Question-and-Answer Session
Operator
Thank you, sir. (Operator Instructions) And our first question comes from the line of Kurt Hallead with RBC Capital Markets. Please proceed.
Kurt Hallead - RBC Capital Markets
Hi, good morning.
Mark Siegel
Good morning, Kurt.
Kurt Hallead - RBC Capital Markets
Just wanted, you said Mark, cash margin down $400 a day, first quarter versus fourth quarter. You said that you see some encouraging signs out there. Does that mean that you think that rates are going to stop declining or do you think the decrement will be generally less than what we've have seen in the fourth quarter and first quarter?
Mark Siegel
Kurt, let me break the question into two parts. The reason for the comment about the change in margin is the impact both in our company and other companies of term contracts expiring. That's the principle reason for that comment. Where in effect, you have an adjustment to market from a rate that may have been set 18 months ago, so that's the principle reason that we're giving that number. What we're saying is, that in the overall market we're seeing at current stabilizing of the market, that's the word we've used in our comments. So that's how they square those two thoughts, if that makes any sense.
Kurt Hallead - RBC Capital Markets
Okay. Does that mean that you think that after this first quarter, it will come back to the question; do you think that pricing is going to stop going down or you think its going to go down on a less decrement?
Mark Siegel
It's going down at a much smaller decrement.
Kurt Hallead - RBC Capital Markets
Okay. And then in terms of encouraging signs, you say there are a number of rigs coming off contract. Was that a reference to the industry in aggregate or was that reference specifically just to your stuff?
Mark Siegel
We have some coming off as I said in our remarks at the start, we think that the industry as a whole has a large number coming off.
Kurt Hallead - RBC Capital Markets
Okay. And with the industry as a whole with a large number of contracts coming off, so your comments basically suggest that you don't see any of these rigs becoming increasingly more competitive with day rates relative to where the market is right now?
Mark Siegel
Well, the thought that we have is that there is sufficient demand for rigs at this point, such that we're not expecting undisciplined price competition as those rigs come off of term contracts. We think they'll go to a kind of a market rate and we think that market rate is showing fair degree of stability. I think I said in my remarks that we'll see exactly what happens. Obviously, it's impossible to predict in a very competitive rig market exactly how all the competitors will respond but we think there is reason for people to behave in a very disciplined form given a significant amount of demand for rigs at this time and starting of rig new builds.
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