Kevin Neveu: I think we’ve demonstrated over the past couple of years that we can be opportunistic, we will, but really clearly, it’s not one of our top three strategic priorities. So I don’t think we’re going to pivot and all of a sudden become highly acquisitional focused. We like the stability of the strong balance sheet. But Carey, you get anything to add that?
Carey Ford: Sure. It’s important to note that when we executed the High Arctic acquisition, we were able to remain committed to our debt reduction target for 2021 and 2022. And if you look at what we’re — what we commented on this conference call that we’re going to complete the CWC acquisition and still meet our debt reduction targets for this year. It shows you where our priorities are to get the balance sheet in order and we’re in a favorable place right now where we’ve got some flexibility where we can do some of these tuck-in acquisitions. But debt reduction is still going to be the number one and more folks to the company for the next year or two.
Cole Pereira: Got it. Okay. That’s all for me. Thanks. I’ll turn it back.
Kevin Neveu: Yes. Thank you, Cole.
Operator: Our next question comes from Waqar Syed with ATB Capital Markets. Your line is open.
Waqar Syed: Thank you. Carey, do you expect shortfall revenues in Q4?
Carey Ford: Yes, they will be similar to what we reported in Q3 in the kind of $6 million range US.
Waqar Syed: And when do they fall off? Is Q4 going to be the last quarter for those? Or do you expect them next year as well?
Carey Ford: We might have a little bit at the beginning of next year, but the bulk of this level of IBC revenue will fall off in Q4 or after Q4.
Waqar Syed: Okay. And then as the CWC rigs get on the payroll in next year in the US, how would those impact your daily operating costs and dairy regrets?
Carey Ford: I think it’s a little bit too early to talk about how that’s going to impact our daily operating margins and rates. We’re planning to close the acquisition here in the next couple of weeks, and we’ll be able to talk about that a bit more clearly.
Waqar Syed: Okay. So let’s assume then with our CWC. On your own fleet, when do you expect US margins to bottom?
Carey Ford: Well, there — they could be bottoming right now. We’re not seeing much of a change from Q3 to Q4. It just depends on whether the rig count continues to trend up into Q1.
Waqar Syed: Okay.
Kevin Neveu: Look, I might answer that kind of focused on what you model for rig count next year, but you’re modeling the rig count to move up in that I think that rates of budget margins a bottom.
Waqar Syed: Okay. That’s good to hear. And then, Kevin, you touched upon these big mergers that are happening. And it was mentioned in one case that they would be looking at these for mile type laterals and some other companies have talked about those as well. What type of rig would be required to drill that? I imagine not every Super Triple rig can do that. There may be even a further subset within Super Triples that would do that. So maybe could you talk about like what exactly — what type of equipment would be required on a rig?
Kevin Neveu: Yeah. I can. So we’ve drilled some 3-mile laterals. We’ve actually drilled a couple of mile laterals they’ve been in shallower plays, not the deeper plays. But any time you extend the length of the well or the vertical depth of the well, either one, you’re increasing the required hope load capacity for the rigs. You need to have the mass has to either be strong enough or been reinforced to be strong enough. We’re increasing the amount of pipe you need to build a rack in the mask so you have to increase the racking capacity of both the racking board and the substructure to support that pipe. And now you’ve got more pipes more weight or everything else to support that weight. And then because you’re drilling farther and you’re adding more pipe in the ground, you hydraulic horsepower.
So we’re typically going from two pumps to three pumps or going from 1,600 to 2,000 horsepower mud pumps. So most of these rigs that — in our fleet, all of these changes for us are kind of bolt-ons. We’re going to bolt on a mass upgrade. We can bolt on a rocking capacity upgrade. You can slide in a third pump, slide in a fourth generator. So the rig doesn’t become obsolete. But these are capital increases. So they had a third pump on the fourth generator is over $1 million upgrade the mass capacity and have more pipe might be in our case might be less than $0.5 million. And if you want to do all of these things together for one of our rigs is probably the trade working $3 million to $5 million. And the other component is a top drive usually has to have a higher torque capacity.
So there’s a bit of work to do on the top drive.
Waqar Syed: All right. Thank you very much. That’s all I have.
Kevin Neveu: Great Thank you, Waqar.
Operator: Our next question comes from Sean Mitchell with Daniel Energy Partners. Your line is open.
Sean Mitchell: Thanks guys for taking my question here. You guys have got the three rigs in Saudi, the fourth and fifth rig in Kuwait. Any thoughts around exploring other international markets? I know Luis Canada and US, but we haven’t really talked about, are there other opportunities international that you guys are looking at? And any color you can add?
Kevin Neveu: Sean, we’ve been clearly focused on maximizing our footprint in Kuwait and Saudi. So for sure, those two countries. We’ve been bidding around the Gulf. We think we can support rigs in Qatar, Bahrain, maybe Abu Dhabi, places like that, from the base of operations we have either in Saudi or Kuwait and our regional offices in Dubai. So we think the entire half regions open to us. We’re not looking really aggressively outside the Gulf. We have had inquiries for Argentina, we’ve got inquiries from Central Africa, not anxious to see us in six to seven different countries around the world. But if we had a one-off chance to put a rig somewhere up to really good day rate, we’d look at that.
Sean Mitchell: Okay. Thank you.
Kevin Neveu: Thanks, Sean.
Operator: And I’m not showing any further questions at this time. I’d like to turn the call back over to Lavonne for any closing remarks.
Lavonne Zdunich: On behalf of the team here at Precision, I’d like to thank people for joining us today, and that concludes our conference call. Thank you.
Operator: Ladies and gentlemen, this does conclude today’s presentation. You may now disconnect, and have a wonderful day.
