Question-and-Answer Session
Operator
Thank you, sir. Ladies and gentlemen, we’ll now begin the question-and-answer session. (Operator instructions) Our first question comes from the line of Marshall Adkins with Raymond James. Please go ahead.
Marshall Adkins – Raymond James
Good morning, guys. We’re hearing numbers all over the board right now in terms of where leading edge rates are. Obviously, you’re going to be supported by a lot of fixed contracts. So my question is, where do you think margins are you heading? I know you can’t look at all year, let’s just say the next quarter, both in terms of leading edge and blended average of your contracted stuff.
Gene Isenberg
The blended average is going to be pretty good. And frankly, it’s going to be enhanced. I can’t separate out all of these elements right now, but we can do it online later – offline later. In other words, we have to book the cash that we get as the prepayment for three months, three weeks, two years settlement of commitment contracts or commitments.
Marshall Adkins – Raymond James
You book that all at once, right?
Gene Isenberg
Yes. We have to book it when we get it.
Marshall Adkins – Raymond James
Okay.
Gene Isenberg
I mean it’s a high class problem that it screws up the average margin per day. Then basically, we’ve been doing pretty well on – let me put it this way, when guys cut back, largely they’re cutting back across the board. They’re not saying, ?I’ll cut back if you come down 30%. Then I won’t come back if you cut down 35%.? So we’ve had very little of that. We are in the competitive market like everybody else. And I would say, so far, I would say maybe a 35% drop in margins for the more prominent rigs, our (inaudible) rigs compared to what it was earlier.
I’ve heard, for example, our good friend, David, he was – he bought – he was able to contract the rig for $10,000 a day plus $1,500 top drive in the Haynesville shale. And I think, God bless him, good luck to him, we don’t have to do that. And frankly, that particular chap has his own drilling plate. So I don’t know why he’s cutting down.
But further on that point, most of those rigs are resold and restocked. So I wonder if he’s making any money compared to us, (inaudible).
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