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

Thank you, Camille. Hello, everyone, and welcome to Transocean’s third quarter 2010 earnings conference call. A copy of the third 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 covering 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, our 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 would 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 or 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 and that concludes the preliminary details. And now I’ll turn the call over to Steven.

Thanks Greg. Hello, everyone, and thank you for joining us today. Our reported third quarters were $1.15 per diluted share. After adjusting for the items highlighted in our press release, the diluted earnings per share would have be $1.36. Before I turn the call over to Ricardo, to provide some additional insight into the numbers, I want to make a couple of comments about the company and our business. Our investigation into the events of the Macondo tragedy continues. Next week, we will review some of our preliminary findings with the Presidential Spill Commission. I expect our final report will be available late this year or early in 2011. We are currently finalizing our own conclusions and are waiting the results of inspection work on the Deepwater Horizon's blowout preventer. While the general public’s interest in the tragedy has subsided and the media have turned their attention elsewhere, I want to assure you that our focus is squarely on the execution of safe and efficient operations around the world, and the resolution of Macondo related litigation and public policy issues. During the third quarter, there were a few developments with respect to our shareholder approved distribution. As you know, the commercial register in Zug rejected our request to register the first installment of the par value reduction. We appealed this decision in the Zug administrative court and we are currently awaiting the court’s decision on our appeal. We expect to hear from the Zug administrative court sometime in the next couple of months. If we are unsuccessful at this level, we will evaluate our options including a further appeal at the Federal level. We maintain the position that we have met all of the legal requirements to register the par value reduction and make the distribution. Let me now make…

Thank you, Steven, and hello, everyone. In the third quarter of 2010 we generated net income of $368 million or $1.15 per diluted share, this compares to net income of $715 million or $2.22 per diluted share in the second quarter of this year. Third quarter net income was unfavorably impacted by certain items highlighted in our press release, totaling $65 million or $0.21 per diluted share. The two most significant items on an after-tax basis were, first, a $22 million loss associated with the early retirement of approximately $703 million of our Series B and Series D convertible senior notes, and second, additional expenses totaling $22 million incurred as a result of the Macondo well incident and comprised mainly of legal expenses, professional fees and increased insurance premiums. After adjusting for these items, third quarter net income was $433 million or $1.36 per diluted share, compared on an equivalent basis with $535 million or $1.67 per diluted share for the second quarter. Compared to the second quarter, third quarter’s contract drilling revenues were down $92million. The quarter-on-quarter reduction reflected the application of special standby rates negotiated with customers with four of our rigs in response to the drilling moratorium in the Gulf of Mexico with an aggregate impact of about a $118 million. We also experienced the full-quarter effect totaling $34 million of certain midwater floaters and jackups which were cold stacked during the previous quarter. Days out of service due to shipyards were significantly lower than the previous quarter, resulting in an $85 million increase in revenues, but this was partly offset by a total of $25 million in other activity and dayrate related variances, the most significant being the idling of the M.G. Hulme. Other revenues were a $104 million lower, primarily due to depressed activity levels…

Thanks Ricardo, and hello to everyone. Before I move to the specific markets, let me make a few general comments. The ultra-deepwater market remains active with a few new tenders coming to market in the contracting of several speculative new builds, taking some of the available supply of to market. Deepwater opportunities are becoming more visible than in previous quarters, the midwater market has been active, yet actual contracting has been light. However, we do expect some contract closures to occur within the next few months. And jackup tendering has increased for availability in early 2011, while actual contracting remains steady over the previous quarter. High-spec jackup requirements are increasing along with utilization and dayrate. Additionally, several long-term high-spec tenders are outstanding and should result in awards in 2010 and early 2011. I’ll now move to the various markets and we’ll begin with a discussion on the ultra-deepwater market. Activity in the ultra-deepwater market has been brisk with several contracts, albeit a few of short-term duration, being executed by the speculative new builds in various market. Even with a temporary near-term softness in the ultra-deepwater market, this last quarter alone resulted in several new contracts, all at market dayrates well above 400,000. If we combine this positive move with the efficient listing of the moratorium, the continuing success in Brazil and West Africa and the potential for incremental demand in the US Gulf of Mexico, we see improving customer sentiment and increasing demand moving the market in the right direction. As a result of this positive trend, we’re in advanced discussions on multiple fronts with our customers are our only available ultra-deepwater unit in 2011. Moving to Brazil, further delay is expected in awarding the Petrobras new build tender for up to 28 units, supporting our belief that additional incremental…

Thank you. And with that, we’re happy to open up the queue for your questions.

Thank you. (Operator Instructions). And our first question is from Jim Crandell with Barclays Capital Jim Crandell – Barclays Capital : Good morning.

Hi Jim. Jim Crandell – Barclays Capital : Steve, what is your interest in newbuilds today, both on the floater side and the jackup side?

Well, Jim, we’re always interested in growing our business. And so our marketing teams around the world continue to scour for opportunities that would justify us committing significant capital and growing the business, taking advantage to those kind of opportunities, so we’re always interested. I would say my – I wouldn’t say my interest has changed from anytime in the past till now, we continue to look for those kind of opportunity. Jim Crandell – Barclays Capital : Are you surprised over the surge in jackup orders recently and seemingly the growing activity around the yards for floaters?

Well, we have been talking about this emerging bifurcation in the jackup market for the last quarter or two. And so I think other companies in the space see the same thing and our trying to potentially get ahead of that by committing to build on spec, and that’s not something we’ve done historically in the past, and I would be real reluctant to change that aspect of our approach to the business. And so I think we will continue to look for opportunities that justify us committing to new construction. Jim Crandell – Barclays Capital : Okay. Don’t you – or do you think that the opportunities to sign up a rig with a three or four-year contract could be well out into the future?

Well, certainly in the jackup space Jim, we’re seeing tenders today that are requiring high-spec equipment and offering long-term contract opportunities. And so we’ve cast our marketing folks with fully exploring those opportunities to see if we can land one or two or four of them and embark on a construction program that would be supported by contracts. Jim Crandell – Barclays Capital : Okay. Thank you, Steve.

Next from Tudor Pickering Holt, we have Jeff Tillery. Jeff Tillery – Tudor Pickering Holt: Hi, good morning.

Hi Jeff. Jeff Tillery – Tudor Pickering Holt: Terry, could you talk on the ultra-deepwater side just – so you mentioned the Sedco Energy under discussions with, but could you just talk about kind of the range of terms available? The recent fixtures have been biased kind of nine months to two years. Are you seeing opportunities for three and four-year contracts emerge?

Hi Jeff. We’re currently – as I have mentioned in the notes, we’re currently in discussions with several customers about opportunities for this particular rig, and those are a little bit longer terms. So it’s not the short-term nature for that specific program. But if we look a bit further afield, we still have the Petrobras tender that’s open, that hasn’t been closed yet, and that’s certainly three years, and then you have some tendering in – open tendering in Angola and you also have certainly a lot of open ultra-deepwater tendering in Nigeria. So those fixtures are a bit longer term. So what we’re doing is to try and understand how this market is going to unfold here in the near term and we’re having a lot of positive conversation, and our customers are indicating that there maybe some incremental demand on the horizon. Jeff Tillery – Tudor Pickering Holt: Great. Just one question on the deepwater fleet; with half a dozen or so either idle or rolling out contract over the next four or five months, what does the rate environment look like for those rigs? As well as, I mean if you were in our shoes, do we assume two-thirds of those keep working, one-third, half? Just trying to look for some guidance on utilization for those rigs.

Well, right now, what we see is, we see that about 17 of the – if you look at the total fleet, so we think 17of the 57 are rolling over in 2011, and we do have some idle rigs right now. What we see is we are starting to see some more activity. We are starting to see some interest. And that – and then we are having some conversations with the customers. So I don’t know that I can give you a number that is really indicative of what you can take to the bank. But again I’m encouraged by a bit more of the conversations that’s going on and I think we’re just going to have to wait and see. Jeff Tillery – Tudor Pickering Holt: Okay, thank you very much.

Our next question comes from Robin Shoemaker with Citi. Robin Shoemaker – Citi : Thank you. Steven, I was wondering with respect to your standby agreements in the Gulf of Mexico, I think some of those were negotiated with a November 30th target date in mind. Is it your view that the force majeure claims are kind of behind us or could they potentially reappear after November 30th?

I’ll tell you Robin, Terry has spent the most time intimately involved with those contracts, so I’m going to let her give you some insight into what we think might happen. Robin Shoemaker – Citi : Okay.

Hi Robin. In these – when we sit down and spend a lot of time with our customers to come up with the solution of how we all work together through this event, we made some initial agreement, whereby the customers we would be on a special standby rate up until a particular date. And off the ones that we discussed, there’s four of them as I recall. And so we have a set standby where it goes to a particular date and then if the moratorium is lifted, then we go back to work. Well, as we know the recertification of the BOC has taken sometime. But in discussing with the customers on these four rigs, we are getting positive indications that they feel like they’re going to be able to get their permitting as soon as we get our BLTs recertified. So we think it’s a positive conversation, we do believe that the force majeure claims aren’t going to come back to the forth run, and that it’s going to take some time to get back to work as we all know as the permitting plays out. But we’re positive of being able to work some things out here. Robin Shoemaker – Citi : Okay. Steven, if I may ask you, there was talk earlier this year about an Arctic class drill ship which you might be able to build with a very long-term contract. But you haven't announced that and I wonder if that’s been put on hold or if that idea has been scrapped at this point?

I would say the appropriate characterization, Robin, is that it has been put on hold. The Macondo tragedy certainly caused the Canadian regulators to rethink their approach and some of their regulations and so they’ve gone into revaluation mode. The leases are still up there, the customers still have the work commitments to carry out and the initial terms on those leases are continuing to tick away, even though the regulator up there appears to be in a bit of a holding pattern. So we have the design and more prepared to embark on building that design if and when we get a contract that will justify building it. Robin Shoemaker – Citi : Yes. Okay, so it's more the Canadian Government indecision as opposed to a backing away from its customer I guess is the way you would describe it?

I think that’s the right way to think about it. We’re ready, the customers have the leases, and they’ve got the work commitment, so the work is up there. It’s just the question of when we get to a point that everybody feels comfortable going forward. Robin Shoemaker – Citi : Okay, thank you.

Our next question is from Scott Burk with Oppenheimer. Scott Burk – Oppenheimer : Hi, good morning. I had a couple of questions to follow up on kind of the Macondo spill. First of all, the costs associated with that have gone down the last two quarters. You did give some guidance on what you expect for next quarter, I didn't quite catch that number. And then I just wondered if – what’s going to be the run rate going forward that’s going to be in operating expenses for Macondo litigation?

Scott, this is Ricardo. I think the figure I quoted for the 2010 outlook was a $170 million. We don’t give guidance by quarter. The guidance of a $170 million is down $10 million from the $180 million that we provided you last quarter. And as with regard to 2011, I’ll be in a better position to communicate some guidance in that respect once we’ve – when we have our next earnings call in early in the next year. Scott Burk – Oppenheimer : Okay. And I guess what I kind of wanted to get at is there some kind of a structural change to your cost basis that’s going to stay there from the Macondo litigation or is that going to gradually get back down to zero over the next year or two? What are your thoughts on that?

The clear change that we’ve seen as the result of the Macondo well is in respect of the cost of our insurance cover. We’ve been able successfully to renew our insurance cover on the same terms and conditions as prevailed prior to the Macondo incident, but the cost is significantly higher. This been said, when you look at the operating cost on a daily basis and on a per rig basis it’s not going to result in a very significant output. Scott Burk – Oppenheimer : Okay, understood. But that insurance premium is not included in like the $27 million for this quarter, correct?

It is, yes. Scott Burk – Oppenheimer : It is, okay. Okay, and then I also wanted to ask about if you – in terms of the court holding up the payouts for the dividends, is that the main holdup to paying out the dividends? Or is there also – you also mentioned last quarter in agreement with the Department of Justice to get approval 30 days before you made any kind of payments to shareholders. Anything else – which of those two is kind of the bigger holdup in terms of actually paying out dividends or doing share buybacks?

The only impediment to fulfilling the shareholder approved distributing stock is the rejection by the Commercial Register and the Canton of Zug to register the first installment of the par value reduction. We have appealed that decision to the administrative courts here in Switzerland, and so that’s the situation we’re in right now. The discussions we have been having with the Department of Justice relate only to the shareholder approved stock repurchase program. Scott Burk – Oppenheimer : Okay. Okay, very good. Thanks for the clarification.

Next we have Doug Becker with Merrill Lynch. Doug Becker – Merrill Lynch : Thanks. Steven, you mentioned Transocean's investigation of the Macondo tragedy would be completed by early 2011. Do you have a sense for the timing of some of these other investigations? We have the BOP, the National Commission, and then the Department of Justice. Any sense on the timing of those investigations?

Doug, I have sort of directional sense on the Presidential Spill Commission and the joint MMS or BOE, Coast Guard, the Marine Investigation Board, the – I understand that the Presidential Spill Commission is targeting the release of their report in January. I understand that Marine Investigation Board has just delayed the release of their report. And I think they’re intending to release in March of next year. I’m not sure what scheduled the Department of Justice is on. Doug Becker – Merrill Lynch : Fair enough. And then I guess circling back to the potential of a par value reduction and some form of distribution. If the appeals are not successful, are there other avenues to go down or is that just kind of – does that just get removed as an option?

Fortunately, Doug, in – at the beginning of 2011, there is a change in the Swiss tax laws that will allow us to distribute cash out of legal reserve, what Swiss call legal reserve or additional paid-in capital, we’ll be able to distribute that without any Swiss withholding tax. And so as we get into 2011, that would open up that alternative as a possibility for us to follow through on our commitments to returning cash to our shareholders. Doug Becker – Merrill Lynch : And I assume that would be an avenue you would pursue?

Well, as we get closer to 2011, we’ll continue to discuss with our Board, the outlook for our business, the prospects for cash generation and cash needs, and we’ll evaluate disposition of cash, and certainly returning cash to our shareholders is always a component of those conversation. Doug Becker – Merrill Lynch : Fair enough, thank you.

Our next question is from Roger Read with Natixis Bleichroeder. Roger Read – Natixis Bleichroeder: Hi, good morning or afternoon as the case may be.

Well, it is afternoon where we are. Roger Read – Natixis Bleichroeder: If I could, since a lot of that stuff has been hit, what is your sort of strategy, thought process, view of your jackup fleet? I mean, in an industry that are obviously – we’re always moving towards higher spec, certainly we’re seeing that steady march on the jackup front. You’ve got a fleet with both, but I think it's fair to say it's a little more weighted towards the standard side. Where do we – where do you want to take that over the next couple of years?

We have – every time I get asked that question, Roger, I take advantage of the opportunity to talk about our commitment to the jackup business. There’s a lot of advantages that the company enjoys, because of our participation in that part of our business, including the size of the companies, the geographic distribution to the company, the leadership position we enjoy in a lot of the markets we participate in. The key customer relationship we have that we wouldn’t have it, we weren’t operating jackups in the opportunity to participate in those markets as those markets transitioned from shallow water activity to deepwater activity, and so we’ve remain committed to the jackup business. Now the real question I think you’re asking about is how do we maintain a competitive position in that jackup market. And we’ll do the same thing in the jackup business that we’ve done in the floater business. We’ll continually look for opportunities to high grade our fleet. We’ve done that in the past, where we’ve taken advantage of contracts that justify significant expenditures to upgrade and modify and improve the capabilities of the existing rigs. And if we’re fortunate enough in some of these tender exercises that are going on right now to land, some of these high-spec long-term term contract, that will justify us taking advantage of the opportunity to possibly build some new rig. Roger Read – Natixis Bleichroeder: Okay. And have you – and I don't think it's out there, but have you taken the advantage during this downtime to do any significant upgrades on any of the jackups?

Not that I would characterize as significant. We’re always looking for opportunities here and there to make modifications, I guess I would say that over the last year or 18 months, most of those modifications have been minor in nature. Roger Read – Natixis Bleichroeder: Okay, thank you.

Next we have Ian Macpherson with Simmons. Ian Macpherson – Simmons : Hi, thanks. My impression on your commentary for ultra-deepwater is that the market is –pricing is probably flattish for now for the foreseeable future. And if that’s call it a dayrate range of $400,000 to $450,000, do you agree with that and do you think that that’s probably projectable for a few quarters? And I wanted also to see if you have any color commentary on subletting dynamics currently and as you see them unfolding first half of next year.

Ian, yes, I would agree that the ultra-deepwater pricing right now probably is flat, but it’s been disciplined, it’s been disciplined, it’s has been holding above $400,000. But I also say that it will be impacted, although they could be some positive news if we see Petrobras come out for some multiple opportunities in Brazil. So I think that there is a dynamic that could change very quickly with that type of positive news. But all that being said, I think we’re going to see that in the next couple of quarters, steady as we go. Ian Macpherson – Simmons : Okay. Subletting?

Subletting, we have seen a couple of a sublet rigs in the market that has been absorbed. We are – have been in discussions ourselves with some of our fleet with customers who would like to assign us a couple of months here and there. And then we hear of other sublets that have been successfully taken on the market. So as of today, we really haven’t seen our customers being able to – they’ve been able to go ahead and forward contracts the free time that they have available. So it seems to be percolating along. I don’t think there is a lot of it out there, but we are seeing one-off in there. Ian Macpherson – Simmons : Okay, thanks. Steven, are you engaged with the new build inquiries from Statoil for the new Norway work horse new builds?

Yes, we have a long relationship in history in Norway, and so as Statoil started talking about renewing their fleet in Norway, we were right there with them exploring opportunities for us to participate in that, absolutely. Ian Macpherson – Simmons : Do you think that that’s something that is actually going to move forward or is it kind of a slow burn development?

I would characterize it as slow burn, but Statoil seems pretty committed to following through on what they have been talking about. Ian Macpherson – Simmons : Okay, thanks. Can I sneak in one more? Ricardo, will you help us with depreciation for Q4?

There is no change in the guidance that I had provided in the last quarter, Ian. Ian Macpherson – Simmons : Okay, thank you.

Next, we have Matt Conlan with Wells Fargo Securities. Matt Conlan – Wells Fargo Securities: Hi, guys. First, Terry, I just wanted to make sure that I heard you correctly. Did you say that your customers are suggesting that as soon as you get your rigs certified they can move forward with permitting? Is it really the rig certification that is the key component to getting permits issued?

It's the BOP certification. So what the – it's not the MMS anymore. The BOEM is saying that bring the rigs, the BOP certification with the application to repermit. So that’s how we understand the processes now and that’s what our customers are saying, but they feel like they’ll be able to move forward at that time. Matt Conlan – Wells Fargo Securities: Do they think that they can handle the requirements, the additional requirements that are being put on them, particularly the environmental requirements?

My experience, Matt, in taking with the customers is, as soon as NTL-06 came out, they started working on developing all of the analytical support and the environment justification and analyses that would allow them to comply with NTL-06. So it’s sort of a dual path for contractors to comply with NTL-05 and operators to comply with NTL-06. And as Terry said, the BOE have set clear expectations that you can’t even apply for your permit until you have both certification of the BOP under NTL-05 and all of the analytical and support documentation required to satisfy the requirements of NTL-06. Matt Conlan – Wells Fargo Securities: All right, I’ll move on. In your slideshow you show that the shipyard time, out-of-service time for the first half of 2011 is going to be decreasing significantly, particularly for the ultra-deepwater units. Is that an estimate that we should feel good about or is that something that’s likely to trend upwards when 2011 budgeting is completed?

I think it’s something that has the tendency to trend upwards Matt. As shipyards which are potential, but not – but are still subject to a certain amount of uncertainty crystallize. This being said, I mean 2010 is being characterized by a lot of work on the 10-year special periodic survey, and we’re not expecting that sort of activity in 2011. We’re also working very hard at present to as I indicated in my comments to recertify rigs and make them compliant to certain aspects of NTL-05 inroads that are operating outside the US, and I would see that peaking in the next six months. Matt Conlan – Wells Fargo Securities: Okay. Terrific, that’s very helpful. Thank you very much.

Thank you very much.

(Operator Instructions). Our next question comes from Kurt Hallead with RBC Capital Markets. Kurt Hallead – RBC Capital Markets: Hi, hello.

Hi Kurt. Kurt Hallead – RBC Capital Markets: I don't want to get into too much of the semantics here so my question is really based on curiosity. When you look at some of the contract and what you have in the fleet status with respect to these deepwater Gulf of Mexico rigs that are on standby rate and some of the terminology that suggests that if these companies cannot or are prevented from operating after November 30th they could potentially terminate the contract. To me it's pretty crystal clear that the lifting – the official lifting in the Gulf of Mexico moratorium does not prevent them from operating in the Gulf of Mexico and the fact that if they file their permits they could operate. But once again, I can – I’ve been in this business a while and you never know how the operators are going to act to try to get their cost down. So how do you guys think about that situation and how do you view it? And what kind of risk is there that come November 30th these operators opt not to get permits filed and use that as an excuse to try to get out of a contract?

Well, let me give an initial comment and then I’ll ask Terry to give you some more details. In my opening comments, Kurt, I talked about the strength of our relationships and I think that has served us extremely well in the last few months as we have had situations where the customers could have pressed a force majeure claim and hauled us and litigated the issue and really forced us to try and come to some extremely uncomfortable resolution. But you haven’t seen us to do that and I think that’s reflective of the strong operating history we have with those customers, with the great performance our people have delivered to those customers, and the fact that they really need the activity and the access to the equipment going forward.

I think Steven summed it up. I think that’s what I would also said if the strength of the performance of the folks out there working with our customers, they don’t want to lose the crews and they don’t want to lose those rigs. So I think that it speaks for itself. It’s been – as we all know it’s been very difficult for everyone who’s involved and certainly the industry for our customers to standby and say, “Hey, we’re in this with you, let’s try to get these rigs back to work.” I think it speaks volumes. Kurt Hallead – RBC Capital Markets: Okay. And then I’ve been hearing recently that the outlook for the ultra-deepwater market is definitely improving and that there is a possibility, very strong possibility that we could see a $500,000 a day contract sometime by the end of 2011. I know you guys are generally optimistic on the direction of the ultra-deepwater market. Would you generally agree with that price point and/or the timing?

Well, I would just make the – I think it’s much of what I had answered earlier regarding Petrobras. I think Petrobras is the swing and I believe again that they’re going to have a lot more incremental demand in the conversations that we’re having it’s been very positive. So I think that we’re going to be surprised by 2011. And I think it’s going to be a pleasant surprise. Kurt Hallead – RBC Capital Markets: And then typically that drags everything else up along with it? Is that typically correct or do think there is a structural problem with the deepwater market that would prevent that asset class from participating?

No, I think that we’re talking about the ultra-deepwater market I think that that’s certainly is, it could easily happen. I think there’s no pent-up demand out there that has been held back because of the short term and also the crisis of what we’ve been facing and the newbuilds coming online. But I do see a positive trend and again confidence from customers and positive conversation. Kurt Hallead – RBC Capital Markets: I’m sorry, my question was on the structural issue with the deepwater market. Would there be anything structural that would prevent the deepwater market from participating as well?

No, Kurt, I think the market dynamics would allow for 500 or an increasing dayrate environment and the ultra-deepwater market will certainly have a similar effect on the deepwater market as well. Kurt Hallead – RBC Capital Markets: Okay, great, thanks.

Our next question is from Jud Bailey with Jefferies & Co. Jud Bailey – Jefferies & Co.: Thanks, good morning or good afternoon to you guys.

Good morning, Jud. How are you? Jud Bailey – Jefferies & Co.: Good. I wanted to circle back on some of the commentary on the midwater and the deepwater markets. Terry, if I understood you correctly, it sounds like you think you have – you’re going to keep your four midwater rigs that are rolling here, in 2011 you are probably going to keep those working. Your prospects for the ones that are cold stacked, do you anticipate a scenario where any of those could be reactivated or do think it's more realistic those probably stay idle next year?

Well, Jud, we are with the number of opportunities and discussions that we’re starting to see now. It’s not long term, these are more of the well-to-well type discussions with our customers. We could see that we could reactivate one of the units. And we’ll just have to see how this plays out. But I think there’s going to be some new demand that comes on to the market in India that there’s going to be a little bit of a long-term nature, and I think we may have an opportunity there. But the four rigs I think it’s going to be well-to-well, and we’ll keep punching out there to keep these rigs contracted. Jud Bailey – Jefferies & Co.: Okay. So to summarize, it sounds like there is some short-term opportunities and you could reactivate a cold stacked one if you could land one of these longer term contract opportunities. Is that fair?

That’s exactly right. Jud Bailey – Jefferies & Co.: Yes, okay. And on the deepwater side you mentioned the 534 and the Hulme. Could you give a little more color about the opportunities there, just in terms of maybe geography and contract term that you are evaluating?

I’d hate to give up. There are still some secrets in the industry, not very many. But I’d hate to give that up. But I’d love to tell you, but I just can’t. Jud Bailey – Jefferies & Co.: Okay.

It’s – at this point I can’t, but we are a little bit optimistic in that – one of these is certain tendering opportunity in Australia, and the other is perhaps a direct negotiations, so that’s why I really can’t say. Jud Bailey – Jefferies & Co.: All right. Well, I don't want to get you into trouble on the call, so I will move on to the next question. On the cost of reactivation on some of the cold stacked units that you have could you remind us, and I’m sure the number may have gone up some, for your jackup fleet, the rigs that are cold stacked can you maybe update us on the range of cost of reactivating some of your cold stacked jackups? And while you are at it, maybe the cold stacked midwater rigs as well?

Yes, if you look at the jackup fleet, Jud, there’s about a third of those rigs that you could reactive for $10 million and less. There’s another third of the fleet that’s probably at the other end of the spectrum, probably $60 million or $70 million or $80 million to reactivate. And then there’s the third that’s somewhere in the middle of that, $10 million or $20 million or $30 million reactivation. Jud Bailey – Jefferies & Co.: Okay.

Again, it’s probably through of the midwater floater fleets. There are a couple that you could reactivate for relatively inexpensive and there are a couple that are going to require significant expenditure to come back out. Jud Bailey – Jefferies & Co.: Okay, that’s great. And if I could slip in one more. Steven, on the newbuild jackup side I just want to make sure, if you were to pursue a newbuild opportunity is your criteria for a jackup the same as it is for ultra-deepwater, roughly a five-year payback? Or would you accept a shorter term to maybe try to renew some of your jackup fleet?

Well, we’ve accepted shorter term on some of the floater newbuilds we’ve done in the past too. So our starting point is out of a position of preference, we’d like our five-year firm contract. But we’ll negotiate after that down to a four or three-year firm contract and we’ve done that on the floater side. We would be willing to do the same thing on the jackup side. Jud Bailey – Jefferies & Co.: Okay, great. That’s all I have got. Thank you.

Our next question comes from Lukas Daul with SEB. Lukas Daul – SEB : In ultra-deepwater fixtures that we have seen recently are you surprised by, one, the dayrate level, and second, that these operators are able to secure a contract because they certainly have a limited track record on the deepwater side?

Lukas, I would like to think that there has been some good discipline amongst the contract drillers in securing their ultra-deepwater fleet. They have economic returns that they have to meet also, so the speculators have got to remain disciplined and focused in getting their fleets put together and contracted. As far as their ability to perform, I think that’s what you’re asking, and the operators to have confidence. I think there’s – we have quite a few of our former folks that are out there with the some of the speculators, so those are some good folks and they’re able to put together some things evidently that the operators are having some confidence in. So I’m not terribly surprised, but I’m glad of the discipline. Lukas Daul – SEB : Okay. And when you sort of look at Brazil and you talk about the needs that Petrobras has, how many rigs do you think they should take to sort of turn the momentum in between the operators and the contractors so that operators maybe start thinking, well, it's getting serious again and maybe we should start contracting rigs? Are we talking about three, five, or eight rigs?

Lucas, I wish I had that magic, that crystal ball to be able to determine what that turning point is. But I think if you look at the developments that they have to do and the contracted fleet that Petrobras have, if you can do the math, you can see that they’re short of some rigs. So I don’t have a number for you, but I think that we’re taking a few more rigs off to market and the ultra-deepwater space is going to be a positive move. Lukas Daul – SEB : Okay, thanks.

Operator, we’d like to just keep the call open for one more question, and then we’ll have to end the call.

All right, thank you very much. Then our last question comes from Waqar Syed with Macquarie Capital. Waqar Syed – Macquarie Capital : Thank you for taking my call. Could you provide us with some guidance on interest expenses for next year?

Waqar we don’t normally provide guidance for 2011 until the first earnings call of next year. And that’s in part because we’re still in the budget process and our budget has not yet been approved. Waqar Syed – Macquarie Capital : Okay. And secondly, on Pacific Drilling, they have an option that they can sell their interest in a couple of rigs to you guys. Do you know what they’re going to do with that and whether they would want cash or shares?

We have absolutely no indication at present, Waqar, what their intentions are. Waqar Syed – Macquarie Capital : Okay. But that option is now exercisable; is that correct?

That is correct, yes. Waqar Syed – Macquarie Capital : Okay, thank you.

And it’s articulated in the Q. Waqar Syed – Macquarie Capital : Yes, thank you very much.

Okay.

All right, everybody. Thank you for your time. And if you have any questions, feel free to call Amy Roddy or me.

And that does conclude our call. We appreciate your participation.