Prosafe SE

Thanks. Good morning, and welcome to Prosafe's Q2 presentation.

My name is Jesper Andresen. I'm the CEO of Prosafe.

And with me, I have Reese McNeel, who will introduce himself shortly, new CFO in Prosafe. Thanks to all who showed up in person, maybe a sign of a good quarter that our soft drink selection outside has improved significantly.

If someone wants to take a look, there has to be a benefit of showing up in person. A quick view on the highlights.

When we're done the highlights, Reese will take us through the numbers. I will give a commercial update and a bit on the strategic agenda we have.

First of all, second quarter was a good and busy quarter for Prosafe. Fleet utilization came in at 81%.

And I think we have to go back to 2015 to find a similar utilization for the fleet. Earnings also positively affected.

EBITDA came in at $22.8 million. And the cash flow was around neutral, which Reese will come back to, mainly due to working capital when activity picks up.

Therefore, liquidity stands at the $57.6 million, more or less in line. As a result also of the positive quarter, book equity has improved by 36% from last quarter.

Operations were busy. Only the Scandinavia and the Boreas were not in full utilization in the quarter.

So it's a good quarter in that respect. We have not had any incidents or poor performance in the quarter, which is impressive considering the high activity.

And on the contract side, I think most are updated. In the quarter, we formally won the 2 contracts with Petrobras.

We secured a short contract for Boreas in the U.K. sector, which is waiting to commence in September.

And finally, as we informed recently, on the Concordia, BP called early all the 4 weeks options they have on that vessel. And then we will have to wait and see if more is required.

But those are the highlights for the quarter. Positive quarter, good operations, good numbers.

We hope to continue. And with that, Reese?

Thank you very much, Jesper. Maybe a few words about myself first.

So I'm in actually week 3. It's a great pleasure actually to see so many people here in person.

I think that's probably not a reflection of me joining, unfortunately. But I think a reflection of a substantially improved marketplace, I think, across the board in oil services.

But I hope, also a reflection of what people see in Prosafe because I'm very excited to be here. And I think that Prosafe has a very strong future ahead of it in the coming years.

I wanted to say that I think the accommodation sector is very interesting. I think I had my first dip into the accommodation sector when I was the CFO and then CEO of Sevan Marine.

We also ordered and built a couple of accommodation rigs, probably at just about the wrong time. But I did have the pleasure actually then of visiting both of those in Nantong and Cosco and Qidong.

And at that time, I also visited -- maybe quite sneaketively. I also had the pleasure of visiting a couple of Prosafe rigs that were being built there.

They looked very nice then. And I also had the pleasure last week of visiting the Boreas, and I can say that she's a high-spec vessel.

She looks very good. Coming from Atlantic at tender drilling and looking at rigs operating in Congo, I can say that these are impressive rigs.

And I had also the pleasure then of meeting, I think, the crew, which is really crucial to any offshore business, and also getting to know some of the people in Prosafe. So my focus these last weeks has been meeting the team and also getting into the numbers and also look forward to meeting all of our investor base here in the future as well and hopefully growing that investor base over the coming quarters and years.

On a little bit to the income statement. As Jesper said, it was a very solid quarter.

I think operating revenues, obviously, higher than last quarter. That's obviously somewhat seasonal, particularly in the North Sea, but also much better than last year.

And that is simply driven by the higher utilization with all the rigs, except for Scandinavia, working during the quarter. Obviously, that drove quite a substantial revenue and that also flowed through then to the EBITDA.

Maybe worth noting as well that we did have in the operating expense some one-offs in the SG&A. So I think our SG&A, we're still tracking to the $14 million, which comes later.

But actually, this quarter, I think we had about $1 million of sort of one-off items in the SG&A. So if you were to sort of take that out, I think actually, the operating result was actually slightly better even, which is, again, the reflection of having that high utilization in the quarter.

Interest expense, I think we pay approximately $3 million in interest under this -- the restructured facility. Obviously, very favorable in the current market.

And the rest is actually noncash and related to the Cosco agreement. We do have some taxes, Trinidad and Tobago with the Concordia working.

So we do actually have some actual tax payable there, which is reflected here in the P&L. On to liquidity.

This was, I think, the first thing that I picked up on is, okay, we have really strong EBITDA, but little cash generation in the quarter. And that is purely a reflection of accounts receivable.

So our accounts receivable balance is approximately $44 million, $45 million at the end of the quarter. And that is purely driven by rigs ramping up in the quarter, Boreas, and also the Caledonia coming on stream, receivables outstanding as the activity picked up, increasing need in working capital.

And we did also have a little bit outstanding on Trinidad and Tobago. I think some of that will normalize in the coming quarter.

But of course, as your activity level increases, you will have a bit of a draw on working capital, particularly from AR. So no big surprises there, simply a reflection of the increased activity level.

Otherwise, I have to say that I have the pleasure of joining a company with a substantially revised and cleaned out balance sheet, which is really good to see. And I think we look forward to improving the cash balance over the coming quarters.

Hopefully, the working capital will normalize out, I think. And we'll see how we can manage that going forward.

I think I'll hand back to Jesper.

Sure.

Who'll take it forward, and then we can take some questions at the end.

Sure. Just on the practicality questions, in the room, welcome.

Otherwise, there's an e-mail if you're following online, that you can send questions, and we'll pick those up at the end. Quick overview of the commercial.

This is the detailed slides. As you can see, starting, I'll just go quickly through this.

No surprises. Boreas, completed Ekofisk, that was actually done before the end of the firm period.

Very unusual. Normally, you have a firm period which is P90, P70 of a project duration, and then you have options that traditionally work out.

But ConocoPhillips did a good job. So when we saw that those options were not likely to be called, we -- our markets at the vessel very aggressively, were able to secure direct awards from a customer in the U.K.

That should be ready to operate in mid-September, in the second half of September. So good to have extra utilization on that.

Caledonia and Zephyrus, steady states, both operating very well. OpEx, very stable for those 2 vessels and have been that for a very long time.

Looks very efficient. Concordia, as I mentioned, in Trinidad, all options are called.

We can speculate if there will be additional need in Trinidad. I don't know.

It's always a good sign that the options are called early by the clients. But I don't know whether we will need a further short extension.

Naturally, we are already marketing that vessel for its next job. Notos and Eurus in Brazil.

As you can see, Notos already commenced its new contract with Petrobras. Commencement date was moved forward, which means that when it's done at the existing FPSO later the year, we'll just take a week, max 2 out to do a few cleanups, hall cleaning, other things that are mandatory in Brazil.

And then basically, it's on to its long-term contract. Same for Eurus, but that will commence next year, and we'll just have a week or 2, hopefully less, in between those 2 contracts.

Scandinavia, still in layup in at CCB. In Bergen, we had one potential client inspecting that vessel last week, I think, but it's very early days.

But of course, we are very keen to attract potential clients on board and showcase the vessel. It is a very impressive vessel that is well maintained and capable.

And at the yard, we have the 2 vessels, Nova and Vega. At Cosco, we are in dialogue with Cosco.

Of course, we would like to take these vessels into the market when the financials make sense. So we are in constant dialogue with Cosco.

How do we make sure that delivery terms are suitable for the current markets. There is no secret that Brazil is our main focus these days given the market outlook there.

And we will see basically when we are in a position to do something concrete, but it's higher on our list of priority. And as you will see on some of the coming slides, the supply of Petrobras preferred spec, which these vessels fit, is drying out.

So we have some focus on these. Order backlog update, no big developments compared to last.

As a comment on Safe Boreas in Brazil, there was a process. Safe Boreas was bid in at $117,000 a day.

Other 4-year contracts were awarded. And Boreas, as we predicted, came into contention.

We were at the head of the pack with that rate. Unfortunate, the rate was higher than Petrobras maximum budget that they had allocated for this tender.

And then you are given the option to reduce your rates to match the budget, which we declined. And I think at last presentation, I think I answered on a good question that Boreas is a bit of a dilemma.

We expect that there will be very good use for these vessels in the North Sea. So do you take it to Brazil.

And especially at the latter end of the 650 days, we would probably prefer to have it in the North Sea. So we were not willing to revise what we had indicated to Petrobras.

So what happens now? I guess, Petrobras have issued an RFI, which means that the process has basically restarted.

I think there are probably many potential outcomes. But 3 can be cancellation, no 650-day job; #2, increase budgets; and #3, change technical specification to see if you can find cheaper supply.

Or a combination of the 2 latter. And I think I don't want to speculate, but I think there will -- there is a need for the 650-day job.

I think they need something. Will they increase price or the budget?

Or will they have a different specification? I think that's speculation for the shorter durations.

And this -- for Petrobras, this is shorter. For 650 days, you can have more flexibility.

What decides the technical requirements is a long discussion. But I think you have -- there are many elements.

But safe and efficient are probably the 2 to start with. Safe in the sense that when you consider alternative spec, the first question is, of course, does that represent an acceptable operational risk when considering collision and other aspects.

And the second element is efficiency. What is the expected gangway connectivity in these environmental conditions at the prospective fields and so on.

So this is the trade-off which I think Petrobras will do. And we know for the long contracts, they seem quite fixed on having understood over many years what is the optimal spec.

So we will see. The process is ongoing.

On 2024 - '23 and '24, North Sea and in Brazil, there are a number of tenders ongoing. And to preempt many of the questions in the room, I'm sure, I would love to lay out a fully visible field of opportunities and rates so you can predict the earnings.

Unfortunately, things have not changed in this quarter still. It is a low-visibility industry.

And many of the tenders that are going to, of course, as you know, have a binary outcome. So we would have to guide in quite detail to make this visible, and I will refrain from doing that.

There are tenders ongoing in the North Sea for '23, outside the North Sea for '23. And for 2024,is actually the more active year already when you look at a tendering point, some of the more meatier, the active is actually relating to 2024.

I think when will the first awards be there? Yes, within the next 2 months, I think there will be some awards that basically will give current event an indication.

And then the last bullet here. Options is -- yes, I don't want to call it a lottery.

Well, we cannot influence so much. But of course, we try to take a view on what is the probability and duration of the contracts we enter into.

And historically, more than 50% has been called. And if you look at our numbers, there are a number of options at the end.

And I think the EBITDA range for all coal will be $10 million to $15 million, depending on if you have full payout on those and considering something in Trinidad. So that's the range of the uncertainty we have for the remainder of this year.

A bit overview of the market, and a few familiar slides to those who follow us regularly. A bit of a supply overview.

It's a very selective snapshot. And we can spend all day discussing what is supply here.

The truth is, of course, that this market is regional. So if you're in Mexico supply, your competitor is one thing.

If you're Norway, if you're U.K., if you're Brazil, it's one things. So the list changes.

And I think what we are seeing now, which links back to what I mentioned about Brazil, is that first-tier demand in many regions is basically drying up or supply is drying up. And therefore, we can easily see competition from other vessels when basically demand of the preferred specification starts to dry up.

And then basically, the competitive field changes a bit. And if you look in Brazil, then everybody is fairly busy these days.

Cost slide, we always include. I don't think that the sharp observers would be -- would find it difficult to spot any differences from last slide.

Reese gave intro on the SG&A. And we have our main CapEx assumptions here, which, I guess, basically should pave the way for a good cash conversion in the near coming years as we don't expect to have no big CapEx elements planned.

If we have big CapEx, hopefully, it will link to our contract. Oil and gas will play a role through the energy transition.

It's probably a very modest statement. And I don't want to be preaching to the converted in this room.

But I think it's a fairly self-evident statement. And compared to the last presentation we did were here, I think things have developed as we had expected.

There's a full focus on security of energy supply. We had a Board meeting yesterday with a presentation from one of our customers and one of the oil majors from U.K.

to get a better understanding of their thinking. And it's quite interesting to see how the customers are doing quite well these days, and of course, have a number of interesting opportunities on their desk that are definitely in the money.

So the pipeline is growing. Quickly on the North Sea and in Brazil.

As you can see, this year, everybody is working in the North Sea. And that has been a bit the trend the previous year.

So how does that work from an earnings point of view? A number of vessels overlapping drive day rate.

And then, of course, when you move supply with duration, then it gets interesting from an EBITDA point of view. In Brazil, as I mentioned, this is also a snapshot.

Right now, there are 11 vessels on contract in Brazil. These 6 are the Petrobras preferred specification.

And then you have different levels. They think how we think about Brazil is probably we try to divide demand into 3 brackets.

We have Petrobras that use the vessels for plant maintenance, have a good idea of the specification, long contracts and an FPSO program. Then we have a group of customers that have, let's say, recurrent demand, not long contract, but have a recurrent demand.

Those would be the likes of Equinor SBM MODEC. And then we have -- as the market in Brazil is fragmenting right now on the customer side, in conjunction with Petrobras selling off assets, we have a whole range of new operators that are our potential customers.

And we will be in Brazil next week and look forward to speaking to potential customers. So Brazil is quite interesting.

The prime supply is drying up. We have 2 vessels that meets the spec in China, and we will follow that closely.

I think a quick comment on the North Sea market. Historically, U.K.

has been a source of a recurrent and fairly stable demand. Norway has in recent years been a bit more staccato, something nothing, something nothing.

And that is probably -- Norway is probably one region where the arrow is pointing in the right direction when we look at the activity from our customers and potential customers, the FIDs, the PDOs submitted, the many developments. Some incentivized by the tax breaks.

And just keep in mind that we are a bit down the value chain. We are not the first who will service our customer when the investment decision is taken.

So we will basically be a bit down the line. But activity in the U.K.

looks solid. Activity in Norway looks very promising in the coming years.

So we are keenly focused on that. And in Brazil, just a quick comment.

This is the FPSO program. Some are with Petrobras, some are with others.

I think the third bullet, I have mentioned a few times the question, what does the new FPSO program mean for our services? And I think when we analyze the data, we can see that there's 8 or 9 replicates which are now in service in Brazil.

And we see that they have a higher flotel intensity than the existing infrastructure. So they are fairly new, 2, 3, 4, 5 years old.

But we can already see that when you start using a floater, normally after 2 to 3 years, the days you use a flotel at an FPSO is higher, the intensity is higher for the new replicas compared to the older versions, even though, normally old infrastructure is more in demand of maintenance and modification than the new ones. But these are, of course, substantially larger.

And so one comparison that for a job had [ one ], we had to accommodate painting of about 200,000 square meters of an FPSO. Some of the new, they have 400 and 450.

So there is a significant size difference. So that is encouraging, that the new FPSO seems to have a higher intensity and use for flotel than the existing despite the age difference.

That concludes the quick presentation and update. Hopefully, capturing the main points.

Good quarter. 81% utilization, $22.8 million EBITDA.

Big growth in working capital. That more or less explains the difference between cash and EBITDA.

And then we will see in the next month or 2 if we can provide updates on contract awards in the North Sea outside for '23 and '24. With that, I think we will open for questions.

We can start in the room. Otherwise, Reese might have some on the phone.

Yes, please go ahead. You can just -- then I repeat the question if necessary.

Perfect. So I wanted to just get a bit more color on the way of on the and what you're thinking in Brazil.

I think it's good to hear that you find it they weren't able to bunch budget right now. But I also wonder if this has kind of made you rethink how you're positioning your fleet there.

And if there's any tender, will -- and then you're saying that you could actually prefer to keep the Wales in the North Sea. But if there is a new tender now in Brazil, do you think you're still going to be in that?

Or would you instead use that as an opportunity to potentially tighten the market there and instead put your new builds into Brazil?

Good question. So first, in the 650-day tender, the fact that a tender is issued and then it's not awarded and unused, I think it's been seen before in Brazil.

It's not an unusual process. So that's quite normal.

In terms of Brazil right now, I wish we had more vessels. What we see -- and we're going there next week, Reese and I.

We see how there are new customers coming up. They have different types of demands.

So right now, we wish we had more vessels. Would we mobilize our prime vessels from the North Sea to Brazil?

Very tough call, I would have to say. It would have to be quite attractive.

And we see -- and this is the interesting thing about Brazil. We see Petrobras with a long-term fixed mindset on a specification that will require a North Sea vessel.

We also see the likes of Equinor. That did mobilize a flotel from the North Sea because of the operations on Peregrino.

So right now, I would like to have more vessels, and I would like to have the high-spec vessels. I think those provide.

From an operational cost point of view, almost the same. Some of the small are a bit cheap, but not a big difference.

From an efficiency point of view, much better. So I would like to have more vessels in Brazil right now and the -- hopefully not have to juggle the basically limited supply game that you're playing where the earnings best.

But on the other hand, we are also a bit careful. We don't want to flock new supply into the market at terms which don't work financially.

We are not desperate. We have time.

So with the development in Brazil, there are opportunities now. There could be opportunities later.

So we are -- we will be ready, but the numbers have to work. And I don't have a fixed answer on what is the inflection point before we do one and the other.

But it's a dilemma. But we would expect that, normally, the North Sea vessels belong in the North Sea.

That is the rule of thumb.

Just as a follow-up to that one. I guess it's kind of a broader question.

But in Brazil or U.S. market does have the best visibility.

And I think most of us can have a -- that's absolutely correct.

Yes.

But I guess there is a question here to be made around how you would think about long versus short-term opportunities. Probably kind of in a point where in a market now when we're looking for example on drilling as well.

So you see the acceleration rates.

Yes.

You have a new balance sheet. You have some cash and favorable debt.

But how -- have you made any thoughts around how long you can afford to wait? Or would you prefer short-term opportunities now to make sure that we're able to also capture higher rates in the future and get those earnings up faster rather than slowly?

Yes. So I think generally, we are fairly risk on.

We don't see a need to go long in the current market. We think they are positive indicators, so we are fairly risk on.

So yes, we have that. And of course, in the balance sheet we have, we don't price based on balance sheet.

We price to get the maximum. So it's -- that's how it works.

We have a solid cash balance. We have a flexible and more structure.

So we can play the market. We are not forced to take what we have, and we intend to play in the market.

And then we'll see if we are right. But right now, we are risk on.

So we think there will be high activity, '24, '25, '26 when you see the pipeline. It's very difficult to say if and when.

And then in Brazil, about visibility, good points. Anyone would do some research, that would be helpful because we are doing it ourselves.

So what we are doing is that, yes, long visibility. You have some statistical material you can use for Petrobras.

Some GPS tracking where you can get some good intel for the long run. But we combine that with a bottom-up, and especially with the fragmentation of the market in Brazil, does that mean that you will have the long-term Petrobras market?

And then you will have more like a North Sea lookalike markets, where you have the recurring but not full year demands for some operators that have some size of infrastructure? And then will you have like a third tier or another group of customers that will join forces basically to get the optimal solution?

So yes. Visibility with Petrobras on the long contract is fine.

But what's happening in Brazil now means that it's much more of a complex exercise. And we try to track that very much to basically get the long and short-term effects.

Yes. Okay.

Other questions? Julia?

Yes.

[indiscernible] on the financials [indiscernible] the decision-making process and the timeline that you're seeing [indiscernible] you say the revenue capacity at now that we see to have more high equity on an there are what position or financial situation.

Yes, yes. That's a good question and something we are working on very actively.

But I think from the starting points, I think our start would be that we need to have some contract visibility before we take out a new build. That's the first.

Secondly, you -- when you look at the deal structures that are done in China these days, there are mainly 3 models, but -- or 3 models and a number of variants around those. But I think the current deal terms we have would require a much stronger market.

So one is basically to say that way. I understand the yard would very much like to work with us to get the rigs out in the current market.

And then, of course, the terms have to reflect that. And I think with Cosco, as I said on the slide, they have not reactivated the rig.

They shouldn't. We haven't given notice.

So we are in this mutual dependency, which has been for a long time. And I have worked with Cosco since 2008.

And you also -- you normally find a solution where you calibrate the terms to reflect the market. So that is the discussion we are having also with Cosco and what to do.

But I think you can have different models depending on your visibility and so on. But I think the rule of thumb is just that, when we take the rigs out, it has to make obvious financial sense.

That's the shorter, and then we can kind of shape that in different ways. But that is something -- time line, yes, that's a very good.

We expect there will be new opportunities in Brazil, either late this year or early next year. That's something we are thinking about.

Will that provide the ideal competitive setup for us? That's a good question, but we will be there.

No doubt. Our ambition is when there's a new, we'll be there.

And then we, I think, also have a bit of faith in the activity. So we are not desperate to take the rigs out if the market improves.

And of course, it makes it a bit easier. So I think that's as much as I can say apart from it's an ongoing process.

Any other questions in the room? Yes?

How the [indiscernible] Concordia.

Concordia used to work with Petrobras. Right now, it's not in the top tier.

It's a DP2 vessel, the DP3. So for Concordia, of course, if Petrobras changed their spec, it could come back into play.

I don't think so. I think they have zoned in on the high spec if -- and then, of course, for shorter duration, they can be more flexible because they can be more flexible.

But will Concordia go back and work long term for Petrobras? Well, if the opportunity is there, we will consider it.

But I will be surprised. So Concordia is probably a bit more the rest of the Brazil market.

And what you see in Guyana and what you see in the Americas, we're in Trinidad. U.S.

Gulf is probably more that kind of -- better suited for that.

Is still in there for that tower?

Yes. that will be ideal for that.

And the Concordia has done follow target work, which I guess is the most complex, and they can do that. And I will be honest, I think it was the first vessel that ever did.

Poor result the first 3 months. Then there was a learning curve, and now it's done very well.

And Equinor used it in Brazil and had very efficient operations. So it can definitely do it.

It's a versatile vessel, but it's not spec to 2005 vessels, not DP3. I think Petrobras have zoomed in on what they need.

But for the secondary market in Brazil also, absolutely. Also work for MODEC.

Selina?

Looking at properties in the offshore service market at the moment is in a Q2 positive momentum. And there seems to be great deal of dynamics around consolidation, I think in your acquisitions or whatever, peeling off things.

Do you have use of that? Do you have any current processes?

Any ideas? Any wishful thinking around it?

Yes, yes. The wishful thinking is plenty.

But we also we have closer contact with basically all the owners that have equipment that we could -- that we think we can operate better and that we think would makes sense to have in hour -- under our wings. And we have a good dialogue.

It takes 2 to tangle. Has to make financial sense.

So it will happen sooner or later. When is the right time?

I don't know. But we follow quite keenly what is going on in other parts of the industry.

And I think there are some obvious synergies for many of the 1 or 2-vessel owners. There are some already have external management arrangements in place.

We think we could add more value to those vessels and would be a much more sensible long-term owner. And of course, we can also offer and align structure where we have part payment and shares, part payment and sales credit, what have you, basically to give an aligned structure, but where we have, I think, probably a stronger position to extract value from that.

So that is something we would be very keen to do and we have pursued for some time. But it has to make financial sense.

Would [indiscernible] anyway?

Yes. Exactly.

Exactly. And that is, I think that is probably very helpful to the process, yes.

Yes? Any -- Reese, anything on the phone?

Questions that came in. So I would just read them out.

Okay.

The 650 days for Petrobras is canceled. Do you think they need a vessel since this was canceled?

Yes.

I think you have answered that question.

Yes.

Already. Is it possible to get Nova and Vega there now?

I think we have also...

Everything is possible. But financially, it has to make sense.

Yes, yes.

And I think we'd very much like to see a contract to back out getting it out of the yard. So if you had a contract that could support that, that would be the easiest.

How do you see opportunities for Scandinavia as a flotel or TSV?

Yes. Very good question.

It's like -- Scandinavia is not the ideal flotel. That's true after it's been converted.

POB, people in U.K. 2 20, 2 30 can actually be meaningful.

In Norway, about half. That can work for some prospects.

But realistically, as we see last time, Scandinavia worked as a flotel, base sold out. And that is, of course, something that very well can happen in the coming years.

So that's one option. But is it the ideal floatel?

No, it's not. TSV?

Yes, we are in dialogue with that. I think the potential customer that were looking at it a few weeks ago was looking at that.

Can you use the pump capacity to boost production? That's, of course, also something which is very much in focus with our customers.

Do you modify the fixed installation to recovery? Or are you possibly late production other where you can boost production in the immediate by using our pumping capacity as kind of the business cases we have discussed.

So -- but it's a bit -- it has been there for some time. It's well preserved.

It's a good rig. But then yes, it's not on the top of the shelf.

And I think as we have mentioned before, how do we think about it? It costs us about $3,000 a day to have it there.

So we consider it a fair option.

I think it's fair to say we're open for whatever opportunity come forward to get her working.

Very much. But I think from the value point of view, we can -- it can add considerable value if you could boost production in this -- it can be quite valuable.

Do we -- when do we believe Nova and Vega will be activated?

As soon as possible?

I think you also mentioned tenders looking, next one, like the end of the year, early next year, in Brazil for Petrobras?

Yes.

Yes. So then there's obviously some activation time for the rig post any sort of tender.

How do you see rates in the North Sea? Rates, economics and length of contract?

Yes. So that's probably a place I have to be careful, but we'll see when the next awards are coming out.

And of course, it depends on the individual operators market view. And there may be some -- let's see, if people converge or whether there's a big pricing difference.

We have our view. And then we'll see if others are -- have the same view.

But we are fairly optimistic about activity. So we'll see.

And then of course, the more challenging part is probably duration. How do you see that?

And you have many contracts, like 5-plus 5, months or 6-plus 3-year, 5-plus, all that makes it a bit more difficult. You have the firm period.

And then you have a kind of an option period that normally spills into the earnings for the year. But it's, of course, difficult really to get a good grip on.

So that's something we are focusing on. The second thing we are focusing on is, of course, when markets become a bit tight, we would try to have the best possible utilization.

So if we can get flexibility or combine basically to make sure that we make the best use of our assets and do not have a Boreas contract like the share for a few months smacked in the middle of the year, that would, of course, be ideal to get the maximum utilization.

I do think it's fair to say we see lot of activity in '24 in particular, a lot of interest.

Yes.

The next question was Concordia in Trinidad. Where do you see it continuing afterwards, Brazil or North Sea?

I think we -- there was a question on that a little bit earlier about whether she could go back to Brazil, which I think the answer was, we assume possibility, that has a lower spec than what Petrobras is looking for. So maybe the North Sea.

No. I think there will have to be a -- it doesn't have a U.K.

safety case and so on. That will be challenging.

But yes. I don't think go there.

But we are bidding in that part of the world, the Americas, and that that's something both north and south, so yes.

And related to that, how do you see a return to Mexico?

Yes. That's very good fit.

It has worked many years in Mexico. And I guess, Mexico and PEMEX spent some time on sorting itself out.

We are following it quite closely. There hasn't been new floaters coming in there since 2016, 2017.

But we see the backlog there. It's a bit difficult market to predict, but it's certainly not something we would rule out.

And I think the final question that we received here by e-mail was, how do you see -- I will summarize the question. But how do you see the current geopolitical situation, potential Taiwan conflict and Ukraine with respect to getting the rigs and accessing the rigs in China?

Yes, yes I guess right now, we don't see a threat in that respect. I guess the biggest challenge right now in China is COVID, where we see some people actually have to take the rigs to Singapore to reactivate them because it's -- you still have a 10-day quarantine when you enter China.

So I think it's -- on the geopolitical side, I think I'm not the right person to comment. But right now, it's not a concern for us.

And I think it's fair to say, at least I have been involved already in some dialogue with Cosco, so they're very responsive and answering questions and coming back and joining calls. So I think it's -- I don't think this is a concern of us right now.

No.

That was the questions which we received by mail.

Okay. Okay.

Well, on that note, unless someone has a burning desire to ask more questions, then thank you very much for coming and thank you for those who are listening. I hope that it answered your questions.

And I look forward to seeing you next quarter presentation, and hopefully have some good news in the meantime.

Thank you.

Thank you.