Tony Petrello: I think at the kind of numbers that we’re talking about I mean I think if you listen to what I just said our payback on adapting these rigs is less than 2.5 year payback to move a rig into the international these type of rigs. And I think we have another 10 of those available. So it depends of course on the market it depends on every market is different and every market has different deal – these required which drives this course higher. But generally we have about 10 more rigs that fit easily into the international marketplace from the U.S.
Kurt Hallead: Okay. That’s great. And again it gets to the question Tony which was in beyond those 10 it would then require — I would assume it will require some element of newbuild right? And number of…
Tony Petrello: No, no, no. I’m just giving you the numbers of the low-hanging fruit. I think we have a bunch of iron out there and the pending one that we’re in process hopefully of concluding right now the three that I’m talking about, those rigs are actually in country, so that makes it even easier for those. So yes, we have – we have additional assets internationally as well, not just in the US but US, it depends on the opportunity. Some – if a deep gas with heavy BOP stuff then you need an existing international rig if it’s something more like a version beyond conventional like in Argentina then we could take one of our prime US rigs and move it down there without a lot of incremental expense. So you can’t just – it’s not one size fits all kind of concept it’s more complicated than that.
William Restrepo: And by the way, it’s not that the rest of the rigs could not be transferred. The reason why we say 10 is because the remainder of the fleet is more – is more adapted and has been adapted to US drilling. So we wouldn’t want to transfer those at this point but the other ones can also perform very well in the US but have some characteristics that make it more adaptive and easier to move to international markets.
Kurt Hallead: That’s great. Appreciate all that. Now one follow-up. So there’s been a lot of discussion about the prospect of incremental rigs needed in the US to satisfy the LNG export capacity coming on in 2025. And then there’s been a lot of discussion here late about incremental gas demand needed for the data center build out. You guys got any rough numbers as to what the incremental rig demand could be from those two factors?
Tony Petrello: Yes. I would say at this point it’s pure speculation. I mean we believe in the thesis that the export market is real on LNG. We believe in the macro thesis about the drivers for gas globally. And in particular, for growth in non-OECD countries. And particularly, in terms of gas in particular for AI, I mean if you look at the electricity production in the US for the past roughly 15 years I think it’s been relatively flat and that’s because we’ve been able to rely on efficiencies in use of electricity to offset the demand. But with this new AI stuff that’s coming out, it’s so intensive that I think the only clear answer is actually for baseload power is in fact gas. You show the average data about Amazon I think on the data centers that they’re doing and these data centers are going to be huge consumers.
And therefore, we think we – as I said, these are all the reasons why we really strongly believe in it. And we’ve been disappointed that it has happened earlier. But we think as you go through this year I think it should become more visible. And obviously, we’re well positioned to handle that. Our gas mix have obviously moved dramatically from where we were back in – beginning of last year to today. And that market today is probably that – the Haynesville and the Northeast are the two most challenged markets in terms of Lower 48 right now in terms of activity. And – but for the reasons you’re identifying I think the prospects are bright going forward.
Kurt Hallead: That’s great. I appreciate the color…
William Restrepo: Even with all the transfers that we have made and are making of rigs out of the US, we still have a significant number of rigs that we could ramp up in the US with very limited costs and very short lead times.
Kurt Hallead: Appreciate it, guys. Thanks.
Operator: The next question comes from Derek Podhaizer with Barclays. Please go ahead.
Derek Podhaizer: I just was hoping you guys could refresh us on your exposure in the Saudi Arabia market, specifically gas versus oil and more specifically, the unconventional gas, given this looks like an area of growth in the Kingdom. So just maybe some more comments around your growth prospects in that unconventional gas play that’s being built out there.
Tony Petrello: Okay. Well, today, we have roughly 80% of our rigs are in gas. And of that 80% about — just going to count in my head here about 20% of the 80% is in the unconventional today of what we have. And that — the unconventional obviously all the new builds that are being built or all can be [indiscernible] directly up to ramp where they want to put them. So far they have moved many of them to be unconventional because they have so many other needs right now, but obviously we can easily handle that. So of the footprint for us today 80% is in gas and the market as a whole. I think the numbers for onshore today conventional is 84% gas, unconventional is 22% and exploration 37%, oil is 70%, so it gives you an idea of what — how the market breaks down right now.
William Restrepo: Let me make a comment though on the 20% most of those could be redeployed to gas activity. We really do have the strongest fleet in terms of gas capabilities and deep high-pressure wells in the Kingdom.
Derek Podhaizer: Yeah. That makes sense. So no issues as far as being able to move your existing equipment over there into unconventional fields, if that’s where the demand pulls you those rigs are ready to go and just — it could be slotted either conventional or unconventional?
Tony Petrello: Absolutely. Absolutely.
Derek Podhaizer: Okay. Great. That’s helpful. And then a question for you William on the $590 million of CapEx, any — could there be any upside surprise to that? Does that feel contained at this point? Or how should we think about potential moving pieces that could push this higher outside of maintenance CapEx with activity? But anything on the horizon that’s behind the scenes that could surprise to the upside?
