Hello, everyone. Thank you for joining us and welcome to the C-Drill second quarter 2026 earnings call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Kevin Smith. Please go ahead.

Hello and welcome to Cdrill's second quarter 2026 earnings call. I'm Kevin Smith, Vice President of Corporate Finance and Investor Relations, and I'm joined today by Samir Ali, President and Chief Executive Officer, Grant Creed, Executive Vice President and Chief Financial Officer, and Jacob Taylor, Vice President Commercial. Our call will include forward-looking statements that involve risks and certainty. Actual results may differ materially. No one should assume these forward-looking statements remain valid later in the quarter or year, and we assume no obligation to update them except as required by securities laws. Our filings with the U.S. Securities and Exchange Commission provide a more detailed discussion of our forward-looking statements and the risk factors affecting our business. During the call, we will also reference non-GAAP measures. Our earnings release, furnished to the SEC and available on our website, includes reconciliations with the nearest corresponding GAAP measures. Our use of the term EBITDA on today's call corresponds with the term adjusted EBITDA as defined in our earnings release. I'll now turn the call over to Samir.

Thanks, Kevin. Welcome, everyone. Thank you for joining us. I'll begin with our second quarter highlights, including continued progress against our core priorities and our recent contracting successes. I'll then discuss the market backdrop and regional outlook before turning the call over to Grant to review our financial results and updated full year 2026 guidance. Second quarter financial performance was very strong, exceeding expectations. We delivered EBITDA of $144 million, underpinning our decision to raise full-year revenue and EBITDA guidance. This marks our second guidance increase this year. The quarter also reflected continued execution against our core priorities, delivering safe, reliable operations, generating free cash flow, and capturing the upside ahead of us. Let's start with our first priority, safe and reliable operations. We delivered another solid quarter achieving economic utilization of 96%. We also successfully completed the West TELUS re-acceptance on schedule and on budget. Cedral's one team culture met all client expectations and the rig has been successfully operating since mid-June. This is an important milestone. It marks the second of three rigs to roll off legacy day rate contracts and begin generating revenue at substantially higher rates. Safety remains our top priority. We are proud of the progress we've made, but we are never satisfied with standing still. By continuing to invest in training, knowledge sharing, and leadership development, we are building an even stronger organization for the future. I want to take this moment to remind our dedicated crews, everyone has stop work authority and no task is worth compromising our high safety standards. Priority two, free cash flow generation. We remain on track to generate meaningful free cash flow in the second half of 2026. With that visibility, we resume shareholder returns during the second quarter, opportunistically repurchasing $20 million of shares under our repurchase program during the last week of June. Priority three, capturing the upside. Our recent contracting success strengthens 2027 revenue visibility and demonstrates CEDRAL's ability to capture the upside ahead of us. Since our May call, we have added approximately $200 million of backlog, including new contracts and contract extensions on three rigs in the US Gulf and Malaysia. In the U.S. Gulf, the Westfella secured a 12-month contract with Talos beginning in June 2027 in direct continuation of its current program. The award adds approximately $161 million to backlog, excluding additional services, and reflects the strength of our operational execution and customer relationships. We are pleased to extend our partnership with Thales and thank the crew of the Westfella for their superior performance that is the foundation for what's next. Staying in the U.S. Gulf, the Savon, Louisiana has worked steadily throughout the year. The rig is expected to wrap up its current program with Walter Oil & Gas later this week, following the successful completion of earlier campaigns with Guardian and Log in July. We also want to recognize Harbor and Logg for their continued trust in Cedral. Earlier this year, Harbor and Logg extended the West Neptune once again and selected the West Vela for a 270-day campaign beginning later this year. Harbor also contracted the Savon, Louisiana for a short campaign at the end of July, meaning they will have had all of Cedral's U.S. Gulf Fleet under contract in 2026. We appreciate their confidence and remain focused on delivering safe, efficient, and reliable operations across every rig. And in Malaysia, our customer recently exercised a priced option for approximately 75 days on the West Capella, extending operations into the second half of 2027. Turning to the broader market, the current tender pipeline points to a materially tighter environment in 2027. If these tenders convert into awards as expected, we believe drill ship utilization could reach the mid-90% range by next year. Collectively, developments across strategic reserves, offshore investment, and exploration activity support our view of growing demand for deepwater rigs. The U.S. Energy Information Administration's latest outlook shows OECD inventories falling to their lowest levels since at least 2003, as supply disruptions accelerate stock draws. Oil majors have also highlighted tightening supply conditions, with Chevron noting that supply crunch could soon be felt globally, and ExxonMobil noting that the U.S. is approaching unheard of inventory levels. Wood Mackenzie forecasts offshore project FIDs to rise to $165 billion in 2027, representing a 132% increase from 2025, underscoring the strength of the offshore cycle. Further, we continue to see offshore exploration activity gaining momentum, driven by structurally higher oil price, energy security coming back into vogue, slowing non-OPEC production growth, and operators need to rebuild reserve bases. Equinor validated this theme in its Capital Markets Day in June, guiding to an international exploration budget for the first time, and highlighting plans to step up exploration along the Atlantic margin, supported by its view that oil and gas demand will remain higher for longer. Recent exploration announcements also reinforce this momentum, with Total Energies securing offshore exploration agreements in Egypt and Syria, Chevron signing an early exploration deal offshore Guinea, Exxon applying for new exploration permits offshore Guyana, and Repsol entering into an exploration agreement in Venezuela. Moving to the outlook for key regions where Cedral operates. The U.S. Gulf remains in transition, with several drill ships expected to become available before year-end. Sea drill is ahead of the curve, by recently securing a 365-day contract at leading-edge day rates for the West Vela, bringing total year-to-date backlog added in the region to nearly half a billion dollars. The West Neptune is already contracted into late 2027 and is well-positioned for attractive follow-on opportunities. We remain confident that the supply-demand balance of drill ships in the region will improve in 2027. Our semi-submersible, the Savon Louisiana, is also favorably positioned as market conditions in the U.S. Gulf strengthen into 2027. While we have a strong track record of winning programs with short lead times, visibility for the balance of 2026 remains limited. We will continue to manage the asset with commercial discipline while preserving flexibility Turning to Brazil, seed drill remains well contracted in one of the industry's most important deepwater geographies. Recent multi-year awards and extensions reinforce our view that Brazil will remain a core source of drill ship demand through the end of the decade. 25 drill ships are currently contracted in the region, with only three expected to become available before the end of 2027, if options on a couple of rigs are exercised. A recent Petrobras pre-qualification exercise may be an indication of tendering activity to come. We expect Brazil to remain balanced and competitive, with opportunities favoring rigs that align closely with customer needs and basin requirements. Following the completion of the West Carina contract at the end of June, we mobilized the rig outside of Brazil, consistent with typical post-contract process in the country. We are in advanced discussions for follow-on opportunities and remain confident in our abilities to secure work commencing in the first half of 2027. In Southeast Asia, a region we have repeatedly identified as a source of growing demand, momentum is building. A recent leading-edge fixture awarded for work commencing in mid-2028 is a positive data point. Customers' willingness to secure assets at leading-edge rates for future work is an indicator that the balance of supply and demand is expected to tighten. With limited drill ship availability in the region, the West Capella is in a strong position to capture potential upside. In West Africa, and particularly Angola, the Sanro Drill Joint Venture continues to demonstrate the strength of our local partnership and the reliability of our operations. with all three rigs delivering technical uptime above 99% during the second quarter. Our near-term commercial focus is on the West Gemini, which is due to roll off contract later this year. While the rig is well positioned for future work in Angola, we continue to market it across West Africa. We expect upcoming FIDs and tenders in countries such as Angola, Ghana, Cote d'Ivoire, Nigeria and Namibia to absorb a meaningful share of available rig capacity. Bringing it all together, the broader deepwater market continues to tighten, supported by improving market fundamentals, rising offshore investment and exploration momentum. We remain encouraged by the outlook across our key regions and believe CEDRIL is entering 2027 from a position of strength, well positioned to capitalize on the opportunities ahead. With that, I'll hand it over to Grant.

Thanks, Samir. I'll now discuss our second quarter 2026 financial results, recap the refinancing completed in June, and then provide an update on our outlook for the balance of the year. CEDRAL delivered strong second quarter financial performance with total operating revenues of $449 million and adjusted EBITDA of $144 million. The quarter-on-quarter increase was primarily driven by more operating days and an improving average day rate. In Malaysia and Brazil, the West Capella and West Jupiter contributed full quarters of revenue after commencing their new programs in late March, while increased activity on the Savan, Louisiana and the US Gulf also supported revenue growth. This was partially offset by the impact of fewer operating days for the West Telus, which underwent re-acceptance testing before commencing its contract in Brazil as planned late in the second quarter. Importantly, both the West Jupiter and West Telus have now commenced contracts at materially higher day rates, representing a meaningful step up in revenue of roughly $400,000 per day between the two rigs compared with their prior contracts. Repricing these legacy contracts has long been a strategic objective and is now strengthening the cash generation from our active fleet as we move into the second half of the year and into 2027. Also contributing to second quarter revenue was an uplift in management contract revenues, reflecting an increase in the daily management fee CEDRAL earns for providing management, operational and technical support to Sonadrol. The increase was applied retroactively from January 1st, 2026. And now moving to operating expenses, which were $377 million in the second quarter, up $43 million from the prior quarter. The increase was primarily attributable to the West Capella and West Jupiter returning to operations for the full quarter. Resulting EBITDA was $144 million, a sequential increase of $47 million compared to the prior quarter, with an EBITDA margin excluding reimbursables of 33.5%. Now turning to the balance sheet and cash flow statement. I'll start by providing a recap of the refinancing completed in June. The refinancing strengthens our financial flexibility, extends debt maturities further into the next decade, and reinforces our commitment to maintaining a resilient, through-cycle capital structure. CEDRAL issued $700 million of six- and three-quarter senior notes due in 2034, and used part of the proceeds to redeem $575 million of eight- and three-eighths senior secured secondee notes due in 2030. We also increased the revolving credit facility from $225 million to $300 million and extended the maturity by three years to 2031. We ended the quarter with total cash of $360 million, a $31 million increase from the prior quarter. The net proceeds from the refinancing, as well as a $30 million lump sum receipt for mobilization revenue related to the West Jupiter's contract in Brazil, were partially offset by $57 million of capital expenditures, a $16 million final payment for a legal judgment related to the Sonodrill joint venture as previously disclosed in 2025, an accelerated interest payment of $20 million relating to the redemption of the old notes, and a build in accounts receivable primarily related to the commencement of West Jupiter and West Capella contracts, plus timing of receipts across the remainder of the fleet. Notably, we are entering a stronger phase of cash generation. Major project-related outflows are now behind us. With cash benefits from the West Capella, West Jupiter and West TELUS contracts ahead of us, we expect cash flow to strengthen through the second half of the year, including the anticipated collection of the West TELUS mobilization fee in the third quarter. Cedar remains focused on three financial priorities to enhance long-term shoulder value. Generating free cash flow, disciplined capital deployments, and maintaining a robust balance sheet. On June 22nd, the Board of Directors authorized an extension of the $208 million remaining on the Share Repurchase Program through the end of the current calendar year. And during the last week of June, we repurchased $20 million worth of shares. Now turning to our outlook for the remainder of the year, strong project execution and higher than anticipated utilization have driven the increase in the revenue and EBITDA guidance ranges set out in our press release. We now anticipate operating revenues of $1.5 billion to $1.55 billion, and that excludes $50 million of reimbursable revenues. An EBITDA of $420 to $450 million. Our updated guidance ranges reflect two factors for the second half of the year. Assumed utilization for the Savan, Louisiana, which was fully contracted in the second quarter but has less visibility for the remainder of 2026, and the timing of repair and maintenance expenses, which we expect to be higher of the balance of the year. Our EBITDA guidance includes a non-cash net expense of $30 million related to the amortization and mobilization costs and revenues, of which 16 million has been recognized through the end of the second quarter. Full year capital expenditure guidance range is maintained at 200 to $240 million. With three major projects delivered on time and on budget, a strengthened balance sheet and a supportive commercial backdrop, CEDRAL is well positioned to generate meaningful free cashflow in the second half of the year and create long-term shelter value. And with that, I'll hand back to Samir for his closing remarks.

Thanks Grant. For Cedral, the message is straightforward. Our commercial approach remains centered on winning direct continuation work and maximizing the total economic value of contracts. In the U.S. Gulf, we secured work for the West Vela at leading-edge day rates despite near-term oversupply. In Brazil, West Africa, and Southeast Asia, our fleet remains well positioned for both established and emerging sources of deepwater demand. Across the rest of the world, the demand outlook continues to support our conviction that available high specification floaters will become increasingly scarce as the cycle progresses. Taken together, CDRL is well positioned to create long-term shareholder value through disciplined contracting, free cash flow generation, and a relentless focus on safe and reliable operations. With that, I'll hand the call over for questions.

We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question from the line of Doug Becker with Capital One Securities. Please go ahead. Your line is now open.

Thank you. Samir, you extended the share repurchase program through December. We actually saw the restart of buybacks with about 20 million shares in the second quarter. Just how would you frame the scale and the pace of buybacks once we see the free cash flow inflection in the second half of the year?

Sure. Hey, Doug. I'll start and I'll hand it over to Grant. Holistically, our job at Cedral as a management team is to maximize free cash flow. So every contract we look at, everything we're doing around here, we're hyper-focused on generating as much free cash flow as possible, but Grant can kind of speak through the mechanics of how we're thinking about it.

Yeah, thanks. And hey, Doug, and just to add to that, look, when we think about the buyback First thing we look at is our cash position. And of course, we had a very healthy cash position in June and that was further supported by a successful refinancing that was executed in June. Then we look at forecast cash going forward. And as we discussed on our prepared remarks, we're at this inflection point that we've been looking forward to for some time, primarily related to the repricing off of legacy contracts on the spot rate contracts. So we're starting to enjoy the step up in earnings and We saw during Q2 as expected, we had some working capital build, but that's going to be behind us from the Q3 onwards. So we're looking healthy in that perspective. And then deploying the capital is all about assessing the alternatives through a disciplined and deliberate lens. And then when the share price started trading in the 30s in June, it became apparent to us that a buyback was going to be a very accretive use of that capital. So that's a little bit of insight as to how we approach the buybacks and yeah, I hope that helps.

Now that's helpful context. Is the plan to kind of utilize the full remaining share authorization over the course of this year or just to be determined based on the parameters you just laid out?

Yeah, look, Doug, it's to be determined. We take those decisions at any point in time, and yeah, we'll see how it goes the rest of the year. Yeah.

Yeah, it's a discussion obviously we have with our board on a regular basis, but coming back to it, the management team's focus is maximizing cash flow, and then we have an in-depth discussion with the board of how we want to deploy that capital.

Got it. Thank you very much.

Your next question comes from the line of Eddie Kim with Barclays. Please go ahead. Your line is now open.

Hi, good morning. So this is the second consecutive quarter where you've raised full year guidance, which is particularly notable as offshore drillers are more commonly known to lower full year guidance than to raise. So could you just talk about what has surprised you to the upside compared to when you first provided full year guidance at the beginning of the year? Is it Contracts you secured that you didn't necessarily expect to or better operational performance or costs maybe getting pushed into 2027. Just some more color on the main drivers of the guidance raises the past two quarters would be great.

Hey, Eddie. Yeah, thanks. I'd say first and foremost, operational execution has been great this year. So the operations team has done a fantastic job on executing work. The projects, we know that those projects are key to determining our results in any year and we executed those very well for the Jupiter Capella and TELUS. And then on the rig activity side, I'd say Carina ended up working longer than we anticipated at the beginning of the year. and then we call the Louisiana the show me rig where we don't get too far ahead of ourselves in booking or estimating or forecasting revenue for that rig. She ended up working more in the first half of the year than we anticipated. On the expense side, I think it's more or less in line with how we are seeing expenses, but I would say that repairs and maintenance is skewed to the second half of the year. We see that quite often in our business, that the first half of the year we spend less on repairs and maintenance projects in particular than in the second half.

Understood. Thanks for that, Kohler. And then my follow-up is just More broadly, the outlook you laid out was pretty constructive with drill ship utilization potentially reaching the mid-90s by next year. It feels like leading-edge day rates are now firmly in the mid-400s, as indicated by the most recent contract you signed on the West Vela, as well as other contracts industry-wide. Is there any reason to believe that leading-edge day rates shouldn't continue to move higher next year off of this current mid-400s level, just given tightness in the market? And if not, what would you say are the potential headwinds or roadblocks that might prevent that from happening?

The day rate progression is purely driven by utilization, right? So we continue to expect utilization to improve. I mean, it is a global market and, you know, rigs are going to continue to move from kind of western hemisphere into eastern hemisphere. So that should drive kind of day rate momentum. But the other thing, you know, I'd say at least procedural, we look at it holistically. It's not just day rate, right? It is the full contract value. It is mobilization fees. It's T's and C's. How do we make sure that we are maximizing the cash out of that contract, not just, you know, We don't have a huge ego around here. It's not about getting the highest day rate. It is getting the best potential contract for our rigs. But, you know, that's how I'd say we holistically look at it. It's definitely not just day rate driven for us.

Got it. Great. Thank you. I'll turn it back.

The next question is from the line of Frederick Dean with Clarkson Securities. Please go ahead. Your line is open.

Hey, Samir and team, and congratulations on a very strong operational quarter. I wanted to, and thanks for actually providing quite detailed commentary on the regions already, but I wanted to be a bit more rig specific maybe. Obviously, like the West Carina, the Gemini, I'm pretty sure that those are very high on your list in terms of getting recontracted. and you seemed relatively positive on the Carina maybe from the first half of next year. But maybe if you leave those aside and think about the rigs that are rolling off in the second half of next year, have you started progression on new contracts for those rigs? And I guess in the context of your market view, expecting mid-90s utilization for drill ships, How would you also kind of think about looking in short versus long-term work as you work on extending those rigs, weighing visibility versus upside capture? Any call would be very helpful. Thanks.

Hi, Frederik. Jacob here. I'll go ahead and take that one. For us, I mean, going back to what Samir said, we are heavily focused on our capital discipline cash management. and Swift Payback Period is the highest priority. Rates will increase as utilization tightens. And the way we look at it right now is if we are successful in securing work for, say, the Carina, then we have assets like the Gemini, potentially even the Auriga, to play for the upside. So we'll continue just to monitor opportunities as they come, but if we start Seeing the utilization tighten or squeeze to above 95%, I think it's just inherent that we're going to see rates pushing up to the higher 400s.

And Frederick, the only thing I'd add to that is, look, you saw with the VELA, we've got direct continuation work. Our team's focus is minimizing as many gaps as humanly possible, right? For us, gaps are wasted money and wasted time. So whatever we can do to close those will be very important to us.

All right, very helpful. And then just maybe one quick to Grant as well. You gave some commentary about the working capital and there were overarching comments that the second half would be better on free cash flow. I was hoping that given the working capital builds in the second quarter in particular as new contracts start up, Are you able to kind of help us quantify a bit how you think maybe like the working capital element in particular is going to be reversed in the second half as things normalize and as you start or you get the mobilization fee from Petrobras, et cetera?

Yeah. Yeah, sure. I think now you can think of the, so the building accounts receivable this quarter was primarily Stupid and Capella, remember they started contracts late March. And so they start collecting revenue then in Q2, in Q3 rather. So I'd think about them then on a normalized working capital rate. So don't expect any sort of reversal or inflow, but I'd consider them at a normal level, so no outflow beyond that. Then on the TELUS, I guess is gonna be the interesting rigged to look at from a working capital perspective in Q3 because she will then have a working capital build on accounts receivable, just as we experienced in Jupiter and Capella. But we will also enjoy the mobilization receipts from Petrobras of $40 million in Q3. I think as far as work capital is concerned, that's the one to watch in Q3, really, Frederick. And once that's behind us, we really then should be on a on a sort of a normal basis.

All right. Appreciate all the answers. Thank you so much. That's all from me. I'll hand it back.

Your next question comes from the line of Gregory Lewis with BTIG. Please go ahead. Your line is open.

Yeah, hey, thank you, and good morning, and thanks for taking my question. Samir, kind of curious on your views. You know, I guess it kind of dovetails on Frederick's question. You know, clearly there's opportunities in Asia for rigs, you know, obviously all over the world, right? West Africa as well, the Golden Triangle. But as we think about Asia, we think about India. I know the last rig you guys had in India was the Polaris. That was a 6th gen rig. The Capella operated in Asia is 6th gen. How do you think about the opportunity set for 7th gen rigs in Asia just given that historically maybe that part of the world has been maybe a lower on average Thank you for joining us.

If we look at the Carina, we've positioned her, she's currently in Walvis Bay, so she's got access to both Africa and Asia as a potential. And as we look at the Asian market, it's back to, you know, look at the whole contract value. Your OPEX is a little lower out there. So can you get, you know, still good return, but let Jacob kind of speak to the opportunity specifically.

Well, I think one thing I would add to that is in 2024, you know, we saw one of our sixth gen units kind of in a niche position and We were opportunistic about that and we got a rate of 545,000 a day. And so there could be a scenario where the seventh gens get scooped up early on in this cycle and what's left are the sixth gens to play for the upside. So, you know, we look at, you know, both parts of our fleet as opportunity. We're not just focused on kind of the higher end rates for the 710 units.

Okay, so super helpful. And then realize it's, you know, It's still the middle of 2026, but just since we did kick the buyback back on, I guess I'll just ask it this way. Are there any kind of, as we look out in 2027, are there any special surveys that are coming? Are there any kind of rig upgrades we're thinking about kind of happening? I guess you'd say out of the normal operations that we should be thinking about just as we think about, you know, as we start to try to kind of pencil in what a capex could look like in 27. Not asking for guidance, just asking any special surveys and kind of upgrade type things.

Yeah. Hey, Greg. The short answer is no significant SPS projects or re-acceptance projects. I think, of course, you look at the rig activity schedule and any rigs that are coming up for new contracts. To the extent the contract is signed that has specific requirements, we would have to take that. But like Samir said, we assess our opportunities on an all-in cash basis and would look to be compensated through the terms of that contract?

Yeah, Greg, I would just add that, you know, sorry, I would just add that, you know, commercially, our strategy is to ensure that, you know, if there are any major mobilizations or sizable upgrades to the rigs, then there would be a meaningful, you know, mobilization upfront fee that from our customers in order to help cover the cost of that.

Okay, super helpful. Thank you for taking my question.

Your next question comes from the line of Keith Beckman with Pickering Energy Partners. Please go ahead. Your line is now open.

Hey, good morning. Thanks for taking my question. I'm just wondering if you guys are seeing any change in customer behavior at all here as the market starts to look like it's going to tighten here into 2027. I mean, are you seeing any customers look to lock in rates further out for longer term? Sort of maybe what we saw with the Vela here for kind of a year in the Gulf and mid-28. Just any thoughts around that and operator behavior changing?

Not really, to be honest. You're seeing maybe on the margins, you're seeing a bit here and there. You saw, you know, a client secure rig in Southeast Asia for a 28th start. is a bit further out there. There's some tenders that are for 28, 29 starts. So maybe on the margins you're seeing it, but would I say it's a wholesale change yet? No. I would say, look, our clients probably have some more free cash flow coming into their doors given the higher commodity price. So as they enter budgeting season, that maybe puts a wind at their backs of, hey, maybe we want to go spend a bit more and kind of develop a few more fields. But I wouldn't say we've seen a wholesale change just yet, but hopefully it will come.

Okay, perfect. That's very helpful. And then my second question, maybe just thinking a little bit longer term here, probably not in the near term, but you guys still kind of have the two stacked harsh environment semis, I believe the Aquarius and the Phoenix. And, you know, that market has gotten a little bit tighter here. If we continue to see tightness, my question is really just around, what could the potential reactivation costs be on those? Do you have any sense of that? And then What would the contract terms kind of need to look like to make that make sense for you guys, maybe longer term?

Yeah, sure. So, yeah, I'd say, look, the harsher environment floater space is almost 100% utilized right now. And it's something that we would love to grow our fleet into. We've got a presence in Norway. We've got one asset working there. You know, we've been very deliberate and vocal about our strategy to cluster rigs. So we would love to add a few more rigs into that market. In terms of reactivations for the Phoenix or the Aquarius, look, it's a meaningful number. It's probably over $100 million to reactivate those. In terms of what we're looking for is a contract that justifies that investment. And for us, you know, and this is a bit hyperbole, would I take, you know, a short contract to $2 million a day that covers that cost? Absolutely. Right? So it doesn't need to be a long contract. It really comes down to the economics of the whole contract. And is it a mobilization fee? Is it longer term? What's the day rate? We throw all of that into the pot and kind of say, look, does this make economic sense for seed roll or not?

Awesome. That's really helpful, guys. I'll turn it back.

Your next question comes from the line of Ahmed Corsent with BWS Financial. Please go ahead. Your line is open.

Good morning. Could you just expand on your commentary on the Carina? It looks like You've shifted it to West Africa already. What your expectations are that you've already completed that mobilization?

Yeah. Hi, Ahmed. I think for the Carina, the reason we shifted it over to West Africa is because we feel, based off of our outlook, that that gives us the closest proximity to near term work in the regions. So it gives us the flexibility to pursue are all prospects both in West Africa and in Southeast Asia because that's where we're seeing the largest amount of demand at the moment. And also, we get synergies from our presence out there in the region already. We're able to continue to maintain that rig and have it ready for the next campaign.

Is there a timing of when we should expect some sort of contract activity there?

Most of the campaigns we're seeing right now in the market are commencing probably in the first half of twenty seven. So there is a bit of time. There is a bit of a lead time before commencement would happen. Awards, I would say within the next quarter or two.

OK, great. Thank you.

The next question comes from Noel Parks. with Toy Brothers. Please go ahead. Your line is open.

Hi, good morning. I was also on the topic of sort of customer behavior. I just was wondering sort of, you know, maybe what negotiations might be like right now when, say, I don't know, you have a customer that wants a rig for, say, you know, mid-year next year. You've got something coming available six months earlier, say beginning of the year. I'm just kind of wondering what that back and forth looks like when you would get reflected in price for the time difference or are situations like that kind of not so common still yet?

Yeah, I can go ahead and take that one. So I think for us, going back to what we've said in earlier statements, we're not going to invest in a major mobilization, reactivation, or upgrade without a meaningful contribution from the customer. We also look at the cost of having that rig idle, waiting for that opportunity. But it just depends on whether or not it's competing against an alternative prospect. For us, we're not solely focused on day rate. The terms and conditions drive a lot of value for our business. And so economic uptime is another lever that is really important for us that we like to play with. And I think that with the market tightening, all of those factors are becoming more and more favorable.

Terrific. I was also wondering, does what you see ahead for the next few years Is it in any way reminiscent of sort of where we were at any particular prior cycle? I'm just thinking about, you know, sort of seeing tightening ahead after a bit of a slowdown. But then I'm also mindful that this time around we do have that sort of gradual bounce back and exploration that maybe wasn't there in in past cycles. So any thoughts there would be great.

Absolutely. So look, it does feel kind of like the beginnings of up cycles you've seen in the past, kind of the 08 cycle, if you will. I think the fundamental difference this time around is there's not a whole bunch of new builds sitting on the sideline that can come back, right? We are a relatively inelastic supply in an increasing demand environment, right? So it does have some flavors of the previous cycle, but The last cycle you had a bunch of drill ships coming out of the shipyard still kind of from 08 to almost 2013, 2014 rigs were being delivered to kind of help take up some of that demand. That doesn't exist today. Yes, there's a couple of rigs still out there, but the realities are inelastic supply with increasing demand. It feels even better than the last cycle, in my opinion.

Terrific. Thanks a lot.

Your next question comes from Josh Jane with Daniel Energy Partners. Please go ahead. Your line is now open.

Good morning. Thanks for taking my questions. First one is just a bit of a follow up on Greg's question. I was hoping you could touch on supply chain, how you're seeing the world. Are you seeing any issues getting equipment over the last couple of quarters? Do you see any issues moving forward? And just how are you potentially thinking about inflation in equipment cost or capex moving forward? Are you seeing anything material or not at all?

Look, we're seeing some inflation that you would expect both on labor and material. Obviously, fuel's gone up probably the most, but most of our contracts, we don't take fuel exposure. It's provided by the client. So when we think about it is when we have kind of gaps between schedules back to our contracting strategy of not having to try to minimize our gaps so we don't have that fuel cost. But the rest of it, look we're seeing your normal inflation across the board um you know and i bring it back to what Jacob was talking about earlier in t's and c's we're trying to pass that on to clients right wherever we can is better you know the whole contract is kind of how we think about it is can we pass some of those you know inflation costs back onto the day rate or into the contract value if you will understood thanks for that and then i just wanted to follow up on a rig specific question so the Louisiana has obviously continued to

you know put together a string together number of short-term opportunities could you just could you speak to what's embedded in the guidance for the back half of this year surrounding that rig and then as we think about it longer term I guess into 27 are there term opportunities for that rig in your view or do you view this as sort of you know continuing to put together shorter term programs I'm just curious how you and we should be thinking about the rig opportunities and you know in across 27 thanks

Yeah, sure, Josh, thanks. And yeah, so like I said in one of these answers in the Q&A, I said Louisiana ended up working more than we anticipated the first half of the year. But then I did also mention in my prepared remarks that the rest of this year is a little less clear. And I think as we look at guidance, we still apply the same principle as we typically apply to that rig, which is quote unquote the show me rig. So when we secure the work, we'll start baking it into our forwarding projections. And so I guess that's a long way of saying it's not really, you know, we're not booking upside on that rig the remainder of this year. But then I'll hand over to Jacob for commentary on 27 and beyond.

Yeah, I would just add that, you know, it didn't just exceed our expectations. I mean, I think it's had 99% economic uptime so far this year. and a lot of that work was captured with a very short lead time. There's a diverse set of customers in the Gulf of America and even new ones such as Guardian who we've recently worked with that love the versatility of that asset. She has a trendsetter intervention system on board as well and so it enables her to go do drilling, P&A, intervention, all the likes of it. and we're having positive dialogue with customers who have some campaigns starting as early as towards the end of this year and then probably some longer term prospects that are gonna be maturing in Q2, Q3 of 27. So I think we're still very optimistic about the capabilities of that rig.

Thanks, we'll turn it back.

There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect.