Question-and-Answer Session
Operator
Thank you sir. We will now begin the question-and-answer session. (Operator Instructions). The first question comes from the line of Mike Drickamer with Morgan, Keegan. Please go ahead.
Michael Drickamer – Morgan, Keegan & Company, Inc.
Hi good morning guys.
Robert Parker Jr.
Good morning, Mike.
David Mannon
Good morning.
Michael Drickamer – Morgan, Keegan & Company, Inc.
Dave, can you talk what are you doing with the idle rates at this point? Are they still warm stack or are you considering them cold stack at this point?
David Mannon
Sure Mike, I’ll be happy to do that. We currently have one cold stack rig. We have three operating. We have two in the shipyard and we have nine warm stacks. What we’ve done with those warm stack rigs is we’ve grouped those together in various locations of Southern Louisiana, some at the key side in our Fort facility and some in another facility at a Southern shipyard in Southern Louisiana. And so what we are doing is that we’ve stripped out the majority of our crews. We’ve gone to a minimal crew list on average of about nine guys per rig. And so the reason for that is we want to retain those people and we also want to maintain those rigs. We’ve spent about a $110 million in last three years on these rigs, and often times from my experience in the industry, once you cold stack a rig, the management is not compelled to return that rig to service and when they do it often comes with a fairly high capital cost. And so we are optimistic that this market is going to turn for us. We’re optimistic that our rigs are the right rigs for the fleet and that they will go to work first and just from the discussions that we’ve had with our customers, we think that’s going to be a second quarter event, that some of these rigs are going back to work and so we anticipate that with this warm stacking. So what we are doing is that we're working to a break-even EBITDA basis in our Gulf of Mexico operations and so we will continue to monitor our costs and reduce costs as necessary, depending on our activity of our rig fleet.
Michael Drickamer – Morgan, Keegan & Company, Inc.
Okay, when does the decrease in utilization from say the 60% plus they had in the fourth quarter to where you're now? How did that occur? Was it kind of over this timeframe or did you see a sudden decrease in that utilization?
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