Operator: Our next question comes from Josh Jayne with Daniel Energy. Your line is open.
Josh Jayne: Thanks. Good morning.
Bernie G. Wolford: Good morning, Josh.
Josh Jayne: So, I don’t want to beat a dead horse, but just to go back to the three new gold rigs. Could you talk about why this was the right path for Diamond instead of, like with the agreements that you signed instead of pursuing some sort of path-to-ownership for all three potentially one of the rigs. Was ownership a consideration or an option in your discussions or was it because you’re a capital constrained today or just maybe just talk me through the discussions and how you were thinking about this being the best path forward for those rigs and Diamond?
Bernie G. Wolford: Sure. The first part of that question as to us pursuing the marketing rights and why it’s right for Diamond, largely that’s because we have the global scale, we have the people, processes and systems that allow us to take on those rigs and market those rigs and provide great services for our clients without much add to our infrastructure and costs. And, particularly that’s important with our expectation that all of our black ships are going to be, are likely to be committed in the not-too-distant future, and so we would be, have no availability in the drillship market to make offerings to our clients. With regarding to path-to-ownership, Josh, we have looked at ownership of these assets and other assets similar to these that we’re well aware of working in the market today.
In some cases, simply put the bid-ask spread has been too wide for us to cover. In other cases, as our equity has continued to trade at prices that might indicate a per drillship value of $300 million. Our equity currency is really not priced to support a potential acquisition right now. We remain genuinely interested in acquiring assets like these, and we’ll continue to pursue those opportunities, but it does little good to try to negotiate a path-to-ownership when there’s a large disparity on the bid-ask premium at this stage.
Josh Jayne: Thanks. That’s helpful. And, maybe on that point on the equity valuation, as you think about where the fleet is today, where it’s going to be earning in ‘25 and ‘26, how should we be thinking about what your, the opportunities to likely return capital over the next couple of years given where we are in the up cycle? Is there any chance that you could give, just offer some preliminary thoughts about that?
Dominic A. Savarino: Yes. This is Dominic, Josh. There certainly is that possibility as we exit 2024 and get into 2025, we’ll have the financial profile that we meet our covenants in our RCF and our indenture that would give us the flexibility to be able to do that starting next year. That’s a decision that the Board will take at that point in time. We are focused on managing our liquidity and our balance sheet in a conservative manner, but certainly those discussions would take place and we would have that opportunity once we meet those covenants by the time we exit this year.
Bernie G. Wolford: And Josh, I might add that, part and follow-up to your other question and part to this question, two things. One, we’re keenly focused on cash flow and building our cash on the balance sheet. And secondly, with regard to potential acquisitions and my reference to how our equity was trading today on a per seventh-gen equivalent, we’re obviously very sensitive to pursuing deals that are accretive for our shareholders. And, in some cases that simply does not allow us to go to where the ask process.
Josh Jayne: Sounds good. I appreciate it.
Operator: [Operator Instructions] The next question comes from Doug Becker with Capital One. Your line is open.
Doug Becker: Thank you. Bernie, you mentioned the BlackRhino is expected to secure additional work without gaps between contracts. I’m curious if that extends through the entire 2025 outlook. I’m really just trying to gauge what type of visibility you have for that rig next year.
Bernie G. Wolford: Yes. Thanks, Doug, for the question. Yes, it does extend to the 2025 outlook for the full-year. I mean, to the extent, my comment regarding not having any gap, there may be a mobilization involved in getting from where we are to where the job is depending on whether it’s in West Africa, Brazil or the U.S. Gulf of Mexico, but we expect to be fully contracted for the year at this stage.
Doug Becker: Now, that really derisks the outlook. Dominic, I was hoping you could talk a little bit about normalized operating costs. First quarter, the rig was being released. I guess there were some efficiency bonuses, but just trying to think about the fleet going forward. Just any context on operating cost exclusively?
Dominic A. Savarino: We can get into details about the operating cost, although, certainly we’ve seen costs from our guidance has come down. We had some benefits in the first quarter from some deferral of cost that got pushed out into later in the year from a repairs and maintenance perspective. But overall, our operating costs have come down slightly relative to our expectations. But, we can talk more offline if we wanted to get into more details about rig-by-rig view of that from a modeling standpoint.
Bernie G. Wolford: Doug, I would add that our inflation expectations for the year I think are on the order of 3% to 4% and that’s baked to the guidance we provided today.
Doug Becker: Got it. Well, thank you very much.
Bernie G. Wolford: Thank you.
Operator: I show no further questions at this time. I would now like to turn the call back to Bernie, for closing remarks.
Bernie G. Wolford: Thanks all for your participation in today’s call. We certainly look forward to speaking with you again next quarter and wish you all a good day. Thanks and goodbye.
Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect.
