. You you your may disconnect phone joining thank for us