Hello, and welcome to Seadrill'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 uncertainty. 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 US 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 Tellus re-acceptance on schedule and on budget.

Seadrill'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 dayrate 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 resumed 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 Seadrill'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 US Gulf, the West Vela 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 Talos and thank the crew of the West Vela for their superior performance that is the foundation for what's next.

Staying in the US Gulf, the Sevan 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 LLOG in July.

We also want to recognize Harbour and LLOG for their continued trust in Seadrill. Earlier this year, Harbour and LLOG extended the West Neptune once again and selected the West Vela for a 270-day campaign beginning later this year.

Harbour also contracted the Sevan Louisiana for a short campaign at the end of July, meaning they will have had all of Seadrill's US Gulf fleet under contract in 2026. We appreciate their confidence and remain focused on delivering safe, efficient, and reliable operations across every rig.

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 drillship 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 US 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 US 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 TotalEnergies 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 Seadrill operates. The US Gulf remains in transition, with several drillships expected to become available before year end.

Seadrill is ahead of the curve by recently securing a 365-day contract at leading-edge dayrates 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 drillships in the region will improve in 2027. Our semisubmersible, the Sevan Louisiana, is also favorably positioned as market conditions in the US 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, Seadrill 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 drillship demand through the end of the decade.

25 drillships 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-to-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 drillship availability in the region, the West Capella is in a strong position to capture potential upside. In West Africa, and particularly Angola, the Sonadrill 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, Côte 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 Seadrill 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.

Seadrill 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 dayrate.

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 Sevan Louisiana in the US Gulf also supported revenue growth. This was partially offset by the impact of fewer operating days for the West Tellus, 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 Tellus have now commenced contracts at materially higher dayrates, 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 Seadrill earns for providing management, operational, and technical support to Sonadrill. The increase was applied retroactively from January 1st, 2026.

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 statements, 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. Seadrill issued $700 million of 6.75% senior notes due in 2034 and used part of the proceeds to redeem $575 million of 8.375% senior secured second lien 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 Sonadrill 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 Tellus contracts ahead of us, we expect cash flow to strengthen through the second half of the year, including the anticipated collection of the West Tellus mobilization fee in the third quarter.

Seadrill remains focused on three financial priorities to enhance long-term shareholder value: generating free cash flow, disciplined capital deployment, 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.

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, and EBITDA of $420 to $450 million.

Our updated guidance ranges reflect two factors for the second half of the year: assumed utilization for the Sevan 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 over the balance of the year. Our EBITDA guidance includes a non-cash net expense of $30 million related to the amortization of 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, Seadrill is well-positioned to generate meaningful free cash flow in the second half of the year and create long-term shareholder value.

With that, I'll hand back to Samir for his closing remarks.

Thanks, Grant. For Seadrill, the message is straightforward.

Our commercial approach remains centered on winning direct continuation work and maximizing the total economic value of contracts. In the US Gulf, we secured work for the West Vela at leading-edge dayrates 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, Seadrill 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.

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, well, we see the free cash flow inflection in the second half of the year?

Sure. Hey, Doug.

I'll start and I'll hand over to Grant. Holistically, [coughs] our job at Seadrill as a management team is to maximize free cash flow.

Every contract we look at, everything we're doing around here, we are hyper-focused on generating as much free cash flow as possible. Grant can kind of speak to the mechanics of how we're thinking about it.

Thanks, Sam. Hey, Doug.

Just to add to that, look, when we think about the buyback, first thing we look at is our cash position. 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 our forecast cash going forward. 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.

We're starting to enjoy the step-up in earnings. We saw during Q2, as expected, we had some working capital build, but that's going to be behind us from the Q3 onwards.

We're looking healthy in that perspective. 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.

That's a little bit of insight as to how we approach the buybacks and yeah, hope that helps.

Oh, 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?

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.

It's a discussion, obviously, we have with our board on a regular basis. 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.

Hi, good morning. 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.

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. Thanks.

I'd say first and foremost, operational execution has been great this year. The operations team has done a fantastic job on executing work.

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 Tellus. Then on the rig activity side, I'd say Carina ended up working longer than we anticipated at the beginning of the year.

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 color.

Then my follow-up is just more broadly. The outlook you laid out was pretty constructive, with drillship utilization potentially reaching the mid-90s by next year.

Feels like leading-edge dayrates 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 in industry wide. Is there any reason to believe that leading-edge dayrates shouldn't continue to move higher next year off of this current mid-400 level just given tightness in the market?

If not, what would you say are the potential headwinds or roadblocks that might prevent that from happening? Hey,

Eddie. Look, the dayrate progression is purely driven by utilization, right?

We continue to expect utilization to improve. It is a global market, and rigs are going to continue to move from kind of Western Hemisphere into Eastern Hemisphere, so that should drive kind of dayrate momentum.

The other thing, I'd say at least for Seadrill, we look at it holistically. It's not just dayrate, 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?

We don't have a huge ego around here. It's not about getting the highest dayrate.

It is getting the best potential contract for our rigs. That's how I'd say we holistically look at it.

It's definitely not just dayrate-driven for us.

Got it. Great.

Thank you. I'll turn it back.

Hey, Samir and team, and congratulations on a very strong operational quarter.

Thanks

for actually [laughs] providing quite detailed commentary on the regions already. 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 re-contracted. You seemed relatively positive on the Carina maybe from the first half of next year.

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? I guess in the context of your market view expecting mid-90s utilization for drillships, how do you also kind of think about locking in short versus long-term work as you work on extending those rigs, weighing visibility versus upside capture?

Any color would be very helpful. Thanks.

Hi, Fredrik. Jacob here.

I'll go ahead and take that one. For us, 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. 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.

We'll continue just to monitor opportunities as they come. 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.

Fredrik, the only other thing I'd add to that is, look, you saw it with the Vela, we 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. Whatever we can do to close those will be very important to us.

All right, very helpful. 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 the working capital element in particular going to be reversed in the second half as things normalize and as you start or you get some mobilization fee from Petrobras, etc.?

Yeah. Sure.

The build in accounts receivable this quarter was primarily Jupiter and Capella. Remember, they started contracts late March, and so they start collecting revenue then in Q2 in Q3, rather.

I'd think about them then on a normalized working capital rate. Don't expect any sort of reversal or inflow, but I'd consider them at a normal level, no outflow, beyond that.

Then on the Tellus, I guess, is going to be the interesting rig 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 from Jupiter and Capella. We will also enjoy the mobilization receipt from Petrobras of $40 million in Q3.

I think as far as working capital is concerned, that's the one to watch in Q3 really, Fredrik. Once that's behind us, we really then should be on a sort of a normal basis.

All right. Appreciate all the answers.

Thank you so much. That's all for me.

I'll hand it back.

Hey. Thank you and good morning, and thanks for taking my question.

Samir, kind of curious on your views, I guess kind of dovetails on Fredrik's question. Clearly, there's opportunities in Asia for rigs, obviously all over the world, right, West Africa as well, Golden Triangle.

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 sixth-gen rig.

The Capella operating in Asia is sixth-gen. How do you think about the opportunity set for seventh-gen rigs in Asia, just given that historically, maybe that part of the world has been maybe a lower on average pricing market for I guess we'll call them leading-edge high-quality drillships?

I'd start with our sixth-generation rigs, yes, they're sixes, but they're dual activity. The Capella has MPD on it, the Polaris has MPD on it.

I'd say they're better than your average sixth-gen rig, working in those markets. Yes, there's a bit of a difference, but not as much as you would think.

If we look at the Carina, she's currently in Walvis Bay, she's got access to both Africa and Asia as a potential. As we look at the Asian market, it's back to look at the whole contract value.

Your OpEx is a little lower out there, can you get still good return? Let Jacob kind of speak to the opportunity specifically.

I think one thing I would add to that is in 2024, 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. 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.

We look at both parts of our fleet as opportunity. We're not just focused on kind of the higher-end rates for the seventh-gen units.

Super helpful. Then realized it's still the middle of 2026.

Just since we did kick the buyback back on, I guess I'll just ask it this way: as we look out in 2027, are there any special surveys that are coming, or are there any kind of rig upgrades we're thinking about kind of, I guess you'd say, out of the normal operations that we should be thinking about just as we start to try to kind of pencil in what a CapEx could look like in '27? Not asking for guidance, just asking are there any special surveys, any kind of rig upgrade type things?

Hey, Greg. No, 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 a contract is signed that has specific requirements, we would have to take that. Like Samir said, we assess our opportunities on all-in cash basis, and would look to be compensated through the terms of that contract.

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

Super helpful. Thank you for taking my questions.

good morning, and 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.

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-2028? 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 a client secure a rig in Southeast Asia for a '28 start, which is a bit further out there. There's some tenders that are for '28, '29 starts.

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 are probably having some more free cash flow coming into their doors given the higher commodity price. 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.

I wouldn't say we've seen a wholesale change just yet, but hopefully it will come.

Perfect. That's very helpful.

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, believe the Aquarius and the Phoenix, and 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? Then what would the contract terms kind of need to look like to make that make sense for you guys, maybe longer term?

Sure. I'd say, look, the harsh 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.

We've been very deliberate and vocal about our strategy to cluster rigs, we would love to add a few more rigs into that market. In terms of reactivations for the Phoenix and 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, it's a contract that justifies that investment, right?

For us, and this is a bit hyperbole, would I take a short contract at $2 million a day that covers that cost? Absolutely, right?

It doesn't need to be a long contract. It really comes down to the economics of the whole contract.

Is it a mobilization fee? Is it longer term?

What's the dayrate? We throw all of that into the pot and kind of say, look, does this make economic sense for Seadrill or not?

Awesome. That's really helpful, guys.

I'll turn it back.

Good morning. Could you just expand on your commentary on the Carina?

Looks like you've shifted it to West Africa already. What your expectations are that you've already completed that mobilization?

Yeah. Hi, Hamed.

I think for the Carina, the reason we shifted it over to West Africa is because we feel, based off of our outlook, that gives us the closest proximity to near-term work in the regions. It gives us the flexibility to pursue prospects both in West Africa and in Southeast Asia, because that's where we're seeing the largest amount of demand at the moment.

We get synergies from our presence out there in the region already, where 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 '27. There is a bit of a lead time before commencement would happen.

Awards, I would say, within the next quarter or two.

Great. Thank you.

Hi, good morning. Also on the topic of sort of customer behavior, I just was wondering sort of maybe what negotiations might be like right now when, say, I don't know, you have a customer that wants a rig for, say, mid-year next year, you've got something coming available, 6 months earlier, say beginning of the year.

I'm just kind of wondering what that back-and-forth looks like. Is that something that just you would get reflected in price for the time difference, or are situations like that kind of not so common still yet?

I can go ahead and take that one. 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. It just depends on, whether or not it's it's competing against an alternative prospect.

For us, we're not solely focused on dayrate. I think the terms and conditions drive a lot of value for our business.

Economic uptime is some is another lever that is really important with us for us that we like to play with. 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 sort of seeing tightening ahead after a bit of a slowdown. Then I'm also mindful that, this time around, we do have that sort of gradual bounce-back in exploration that maybe wasn't there in past cycles.

Any thoughts there would be great.

Absolutely. Look, it does feel kind of like the beginnings of upcycles you've seen in the past, the kind of the '08 cycle, if you will.

I think the fundamental difference this time around is there's not a whole bunch of newbuilds sitting on the sideline that can come back, right? We're at a relatively inelastic supply, in an increasing demand environment, right?

It does have some flavors of the previous cycle, but the last cycle you had a bunch of drillships 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 rigs still out there, but the realities are inelastic supply with increasing demand. It feels even better than the last cycle, if you will, in my opinion.

Terrific. Thanks a lot.

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?

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 has gone up probably the most, but most of our contracts, we don't take fuel exposure.

It's provided by the client. When we think about it is when we have kind of gaps between schedules, back to our contracting strategy of trying to minimize our gaps so we don't have that fuel cost.

The rest of it, look, we're seeing the normal inflation across the board, 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.

The whole contract is kind of how we think about it, and can we pass some of those inflation costs back on to the dayrate or into the contract value, if you will?

Understood. Thanks for that.

Then I just wanted to follow up on a rig-specific question. The Louisiana has obviously continued to string together a number of short-term opportunities.

Could you speak to what's embedded in the guidance for the back half of this year surrounding that rig? Then as we think about it longer term, I guess into 2027, are there term opportunities for that rig in your view, or do you view this as sort of continuing to put together shorter-term programs?

I'm just curious how you and we should be thinking about the rig opportunities across 2027. Thanks.

Sure, Josh. Thanks.

Like I said in one of these answer in the Q&A, I said Louisiana ended up working more than we anticipated the first half of the year. Then I did also mention in my prepared remarks that the rest of this year is a little less clear.

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." When we secure the work, we'll start baking it into our forward-looking projections.

I guess that's a long way of saying we're not booking upside on that rig for the remainder of this year. Then I'll hand over to Jacob for commentary on 2027 and beyond.

I would just add that it didn't just exceed our expectations. I think it's had 99% economic uptime so far this year.

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 recently worked with, that love the versatility of that asset.

She has the Trendsetter intervention system on board as well, and enables her to go do drilling, P&A, intervention, all the likes of it. 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 more longer-term prospects that are going to be maturing in Q2, Q3 of 2027.

I think we're still very optimistic about the capabilities of that rig.

Thanks. I'll turn it back.