Borr Drilling Limited

Good morning, and thank you for participating in the Board Drilling Second Quarter 2024 Earnings Call. I'm Patrick Schorn, and with me here today in Dubai is Bruno Moran, our Chief Commercial Officer, and Magnus Feiler, our Chief Financial Officer. Next slide, please. First, covering the required disclaimers. I would like to remind all participants that some of the statements will be forward-looking. These matters involve risk and uncertainties that could cause actual results to differ materially from those projected in these statements. I therefore refer you to our latest public filings. Next slide. I'm pleased with the second quarter results and performance. All 22 delivered rigs are contracted and committed. In addition, one of the new-built rigs, the Vale, has been delivered today, for which we already have a work scope assigned. and the VAR, our final new build, remains on schedule for delivery in late Q4 2024. On the back of our strong contract portfolio, we generated 253 million in adjusted EBITDA year-to-date, positioning us well to meet our full year 2024 adjusted EBITDA guidance of 500 to 550 million. From a cash standpoint, we are well-positioned for the future. We have an underground 150 million RCF, a 45 million guarantee facility, and nearly 200 million in cash at the end of the quarter. In 2024, we will complete our CAPEX program related to the new build rigs, enable us to further enhance shareholder returns through additional dividends and or share buybacks, with a hundred million still available under the current buyback authorization the board has approved a quarterly dividend of 10 cents per share for q2 2024 which was doubled in the first quarter amounting to approximately 100 million in annual dividends In terms of contracting, we have continued to secure new contracts at a creative day rate, including the recently announced long-term contract for the Arabia One in Brazil. I'm particularly pleased that following the unexpected suspension in Saudi Arabia, we were successfully in obtaining a replacement contract. It should be advantageous for the coming four years due to its higher day rate and longer contract duration. As I already mentioned, all our 22 delivered rigs are again contracted with only few days left remaining available in 2024. Looking ahead to 2025, we currently have about 73% of our capacity contracted. which aligns with our expectations for this time of the year. Looking ahead, we foresee a continued tight market for premium assets, leading to sustained better pricing. The global jack-up fleet's age profile, with now 30% of the rigs being over 35 years old, is expected to drive incremental retirements. Coupled with the fact that no new rigs have been ordered in the past decade, these conditions create a favorable environment for our company, which operates the youngest fleet of 24 premium rigs in the industry. The second quarter operational performance has been strong, with a technical utilization rate of 99.2%, which was converted into a strong economic utilization of 98.4%. Magnus will now step you through the financial details of the second quarter. Thank you, Patrick.

The financial performance for Q2 was strong and continues the positive trend experienced in the recent quarters, with an increase quarter-on-quarter in total revenue of 16% and an increase in adjusted EBITDA of 17%. Q2 total operating revenues were 271.9 million, an increase of 37.9 million compared to the first quarter. Out of these 37.9 million, day rate revenues increased by 24.7 million. This related partly to increases in operating days and day rates for the rigs Aydin, Thor, and the Prospective 5, and 14.5 million impact from the amortization of deferred MOB revenue related to the contract termination for the Arabia one. These increases were partly offset by a decrease in operating days for the railway one. In addition, for the first time included in the total operating revenues was the recognition of management contract revenue of 11.7 million for three of our bare boat rigs in Mexico, for which we also provide rig operational and maintenance support services. Total operating expenses for the second quarter were 167.6 million, an increase of 18.4 million compared to the first quarter. 11.2 million of the increase relates to the rig operating and maintenance support services we do in Mexico, which I mentioned under revenues, and that we earned 5% margin on. In addition, 3.9 million of the total variance is due to the increase in amortization of deferred costs associated with the termination of Arabia 1. Net income for the quarter was 31.7 million, an increase of 17.3 million, or more than doubling from Q1. Adjusted EBITDA was 136.4 million, an increase of 19.6 million, or 17%. Our free cash position at the end of Q2 was 193.5 million. In addition, we had 150 million undrawn under our RCF facility resulting in total available liquidity of approximately 344 million. The total cash in the quarter decreased by 88.5 million. We've taken a closer look at the cash flows where net cash provided by operating activities was 9.1 million. This includes 91.9 million of cash interest paid on our bonds and 17.2 million of income taxes paid. Net cash used in the Investing activities was 13.4 million. This includes 6.8 million used on jack-up additions consisting primarily of costs for special periodic surveys and long-term maintenance, and 6.4 million used on new building additions relating to the activation costs for our new buildings. Net cash in financing activities was 84.2 million. This includes 60.3 million paid on our bond debt amortization. and 23.9 million of cash distributions paid to shareholders. Subsequent to quarter end, we raised 150 million of additional debt under our 2028 senior secured notes to finance the delivery of our new build, Devaldi. While the seller's financing was available for this rig due to more favorable pricing and terms under our bones, we decided to raise additional debt through this 150 million tax. We continue to have sellers financing committed to the last new build to be delivered later this year, but we will explore possibilities when we are approaching delivery. With this, I will pass the word over to Bruno.

Thanks, Magnus. On the commercial front, we have continued to add accretive contract to our backlog, including one further fixture with a clean day rate above $200,000 per day. So far this year, we've secured 14 new commitments, adding nearly 10 rig years and 651 million in backlog at market leading rates. Let me provide some highlights of our recent fixtures. Firstly, the Prospector 1 has had a one-well option exercised by ONI Diaz. This option should keep the rig contracted into Q2 2025. This additional scope relates to the GEMS project in the Netherlands, which includes upgrades to the Prospector 1 that will ultimately enable it to operate with 100% green electricity provided by a nearby wind farm. We're very pleased with our close collaboration with ONI Diaz and how this continues to add to our portfolio of projects focused on reducing the carbon footprint from our operations. In Southeast Asia, we secured a binding letter of award for the gun lot for a 210-day program commencing November this year. In Africa, the NORVA has secured a further extension with VWE that will maintain the rig contracted until February 2025. The rig will then commence its subsequent contract with Marathon Oil in EG. We continue to see interest work prospects across Africa. The NORVA is a high-performing unit capable of operating up to 400 feet of water and remains well positioned to secure continued commitments in the region. During our last quarter's conference call, we announced the company had secured two commitments in Africa amounting to 660 days of backlog for which rig assignments were still under review. We're pleased to confirm that the GERD has been assigned the first commitment with ENI in Congo. It will commence its mobilization from the UAE in September following the completion of the current contract with Gunduk. For the second commitment, we will assign our new group Vali and expect the work to commence between late Q4 2024 and Q1 2025. And lastly, the Arabia One, which had its contract suspended by Iran this year, has now secured a new long-term contract in Brazil, expected to commence in Q1 2025 and significantly improve the economics. On the back of this contract, our fleet is nearly fully contracted for 2024, with limited wide spaces mainly related to the door in late Q4. For 2025, our contracted coverage has now reached 70%, including firm contracts and priced options. The new awards received this year at market-leading rates have resulted in an increase of approximately $13,000 per day to the average day rate of our backlog. And the combination of health contract coverage and higher day rates gives us strong revenue visibility in 2025. From a broader market perspective, utilization for modern jackups remains at approximately 95% not adjusted for aeronautical suspensions. Following a second wave of suspensions by Aramco, there have been 22 modern rigs suspended this year, of which five have already been recontracted elsewhere, including our Arabia 1. We anticipate that only 12 of the 17 rigs remain suspended will be competitive international market due to factors such as the technical capabilities and the geographical footprint of their operators. On the new build front, no orders have been placed for nearly a decade, and the shipyard order book extended 12 rigs, representing only 2% of the total Jacob fleet. This is a remarkably low number, particularly considering the fleet age statistics mentioned earlier by Patrick. We anticipate that only four of the rigs under construction could join the active fleet in the next 12 to 18 months, and that includes our new butte bar. Looking at the demand side, we reiterate our view that incremental demand in the next 12 to 18 months will be sufficient to offset the supply impact from aeronautical suspensions and UV deliveries. Based on our in-house outlook, we forecast an incremental demand of 15 to 20 rigs. Comparatively, data from S&P Global in their latest World Rig Forecast indicates an incremental demand of 25 to 30 rigs in the period, which supports our projection. While some markets may experience near-term competitive pressure, we anticipate it to be punctual and short-lived as the market continues to absorb the available capacity. In summary, we maintain a positive view of the market balance for Modern Jacket Flea and its day rate momentum. With that, I'd like to hand the call back to Patrick.

Thank you, Bruno. So, in conclusion, there are three main messages I would like to leave you with. Firstly, Our ability to add backlog at market leading rates remains intact and is strengthening our future earnings. This is very much related to our truly global footprint and deep client relationships across the globe. Secondly, our adjusted EBITDA guidance is and remains $500 to $550 million for the full year 2024. And lastly, the Board approved quarterly dividend of 10 cents per share, resulting in $100 million annualized dividend payment. Looking at 2025, with reduced CAPEX outlay and incremental day rates for the already committed contracts, then there is plenty potential to significantly increase returns to shareholders going forward. Ladies and gentlemen, I would like to end here our prepared remarks, and we can go to Q&A.

Thank you so much, dear participants. As a reminder, if you wish to ask a question, please press star 1-1 on your telephone keypad and wait for a name to be announced. To withdraw a question, please press star 1-1 again. Please kindly ask one question and possibly a follow-up question at a time to leave room for other participants. If you do have any further questions, you can please rejoin the queue. If you wish to ask a question via the webcast, please type it in the question box and click Submit. Please kindly submit your questions in a timely manner so that we will have the opportunity to view beforehand.

And now we're going to take our first question.

And it comes from the line of James West from Evercore ISI. Your line is open. Please ask your question.

Hey, good afternoon, guys. Hi, James. Patrick, you're going from a situation where you guys are using cash for the new builds to next year where you're going to have just a huge amount of cash flow, and a lot of that will turn into free cash flow. I know you just doubled the dividend, but as you and your discussions with the board are thinking about shareholder returns, where do you think the best returns are? Is it the buyback dividend? Is it any debt reduction? I mean, how are you guys thinking about the uses of the free cash flow?

All right, let me maybe give a bit of an idea of firstly, how much do we think that this approximately is going to be? And then Magnus can talk a little bit as to the uses of that and where we see the benefit. But if you look at the year on year change that we see, Because 2024 CompEx was impacted by the delivery of the two and the final new builds in the second half of this year. The cash outflow related to these two deliveries, net of the loan financing, is approximately $80 million when taking into account the delivery installment and activation cost for these rigs. This will not be occurring again next year, and we will thus have a positive impact on the cash available in 2025. Secondly, 2024 has a higher number of special periodic surveys for our rigs, coming due every five years, and a large portion of our rigs were delivered five years ago in 2019. With our fleet consisting of 24 rigs when all are delivered and SPS carried out every five years, you would expect an average of approximately five years coming up for SPS every year. In 2024, we actually 10 rigs, obviously more cash costs associated. And in 25 and 26, we expect only to do two or three per year. So that cost also goes down. So lastly, from an earnings perspective, and if you look at a simple back of the envelope, back based on the numbers that Bruno has shown, then in 2024, the average day rate we have fixed is around $135,000 per day. And what we have so far in the books for 2025 is $148,000 per day. This increase of around $13,000 per day for the full fleet is totaling to just over a hundred million as well. So adding all these three factors together just for illustrative purpose, one can expect an increase cashflow year over year of over $200 million, which in turn obviously then can be used for capital returns through dividend share buyback or repayment of debt. And maybe Magnus, you can talk a little bit about what are some of the considerations that we have there.

Yes, thanks, Patrick. So we have, as mentioned, the quarterly dividend established already, which the board has set of 10 cents. Secondly, we're doing the annual amortization of the bonds of around $125 million per year. There's also a cash sweep element in the bonds that, depending on our leverage ratio, the bondholders can elect to take additional down payments on the bonds starting in 2025, up to 50% of our free cash flow the preceding year. So that is also a way of making capital returns. Lastly, we also have the 100 million authorized share buyback program, which we haven't started utilizing yet. I think it's a matter of, it's obviously up to the board to decide which one of these go for but it's very good to have all these tools available for us to see what is what is most beneficial at the time of when the cash comes in looking at the share price at that time and also to see what the shareholders would prefer so lastly up to up to the board to decide, but we have all the tools necessary to provide a good, balanced return to stakeholders.

That's great. Very comprehensive. Thanks, guys.

Thank you, James. Now we're going to take our next question. And the question comes from the line of Frederick Steen from Clarkson Securities. Your line is open. Please ask your question.

Hey, Patrick and team. Hope you're all well. I wanted to touch a bit on the new builds. You said that the VALIS is going to be delivered this week and now it's assigned to this Africa contract. And you've financed it with the bond instead of shipyard financing. And then clearly the next big event here is what's going to happen with the VAR. And you seem relatively confident, in my view at least, that you'll be able to get something lined up for that rig ahead of its delivery. So for me, it would be very interesting to hear any call that you could give on what those potential opportunities look like. What type of geography are we looking at? Will it be a long idle time from delivery until contract startup? Should we expect rates similar to the leading edge rates you signed already? Anything on that would be very helpful. Thanks.

Okay Frederik, I understand. And clearly the commercial environment is a very interesting one at this moment. Obviously after the Saudi suspension it has changed somewhat, but I think it needs to be very clear that the people that we compete with in general particularly the ones affected by some of the bigger suspensions in Saudi, don't all have a global footprint, don't all have operating bases in the places where there might be activity coming up, nor necessarily the setup to actually take care of it. And I think that therefore you have to think that there is a bit of a bifurcation in markets. I think that what you see today is that in Asia, the competitive pressures have changed quite a bit due to the Aramco suspensions. But in the rest of the world, there is still quite a bit of expertise required from companies to work in areas as the Americas, Mexico, Africa. These are not as open to everybody. That is what I would say is where some of our strength comes from and where we are also able to maintain the pricing that we have today. I understand you would like more color where we see the contract for the VAR coming from, I would like to keep that commercial part a little bit under wraps until we indeed have signed it up. So I'll have to kind of speak a little bit in riddles to you there until we have it all covered. But you are correct in stating that we feel that we have sufficient irons in the fire to make sure that we have work lined up by the time that the farm becomes available as well.

That's very helpful, Patrick. And just on the back of that, the jacket market seem, as you kind of using your own words, quite bifurcated currently. And we've seen rates, in the back of better words, all over the place after Saudi started to suspend rigs. And on the back of what you said now around the VAR, do you think, and potentially also taking your... contract coverage for next year into account. Are you comfortable still beating those high levels and comfortable also potentially losing out to some work while doing so to make sure that you're still in that high end of the rate spread?

Yeah, I'll let Bruno talk more about the raise, but I think there's two things that impacted for us and that you gotta keep in mind as well. We don't have much available, so I don't have to bid a whole lot, right? It's not like I have to sell 100 rigs, we have here and there some availability. So that makes the picture quite different. I also think there is different value that we provide, right? And therefore, pricing is different. But I'll let Bruno elaborate a little bit more on that. That obviously has more details on it.

Yeah, Frederick, and Patrick alluded to that a while ago, but the reality is in some markets where barriers of entry are a bit lower, we've seen realistically a stronger complexion behavior, some of our complexions, and people that don't necessarily have the same geographical footprint as us will fight more aggressive for opportunities that they can grasp, and I think that's normal, that's expected. I think Asia particularly has been one of those markets. Outside of that, I think the impact has been quite discreet, I would say. So that leaves us in a good position to look for opportunities. I think there's a few things to consider here. I mean, if you look at the exposure that we have, and particularly the VAR, it's a series of rates that are very unique capabilities. If you look at the sister rate saga operating for Brunei and for Shell in Brunei, performance of the rig has been remarkable and those rigs build a reputation for themselves in the industry. So they're well sought after assets that gives us certainly a competitive advantage. Now, Patrick mentioned, if you look at our exposure and seeing what we already have in the works, we feel that the open days, even in 2025, that we have are predominantly focused on the second half of the year. That basically effectively gives us two to three quarters here for the market to absorb, and you oversupply and normalize in a place where you think that it will continue to provide robust pricing power. So we're confident in the market. I don't see any from our rigs and our availability, we don't see any substantial rate pressure on the downside. Much the opposite. but a lot of opportunities where we can continue to drive rates upwards. We mentioned in the second quarter we had one further fixture breaking the $200,000 a day mark. I think that's a good testament of that.

Thank you. Thank you very much. Final, and I'm sorry for doing two main questions here. The final one for me. Your range 500 to 550 for the year guidance, you're 92% covered, and I think a couple of the quote, idle periods for the prospector one, Gundlod, Gerd. What's going to make you end up in the low end and the high end of that range? Thanks.

Yeah, I think that at this moment, Frederik, I don't think we're in a position to close that in any further. As you have seen with some of the suspensions in Saudi, these things can happen fast and do change your income profile and you have to deal with it that's just part of the business that we have so i think for right now we are able to deal with the changes that we see in the business and we have no concern with regards to keeping the guidance where it is but i wouldn't want to change the Brackets of that make it any tighter or anything like that. I think there is there's too many things that still can happen in the year It is a very Full of our business from time to time so you're right I mean there shouldn't be too many moving pieces if everything unfolds as we expect it to be will be delivering within that bracket and That is what remains our goal All right

Thank you so much. I'll hand it back. Have a good day.

Thank you. Now we're going to take over to the next question, and it comes from the line of Charles Olsen from Fernley Securities. Your line is open. Please ask your question.

Thank you. Hi, Patrick, Magnus, Bruno. So switching gears, you won a significant contract in Brazil. Obviously, Brazil is not the biggest jack-of-market. But it has its, call it, challenges, or it's a bit cumbersome from an import acceptance point of view. How should we think about that cost-wise and any risk we should sort of have in mind related to, call it, the project of bringing the jack-up into Brazil and on operations? You have a local partner as well, I gather, or as I understand it, so...

Yes, that's absolutely fair. I think that all operating environments come with their own peculiarities. And Brazil certainly has its share of that as well. And acceptance in Brazil can be complicated. So for us, it was very clear that because of the volume of future work that we see there, also on the Jacob side, it is important enough for us to not ignore it and therefore we have analyzed this very carefully and it became clear that without a local partner for us it wouldn't be the right market so we do have the right partner and together I think we put something very attractive together I mean, Bruno obviously knows that market far better than I do. Maybe, Bruno, you can talk a little bit on how we manage our rigs or our startup risk in relation to the cooperation that we have there.

Yeah, for sure. We are currently forecasting the rig will be on contract in the first quarter of 2025. a quite essential period now to address those things and prepare for that. We have been working and we continue to work now in very close cooperation with the Brazilian company that will help us in our operation. We have their people currently on board the rig, so we're doing obviously a very substantial scoping of everything that has to be done. It's worthwhile to mention that certainly while the Petrobras contract in Brazil comes with challenges, that contract is one that is coupled with a quite substantial mobilization fee, so that will help us a long way in preparing and making sure that we're appropriately funded. But we have time and we're operating with a company that has quite a bit of the local expertise and will give us the volume as well. We do appreciate that it's a complex market and running a one-ring operation will be probably undersized. Now joining forces with a company with a large experience would help. That all said, I think one of the interesting features of the Brazil contract is that program is predominantly or almost exclusively, I would say, focused on P&A and intervention. And from a working perspective, it should be a relatively simple piece of work. And I think it's probably fair to say that we have a rig that is oversized potentially for what was needed. That said, I think it was a good fit for Petrobras. It was a good fit for us. It's a four-year contract with a very high likelihood that we extend way beyond that. So we're very pleased with it.

And I think this is one also where the focus will be heavily on efficiency, using all the capabilities of the rig to make sure that we can P&A that's far faster than what you would do on a more traditional rig. So very pleased with that. But your comments are fair. It is a market that we are trying to treat with the appropriate respect.

Okay, good. Thank you. And yeah, I think that's it for me. Thank you, guys. Thank you, George. Thank you.

Thank you. Now we're going to take our next question. And the next question comes from the line of Doug Becker from Capital One. Your line is open. Please ask your question.

Thank you. Patrick, you clearly remain constructive on the jack-up market, despite the second wave of suspensions in Saudi Arabia. How do you assess the risk of a third wave of suspensions? And the reason I ask is after the first wave, there were rumblings that a second wave was possible. Is there anything like that this time around?

Yeah, that is a very good question, Doug. And I mean, I honestly don't quite know. I think that if I look back, and I mean, we've had here at Boer and previously, you a lot of interactions with Aramco as well. So this sudden change and the magnitude of it had me quite surprised and I think with me probably quite a few people. So I think if you look after the build-up that they did of the big build-up offshore and then basically halving that within a year, I was quite surprised. But I think that some of the fundamentals remain true. I do believe that the better fields with the virgin pressure for Saudi are still offshore. um that this is absolutely required in the future to be further developed the expansion plans on the various fields still needs to be implemented so i think it is a bit a shift to the right that work scope won't disappear now does that mean that they couldn't tighten the belt any further because i mean to me it seems that the work that is being suspended or put a little bit more to the right is work that eventually will get done, but currently it's only suspended to make sure that the capex budget and maybe unnecessarily early expenses are curbed as much as possible so i can understand where they are but i don't know that even for saudi arabia this is something that you could exercise for the long term so i do feel that that work comes back now are there any more small upsets that we could see in the activity it's absolutely possible uh i think that there's probably some land upsets as well going on um so that we have some curbing and some of capex absolutely possible i'm not aware of any of it and i also think at a certain moment you get to a point where it probably becomes counterproductive and costing more cash to Saudi Aramco than anything else. So I don't want to rule it out because I don't know if there could be further ups or downs, but I think that the industry can deal with that. For us, we have two more rigs there. We're very pleased with the work there, but that's kind of our direct exposure to that market.

Got it. And then maybe a little more specific to BOR, just Can you help frame the prospects for the Thor and Ron after they finish contracts later this year? And maybe more to the Ron specifically, is it likely to stay in Mexico?

Yeah, Bruno, maybe you want to talk a little bit about that on the prospect that we have for Ron, maybe a bit on the Mexican market in general.

Yeah, no, indeed. Undoubtedly, the Mexican market is one that we pay a lot of attention to. We have a large fleet of rigs there. We have a good performance there. It's a good chunk of our business. Activity in Mexico is obviously mainly driven by PMAX, but not only PMAX. There's other independents as well that are available in the country. One thing that is interesting to mention, Doug, is that there are... New models, working models being implemented in Mexico, as you speak, including certain models where PMAX let other companies basically run the field and run the production, which streamline cash flows. I think that this is in the early stages of being rolled out. That could open a very interesting window of opportunity for our race, including the run. But as I said, we're not only focused on PMAICs, we do see some outstanding work with IOCs that could give us interesting opportunities. Now, if I think about Americas broadly, it's not all about Mexico. We do see some pockets of activity now appearing in places like Suriname, for example, and Trinidad. So we keep monitoring that quite closely and remain quite confident that the REI will have a continued program. If I think about the TOR in Asia, there's definitely a lot of tenders open at the moment. It's actually quite buoyant in terms of how many things are open and tenders we're pursuing. There's definitely a tighter competitive landscape, but as I said, the TOR and the rig that we have in Asia, they've kind of set themselves apart because of the operating capabilities that they have. They deliver these wells substantially faster to the customers, and they're very well sought after. I'll probably fall shy of listing and naming the prospects, but we see a range of things that could see that rig occupied, whether in Vietnam, where the rig is going to be soon, or within the region as well. Now, our rigs are mobile in nature, Doug. We obviously like the markets where we operate. Southeast Asia has been a very good market to board. But if opportunities of better economic results appear elsewhere, we're not afraid as well. We're not shy of moving them around. We've done it over the years and we'll continue to do to make sure that our fleet is placed where we make the most value of it.

Thank you very much. Thank you.

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Once again, if you wish to ask a question, please press star 1 1. We have no more questions on the phone line.

Magnus, are there any other questions that we have? I think we have time for one written question, Andreas, please.

Yep. The obligatory question about new build orders. Have there been any changes in market dynamics that suggest an order could be made? Also, is there any shipyard appetite to take on such an order?

So I think that there is definitely appetite, not in large numbers, but I think that what we hear is that shipyards wouldn't mind taking small orders. The problem is that the shipyards are extremely busy. and therefore nothing can be delivered very quickly. So I think that is a little bit the problem. I think, Bruno, the latest we heard was probably around companies like ONGC still looking, isn't it?

Yeah, in large, the conversations that we hear about potential shipyard orders are driven by long-term demand. We mentioned that before. I think the financial situation and what it would take for you to acquire a rig in the long-term economics contracts or orders will have to be backed up by long-term commitment. So naturally the most buoyant conversations are the likes with ONGC and so on and so forth. Structurally, I don't think things changed. We still hear that figures for a new build are in the high 200s, probably pushing close or above 300 on a fully delivered basis. And that obviously would have to come coupled with continued improvement in day rate. So nothing's changed. I think they're still talking. If that happens, again, I think it's positive for us because then it means that the EUAs are supportive of that type of construction cost. I don't think we're quite there yet. I think it's going to take some time before there are long enough contracts for someone to actually call that.

Yeah, and I think that maybe as a last comment around this, Clearly with the fleet getting older and older and now having, as I mentioned in my remarks, 30% of the rigs being over 35 years old, you can stretch that to a few years here and there, but there has to be a concerted effort to make sure that the future of this industry has enough rigs available to what the customers need. So I absolutely believe that we will be building rigs again as an industry. It might take a little bit of time, but this is going to be purely driven by economics and the day rates. So I believe strongly that we will get to that point in the future. Now with that and it being the last questions, I would like to thank everybody for participating in our call and we look forward to talking to all of you again soon.