Hello, everyone, and welcome to NorAm Drilling 's first quarter 2024 results presentation. My name is Marius Furuly, and with me, I have the company's CEO and CFO, Marty Jimmerson from Houston. We will go through a presentation of the quarterly results and recent market developments before we will open up for a Q&A session. I'll give the instructions on how to submit a question, and if you are familiar with the raise hand function, please, please use that to submit a question. Before we begin our presentation, I would like to note that this conference call will contain forward-looking statements. Words such as expects, anticipates, intends, estimates, or similar expressions are intended to identify these forward-looking statements. Forward-looking statements are not guarantees of future performance, and these statements are based on our current plans and expectations and are inherently subject to risks and uncertainties that could cause future activities and results of operations to be materially different from those set forth in the forward-looking statements. You should therefore not place undue reliance on these forward-looking statements. With that, I would like to turn the floor over to Marty. Thank you, Marius, and welcome to everyone for joining our first quarter 2024 results and earnings call. WTI began the first quarter trading at around $72 and finished the quarter at around $82. Currently, WTI is at around $79, although today it is starting off down somewhat. US rig counts were flat in the first quarter. However, Permian rig counts increased by 8. Revenue for the quarter was $25 million, or up 5% from the previous quarter in the fourth quarter of 2023. The increase in revenue was primarily attributable to higher utilization, offset by slightly lower day rates. Our fleet utilization improved to 87.5% from 82.3% in the prior quarter. During the quarter, we had two rigs released as a result of M&A activity and successfully contracted both rigs to a new customer, and both rigs commenced operation in early Q2. Our clean day rate decreased by only 2% to $26,300 per day in the first quarter. Adjusted EBITDA, defined as earnings before interest, tax, depreciation, and amortization, plus non-cash stock option expense, was $6.7 million, up 24% from the previous quarter. We reported net income after tax of $1.8 million, or $0.04 per fully diluted share. Our current backlog, as of yesterday, had increased to $24.2 million. All of our rigs are operating under six-month contract terms, except one rig that is on pad to pad and has been working for the same customer for several years now. Turning to page four, let's take a look at recent events and outlook. As mentioned earlier, during the first quarter of 2024, rig counts in the Permian increased 8 rigs or 2.6%. In the U.S., outside of the Permian, the U.S. rig counts decreased by 8 during the same period. Based upon current customer discussions, we expect rig counts in the first half of 2024 to remain relatively flat, given the current WTI prices, but continue to see opportunities for high grading and replacing existing rigs with upgraded equipment and performance issues, such as we experience, as noted earlier, in picking up or putting 2 rigs recently released to work for a new customer. That was clearly a high grading situation. Natural gas prices continued to decline in the first quarter of 2024, further impacting our outlook for U.S. rigs. Subsequent to the first quarter, natural gas prices have significantly improved and are currently trading in the upper $2 range, approaching what we consider to be, the magic point of $3, which is where we would think that we would see an increase in rig activity. We continue to believe that a modest increase in rig activity could occur in the second half of 2024, which would increase demand for super spec rigs. We remain committed to pursuing opportunities that result in economics that justify operating our high-end super spec rigs. We believe most drillers continue to maintain the same financial discipline as us on pricing and believe day rates for renewals have stabilized. Now, turning to page 5, we'll look at our rig count and production activity, which is somewhat similar to the fourth quarter of 2023. The largest factor impacting our business today is, has been consolidation among operators, which has resulted in continued declining rig counts. The average number of completed wells have been declining for over a year now. With the latest data points suggesting a 15% decline from the three-month rolling peak in 2022. As the inventory of DUCs have continued to decline, we believe operators will need to increase drilling to maintain their current production levels over time. With this backdrop and operator financial discipline, we expect lower production growth ahead, which should lead to a rebound in activity sooner than later, as oil rigs or oil wells in the Permian typically has a production decline rate of at least 40%-50% per annum. In other words, to sustain production, you would continuously need to drill new wells. With that, Marius, may I turn it back to you for the discussion of our key operational figures for the quarter? Thank you, Marty. Let's turn over to the next page. In the first quarter, we achieved a rig utilization of 87.5%, up from 82.3% in the fourth quarter. We are happy to see that this is the second consecutive quarter with increasing utilization. However, we have one rig unemployed left, and we are working hard to secure employment for rig number 11. In the first quarter, we earned an average day rate of approximately $26,300 per day. That's down 2% from the fourth quarter. And note that this day rate is adjusted for reimbursables of out-of-pocket expenses, which were approximately $2 million in the quarter. On the cost side, we paid operating expenses in line with expectations, except for slightly higher ad hoc repair and maintenance expenses. We anticipate that these expenses should be about the same for Q2 due to weather-related flooding issues in April and May, but the current run rate, as of today, should point to a more normalized level going forward. And as such, we expect the clean cash breakeven level of our working rigs to be in the area of $17,000 to $17,500 per day. And the idle rig is hot stacked at about 30% lower cost than the working rigs. On the right-hand side, we show our income statement for the quarter. As Marty previously said, revenues came in at $25 million, and we had an adjusted EBITDA of $6.7 million, excluding a $0.1 million non-cash cost related to stock options. Net financial expenses were close to zero in the quarter, as interest income has offset bank charges and other financial expenses. Due to the fact that we are debt-free, we typically do not have any material financial expenses. As a result, we reported a net profit after tax of $1.8 million, or $0.04 per share. Over to the balance sheet and cash flow statements. NorAm, we have a debt-free balance sheet, as you can see, and minimal investment requirements. We ended the quarter with a cash balance of $10.5 million. Do note that we are currently running with a little excess liquidity versus our self-imposed $11 million of minimum liquidity target, which includes a $4.5 million RCF, which is currently undrawn. That means that in a normal scenario, we could have cash all the way down to NOK 6.5 million before we would be below our liquidity target. The excess liquidity will be used as working capital buffer for funding future rig activations, and we do not expect any rig reactivations to interfere with our distribution policy of paying out excess free cash flow from operations. So during Q1, we paid out NOK 6.4 million, or 1.57 NOK per share, to our shareholders, and subsequently to the first quarter, we declared two quarterly dividends so far in Q2. We will continue to pay dividends subject to continued positive net cash flow from operations. So to summarize, Noram Drilling has a fleet of 11 ultra super spec rigs, fully upgraded with state-of-the-art walking systems and racking capacity, with a track record of drilling the longest wells in the Permian. We are strategically positioned with 100% of our operations in Permian, the largest U.S. shale basin, where our rigs are among the very top performers in terms of drilling efficiency, measured by, number of feet per rig per day. We retain a top-quality customer portfolio of six, individual E&Ps, ranging from super majors to smaller private companies. And the company has an industry-low, cash breakeven, with minimal investment requirements in the rigs to keep them at the top of the market. We have a clear dividend policy of returning all excess cash to our shareholders, and since our listing, we have returned $57 million to our shareholders, equal to 13.8 NOK per share, and our latest monthly cash distribution of $0.04 per share implies an annual yield of 13% as of the closing price yesterday. With that, I'd like to open up for a Q&A session. In order to ask a question, please use the raise hand function, and I'll allow everyone some seconds to find that hand in the Teams. And I'll read out your name before you can ask your question, so we'll unmute you. So the first question will come from Truls Olsen of Fearnley Securities. Please ask your question. I had to unmute myself as well. So, anyways, good morning, Marty, and afternoon, Marius. Thanks for taking my question or questions. Starting off, you said, Marty, that the day rates were stabilized and such. I mean, what's the client conversations like? I mean, any, call it, pressure points related to the idle rig and how to think about that going forward, in this respect as well? Good afternoon, Truls, and good to catch up. And so clearly there's a bifurcation over whether a hot rig versus a rig like Rig 23 that's been in the yard for going on between six and nine months. And so, you know, we're still fighting, if you will, in the U.S., a little over 100 super spec rigs that have been upgraded. How many of them are hot and available, I think is probably on the lower end. But you have also still some churn of rigs from these consolidations of the M&A players. And so if you, if you have a stacked rig like ours and you're competing with a a rig that was just released by, let's just make up an example, Exxon from their, their acquisition, then you're, you're gonna have to take a lower day rate to put it to work to give the, the operator incentive. However, I would like to reiterate that we, we still are seeing stability in our renewals for our existing contracts and hot rigs. Okay, so somewhat lower, but you're not really alarmed in this respect. But thinking about the contract as such, I mean, normally when the market is often oil companies, they, I mean, it's either give or take, and clearly, the oil companies, they're at the taker side at the moment. So, I guess they're asking for more in the contract. What are you... What's the give here? Yeah, yeah. You know, it's the pendulum. The pendulum's back on the operator side. Most of our contract terms have already been negotiated, so there hasn't been any real change there. What I will tell you is that our relationships with our customers are very good. Our performance has been outstanding. And what I think is that, you know, it creates more of a partnership that we don't feel the intimidating pressure, if you will, to concede significantly on any rates upon renewal. But there is the signal, "Hey, you know, there's XYZ out there willing to give us a rig for 70 cents on the dollar or 80 cents on the dollar." And we tell them, "Well, if you, if you want to go from having a top-performing rig to one that you have no idea what you're gonna get, you know, knock yourself out. Okay. Do you think we're gonna see any kind of, call it, consolidation in this environment, amongst the... just, just given this, the sort of overall supply side and, and what's going on in, in, in the market? Yeah, Truls, I think it probably is a little bit difficult right now. I don't want to say that it won't occur. I think if it does, it's probably gonna be a situation where it's a larger player consolidating a player with, you know, anywhere from 5 to, I don't know, 15, 30 rigs, whatever, if it happens. I personally think that the larger contract drillers have enough rigs available and idle that could be put back to work cheaper than the consolidation efforts that it would require. But having said that, we still have a couple contract drillers that may have balance sheets that may cause them to kind of think about, maybe it does make sense to move forward with a roll-up. We continue to be interested in opportunities, but as reiterated in the past, we're, we're not gonna compromise our primary strategy of returning value to our shareholders. And if we were to do a transaction, it would need to be accretive. And more importantly, and again, I think this speaks to why our utilization's holding up extremely well, is you know, they have to be high-end rigs. They, they can't be rigs that, okay, well, 70% of them have been upgraded, the remaining 30%, you either need to put a bunch of money into to get them to work, or maybe a few of them never go back to work. So again, it's really a nice, and I do think that it's somewhat, albeit small, NorAm is in a very enviable position of having 11 ultra super-spec rigs. We have a debt-free balance sheet, and we have flexibility that our competitors do not have. Okay. Thanks for the color, Marty. I hand it back. Thank you, Truls. Thank you. Our next question comes from Erik Aspen Fosså of Carnegie. Please, please ask your question. Remember to unmute yourself. Yes. Hi, guys. I was just wondering about what you see in the market now with your discussions with the oil companies, the operators. We've seen that the oil service majors, they've kind of still a bit cautious on 2024, but I've noticed at least one was a bit optimistic on 2025 picking up. And I'm just wondering if you're seeing something similar, or if there's any signs that the market is gonna turn, or the activity in the market is gonna turn upwards in terms of, for example, your dialogue with your clients? Or if it's your view that the market is turning upwards is more based on them having to drill more in order to increase production again. Erik, thank you for the question. And, you know, let's start with kind of 2024, and I'm gonna break it down into kind of three different customer types. You know, the first is, which I think the majority of our customers are, the... They're, they're at a point for 2024 that they're basically saying they're gonna be flat, throughout 2024, but maybe looking to pick up a rig or two towards the tail end of the year. The second group of operators would be operators that are involved, in a, in an announced M&A transactions, let's say, such as Diamondback and Endeavor, which we have no exposure to. And they, they've publicly announced that one plus one, equals two rigs today, but it will not be two rigs, once the consolidation occurs, as currently, announced. So I think you'll see some reduction there that I think will offset what we do see to be some pickup from our existing customers. And then there's a third category that, you know, you're starting to see at current WTI pricing levels, you know, the re-emergence of new private equity-backed operators that are finding acreage, and they're putting 1-2 rigs to work. And we've been successful in participating in that here in 2024. So answer your question, Erik, I do think it's kind of generally flat for now. I do think there's the opportunity to increase, all things being the same today, into the back half of 2025. You know, our customers in the Permian are looking more favorable to 2025. The final response to your question is, I'm pleasantly encouraged by the price of natural gas. That has not resulted in any material changes in any conversations we've had, especially in the Haynesville. I think the Haynesville picked up one rig last week. But if we get some movement on natural gas, and many have been forecasting that the excess natural gas supply inventory will be mitigated and eliminated with any kind of reasonable, cool or cold winter, you know, that might be a further catalyst that's not baked into kind of my outlook and our conversations with our customers. Thank you very much, Marty. That was it for me. Thank you. Thank you, Erik. Thank you, Erik. Our next question comes from Jason. You are now unmuted. All right, I'll read that question as it's written in the chat. Sorry about that. So from Jason Kim, he asks, "Good morning, everyone. Marty, you have consistently mentioned for quite a period of time that DUC wells have been at decade lows, but Permian rig counts still remain at low 300s. What might be the trigger for Permian rig counts to get back to 2022 levels, or maybe 2018 levels? Boy, I hope it comes really soon, 'cause we're well positioned. But I really think it's kind of two factors. The first that kinda is most applicable to Noram and the Permian, which would be stability and WTI. And secondly, as you mentioned, the DUCs have declined. We happen to have the belief that whatever the reported DUCs available in the Permian, many of those are not viable. And with all the data that we continue to look at, the only... Just to maintain current production levels, there will need to be an increase in number of rigs. I remain, you know, maybe, you know, all CEOs are always optimistic, and I remain optimistic that I see a positive trend coming here, and obviously something else can happen that could cause WTI to go down. But for the U.S. to maintain its current production level over time, we will need to operate more rigs and drill more wells. The second catalyst, and I just referred to it, that I think is a game changer, to accelerate any rebound, will be the price of natural gas and what occurs in the Haynesville and the Eagle Ford. You know, bottom line is, I think that, you know, there's probably... I don't remember the exact number, but there's probably 50-75 rigs minimum that have been released since natural gas took its downturn. So if you get back above $3, you could see a mad rush for 50-75 rigs to go back to work in natural gas basins, and that would be a situation that I think we would benefit very well in the Permian. Yeah, and also with the U.S. export plans of nat gas, it's, at some point, more gas rigs will eventually be needed to fill up those, export terminals with supply. We could also mention, Marty, that, if, we, we're just released our annual report, last, last night, and, there, there's an overview of, some of the contract duration on... we have on the rigs. And I would say, looking over the past year, I don't think we've had the amount of, I would say, more term contracts than, than what we have currently. I mean, it seems to be a direction of our customers choosing a little more term, at, at the current, in the current market, which, which all else equal points to, Yeah, that they are, they're finding good value at current rates, which- Well said. Yeah. All right. There seems that there are no further questions from the audience. So, I would like to thank everyone for listening in, and thank you to the Noram family of workers, customers, and suppliers. We hope to see you next quarter. In the meantime, have a good summer. Thank you, all.