William Restrepo : Let me say something what Tony said, that I think is very interesting and a lot of people are not seeing is that we still have some 11 rigs that have been awarded that are going to be deployed before the end of the year, 2024. And then we have another seven already awarded that would be deployed in 2025. So that’s what are between the beginning and the end of 2025. So, there’s 18 more rigs that are coming on the payroll over the next couple of years. And that’s huge growth based on our 77 bases.
Tony Petrello : Yes, I would say there’s nothing like that in the sector or there’s ever been that much planned growth committed to in the land drilling sector ever at the, at this kind of numbers. It really is unparalleled, and then as I said, and then you have away from Saudi Arabia, you have the other things that’s going on in the macro environment.
Operator: And the next question comes from John Daniel with Daniel Energy Partners.
John Daniel : Tony, just sort of a big picture question for you, but let’s assume Middle East tensions, the situation escalates, and energy security, fears, ramp even higher. How quickly can you just ramp your international business, not country-specific, but just broadly speaking, how quickly could you ramp it further?
Tony Petrello : I would say very, very quickly actually that that’s the benefit of having the integrated infrastructure that we have. And so, we actually have a bunch of assets around the world in various places that form the outlines of something and adding them and refurbishing them and bringing them out. The stuff is what we do every day. And that is just a question of the opportunity. So, if that comes up, whether it’s enhanced energy security here in the US or there’s other markets that need it, I think that that is really the power of the company that we have today. And that’s actually what makes us different than everybody else, John, as. And so, that is really the strength of the company and I think, we’re all positioned to meet that.
John Daniel : And I guess sticking with the energy security theme, are you seeing any change in behavior with people looking for longer-term contracts on equipment just to know you they’ve got it? Or is it too early?
Tony Petrello : Too early. Although, we have gotten inquiries from the Middle East. We’ve had a number of on the can rig side actually, we’ve gotten a number of inquiries from what you might call our local, what our local competitor companies. These are companies that really, we don’t really compete with because they typically drill in the shallower part of the market or they’re captive companies for certain markets where the national oil company controls it more. And those companies, we’ve had a lot of inquiries recently reaching out, asking about equipment and sizing things up. I mean, this goes consistent with the theme that William alluded to, which is the overall international arena here. I mean, just to give you an idea, there is a away from Saudi Arabia, I may have a list here just to give you an idea of the breadth of what’s going on internationally.
I mean, you’ve heard the big, all the big boys oil service companies, they’ve all talked about super cycles and things like that. But let me — I can illustrate the following way. Let me give you a list of company’s countries, Kuwait, Algeria, Oman, India, Abu Dhabi, PNG, I mean, Papua New Guinea, Argentina, Mexico, Columbia, Venezuela. Those companies today have tenders out what we have in hand for more than 50 rigs. — I’ve never seen, this is really something that we’ve never seen before. This kind of scale, it’s kind of stunning. And what the reason for that, I think the reason alluding to what you’re talking about, which is the security thing, I think, the AMCs appear driven to increase their production capacity. That’s clearly a big driver of it.
Second, obviously, the geopolitical events obviously are also reordering the flows of oil and gas, including into areas like North Africa where you’re going to see people there that up to now are put a higher priority on increasing their production. And then finally, I think we’re all underestimating the fact that all these major oil and gas countries, their internal energy consumption is increasing themselves. And so that also is a driver. So, you put all this together and the fact of lack of investment, what’s gone on in the past five years, that’s what all this — that’s what’s generating all this activity. Now will this all result in that number of rigs being awarded that I’m not going to — I don’t want to — I’m not overselling that, but I’m just trying to give you an idea to respond to your question of inquiries.
When you have that many tenders out, you can see why can Rig is getting in inquiries from everybody in the world because they want top drives. They want things to be upgraded. They want all kinds of things. And so that’s what’s driving the activity.
Operator: [Operator Instructions]. And the next question comes from Dan Kutz with Morgan Stanley.
Dan Kutz: So, I wanted to ask on the lower 48 activity, it looks like you guys have kind of stated in a pretty consistent market share range recently, which is a little bit lower than maybe we saw in some past years, but that seems consistent with your strategy and what you’re saying about defending, being disciplined in your bidding, managing costs and kind of trying to defend margins as much as possible. But I wanted to ask, is there a scenario where you could gain some market share and still achieve all the other stated goals? Or do you think that we’re kind of at a fairly steady state from that perspective? And it’s just going to be more the macro backdrop that will be the biggest driver of your lower 48 rig count. Thank you.
Tony Petrello: Well, obviously, we do like to grow, and but we like to go profitably. And so, there’s always that balance. And what we’ve tried to prioritize in our thinking is focusing on customers that also have a similar view us as the adoption of technology, because as the rig count or our rig margins one thing, but that the added benefit of NDS margins on these rigs also it’s material enhancer, not just of absolute margin, but also of return on capital. Because the NDS quality of that EBITDA is much higher than also the base drilling business where the cash conversion rate is almost 80% of the EBITDA, the cash conversion. So that’s where the priority is. And we think that as customers begin to get the story of NDS more and more and learn about the product line, that offers great expansion opportunities to help drive the rig sales and it also helps to drive the use of NDS on third party rigs.
