Question-and-Answer Session
Operator
Thank you. (Operator Instructions) Your first question comes from the line of John Fitzgerald with Patterson. Please proceed.
John Fitzgerald – Raymond James
Good morning guys, it’s actually Raymond James but. On the drilling side I guess costs were actually down during the quarter, maybe some help from lower fuel costs and I don’t know if you were still deploying some of your stacked rigs. But can you guys describe how you’re able to control costs so well and where you see that going over maybe the next quarter or two?
John E. Vollmer III
Yes, this is John Vollmer. In the second quarter we expended quite a few dollars activating rigs and Doug mentioned earlier, our U.S. rig count during the first nine months was 40. It was higher than it was at year end. We – as we went into third quarter it was a little bit unclear to us whether we would get savings in the third quarter or if it would occur in the fourth. But most of the reactivation cost did occur during the second quarter resulting in an improvement in our average cost per day.
We also had, in response to some other drilling companies we increased wages for rig employees right in the third quarter so that actually contributed somewhere toward the $100 in increased costs. So without that we would have been closer to 11,000 or so in cost per day in the third quarter.
Looking forward to the fourth quarter we’ll see the rest of that increase which is approximately $500 a day and that would take our per day costs in Q4 to about 11,500. And also since those costs are a direct pass through to the customers we’ll get a little bit of benefit in the average revenue per day side and we would guess that that would be somewhere around 20,000 in Q4.
John Fitzgerald – Raymond James
Okay. Thanks for the color. And then I guess bigger picture, you guys have a clean balance sheet. We’re thinking next year might be a good chance for consolidation in the market. Is that a possibility for you guys? Are you still inclined to stick with the new bills and put out your Apex rigs? Or are you still just thinking stick – maybe even just go on to refurb side? Axe what you’ve already planned putting out in the market.
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