Question-and-Answer Session
Operator
(Operator Instructions) We'll take our first question from the side of Mark Brown of Pritchard Capital.
Mark Brown - Pritchard Capital
Can you clarify the point on the tax? What is the driving up your effective tax rate, related to how you account for revenues in Venezuela?
Doug Fears
Yes. This is Doug. In Venezuela, regardless of what you do on your US books, you are required to book revenues if you are billing them. You are going to do it on an accrual basis. You cannot just arbitrarily switchover to a cash basis and therefore report negative income or lower income for tax purposes in Venezuela. They are going to make you pay taxes on accrued revenue.
With that in mind, even though for accounting purposes here in the US, we are not recording revenue. There is still a tax liability that's accruing in Venezuela, which we then must book for US purposes. At the end of the day, as a US analyst, you don't have the income, but you have got to pay the taxes. So, that is what drove up the effective rate.
Mark Brown - Pritchard Capital
Okay. Further rings in that country, do you have any insurance on them? What are your plans potentially to move them somewhere else, or any resale value on those rigs?
Doug Fears
First of all, we cannot comment on the insurance issues. We can't do that. At this particular time, we are stacking rigs, but have no plans to move at this time. We are still in hopes of working that situation out in Venezuela.
Operator
Our next question will come from the side of Pierre Conner of Capital One.
Pierre Conner - Capital One
First, John, a color on guidance on a number of items, I wanted to try to push a little bit more on the costs; the daily operating cost side on the clean basis, absent, standby etcetera. How much can you work those costs down? Are they going to be fairly sticky? Give us some sequential perspective of where the daily operating cost on US land could go?
John Lindsay
Pierre you said it, there is a lot of moving parts. When you are stacking rigs, you've got stack costs, you've got the personnel side, so I tried to address it.
In my comments, there are some efforts, I believe on our supply chain side that are helping us, as you would expect pricing is coming down on certain maintenance and supply items. That's helpful, but at the same time you've got these other moving parts and pieces related to stacking rigs.
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