Good day, everyone and welcome to the first quarter 2010 results conference call for Transocean Limited. Today's call is being recorded. At this time, for opening remarks and introductions, I’d like to turn this conference over to Mr. Greg Panagos, Vice President, Investor Relations and Communications. Please go ahead, sir.

Thank you, John. Good morning and welcome to Transocean's first quarter 2010 earnings conference call. A copy of the first quarter press release covering our financial results along with supporting statements and schedules is posted on the company's website at www.deepwater.com. We've also posted a file containing four charts that will be discussed during this morning's call. That file can be found on the company's website by selecting Investor Relations, Quarterly Toolkit and then PowerPoint Charts. The charts included cover average contracted dayrate by rig type, out of service rig months, operating and maintenance cost trends and free cash flow backlog and debt maturities. The Quarterly Toolkit also has four additional financial tables for your convenience. These tables cover revenue efficiency, other revenue details, daily operating and maintenance costs by rig type and contract intangible revenues. Joining me on this morning's call are Steven Newman, Chief Executive Officer; Ricardo Rosa, Senior Vice President and Chief Financial Officer; Ihab Toma, Senior Vice President, of Marketing and Planning; and Terry Bonno, Vice President of Marketing. Before I turn the call over to Steven, I’d like to point out that during the course of this conference call participants may make certain forward-looking statements regarding various matters related to our business and company that are not historical facts, including future financial performance, operating results and the prospects for the contract drilling business. As you know, it is inherently difficult to make projections or other forward-looking statements in a cyclical industry, since the risks, assumptions and uncertainties involved in these forward-looking statements include the level of crude oil and natural gas prices, rig demand and operational and other risks which are described in the company's most recent Form 10-K and other filings with the US Securities and Exchange Commission. Should one or more of these risks and uncertainties materialize or underlying assumptions prove incorrect, actual results may vary materially from those indicated. Also note that we may use various numerical measures on the call today that are may be considered non-GAAP financial measures under Regulation G. As I indicated earlier, you will find the required supplemental financial disclosure for these measures, including the most directly comparable GAAP measure and an associated reconciliation, on our website at www.deepwater.com under Investor Relations, Quarterly Toolkit and Non-GAAP Financial Measures and Reconciliations. Finally, in order to give more people an opportunity to ask questions, please limit your questions to one initial question and one follow-up. Thank you. That concludes the preliminary details. Now I’ll turn the call over to Steven.

Thank you, Greg. Good morning, everyone and thank you for joining us this morning. Before making any comments about our first quarter results, I want to say a few words about the Deepwater Horizon incident. I know you are concerned about the incident and its aftermath. Many of you have sent condolences and messages of support and all of us at Transocean appreciate your concern very much. On the evening of April 20 at around 10 pm the Semisubmersible Deepwater Horizon experienced an explosion and catastrophic fire. The rig had a crew of 126 people and through the quick actions and courage of many onboard a 115 people were safely evacuated. Tragically, however, we lost 11 of the Horizon’s crew nine of whom were Transocean employees. At this point we do not no the cause of the fire and explosion. We are working to support BP and containing the well and we are conducting an investigation to determine the cause of this tragic accident. We will be dealing with the emotional consequences for some time to come we are deeply saddened by the loss of our team members and we are working closely with their families to assist them through this difficult period. Before I close my comments on this tragic incident, I want everyone to know the following. We are determined to find out what cause this incident which resulted in the loss of 11 lives, but believe that it is in appropriate to speculate on what may have caused the catastrophic failure of a cased and cemented well in advance of that investigation. We are determined to appropriately honor the 11 individuals who lost their lives in this incident. We will continue to live by the core values of Transocean, particularly the values of integrity and honesty respect…

Thank you, Steven, and good morning everyone. In the first quarter of 2010 we’ve generated net income of $677 million or $2.09 per diluted share, this compares to net income of $723 million or $2.24 per diluted share in the fourth quarter of 2009. First quarter net income was unfavorably impacted by certain items. Highlighted in our press release totaling on a net basis $42 million or $0.13 per share. After adjusting for these items first quarter net income was $719 million or $2.22 per diluted share. First quarter contract drilling revenues were down $105 million, compared to the fourth quarter of 2009 due to two main factors amounting to a total of $156 million. The first was incremental off contract time from stacked rigs with an adverse revenue impact of $78 million, the second was increases in shipyard and mobilization time which resulted in a further reduction in revenue of $78 million. Our accounting policies provide that pre-contract commencement mobilization revenues and the associated operating costs are deferred and then amortized to income from the start of drilling operations. In addition, our fleets revenue efficiency with 93.2% in the first quarter, marginally lower than the 93.5% achieved in the previous quarter. The declined primarily due to start-up related unplanned downtime, affecting certain new build rigs, as well as extended unplanned downtime effecting two Deepwater rigs operating in India. These reductions were partly offset by $49 million increase in revenue from new build rigs commencing or continuing operations in the quarter. Contract drilling revenues for the full-year 2010 are expected to benefit from the start of high dayrate contracts for floaters is shown on the average contracted dayrates are posted in our website. We will also benefit from the commenced in operations in 2010 of four additional Ultra-Deepwater newbuilds, as…

Thanks, Ricardo and good morning to everyone. I will move straight to various markets. The Ultra-Deepwater fleet utilization has improved for 2011 as a result of the contracting of two of our drill ships. The Deepwater Frontier for two years in Australia at 475K and extending the Enterprise for 18 months in the US Gulf of Mexico at 435K. Both of these contracts are very encouraging, given the small number of fixtures reported for Ultra-Deepwater market during the first quarter. We remain confident that we will extend our last three Ultra-Deepwater units available in 2011, despite the number of competing units in the market. The ongoing inquiries and tendering the US Gulf of Mexico and West Africa for Ultra Deep rigs could result in five to seven contracts thereby further tightening the Ultra-Deepwater market for 2010 and early 2011. Incremental demand is also expected from Brazil, as Petrobras will look to bridge the gap with the anticipated delivery of any Brazilian newbuilds. Future Ultra-Deepwater demand will continue to grow based on the recent drilling success in the US Gulf of Mexico, Brazil, Angola and Mozambique and Ghana and new areas of opportunity coming to market in the Red Sea and East Africa. With the solid worldwide resource base, we remain optimistic about the healthy future of the Ultra-Deepwater market. Our focus on growth opportunities in the Ultra-Deepwater continues with the Petrobras newbuild tender in addition to the Voyager and Arctic designed vessels. The Brazil tender process has been extended due to the complexity of restarting the Brazilian shipyard industry additionally Petrobras has changed the requirement of the Petrobras built units to a possibility of up to 28 units giving Petrobras maximum contracting flexibility. Turning to the Deepwater market, we follow through on our previous comments of capitalizing on the available…

Thank you and we will now be happy to take your questions.

(Operator Instructions) We’ll take our first question from Angie Sedita with UBS.

Steven, I certainly respect your request not to speculate on the cause of the accident. But if you could talk a little bit about in general how you see the industry could change as far as what could be asked on the safety side. There has been commentary on the acoustic system, whether they are reliable or not reliable. So any thoughts there, just what you see going forward is possible changes, besides obviously the insurance side for the industry?

I’ll qualify any comments I make with respected to your question on the basis that we are looking forward and speculating on the impact and there has been a lot of conversation in the media regarding acoustic controlled systems in that acoustic controlled system is just one more alternative means of functioning BOP and addition to the many means that already exist for functioning BOP, so in terms of adding additional flexibility or redundancy I’m not sure that once you consider all of the redundancy and flexibility that already exists that adding an acoustic controlled system changes that picture meaningfully. With respect to the other additional safety regulations or operational procedures or polices that might come into play knowing what we know today in the very early stage of our investigation I think it‘s just far too premature to speculate on what might come about as a result of what we learn during the investigation.

And then in the Q at least, there was a comment, if it could be clarified, somewhat of vague comment. You can come the details that it could be subject to various claims, costs, penalties for which we would not be indemnified. Could you give us an idea of what this could possibly be?

Well, in terms of the specific situation we’re talking about here with respect to our contractual relationship with BP. Under our drilling contracts for the Horizon, Bp has agreed to assume full responsibility for the costs and the liability of pollution and contamination and we believe that contract is clear there is a long history of contract sanctity in our industry; and we expect that BP will honor that contract. There is tremendous amounts of investigation and scrutiny being paid to this particular incident as it should by both our sales and the governmental agencies and what remains to be seen is the root cause of why a cased and cemented hole would have failed so catastrophically, so trying to speculate on that root cause, I think it’s premature and consequently trying to draw any conclusions about what impact that root cost might have I think is very, very early

We’ll take our next question from Scott Gruber with Bernstein

I want to turn to the jackup fleet. I realized there is a wide range of incremental investment needed to reactivate the idled rigs. But could you estimate for us the threshold level of investment beyond which most of the rigs can return to service? Meaning that most of the jackups need less than X amount to be reactivated?

I can give you a thoroughly good write down of that Scott, in our fleet of stacked-rigs there are eight of those that are still stack that would require reactivation investment less than $10 million, $10 million or less, but the other end of the spectrums there are handful five of them that will require reactivation expenditure in excess of $40 million and the remaining 12 are in-between that amount So the remaining 12 would be somewhere between 10 and 40 million.

Okay. Are they smoothly distributed between the high-end and low-end?

Yeah, that spans the spectrum.

Okay. Do you think during the previous cycle, was your rate of investment in the jackup fleet less than peers or does the idling of the equipment now simply reflect a different strategy of investing in the fleets?

Our rate of the investment, I would say, relative to our peer group is probably comparable. We focus a lot on operating standards and maintenance standards designed to keep the fleet competitive with respect to the worldwide fleet and the opportunities available in the marketplace. Whereas stacking of our jackups is a result primarily of where the jackups were. We were the largest operator in West Africa and the political uncertainty in Nigeria and the OPEC quota restrictions in Angola forced our customers there to reduce their activity levels and so they quit working and they laid down Transocean jackups when it came to the end of those contracts. It wasn’t a specific strategy designed to take capacity off the market, it was a result decisions being made by our customers.

We will take our next question from Scott Burk with Oppenheimer.

I know the Discover Enterprise is drilling a relief well for BP. I just wondered, is the other rig also transition rig and are they earning normal dayrates while they are doing that activity?

Actually the Development Driller III is the rig that has spudded the relief well and it is operating under its normal contract with BP. The Discover Enterprises is preparing to mobilize two of the location and may or may not undertake operations with respect to relief well or crude oil recovery, affluent recovering. And yet it too will be operating under its existing contract with BP.

Okay, so in terms of recovery, that means the rigs might actually be involved in putting this dome over the leak somehow?

That’s one of the alternative operations being contemplated for the Discover Enterprises. Discover Enterprise as you probably know has crude oil storage capacity on the vessel, it is fitted with the third party completion and separating equipments to be able to handle those well fluids. So it’s ideally suited be able to undertake these kinds of operations.

Okay. Can you give us pessimistic and optimistic case for the amount of time required to finish the relief well that Development Driller has already spudded?

Yeah, to answer a question like that Scott, I would just point you to the comments and official prospective that’s coming out of the Unified Area Command there in Louisiana. I believe the latest estimates are up to 90 days.

We will take our next question from Mike Urban with Deutsche Bank.

It may be too early to understand the market impact, but since the Horizon incident have you noticed any slowdown or delays in conversations with customers about picking up new deepwater equipment?

I’ll tell you that the outpouring of first sympathy and secondary support from our customers has been overwhelming and extremely appreciated. Like us they are anxious to understand what happened, so that whatever changes need to be made can be efficiently and swiftly implemented, but with respected to specific conversations about actual deepwater activity, I would say that there hasn’t been very much of a change at all, the customers continue to be interested in executing their plans.

Then I guess same kind of question on newbuild discussions. I guess you have been talking about a few things, in particular in one Arctic-class rig, anything to report on that front?

I’ll let Terry update you on when we have the first specific conversations.

Mike, the conversations continues, on Arctic we’re still in conversations with our customer. I would say there isn’t really anything to update at this point. On the Voyager we are seeing some interest in the smaller ship design and we’ve continued that discussion with several other customers. So, we continue the discussions and we believe that at some point that we’ll have something meaningful to report.

We’ll take our next question from Rob MacKenzie with FBR Capital Markets.

I wanted to delve more deeply actually back into the jackup market, which you guys illustrated some increased confidence in here. If you could tell me where you see the potential for incremental growth in tenders over and above what we are already seeing. So where is the next new source of demand likely to come from based on your conversations with your customers?

Terry will give you an answer to that one.

Rob, right now the interest from our perspective certainly continues in South East Asia. We were also seeing a little bit of pick-up in activity in West Africa, so those two areas we believe are going to continue to improve and certainly there is a lot of pent-up demand in Nigeria. So I think that those could certainly be optimistic areas that we could put more effort to work and/or extend our current fleet there. And then again writing on Pemex and their fleets that they currently head our and we did believe that there will be more tenders in Mexico. Also Middle East we understand there may be a few more requirements from Saudi Aramco, so I think that with this continuous price stability we are going to see these markets pick up.

My follow-up question is, I wondered if you can comment or share with us some of the precautions you might be taking on your other deepwater rigs. Not knowing exactly what happened with the Horizon, what precautions are you taking elsewhere to ensure you don't have a similar event?

I’ll tell you Rob, we haven’t really provided any specific guidance to the worldwide fleet and tell we know exactly what happen, but we’ve simple reminded our people that our comprehensive systems, our policies and procedures are traditional approach to our business, we think addresses specific aspects of well control and operational efficiency and safety and so we’ve just had continuing conversation and dialogue with our people around the world about those aspects of our business.

We’ll take our next question from Lee Cooperman with Omega Advisors.

Just a question really on the repurchase program, have we suspended the re program or do we intend to continue to pursue it?

Repurchases under our program are function of our outlook for the business, our estimates of the future cash flow the companies ongoing capital requirements and a lot of factors like that, the relationship between debt and backlog, general market conditions and other things and so as we continue to evaluate the potential impact of the Deepwater Horizon incident and how that might affect one or more of those factors that made determine what we ultimately decide to do with respect to the stock repurchase program but as it stands right now, we’ve not made any changes to that program.

Would the pace certainly slowed down? If I am tracking it right, we were seem to be buying back or I’m not saying you shouldn’t by the way, I just wanted as a measure of your confidence in the outlook and what’s going on, I wouldn't be surprised if you suspended it. That was the question I was really asking. Do you think you’ll step to the sidelines to see things settle out?

What we’ll do is watch out the situation with the Deepwater Horizon incident evolves and if it significantly influences any one of those factors particularly our estimates of cash flow or our outlook for our business and that would obviously have a significant impact on our thinking about the stock repurchase program.

We’ll take our next question from Roger Read with Natixis Bleichroeder.

I guess I’d like to maybe delve in a little bit on the op costs just to make sure I've got all the moving parts here. On the last call, $5 billion to $5.5 billion for the year, now $5.2 billion to $5.5 billion, so really all we have added in is the estimated $200 million of costs associated with the Deepwater Horizon event, right?

Ricardo is going to give you an answer to that Roger.

In fact just a small correction, I think the last guidance that we gave in February was between $5 billion or $5.4 billion, excluding of course any reference to Deepwater Horizon cost and if you take the range that we effectively tightened our guidance today excluding the Deepwater Horizon cost of $200 million and placed it between $5 billion and $5.3 billion and I highlighted in my comment, the factors that would cause us to coming at the high-end of the range or the low-end of the range.

Right, I got the factors, now I’m just trying to make sure what baseline was to start from there. Okay, and then maybe just a little bit on kind of acquisitions, dispositions side. I mean you've got some jackups that may cost a substantial amount to reactivate; I would imagine those rigs could be in the disposition category and then maybe if you could just comment, I know it is probably not foremost on your mind, but you are always looking for rig acquisitions on the higher end of the jackups scale or potentially deepwater. Just what you are seeing there on the bid prices, the ask prices on those units?

The cost to reactivate an asset Rogers is one factor we take into consideration and other factor would be the basic strategic quality of the asset itself. So it’s a high-end jackup, a high specification jackup even if it might cost the significant amount of money to reactivate it. We may not be necessarily inclined to sell that kind of asset. So in terms of looking at the strategic quality of the fleet we’ll continue to do what we have done over the last several years which is look for opportunities to dispose off non-core, non-strategic assets and similarly continue to look for opportunities to acquire strategic assets. There are conversations going on on both sides of that spectrum all the time, we get approached regularly about opportunities to dispose off assets and we are looking for opportunities to acquire asset.

Any comments, I mean have prices changed at all one direction or the other over let's say year-to-date?

I wouldn’t say that there has been a meaningful change in price expectation at all, either our price expectations for selling assets or the seller’s expectations for assets we might be looking to acquire.

We’ll take our next question from Ian MacPherson with Simmons.

I guess with regard to the Horizon related costs of $200 million; could you repeat what that entails and how it might breakdown into the respective elements and also provide any indication as to how it might impact the year timing-wise?

Ricardo, do you want to answer that?

I hesitate to give you a detail breakdown, I’ve given indication of the cost that comprise the $200 million, I mention the insurance deductable, the possibility of increased insurance premiums and additional legal fees is the main components. It’s difficult to tell at this stage at which point these costs will be incurred during the year.

Ian, we will start incurring those costs in the second quarter.

Okay. Switching to a question on the markets, part of your opening comments you talked about Petrobras's expected need to backfill their newbuild program with other rig requirements and I think that seems to me to be one of the biggest X factors for Deepwater demand over the next couple years. And I wonder if you might throw some numbers out there to kind of frame what you think that demand opportunity could be, given maybe a high and low case?

Really the speculation for us to throw a number out there, but we do believe that they do need incremental units and believe that their strategy has been to have open tendering inquires and then they select only a few rigs from that tender and then the last example I write it a couple of months and then I presented a new tender inquiry and it resulted in lower pricing, so we believe that they will follow the same strategy and another tendering inquiry maybe forth coming that we would be speculated on the number of units.

If I may to squeezing one more quick one, the $80 million in cost variability for this year that relates to the potential for reactivations above what’s already been disclosed, just to confirm, that is all jackup related and would it be fair to assume that that might correspond with say four to five jackups?

I wouldn’t make either one of those assumptions, Ian, it might relate to reactivation of Midwater Floater assets as well, what we are trying to do in terms of guiding the street or giving the street some additional information with respect to what we think drives the range, we have targeted $80 million or identified $80 million in potential reactivation costs that could drive us towards that upper end of that range, but that would likely be a combination of jackup assets and Midwater assets, difficult to be too precise about the numbers, but directionally that’s what we would expect would drive us towards to upper end of that range.

We’ll take our next question from Geoff Kieburtz with Weedon & Company. Geoff Kieburtz - Weeden & Company: Steve, I don't know to make a comment on these calls, but I just want to express my appreciation for your decision to field questions on the Deepwater Horizon under the circumstances. But with that, my questions are, one, are you aware of there ever being a blowout with a subsea BOP?

I’m aware of well control incidence on floating, drilling rigs and I can give you crisp numbers, but there are a couple of them that stand out in my mind on Transocean rigs over the history of the offshore drilling industry and I’m sure if we did a thorough deep dive into the record books, I’m sure we would identify well control events where hydrocarbons were allowed to get to the surface. Geoff Kieburtz - Weeden & Company: Okay

Non-obviously magnitude, but there have been well control events in past on floating-drilling rigs. Geoff Kieburtz - Weeden & Company: But we would have to say that, pretty exceptional circumstances?

I would say it’s a rare event, yes. Geoff Kieburtz - Weeden & Company: And I had been told down at OTC that BP had sent out a letter asking drilling contractors to verify the condition of their BOPs. I don't know what the specifics were. It seemed to be something to do with original manufacturer specifications. Are you aware of such a letter?

Yes, I can confirm that we have received the letter from BP and we are currently going though the exercise of responding to the questions that are addressed in that letter.

We’ll take our next question from Pierre Conner with Capital One Southcoast

I am sure Greg has passed on, just wanted to know that many of us are thinking of you and all your employees at this time.

Thank you appreciate that

Steve, I want to ask you about revenue efficiency and sort of the trends we are seeing, more so the Deepwater fleet. If I am looking at the numbers correctly for the first quarter, we're about 90%. What’s that target, it seems like the last couple of quarters have been fairly flat. Do you see some trends there? Do you have some projects underway to improve it?

We do have projects underway to improve it, we’ve put in place a teams specifically looking at the performance of the Deepwater fleet in general and significant effects underway to address where we think the equipment reliability issues are? The conventional Deepwater fleet in the first quarter of 2010 was affected by primarily two rigs operating in India, the 534 and Seven Seas, the 534 was a dynamic positioning issue and the Seven Seas was a BOP issue.

Okay. As a follow-up, just to ensure, as a result of the incident MMS is doing a number of rig inspections in the Gulf. And my assumption is that additional testing that they might require, that that would be at full dayrate costs and not a part of any downtime cost?

As always the testing is successful.

Right

As always the testing is successful and then the cost of meeting regulatory requirements and satisfying regulatory oversight is a normal part of the operation.

Okay. My follow-up is for actually Ricardo. Maybe I missed it. Any guidance on other revenues? In particular, integrated services revenues, any update from prior guidance that you had given in last quarter?

Pierre, there is no additional guidance and with regard to the last quarter.

Okay. I’ll stick with that. Thank you, gentlemen.

We’ll take our next question from Jason Mandel with Chapdelaine.

I just wanted to get a little bit of more clarity if possible regarding the progress in rolling over renewing the insurance policies that were set to expire on May 1, that was extended for a month given the current situation. Given that you have a $200 million estimate which includes expectations for higher premiums, does that mean you’ve made progress in sort of negotiating the rolling of the insurance contracts?

What I can tell you with regard to our insurance coverage is that, we review it every year within this timeframe this month in fact. We’ve posted that negotiating we got underwrite to renewal before May, 2010 through 2011. Clearly the Deepwater Horizon incident will have an impact on the level of premiums that we can expect, however, at this stage and the discussion is going to be fluid. Although we expect prices to harden, we also have to taken into account the opportunity to increase the level of risk that we retain in-house. This is difficult, but we’ve made on initial estimates, but it’s difficult to determine at this stag were it was under panel.

So as part of the discussions, and as part of your own decisions there, there is a consideration of possibly ending up with, in one way, shape or form, reduce coverage for certain types of events or cats things of that nature?

That is the possibility that I wouldn’t rule out.

We will take our next question from Walther Lovato with Passport Capital.

I’m sorry; my questions have been answered. Thank you.

We will take our next question from Waqar Syed with Macquarie Capital.

My question relates to the taxes. In your 10-Q you mentioned there are some additional investigations that have recently been started in Norway and in the U.S. Could you kindly provide us with some more color on those investigations?

I think they are well defined and articulated in the 10-Q. So, there is not lot more that I can comment in addition to what’s already in there in either case.

Okay.

In the case of Norway, as we indicated, we have received a notification of some criminal charges, but however this clarification doesn’t constitution in itself in incitement and now we can low and we are continuing to discuss issues with authorities there. And in the US we have yet to receive any formal notification of the assessment. And once we have received them, we will defend our position vigorously we believe that our position is clear and very defendable.

Okay. Then lastly just one general question, in various places in the disclosures you say that some event could have a material impact on the financials. What is your definition of material? What is the cutoff where you - revenue impact cut off where you say okay, now it is in the material range?

I think that’s a question that is very difficult to answer, Waqar, I think it depends on the circumstances and clearly the amounts involved and the financial situation of the company of the time that we estimate that decision.

Okay. Is it on a percentage of earnings basis? If it has a certain percentage impact that you start to call it material?

I really don’t think I can comment further in any informative way on that, Waqar.

Waqar, my perspective on that is, there is always two issues of material, I wanted to quantitative measure and that’s when the accountant spend a lot of time trying to articulate and mail down and the other one is a qualitative measurement of materiality and that’s how might the information impact a prudent investor in the company. And so it’s difficult to be too very crisp about that qualitative aspect of materiality, but that factors heavily into the conversations that was a bit difficult to give you a meaningful answer to the question.

We will take our next question from Arun Jayaram with Credit Suisse.

As you know, standard IADC contracts in the Gulf of Mexico indemnified drilling contractors such as yourself from the release of hydrocarbons and cleanup costs. My question is if the indemnity clause would limit your potential exposure to lawsuits brought off by fishermen, the tourism industry, etc, so, lawsuits resulting from the impact of the spill?

The way the contract language typically reads, we are indemnified from any expense or claim related to pollution from the well bore and we believe in this particular incidence the contract is pretty clear about that. As I said at the outset, our industry has a long history of contract [sign within] and we expect BP to honor that.

Okay, so I just wanted to be clear about that, the indemnity would, you think, limit your exposure to those types of lawsuits, should they be brought?

We think so, yes.

Okay. My follow-up question is, your policies or your indemnity clause are subject to there not being any form of negligence or gross negligence, I believe. And I was just wondering, Steven, if you could just comment on the documentation you have on the historical maintenance of the rig and how this is maintained, including the BOP. Do you believe that the rig was appropriately maintained where there wouldn’t be some form of negligence here?

I can appreciate, Arun, that everybody wants to know the answers to those questions and nobody more than and those are details that are being evaluated and assessed as part of the investigations, so I am just on prepared comment on that aspect right now.

Arun, this is Greg, just to further comment on your question about the indemnity, the indemnification of the contract is very broad.

We’ll take our next question from Jim Crandell with Barclays Capital.

Steve, I think you in response to question talked about the impact of the accident on your Company's business, could you speculate on what you think the impact of this on Gulf of Mexico drilling will be in general going forward here? And then really international deepwater as perhaps as far as what countries contemplate further regulations.

The (inaudible) of word there, Jim being speculate, and so I am, so this is my opinion and it is speculation. I think it’s difficult to overemphasize the importance of the energy industry to the US economy. The Minerals Management Service is the second largest source of federal revenues after the IRS and then when you consider all of the revenues that are collected by the local and state governments, the industry contributes a tremendous amount for the federal and state budget and then when you consider the contributions to the IRS by energy companies and by individuals employed in the energy sector, the amount of contribution to federal and state budgets is significant. The energy industry is a source of revenues, it’s a source of jobs and it’s a source of economic growth. I don’t think that the administration are going to act rashly about this, I think there going to be as thorough as the industry is in understanding what happened? What the root causes are, that caused this cased and cemented well to catastrophically fail and the industry and the administration will implement whatever regulatory requirements are justified in response to that root cause and the industry will continue.

Okay. My follow-up question, Steve, relates to another question about Brazil. You have, I assume, by this point submitted bids, or you will be submitting bids to build rigs in Brazil, which have not really built or don't have the capacity anyway to build many rigs, and where the costs are extremely uncertain. So it would seem that you’d have to have a lot more clarity in order to want to submit bids that would give you a good chance of winning. With that as a backdrop, how do you think this whole thing in Brazil will play out with the 28 rigs that are due, and I think 19 of them, I guess, scheduled to be bid on by contract drillers?

This is a very fluid situation, Jim, the bid submission date is recently been extended to early June and so we are continuing to work through the process of assessing all of the aspects of contemplating building up a rig in Brazil, where there is no existing rig building capacity to speak out. Assessing all of the risks in terms of delivery risk, cost risk, the performance of the sub-contractors and equipment manufacturers and vendors and trying to quantify all of those risks and properly allocate them in a commercial relationship with an appropriate shipyard partner and then present those in a form of a responsive tender to Petrobras, I think it’s going to be an interesting challenge, but the company is taking a thorough look at it.

You think this is something that because of its nature that it is unlikely that we would see any contracts awarded to a contract drilling company this year?

I am nor sure necessarily had abruptly rule it out, but I know the exercise were going through and the complexity of the challenge to the extend that and international drilling contractor can get comfortable with all of those challenges and present the responsive submission to Petrobras. I suspect this is going to take a fair amount of time for Petrobras to go through their evaluation exercise and then conduct all of the interpretive of negotiation exercise, before they ever get the contract signature. So if your question is really about the time frame of it, my guess is, there is going to be a challenge to get all the way through that process to contract signature in 2010. But I do believe that the international community of drilling contractors is paying close attention to it and the opportunity to grow in Brazil is an attractive opportunity and Petrobras are obviously driven by their desires to develop their resource and so both sides I think are going to be interested in participating and making it happen, but it is a complex and time consuming effort.

Operator the next question will have to our last.

Okay thank you. We will take our last question from Jeff Tillery with Tudor Pickering & Holt. Jeff Tillery - Tudor Pickering & Holt: Hi, just one quick question. Most of mine have been answered. As you went through the new fixtures in Ultra-Deepwater, you talked about the Enterprise 18 months at 435 and Frontier at $475,000. If I got those right, I guess, is my question? And then can you amplify on who the customer is for each of those?

Yes, you got the math right there, we extended the Deepwater Frontier for two years in Australia, and that will be with Exxon Mobile and then the Enterprise has been extended by BP for 18 months at 435 in the Gulf of Mexico.

Okay, thank you all for listening and Amy Roddy and I will be available to answer your questions all day.

That concludes today's conference. Thank you for your participation.