Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from James M. Rollyson – Raymond James & Associates, Inc.
James M. Rollyson – Raymond James & Associates, Inc.
You gave us great detail on your view of the day rate side of the equation and kind of what’s happened. Could you maybe give us your thoughts on the cost side? Typically as I’ve watched this business you tend to see your unit costs go up a little as your rig count is falling at first and then as you’re implementing cost reductions that kind of settles out and maybe starts coming down. How are you thinking about that as you go through 2009?
Stacy Locke
Well, unfortunately I guess what we report in the press release is average revenues per day and average cost per day so that includes a little more noise than just a pure day rate and a pure cost per day day rate cost. I guess the cleanest answer would be that I think our average day work cost associated with those day rates has probably been running close to $10,000 per day. I think going forward we feel like we’ll be able to reduce that pure day rate cost down. With the one wage reduction we have in place we think we can reduce that down to $9,000 to $9,500 a day.
Now, when you look at what’s reported in this press release you get a lot more noise that’s in there so you won’t get that clean of a number when the press release comes out but that’s what we believe will kind of be our rough estimates.
James M. Rollyson – Raymond James & Associates, Inc.
Do you think that happens in the first quarter or over the next couple of quarters?
Stacy Locke
Well, we put in a wage decrease at the beginning of February so I think from that pure number we’ll see the impact of that wage decrease in this current quarter. Now, it’s going to be a little masked because like if you noticed in the press release on page eight where it talks about the drilling revenues per day and the drilling costs per day you have a lot of things built besides mobilization just rig job to rig job kind of muddying up the water there are two big mobilizations of the two rigs that went in to Columbia in the middle of the year and one as late as November.
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