Dan Kutz: Awesome. That’s exactly what I was driving at. Thank you very much. I’ll turn it back.
Operator: The next question comes from Keith MacKey with RBC Capital Markets. Please go ahead.
Keith MacKey: Hi, good afternoon, and thanks for the color on the EBITDA and free cash flow definitely super helpful. First question is just in Argentina, so you’ve got the three new rigs you’re sending over there. Can you just discuss what you’re seeing in that market generally? Where are rig counts trending and activity levels trending? And what is the spec of rig you’re sending down to Argentina?
Tony Petrello: Well, I think Argentina has been a great success for us because we’ve exported our technology in the US today. And right now rigs are going down or what we call the f-rigs, which are 1500-horsepower rigs with a higher hook load than a normal 1500-horsepower rig. And the performance there has been outstanding. And so that has gained us a great credibility in the marketplace there. I think the good thing about the Argentina awards is the fact that the next three are going to be redeployed out of the US. So that obviously shrinks the asset base here and shows that we have other advantages other ways to redeploy that capital. And the second point is these contracts actually are going to have a significant component in US dollars, which is also a big change in terms of where we are to make us even more optimistic about the market down there.
So in terms of the Argentina contracts in general, I think the backlog for those — just those three contracts would be about revenue back on about $230 million just to give you a frame of reference. And as I said I think the performance that we’ve demonstrated down there, we’ve now oriented the home marketplace to NDS as well, which has really been a good driver for us. So it’s not just the rig but also our software applications and managed pressure drilling and casing running integrated into the rig are actually gaining a lot of traction there. And I think we have really good market positions on both of those in the country. And that’s a real success for real conversion from this portfolio that the market looked at a drilling contractor and that’s what’s driving some of the move to shifting stuff to Nabors.
Keith MacKey: Awesome. I appreciate the comments there. Just sticking with the international markets. So the guidance for daily margin in Q2 is about 157 [ph] per day, I think you made a comment about getting that to 17,000 by end of the year. Can you just give us a bit of a bridge in terms of how you get there?
William Restrepo: So Keith as I’m sure you’ve learned by following our results. When you have a significant burst of deployments, you have to automatically be a little bit cautious on what sort of guidance you put out there for the margin because there’s always shake down periods and things like that and that hurt the margins a little bit. So we are trying to be a little bit cautious. We do have some more deployments coming and some recent deployments. A lot of rigs are being added to our fleet in the first and second quarter. So that’s part of that. But there is also the fact that we renewed contracts in Saudi Arabia recently. And as part of that commitment we have to do some recertifications of multiple components in the rig.
And that takes a couple of weeks away from each of those rigs in terms of revenue generation. So we are being in the first half of the year, we do have some things that are going to disappear in the second half as all those deployments are completed in Saudi Arabia and Algeria. And at the same time the rigs in Saudi Arabia do have significantly higher margin potential than our legacy rigs. They tend to be in the near the top of margin generation particularly the new rigs that we’re deploying as part of our agreement with Saudi Aramco. So those are the main drivers. So we do have a little bit of extra cost in the first half. And secondly, the rigs coming in — in the second for the full year they’re going to be fully impacting our results in the second part of the year to have higher profitability than our legacy rates.
Keith MacKey: Okay. Thanks very much. That’s it for me.
Operator: The next question comes from Kurt Hallead with Benchmark. Please go ahead.
Kurt Hallead: Hey. Good afternoon, everybody. I appreciate all that color and detail on the EBITDA and the free cash flow. So I guess look the international markets right are clearly strong. And you have a lot of opportunities as you look out into 2025-2026. I’m just trying to reconcile something you guys said about $50 million $50-plus million of incremental EBITDA. Again this is more like going out in the 2025 than what you just said for 2024. So can you just kind of help out in that context? You’ve got five new Saudi rigs and those five rigs get a $50 million in EBITDA and then you got another handful of rigs outside Saudi that could add another x million of EBITDA. Can you just kind of help connect those dots?
Tony Petrello: Let me just do some growth calculus here put this way. So the Argentina rigs plus the Algeria rigs represent about $300 million in backlog. And just by way of background those the investments there and those rigs have a rounded payback of about a two-year payback okay on those rigs. Then when you layer on top of that the Saudi rigs which have a backlog of about $1.1 billion and the short list assuming we got the short that’s $230 billion — $230 million rather that represents the backlog. The entire package of all those rigs combined when they’re all on board would be an EBITDA run rate of at least $125 million by the end of 2025. That’s why we’re so excited.
Kurt Hallead: That’s great. And that $125 million obviously on top of your base of whatever you’re going to do in 2024. Okay?
Tony Petrello: Correct. Obviously, obviously it depends that the market stays stable and all the stuff is truly incremental. But yes that’s — all these things are incremental. So yes.
Kurt Hallead: Okay. Great. And then — so in the context of the prospects of taking idle rigs and moving them internationally how many — just in aggregate right? Take beyond even what you already know you’re potentially going to be moving but how many idle US rigs are feasible options to be upgraded in international?
