There are several burgeoning Gulf Coast Country unconventional plays, where those rigs can differentiate. And we’ve been working, as we have talked about is in successive quarters on these calls, we’ve been working in increasing our brand presence in the region, which was aided by our transaction in partnership with ADNOC and we’re actively participating and looking to differentiate in the unconventional plays in gas and oil, I think, it was a real focus in several of these countries currently on natural gas.
Derek Podhaizer: Okay. Anything on what we could expect from these rigs when they’re fully contributing on as far as a daily margin, they’re just the earnings power on these rigs?
Mark Smith: I think the earnings power on these rigs would be the equivalent with what you’re seeing today and more. And again, that you had another year away before those 6 would actually beginning to turn to the right, so more to come. But we certainly targeted returns for these just like we do for everything in the team .
Derek Podhaizer: Got it. Okay. I appreciate the color. Turn it back.
John Lindsay: Thank you.
Operator: And we’ll go next to David Smith with Pickering Energy. Go ahead, please.
David Smith: Hey, good morning. Thank you for taking my questions.
Mark Smith: Good morning, David.
John Lindsay: Good morning, David.
David Smith: Just a quick follow-up on that last question about the 6 rigs you plan to export from the stacked U.S. fleet. I think you said those are targeted tenders you’re bidding on. I imagine there’s a fairly long lead time in those tenders. So we’ll be thinking about fiscal 2024 is when we could start seeing a contribution from those?
Mark Smith: That’s correct, David.
John Lindsay: That’s correct.
David Smith: Appreciate it. And just regarding the commentary about the base and the supplemental dividend, you’re representing about two-thirds of expected cash flow, less CapEx in fiscal 2023. Is that roughly two-thirds figure indicative of your longer term thinking on returning cash via the base and supplemental dividends?
John Lindsay: David, this is really €“ our 2023 plan is really just that €“ it’s our 2023 plan. Because that’s the €“ you’ve heard me say before, it’s hard to see much past a quarter in this business, and we’re forecasting out a year and making that commitment for 2023. So, our intent €“ our hope is that in future fiscal years, we’ll have similar if not even better, but that’s kind of we’re €“ this is just the 2023. Anything to add?
Mark Smith: Yes, I just add, David is, John and I, the management team and discussions with the board, we think through several capital allocation criteria. And I’ll just kind of take through these, one is maintaining a minimum liquidity for operations, which is less than the cash we had on hand is September 30. We have a €“ with a view that, as we have with our conservative stewardship of the balance sheet and a view to risk management, and also positioning for optionality we prefer $200 million minimum cash balance. Second consideration in our capital allocation criteria, as we have long committed to our creditors is in our fiscal stewardship is assessing cash generation to ensure we maintain the leverage of less than 2 times, less than 2 turns.
Third is, we’re opportunistic for accretive investment opportunities with as I said just a minute ago in a previous question, with mid-to-high teen returns individually and that contribute to our goals for consolidated ROIC in the same range. And fourth, opportunistic and using the evergreen 4 million share-repurchase authorization. Example of that would really be last November and December a year ago, when we believe that there was a dislocation in our share price, which led us to repurchase shares in the first quarter of fiscal 2022. And then, finally, I would say towards the end of the fiscal year and consideration of all the aforementioned if an excess cash balance remains and management and the board will consider further additional dividends.
