Hello, everyone. Thank you for joining us and welcome to the Noble Corp 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 Ian McPherson, Vice President of Investor Relations. Ian, please go ahead.

Thank you, Operator, and welcome everyone to Noble Corporation's second quarter 2026 earnings conference call. You can find a copy of our earnings report along with the supporting statements and schedules on our website at noblecorp.com. We will reference an earnings presentation that's posted on the Investor Relations page of our website. Today's call will feature prepared remarks from our President and CEO, Robert Eifler, as well as our cfo richard barker we also have with us blake dinton senior vice president of marketing and contracts as well as joey kawaja senior vice president of operations during the course of this call we may make certain forward-looking statements regarding various matters related to our business and companies that are not historical facts such statements are based upon current expectations and assumptions of management and are therefore subject to certain risks and uncertainties many factors could cause actual results to differ materially from these forward-looking statements and Noble does not assume any obligation to update these statements. Also note we're referencing non-GAAP financial measures on the call today. You can find the required supplemental disclosure for these measures including the most directly comparable GAAP measure and an associated reconciliation in our earnings report issued yesterday and filed with the SEC. Now I'd like to turn the call over to Robert Eifler, President and CEO of Noble.

Thanks, Ian. Welcome, everyone, and thank you for joining us. On today's call, I will first briefly recap the second quarter results and then cover our recent contract awards and market outlook, including our semi-annual assessment of global deep water rig demand. Next, Richard will provide a financial overview, and then I'll wrap up with closing remarks before we go to Q&A. Starting with the second quarter, we reported adjusted EBITDA of $212 million. We have maintained our robust return of capital program, returning an additional $80 million to shareholders through our 50 cent per share quarterly dividend in Q2. And yesterday, our board declared a 50 cent per share dividend to be paid in September. Q2 was adversely impacted by 43 million dollars due to an operational suspension that impacted both of our rigs in Brazil. Richard will provide additional detail on how we have factored this into our revised guidance for the year. Apart from this discreet headwind, operational and financial performance across the balance of the fleet was strong and was complemented by a successful debt refinancing in June. On the commercial side, we have secured two new contracts over the past three months. First, the Noble Viking has been awarded a six-well contract in the Asia-Pac region, expected to span most of 2028 with options into 2029. And additionally, the recently renamed Noble Klaus Bachmann, originally the Ocean Great White, has been awarded a three-well contract with VP in the UK North Sea with an estimated duration of 150 to 210 days at $320,000 per day plus mobilization fees. This program is slated to commence in March 2027 directly preceding the RIG's three-year contract with Ocker VP in Norway. This renaming recognizes the years of service and leadership from klaus bachmann our vp of operations in europe having recently celebrated our 105th birthday as a company we're proud to carry on the valued tradition of periodically naming rigs in honor of long tenured employees who have made a lasting impact here klaus thank you and congratulations on a combined basis we have booked approximately 200 million dollars of new backlog across these awards with our backlog as of the fleet status report published yesterday now standing at 6.8 billion dollars i would also add that we anticipate signing several additional contracts fairly soon which would further augment our backlog so stay tuned now on to the market outlook while the iran conflict continues to exert preternatural volatility on oil prices underlying demand for our business has been more stable by comparison and continues to trend in a positive direction overall for starters 77 rig years of udw backlog contracted during the first half of this year was by a comfortable margin the highest level seen in well over a decade and on the back end of this historically large surge of fixtures and despite the withdrawal of most of the ONGC rig tenders that surfaced earlier this year, open floater demand of over 95 rig years still remains at a notably high level, especially considering that all of this open demand pertains to markets outside Brazil. Put differently, open floater demand in the rest of the world, excluding Brazil, is actually about 20% higher compared to the recent high watermark of two years ago. Global UDW floater utilization remains firm, with 104 rigs contracted now or in the future, which is down one rig quarter-on-quarter, but represents 95% contracted utilization of the marketed fleet, and 87 UDW units currently under contract, equating to 79% current utilization. We continue to expect the latter statistic to trend upward over the next few quarters as long-term programs ramp up, including several of our own. As the market continues to firm up, day rates have recently begun to move higher, with recent fixtures in the mid $400,000 per day. Current bidding and recent fixtures have generally been characterized by higher rates for longer-term programs out into the future versus lower rates for near-term gap filler work. At a high level geographically, recent developments essentially distill into the tale of two halves, i.e. a slightly reduced demand picture in the Western Hemisphere driven by softer activity in the U.S. Gulf and Brazil, which has been more than offset by eastern hemisphere strength keyed by Africa and Asia Pacific. On a combined basis, global UDW demand looks as strong today as we have seen at any time in the past several years. Starting first in South America, UDW demand is currently 41 units, down from 44 compared to six months ago. Brazil comprises 32 of these 41 rigs and is down from 34 at the beginning of the year. Petrobras activity reduction has been the primary downward driver in the region and upon conclusion of the Noble Fay Cozak's contract, Brazil is expected to decline by one additional unit. The rest of the region appears poised to grow moderately keyed by baseload demand of seven to nine units throughout the Guyana Suriname Basin where Noble has drilled approximately 75 percent of the wells to date plus an expanding array of opportunities of longer and shorter duration, spanning Colombia, Peru, Uruguay, and potentially Venezuela. In total, we expect the South American region to absorb about two to three incremental units over the next year or so. The U.S. Gulf has softened recently, dropping to 19 units currently, versus 21 as of six months ago. While current customer indications support higher levels next year, there remains a limited amount of near-term activity to bring the rig count above the high teens over the balance of this year. Commonly a more economically sensitive basin, the recent volatility with crude prices hasn't necessarily been helpful, although current oil prices if maintained should certainly support a stabilized market of 20 rigs over time. Meanwhile, the likely departure of two to three units for international opportunities is expected to keep drill ship capacity in the gulf fully utilized next in west africa contracted udw demand stands at 14 rigs down one versus six months ago with a strong pipeline of open demand throughout the region comprising 22 rig years across public tenders and pre-tenders throughout the west africa plus mozambique region this includes seven long-term programs with average duration of 2.5 years spanning Namibia, Nigeria, Ghana, Mozambique, and Cote d'Ivoire, supplemented by a variety of smaller-scale requirements throughout Angola, Mauritania, Congo, and Equatorial Ghanaian. The African market appears poised for further growth into the high teens by the second half of 2027. The Mediterranean Black Sea region has grown, as expected, to an all-time high of 12 udw rigs up one unit compared to six months ago there are currently two open tenders in the med as well as two contracts expiring during the second half of this year we continue to assess this as a structural 10 to 12 rig market going forward underpinned by turkey's upsized fleet of six owned drill ships next the asia pacific plus india region continues to be perhaps the the most dynamic growth market for deep water, with a recent range of 10 to 11 contracted UDW rigs, up from eight rigs six months ago and representing a multi-year high since pre-COVID times. Meanwhile, the open demand pipeline is increasingly promising. Even despite the withdrawal of four of ONGC's five long-term rig tenders, open demand in the region still currently stands at 42 rig years. This equates to 45% of total open demand globally, compared to a current rig count share of only 10% of the global total. While some of these requirements are expected to be satisfied by existing capacity in the region, Asia-Pac could expand into the low teens by late 2027, with optional upside on a longer-term basis related to India. Recent indications are that India's multi-rig exploration campaign is likely delayed by about a year due to planning and funding lead times, rather than canceled outright. Rounding out the global picture, the Harsh Environment North Sea and Norway market currently represents 24 units of total floater demand, nine of which are satisfied by UDW semis, both of which are up two units compared to six months ago. Norway comprises about 80% of the floater rig count in the region, including all nine of the UDW units. Despite persisting regulatory and fiscal headwinds, open demand in the region indicates the potential for increased activity. However, with 100% contracted utilization in the region currently, any potential rig additions, whether for Norway, west of Shetlands, or incremental P&A scopes in the UK sector, would require harsh semi-capacity to migrate back from other international locations. Rolling all of these regional outlooks together, it's realistic to see a path to today's marketed fleet becoming essentially fully contracted by late next year. This is very similar to the industry status and outlook that we beheld in mid-2023. prior to the demand downturn that tracked with Brent prices melting from $90 per barrel down to $60 by the end of 2025. However, with global oil inventories and sideline rig capacity both significantly tighter now versus a few years ago, plus the increasing premium on energy security worldwide, we are optimistic about the direction of the deep water market from here. Before passing the call over to Richard, I'd like to also touch on the CJ70 jackup market, which is gaining traction as well, with 100% contracted utilization across all 11 units in Norway and the UK. We are looking forward to the Noble Interceptors reactivation later this summer for a five to eight month accommodation program and are bidding the rig toward promising opportunities for subsequent drilling activity in 2027. In the UK, we have transferred most of the noble innovators remaining backlog with bp to the noble intrepid which has removed some revenue from the second half of this year while availing the intrepid for incremental opportunities in 2027. overall day rates for the cj 70s are generally flat and we are optimistic about securing improved utilization in 27 compared to 2026. with that i'll pause here and pass the call to Richard.

Thank you, Robert, and good morning or good afternoon all. In my prepared remarks today, I will briefly review the highlights of our second quarter and then discuss the outlook for the remainder of 2026. Starting with our quarterly results. Contract drilling services revenue for the second quarter totaled $679 million. Adjusted EBITDA was $212 million and adjusted EBITDA margin was 30%. Q2 cash flow from operations was $144 million, capital expenditures were $205 million, and free cash flow was negative $59 million. As Robert mentioned, Q2 was adversely impacted by $43 million due to the operational suspension of our two rigs in Brazil. I'd also like to highlight a few additional items that impacted the quarter. Firstly, we completed the lease buyout on the third of four blackships BOP systems for $18 million, which impacted Q2 cash flow. The buyout of the last remaining BOP system is expected to occur in the fourth quarter for the same amount. Secondly, we recorded a $42 million impairment in the second quarter associated with the sale for scrap proceeds of the Ocean Apex. The closing occurred in early July, generating net proceeds of $5 million. Lastly, we refinanced all of the legacy diamond bonds plus the portion of the existing noble bonds in June with the issuance of $800 million in new 6.25% senior unsecured notes due 2034. This refinancing enables us to simplify our capital structure into a single credit silo, unlocking $35 million in annual cash benefits, primarily interest expense and tax related going forward. As summarized on page 5 of the earnings presentation slides, our total backlog as of July 27th stands at $6.8 billion. As a reminder, our backlog excludes reimbursable revenue as well as revenue from ancillary services. Our current backlog includes approximately $1 billion that is scheduled for revenue conversion during the remainder of 2026 and $2.3 billion scheduled for 2027. In addition to the new contract awards that Robert highlighted, a current backlog reflects the transfer of backlogs from the noble innovator to the noble intrepid, as well as an earlier anticipated end date for the noble Stanley LaFosse in January 2027, rather than July 2027 previously. For this Riggs Wells-based contract, the well sequence has shifted, which has resulted in an earlier expected completion of the campaign. With respect to the Noble Courage and Noble FECOS Act, both RIGs are currently operating in Brazil. However, our revised guidance does reflect an additional revenue reduction of at least $15 million through January 2027 as we work towards administrative solutions following the suspension. Referring to page 9 of the earnings presentation, we have updated our full year 2026 guidance for total revenue to a new range of $2.8 to $2.9 billion, down from $2.8 to $3 billion previously. And this still includes approximately $150 million in reimbursable and other revenue. We've also revised guidance for full year adjusted EBITDA to between $850 and $925 million, down from $940 million to $1.02 billion previously. This reduction is driven primarily by adverse revenue impact from our Brazil rigs, but also by the intrepid innovative swap and the Viking options likely moving into 2027. Capital expenditures guidance for this year is unchanged at a range of $615 to $665 million. As a reminder, this range includes estimated customer reimbursable capex of $25 million. With that, I'll now pass it back to Robert for concluding remarks.

Thanks, Richard. To wrap up, despite our recent revenue headwinds, we continue to see very encouraging indicators across the deep water and ultra-harsh jack-up markets that should support a meaningful earnings inflection by the second half of next year, at least as strong, if not better, than what we have previously described. This outlook is predicated on contract startups that are already in backlog, plus a relatively small handful of contracts to be secured against our limited remaining available capacity in 2027, including the Black Rhino, Black Hawk, Viking, Stanley LaFalce, and Faye Kozak. The opportunity set confronting these units looks very promising, with utilization and day rates trending better and we do expect to have some contract news to report for some of these units relatively soon meanwhile we are intently focused on delivering our contract startups on a timely and budgeted manner and we have a very strong financial position in capital return program intended to afford shareholders the luxury of being paid to wait for the next leg of the cycle and Noble's cash flow trajectory to kick into high gear in the second half of 2027. With that, I'll turn it back to the operator 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 1 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 comes from the line of Arun Jaram with JPMorgan Securities, LLC. Your line is open, please go ahead.

Yeah, good morning. Robert, I was wondering if you could elaborate on your commentary on just general demand trends you're seeing in the eastern hemisphere versus the western hemisphere um and just thoughts about how this could inform your your future strategy on what markets that you know you'd like to play and obviously as as we sit here today nova has quite a bit of leverage uh to the u.s gulf of mexico or gulf of america and obviously a great program with Exxon and Guyana, but how should we think about future rig moves because you are arguably a little bit underrepresented in West Africa and Asia-PAC.

Yeah, no, morning Arun, thanks for the question. So I guess what I'd say is the increase in open demand and actually activity in Asia-PAC, and I don't know if I would call it a surprise, but certainly an upside that that wasn't wasn't assured a couple of years ago so that's very welcome to the entire market we said in the prepared remarks the situation in India has been bit fluid as everybody knows and we mentioned in there too we hope that those tenders will come back into interview after a year or so delay so i think there's some more upside not only from india but also kind of spread out around the region there i think that region one could assume is particularly affected by some of the heightened energy security issues that have come out of the conflict in iran and i think that we can anticipate seeing some activity that bridges from that so we've all you know we've been a long-term player there as you said oftentimes smaller um way back we had i guess fewer jackups than some some of our competitors had there but it's really never been a substantial floater region um we've been in australia for quite some time uh but then it's always been just a handful of floaters um and oftentimes in somewhat more captive markets and that's what's changing right now uh there is a demand for drill ships uh which wasn't the case uh earlier in my career uh and we're pretty excited about about what all of that might bring for noble specifically which is your question um i could easily see an additional unit moving over there but it's a little too early to to uh to to say definitively on on that right now got it got it and then you West Africa, we've been there for ages. That's actually my first region I ever covered. That has been the, that was the growth story early and then the kind of pause story that we're working through right now and continues to be the growth story going forward. I listed the countries in my prepared remarks. We believe, well, a lot of the uptick there is already FID'd and some of it contracted, but we think that that is very real. And we're very optimistic about the additional demand that's going to be represented there, kind of West Africa, all the way around Mozambique over the next two, two and a half years for startups. And that's going to cover up to five or six years from now in terms of contract coverage for the market. So yes, and I could also see Noble expanding our presence there as well, but again, a little too early to tell.

Yeah, great. And Robert, you mentioned a couple times that, you know, it sounds like you're quite optimistic on some near-term contract news, which will hopefully improve some of your utilization trends. Any things you can maybe unpack a little bit as this perhaps opportunities for some of the idle floaters today, or is this kind of maybe opportunity to add on to backlogging existing rigs that are working today?

Yeah, here's what I'll say. So, of course, most of the work out there is weighted towards second half of 2027, and we have a number of opportunities, all of which, of course, won't go to us, that will really help demand around the industry, And that's the single point of the most optimism that we hold right now. I think we're clear in the comments about that. But I would also say that we do have, at least we have an opportunity that would potentially start this year. And then we have a couple of others that would start in kind of first quarter, second quarter of next year. And so we would be talking about those if we could right now. We still have a little bit of work to do, but we're pretty hopeful that we'll have some news here in the coming quarter.

Great. Thanks a lot, Robert.

Your next question comes from the line of Jeff LeBlanc with TPH & Co. Your line is open. Please go ahead.

Thank you, Robert and team, for taking my question. I wanted to see if you could talk about the resequencing and outlook for the Noble Developer. He's got a question. Oh, yeah.

Sorry. Sorry. Thank you. Uh, uh, yeah. Look, the what, what I'll say is, uh, the D class rigs have been, um, in very high demand in a couple of different regions around where they're, where they're, uh, best fit technically. Um, and that kind of CARICOM region is one of those places, and then in Australia as well. The outlook for the D-rigs has perhaps changed the most dramatically in a positive way over the last 18 months, and those rigs are among the highest quality and most marketable rigs globally in the specific areas that benefit a semi-submersible that has both moored and DP capability. And so there's around in CARICOM, I would say right now there's more work than there are rigs that can perform the work, which is great. And the re-sequencing there was something that we're extremely supportive of and we think will ultimately be better for not only for NOBLE, but also for the various different customers that need rigs down there in the near term. So there's a pipeline of potential work behind what we've booked, and we're very hopeful that we can tag on some additional work around there.

Okay. Thank you very much. I'll hand the call back to the operator.

Thank you. your next question comes from the line of scott gruber with city group your line is now open please go ahead yes good morning um a question on on how we should view the um you know available rig time in 27 you know you noted that um udw rates are taking up into the the mid 400s you as exemplified by the Viking contract, but that, that starts in 28. Um, and so do you think you'll be able to book, you know, if, if you do take a one year job in 27 for some of the available rigs, do you think, you know, the market's at the point where, where you could, you could get, you know, mid four or hundreds for, for a one year job, or do you really have to be looking at work out into 28 or, or multi-year jobs, um, to be in that, that mid 400 range?

Well, let's see, Scott. What I would say is, you know, you mentioned what we had said, where we think the market is pricing right now out in 27 and 28. There's been quite a range over the last 18 months, 12 to 18 months. And that probably is slowing or narrowing, but it definitely persists today. So I actually think the market will track just like the norm. And we've seen some deviations from the norm over the past five years, but I think it will track generally with the norm where gap filler type work is going to be priced at a discount, which is natural. And longer term work is going to be priced at a slight discount, which is also very natural. And then everything kind of else fits into the middle there, which would be that type of range I mentioned on the prepared remarks.

That makes sense.

And we do think, we do see a path, just reiterate, we do see a path, as we mentioned in 27 here, to full utilization for the entire industry, floating fleet, drillship fleet for sure, a high-end fleet. And so those contracts are in process, and it's not going to become entirely evident in the next week or even couple of months. But the programs are there in many cases, and we've heard some of the service companies mention this, the FIDs are largely there for a lot of it. Our customers are in budget season right now, and of course, we discover more about that towards the end of the year, but we're, I'll repeat, but we're as optimistic as we've been about second half of 27 forward here on the demand we've seen.

That makes sense. Things are clearly moving in the right direction. And then just coming back to the revenue impact on the COSAC and the Courage, you mentioned an additional $15 million through January 27, just any additional color in how the $15 million, you know, hits 3Q, 4Q or, you know, a bit in January? Just thought of a thing about that.

Yeah, I would just say I would spread that out over kind of remaining second half of this year. We've never given specifics on cash flow on quarters, and that contract ends very early in January anyways. So this is really a second half 26.

Yeah, yeah, yeah. Okay. I appreciate it. Thank you.

Thank you.

Your next question comes from the line of Doug Becker with Capital One. Your line is open. Please go ahead.

Thank you. Robert, I wanted to continue the conversation about the administrative solutions currently being negotiated with Petrobras. Can you just go into a little more detail about what these might be. Are they day rate reductions? Additional idle time is an early termination of some work of possibility here. Just trying to frame the potential outcomes here.

Yeah, thanks. So what I'll say, which we've said is that the RIGS had some shutdown time during May and June. That was the result of an A&P audit, which is a regulator down there. And that is an ongoing matter that would, unfortunately, I would have a very incomplete answer for you today because we cannot say much about it. But I can offer that our revised guidance It reflects not only the 15 million that Richard mentioned, but also a range of outcomes that, you know, could go kind of on either side of that as we work through all this. Both rigs are operating today, and we're just working through all of that with the regulator down there.

I appreciate the sensitivity there. And maybe just any more color you can provide just on the LaFosse, just trying to get a sense, is this something we might see more in the future, or is it really just schedules getting shifted around and not indicative of a trend you might see going forward?

Yeah, so that's a Wells-based contract. In times past, that's worked in our favor. In this instance, it obviously hasn't for 2027. The customer will be continuing with the rig line. They're out to tender for that. Noble is participating in that tender, and it's a little too early to tell exactly. Of course, that's ongoing, so we don't have an answer there. I guess I would offer that that rig, along with this resequencing, it obviously increases the likelihood that that rig could work elsewhere, either in the U.S. or actually outside of the U.S. Gulf of Mexico, where there's some opportunities.

Makes sense.

Your next question comes from the line of Ben Summers with BTIG.

Hey, good morning, guys, and thank you for taking my question. So kind of to build off the last question, curious, you know, looking into 2027 kind of opportunities we're seeing in the U.S. Gulf. You know, I know we have the Blackhawk rolling off at the end, you know, later at the end of this year. And then, you know, we have Black Rino still there. Just kind of curious, you know, what you're seeing for the opportunities in the U.S. Gulf. and then I guess just, you know, what it would take to potentially maybe move rigs out of that region. Thank you.

Yep, thanks. Good question. So I mentioned earlier that kind of how the timing of the starts of the stuff we see and how those are weighted, which, of course, is more towards the back end of 27. There are, for our rigs, there are opportunities in the U.S. Gulf of America, in West Africa, And in Asia-Pac, and sorry, I skipped over Central and Northern South America, where there's a lot out there that right now has yet to be contracted. So I think you could anticipate one or two of our rigs moving regions, and I think that's a good thing in the long run. And so we're working through all of that right now.

Super helpful. And then as we think about, you know, the sale of the Apex and just fleet optimization moving forward, kind of any color there and just how you're thinking about the broader fleet?

No, we like where our fleet sits today. The GT2 obviously is held for sale. We haven't had any announcement on that, but it is held for sale. Well, outside of that, we have a pretty well-contracted fleet, even among some of the older rigs. And we manage that carefully like you would with any older rig. But they've generally performed well and are producing cash flow for us right now.

Awesome. Super helpful. Thank you guys for taking my questions.

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

Hey, guys. Thanks for taking my question. Just kind of wanted to ask around, you know, now that the, you know, the Ocean Apex has been scrapped and sort of follows up on the last one. I mean, are you thinking about potentially the Globetrotter 1? I mean, is that, do you think contract there is potentially still realistic or do you think disposal could potentially be more likely? And then maybe more broadly, how do you think just about kind of macro-wise, do you think Do you think some of these older, lower-spec assets potentially start to sort of get scrapped more and more? Just any thoughts around all that?

Yeah, so the GT1, we've said, is bid essentially for intervention work, and we've just finished in the Black Sea. So there's – including that plus another opportunity or two, there are a few drilling wells out there that are uniquely suited to the Globetrotters because of their design and capability. So where only a globetrotter can reasonably perform the drilling work, we've been bidding that. And then outside of that, they're actually very well suited to intervention, and we've been working hard on finding some intervention work for the rig. We don't have anything to announce on this quarter, but nothing has changed in how we're approaching the market with that rig. Yeah. Sorry, Keith, you asked more broadly as well. Of course, everybody sees what we see around demand in the back half of 27, I assume. So, of course, scrapping would generally be slower with visibility like this, in a very old rig that's, say, 40 years plus, 35 years plus, something like that, it's always a judgment call based on the specific availability of work for that rig. So SPS costs go up, and every drilling company ever looks at SPS costs, which cover you for effectively another five years and tries to make a determination based on the outlook on whether it's worth putting the capital back into the rigs. So I don't remember the number of 20 or so rigs out there that probably fall into that bucket. And, you know, those are always going to be evaluated on kind of an SPS by SPS basis. And if in a specific instance, the market is not lining up for a specific rig, that's where you can see someone making a rational decision, whether it's us or someone else, that's just kind of how the business works. So I think you'll see some of that. But I also think the incentive to be extremely disciplined around fleet management has dissipated a bit from, say, a year or two years ago.

Awesome. No, that's very helpful. And then my follow-up question, I just wanted to ask around, you know, obviously there's been talk around energy security and that potentially, you know, adding more into the market. The last few months contracting has been a little bit slow. I just wanted to get a sense on if you think, you know, and you guys said on this a little bit, the volatility around obviously the commodity price bouncing back and forth a lot. Do you think that's what's holding up a lot of these projects and, you know, energy security over the long-term wins out here and maybe more contracts to see over the next several months? Just trying to get a sense on why you think things have been a little slower here and if that lines up.

Yeah, I think the way I think about that is, obviously, oil price volatility has been significant. I do not think our customers, it's a question for them, obviously, but I do not think our customers generally have raised their long-term pricing outlook. And the middle part of the Brent curve really hasn't changed. It's changed by a couple bucks total through all of this turmoil. So long-term outlooks haven't changed dramatically based off of oil price. I think you are very much seeing the effect of this trend, which has been ongoing for several years now, of a rotation somewhat away from the Permian and back into deep water. And if you look at decline curves and all of that, that supports the deep water market quite well. And we've said this for quite some time, and I think there's an extremely strong thesis around deep water and the need and the call on deep water barrels over the next few years and then continuing for decades past there. And I think that trend has produced a number of the FIDs that we've seen and is going to drive this uptick that we're predicting in 2027. but I do not think that it's been dramatically changed positively or negatively by the world events so far in 2026. That's a steady trend that's been ongoing. And of course, it's good for us. And then if you look at specifically the energy security, that's an even bigger ship to turn than long-term production for some of these massive customers, which are massive organizations. that's geopolitical. And I think you can anticipate that energy, that demand growing out of energy security would take even a bit longer because it has to work its way through obviously political processes and governmental and regulatory processes. Oftentimes it would then be put to more of an NOC than a major. And I think that's something that very naturally would not have manifested at this point after the Iran conflict broke out. So, you know, all that's to say we haven't changed our view at all, nor have we based any of our view, I think, on overly optimistic visions of the future, because I think primarily what everyone's planning around is a Brent oil curve that hasn't changed that much, and deep water continues to screen well.

Awesome. That's very helpful. I will turn it back.

Your next question comes from the line of Noel Parks with Toohey Brothers. Your line is open. Please go ahead.

Hi, good morning. I just wanted to pick up on what you mentioned about the rotation or the notion of rotation from the Permian to the deep water. And sort of as a reality check, we have been hearing from some of the onshore-only players sort of about new formations that they're pursuing across some of the shale basins with these formations being presented as sort of like an exciting frontier. But from what I'm understanding you're hearing, it sounds like the customers who are both on and offshore are not changing their opinion about core exhaustion in the onshore at all. And that is a motivation for getting back offshore.

Yeah, to be clear, I'm making no comment on onshore feasibility, viability, new formations. It's not our business. We're not close to it. You know, if you ask my personal opinion, I think the Permian always outperforms and will continue to because it's a real innovation generator there. And what they can do technically is unbelievable over the past over a decade, as everybody knows. I think the whole world is searching for how to replace the known decline in global oil reserves going into the 2030s. I'm for sure they're looking in the Permian and using technology to leverage that. And for sure they're looking elsewhere on land. For sure everyone's looking for additional shale plays. I just feel confident and particularly backed by conversations with our customers that within all of that mix, deep water screens well. It has huge denominators and good carbon footprints, which still matters in a lot of instances, and is likely to gain market share going into the 2030s. It's obviously not going to be any sort of sole source, but it's, I think, set up and screening very well. And we're seeing the proof, again, in what we're seeing through sanctioning right now. And I hope that one of the big, Ben mentioned exploration on this call, but we've talked about exploration before. And one of the big unknowns right now is where does exploration go in the deep water? We've heard a number of anecdotes from our customers that we can anticipate that that is going to increase. And so I think all eyes on that as an early indicator on some of this. And it's that's, I think, something that we can anticipate over the next couple of years, hopefully increasing and setting.

Great. Thanks. And, you know, as we look over the past year, year and a half, and how the, you know, conduct and paste utilization has had its fluctuation down and then has turned back up again. um the uh the producers do seem to have benefited from a fairly gentle increase in um in day rates that were at least among what we're we've been hearing and i just wonder um just from your example of your experience with past cycles um do you do you sort of have any examples in mind of what could sort of steepen the day rate increases from here i mean maybe it's just as simple as, you know, utilization by region gets to a place where people get a little nervous and want to be sort of more assured that they can secure, you know, the rigs they want and the timing they want. But any thoughts there would be great.

Yeah, I mean, look, in my career, we've seen instances where day rates move extremely quickly in both directions. And that's not been, And that's not how this market has been over the past year or so, and I actually think that's a very good thing for everybody. Typically, to have a sharp turn upward on day rates, you need to have a real sense of scarcity felt in the marketplace. That is not the case right now. You know, I think you could make an argument that perhaps you're a little closer to that as you look into 27 than we would have been a year or more ago. But the, I guess, BATNA for a customer oftentimes is to simply not drill and to wait. And that's still very much on the table, I think, for a lot of our customers. and they're going they they're going to continue to be disciplined we mentioned price targets earlier and budget um we don't anticipate any change in their commitment to discipline here um and so we actually think that the path forward here is a bit more a bit less severe and perhaps you call it more organic, where demand takes up towards a fixed supply, and that creates higher utilization, which gives rise to some upward pressure on day rates, but probably not from what we foresee right now with any massive spikes upward, like kind of what we've seen in times past, in 2005, 2006, when I came into the industry, and then we saw it again after the short bounced down in around 2011, 2012. So we've seen it happen. I think right now, we are hoping for and anticipating something that's a little more predictable and flatter. And let me just close by saying that works both ways, because if you look at what has kind of played out to be quite perhaps short term, but somewhat dramatic downtick here that we're living through right now, day rates held up quite well through this. And so what I'm hoping we're seeing is a bit of a smoothing on the volatility on day rates. And again, I think that's very good for everybody.

Great. Thanks a lot.

Thank you.

There are no further questions at this time. I will now turn the call back to Ian McPherson for closing remarks.

Thank you for joining us today, everyone. We appreciate being with you again next quarter. Have a great day.

This concludes today's call. Thank you for attending. You may now disconnect.