Question-and-Answer Session
Operator
Thank you. (Operator instructions) And it does appear we will take our first question from the line of Christopher Buchek [ph].
Christopher Buchek
Hi guys, really good quarter. I had a couple of quick questions. Looking to the four rigs you have purchased – you two jack-ups, the Cross and the Richmond, in a real Draconian situation in which all four rigs ended up getting stacked. Between the $280 million I think if my math is right, probably not, from the additional debt you guys have and the cash you have on hand, you could – you should be able to fund your new books over, isn’t that correct or is (inaudible)?
Jim Holland
Yes, I mean – the maximize debt we expect to have to incur under – going forward even with extended down time on those four rigs that you stated, would be say about $400 million around this fiscal year and we hope to keep it, as John said, below $500 million by fiscal year – end of fiscal year ’10, so we expect to be more like the $450 million range and once the Osprey gets out in fiscal ’11 then we expect that debt will start declining somewhat. So – yes, we believe in – even with some extended down time on those four units that we do not need – will not need anymore funding requirements there. So, we believe our $580 million facility puts our expected cash flow based on our almost $2 billion of revenue backlog we have on our dewater units plus the Atwood Aurora to your commitment contract I mean will be more than adequate to allow us to fund the construction of these two semis.
Christopher Buchek
Okay, okay, good stuff. Unrelated followup, I am looking to the jack-up market and I understand it’s really competitive out there and other guys may say anything 10 to 12 jack-ups (inaudible) but we personally have been a bit surprised by how strong day rates have been and we are still seeing 100, 110, 120 care [ph] day contracts even with all this idle capacity and I was wondering, one, if you guys were surprised at all by how strong it were. And, two, if you feel this discipline can continue given all the new bones that resonate the water?
John Irwin
Christopher, certainly we have – there has been limited bidding and a lot of program deferral, so some of the markets out there and the market are less fewer than what might normally be the case. Having said that, I mean so far some of the numbers we have seen have probably surprised on the more favorable side. But there continues to be deferral of programs and pressure on day rates and from our own situation of course with our rigs rolling over, we will take advantage to use down time to the greatest advantage possible to put our rigs in great condition for continuing to work and we’ll continue to market them and man them with all the key people. Ideally, what we would do is have our rigs ready to go and our key people and be bidding them ensure that at the same time we get our cost down at the appropriate time to the lowest level given that approach. And then we will be bidding what we consider to be the right rates to seek out utilization of the units.
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