Michael Smaller

Michael Smaller of Susquehanna Financial Group asked for clarification on the SANAD newbuild capital expenditure schedule. He questioned whether the $60 million shift from 2025 to 2026 would cause a corresponding delay from 2026 into 2027, effectively pushing out the entire delivery timeline for the 20 awarded rigs.

Answer

CFO William Restrepo clarified that the change is a timing shift in milestone payments, not a reduction in the number of rigs. He confirmed it is likely that 2026 milestones will also shift slightly into 2027. He noted the impact on revenue is not dramatic, estimating a minor slippage of about $5 million in 2025 EBITDA due to small deployment delays.

Michael Smaller of Susquehanna Financial Group, LLLP sought clarification on the SANAD newbuild capital expenditure, asking if the $60 million shift from 2025 to 2026 pushes the entire delivery schedule out or simply concentrates more spending in 2026. He was interested in the flexibility of the schedule for all 20 awarded rigs.

Answer

CFO William Restrepo clarified that the change is a timing shift of milestone payments rather than a fundamental change in the total spend or rig count. He explained that some 2025 milestones moved into 2026, and this will likely cause a corresponding shift of 2026 milestones into 2027. He noted the impact on revenue is not dramatic, as it's mostly related to uncompleted rigs and involves only minor deployment delays.

Michael Smaller sought clarification on the SANAD newbuild CapEx, asking if the $60 million shift from 2025 to 2026 implies a broader delay in the entire 20-rig delivery schedule.

Answer

CFO William Restrepo clarified that the change is a timing shift in milestone payments rather than a fundamental delay of the program. He explained that while some 2026 milestones may now slip into 2027, the impact on revenue is not dramatic as it primarily affects uncompleted rigs, estimating only a minor $5 million EBITDA impact in 2025 from slight deployment slippage.