Good day ladies and gentlemen, and welcome to the Transocean Second Quarter 2015 Earnings Conference Call. Today's call is being recorded. At this time I'd like to turn the conference over to that Thad Vayda. Please go ahead, sir.

Thank you, Katherine. Good day and welcome to Transocean's second quarter 2015 earnings conference call. A copy of the press release covering our financial results along with supporting statements and schedules including reconciliations and disclosures regarding non-GAAP financial measures are posted on the company's website at deepwater.com. Joining me on this morning's call are Jeremy Thigpen, President and Chief Executive Officer; Mark Mey, Executive Vice President and Chief Financial Officer; and Terry Bonno, Senior Vice President, Marketing. During the course of this call, participants may make certain forward-looking statements regarding various matters related to our business and company that are not historical facts. Such statements are based upon the current expectations and certain assumptions of management and are therefore subject to certain risks and uncertainties. Many factors could cause actual results to differ materially. Please refer to our SEC filings for more information regarding our forward-looking statements including the risks and uncertainties that could impact our future results. Also please note that the company undertakes no duty to update or revise forward-looking statements. Finally, to give more participants an opportunity to speak on this call, please limit your questions to one initial question and one follow-up question. Thank you very much. I'll now turn the call over to Jeremy Thigpen. Jeremy? Jeremy D. Thigpen - President & Chief Executive Officer: Thank you, Thad, and a warm welcome to our employees, customers, investors and analysts participating in today's call. Before we discuss the quarter's results, I'd like to take a moment to publicly welcome Mark Mey to Transocean. I've known Mark for a number of years and I'm very pleased to have the opportunity to finally work with him. As you already know, Mark brings extensive industry and leadership experience to the CFO role and he's already made a meaningful and…

Thanks, Mark, and good day to everyone. The market continues to be very challenging and is likely to remain so through 2016. The low commodity price environment, corresponding reductions in customer budgets and overcapacity in the global floater and jackup fleet are negatively impacting utilization and pricing in every market around the world. Despite these challenges, we have added $178 million of contract backlog since the last earnings call, bringing the year-to-date total to $212 million. We are happy to report the contracting of the Sedco Express, Development Driller II, the Deepwater Champion, Transocean Barents, the GSF Rig 140, Sedco 704, Transocean Andaman, and the GSF Galaxy II since our last call, highlighting our strong relationships with our customers and the ability to contract our diverse fleet regardless of the asset class. In addition, we are also very close to concluding on several opportunities already in the pipeline. Our backlog as of July 15 was $18.6 billion, comprising a stable and diverse customer base and reflecting favorable contracting terms with very limited exposure to early termination without compensation. This foundation provides a solid base of cash flow generation and visibility of future revenues to help us weather the downturn. Now to the market. We expect challenging conditions to prevail through 2016, negatively impacting rates and utilization for all class of rigs. Contracts are being early terminated, contributing to growing idle capacity and drilling contractors are also more frequently competing with our customers as they are now subsidizing to market rate on farmed out rigs. Indeed, ultra-deepwater market utilization is down to 88% with 17 rigs idle and 10 cold stacked. Year-to-date, 17 ultra-deepwater fixtures have been executed primarily in the Golden Triangle, Mexico and UK/Norway. Deepwater is down to 73% with only four fixtures being recorded, primarily in Australia. Midwater…

Thanks, Terry. Katherine, we're ready to open up the lines for questions and as a reminder to the participants, please one question and one follow-up question. Thank you.

Thank you. We'll go to our first participant, Ian Macpherson with Simmons. Your line is open. Please go ahead. Ian Macpherson - Simmons & Company International: Thank you. Good morning.

Morning, Ian. Ian Macpherson - Simmons & Company International: Hi. Terry your July 15 fleet status had a couple of ultra-deepwater rigs rolling in July and I think quite a few midwater rigs rolling in the third quarter as well. Is there any updated status on any of those rigs? Or should we assume that those rollover dates held and anything that's not been updated is at this point, idle?

Well, I think the only thing between the July fleet status that we actually contracted, and you probably saw that, was the Transocean Barents on a short-term rollover, and other than that that's all that we currently are showing. However, I would tell you that we are in advance discussion on a few opportunities and that's really about all I can say about that, Ian. Ian Macpherson - Simmons & Company International: Okay. I'll stay tuned. To follow up, Mark, if I may, you highlighted some of the near and medium-term CapEx relief that you've negotiated. However, your total new-build spending looks like it's increased by close to $400 million over the duration of the program. Is that entire increase attributable to the payments for deferred delivery? Or have there been any scope changes to the new-builds that explain any of that? Mey Lovell Mark-Anthony - Chief Financial Officer & Executive Vice President: Well, if you look at the rigs in particular and certainly referring to our schedule on the website, you can see that the Jurong new-builds were increased by about $100 million in total with part of that – now that's each. And part of that is associated with the fees to delay delivery by two years each but also part of that is pushing out the final payment. So the capitalized interest that will be accrued over that time period is included in the amount that we have posted out there. There are also some fees and capitalized interest associated with the jackup new-build deliveries, which we delayed as well. So overall, it looks like a big number, but you're looking at five jackups and two floaters for two years or more in the case of some jackups. So I think on a per-rig basis it breaks out to a reasonably minor increase in the overall CapEx of those rigs.

And we'll go on to David Smith with Heikkinen Energy Advisors.

Hi. Thank you. Good morning and congratulations, Mark. Mey Lovell Mark-Anthony - Chief Financial Officer & Executive Vice President: Good morning.

I think you all now have about five drillships that are warm stacked near Trinidad. I think some of them from the Gulf of Mexico, some of them from West Africa. I was just hoping to get some color on that movement and kind of the cost savings you're targeting but especially how that cost savings is achieved whether it's sharing the minimum crew requirements or fuel or where that's coming from. Jeremy D. Thigpen - President & Chief Executive Officer: We don't want to get into too much detail because we actually view this as somewhat of a competitive advantage, but I will tell you that we, like all of our competitors, are learning as we go and as we stack more rigs, we learn more about the process and we get more efficient. So location's very important. The process is very important and when you can park them in the same area, you can certainly take down the manning a little bit.

So when we think about the long-term storage costs for modern drillships, did I understand correctly that $50,000 a day is kind of a new target? Or am I mis-hearing that? Mey Lovell Mark-Anthony - Chief Financial Officer & Executive Vice President: No, David, as you know, Jeremy said it very elegantly that this is a process and as the industry works through this process, we get better at it over time. So if you recall back to the last quarter, we used a range of $50,000 to $85,000 per day for ultra-deepwater assets. Today we can say it's less than $50,000. We're not done looking at this. Our team is continuously looking at opportunities as to how we can save costs around the stacking of these floating rigs. You're well aware that the two biggest costs here are going to be people and fuel, so we can certainly keep looking at this and see how we can get that number down to even lower levels in the future.

And we'll now go to Sean Meakim with JPMorgan.

Thanks. Good morning. Jeremy D. Thigpen - President & Chief Executive Officer: Good morning.

So I was just hoping, Terry, maybe you could give us a little more detail or navigate between some of the exploration versus development opportunities that are out there. In the current oil price environment, it seems like exploration projects are even more likely to get pushed right, but can you give us some indication of what kind of demand is out there for maybe development opportunities?

Well I think the biggest news in the market is certainly that everyone is focused on right now is the ONGC tender. So what I would say, that's where the biggest demand lies today and overall they've got five, I'm sorry, four rigs that are pointed for development. And they also have three other rigs that are pointed for exploration, so it's going to be one of those things that the competition is going to be very fierce for that one. We're also seeing quite a few other development opportunities and that's going to bring some long-term work, and that's mainly in Australia with the Chevron and the Woodside program that's just come to market. So we're starting to see a little bit more, as you look out into now into 2016, 2017, you're seeing a bit more of the development opportunities coming to market. I would say that it is a bit encouraging because there are a few things that have popped up recently where we've been in direct discussions that haven't come to tender, so that always makes us feel a little bit more confident when you're getting a direct negotiation opportunity. And it's something that a lot of folks are unaware of. So we like that kind of opportunity. It gives us a little bit more confidence. But having said that, we all know that we've got a bit of a slog to get through 2016, so I'm just trying to be a little bit balanced with the commentary, but there are quite a few. But I would say more development opportunities are coming forward now than we're seeing exploration, unfortunately.

Okay. Thank you. That's helpful. And I just wanted to talk a little bit more about kind of managing cash flow and managing down costs. I mean, can you give us a little more indication of are there any more levers to pull in the new-build program to manage cash flow, or do we think that we've kind of gotten, we've extended that opportunity as best we can at this point? Mey Lovell Mark-Anthony - Chief Financial Officer & Executive Vice President: Well, Sean, I'm not sure what you're referring to with additional levers. You're entering to a contract to build a rig, there's a certain cost associated with that. There's costs associated with the project management team that you have there from Transocean, and then there's costs associated with the time hold of the cash payment, and at the point you actually make that. So I think by delaying these rigs, what we've done is that we improved liquidity visibility, but ultimately the overall cost of the rig is not going to come down much. If obviously, if you go out and order a new rig today, you'll get a different price which will be substantially less than what it was in the past. But as far as levers on the current rigs under construction, I'm not sure there are levers to actually reduce those costs.

And we'll continue on to J.B. Lowe with Cowen & Company. J.B. Lowe - Cowen & Co. LLC: Hey. Good morning, everyone. I just had a question on the Macondo, the remaining payments on the Macondo issue. Are there any further payments that you, or any further scheduled payments that you still need to make on the PSC settlement, for example? Mey Lovell Mark-Anthony - Chief Financial Officer & Executive Vice President: As I mentioned in my prepared comments, J.B., we intend to fund the court finalizing the settlement with the PSC. We intend to fund $212 million during this quarter. J.B. Lowe - Cowen & Co. LLC: Okay. I missed that. Thank you. And just a follow-up question on the, Terry, you mentioned you're in some direct negotiations. I know you can't provide that much color on it, but could you maybe give the geographies that you're working on some of those opportunities in?

I'm really sorry, J.B., I can't do that.

Our next question will come from Jud Bailey with Wells Fargo.

Thank you. Good morning. Terry, if you could maybe talk, you discussed it a little bit in your prepared comments about Brazil. Could you just talk a little bit about what you're seeing in that market? Petrobras has obviously released their budget and it sounds like their rig count's going to be coming down, but other operators in the area are looking for some rigs. Could you maybe comment a little bit on what you're seeing in that market specifically?

Yeah, what we're seeing right now and you're absolutely right, Petrobras is reducing their rig counts in the near term, but I would like to say that we're certainly delighted that, I'm sure that the peer group and ourselves are delighted that we're able to transfer term and not lose our margins, so we're happy about that. But as far as the other folks tendering in Brazil, we're not seeing a lot of activity, but we do know that several of our customers are saying that they hope to get some of their programs drilled, start drilling into 2016 and 2017, so we anticipate there'll be a bit more. Again, we're very hopeful about the 11th Bidding Round, but I think that there's going to have to be some sort of further concession on the local content. So I know that's going to provide some cause of concern for the general operator population. But certainly, things seem to always in a downturn correct themselves. So we're hopeful that people can find a way to get in there and start drilling the pre-salt.

Okay. Thank you for that. And then my follow-up is, you mentioned some of the recent discoveries in Colombia and Guyana. Can you say, are the customers in those areas already talking to you guys on maybe bringing another rig in to do some appraisal work or how early stage is that and do you have any visibility at all on those new markets?

Yes, actually our tender just closed with ExxonMobil. They're going to try to get a rig in there first quarter 2016 to do some appraisal work. We also know Anadarko had the big discovery in Colombia, but we believe they're going to take a bit of a pause and then ramp up a bit later, so I don't anticipate you'll see incremental work there yet. But I think that certainly the Guyana opportunity looks very promising and hopefully they'll have more opportunity to put some more rigs there.

And we'll continue on to David Anderson with Barclays.

Thanks. Hey, Jeremy, your (33:55) gives you a pretty unique perspective on your competition and considering how many of them have been your customers over the years. I'd be kind of interested in your thoughts on how you think attrition plays out here. You talked about it on the call a couple of times about the overcapacity, but we've only seen I think 20 rigs retired in the industry since the beginning of the year and everybody seems to agree more need to be retired. But why aren't we seeing more go away with such a bleak outlook? And secondarily are you concerned that the pace of this attrition isn't fast enough and could kind of push out this or is there an inflection point that you're starting to get some visibility on? Jeremy D. Thigpen - President & Chief Executive Officer: Yeah, I don't know that we're seeing any inflection point amongst our peers. I think they're probably taking a similar approach to us although we've been far more aggressive in terms of looking at each of the assets and kind of looking at long-term viability and capability and the competitiveness of each asset, and then making a decision as to whether they want to incur the cost of stacking or just retire the asset. So all I can control is what we're doing here, and as we sit on the call, we're going to continue to look at each asset as they roll off contract to see, are these assets that we want to incur the cost of stacking. Are they assets that we just want to retire because we don't think that they're going to be competitive going forward. I'd say in total we probably see maybe 10 to 15 assets in our fleet that we're carefully considering, but it just depends on the market.

Okay, that was actually what I was going to ask you that, because I think you've retired nine since the beginning of the year. So we can assume there will be some added to that by the year-end. Jeremy D. Thigpen - President & Chief Executive Officer: I wouldn't assume it. I would say that we're looking at each asset and as they roll off contract, we'll determine whether or not we think they're going to be competitive going forward. Mey Lovell Mark-Anthony - Chief Financial Officer & Executive Vice President: Let me just add to that, that I would encourage you to consider that ultra-deepwater rigs that are cold stacked are going to be effectively removed from the competitive fleet for a while and a while could be three, five, seven years because the cost of reactivating these rigs will be substantial. And you will need to have a very good day rate environment which means terms and rate where we can bring these rigs out of the stack mode.

And we'll continue on to Angie Sedita with UBS.

Thanks. Good morning, guys. Jeremy D. Thigpen - President & Chief Executive Officer: Good morning.

So, Mark, I appreciated the details on the liquidity and the CapEx side, but this is probably a question for both Jeremy and Mark. When you think about it from a high level and you think about Transocean and obviously you're both fresh faces at Transocean, but what else do think can be done differently than what was done in the past at Transocean from a strategy perspective? Financially, you talked a little bit about but also operational. Can you talk about how you can think about the company differently and from a strategy perspective and just different-decision making processes than in the past? Jeremy D. Thigpen - President & Chief Executive Officer: Yeah, Angie, I'll take it first and Mark can chime in. I think there are three things that we're really focused on and I mentioned in my prepared remarks. I think from a customer interface standpoint, customer relationship standpoint, Transocean has always been viewed as a company that delivers exceptional assets and exceptional performance, but it's sometimes been viewed as not as easy to deal with as it could be, and so we're working hard on that and our customer relationships and managing those. The second and probably the most urgent for us at the moment is taking a fresh look at our entire organization and the cost structure. We've basically taken a zero-based budgeting approach to the organization and said, listen, if we're going to be a much smaller company than we were two years ago, what is the organization that we need to support this smaller and more efficient organization. So Mark's leading that charge, and he can talk more about it in a moment. And then the final is really high-grading the fleet, and we're doing that by getting smaller, first of all, retiring some of the older, less capable assets. But we've still got our new-build program in place. We think this market, the longer the downturn lasts, could present some interesting opportunities to upgrade the fleet through potential acquisitions, so we're interested in that. And then we've also got our technical teams working closely with our customers as well as our supply partners to look at what's kind of the next generation of technology that can help differentiate us in the future. So those are really the three key areas where we're putting the majority of our focus right now. And, Mark, I don't know if you had a comment on anything there. Mey Lovell Mark-Anthony - Chief Financial Officer & Executive Vice President: I don't want to say too much on this because, obviously, they're steps we're taking which need to be internally discussed first. But suffice to say that every level that we have we'll be looking at, and in general looking at reducing complexity around the organization. And obviously, as I said in my prepared comments, Angie, we will update you on a quarterly basis as this progresses, but I don't want to get into details at this stage.

Okay. Both of you, that was very helpful, and then I'll ask the next one for Terry. Terry, can you talk a little bit about how you're conversations have changed from last May when we had higher oil prices and seemingly maybe a little bit more tangible interest in rigs? And if that has been the case, have you see a change in the conversations or the tone of conversations from May, somewhat implying at what oil price they may be willing to come back to the market? And have you also seen an increase in subletting since that time?

Those are great questions, Angie. I think that the tone back in May when there was some stability, and there was actually an increase in commodity pricing, the conversations, from my perspective, became very positive. So I think we were talking to quite a few of our customers to do a bit more conversations around blend and extend. And then when we saw the retreat of commodity pricing here recently, and it's become a, well, you know, we want to take a wait-and-see; we'd like to have a little bit more stability. So that's what it's going to require. It's going to require more stability in commodity pricing. As I said in my opening comments, anything that's below $50 is just very concerning for all of our customers. And then on the other side of that, of course, you're going to see the NOCs and the independents jump out here and take some opportunity to contract their work at some low pricing. We've also seen a pickup in the UK and in the U.S. Gulf of Mexico for the decommissioning and the P&A programs, so that might help a bit. But again, you're just going to see that kind of trickle as far as we can see today.

And we'll now hear from Gregory Lewis of Credit Suisse. Gregory Lewis - Credit Suisse Securities (USA) LLC (Broker): Yes. Thank you, and good morning. Jeremy D. Thigpen - President & Chief Executive Officer: Good morning. Gregory Lewis - Credit Suisse Securities (USA) LLC (Broker): I guess this is to Jeremy or Mark. I mean, and you touched on it at the start of the call, clearly as we look at the MLP right now, it's probably not in a position to take advantage of dropping – or taking assets down. But I guess I really just have two questions about the MLP. One is how committed is Transocean to the MLP? As in your prepared remarks or in the press release, Jeremy, you mentioned about the potential of acquiring assets in this market now. I realize Transocean owns 50% of Transocean Partners, but probably three of those assets that are in Transocean Partners are probably three of the best assets that you can get your hands on probably in the near medium term. And then with that also, as you think about that, as the Development Driller III rolls off contract in next year, given the outlook for the market, does it make sense to potentially reabsorb Transocean Partners? Jeremy D. Thigpen - President & Chief Executive Officer: I would say, Greg, at this point we are evaluating all options, and Mark said that earlier. Everything's on the table. But at this point in time, we see RIGP as a critical piece of our financial structure, and we're going to just see how this market plays out over time. I don't know if you want to add anything to that. Mey Lovell Mark-Anthony - Chief Financial Officer & Executive Vice President: No, I think that's right. As I said in my prepared comments, it is an important part of our capital structure and financing flexibility, and until the market proves to no longer be able to support Transocean Partners, we're going to keep it in that context. Gregory Lewis - Credit Suisse Securities (USA) LLC (Broker): Okay, guys. That's all for me. Thanks. Jeremy D. Thigpen - President & Chief Executive Officer: Thanks, Greg.

Thank you. And we'll go to Andrea Stubsrud with Pareto Securities.

Thank you. A question on the new-builds. Is it correct all the four Shell new-builds will go to Gulf of Mexico?

Good morning, Andreas. As of now, the discussion have certainly been with Shell that they are going to be coming to the Gulf of Mexico, so that's what we know today.

Okay. And then my main question is related to those long 10-year contracts and the day rates above $500,000. How do you see the risk for renegotiation of those contracts, Terry?

Andreas, we're not really having any of those type of conversations with Shell at this time. I mean Shell and Transocean worked very closely together to design these vessels, so they're a very special type of design fit for purpose for their programs. So we don't, as I said, we don't see that that's actually going to be put on the table at this time.

We'll continue on to Mark Brown with Global Hunter.

Hi. I was wondering if you could give an update on the ONGC tender and just what you're hearing about that, and what rigs you might be looking to bid for that?

Yeah, so this is obviously, it's a pretty exciting tender for all of us because it's going to take quite a bit of the capacity off of the market. I would say that as far as what we're tendering, I really don't want to show that hand but I think you'll expect a heavy, heavy participation from the industry. So it would be anything from your shallow water semis all the way up to your brand new drillships that will be in semis bid into this opportunity. But they're going to close around – they have different dates but they're due in August, so they've just firmed up the dates. But we expect that it's going to be on time and that they will be worked very quickly so we're very hopeful that we have many rigs that are successful in that opportunity.

Very good. And the other question I had is just with lower oil prices, could that potentially accelerate the incentive to stack and scrap some of your rigs because it just reduces the probability that there will be demand in the near medium term? And is that something that have you changed your perspective on scrapping or stacking since three months ago when oil prices were around $60? Jeremy D. Thigpen - President & Chief Executive Officer: Mark, I'd argue we've probably been – we have been the most aggressive with respect to recycling older and less competitive rigs, and we'll continue down that process. Obviously the lower oil prices means less demand around the market, and so if we look at our rigs we don't think that they're going to be competitive in the near to mid term then we'll certainly have that conversation internally.

Thank you. We'll take a follow up from David Smith.

Hey. Thank you. Just a quick follow-up on the first question which was as you manage to bring down the cost of warm stacking the drillships, I wanted to ask if anything has changed to your estimated costs to bring those rigs back to service eventually. Mey Lovell Mark-Anthony - Chief Financial Officer & Executive Vice President: At this stage, David, nothing has changed there. Obviously this is something that's going to be evaluated in the future because we're a ways away from that, but we'll update you as we get close to that time and point.

All right. I appreciate it. Thank you.

Thank you. And our final question will come from Ian Macpherson as a follow-up. Ian Macpherson - Simmons & Company International: Hey. Thanks. A quick follow-up just on balance sheet efficiency now that the Macondo uncertainty is substantially eliminated. $3.8 billion of cash is obviously not efficient. How quickly and to what extent do you plan to bring that down to an optimal level? Mey Lovell Mark-Anthony - Chief Financial Officer & Executive Vice President: Yes, you're absolutely right, Ian. In fact we just used almost $1 billion of that to repay our 2015 maturities. So we'll look at reducing our cash on hand because our risk exposure to Macondo-related issues has been eliminated for the most part. So at this stage, I'm not going to give you a targeted cash position or targeted liquidity, but suffice to say we're in the midst of a downturn where cash is your friend. So we'll have more there than we would typically have in up cycle but certainly it will be less than $3.8 billion. Ian Macpherson - Simmons & Company International: Okay. Thanks.

Thank you. And with no additional questions, I'll go ahead and turn the conference back over to management for any additional or closing remarks.

So thank everyone for your participation and questions today. As usual, we are available to respond to any modeling or other questions you may have over the balance of the day. We look forward to chatting with you when we report our third quarter results. Have a good day.

Thank you. And again ladies and gentlemen, that does conclude today's conference. Thank you all again for your participation.