Welcome to the Q2 2024 Nabors Industries Limited Earnings Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note, this event is being recorded. So now I turn the conference over to William Conroy, Vice President of Corporate Development and Investor Relations. Please go ahead, sir. Good morning, everyone. Thank you for joining Nabors' Q2 2024 earnings conference call. Today, we will follow our customary format with Tony Petrello, our Chairman, President, and Chief Executive Officer, and William Restrepo, our Chief Financial Officer, providing their perspectives on the quarter's results, along with insights into our markets and how we expect Nabors to perform in these markets. In support of these remarks, a slide deck is available, both as a download within the webcast and in the investor relations section of nabors.com. Instructions for the replay of this call are posted on the website as well. With us today, in addition to Tony, William, and me, are other members of the senior management team. Since much of our commentary today will include our forward expectations, they may constitute forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Such forward-looking statements are subject to certain risks and uncertainties as disclosed by Nabors from time to time in our filings with the Securities and Exchange Commission. As a result of these factors, our actual results may vary materially from those indicated or implied by such forward-looking statements. Also, during the call, we may discuss certain non-GAAP financial measures, such as net debt, adjusted operating income, adjusted EBITDA, and adjusted free cash flow. All references to EBITDA made by either Tony or William during their presentations, whether qualified by the word adjusted or otherwise, mean adjusted EBITDA, as that term is defined on our website in our earnings release. Likewise, unless the context clearly indicates otherwise, references to cash flow mean adjusted free cash flow, as that non-GAAP measure is defined in our earnings release. We have posted to the investor relations section of our website a reconciliation of these non-GAAP financial measures to the most recently comparable GAAP measures. With that, I will turn the call over to Tony to begin. Good morning. Thank you for joining us today. Before I begin, I would like to acknowledge the challenging conditions impacting the communities in Hurricane Beryl's path. A number of Nabors employees have suffered damage to their homes. It is a strong testament to our staff that we have been able to maintain operational continuity. I want to thank all of our employees, especially those facing difficult personal situations, for their efforts during this time. Now, I'll start with our results and outlook. Total Adjusted EBITDA in the Q2 exceeded our expectations. Daily margins in the U.S. Lower 48 remained strong. Margins in our international segment were essentially in line with the Q1. Demonstrating its broad reach, our drilling solutions segment outperformed the industry rig count in the Lower 48. I will begin my detailed remarks with comments on the international markets. The strength of the international expansion is evident when looking at the considerable number of incremental rig awards and deployments. Nabors has been successful capitalizing on this environment. We've seen this in our own international rig count and our roster of pending deployments. In summary, as I'll detail in a few moments, we expect to deploy five more incremental rigs over the remainder of 2024. Lower 48 industry activity once again declined. The Lower 48 industry land rig count declined by 37 rigs, or 6%, during the Q2. The average Lower 48 industry rig count decreased by approximately 4%. Notwithstanding this Lower 48 industry rig count performance, leading-edge pricing for high-performance rigs remained stable. Current pricing continues to support our daily rig margins at near record levels. Nabors' total adjusted EBITDA reached $218 million in the Q2. Our global average rig count was essentially in line with the previous quarter. Our average international rig count increased by three rigs. Nabors Drilling Solutions and Rig Technologies segments generated a combined EBITDA of $40 million. This high free cash flow, EBITDA, increased from the previous quarter. These high-tech operations account for more than 18% of total EBITDA in the quarter. Next, I will make some comments on the five key drivers of our results. I'll start with our international drilling business. As I have said for some time, this international market is the strongest we have seen in 10 years. That strength is evident across many of our markets. We have been successful on recent tenders and negotiations. We are encouraged by the substantial number of pending opportunities. This environment enables us to remain highly selective. We are targeting high-return opportunities that meet or exceed our free cash flow objectives. In the Q2, we deployed the third rig of our earlier four-rig award in Algeria. We expect the fourth rig to start in the current quarter. We have begun work towards the deployment of three incremental rigs in Argentina. These rigs, which we announced earlier, span multiple operators. We expect all three to commence operations around the end of 2024, the first two in the Q4 and the final one in the Q1 of 2025. The three rigs for Argentina will utilize idle rigs from the Lower 48. In addition, we expect substantial drilling solutions content on all of the rigs. In Saudi Arabia, the sixth SANAD newbuild began drilling during the Q2. The seventh finished its acceptance procedure and spudded its first well in early July. The eighth and ninth new builds are now targeted for deployment in the Q4 of this year. At this point, another five are expected in 2025, and one more should start at the beginning of 2026. A quarter ago, we announced we were shortlisted for three rigs in a large market in the Middle East. We can now say we have received formal awards for the three rigs in Kuwait for work starting in 2025. Each of the rigs is currently in country. Kuwait is an important and challenging market. It requires high-spec equipment and skilled crews. These are Nabors' strengths. We are well positioned to capitalize on increasing demand there. With these developments, it is clear our prior optimism was well-placed. I am confident we will report even more progress on this front. In the Q2, several markets drove the sequential improvement in our international EBITDA. Our operation in Colombia returned to a more normal performance after experiencing some labor unrest in the Q1. Algeria, Saudi Arabia, and Kuwait improved as well. Let me finish by giving you a little more color on our activity in Saudi Arabia. Saudi Aramco recently announced $25 billion of overall contract awards for the development of natural gas. As Nabors, and more recently, through SANAD, we have historically supported Aramco's natural gas production. Today, approximately 80% of SANAD's rigs are spec'd and actively drilling for gas. Next, I'll discuss our performance in the US. Daily rig margins in our Lower 48 rig fleet slightly exceeded our expectations. The market for our rigs remains resilient. We continue to focus on the portion of the market that values automation and performance. At the same time, pricing discipline remains our priority. From the start of the Q2 to the end, our own rig count outperformed the industry. Our reported Lower 48 daily rig margin reflects the financial results of just the rigs. NDS generates significant margin on top of that. I'll discuss this in more detail in a few moments. Next, let me discuss our technology and innovation. Our drilling solutions business continues to gain traction on international rigs. NDS's international revenue and EBITDA were each up sequentially by double digits. This performance demonstrates our growing success to extend NDS beyond the U.S. market. The growth was driven primarily by our casing running and managed pressure drilling solutions. Overall, NDS EBITDA exceeded our expectations. Next, I'll discuss the Lower 48 market specifically. The average daily margin from our drilling and drilling solutions businesses combined was $19,100 in the Q2. Of that, NDS contributed $3,500 per day. This Q2, NDS performance marks a slight increase over the Q1. Penetration of NDS on Nabors rigs in the Lower 48 remained high in the Q2. Penetration was equal to the Q1. However, overall results on Nabors's rigs were muted due to the decline in Nabors's rig count. In terms of specific services, NDS saw volume increases in managed pressure drilling and casing running. Our results for the Q2 validate our continued strategy to focus on the third-party market. This focus enables us to offset the effects of a sideways rig count in the US. Next, let me make some comments on our capital structure. During the Q2, we amended our credit facility. We expanded the facility and extended its maturity by five years. More recently, we issued $550 million of 7-year notes. With those proceeds, we intend to retire the existing notes due in 2026. This financing extends our weighted average maturity by more than a year, from 3.6 years last quarter to 4.7 today. In the Q2, we generated free cash flow and reduced net debt. Our priority remains reducing debt. I'll finish this part of the discussion with remarks on sustainability. Our energy transition portfolio focuses on improving operational performance and reducing emissions. In the Q2, these solutions made a notable contribution to the results in our Rig Technologies segment. The most impactful ET initiative remains our PowerTAP module. This unit connects rigs to the grid. It reduces diesel fuel consumption as well as related emissions. Where grid power is readily available, operators realize significant savings by running PowerTAP. With the performance and savings we demonstrated in the U.S., we see growing opportunity internationally. We expect to have the first three international units deployed by the end of the year. Traction in our energy transition portfolio remains strong in the U.S. On top of that, operators in our markets beyond the U.S. are gaining interest. Next, I will discuss the rig pricing environment. Our Q2 results in the Lower 48 showed resiliency in leading-edge market pricing. With a focus on operational excellence, continued pricing discipline remains our mantra. Our drilling solutions portfolio plays an important role in this approach. In the international market, we still have visibility to additional near-term rig awards. They are spread across geographies including Asia, MENA, and Latin America. These markets are seeking more than 30 rigs. Those are in countries where we work currently or that we consider attractive. With this volume, we can be selective when it comes to adding work. With the increasing tender activity, as you would expect, pricing is showing signs of firming. We surveyed the largest Lower 48 clients at the end of the Q2. Our survey covers 16 operators, which accounted for approximately 47% of the Lower 48 industry's working rigs at the end of the quarter. The latest survey indicates this group's year-end 2024 rig count will be modestly lower than the total at the end of the Q2. Essentially, all of the projected decline relates to announced merger activity. The operators not involved in mergers project activity to remain at current levels. Aside from the mergers, we believe that clients remain cautious about their plans for 2024, particularly in gas-focused basins. At the same time, we expect that the market to continue to exhibit a relatively high level of churn. For the international market, our view remains bullish. We are on track to add an additional 5 rigs in the H2 of 2024. This yields a 10-rig increase in rig count compared to the end of 2023. What is particularly satisfying is that we already have good visibility for 2025, namely nine scheduled deployments, including five rigs in Saudi Arabia, one in Argentina, and three in Kuwait. Next, I will share a couple of highlights from the quarter in addition to those we announced in the press release. The common thread in all of our highlights is a strong element of our advanced technology solutions. A major operator in the Gulf of Mexico extended NDS casing running services for three years on six deepwater units. This award solidifies Nabors' position in this market. We installed our SmartROS Rig Operating System on five third-party rigs for three different drilling contractors. These installations demonstrate the value that our advanced rig technology delivers across the spectrum of contractors and operators. We believe these SmartROS installs provide the basis to secure additional NDS content with these contractors. Let me finish my remarks with the following: Our performance in the Q2 exceeded our expectations. We are deploying the previously awarded rigs in our international markets. At the same time, our advanced technology continues to deliver industry-leading performance across our markets. Now, let me turn the call over to William, who will discuss our financial results. Thank you, Tony, and good morning, everyone. Overall, the Q2 financial EBITDA was slightly below our Q1 results, as increases in our international drilling segment, as well as drilling solutions and rig technologies, were offset by the forecast decline in the U.S. Drilling segment. In general, international activity for all of our segments almost compensated for the reduction in the Lower 48 markets. We are encouraged by the strength of our international activity and its future growth prospects, as well as by the recent stability in our Lower 48 rig count and by the resilience of our pricing in this market. Revenue from operations for the Q2 was $735 million, compared to $734 million in the prior quarter. Our U.S. Drilling segment decreased by $12.3 million, or 4.5%, primarily due to rig count reductions in the Lower 48 market. Lower 48 decreased by 4.9%, as the current market conditions drove a sequential 3-rig reduction. That being said, pricing held up well. Our daily revenue for the fleet came in at $35,334, only $134 below the Q1. Revenue from our international segment increased by $7.4 million, or 2.1% for the quarter. This improvement was primarily driven by our operations in Algeria, with a startup of one more rig, and by Argentina as a result of adjustments in our pricing. The impact of the deployment of an additional rig in Saudi Arabia was mitigated by the previously announced downtime linked to re-recertification work during the quarter. Revenue from our drilling solutions segment also grew by $7.4 million in the Q2, a 10% improvement. This increase was driven by wellbore placement in the U.S. and by international growth in casing running and managed pressure drilling services. Performance software revenue in the U.S. was hurt by our decreased rig count in the Lower 48 market. Despite the challenges in this market, we achieved a 22% sequential increase in third-party revenue. Additionally, in international markets, NDS expanded its sales by 18% as we continue to focus our efforts on growing this segment globally. Rig Technologies revenue was slightly below the Q1 level, as strong aftermarket sales were more than compensated by sluggish capital equipment revenue, particularly in the US. Now turning to the EBITDA and the outlook. Total adjusted EBITDA for the quarter was $218 million, compared to $221 million in the Q1. U.S. Drilling EBITDA of $114 million was down by $6.4 million, or 5.3%, driven primarily by the activity reductions in the Lower 48 market. Lower 48 drilling EBITDA of $92 million decreased by $6.8 million, or 6.9% compared to the prior quarter. Our average rig count in the Lower 48 decreased to 68.7 rigs. The three- rig reduction was one more than we expected. The Lower 48 market continues to exhibit high levels of churn, which in turn impacted our rig count. We exited the Q2 with 69 operating rigs. Average daily rig margins came in at approximately $15,600, down $400 from the Q1, but somewhat higher than our forecast. Leading-edge pricing remains stable, with daily revenue in the low-to-mid $30s. We have been experiencing this leading-edge price point consistently in this range for approximately a year now. Consequently, our average daily revenue has held at high levels. Given the pressure on rig utilization, this stability confirms a strong value proposition of a fleet of high specification, high technology rigs. For the Q3, we project our Lower 48 daily margins will come in between $15,100 and $15,200, as the rigs roll to new contracts, with leading-edge pricing somewhat below our average for the fleet. We also anticipate our rig count in this market to tick up slightly and average approximately 70 for the Q3. On a net basis, Alaska and the U.S. offshore businesses performed somewhat better than we anticipated. In the Q2, the combined EBITDA of these two operations was $21.8 million, a slight sequential improvement. In the Q3, combined EBITDA for these two markets should decrease by approximately $1.5 million, as one of the smaller offshore rigs rolls off contract. This is typical for the season. Our international drilling segment delivered EBITDA of $106.4 million, an increase of almost $4 million. International average rig count grew by 3.4 rigs, with the start of two SANAD newbuilds in the Q2, and the impact of three units redeployed in Algeria over the H1 of the year. Average daily gross margin came in at $16,050, which is in line with the Q1 results. We expect international average rig count in the Q3 to increase by approximately one rig. During the period, we will benefit from the full quarter contribution of the two newbuild startups in Saudi Arabia. We expect to deploy two more SANAD newbuilds in the Q4, with deployments for the full year 2024 totaling four rigs. Another six rigs have already been requested by Aramco for deployment in 2025 and into 2026. In Algeria, we are targeting one rig startup during the Q3, for a total of four rigs deployed in 2024. Looking forward, we also expect to start up in the Q4 of two units redeployed to Argentina from the U.S. The Q3 rig additions may be partially offset by some idle time in another market as one of our rigs rolls to its new contract. We project Q3 international daily margins between $16,200 and $16,300, an increase from the Q2. Drilling solutions Adjusted EBITDA grew by 2.1% to $32.5 million in the Q2. Gross margin for NDS was just above 48%. Our margins were affected during the quarter by an unfavorable mix, as revenue for our lower margin wellbore placement activity grew meaningfully. Despite the current performance of the U.S. Drilling market, the international market continues to expand. Our focus on penetrating international markets is yielding positive results. We expect Q3 EBITDA for drilling solutions to increase by approximately 6% over the Q2 level. NDS gross margin per day for the Lower 48 was $3,500, a 2% increase compared to the Q1. This improvement took our combined drilling rig and solutions daily gross margin to $19,100. Rig Technologies generated EBITDA of $7.3 million, an improvement of 7.8% versus the Q1. The sequential increase was primarily related to our capital equipment sales, aftermarket repairs, and energy transition businesses. These more than offset a decline in parts sales, maintenance services, and rentals, as U.S. operators sought to reduce near-term costs. Despite these pressures, we expect Rig Technologies EBITDA to improve by approximately $1.5 million in the Q3 on the strength of our international activity. Now, turning to liquidity and cash generation. Free cash flow totaled $57 million in the Q2. This compares to free cash flow of $8 million in the Q1. Improved working capital and lower cash interest payments contributed to the increase. Capital expenses in the Q2 were $138 million, an increase of $26 million. This includes $56 million for SANAD newbuild, which drove most of the total sequential CapEx increase. We are targeting CapEx between $190 million and $200 million for the Q3, and reiterate our expectation of approximately $590 million for the full year 2024. Net debt at the end of the quarter decreased by almost $50 million to $2.4 billion. We continue to be on track to deliver free cash flow of between $100 million and $200 million for the full year 2024. During the quarter, we replaced our $350 million credit facility that was scheduled to expire in 2026, with a new $475 million facility that expires in 2029. The facility includes $350 million for revolving credit and $125 million for letters of credit. Additionally, the accordion feature of $100 million was upsized to $200 million. More recently, Nabors issued this week $550 million in eight and 7%, 8% priority guaranteed notes maturing on August 15th, 2031. The proceeds of the transaction will be used to retire the $556 million outstanding in priority guaranteed notes maturing in January 2026. These two transactions have substantially improved our debt profile and provided us with a significant reduction in credit exposure. We have no further maturities until 2027, when our senior priority guaranteed notes mature. With that, I will turn the call to Tony for his concluding remarks. Thank you, William. I will now conclude my remarks this afternoon. As we look ahead, we see significant opportunities. From today, we expect five international rig startups over the remainder of 2024. These will all be working on multi-year contracts. In addition, we have visibility for an additional 10 total deployments in 2025 and 2026. Their economics should generate attractive financial returns. With these, we have secured a well-defined path to a significant growth in our international business and its free cash flow. Looking ahead, this market presents us with opportunities for even more rigs. Additionally, both our drilling solutions and rig technologies businesses are poised to capitalize on this environment. I am looking forward to reporting on our progress. That concludes my remarks today. Thank you for your time and attention. With that, we will take your questions. Yes. T hank you. As mentioned, we will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw it, please press star then two. At this time, we will pause momentarily to assemble the roster. The first question today comes from Kurt Hallead with Benchmark. Hey, good morning, guys. Good morning, Kurt. Good morning, Kurt. Hey, you guys laid everything out quite, quite clearly. I think the one thing that really caught my attention, the commentary about the prospects for your U.S. rig count to modestly increase throughout the year, and this is in particular, I guess, positive contrast to the commentary that you provided, related to that, survey you did of E&P company. So kind of curious as to, you know, what, what are the dynamics that are driving the demand for your rigs, say, relative to the overall market? Well, let's put some context on the thing. Obviously, the U.S. market has been very challenged. The last quarter, you saw the rig count go down almost 40 rigs. And our goal, as you can see from our results, has been trying to maintain profitability in the pricing. So and I think we've done a real good job of that. We haven't chased market share, and we don't intend to. What we've really focused on is operational excellence and following the needs of the customer. I think there's been a lot of talk about the downside of customer consolidation, but there is a lot of upsides of customer consolidation. One, of course, is that the consolidation makes the industry have a life to it. I mean, it provides viability for investors to see that there is or half life as an industry isn't the end of 2030, which, you know, a lot of the ET people keep talking about. So, it's also good for larger contractors, given who the players are. I think what's happening is that as this rationalization occurs and as they get digested over the course of the year, we think that'll create opportunities for us to really have a wider audience for our technology and our type of rigs. We've put a lot of effort into that, as you know. We think as the market tries to capitalize on making these new prospects even more profitable, what's gonna happen is that the large operators are also going to focus on new solutions, and we have a pretty robust portfolio of other things behind us that we think also have good follow-on. So I think in the short term, there's always gonna be ups and downs. We've said what our number we're expecting for this quarter is. That's based on conversations that are in place right now. It's definitely a challenge, and it's also a challenge to do that while trying to maintain, you know, the results you've seen. But I think we've done a pretty good job so far, and that's what we're targeting for this quarter. Okay, that's great. Great color. Maybe one for William on free cash flow. It's like you reaffirmed what you said last quarter, about $100 million-$200 million free cash flow, obviously, and then you have the debt dynamic, where you're gonna basically take out the 26. Now, coming back full circle, maybe William, in the context of the prospect, how do you think about the dynamics related to absolute debt reduction? So, Kurt, the plans are to use all the cash, the proceeds that we got from the bond, obviously, to pay down the debt. So that will reduce the actual total debt. But all the cash that's gonna be generated is going to be applied to reducing total debt. We're not gonna leave the cash on the balance sheet. We're gonna be paying down debt as we go forward. Okay, that's awesome. Appreciate that color. Thank you. Thank you. And the next question comes from Dan Kutz with Morgan Stanley. Hey, thanks. Good morning. I just wanted to ask, so, so you guys have kind of reported somewhere in the ballpark of $220 million of Adjusted EBITDA in the H1, in each quarter in the H1 of the year, and then, the, the, the guidance is in that same ballpark for the Q3. I guess if I was thinking about the Q4 before your comments on this call, I would have thought maybe there could be some seasonality and, and maybe some budget exhaustion in, in the Lower 48 that could be offset by some international growth, and maybe the Q3 might be a good, EBITDA bogey to think about for the Q4. But it sounds like maybe, you know, the, the, the earnings could be growing sequentially from the third to the Q4. I was just wondering if you could help us think about some of the puts and takes just directionally, heading into the Q4 of this year, across the segments and so that consolidated EBITDA line. Thanks. Just from the schedule of rigs internationally, as I've articulated, the H2 has five rigs. Of those five, four are taking place in the Q4. So [foreign language] international, obviously, there's a ramp occurring in international that's back-loaded toward the latter part of 2024. I'll let William add more color to your comment, though. Yeah, I mean, it's a good comment, and there's a lot of focus on the Q4 because of the budget and seasonality. On the rig business, land drilling business, drilling rig business, we don't really see that seasonality like some other businesses, like fracking, coil tubing, and so forth, because the contracts tend to be longer term, and we don't experience that seasonality. So in the U.S., in fact, Tony explained the reasons why he thinks we'll have more rigs through the Q4. But this is based also on concrete awards that we expect and discussions and negotiations we're having with some of the larger clients where we think we'll benefit. So we don't expect to see a drop-off in the Lower 48. If anything, we expect activity to pick up, with a little bit of erosion on the gross margin. So the U.S. will hold up well. And then, of course, as Tony mentioned, international is going to expand very significantly. Got it. Super helpful. I guess, fine if you don't wanna comment, but for the full year, Adjusted EBITDA line, have a nine handle on it? We're comfortable with the consensus. Yeah. And then just a quick follow-up. Wondering if you could maybe break down some of the components of your CapEx budget outside of what you do explicitly give us, which is the SANAD new build component. But just wondering if you could talk through some of, kind of like the maintenance CapEx assumptions across the other segments that feed into that $590 million number this year, so that we could maybe, you know, might help us dial in our extrapolations into the forward years. Just, you know, anything on maintenance CapEx across the segments, any growth investments, maybe in NDS or Rig Tech, but yeah, anything outside of the SANAD new build CapEx that you could help us with would be great. We have said that U.S. rigs require somewhere between $1.2 million-$1.3 million a year in maintenance CapEx, and the international rigs a bit more, maybe in the $1.5 million range or so. So you, I mean, if you take our average rigs, you can, you can do the math for that. Obviously, this year we do have some growth CapEx, as we have said before, due to the tremendous expansion we have experienced in international markets. As you start the new contracts, there are some costs that range anywhere between $4 million-$10 million, I would say, to get these rigs ready. So, so basically, again, you could do the math, based on the 10 rigs that Tony mentioned. Got it. Super helpful. All right, thanks a lot, guys. We'll turn it back. Thank you. The next question comes from Derek Podhaizer with Barclays. Hey, good morning. I wanted to go back to the Lower 48 comments, talking about your rig count to grow for the balance of the year versus your survey, which would seem like that was more flat to down. Can you provide more color on what you're seeing, whether it's the privates versus the publics, oil versus gas, the different basins? Like, where do you see the most upside? I know you talked in your release about the western region, seeing some additional activity, but if you can give us a little more detail as far as where we can see some of these, rig additions you're expecting in the back half of the year. Sure. Well, just make clear, the rig addition we're talking is. It's a modest increase between first and Q2 here, that we're—I mean, for the next quarter, second and Q3, that we're talking about. But give you some more color. So roughly, in our customer mix, over the course of the past year, it's definitely shifted to more of the public operators. Give you an idea, back in 2023, it was roughly 60%. Now it's almost 3/4. So that's a pretty good shift, and that plays into the theme I just talked about. The other point is that there is a continued high level of churn that we're facing. And so, as William referred to, there's a rig count increase, but also there is some pricing margin erosion because of churn. And churn, it applies across all the basins. To give you an idea, West Texas, I would say, is modestly up in churn compared to where we were the Q1. South Texas is actually improved. The environment's improved a little bit, which also should have an effect on activity. East Texas, churn is up, and Northeast and North Dakota, I'd say they're relatively flat. So, right now, our U.S. rigs are at 13%, and obviously, that's not something that we're focused on. But I think, the target market is the large operators I referred to, which is the fat part of the market. And you can look at the consolidations that have occurred. I think we're obviously trying to play to our strengths and promote our solutions with the post-merger companies, and hopefully that'll be recognized. And based on our track record and performance, we hope that's gonna translate into what I've talked about, which is actually slightly increasing rig count as we're moving forward throughout the year. So I'll make a comment on that. I mean, the privates have also been a source of some positive. I've seen a lot of new clients on the client list that I hadn't seen before, and some of the smaller clients are providing a little bit of stability to our rig count. So we were happy to see some of those trends with the private clients. But as Tony mentioned, I mean, a lot of the—most of it, of the increases that we're gonna see, and again, this is not gonna be more than a handful of rigs at most. But those are coming from some of the consolidation, where we think that we have some advantages with some of those clients that have been the big buyers. So, we feel good about our prospects in the H2. Got it. I think that's all really helpful color. Maybe on contract duration trends, are you starting to see some of your customers willing to sign up for year, multi-year agreements, or are we still on more of that, like, six months well-to-well contracting? Just maybe some color around your conversations and where you're seeing trends as far as, contract terms right now. I think, as these consolidations occur, I think it's causing each of the players to reassess their entire portfolio, and there are a bunch of initiatives by several of them to look at the issue of terming out things, given where the market is and given their aspirations of locking in their new programs. And so the answer is yes, I think the market is becoming more amenable to some term contracts, and we are, looking at that as well. Great. Appreciate all the color. I'll turn it back. Thank you. The next question comes from Waqar Syed with ATB Capital Markets. Thanks for taking my question. When do you expect U.S. Drilling margins to bottom out? My goodness. Always a difficult one. Well, I think if you look at our average right now, it's about $35,300. And I think our leading edge probably averages around $33,000-$34,000 revenue per day. So there's still some room to fall. However, we're getting pretty close to convergence and, you know, the stability we've seen in pricing and in rig count, actually, to tell you the truth, gives us hope that we will continue to maintain our leading-edge pricing where it is today. So, you know, we still could drop, I would say, towards the $15,000 level, but I would expect that to be the low point. Great. Very helpful. And when, before year-end. Okay. Oh, so you think most of the drop is going to be this year, and then it kind of stabilizes into next year? Well, yeah, we think so. I mean, and, and keep in mind that not everything changes at the same time, so it's like a progressive- Right You know, rolling into new contracts. You know, and we're starting to get longer-term contracts, by the way, which, you know, we would be happy to sign longer-term contracts because we're still very close to record all-time margins for Nabors in the Lower 48. Right. Now, William, on the debt side, good to see that, you know, you would like to reduce the overall total debt number. So at Q2 end, total debt was $2.5 billion. Where do you expect the debt number to be, let's say, by the end of this year, and then perhaps by the end of next year? So you're working back into the free cash flow, right, Waqar? Well, I did provide guidance. You know, so if we hit the midpoint of the guidance, you know, I think we could reduce our total debt this year by, you know, somewhere in the range of $100+ million. A nd then next year, I have said before that we expect to do significantly better in free cash than this year. And again, that all that extra cash generation will be applied, you know, essentially to reduce our debt. The intention is not to leave the cash on the balance sheet, but we're gonna use it to reduce debt, as we have done in the past. Great. Well, thank you very much. Appreciate your comments. Thank you. Thank you. The next question, Keith Mackey with RBC Capital. Hi, good morning. Thanks for all the color on the international rig additions. You've certainly laid out pretty clearly all the rigs you expect to add across the geographies. Just curious, though, are there any notable expiries or churn that could come up in the next, you know, 18 months that might provide a headwind against the getting to the 102 rigs by the end of next year? I mean, all these contracts are on, you know, three to five year deals, and there is maturity. I think in Saudi, we've renewed, like we said on the last call, many of our oil rigs recently, so that's comforting. But obviously, in this market, depending on the macro, you know, we're not immune, even with these contracts, to something occurring. But I think right now we feel pretty good. In Kuwait, we're gonna have a hiatus of a rig during the time period from now to the startup period as we onboard the new rigs. So that's like a little, you know, a little setback, but that's in the normal course. And you know, when these rigs expire and they move on, there's always a gap. And that, that's one of the things about international compared to U.S., where those gaps are a little more pronounced and a little longer than in the U.S. But having said that, directionally, we're very comfortable with the direction, given the macro. And just to give you an idea of scale, one of the things you should be aware of. I think I gave some numbers on the last call, but now, given what I just said today, just so you understand what the visibility is for these contracts in place now for Argentina, when you add the backlog of the Argentine rigs and the Saudi rigs, the Argentine rigs represent about $300 million in backlog, and the nine Saudi rigs for 2024 and 2025 represent about $1.2 billion, and the rigs in Kuwait about $230 million. So altogether, that's a backlog of about $1.7 billion, which is pretty breathtaking, okay? So just to give you an idea of what we're talking about here. And, Keith, to your question about the 102 rigs, keep in mind that if you look at our presentation, three of those rigs haven't been secured yet. So we have discussions with about nine more rigs, and we estimate that we probably get three of those, but we haven't secured those. So right now, and based on the stuff that we have secured, we're looking more like at a 99 rigs right now at the end of the year 2025. Got it. No, that's, that's super helpful. And for Q3, I must admit, I was a little bit optimistic on the international daily cash margin. You're projecting to be about $162-$163 per day. Can you just maybe give us a little bit more help on how we should be thinking about that number through 2024 and 2025 as you fold in some of these new rig contracts? So, you know, when the team forecasts the additions of the rigs, we always layer in a little bit of downtime because, you know, based on experience, we see it happen when a new rig start up. So there is some underlying costs or downtime forecast in those numbers. And in addition, we did mention that we're going through a recertification process, given all the extensions we've had in Saudi Arabia. So I would say there's, right now, some $300-$400 per day in underlying forecasting for these events. So if you add that on top of what we said for the Q3, you know, the underlying profitability is somewhat higher than that $16,200-$16,300 that we're guiding for the Q3. We said before, Tony has said it, I've said it, that we expect in the Q4 to be approaching towards the $17,000 per day margin in the international markets. Whether we hit it in November or December, you know, as the new Saudi rigs come in, but that's sort of our expectation. Then going forward, you know, that $17,000 should be sustainable for 2025. Got it. Okay, that's very helpful. Thanks very much. Thanks, Keith. Thank you. And the next question comes from Arun Jayaram, with J.P. Morgan. Good morning. Tony, I was wondering if you could go through kind of the competitive balance in Saudi Arabia. Obviously, one of your peers in the U.S. has kind of entered the Saudi Arabian onshore rig market. Nabors or the SANAD JV has scheduled to deploy 15 total new builds as part of that up to 50 rig program. You know, maybe talk to us about the prospects of you know, signing up more, you know, new builds beyond the 15. Yeah. Well, as we've previously spoken about, the new build program is a part of a policy that was embarked upon several years ago by Aramco and MBS to industrialize the kingdom. And it's a long-term plan to add 50 rigs of new builds. And, you know, so we have seven working now. There's 43 to go, and we've talked about the ones that are in process for 2025 and 2026. But we fully expect that right now that those plans will continue unabated because they're part of a macro policy. Now, of course, you know, there's always the vagaries of industrial policy, and things can get temporarily suspended, et cetera. But, you know, as far as we understand, that commitment's there, and you should be aware that the seven new builds have been delivered, are all working in gas rigs today. And as I've spoken about before, you know, the story on the rig count is such that that is continued to be a high priority for Aramco. So there's about 218 rigs in the kingdom today. Thirty-one of them are working on conventional, about 15% of the market. As I mentioned, more than 80% of all SANAD rigs today are gas-directed, and the new builds are gonna be focused on gas. So we think we're in a really good relative position there, and we think we have—we're aligned with the country's objectives and we're, you know, I think all the stars are aligned. So I can't say that, you know, we're not gonna be immune from market conditions, that Aramco does adjust rig count to market conditions. There may well be some other ones out there that they're gonna embark on, but I should say that for all those reasons, we think any adjustment will be tempered and temporary. Great. Great. And then just my follow-up. You guys have announced some rig awards in both Argentina and Kuwait. Obviously, Kuwait has been maybe a long-term disappointment in terms of global spending trends. Tony, what's your thoughts? Have you been down to Argentina recently about, you know, maybe some highlights on what's going on in the Vaca Muerta and just thoughts on Kuwait, you know, incremental demand from Kuwait? Well, as you correctly observed, from my point of view, both are really key long-term from our point of view. Kuwait, for many years on conference calls, we talked about the famed 14-rig tender that was gonna be coming out, and every time that thing has just rolled over and rolled over and been a disappointment. We're very happy we finally got this kind of award here that's we're cementing, and we think it should be the beginning of some additional upside. Just by way of a parenthetical comment, you should also be aware that we're not just benefiting from the rig award there. Actually, Canrig, our rig manufacturing business, is getting awards in this latest round for top drives and wrenches on competitor rigs in the kingdom. So there is additional upside to Nabors from Kuwait, and that makes it a core market for us in terms of equipment supplying as well. Argentina, obviously, what's really happened there, the story is it's always been a good resource, but the political and financial situation in the country has always been a big encumbrance. But given the changes that have occurred there, particularly on the currency side now, I think, you know, that's really helped us out. And one of the things that, as I've mentioned, is with respect to the rigs that are going down there, we're getting a double double benefit in the sense that we're redeploying rigs from the U.S. market down there, making re-use of idle capacity. And the rig contracts are, in fact, very well compared to historical practices with U.S. dollar components. Paid off shore. Yeah. And then lastly, one of the great surprises to me is how fast our NDS thesis is taking hold down there. And NDS content on the Nabors working rigs has really increased to the point where they're doing a lot of stuff as robustly as they are in the U.S. In fact, managed pressure drilling and casing services on those rigs, I think we have a great reputation right now, and that's more the upside in that. And as that basin matures, those kinds of services will become more useful, and I think there's, you know, a good upside path for us. So that's why we're key on both countries. Okay, thank you. The next question comes from John Daniel with Daniel Energy Partners. Hey, good morning, guys. Thank you for including me. I just have one. It's the comment you guys made in the press release about the four-mile lateral in the Delaware. I'm curious if that's a one-off with the customer, or how many more would be behind that, and what the outlook for that would be, just for next year? I'm gonna let Travis Purvis answer that for you. Yeah. Good morning, John. It's a good question. I don't think it's a one-off for sure. A couple of things to comment. You know, customers with large acreage positions are the ones that are gonna probably deploy that well design more often. They've proved that it has some real efficiencies to be gained and had by that, so some real value. Secondly, our rigs are well positioned in terms of our top drives, our Sigma top drives, the amount of torque we can deliver to generate and deliver those four-mile laterals. So it's a space that we're in the pole position, and we're gonna see more of those four-mile laterals and some that are even longer than that. So, more to come, but that's certainly not a one-off. Okay. That's all I had. Thank you. Thanks, John. Thank you. This concludes our question and answer session. I would like to turn the call back over to William Conroy for any closing comments. Thank you, everyone, for joining us this morning. If you have any additional questions, please follow up with us. Keith, we'll wrap up the call there. Thank you. Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.