Welcome to the Paratus Energy Q2 2026 earnings call. There will be a question and answer session after the presentation, and you can submit your questions via the form at the bottom of the player at any time during the presentation. I will now hand over to your host. Thank you, Elva. Good day, everyone, and welcome to this second quarter and half year 2026 results presentation for Paratus Energy Services Limited. My name is Baton Haxhimehmedi, and I'm the Interim CEO and CFO of Paratus. Before we begin today's presentation, I would like to remind all participants that some of the statements on this call may involve forward-looking statements. Forward-looking information involves risks and uncertainties by nature that may cause actual results to differ materially from those projected in such statements. I therefore refer you to our latest public filings. The second quarter of 2026 and the period since have been eventful for Paratus. On July 29, we successfully completed the strategic sale of Fontis ' drilling operations and jackup fleet for a total consideration of $400 million. At completion, Paratus received approximately $163 million in cash and $237 million of seller credit, with a term of 2.5 years structured with interest rates step up from 10% up to 14%. Separately, we received $20 million as reimbursement of interim funding we provided to support Fontis operations between signing of the SPA and completion of the transaction. For your information, Paratus cash following completion increased to over $300 million. We are currently evaluating the available terms for the use of proceeds and will provide a further update once a decision has been made by the company. As announced earlier during the quarter, we also completed the placement of $250 million of a five-year senior secured bonds with a coupon rate of 8.125% and fully redeemed the 2026 Notes during the quarter in June. As I will return to later, at Seagems, the team achieved an important milestone related to our fleet life extension strategy. Seagems has received approval to extend the dry docking regime to up to 20 years for its five 550-ton PLSVs, removing one SPS or dry docking over each vessel's life. From this, we expect lower lifetime CapEx and higher earnings potential as the vessels stay on hire through periods when they would otherwise have been in dry docking. Turning to the operational and financial performance for the quarter at a high level, the PLSV fleet recorded technical utilization of 93%, which was down from approximately 98% in the last quarter. This was due to some downtime driven by maintenance and operational incidents involving Esmeralda and Jade PLSVs. The related work on this has been completed and the financial impact was reflected in our previously announced guidance, which we provided in connection with the Q1 release. We reported Q2 revenues of $71 million and adjusted EBITDA of $42 million, compared with $75 million and $46 million respectively in Q1. We closed Q2 quarter with $148 million in combined segment cash, while net debt was $282 million pro forma for the Fontis transaction. Finally, the board has declared a dividend of $0.22 per share for Q2, in line with every quarterly dividend since our IPO in 2024. Including the dividend that we announced today, we will have returned approximately $350 million to shareholders since we started the cash distribution and buybacks two years ago. Let's move over to the quarterly performance of the joint venture, the Seagems. As usual, please note that the figures referred to here are on 100% basis unless otherwise stated by me. Seagems delivered another quarter of solid financial performance. Revenue was $142 million and EBITDA was $87 million, representing an EBITDA margin of 64%. The quarter-over-quarter decline in earnings mainly reflects maintenance activities and operational incidents, as mentioned earlier in the introduction. Compared with Q2 last year, we see a revenue growth of about 14%, from $125 million last year to $142 million this quarter. This was mainly driven by higher day rates under the new Petrobras contracts and fewer off-hire days compared to the same quarter last year, when the PLSVs underwent acceptance testing in connection with the new contracts. During Q2, the JV distributed $60 million to its two shareholders, of which half of it is to Paratus, compared with $83 million in Q1. At quarter end, backlogs stood at approximately $1.1 billion, compared to approximately $1.2 billion at the end of Q1. CapEx was about $6 million during the quarter and $12 million during the half year 2026. As already publicly available, early in 2026, Petrobras launched a PLSV tender, which includes five lots with different technical specifications and four-year contract durations. Seagems submitted bids for the Jade and a third-party vessel to which Seagems has secured exclusive access to in the event of a contract reward. Negotiations are ongoing, and we will provide an update when there is something concrete to report to the market. As mentioned in the introduction, the JV achieved an important milestone related to our fleet lifetime extension strategy. Seagems secured approval for the extended dry docking program for up to 20 years for five of its six PLSVs. Consequently, each of these five vessels is expected to have one less dry docking during their lifetime than what would have been required normally, reducing future capital expenditures and subject to the vessels being contracted for the relevant period in the projection period, allowing for higher revenue generation during the time the vessels otherwise would have been dry docked. As has been discussed in the past and for practical illustration, such a dry docking can typically involve approximately $10 million in CapEx per vessel and about 30 to 40 days during which that vessel will be unavailable for revenue generation. Seagems continues to seek similar approval for the Esmeralda under the Brazilian flag as well. Let's go through the first half year of 2026 financial results compared to the same period last year. Paratus reported net income from continuing operations after tax of $28 million during the first half year 2026, compared to $3 million same period in 2025. Key drivers were as follows: revenues were $146 million, up 23% compared to last year, mainly driven by higher day rates under the new Petrobras contracts and fewer off-hire days, as the prior period concluded acceptance testing in connection with the new Petrobras contracts. EBITDA was $87 million, up from $69 million on back of higher revenues, partly offset by higher operating costs as 2025 reflected reimbursement of an insurance claim for Esmeralda and other changes in accounting provisions. Financial items and other expenses were $35 million, compared with $47 million in the same period last year. The reduction mainly reflects the absence of the upfront fee related to the Fontis monetization agreement, which was signed and done in Q1 2025, and the arts-related losses reported last year. We reported it based on the equity method. Free cash flow in first half year 2026 was $35 million, compared with a - $1 million last year, same period, supported by material stronger cash flow from Seagems. Overall, the first half year 2026 showed a significant improvement in financial performance compared with the same period last year, mainly driven by stronger operations and higher dayrates. Now let's take a look at the main cash flows here during the quarter. At Paratus, we closed the quarter with a cash balance of $122 million, compared to $130 million at the end of Q1. The main cash flow movements during the quarter were cash flow used in continuing operation of about $33 million compared to $4 million in Q1. We received cash distribution from Seagems of $30 million compared to $41 million in Q1. And we pay net interest of about $26 million, compared with $4 million in Q1. This comprised the quarterly interest payment on the 2026 Notes and the semiannual interest payment on the 2029 Bonds. The net cash inflow of $47 million from new bond issuance, as I mentioned before, after redemption of 2026 Notes, net of any fees, and a $3 million in financing fees related to the Fontis sale. And finally, consistent with the prior quarters, we paid $36 million in dividends to our shareholders. After these movements, as I explained here, we ended the quarter with $122 million in Paratus. At closing of the Fontis transaction in July, we received $183 million in cash received from the buyers. As you can see here, pro forma for the Fontis sale, total cash was $305 million. If including the pro rata share of the Seagems cash, combined segment cash on a pro forma basis would have been approximately $331 million. So overall, Paratus continues to have a strong liquidity position, supported by stable distribution from Seagems and the completion of the Fontis transaction of the quarter. Next, please. Now to our capital structure and the impact of the Fontis transaction. As you can see here, at the end of Q2, the reported net debt was $661 million, which is before the completion of the Fontis transaction. However, pro forma for the Fontis sale, net debt was reduced to $252 million, which reflects a $400 million transaction consideration. As a result, the pro forma leverage was reduced from 2.7 x to around 1.6 x EBITDA. As mentioned earlier, at transaction completion, we received $163 million in cash and $237 million of 2.5 year seller credit. The seller credit bears interest at 10% during the first 12 months, 12% during months 13-18, and 14% thereafter. Separately, not reflecting the pro forma capitalization graph here, we received another $20 million as reimbursement of interim funding provided for Fontis operations. As disclosed before, under our bond agreements, the Fontis proceeds may either be used to repay debt, meaning the 2029 Bonds, or held in escrow for up to 12 months while the company evaluates potential reinvestment opportunities. We are currently evaluating and will provide a further update once the decision has been made to this. With that, I think we can open up for the Q&A. Thank you. Ladies and gentlemen, we are now ready to take your questions. Just as a reminder, you can submit your questions via the form at the bottom of the player. We will now take some time so you can register your question. There is a question around the Petrobras tender, not a surprise, of course. Whether we can talk more about the Jade since it will roll off the contract in September or in August 2027. Is Paratus expecting an extension? Let's take that first. Our current expectation is that an extension with Petrobras is the most likely solution or what will happen. Potentially bringing the existing contract through January 2028, when the mobilization date is based on the tender. Again, more broadly, the fleet's historical technical uptime has over approximately 98%, demonstrates our ability to operate the vessels effectively and to deploy them on work both with and outside Petrobras. The other question is about earnings potential on the third-party vessel. What I can say in general now is that discussions are ongoing, and negotiations are ongoing with Petrobras. However, this remains an active commercial process, as you may appreciate. Due to its sensitivity, commercially sensitive, we are not in a position to comment any earnings potential yet or again, any economics or expected outcome out of this before we actually get to any concrete stage with an award or not. Since the start of date of the current PLSV tenders in 2028, are expecting to see another Petrobras tender for the other five PLSVs. The remainder of the other PLSVs rolls off contract from mid-2028. One of them rolls off in September 2028, the Ônix. Based on what I can say is based on historical practice, Petrobras typically tenders one to two years ahead of the required start date. We therefore expect another potential larger tender addressing those 2028 requirements, hopefully, and possibly during 2027. If you look at the history, Seagems has secured contracts in every major contracting cycle since 2011. Of course, pricing and contracted terms can vary between cycles, but fleet utilization has been historically remained strong, and as we have said before, we continue to view the PLSV market outlook as promising. How we are thinking about the use of proceeds from the Fontis transaction, as we are reporting our Q1 report and as I just talked about. Under our bond agreements, the proceeds may either be used to repay debt or it can be held in escrow for up to 12 months while the company evaluates potential reinvestment opportunities. It provides a good optionality. But as I said in the call here, in the report, we are currently evaluating our available options and will provide a further update once a decision has been made by the company. How much are you expecting dividends from Seagems 2026? We provided our financial guidance in Q1 for revenue EBITDA and CapEx. We haven't really guided on the distributions from Seagems. However, what I can say is one should expect not much different from last year. I've seen this question before. What is your expectation day rates from the Petrobras tender? I cannot really discuss that. It is an ongoing negotiation with Petrobras. I will not discuss it in this conference call. There's a question about the operational incidents involving Esmeralda and Jade, as we have reported in our quarter report, impact and so on, and more details. I don't think there's more to say than what we have disclosed in the report. The Esmeralda incidents involved an LTI which required a short stop of operations while completing needed procedures, while the Jade needed some equipment repair. Safety is very strict and is first priority, and for the smallest incidents, operations are paused or shut until they are resolved and in alignment, of course, with Petrobras. In addition, as we also said in the report, as per the contracts, we have some maintenance cap, and we have some scheduled maintenance that we have performed during the quarter. I would say the EBITDA is more like you should respect more closer to the financial guidance. So we have reiterated the financial guidance anyway. The impact of these two incidents, since of these was already factored into our Q1 communicated financial guidance. There's not so many questions, but there's another question about Jade and how it will be kept on work until the potential new contract and if there's any other regions than Brazil. What I can say is that we're very comfortable that and also history shows that we have always been able to deploy these PLSVs. If you look at since 2011, our average utilization has been about 98% during those years. So yeah, our ability to operate the vessels effectively and to deploy them on work has been very efficient, both with and outside of Petrobras if needed. But the base case is that that will be extended by Petrobras until mobilization for the potential new contract. When is the negotiation round for this tender expected to finish or get completed with Petrobras? I hope to report to you something in the near future. But as discussions and negotiations are ongoing, and again, this is an active commercial process and it's sensitive, I'm not in a position to comment on any specific negotiations or timing as you asked or potential outcomes at this stage. But we will report to the market whenever we have any concrete to report. I think with that, there were no further questions. With that, I will wrap up today's call. Thank you all for joining. Thank you for the questions, and thank you for your continued interest in Paratus. We look forward to speaking with you again in Q3. Thank you.