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RIG Transocean

Participants
Lexington May Manager, Investor Relations
Jeremy Thigpen President and CEO
Mark Mey Executive Vice President and CFO
Roddie Mackenzie Senior Vice President, Marketing, Innovation and Industry Relations
Ian MacPherson Simmons
Connor Lynagh Morgan Stanley
Taylor Zurcher Tudor, Pickering & Holt
Fredrik Stene Clarksons Platou Securities
Mike Sabella Bank of America
Sean Meakim JP Morgan
Call transcript
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Operator

Good day. And welcome to the Q4 2020 Transocean Earnings Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Lexington May, Manager of Investor Relations. Please go ahead, sir.

Lexington May

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

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

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

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

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

Jeremy Thigpen

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

connectivity us communications are power deterioration quality you temperatures, to the for the the also calls know, of challenges. part record Therefore, to in the experiencing of for Texas, been we protocols and battling do have forgive and we As COVID-XX, as spread appropriate prevent water year, work we’ve part outages, continue today. better audio of past to any please of and our and many intermittent following low

quarter, $XXX in million revenue. the adjusted on earnings As Transocean for adjusted fourth in reported million $XXX yesterday’s delivered release, EBITDA of

past flow. by driven that unbelievably performance, us of which $XXX teams strong enabled operations generate presented logistical including the our can a efficient deliver was to the reliable and safe, our resilient cash and and we during challenges experienced, best-in-class Importantly, customers. year, continue operating Despite operating global faced and for new number to committed pandemic in we million physical unparalleled a hurdles, that

operational achieved fact, best lost In we In we history time XXXX, Even of incident any second no year incidents. the in a company. recordable delivered the history this total the in with for overall the of single performance of our remarkably, we delivered X.XX, lowest more rate Transocean.

across our We also Transocean. over delivered for new a XX% marked uptime global which fleet, best

Importantly, focused we exclusively of this which deepwater conditions. present and the fleet environment operational are with that result floaters harsh operations, ultra challenging a on most delivered

this even decreased. fleet due Therefore, our market has more Additionally, conditions, active to each to event our significant business. unplanned makes

So, a that, face, to best-in-class sacrifices and to to COVID-XX-related XXXX, needless pandemic continue entire like team continues demonstrate this our each our to Transocean service and inspiring. personal say, to throughout Despite our to truly customers. challenges extend strength the day the for deliver our great made we deepest that I operations to my team the of gratitude for delivered would every team is

support teams, I’d great take to teams addition our shore-based In to delivered effort by moment well. recognize as the operations our a like to

right and earth time. right the to Our rig have at HR that on and travel teams people the ensure right have we moved heaven the

operate to overcame teams equipment, chain our maintain and supply assets. parts and deliver properly to Our obstacles numerous services

liquidity our and their finance to seize material runway reduce to legal and opportunities if and efficiency scale exposures. continue Our they creativity, our teams demonstrate identified extend and

XXXX, efficient remain our And solutions. we for the linking that of of while has And the beneficial mutually continued rejected, revenues. of combination practice efficient to create revenue to have cash. environment. resulted backlog scarce to customers and that competitors customers ensure approximately in to practice our our continue a performance of our as such opportunities to performance, of were an our working ability teams in our many IT connected customers with from much our Our fact and marketing remote align those believe by ultimately we speaking a solutions, of COVID-XX interests to but of the a operational $X.X our our those the compensation continue efficient proud I’m billion enhancement our that with into that overcome to We work helps drive highly into challenges conversion and team

you the to done well transaction. for thank the again, continued entire and all team once for So, to do

Now turning Transocean in the Norway, fleet, starting we the where Barents. repositioned to recently

reputation she and already to have The off the that of further and has is change Norway, busy law MOL an This the in the from a kick set is second are the late pleased Norway, the additional of with outstanding keep quarter run extension Government’s campaign the Barents secured Norge. just and a direct and favorable highlights conditions to offshore in with contract result that is report, in in tax Also Transocean Transocean year. secured into We through end investment slated recently the the fixture to will market spur Equinor production. exploration summer. has attractive Norwegian her in help to resulting Norge

her projects continued can she several commence the that deliver. campaign. current customer bidding improved rig garner after into to of and completion her state-of-the-art actively This interest We’re has would

contract very Paul her the bright. third Jr., such, working the will Loyd, the extended In B As U.K., Chrysaor remains which quarter. continue future the now for through

excellence of week all Mexico, the BHP Deepwater working customer day and at of to its pleased I’m in the Gulf as floating recently Gulf the is best-in-class an This Deepwater the of a its campaign successful is Invictus for Offshore the to named assets one Mexico. advanced Staying finally the in a testament last to outstanding operational over Mexico, The Shell the Moving now announce the of of you exercised recently rate summer. Mexico. rig Gulf options our happy day. the Mexico, performance the The that Atlas the completed on year Gulf to rig announce one stacked, January. in its has just service. in the per well-respected is of $XXX,XXX warm of technically know, increased in Asgard most U.S. most to and Beacon Gulf of And rig but expected Asgard for through is of continue I’m

an further the and look we’re exercise Deepwater for the that XXX-day actively into extend option around Petrobras could option Brazil in her option and In from $XXX,XXX a the from opportunities. into extension during for day the Continuing in Corcovado ranging the As of fall. that that fleet, a announced The These a fourth a to the received These such, I’m BHP these the industry of Shell $XXX we report backlog. her activities XXX-day the busy summer contract signed to work $XXX,XXX rigs nearly with a million day XXXX through pleased one-well to attractive Trinidad. added keep with new to Deepwater extensions Trinidad, both keep focusing now Mykonos. August our bidding multiple day. Brazil her total fixtures will carry rates will and working DDX in through the leading quarter,

customer and terminate as monitor for priority. to expected there recent zero Skyros large term number Asia-Pacific one crew KGX. closely part November term India, The has February. the performance attempted that announce option Deepwater pleased continue than the remaining million I region, rig believe I’m to contract continue loss to the continued due operate rig her a We the the that Furthermore, new exercised Africa, of its the report commenced will to end added with all we in at under with Deepwater development March remedies. in a backlog. Nautilus Reliance events in will keep to to recently signed the with safety strongly busy report West termination to Petronas and summer. we to customer In early urgently Myanmar. the I’m with be working assured, XXXX. the superior and to Shifting area, I’m yesterday quarter, we in crew more safely of on Rest into Malaysia the Despite named time the into to XXXX our Nautilus rig $XX the this and in is with over during our Total will Pasco. that The fourth invalid its was just are for its applicable that the that her the contract quarter end as fixture onboard. was the Also in pleased the of early Moving of record. expire KGX we seven-well pleased has year This the our pursuing Woodside attempted at

quickly Consistent have less her and a after Eriksson in active has once we working, discipline fleet assets actively our early demonstrated repeatedly of continue from decided keeping successful retirements practice XXXX, since units, assess rig marketability remove and profitable diligent campaign with our to of our we each that the competitive Leiv past on responsibly with long-term ConocoPhillips determine to to completion addition philosophy recycle In fleet. we we her Norway. remain opportunities, and as limited we

slowly from upcoming $XX OPEC spoke. discipline as as the recovering oil of result producers distributed toward since of COVID-XX and per is As Brent above and prices and we’re the we shale is barrel, U.S. world. opportunities, cuts, last around demand by improvement trading steady encouraged look spending we Today, vaccine a stability the production

launching Inspiration for this have their the opportunities. Brazil, Our stability and into well commence upwardly that awards delayed in to the Petrobras should line timing planning of economic and but reacting both activity multiyear we stellar to many to contracts previously and adding globe, long-term going U.S. the fixtures and technical not global in additional XXXX rigs year We of believe half of new in of recovery. and available with customers weeks projects second with coming continues expected started projects Brazil. several to And in project are capitalize increase starting the around biased Asgard look In these later make next to Marinas and this in specifications recently several on Mexico, the and the given expected the XXXX. expected early Gulf starting for Trese closer all placed if tenders are months. Taking reputations, a is the the or awards,

pack. tax are we seeing, optimistic successful return wells the activity about to of off the signal will excited Encouraged to incentives during Petrobras’ count the of from market in IOCs unfolding levels over Norway, on demand incentives. incrementally in of that steadily contracts, past matching forward recent rig welcome pace couple in seen with haven’t signs rise rigs project Brazil pre-salt favorable over coupled brought a the this years. We IOCs continue tender gas we projects We next few favorable based the to Brazil handful more account, are we the that by fields sustain Government’s the by result a Norwegian few a for the as of enactment tighten well to expect years exploration the the with and coming next adding of the are sanction investment we opportunities capitalize and to In the on years. anticipate as will are

I mentioned, the to see this with already As the started previously Transocean of Barents. contracting we’ve to fruition come

region, excluding and for multiyear Africa, the could which tender. Mozambique, for Asia-Pacific several in Looking The year. lack Exxon we’ve hot appeared emerged, over of In that by XX medium-term the including long-term Australia, months, encouraged since the programs could short- dearth Total’s several what the next pool multiyear are of now Angola, be in a coming Norway see warm and resurgence the medium- some first seen and U.K., prospects U.K. slight to of we available including be Total’s second activity that perform of could tender opportunities from following a see rigs awarded of tender actually be year. starting multiyear half anticipated we has well work including and XXXX. the rigs In a the we tender tendering this in awarded at see the new now witnessed we’ve to

may half we and generated the volume continued of this As brought In the global global offshore materialize know, difficult you summary, in likely continue for region activity of to sustained expect challenges and and before second through decline that will on opportunities our the has mid-XXXX. to from before year. is drilling these nearing recognize times do expectations levels. pandemic a not We floater account stabilizing the pre-COVID-XX the recovery

XXXX. in customers opportunities However, the back emerging XXXX we’re conversations the improving environment many half very of encouraged macro and and with by our for

initial our the every the this our the through our day deployment valued and of continued assets, investment and the I by our believe adapt opportunity result we to and the efforts is and collective of including technologies caused development of specification each continuously disruptions meaningful organization. development Following across to COVID-XX, improve and direct in that innovate, investments Transocean, deliver have change in team our high innovative members. training seized

our the evidence in techniques Deepwater machine our recently leading drill Conqueror we device system Mexico. on dedication works vision technology of of successful Guard technologies perception. of patented machine deployment As the and by a to worn announced innovation, floor the of through a edge combination the and personnel on learning locating Halo Halo Guard Gulf using and

halt his the overall and around her moves in to operations. something the floor, crew without able the members human but the safety moving area, ability drill has also drilling alert seen a track we not As equipment, and moving technology haven’t to or equipment the is further to our and locate, for only identify individual to ability prompting enhancing before. The equipment crew of respond is member

crews We their going safety to adds our incorporating believe want This our training resources to will additional layer of an also complement we leading other and operations programs. industry potentially and are provide and technology additional industries tools consider protection into crews forward. other with pleased our participants this technology to industry for and

of restructuring competitors. Transocean to offshore I’d are a a majority emerged. discuss six have install of either the to different on to started state have planning our or formally relative this recently now to in The technology the process We like advantageous peers floaters drilling. additional this position moment currently our year. very take is and

competitors liquidity industry post-restructuring, experience candidly, and industry restructure, that But leading we’re and our are decision to our consolidation. as embracing of anticipate to Given backlog, we see pleased the restructuring not we rationalization a a decision. wave we position fleet will facing

owners new more and activity looking at as reactivating costs side well supply supply assets, peers make benefit of including starting sustainable up move As the of and unfolds, quickly ultimately rig shareholders. associated our reduce maintaining and associated heading we equation, costs, the these their will This with to that it as multiple fleets contracting to to teams. the witness marketable reduce rigs. capable the latter undoubtedly approach cash and believe of consolidation new easier in to management companies next. And for demand -- with in stacking marketable to of will see rationalize as existing restructured less pick When part costs we a year we the the of the the into

setting will we out consolidating XXXX offshore and from and time. dwindling potentially recover As the is a the of distributed plays demand could beyond. same to into demand be global vaccines and This increase. way will market the day we continue the rates we pandemic, with the and COVID-XX meaningfully precisely begins increasing to as converging for hydrocarbons think economy for recovery up believe supply robust move currently increase at a If assets the drilling, it

high floaters the Our specific exceptionally arise. and to ultimately when with to is fleet balance generate the specification sufficient well-positioned us capitalize of recovery, deliver opportunities on cash opportunities providing meaningfully sheet flow --

backlog, billion we market take approximately past major by the encouraged fix increasingly are we head market and a $X.X few we six in our comfort experienced have years. that recognize over the dynamics While fully related

in to and the As pragmatic continue that challenges the Transocean will operational such, in the face planning, industry very we specifically and financial our remained near-term. improvement to those recognizing

Mexico. of the U.S. to concerns the drilling like potential regarding in address activity some of Gulf I’d Now,

time and on for drilling and as attention requirements leading paying and regulations changes reduce We by is taking executive to Biden contractor understand we believe this close activity the policies administration’s drilling to to been review regulatory climate this the administration emissions deepwater leasing impose could property the permitting that administration carbon hydrocarbon our to to by any Biden federal in regulatory federal the report adversely impact region, has more exploration of that the desire effort the current by is recent production part can impacted legislative I are orders. and around an around offshore not stringent or waters. industry. change. current lands As drilling We

other these may ultimately believe the placed our production one offshore to elsewhere believe Africa, growth; we carbon intensity long-term produced cap the of that customers Sea lead of barrel United being world, areas. in implications in have It is will West States actions of comes from North the the from Mexico However, among oil should it two that produce on prolific be of all such and significant had including of of the the and that regulations comes looking Mexico noted the first the Gulf oil more our to the is could deepwater produced oil production around macro U.S. Mexico of and hydrocarbons, vast from be the as, lowest on explore Gulf that oil stringent the the deepwater. environment; We customers Gulf economy XX% basins second production that approximately the U.S. Brazil, and important of will States. total as an United part XX%

protecting thus help certain continue types is we still from such, will Gulf certain Transocean Biden initial heard to in from drilling early support the backlog the shore-based has we Transocean impact need have Mexico, Gulf of we full and following conclusion, contracted activities of Mexico It fleet most cash the the the industry, announced the that team. that competitive who approach providing fleet, be too company assess invest regarding training the our needs. will in us with of have world’s we proactive while most permits to of believe largest have note shareholders. the new and to in administration. strongest to floating received of continue maintenance for As from been strategically actions the operators continue announcements fulfill the in energy experienced to U.S. to future to It’s flows that we oil that But In the We the of assets. important assembled to maintain the with to our need the industry’s visibility crews our our and the our crews far. with

have best we the positioned As compelling the are market observe supporting think recovery benefit the prices stabilized, to in such, Indeed, it ready overcome We and we gives are in we the full deepwater their should generation and confidence more of that increase our the us evidence years market as customers In flows. cash to to from that be recovery. to our and eventual come. preservation activity to year. offshore challenges later at customers oil will interim, committed this scale

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

we we remain economic current will our marketed Mark? cycle. industry’s navigate expect successfully utilized that the fleet the most such, As as

Mark Mey

day and all. Thank you, good to Jeremy,

During today’s as call, I well the first for the year and expectations our for XXXX. results then will quarter, briefly quarter full guidance recap fourth as provide

our XXXX. liquidity Let’s provide forecast update an now on through

some a due by weather events team of note to please filing cadence that which significant later experienced reside expect our in of Before to XX-K I is the a who delays few Form caused members our days last by week, typical week begin, winter than Texas. later we this file

loss our of efficiency interest reflects in expenses, the per debt flow $XX for controlling share. of quarter good are associated items, in million of cash put $X.XX quarter-over-quarter to generated fourth about in exceeded loss $XX of due excellence retirement an quarter it diluted including cost reported we press share. or After of third severance reduced flow $XXX XXXX, collections XX%, per million million, Free of EBITDA our you and $XXX details lower was million, include, reported showcasing release. personnel $XXX and fourth a Operating operational our release cash quarter, largely million of net interests Further another improved million. tax wide period attributable quarter fleet expenses. receivables discrete As improved $X.XX expense, with diluted in press performance to revenue adjustments significant stellar revenue $XXX in conversion. adjusted or backlog quarter for included net was Highlights $XXX we adjusted reflecting fourth control, the million, and improvement the from

associated drilling closer operating our primarily million, expected maintenance was December. at and strong for our fourth during expense $XXX -- above well Deepwater the realization previously, quarter slow due above with guidance Operating in other to contract This is the revenue Asgard. of our days our obsolete in results, Looking revenues as efficiency as Asgard for quarter, a mentioned of OEM provision as non-cash inventory. primarily delivered to than additional due and for Deepwater on million. performance fourth gardens activity $XXX moving care The agreements bonuses we

revolving equivalents to Turning ended total cash billion, of cash quarter, the fourth debt approximately including we $X.X $X.X approximately balance of and $X.X cash million and billion, flow approximately liquidity with restricted for and service $XXX cash of unrestricted $X savings discount sheet, from to million of and our million Furthermore, quarter, resulting we market our maturity. of XX%, billion opportunistically credit approximately the approximately in almost interest of during $XX open in repurchase average the debt facility. undrawn

update now full an quarter provide year financial the our first for me on and performance. Let expectations

large campaigns Deepwater XXXX in in Leiv the Asgard during early coupled the the Deepwater the This For on with a fleet-wide revenue drilling XX%. the quarter level Nautilus. $XXX termination expect of and quarter part notice contract the upon efficiency of XXXX, fourth approximately quarter first reflects relative revenue of we activity of of adjusted of average million fleet-wide to respect Eriksson concluded based to due

disputing we validity termination of As currently mentioned, this are notice. the Jeremy

rig retiring in limited that concluded Additionally, the the we we’ll as is future. viability be the Leiv commercial Eriksson

approximately year, adjusted to be anticipating full the For revenue trillion. we are $X.X

result The rolling attributable million. mentioned We as expect off approximately to of a contract. decrease rigs first low quarter O&M quarter-over-quarter activity previously $XXX be the to expense

billion. be O&M we’re full the to year, expense $X.X For approximately anticipating

and $XXX $XXX the G&A for million be expense first quarter be first to $XX million. the approximately interest of interest full the $XX year. includes expect quarter approximately approximately approximately This million. for for We million Net to forecasted capitalized expense is

billion For million, to interest $XX the for anticipate $XXX approximately year, of including million. $XXX of expenditures, quarter for to the interest including approximately first our under net we new construction million maintenance million forecast build and be CapEx. approximately ships $XXX the quarter million. to interest are taxes $XX approximately This approximately expense expected capitalized drill for Capital full and first $XX capitalized million Cash are the be of $X includes for year. $XX million

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

flow to in guidance cost rigs, speculative conclusion, our and efficient to As rig revenue on addition always, any excludes upgrades. enhancement cash or continue optimizing our reactivations safe initiatives. we’ll and focus control through of In operation

We our balance will take sheet continue also we improve to -- also and steps liquidity. to take will

million. transactions to repurchases tenders, XXXX total exchanges, in that a savings overall in and liability debt of also demonstrated our debt debt debt, our through XXXX of we approximately $XXX we included improved billion. maturity approximately by through liquidity resulted a management expense refinancing, These of interest open market $X.X series As private transactions public

available in balance that million of us exchangeable rate been bond note $XXX we release transactions from will into have You continue Subsequent liquidity yesterday to bonds December principal steps deliver to due by amount In release increasing a the the $XX results $XXX the $XXX XXXX. our will into this issued. December of tools exchangeable transactions priority million, since our bonds I participation should run and new transactions due the effectively remaining exchange the extend been of take of increased bonds principal on XXXX of sheet one maturity exchangeable the in close, priority over appropriate of our balance participation these exchangeable total exchange principal beginning using you turn been approximately reduction million million. XXXX guaranteed the result press all principal priority to principal XXXX exchange approximately million guaranteed to This issued of XXXX approximately aggregate that will press reflecting regard, it exchangeable a now approximately our million, in to entered our of bonds in will extended After to expect $XXX Lex. $XXX be market. of the back XXXX.

Lexington May

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

Operator

Instructions] Ian take we’ll the All right. with [Operator And Simmons. question from first MacPherson

Ian MacPherson

for all Thanks. morning, and detail. Mark. Good Thanks the Jeremy

Jeremy Thigpen

Good morning, Ian.

Ian MacPherson

update with It’s question it Same we’ve for is, while are we contract program. CapEx Atlas plowing me an where seems got since like on we’re been a forward with the negotiation. Deepwater

sort on with the maybe cash of in course concerns of strategy us one I burn for think the full is contract just absence here? light update So the So news changing the maybe you there that green any or could points trigger CapEx? of and

Jeremy Thigpen

Roddie delivery us to. for world Obviously, the Thanks, one and assets and well. chime excited the Mark the wanted start we’re big delivery as and of will of can I’ll a then -- be in Ian. best in what Yeah. one to it’s take of

with in their been unwavering. have has Their obviously, been has commitment been unwavering. constant Beacon conversation, We the enthusiasm for project and Offshore

discussions course, their and if then, as of to with so every well. every on we’re to day, backside we that, confident closely. awaiting seem of monitor We the engaged other on are we them, talked on continuing they And obviously FID, not still and but day are the side shipyard that situation

timely point for can And and in if anything trying to time everything And to to so shipyard you then with don’t to know work that. this the get do add Beacon delivery. moving I secure FID want Mark, forward at we to

You might be muted.

Mark Mey

Oh! Yeah. I’m sorry. Yes.

whether Just shipyard with on Ian, we the take not, several Beacon have deal options occur, obviously, we we think, to does as delivery, certainly or rig times, well. say that, payments it’s as the around will if the I final not a that to one great we thing, in rig past whether engage FID we the and with delay Jeremy. discuss how

So it indicated think Beacon. I all to comes back with contract Jeremy discussions

Ian MacPherson

Understood. comments. Thanks for those

heading a I of and you’ve shape over positive a the case made Regarding next that you -- supply forward, got the the over year. Nexus demand the coming think, with market year strong

to of don’t it’s It’s But your that do But of the you maybe I get been were not that also peers peers at bidding discipline to evidence majority had me it worse. will but of So think recapitalization bidding? you see itself market a more the argued as over benefit. opposed a all, before that you that all, when competitive dynamic, for will it you look recapitalization influence of think Do manifest imagine your is much the the recapitalized. the particular already that now? coming the they quarters? how better hard dynamics the than on think of competitive been in threat how Do

Jeremy Thigpen

offer start chime then I’ll color. more even as and can you in Roddie and well

seeing looking and restructuring forward what actually We’re the to then happens all of afterward.

of to owners new the quickly conserve these will ways in to find participants cash is restructured to which want -- sense cash. Our each move are companies and heavy with generate that,

retired to lower assets probably cash just them. of have are to ago, less so their be consume technical we do because activated, a standard the could of will, there you are that reactivated and And go that certainly rig cash And actually in and retirements, rigs them if stack been near-term. years be you reactivate to likely lot consume they of wave, that probably think should a once

see a restructuring. -- we bit -- you’ll through G&A cash see Also rigs quite quite across for a There of we is mean, companies of teams consolidation. going in a retired look post-restructuring. think the I could that think could of up few these that the So are of a I management space. tied each lot you

multiple these a to I Board some to try you’re large if on have owner, consolidate so, And might seats and quickly them. of think companies, restructured move probably,

brings also available think discipline forward. more certainly And of shrinks so think all that -- of we that supply I brings going rigs,

But going it will a more don’t structure, have we’re happens could on So they get want healthier what into post-restructuring. healthier could a see market the much going actually to can be and much work. cash think certainly day to We lead I generate to getting we’ll we a the industry to they’re get standard which and as Roddie, They’re best that. want see set to encouraged approach what to rate disadvantage. obviously… to And this

Roddie Mackenzie

Yeah. Yeah.

Jeremy Thigpen

want you to to anything … add that?

Roddie Mackenzie

XXXX the I doubling basically market bid that dynamics there, in the seeing that could tendering, now less here in were that kind than there’s there’s about you rigs real count return But four I XXXX, levels the years five be fact, activity was timeframe. you cold Sure. than Yeah. there floaters different as mean, big years in you rigs And now. see not even mothballed activity much XX XXX durations the for or may the the then, ago. a if of in rigs levels. and and that maybe added We is that are we’re stacked to levels the opportunity just competitive as and difference

a of announcements Jeremy to intend our they shackles the on have as competitors that several So, taking they and lot the some consolidation. during steps of the because plus basically removed those restructuring, says, these scrap financial assets, made by

easy it’s of very see of fewer number significantly to hands available think the rigs fewer competitors. in I

those a So very bondholders eventually. keen we return to investments would imagine that see their are on

Ian MacPherson

everyone. Thanks, sense. makes All Yeah.

Jeremy Thigpen

Thanks, Ian.

Operator

Lynagh is next Connor the Morgan from And Instructions] with [Operator question Stanley.

Connor Lynagh

Thanks. on to wanted the attrition Yeah. stay here. I theme

sort on older feel impact rigs, you these some that quality on guess we was of presence that in are older the of large part, in or in rigs maybe XXXX, still do large loss or these and hear on the whether the curious, part market clock older to now. but XXXX, taking what’s lower just rewind few not XXXX, there? for going not retirements that some these of rates some to if your out One places -- competitive been take push rigs we of is the less bidding the environment of are the maybe of And weighing on of weighing a day the entirely, I the years market? backs I’m

Jeremy Thigpen

one, that Roddie… take I’ll Yeah.

Roddie Mackenzie

think… I

Jeremy Thigpen

Yeah.

Roddie Mackenzie

Yeah. Absolutely.

were those contract were active think warm, I frame, recognize long-term kept in a have into obviously strong. we point they somewhat the to rigs stacked perhaps somewhat when that that being time turn to back not desire that that at pretty

that’s lot now warm. ability you things. fewer in those debt and this removed to from and some with faced especially a desire kind rigs those enters the decision, or marketplace. and keep of Certainly of being when see what assets covenants So that discipline those of that there’s forwards moving lack of I restructuring no, But fewer think,

number you’re now at number we’re So beginning look point I fleet --by count rigs our the think the are that’s approaching I we half of is it scrapped. the general, we quarter-on-quarter, XXX some if down -- count it’s we’re in at seeing. actually basically eclipse if in And being about and because fleet mean, actually like the this stack of of going equivalent down cold XXXX. the scrapping And we rigs scrapped see numbers, our And later have mean, of you the turn been the year. since half will what

yeah, So, -- the is really game. of scrapping it or name retiring the so

Jeremy Thigpen

think… I

Connor Lynagh

I Okay. sorry. -- Go And ahead. am

Jeremy Thigpen

project not more and it’s the little a the driven if get is years, -- over couple these their of be of can the contracts day, of efficiencies the past the assets over our quickly. too, think been I higher couple meaningful as some seen compress been for day end past can have And [ph] assets. just yeah, have their customers at from the that that newer rate the spec best the the them project think I of have secured they time ones and years

forward. to think accept lower I spec going assets that and they’re so And won’t the starting see

Connor Lynagh

Yeah. different that I asset through think justify becomes longer in it you the set, just reactivate out how stacked require been versus that us rate day But cold or that XXXX, and side the help Understood. cost, think different or your XXXX? assets? would guess higher differently, two you assets that’s they reactivation it those to stack them. the the I would it is just a the is to that other to is can of of are maybe the for becomes an looking the the some prohibitive, of How assets experience put cost some come of year for

Jeremy Thigpen

I that for one multiple I don’t is sit know the to that budget what we as we’ve, fully as it properly list made. don’t years, see have to an now or put what it out. what industry some and asset together to of to two we going for these what experienced year might the understand brought a we together points then assets, we cost process going this know these before, be, thought But it of to back your stacked going and you obviously a reactivate. to well would cost reactivate take But put of be. a preserved We we thought I was is think

time, cumbersome the stacked, the depending length million passes, still more $XX I think million might as more time we’ve reactivation yet. from so know the more on the to and and the water in in anywhere well you think a it’s and salt -- that But long and -- this said, I don’t dollars. -- I candidly, the electronics think we’ve to been see of over sitting just we $XXX is asset you water and mean, got repeatedly expensive. probably reactivation

invest that with competitors’ perspective, reactivation perspective, we’re and that our us from the capital unless so contract we’re for return. our gets getting willing And hopefully, into not rewarded to

Mark Mey

And you… will Connor, tell I

Connor Lynagh

that… With Yeah.

Mark Mey

will say… I just

Connor Lynagh

ahead. Go Okay.

Sorry.

Mark Mey

If at assets. million $XX $XXX for at they balance to plus and million million. just the, I’m said, cannot to afford you going not go to spend possible our sort It’s Jeremy liquidity the ahead reactivating and sheets of look of everybody. peers, $XX start on

Jeremy Thigpen

-- that once that have. was our yeah. Yeah. now certainly be the money really was a upon amongst was a that. remaining then No. point bad capital the coffers to do in the that there of my That would use time very was That But groups competitors perhaps

imagine So they’re that do. not we to that going want something to is

Connor Lynagh

sense. Thanks all for Makes the color. Thanks.

Operator

Taylor Tudor, & Zurcher right. question Pickering is All with The next from Holt.

Taylor Zurcher

thank Gulf Hey. Good the in to regulatory the environment premature, if you. Mexico said be asking going and XX of question this not of a in and that’s bit the morning new specific you opportunity, to be start but most Gulf of I of on wanted realized that, to kpsi all the I by might Mexico.

But your a to could with kpsi I’m thinking of there regulatory of capabilities. you Thanks. curious now. XX would respect with us am Atlas, help thinking your whether intent two So has the any mainly just about think I some upgrading impact if might only which thought here, helpful. these letter right changes newbuilds be

Jeremy Thigpen

up that. with pick I’ll Yeah. Roddie

Roddie Mackenzie

Yeah.

Jeremy Thigpen

Sure. Yeah.

of have They’ve -- in the the development on things, on approved. the have Those are look, got of Anchor fields are been XX plans and So, development Shenandoah. the k that that side sanctioned. place that prospects for been that previously for likes plans

in compliance. the current, getting the so the in that is existing they basically rules the that all are process all which being obviously, they following are drilling these means as permits, of leases go technology of leases that all are through qualified, the of Now, and

commitments, drilling rules, that that the administration previous in of accordance the that they with shown license. their filed course, under that -- honoring permits So has are means approving are which filed they current are the and

mean, being just these to that of see permits development don’t do. challenges Boma just the allow rules, the of the really we authorities are the the the of are see we operators Interior following what to we’re I see assets. offices, any as that, should So, local are precautions And they’re to Department we exactly really again, to particular a as existing because don’t doing all And hurdle. supposed do. they Returning all taken these

So at from view, on there much see XX really point don’t the that of of risk qualifications we all k equipment. the

Taylor Zurcher

Inspiration of are up sounded some And both as relates it most today. my marketable prepared of was That’s those Mexico. and the In in idle like Gulf the good helpful. both sounded XXXX for have is, assets opportunities those that. follow of that it Thanks and of within like remarks, right. All Asgard to the

by, could color you any would a way some Mexico both for and there’s think of XXXX, might provide whether let’s guidance if So the I’m helpful. bid just that be be Gulf back year-end in U.S. of you curious, say, on rigs largely rigs are those opportunities super being working those or

Roddie Mackenzie

one that stick Yeah. up. I’ll Sure.

when it exited Mexico, XXXX. very the to So, it’s interesting, compare as what we’re of we enter in seeing saw we -- we Gulf what

kind that or just So began tight, not the XXX, may we XXX getting the recall you mid-Xs. from kind all level little assets were up of of to successful the available supply shrink. the And essentially in became quite rates may a to

and again. same the of or been the that number mothballed, we retired the of seeing of actually thing, that we’re greater by detail, opportunities the go end show rigs rigs couple into the and see and have kind because number cold rigs permanently of since short. When actually XXXX available So we stacked, number we demand of put there’s together supply of a chart of our

that with that. control well have new and like the they So rules combined and shooting stuff

of long things. required some items arms and lead kind there’s those share So on

to demand already going optimistic it we’re cautiously the pop the in that see Mexico there We’re seen of and is Gulf a tenders. in

working So the there’s both of I from a rates possibility very these take will once the to good for a of market and we year at think, there. get But end this looking those few it’s it things be like get sure exiting up, booked balanced a year.

where to months, development nine very that’s positive we compared months some So were ago. a six

Taylor Zurcher

the Thanks for answers. Awesome.

Operator

Platou Fredrik is from All with question right. Stene Securities. The next Clarksons

Fredrik Stene

guys. first congratulations on strong operational quarter. and question… here, very My Hey, the Fredrik It’s

Jeremy Thigpen

Fredrik. you, Thank

Fredrik Stene

few the to also you now …relates substantially and particularly had relate you’ve side the what is the of reduce you’ve you -- here, done to have question kind the have I able in lever which unsecured mostly debt years. of pulled on every next due you’ve to that been my financial impressive, what amount think

example, for think secured amounts turn the you for the So runway you I even and of instead this? minimal would you to do you or bond have. to senior Do that left capacity your compared century levers now out the left try you efforts guarantee even more get other was bonds can towards, example, wondering any to pull, more quote what we don’t have that

Mark Mey

several the for a good question. runway Fredrik, philosophy of been of and that’s And has a maintain our liquidity five years last years. about look, to try

we bonds, and and secured, years that way or we it’s that out So in any five guaranteed in can as which soon as runway, convertible can. we and whatever check try we look is unsecured, whether over

equity in year, and hit sitting we COVID pricing go February, some opportunity to impact to which and were that our debt exchanges. provides last no do idea a we So the and going we month had later, us on had were dramatic for an a

the through of arise, we possible. rest that, we keep as and continue advantage of to as look runway that So arise this take year, opportunities as and will -- clear as

Fredrik Stene

again, like as future from with these Do to with have MCs for that, of effect. update you any an something as had just up a you’ve Equinor, those an have well, -- a to of tax as Norway from bonds, new your rigs option And is pricing new if actually or discussions a I the rigs or on in contract, about exercised starting the to follow expectations this -- [ph]? scheme and the or the the contract think, Perfect. definitely I that like about and any seems it them. the market relates the Equinor call in At moment, the

Jeremy Thigpen

Roddie, you to that. do want take

Roddie Mackenzie

take will one. I Yeah. that Absolutely.

those exploring are that for customers, with But, are various in the constant rigs. customized. dialogue through rigs. could have We’ve technology meaningful Equinor being highly our really yeah, recently things They So, several biggest. course, of been side we do upgrades the on yes, gone we one of those with we so different

invested actually upgrades. reaping Equinor’s well the extremely actually performing those of and are that rigs these benefits in So

we certainly, the active seems the there an remain demand the that Equinor, will part be very because be fleet. are in the top optimistic but also they there So to fleet, performers of amongst from Equinor

good pretty about feeling we’re So that.

Fredrik Stene

Thank you, the queue. guys. in I’ll back get

Operator

of Bank The All is right. question Mike with from next Sabella America.

Mike Sabella

everyone. morning, Good Hey.

little as as Could is one day into year the head and towards we I that we you or of later on, too improving improving sort hoping is for what things was touch recovery? start a kind of to still I the idea outlook So you Jeremy, means, is guess an of it give the year us of this mentioned, kind next kind that $XXX-ish rate of earlier of optimistic XXXX.

Jeremy Thigpen

if Yeah. Well, one have think, -- Trinidad, till we what of of it’s we we in to -- back you we we to, remember in signed XXXX, prepared DDX, kind it and I about starting the range. and $XXX that had I’d fixtures, up close January moving was that for were were deepwater the momentum, quoted mid-XXX the I in And and all signed was drillship We our in some semi-submersibles XXXX really point when remarks, in the XXXX think which the direction. five build ultra we announced right $XXX,XXX. so I of that

a little maybe And more were as our momentum COVID of and we the hit bit think sails. I around they entered averaged unfortunately, just suck the more. XXX, seeing building year, out we wind and

of happens, I elsewhere, think so and where rates Gulf we is you similar trajectory, marketable pretty Roddie day market And there push as now right some Mexico when enthusiasm could could rigs can consumed that you quickly. there out probably and quickly start the get pretty some see supply a where, and to of said, see

Xs add to is if the So, color can to you market more want don’t know to -- together. But not hold I that. if Roddie, continue high I mean, mid-Xs I unrealistic I think

Roddie Mackenzie

Yeah.

some And a barrel be the and have think I year some folks they’re a even barrel, to predicting operators still the floater. commodity supply cases with our close to modest going demand the associated the years concur if to in several charts tooling in to And and a you point in day is would quite very made lower. opportunity I pay by I be be see and the at think, to XXs mean, customers by attention think few the certainly, this profitable a we past $XX XXs with that. the certainly, be that’s is, prices in have money or end, I the honest, there. And I the in XXXX. good the a $XX we rates with there’s case even business spent really increase those

to is So, XX in high the yeah, months. XX certainly, next very months to possible Xs mid-Xs

Mike Sabella

as place, Perfect. relative in if laid in are Thanks. point. long-term long-term contracts Anchor in on on I’ve anything that schedule But Gulf for beaten then, to of takes of and other been contracts at this that a Gulf expected expecting? than in from what’s and think the probably of be of Chevron is that Mexico. other Gulf the us of if kind previous the And still hearing you of to going Anchor bad what are depth the the any of administration Mexico? the we any was Mexico rigs, it the gets time some is direction their mean, people out I concern of more those there Are

Roddie Mackenzie

no there’s mean, I Yeah. Yeah. accounting.

Jeremy. ahead, go Sorry,

Jeremy Thigpen

Yeah. Roddie, go ahead.

Jeremy Thigpen

but keen feedback get technical talk there’s to the them for and not to immediate increased to no Okay. case. environment. left the them sadly, I ESG of accounting could seen And is. from so far Gulf very see the take -- kind the that not customers worth There is and about if our certainly larger those they so now we pushing earlier time. of get we’ve an the just means in from actually trying of and is political But economic it’s Mexico mean, they we on, get all But, -- think, them an we the certainly, that would is that’s turn. -- macro engine things. think But I the rigs shutdown they But I we details they’re targets are where it. what also start environment with to the improvements I think administration that a the is attractive I on earlier, urgency

yet? not by drawbacks So the have customer. anything, urgency we saying, we’ve from If I would seen just more any to that summarize seen

that best we we look as that, can. So, we will appreciate and service obviously, possibly to

Mike Sabella

Perfect. everyone. Thanks,

Operator

we’ll right. question JP And final Morgan. take from All Meakim Sean with our

Sean Meakim

Good you. Thank morning.

Jeremy Thigpen

morning. Good

Sean Meakim

shorter in the or contract term get So, duration you markets optionality in where not some supply/demand can you’ll headed in talk words, leave lock a contracts you and a for some in rates as then you approach expect, on just tenders expect duration? maybe barbell work if you you you approach you focus where and see more see try at as would for should high favorable Anchor to lock to maybe others? below longer level do other ‘XX, better So how we dynamics about prospects

Roddie Mackenzie

Yeah.

I think…

Jeremy Thigpen

Probably above. all of the

Roddie Mackenzie

Right?

Jeremy Thigpen

powers were, Yeah. that in of you can have see fleet I So we the specifically which of the We’ll are term. competitive longer mean, have few on to assets where the right? ones analysis the industry. features you special as extremely are of that, like look status at that have do you’d Roddie, if a they are report, you kind think locked super or rare perhaps in

tag to So we up we’re I say, the We all best rates few. our that do assets them to going EBITDA. take do a not don’t certainly, create would meaningful in day to lock But and of look above.

begin do if even That’s those upside going we keep see worth contracts. in as time to this thing short will for it have little a between We of the be improve. we bit to idle

periods So, long we up low at of time but better tie keen yeah, sure, are to a split the on rates. assets for them not strategy for certainly

Roddie Mackenzie

scaling two year day rate, a agree rate, to even three higher higher I day anything day we were going that? do at year with No. at some a like rate, one an year up

Sean Meakim

mentioned the options it’s one last perspective? and your noting as of by terms up stocks four at does perhaps up of follow Mark, months, the just of runway sense. set options, change before, Right. Right. for, how worth you that all in liquidity max your that your lot in more from Maybe That a to financing on you clearing see remaining just makes

Mark Mey

at it equity. options. could length, out we look one equity enhances think could Having I our we there, tool potential look more at

has driver market the with, repurchases. tenders, seen first as been you’ve primary Our exchanges, open

of the sense to and So at go for most shareholders, we’re economic going after we’re look going whatever all that. makes our that to

Sean Meakim

Very good. it. Got you. Thank

Operator

additional for are Lexington, call further or at turn And the there this any All questions to remarks. closing you like to time. back right. no I’d

Lexington May

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

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

Operator

call. concludes you for This participation. today’s your Thank

You may disconnect. now