Good day, everyone. Welcome to the First Quarter 2011 Results Conference Call for Transocean Ltd. Today's conference is being recorded. At this time, for opening remarks and introductions, I’d like to turn this conference over to Mr. Gregory Panagos, Vice President of Investor Relations and Communications. Please go ahead, sir.

Thank you, Anna. Good morning and welcome to Transocean's first quarter 2011 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 first average contracted dayrate by rig type, out of service rig months, operating and maintenance cost trends, free cash flow backlog and debt maturities. The Quarterly Toolkit also has four additional financial tables for your convenience covering, first revenue efficiency and 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, Executive Vice President, Global Business; 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 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. I’ll now turn the call over to Steven.

Thanks, Greg. Hello, everyone, and thank you for joining us today. Our reported first quarter earnings were $0.96 per diluted share. After adjusting for discontinued operations and the other items noted in our press release, diluted earnings per share would have been $0.53. This compared to $0.67 for the fourth quarter of 2010. Adjusted earnings per share were down $0.14 sequentially, primarily driven by an increase in our effective tax rate partially offset by lower depreciation and increased interest income. Revenues and cost, with the exception of depreciation, were essentially flat quarter-to-quarter. Ricardo will walk you through the change in our effective tax rate and the details of our financial results shortly, followed by Terry who will provide some color on the market. First though I want to make a few comments. Looking at the market globally, sustained high crude oil prices are contributing to increased interest across oil rig categories. During the first quarter, we were pleased to see this increased interest manifest itself and our ability to sign $2.5 billion worth of contracts, which Terry will talk more about shortly. Driven primarily by Petrobras’ urgency to fulfill their immediate needs along with increased tendering activity globally, we’re beginning to see the near term availability of the ultra deepwater rig diminish. It’s also very encouraging to see that we’re already discussing contracts that would commence in 2012 and beyond. The deepwater and mid-water markets which had been soft until recently are beginning to show signs of a pick up in the second half of this year. While the deepwater market may be in the earlier stages of its ramp up, mid-water tendering pace is noticeably accelerating. As the supply tightens in both the ultra deepwater and mid-water markets, we expect to see the deepwater market follow suite and tighten…

Thank you Steven and hello everyone. As Steven has mentioned we reported net income of $310 million or $0.96 per diluted share for the first quarter of 2010. Excluding the four items highlighted in our press release, which I will discuss in more detail. First quarter net income was $0.53 per diluted share compared to $0.67 per diluted share for the fourth quarter 2010. Compared to the prior quarter, adjusted first quarter 2011 results were generally flat with a few exceptions. Our annual effective tax rate of 19.3% mainly reflects the change in the mix of operating locations. In addition, we recognized a tax benefit in the fourth quarter of 2010, which was the result of the redeployment of certain rigs. The change in the annual effective tax rate alone, which totaled $88 million accounted for a $0.28 drop in adjusted earnings per share in the first quarter. Partially offsetting the higher annual effective tax rate was a $27 million decrease in depreciation due to the impact of the prior quarter impairment charge against the carrying value of the standard jack up fleet. As highlighted in our press release and in line with our continuing efforts to disposal of non-strategic assets, we have classified as discontinued operation, the oil and gas properties of Challenger Minerals, our exploration and production business as well as our Caspian Sea contract drilling operations. The $176 million of income generated by these operations in the quarter was due almost entirely to the gain on sale of the subsidiary earning the Trinidad 20, our sole rig operating in the Caspian Sea. We expect to close on the sale of the Challenger Minerals properties in the second half of this year. We do not expect recurring net income in future quarters to be significantly impacted by the…

Thanks, Ricardo, and hello to everyone. While I cover specific market, I would like to make a few general comments. As we stated in our previous conference call, we believe that 2011 is going to be an exciting year. It has certainly been successful thus far for Transocean from the contracting perspective as we had executed contract worth over $2.5 billion since the beginning of the year and we expect more positive news to follow as we move through the next quarter. With the additional backlog, we have reversed the downward trend that we have experienced since the fourth quarter 2008. For tendering pace in worldwide ultra deepwater market over the past quarter has been brisk. Previously available ultra deepwater units have been snatched up by customers who are anxiously secure capacity for the upcoming programs. The rush to contract available fleet has been nurtured by the stable and now raising commodity price coupled with Petrobras’ urgency to fulfill their immediate needs. We expect more awards to be announced shortly as the 2011 supply of ultra deepwater unit gets fully committed. Even in a timeframe as near term uncertainty in the U.S. Gulf of Mexico. Contracting activity in the deepwater market has been light, but we expect to see more opportunities in the second half of 2011. While we are seeing some idle capacity in the near-term especially for the Motley, the lack of available ultra deepwater units should improve the deepwater market going forward. The mid-water market outlook for the second half of ’11 is also positive, as tendering activity has been very highly in the U.K, Asia, India and West Africa with our available mid-water fleet being there on multiple tenders. In the end, high-spec jack up market continues to improve resulting in anticipated demand outpacing supply for…

Thank you. Anna we’re ready to open up the Q&A in taking questions.

Thank you. (Operator Instructions) Our first question comes from Roger Read with Morgan, Keegan. Roger Read – Morgan, Keegan & Company, Inc: Yes, good morning.

Good morning, Roger. Roger Read – Morgan, Keegan & Company, Inc: Good afternoon I guess in case.

It is afternoon in (Inaudible) Roger Read – Morgan, Keegan & Company, Inc: Yes. They will spread out. If you look at this, number one, thanks for the in depth review of the market conditions here, I was trying to reconcile one thing one of the other calls earlier in this earning season that was talk away contract tender in Brazil that they ended up pulling the high spec equipment bid on it yet it was a they were happy with the standard type deepwater rig lets say, I suppose to ultra deepwater. And there were a lot of rigs that bid on that contract, I’m just trying to reconcile that with what appears to be a much more tighter market as you all are looking at, kind of what may be it was a timing issue when that contract began but trying to put the two pieces together there?

Hi Roger, this is Terry. The 1,500 meter tender was cancelled though it has several reasons for that but I think basically Petrobras wanted to test the market and wanted to see where the market rights are going to be offered, and I believe that they saw that at this time the rights that were offered were higher than their expectation. And then there was some procedural issues also that just to say that they’ll be back in the market and we’ll see how they put the new tender forward. It could be a reduction in the rate, I mean, I am sorry, a reduction in the water debt and maybe a reduction in capability. But we’re hearing both things, we’re hearing it could be a higher spec, it could be a lower spec. Again the important thing to remember is they’re going to come back out for a tender, we’re going to take two more rigs off the market. Roger Read – Morgan, Keegan & Company, Inc: Okay, thanks. And then the other question I had was on the operating cost side, the last conference call the range was given, it’s in your higher end of the range, assuming you bring rigs back into the market. Obviously that looks to be the indications here. Is that the only thing driving that in the drilling management cost, the only thing driving into the higher range or is there anything else? I mean other than the items you mentioned Brazil and so forth, it's pushing on the higher cost side?

I think that, I gave a pretty comprehensive list of the items that will impact our operating expenses. As I said earlier it’s largely as a result of the additional shipyard time and some wage pressures. We will see potentially, depending on where the rigs are deployed geographically, some cost upside, while the cost increases as a result of the location where they likely to operate. But the main drivers are the ones that I mentioned in my prepared notes. Roger Read – Morgan, Keegan & Company, Inc: Okay. Thank you.

Thank you. Our next question comes from Mike Urban of Deutsche Bank. Michael Urban – Deutsche Bank: Thanks, good afternoon.

Hello, Mike. Michael Urban – Deutsche Bank: I wanted to dig into your comments about some of the kind of the differed; I guess divergent trends in the floater market. It makes a lot of sense; you’re seeing that tightness in the ultra deepwater market. I was a bit surprised to hear that the mid-water market, at least from a tendering standpoint, kind of tightening so rapidly without really commensurate improvement in deepwater. I would normally kind of think of it as a progression downward from a specs standpoint. What’s driving that dynamic there?

Good morning, Mike. As we look at what's happening in the market, a lot of the mid-water opportunities, the demand has been there. But now with the high price, the demand is really coming out very strong. And I understand what you're saying, you're saying that the deepwater competes down into the mid-water. And until that market tightens, we’re still going to see capacity in the mid-water arena. But we can see with the buildup that in mid 2011 that we believe we are going to see a lot more opportunity. So that means that the market tightens completely, now. I think we’ve got a lot of capacity before we get to that stage. But each asset class has to move up through where it is fit for purpose. So the Deepwater has to move back to working in the Deepwater. And then the Ultra-Deepwater has to tighten a bit more so that each asset class is working in the segment that they were build for. So that’s what we see, the increase in demand is pretty prolific and we expect again to see a positive picture by mid 2011. Michael Urban – Deutsche Bank: So what is the function of kind of where the projects are located for like capability and water depth standpoint that’s kind of the driver?

Yes. Michael Urban – Deutsche Bank: Okay. And then, as you do see the market tighten up, how would you view un-stacking some of the capacity that you have stacked right now and kind of the timing of that? Do you still need to build up a significant amount of backlog on the existing rigs, do you need to see pricing go up, how you’re thinking about stacking that item capacity right now?

In both Ricardo’s comments and Terry’s comments, we indicated that we’re in the process today of shipyards related to reactivation. And so, as an incremental project comes in we look at the opportunity in terms of the economics that might justify reactivating additional capacity. So we’ll continue to do that, Mike. We think demand is going to tighten. We think that the outlook is good and we think that should present opportunities to us to think about further reactivation. Michael Urban – Deutsche Bank: Okay. Great. Thank you.

And next we’ll hear from Scott Burk with Canaccord. Scott Burk – Canaccord Genuity: Good morning. Can you hear me?

Yes. Scott Burk – Canaccord Genuity: Hello?

How are you? Scott Burk – Canaccord Genuity: Hey. How is it going? I want to also ask about the Midwater rig to bring, taking out the stacking. Previously you’ve given some ranges about how much it’d cost for a certain percentage of your fleet, although I think those are more focusing of your Jackup fleet. Can you talk about how much would cost to bring out the remaining five or six rigs that are currently stacked in Midwater fully?

But then, Scott, the way I’ve described it for the Jackups is probably analogies to the way I would describe it for the Floaters. That’s probably a third of those rigs. One or two of those rigs could come back well relatively easily, probably $30 million or so in terms of reactivation expenses. There’s probably another one or two that would cost in excess of $60 million or $70 million and there is a couple that we are not contemplating, reactivating because the costs are simply prohibited. Scott Burk – Canaccord Genuity: Okay. And when you look at the rates that they are receiving, this 210,000, 260,000 down is to reactivated rigs. Are those the kind of rates you anticipate towards the second half as this demand continues or do you see up sight to those rate levels?

Yes, Scott. This is Terry. What we’re seeing now, it’s been stable for quite some time. We are seeing a little bit of movement in the U.K. market, but you would expect that because it is extremely tight. So I think stable – I’d say stable to improving. We still got out some capacity out there and that’s how I would view it. Scott Burk – Canaccord Genuity: And then on those two rigs that just came out of stacking, the contract was relatively short, if I’m looking at the right ones. I assume that you anticipate some additional work after those contracts are up or you wouldn’t bought them out of service, what do you anticipate after this current contracts?

Well, there is numerous opportunities out there that we’re currently tendering. And then if you look at India alone has got 12 rig years. Those are four separate opportunities. And I like our chances and there is quite a few more opportunities out there. So I think that with given the active tendering pace we like what we see. Scott Burk – Canaccord Genuity: That sounds terrific. It is very good color. And then one other question about revenue efficiency, if you look back at 2008, revenue efficiency was almost 95%. With the various levers that you guys are doing, the increasing inspections and what not. Can you get back to those levels of revenue efficiency or should we anticipate that first quarter levels are kind of be where we stay.

Scott, I will be pretty frank with you. I’m not happy with the first quarter revenue efficiency particularly in Deepwater and Ultra-Deepwater. And I have said I think we can get back to historical levels. We are already there with the other asset classes with the exception of Deepwater and Ultra-Deepwater. And I think the programs that we have in place, the efforts that our people are going through, I think are going to help us return to that historical level of revenue efficiency. Scott Burk – Canaccord Genuity: All right, thanks.

Thanks, Scott.

Thank you. Our next question comes from Ole Slorer with Morgan Stanley. Ole Slorer – Morgan Stanley: Yeah, thank you, thank you very much. Sort of little bit more on the structure of the company. We are starting to see quite a few, I wouldn’t say stock ups, but fuel play Deepwater companies. How do you see your company competing and positioning itself over the medium-term given your array of assets from kind of the low-end to the very, very high-end. Do you see any benefits in potential during what you did with quite a few years ago and spinning out some of the older assets and may be leaving them as an asset player on the really strong market while focusing the core company on the more narrow asset base, and more modern asset base?

That is an excellent question. It speaks to strategy we have been talking publicly about for quite awhile now. We are focused on increasing our exposure to high spec assets. Both high spec floaters and high spec jackups and decreasing our exposure to low spec of commodity class assets. So, we’ve just come out of our 10 rig ultradeep water new build program and I really like all position in the ultradeep water and the high spec Floater fleets. We’re in the process today of building three high spec Jackups, so we’re finding opportunities. Our marketing people are doing an excellent job in finding opportunities for us to reinvest in high spec Jackups in a disciplined manner. We’re going to continue to look for those kinds of opportunity. So, I think the company has done an excellent job in pursuing that increased exposure to high spec assets, for Jackups and Floaters. We have seen a couple of asset sales in this first quarter that have continued to execute on our stated strategy of decreasing our exposure to commodity class assets. We’re going to continue to do that. We will look at one by one asset transactions and we’ll look at packages of assets if we can put all like that together. And if we’re successful and I think we would be, if we’re successful in executing on this strategy I really like what would be. Ole Slorer – Morgan Stanley: I saw that you have a very strong modern core. My question was more if you look at the average please you’ll have a nice profile and average age profile which will be very different to say some of the more recent entrance into the market. Do you see any benefit in may be doing what you did with the TODCO and separating Transocean into two units?

Well, you have to bare in mind that the TODCO transaction was a geographic transaction, what that did is it got us out of the shallow water Gulf of Mexico market. And we’re not in that market today, so we might consider disposing the package of low spec assets similar to the deal we did with TODCO. But the end result of that deal would not be to get us out of the Jackup market. I intend to stay in the Jackup market and remain competitive, that’s why we’ve got the three new build constructions projects going on today. Ole Slorer – Morgan Stanley: And I think that makes a lot of sense, but my question was whether you’ll you’d see (inaudible), which has been the older assets to shareholders and give them may be an opportunity to participate in the tail end of the bid?

Yes, its one of the alternatives we’re considering. Ole Slorer – Morgan Stanley: Thank you very much.

Our next question comes from Scott Gruber with Bernstein. Scott Gruber – Bernstein: Yes, good morning. The internal equipment review and upgrade program appears, just there’s so many key to improving revenue efficiency number. I assume this program that you’re executing today which was started mid point of last year was an enhancement of your legacy review process. I think you said too the timing of the step up of risk is just in reaction to the drop in revenue efficiency or has there also been a marked increase in the equipment performance standards of clients and if so does this in your reflect the new rigs that have come into the market over the past few years?

I don’t think it’s necessary the reflection of the new rig. I think that’s an interesting question. We started down the path in challenging ourselves on our revenue efficiency a year and a half ago, and in response to some trends we saw as we started to deliver our Ultra-Deepwater new builds we recognized that the conventional component of our deepwater fleet. The performance there started to deteriorate. So we stepped up our gain initially in response to that. I think the more stringent industry expectations are more our reflection of the post Macondo world we all operate in rather than necessarily a result of the new equipment that come into the marketplace. Scott Gruber – Bernstein: Okay that makes sense. And then during this enhanced review process do you expect your maintenance CapEx here to rise materially. I think it’s just made around $650 million today?

Yeah not materially, no. We suffer a little bit in 2010 in the Gulf of Mexico fleet in terms of an increase in capital spending, so that’s because we had to bring significant number of rigs to a new standard almost immediately. So on the Gulf of Mexico fleet in 2010 I think we spent an incremental $25 million over what we had anticipated. I don’t see having that kind of an impact over the global fleet because we’ll able to do it kind of more on our own timeframe rather than the acute timeframe constraints we are under in the Gulf of Mexico in response to increased regulatory requirements. Scott Gruber – Bernstein: And does the incremental cost spent virtually over at this point and is that $650 million figure fair for this year in terms of maintenance?

Scott this is Ricardo. We kept our capital expenditure guidance unchanged for this year and it takes into account any incremental expenditures associated with the up price that Steven was discussing. Scott Gruber – Bernstein: Okay, excellent. Thank you.

Thanks, Scott.

Thank you. And next we’ll hear from Robin Shoemaker with Citi. Robin Shoemaker – Citi: Yes, thank you. Steven, I just want to go with the projection for the out of service retirement in the second half of the year which is quite low, and of course the first and second quarter got revised upward very substantially from what you estimated at the beginning of the year. For good reasons, it sounds like for good reasons and bad reasons and reactivation of rigs of course being the good reason, but what’s the possibility that your current estimates for the third and fourth quarter meaningfully increase either for good or bad reasons?

Robin, hello, this is Ricardo. I’ll attempt to answer your question there. I think this is a good one. And the best way of expanding it is to give you an insight into the methodology that we apply in determining whether or not to include a shipyard in our out-of-service time, a project in our out-of-service time data that we reflect in our fleet status report. Essentially we have to have a very high degree of confidence that that shipyard is going to be executed upon and often that’s driven by the renewal or the confirmation of a contract. In exceptional cases, we make a commitment to take a rig into shipyard even without the necessary contract coverage and you can detect those items by reviewing the fleet status report. But in general, we don’t reflect shipyard that we are still considering whether or not to execute upon. As a result of this approach, there is a tendency all the time for shipyard out-of-service periods to increase in the out of quarters that we display on our (inaudible). Robin Shoemaker – Citi: Right. Again I guess especially at a time when you are reactivating idle rigs.

That is correct, Robin. So that clearly reactivation would be driven by contracting opportunities and we have to have a high degree of confidence that those opportunities will crystallize before we commit to the shipyard. This one is required. Robin Shoemaker – Citi: Okay. Then my other question was on Brazil. Could you update us on the statutory of the 3,000 meter? I understand that was not a tender, but kind of a market inquiry and you had previously offered this Sedco Energy and express under the 1,500 meter tender. But what is your expectation on the timing of the 3,000 meter?

Really here it could be today or it could be next week to have a weekly board meeting to a previous type of thing. The 3,000 meter was a direct negotiation type tendering process to where, it’s not their formal protocol. The 1,500 meter was the formal protocol. So it’s an opportunity in the expression of interest to be able to be a bit more flexible. The 1,500 meter protocol requires that you comply 100%. And with our two rigs we knew that we were not going to be compliant because of being able to get through one-way items. We couldn’t deliver the rig in the timeframe, but we wanted to participate anyway and show our interest in Petrobras. We expect to be able to participate in the next tender that comes out. Robin Shoemaker – Citi: And your rough estimate of the number of rigs they could hire imminently under this 3,000 meter inquiry?

Well, I mean, I said in my notes, the market is heavy on the rumor side same as three. Robin Shoemaker – Citi: Okay.

So, we’ll see if that’s true. As far as putting the number out there, what we believe that they could contract for this year. In the last earnings call I said four to eight. So I hope its more, but we'll see. Robin Shoemaker – Citi: Okay, thank you.

Our next question comes from Collin Gerry with Raymond James. Collin Gerry – Raymond James: Hi, I just had a follow-up question on the, a kind of more strategy question. Steve, it seems that it’s obviously been interesting last few years and the company is at a point now from a balance sheet perspective, certainly more dry powder. A more bullish outlook on the market, and still a very disciplined approach I would say to new builds. So I guess if we think about all that put together, if you were to monetize some assets, what do you do with the cash? If you are not going to be building new assets, should we think about more dividends or is it acquisitions? I mean, just more strategic how do we hydrate the fleet further as it relates to kind of your cash situation?

So this is a kind of two questions embedded in that Collin. One of them is how do we think about cash and whether the cash comes from asset sales or from operating cash. We think about it as cash and we take a disciplined approach to how we make use of that cash. Our first preference is to reinvest in our business. So we will continue to challenge our marketing people to help us find opportunities that make sense. And I think so far they have done an excellent job this year in identifying strategic opportunity for us to redeploy capital in our business. We are going to remain disciplined about that. We won’t build on specs. We look for opportunities to add to our high spec position in routers and jack ups. And I think we will be successful in doing that. Second priority, when we think about our cash is the quality of our balance sheet. We want to remain in investment grade quality balance sheet. We've done a good job at that and we are comfortable in our position particularly as it relates to have a rating agency think about us. Third, alternative then is to give it back to the shareholders. And I think we’ve demonstrated a historical track record of discipline in doing that. And so that’s the way we think about it going forward. Collin, we want to reinvest in our business. We want to maintain an investment rate quality balance sheet and we want it to be shareholder friendly and how we think about our cash. Collin Gerry – Raymond James: Okay. And maybe just drilling down a little bit more. Seems to me in your disciplined approach and not building on spec, you’ve been very adamant about that. And the market as it stands today based on [what] it seems to be that building a rig is done on specific markets, not really offering a lot of contract back to new builds. Do you anticipate that changing over the next year? And if not, does that put you in a position where you’re more focused on the M&A market from a new rig point of view?

Well, I think if you I had this conversation six months ago, Collin, you probably would have told me that it would be impossible to get a contract that would support building and Jackup. There’s just too many Jackups available, too many Jackups being build on spec and yet our marketing team was successful in landing opportunities for us to do that. Broader level we want to rule out the possibility of our talented marketing team who’ll find more opportunities for us to do that. Collin Gerry – Raymond James: Okay. That’s very helpful. Then the last one for me. It seems we got OTC going on, and I think some of the scuttlebutt coming out of it is renewed vigor on the BOP restrictions and possibly that’s kind of making its way across the globe. You have seven rams on the deepwater stack. I guess my question is, how many meaningful is that to the industry? If we think about the industry, there’s a lot of old assets out there that may or may not be able to handle that capability of a BOP. And if you see a lot of these customers have standardized on that type of BOP, is there a tightening mechanism there? Is there an obsolescence factor in some of the industry’s older rigs that can’t handle the new BOP standards?

Collin, I hear a lot of discussion about that and I’m always a little perplexed because of the historical creativity of this industry. If you come out and said for any rig to operate on a well it’s got to have x number of ram heated on the well head. The industry would figure out a way to get that done with the minimal amount of incremental capital, without obsolescing a $200 million hull. So I think the industry will apply their creativity we’ve always applied in figuring out how to accomplish the increased expectations. Collin Gerry – Raymond James: That’s excellent color. Thank you on both questions. Thanks.

Thank you. Our next question comes from Kurt Hallead with RBC. Kurt Hallead – RBC Capital Markets: Hey, good morning.

Good afternoon. Kurt Hallead – RBC Capital Markets: Or good afternoon.

I’ve said before. Kurt Hallead – RBC Capital Markets: Sorry.

I think we lost Kurt.

I do show him still connected. Kurt, are you still on the line?

I think we lost him.

Yeah.

Maybe we should go to the next question. Kurt Hallead – RBC Capital Markets: Hi, hi. Sorry. Hey, sorry about that. Hey, I’m here. I don’t (inaudible).

Welcome back. Kurt Hallead – RBC Capital Markets: Archives have technical difficulties here. Let me try that again. On the Gulf of Mexico, question is how many Ultra-Deepwater rigs do you have currently running, and out of the rigs that you do have running, how many are at or near the contractual day rate.

As I scramble for the slide, Kurt, I’ll have to do this in my memory but I think well they are all on a rate and most of them are on operating rates and the standby rate which is very close to the operating rate and I think that two are on, no I think that’s it. Yeah, that’s it. Kurt Hallead – RBC Capital Markets: How many, so is it 10 or 13. How many rigs you have on Ultra-Deepwater now actually running in the Gulf of Mexico, actually operating?

Kurt, today there are 12 Transocean rigs in the Gulf of Mexico, only one of those is a Midwater rig. The (Inaudible) is the only Midwater rig left in the Gulf of Mexico, Transocean. Kurt Hallead – RBC Capital Markets: Right. The Ultra-Deepwater rig that you do have I guess I’m trying to get it, how many are actually drilling right now. How many are actually working as we speak?

One of us is going to have to get back to you with the answer to that question. Kurt Hallead – RBC Capital Markets: Okay thanks. I appreciate that now. You didn’t’ mention Terry earlier that there somewhat I couldn’t pick it up exactly, how many permits did you say were waiting approval right now in the Gulf of Mexico.

36. Kurt Hallead – RBC Capital Markets: 36 are waiting approval. Interesting. Okay. And now we have heard some scuttlebutt about there being potential risk of environmental losses to hold up the permits that have actually been approved today and hold up any additional permits that have been that maybe coming down the price. How do you guys assess that risk? Do you think it is a real risk? Do you think it is one that has low probability? Can you give us some color around what are your thoughts are?

Kurt, I can only give you anecdotal color on that as we are not directly involved in the permitting process. We support our customers in their attempts to secure permit. So all I can tell you and maybe Terry can add to my comments, all I can tell you is what the customers tell me which is they anticipate that there will be some environmental challenges to the permitting process going forward. But they don’t consider it to be detrimental to their long-term business model in the Gulf of Mexico. They think it might introduce some incremental administrative burden and some incremental frustration, but not a significant challenge to their long-term business. Okay.

I agree with that Steven. If we look at the 2011 and the customer base and the progress that they have queued up, they are still comfortable that they are going to be able to build continuous work to get through 2011 and that maybe the neo normal or at least this is what we hear from the customers. We’ll have a neo normal by the end of the year so that there is a normal cycle that they are going through. But right now they seem optimistic and we even received a permit for our older mid-water fleet, I mean our older mid-water floater Amaron. So we’re heading back to work with that one which we are really encouraged about that. Kurt Hallead – RBC Capital Markets: Okay. I appreciate that color. Now you had mentioned earlier too that on the revenue efficiency front there are some bottlenecks or at least I infer from your commentary there are some bottlenecks at the vendor level as you are kind of working through your certification processes. What do you see from a timing standpoint? How long will it take to work through these bottlenecks? When do you think you’ll have all these certifications done and these rates ready to get back to work?

Okay, Chris, its interesting. One of our sub sea-equipment vendors told us than in the last nine months, they have been presented with more work than they had conducted in the previous five years. So these guys are completely overwhelmed with the surge in activity. So we have taken the step of putting some transaction personnel in their shops to help them do simple tasks like demand planing and quality control on our equipment before it leaves their shop. We feel a lot better about their ability to support us given the assistance we are providing. Hopefully we are getting to a point where they have ramped up their resources. We are providing whatever assistance we can and we’ll see this, the bottleneck that we have been experiencing over the last year. We’ll see it start to wind down hopefully over the next six, seven, seven eight months.

Operator, we have time for two more questions.

Absolutely.

Thank you.

Thank you. Next we’ll hear from Lee Cooperman with Omega Advisors. Lee Cooperman – Omega Advisors: Thank you very much. I'm a little confused. I would appreciate. Good morning to you, and thank you for taking the question. I'm a little confused about the dividend in a sense, and I think it is kind of important. A $3 dividend were yielding over 4%, which is more than twice the yield of the S&P 500, more than any energy-related company I know of today. And I am just trying to figure out, who is trying to get their beak into our business and holding us back? What are the different things that are going to determine the outcome here? And how comfortable are you that this dividend will be paid in May and be paid quarterly, as you anticipate? I would just like to understand the issues. I'm a little confused.

So what happened here Lee is, the Swiss voters voted on a referendum in 2008 that changed the tax laws in Switzerland to make dividends out of APIC, three years Swiss withholding tax. So that vote took place back in 2008. Here in the first few months of 2011, the Swiss authority, the tax authorities have come out and made noises about how that tax law change is going to have an effect on Swiss tax revenues. So you have a reaction done to that kind of commentary coming out of the Swiss tax authority. It’s a general reaction. It has nothing to do specifically with Transocean. We’re not the only company that is making use of this change in Swiss tax laws; there are a number of companies that are pursuing the same path work or so. Lee Cooperman – Omega Advisors: Are they looking then to tax dividends paid by the company to their shareholders?

Well, what the initial debate has centered around is the possibility of reinstating the withholding tax on dividends out of APIC. That’s one alternative that has been debated in the parliament. Lee Cooperman – Omega Advisors: Okay.

So what form that debate ultimately takes whether it actually ultimately results in any change to the laws, it’s pure speculation at this point. Lee Cooperman – Omega Advisors: All right, if that happens do you have recourse of leaving their tax jurisdiction or that’s not practical?

If things got too painful for us that’s certainly something we would consider. But I’d tell you today we’re a long way from that. Lee Cooperman – Omega Advisors: So what are the other considerations in paying a dividend? In other words, they are going not going to stop you from paying a dividend, they would just be withholding on a dividend?

That’s correct. That’s the only impact that we would have is to reinstate the 35% Swiss withholding tax. Lee Cooperman – Omega Advisors: Okay. Are there any other issues then surrounding the dividend?

Shareholder approval on the issue, but we’re confident that the shareholders will support us in that resolution. Lee Cooperman – Omega Advisors: Well, they did last year, didn't they?

Yes. They did. Lee Cooperman – Omega Advisors: So, then when the shareholders vote then you will have a dividend declaration date for the next date, like every other company has?

Yes. Exactly. Lee Cooperman – Omega Advisors: Okay, thank you for clarifying that. I appreciate it. And I assume the dividend was set at a level that you feel constable that it was sustainable going forward based upon your expectation of future earnings.

Yes. When we engaged our Board in the conversations over the last couple of years as we’ve talked about returning cash, we’ve looked at a number of scenarios and obviously since Macondo, we’ve had the factor Macondo into that scenario planning as well. But that's the way we want to think about it is a dividend that we can sustain going forward. Lee Cooperman – Omega Advisors: Thank you very much. Good luck. I appreciate your answers.

Thanks Barry.

Geoff Kieburtz – Weeden & Company: Thanks very much. I guess two questions actually. One on the vendor constraint topic again. I think you made it clear earlier that you have sort of accelerated some of your shipyard projects. I guess I am -- did you kind of make your vendors suffer a bit greater capacity constraints by accelerating your program?

The only area where we really accelerated shipyards is in the Gulf of Mexico and that was in the thoughts to ongoing conversations with our customers about how to mitigate the impacts of the moratorium and slow release of permits. Geoff Kieburtz – Weeden & Company: Okay.

And so the rigs would have had to go through BOP recertification anyway. We just chose to do the SPS related work especially our survey related in addition to the BOP recertification. So we didn't accelerate BOP recertification that was a function of NPL-05. Geoff Kieburtz – Weeden & Company: Sure.

And we had nothing to do with that. So we were constrained by NPL-05. We just chose to do some other work in addition to the BOP recertification. Geoff Kieburtz – Weeden & Company: Presumably, your competitors did much the same sort of thing. Is that part of the reason you've got this confidence that over the next six to nine months the bottlenecks are going to relieve, because, obviously, the Gulf of Mexico stuff is a bit kind of one-time?

Yes. I think we are in a temporary situation where people have scrambled to respond to either regulatory requirements in the case of Gulf of Mexico or customer requirements outside the Gulf of Mexico that have overwhelmed the inability of some of the equipment vendors to respond. Geoff Kieburtz – Weeden & Company: Okay.

I think it is a temporary situation as we work through this over the next six or nine months. Geoff Kieburtz – Weeden & Company: Okay. My other question has to do with the reactivation. You kind of gave us on the – both the floaters and Jackups sort of deferred, deferred, deferred breakdown, but based on couple of contracts that you’ve entered into recently, it seems that you are willing to go into a reactivation commitment with a contract that’s something less than a full payout, correct?

Yes, I rely on our marketing people to give me an assessment of their ability to find follow-on work. So it’s a well-informed decision, but it’s not a dogmatic requirement that we return the entire 100% of the reactivation cost with the first contract. Geoff Kieburtz – Weeden & Company: Okay. So there is no kind of simple rule that you could share with us. I mean, with the newbuild it seems you’re pretty clear that you’re not going to make a newbuild commitment, obviously, a much greater capital commitments in reactivation. You’re not going to make a newbuild commitment without some very high percentage contract payout on the initial term. Is there anything analogous that you can share with us in regards to your decision to reactivate?

Not anything that is as crisply articulated as the 80% simple payback we look for an ultra-deepwater floater in newbuild project. There isn’t anything that simplistic that we apply to our reactivation decision. Geoff Kieburtz – Weeden & Company: Okay. All right, great. Thank you very much.

Thanks, Jeff. Thank you all for your interest and we will talk to you in the next quarter.

Thank you. And that concludes our conference for today. We thank you all for your participation.