Question-and-Answer Session
Operator
Thank you very much. (Operator Instructions). And the first question we have is from Jim Rollyson of Raymond James. Please go ahead with your question.
James Rollyson - Raymond James
Gene, you mentioned looking for modeling purposes at the different types of rigs, when you look forward. Can you may be spend a minute just kind of refreshing our memory on what you're looking at for average margins today on the term rigs that you've got going through the next few years and maybe contrast that to what you're seeing in the spot market?
Eugene Isenberg
Joe, you can probably handle that.
Joe Hudson
Okay. The spot market obviously has been significantly impacted with the day rates.
We're now pursuing in the spot market is probably 35% down from last year's high. When you're looking at margins anywhere, depending that you're looking at the recent increased activity has all been pretty much in shallow rig counts, plus Texas, Kansas, Oklahoma. There is no day rates when we have intended 10 to 10.5 or less.
Eugene Isenberg
That was the really legacy rates.
Joe Hudson
Oh yeah, they are all legacy rigs. So that's what you're seeing in that area. So you've seen a very low margin of about 1500 bucks max, in that area. In the -- we're going continue to see as we mentioned with our new rigs still coming out in 16 new builds. All are coming out at margins in excess of anywhere from 14 to 15,000 a day. So when you blend those, we're still looking at an average margin for the new build activity somewhere 12,000, 13,000 for the new build rigs.
Eugene Isenberg
And that number would be ex the lump-sum payment.
James Rollyson - Raymond James
Very helpful. Gene, you had also mentioned that the cost cutting in various ways and forms. Can you maybe talk about how much of those cost cuts were demonstrated already in second quarter results and do we have more of that to show up in the third quarter, second half of year. Now what are your thoughts are there?
Eugene Isenberg
Most of it is yet to come, frankly. So I mean, the cuts are already made.
More of this going to come in, nobody is guaranteeing that there won't be additional cuts. We've -- the highest paid guys took the biggest cuts. We've laid off reluctantly, but out of necessity, and that will probably continue.
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