Good morning. My name is Crissy, and I will be your conference operator today. At this time, I would like to welcome everyone to the Noble Corporation Second Quarter 2012 Earnings Call. [Operator Instructions] As a reminder, ladies and gentlemen, this conference is being recorded today, Thursday, July 19, 2012. Thank you. I would now like introduce Mr. Jeff Chastain, Vice President of Investor Relations. Mr. Chastain, you may begin your conference.

Okay. Thank you, Crissy, and welcome to everyone to Noble's second quarter 2012 earnings call. We appreciate your interest in the company. A copy of the company's earnings report issued last evening, along with supporting statements and schedules, can be found on the Noble website, and that's noblecorp.com. Before I turn the call over to David, I'll once again remind everyone that any statements we make about our plans, expectations, estimates, predictions or similar expressions for the future, including those concerning the drilling business; market outlook and industry fundamentals; financial performance, operating results, fleet condition, performance and downtime; also tax rates, spending guidance, backlog, dayrates, contract opportunities, tenders, announcements, commencements and extensions; letters of intent; and finally, growth opportunities, newbuild delivery costs and dates and plans and objectives of management for future operations are all forward-looking statements and are subject to risks and uncertainties. Our filings with the U.S. Securities and Exchange Commission, which are posted on our website, discuss the risks and uncertainties in our business and industry and the various factors that could keep outcomes of any forward-looking statements from being realized. Our actual results could differ materially from these forward-looking statements. Also note that we may use non-GAAP financial measures in the call today. If we do, you will find the required supplemental disclosure for these measures including the most directly comparable GAAP measure and an associated reconciliation on our website. With that, I'll now turn the call over to David Williams, Chairman, President and Chief Executive. David?

Thanks, Jeff. Good morning, everyone, and welcome to the call. Joining me today in Geneva in addition to Jeff are James MacLennan, our Senior Vice President and Chief Financial Officer; and Roger Hunt, our Senior Vice President of Marketing and Contracts. Roger's recovering from a summer cold, so Simon Johnson, our Vice President of Marketing and Contracts, who's based in Geneva, will make some comments on the market, and Roger will be available for some questions after the call. Today, I'll provide some opening comments on the second quarter and cover some recent achievements as it pertains to our fleet transformation efforts, and James will give you more in-depth explanation for the quarterly performance and more importantly, some updated guidance for the balance of 2012. Simon will share some views on the offshore market, which continues to be quite strong, and he will highlight some recent and expected developments. Finally, I'll offer some closing thoughts on where we are as a company and where we're going before we begin addressing your questions. I'm very happy with our results for the second quarter 2012 and some of the significant accomplishments that we posted in recent days. Second quarter results included a 14% improvement in revenues along with higher margins, both driven by a continuation of great market fundamentals. Also, our revenue efficiency improved with our unpaid downtime declining to under 3%, as we continue to experience some benefits from a number of operational and process improvements put in place over 2011 by Bernie Wolford and his team. There remains plenty to be done, but we are encouraged by the early results. James will address these quarterly highlights in more detail in just a minute. Another area I'm delighted with is the steady improvement in numerous milestones we continue to record on…

Thank you, David, and good morning. Since you've had a chance to review the financial report and schedules issued last evening, I'll spend some time this morning reviewing certain aspects of the second quarter performance that I wish to highlight, with the majority of my time spent providing you with updated guidance as it pertains to the third quarter and to the remainder of 2012. Last night, we reported second quarter net income of $160 million or $0.63 per fully diluted share on total revenues of $899 million. These results compared to net income in the first quarter 2012 of $120 million or $0.47 per share. During the second quarter, we had an after-tax net gain of $0.04 per diluted share, a gain of approximately $15 million, which was related to the final settlement of certain Hurricane Ike claims, partially offset by the impairment of 2 of our submersible rigs, the Noble Joe Alford and the Noble Lester Pettus and certain other assets in anticipation of the disposition of those assets. Contract drilling services revenues increased $102 million or 14% quarter-on-quarter to $848 million. This increase in revenue is primarily attributed to improving dayrates, increased utilization and rigs commencing or returning to work during the quarter. The Noble Bully II began operating in early April joining its sister rig, the Noble Bully I, which began operations in late March of the first quarter of this year. As a reminder, both of these drillships are owned in 50-50 joint ventures with Shell. The Noble Leonard Jones and the Noble Bill Jennings, both jackup rigs located in Mexico, returned to work in mid-April. Favorable changes in dayrates throughout the fleet contributed another estimated $6 million. Our contract drilling services costs for the second quarter were $424 million, relatively flat with the first…

Thank you, James, and good morning to everyone. We thought it appropriate to start with a bold remark that the last quarter saw a record level of fixtures the ultra-deepwater sector. First up, you may be quick to argue that the quarter that only saw 5 announced ultra-deepwater fixtures versus 11 for the previous quarter is hardly the stuff of records. You might go on to look for connection between softening commodity prices and the slowdown in fixture activity. Now whilst there's no doubt the commodity prices withdrew from previous levels, we have a view that not only is all 2012 supply being contracted, but signs indicate that most of 2013 ultra-deepwater supply is effectively booked also. How do we reach this conclusion? At the time of our last earnings call, the ultra-deepwater sector had approximately 36 rigs with 168 rig months of availability in 2013. This included new capacity and existing rigs with contract rollovers. Of the 36 rigs, 11 units had options varying in lengths of time. Based in our experience and the preference of customers today to secure the capabilities of such rigs, we believe that most, if not all of these 11 rigs, are unavailable. That is the current customer will exercise the option and keep the rig. This effectively leaves 25 ultra-deepwater rigs with around 123 rig months of clear availability in 2013. Once we review our own database and customer specific programs and timing preferences and match rig availability with those programs, we conclude that as many as 22 of these 25 rigs are already spoken for, with much of the units expected to be deployed in the Gulf of Mexico and West Africa. One of these rigs is the Bob Douglas, which as you know we have recently contracted for 3 years. We…

Thanks, Simon. For the past, the tone of Simon's comments, you can conclude that the favorable fundamentals to support our business are intact despite the economic uncertainty and declining commodity prices seen during the second quarter. We continue to observe strong customer demand for both the floating and shallow water assets in our drilling fleet with numerous opportunities to bid for work around the world. Exploration programs continue to score drilling successes, and geographic locations continue to expand. Successful exploration efforts are increasingly leading to a backlog of development programs especially in U.S. Gulf of Mexico, Brazil and West Africa, and the leading indicators of activities such as licensing rounds and active marine seismic programs suggest more offshore drilling is being planned. The decline in crude oil prices seen during the second quarter was a source of considerable equity market volatility. However, the fact is from a rig contracts perspective, these recent fluctuations in product price has been largely ignored by our customers, and we expect that they will remain very active in the current commodity price environment. Unless our customers conclude crude oil prices are likely to decline dramatically from current levels and more importantly, be sustained at a greatly reduced level for an indefinite period, we expect to see no material change in our activity levels. We're doing a number of things right at Noble. We have new systems in process, and our global organization are addressing many of the issues we faced in 2011 and resulted in decreased revenue efficiency. Our experience with fleet downtime in 2012 was significantly better than this time last year. Our fleet expansion program is largely consolidated into 2 high-performing yards with the excellent histories of strong execution and interest in each of our remaining uncontracted ultra-deepwater drillships and high-specification jackups remains very high. We fully expect to exit 2012 with additional units under contract and rigs in our active fleets are benefiting from the tighter utilization and rising dayrates. Now I'll turn the call back over to Jeff.

Okay. Thank you, David and James. Crissy, we are now ready to begin the question-and-answer segment of the call. [Operator Instructions] Crissy?

[Operator Instructions] Our first question comes from the line of Brian Uhlmer from Global Hunter.

I've got a couple of pretty easy questions for you all. I just want a further update on the rigs that are rolling off contract in Mexico towards the end of the year and what you think the likelihood for those are. And then also along those lines, you've got one coming up in Nigeria and then the stacked rig in Nigeria as well and what the prospects are for those rigs.

Yes, Brian, Roger. Mexico is a good story. As you've seen, we just placed the -- 2 more rigs back to work in Mexico. We're optimistic that the 2 that roll at the end of the year and then 1 right thereafter will be required by PEMEX. It's likely that, that might be the process of a direct negotiation as opposed to the bid process. So we feel good about those units in Mexico. Nigeria, Simon, you want to talk to Nigeria?

Yes, sure. We have a number of active discussions presently for the Lloyd Noble when it exits the yard in Q3, and we don't foresee any problems at the moment with timely contract opportunities to the rig.

And for Percy, likely to stay stacked?

No, you'd be speaking to the Lloyd Noble.

The Don Walker.

Oh, the Don Walker. I'm sorry. The Don Walker, I think, the quick answer would be yes.

Okay. Now for you, David, more of a strategy question as we look at how much cash you have available and your CapEx spend. There's going be some room available, possibly $1 billion additional capital available on the revolver. How do you view how tight you want to get with that and where you want to add some more rigs for the 2015 time frame and how you look at making those decisions as we go through the back half of '12.

Well, we still have a number of uncommitted newbuild rigs, and we still have a good bit of CapEx coming down the line. I think James talked about $2.7 billion that's due over the next couple of years. Current liquidity is as anticipated about 1.9. So you kind of do the math, and you can see that all of our newbuilds are back-end loaded, so we still have a lot of commitments against the newbuilds. Clearly, we like the newbuild scenario. We like to shipyard prices. We are very pleased with our timing. Our marketing operations and engineering guys, I think, hit these shipyards perfectly with the commitments that we've had, evident the Bob Douglas contract and what we've done on the Regina Allen and what we're doing on some of the other rigs are, I think, are good evidence of the strength of the market. So we feel good about newbuilds. We've still got a lot to do. We are looking at what would be next for us, whether it be more ships, semis or what, but we're evaluating that. We'll have to see how it develops as, we go forward. We still have the desire. I think, were probably a little early on pulling the trigger right now.

Right and just as a follow-up, sorry, one, real quick, the pro forma debt to EBITDA is going to be less than 2x as we get into '14. How do you look at that number? And how you -- when do you get confident with being under 2x and being willing to go a little bit higher? Or how do you actually look at your -- managing your balance sheet in that regard? And that's all for me.

Well, I mean, we're clearly above that now, so I mean, we're not afraid of it clearly. We've got some work to do. We like the way we've been using the balance sheet. We historically have not put a lot of debt on it, but we've been willing to do it now. As we sit right now, the newbuilds don't really start adding a lot of benefit from a cash flow perspective until 2015. We're still outspending our cash flow until then. So as we get to the end of 2014 and '15, we clearly have a very high-class problem. It's a problem that we are evaluating now, and we will let you know exactly how we're going to progress as soon as we figure it out.

Our next question comes from the line of Matt Conlan of Wells Fargo Securities.

So there have been some recent announcements in the Gulf of Mexico for midwater rigs and lower end deepwater rigs. Have you guys had any discussions on the boozer guard [ph] perhaps spending some money to reactivate that piece of equipment?

Well, I will answer that, Matt, and Roger could throw something at me if I'm wrong. The boozer guard [ph] is a rig that -- it's a full wrench stack . It's a second-generation rig that's -- it really is a second-generation rig. It had a stretched boring system. The fact is, yes, we have had some conversations about the boozer guard [ph] . And I have said previously that I wouldn't look for opportunities -- seriously at opportunities to bring it back in the near term. I think the odds are getting better all the time, although I don't think that we're close enough yet to tell you that we have a -- an indeed a real live opportunity to -- that I think you should bank on. The market in the Gulf of Mexico is highly constrained from an available rig perspective. It looks like it's probably getting worse rather than better as we move forward, so the future for the boozer guard [ph] is better. I'm not going to sit here and tell you we're going put it together -- put it work fully in the year. Could happen but I wouldn't -- there's still a lot of work to do.

Okay, great. And the follow-up on the Ferrington, great contract, $500,000 for a short-term deal. Is that a special situation? Or is that really the market rate for that piece of equipment in the Med?

Well, it's the market right, Matt. The rig is well positioned in Israel. As you all know, there's going to be a lot of activity both offshore Israel and following up on the recent discoveries in Cyprus, and people are just trying to get their programs in order. So we like what's happened in the Med. We also like, frankly, that the Paul Romano is going to be available later in the year. When you look at visible supply in that part of the world, the recent fixture would have us conclude that we're in the right place.

Our next question comes from the line of Jud Bailey of ISI Group.

A couple of questions. First, I was wondering if you could maybe follow up a little bit on the Paul Romano, which you have rolling later this year. I know talk a little more about some of the opportunities you're evaluating and maybe more specifically what markets you're seeing the most demand in for that unit and when you think about where you ultimately want to put that rig, are you thinking about a long-term suitable home for that? Is the Med the best long-term market for that rig or someplace like West Africa or even the Gulf of Mexico?

You probably caught the tail end of my answer to the previous question. We like what we see in the Med. It'll take a little while for the discovery in Cyprus to unfold, but Lebanon is going through a lease sale, and you'll see a lot of scouring going on in Greece and other places to try and get operators interested in those areas. So we are working bids as we speak for that unit in the region. We have every expectation that we'll have opportunities. There might be a gap between when we release from the current customer and the next opportunity. If you back away then and look at the next area, it would be West Africa. We have customers that are rig short and are interested in something like the Romano up and down that coast, so we're not opportunity short.

And my next question was on your newbuild jackups. The jackup market seems to be tight it would appear, and I wondered if you could just talk about the opportunities there. There are several high-spec jackups being marketed into the market for next year. Is that a market that you would say is getting tighter or one that's just kind of holding firm, and you're probably just going to meet demand with all the newbuild supply coming in. Or are we actually seeing rates get a little bit better as we kind of go through the year?

I think one ought to be cautious about answering that question, but the first thing we need to do is look at the specification of the newbuild jackups. And the answer to that body of work is that there's not a lot of units that have the capability of our JU3000. Having said that, you saw the fixture. We've got the funds in the North Sea. We are engaged in several conversations in different sectors on units 2, 3 and 4, and these are projects that require the absolute maximum capability that's available in the marketplace. So we don't want to predict where the prices are going to end up, but certainly, we see a match between our niche specification and the customers' needs.

And would you say that all of those rigs will probably wind up in the North Sea? Or do you think there's a good opportunity for maybe 1 or 2 of them to not -- to go to the Middle East or other markets?

I think there's -- we see unique opportunities for that type of rig in several areas. So it could be the North Sea, could be the Middle East, it could the Southeast Asia, the Pacific. It could be West Africa.

Our next question comes from the line of Robin Shoemaker from Citi.

Say, I wanted to ask about your analysis on the 25 rigs available in 2013, of which you said 22 are already spoken for. Are any of those rigs that you see as spoken for in 2012, are those going to Petrobras?

Robin, yes. They're -- there's probably a -- maybe a rig that will go to Petrobras. But then again, kind of the core of this analysis is stepping into our customers' shoes and looking at all the various programs and the finite deliveries offered during 2013. And obviously, many of these rigs that are available this year or in 2013 have been offered on the same programs. And he who moves first is securing his rig of preference. So I would be cautious of predicting how many Petrobras, frankly, not many. I think Brazil's story right now, we saw recently Petrobras announcing their plan through 2016 in that publication, it said that they will add 2 more rigs in addition to those that they're going to build locally. That plan was also based on 8 -- no, 6 being delivered by 2016. And so then the answer to the question, if those rigs will be loaded on time, then maybe all Petrobras needs is the 2 that they've identified. Anybody's guess on whether those deliveries will occur or not.

Yes. That was kind of what I was getting at. So you're -- you have talked about a plethora of contract announcements in the near future, which would be on those 22. So those are kind of -- you perceive at the letter of intent stage and on the ultra-deepwater market size of these 2 recent fixtures, high 500, low 600, is that where you believe these fixtures will be?

I would be surprised if they weren't in a band around that number depending on whether the application is in the Gulf of Mexico or West Africa. But one would hope that this is all a result of bidding and direct negotiation activities that's taken place over last 60 to 90 days and that the pricing would be similar to these last 2 announcements.

Our next question comes from the line of Collin Gerry of Raymond James. Collin Gerry - Raymond James & Associates, Inc., Research Division: Since no conference call is complete without asking you guys on your updated thoughts on divesting of maybe some of your more legacy assets. So I just kind of wanted to get your updated thoughts there. I know you spoke to it at the analyst day, but what's the latest?

I hate you wasted a question on that. It's -- we're still studying it, Collin. We haven't given up on the strategy. We still think that long term, that is -- that's the right direction for the company to go. We still maintain that -- we're still looking at opportunities, and we've -- there are opportunities out there but opportunities to deal with a large number of rigs that I think that we would like to see at a price that we think supports the value that our rigs are worth, we haven't seen that deal yet. So we're watching the market. We're -- we certainly hear and see what other people are trying to do, but we have a view of what our rigs are worth based on the contracting capability that we've got. I mean, when you look at the 2 fixtures, West Africa, north of $140,000 a day that very recently were below $90,000, just kind of gives you an idea what a rig can generate in the right market. And again, we just haven't seen the opportunity that generates the right value yet, so we're -- we think the strategy is the right one. We just haven't seen the right deal yet. Collin Gerry - Raymond James & Associates, Inc., Research Division: Okay, that's perfectly clear. Just a follow-up question on a different subject. I guess there's been recent news regarding the Alaska program and maybe some -- one of the rigs -- one of your rigs slipping its moorings up there and just wondering if that's -- if the implications of that are embedded in the cost guidance that we see for the third quarter and maybe just an update on-- if that's a big deal or if it's some we should just not really be too concerned with.

I'm glad you asked that question. There really are no, for us, no cost implications to that. What happened was the rig was sitting in Dutch Harbor moored on one hook, which is customary. The rig on location has an 8-point turret spread mooring and it was -- those were not deployed. You can't deploy those in a harbor situation. So it's just hanging on a harbor anchor. And you hang it on one anchor just so it weather vanes with the weather. The weather got up and just because the soil conditions and where we're sitting, the anchor slipped. The rig did not run aground. It doesn't appear to -- it impacted anything. We've done an underwater survey. There are still barnacles on the rudder. There's no mud indicated. There's no drag. It doesn't appear there's anything that happened. So there's a lot of media attention on this program. It is a big deal to Shell, and we're here to support Shell and of course, because the media picked it up, it's -- you hate to see that happen, wish it hadn't happened. But the net effect is nothing happened. The mooring system when the rig goes to work will be a -- an 8-point very robust, properly sized, mooring package for the environment that we expect to see. And for the reasons of the way the ship and the mooring systems configure, are configured, it's not appropriate for that mooring system, not appropriate in a harbor. So the net effect so far is nothing. We certainly hope that Shell gets their permits, and we want to go to work with both the Pelican and the Discoverer. Collin Gerry - Raymond James & Associates, Inc., Research Division: Well, that's -- I think that's great that you clarified that. I didn't read anything that mentioned that it was just the harbor mooring and it didn't have much to do with the drilling operation, so that's -- I think that's key.

It's not as good a story. But it's -- the fact is we're standing by waiting on the ice to clear, and so we're waiting for the window to open. So there was no -- there are no -- there was no operation going on. We were -- we're just standing by.

Our next question comes from the line of Waqar Syed from Goldman Sachs.

My question is regarding a labor cost in Saudi Arabia. Are you seeing any escalation to cost there?

We don't, as a rule, break down labor and just particularly by region. That's a little more granularity, I think, than what we guide to. I think that with the updated guidance that James has given you, I think you're going to have to do the homework in your models to determine where it fits and how it is. Regionally speaking -- I think globally speaking, there's a lot of activity starting offshore. Some markets are a little more aggressive than others in terms of labor, but I think that our -- the -- those -- the guidance we've given for the fleet is what we can give at this point.

From a global perspective, certainly the inflation on the labor side of the cost is significantly higher than inflation on other aspects of cost. That's a general comment. It's not regional.

Okay. Secondly, on your Bully rigs now that they are working and Globetrotter, any early indication of performance? And what's your early take on the Huisman Tower?

It's been actually very positive. We -- the Bully I, Bully II and Globetrotter, one are all on operating rate. They're all actively engaged in their specific programs. The Bully II in Brazil has been engaged in a backset operation that's anecdotally, I will tell you, has set records. It was a very good operation. We've seen -- on any startup rig, we've seen nits [ph] here and there that things that need to be dealt with. We had some -- we had a top drive issue on the Bully I early on that was -- had a little bit of damage to the top drive. That's been dealt with and since then, no issues. But I would say that on par, the Huisman kit that we've seen, the tower, the pipe handler, the equipment we've been has performed as well or better than we expected. And certainly, the rigs are doing equally as well as any other startup we've had, if not, better. We're very pleased with what we see so far.

Next question comes from the line of Ian Macpherson from Simmons. Ian Macpherson - Simmons & Company International, Research Division: Can you remind me or are you the doing the -- placing a second BOP unit on the Bob Douglas for Anadarko?

We are, yes. Ian Macpherson - Simmons & Company International, Research Division: Okay. What is the full CapEx for that? I can't remember if that was spec-ed into the CapEx for that rig originally or if it's additional with the contract award?

We announced that rig originally -- both the first 2 rigs, we announced with 2 BOP stacks. So if you go back to the original CapEx, it was in the number. We've had some yard adjustments since then but nothing material to speak of. So that was -- from a CapEx perspective, it was contemplated at the time. Ian Macpherson - Simmons & Company International, Research Division: Okay. Do you -- David, do you see that becoming more of a mainstream customer demand? In Anadarko, it's certainly been at the forefront of demanding that, but do you think that's going to become more widespread as a demand feature?

Well, it's almost by definition is more widespread just because there are some and in the past, there have been very few if any. It's interesting and we see a lot of bids that are 1 or 2, some demand 2. Some demand 1. Don't want to. Clearly, in the Gulf of Mexico, I think most people are looking at 2, but abroad, some are, some aren't. It's -- it is -- it's a mixed bag. There are times when the marketing guys will come in and talk about a bid, and it'll be an operator that, I would say, almost would insist on 2, and they'll tell me they're only asking for 1. So it's a mixed bag. I think the -- it's going be interesting when all these rigs come out with 2 BOPs to see what the real value in there is going to be. There's -- our rigs are configured so that the BOPs are effectively fully redundant and interchangeable. I'm not sure everybody's doing it that way because there are some nuances that you may or may not be able to fully utilize all the benefits of that all the time. But ours are redundant and interchangeable. So it's a mixed bag. It's kind of an interesting program, and I can't wait to see how these rigs get out and see it -- see how we view the value on it. Ian Macpherson - Simmons & Company International, Research Division: Just a quick follow-up question, unrelated. You talked about the Alaska drillship but also the Kulluk, I don't think we've ever gotten any real specific revenue guidance for your management services on that. Is it material in the future? Is it something that we ought to think about putting under the revenue model?

It's relatively immaterial. We'll isolate the number in -- the next time we give guidance.

Give us some room, Ian.

And I just offer one follow-up comment to David's remarks on the BOPs. The pace of operators accessing the second BOPs is also going to be driven a lot by relatively substantial long lead times. And unless a contractor ordered the second BOP with the initial placement of the order of the new drilling rig, there's going be quite a gap between maybe a customer wanting it and accessing it.

Our next question comes from the line of Kurt Hallead from RBC Capital Markets.

Just a quick question I had for you was how do you guys think that we should be assessing the bonus revenue opportunity for the rigs that you obviously have in Brazil but more broadly speaking, from an operational performance standpoint. And I think you had some of your rigs that had maybe what, 15% incremental bonus opportunity, something along those lines. Just want to look for an update on that.

If I were you, the bonus is fairly broad. It encompasses a number of elements of our operation and Shell's operation. You talked specifically about the Shell rigs. Some have it, some don't. And then Petrobras being separate. But it's unlikely that you get yourself in a box or a spot where you earn all the bonus all the time because it depends on Shell's performance as well. For instance, we had one of our rigs drilled a technically a very good well for Shell, and they had some issues on some other elements to their other operation. I think Walgreen or something like -- I don't know exactly -- that affected the overall curve. And even though our up time was good and we had no rig issues, of course, we continue to be paid even though they're delayed. But the overall project was not as successful as they had hoped in terms of numbers of days. Our bonus potential was diminished. So over time, I think the best thing you can do is take your best shot and over time, see how it plays out. I could tell you that over time, the bonus performance will improve. Shell wants us -- Shell, you got to love these guys. They want to pay the bonus, so they keep -- because the bonus is funded out of the operation and so they -- technical successes are what they're after as well. So the better we get, the better they look, the more bonus they pay us and so I think over time, the bonus earnings will increase. But I think you got to give it some time. The Danny Adkins well, the days not working for them, the Adkins is getting a little time. The Thompson's getting a little time. We're getting some time on some of the rigs. There's going to take -- it's going to take a while to really get into a groove where the bonus is predictable.

So that's kind of guidance.

That's right.

I appreciate that color. A follow-up I would have, I know you guys don't have any rigs with OGX, but they did indicate they're going to drop some rigs due to some disappointing production results. What kind of impact do you think that's going to have on the midwater -- for Brazilian market, maybe specifically and more broadly, what kind of impact do you it might have outside of Brazil?

Yes, Kurt. I don't think it will have any impact at all. Having availability and even if it was unexpected is probably going be viewed by the customer base right now as a good thing. So if those rigs can't find a home in Brazil, they will find a place elsewhere.

Our next question comes from the line of Trey Stolz from Iberia Capital Partners.

Just a couple of quick questions. First off on OpEx, you mentioned, David, that you made some improvements and there was positive commentary in the press release but also stated that there are some work to do. Is there any detail you could give, a little further detail on where you stand with measures to improve OpEx and what we might see or expect in the second half of 2012 and with regard to specific actions being taken?

Well, we've talked ad nauseam about the actions we're taking, I mean, there's -- from a spares perspective, a training perspective. I think what I've talked about on previous calls is 3 ways to attack it. One is get better at what you do. One is draft a better contract language and lay off more risk on the customer, and the other one is the government getting more comfortable with the industry and the technology and the science that goes into the operation and when it's appropriate full stack and when it's not appropriate full stack. All of those elements, I think, will improve over time. I think James guided -- I think he told you what the downtime was in the first 2 quarters, and he guided to the rest of the year. And I think the last fleet status will give you some indication of what we're expecting kind of for the rest of the year. But I think what would -- I don't think, what we're referring to really is day-to-day operational downtime. We had a couple of events in the last quarter that were unexpected. We had a fire on the Copeland that was caused by workers in the yard as we're getting ready for the Aramco job. And we had a punch through on the rig in India. Both of those are unexpected events that are operational risks that you take in this business and those impact -- I will say one of the things that I'm most happy about in our downtime through the second quarter and some of the first quarter as well is we -- most of our downtime has not been subsea downtime, and some of the -- most of the downtime events we've had on the floaters has been top drive stuff. We've had more downtime in the jackups than we would normally expect to suffer, and it's for various reasons. But we've had less on the floaters and less subsea. So that -- to me, that's very encouraging. That's where the biggest risk is. The 2 biggest outings you have at downtime or subsea and top drive. And top drive, you can get a unit right of the yard and stand it up, and 300 hours later, the gearbox can fly apart and there's nothing you can do about it. But it's just -- those are the 2 elements. And they're probably still the 2 biggest, but our subsea downtime is way, way down, and our floating downtime is down. So those are the things -- those where the real exposure is. James talked about percentages. If the jackups are down or the lower spec floaters are down, it's not as a material impact as it were the deepwater rigs are down. So all of those things are things we're working on. We're highly focused on operational efficiency on the ultra-deepwater and the deepwater fleet and I would argue that it's getting better.

It puts the -- it's good to hear about the subsea and puts the comment in context for me. And then finally probably not an update here but I guess I might as well ask, on -- at analyst day, you talked about additional rigs potentially arctic capable or drillship down the line. Where do you stand? And what triggers might you be looking for before -- in order to get additional newbuilds?

Well, we talked about a number of things. We're looking at -- we are looking at a number of designs. We really like what we're building now. I mean, we really like what we're building now. We think the operational efficiencies that are built into price of the Bullies, the Globetrotters and HHI ultra-deepwater ships. I think, we have yet to really figure out how capable those units are really going to be. I think that as we get them out to work. We're -- we'll be -- we'll see lots of opportunities that we haven't really contemplated in the design phase that will improve, so we like those. But there've been a lot of ships built. There is a growing wave of interest in the market in those places where there are harsh environment requirements, and there is a lot of interest in not necessarily the harsh environment but harsher environment, semis particularly, for the North Sea, both Norway and U.K. sector going forward. So they -- those are interesting opportunities. I think most operators would tell you that even though these ships are big and efficient, their preferred completion tool is still the semis. So a milder environment, big semisubmersible completion rig has some interest. And then there is, I think, coming a wave and an opportunity for 20,000-pound well control equipment. There's no question there are going to be wells drilled that require 20k equipment. So we're looking at all of that. Exactly where we go next, I'm not sure. We will go somewhere. We're not through yet. I'm just not sure exactly which way we go. It'll depend on which opportunity gets the most exciting fast. I can tell you that we have a semisubmersible design we've been working with for a while that we like that we have had some conversation with customers about. We like -- say we still like the HHI ship, and so there's lots of opportunities. We're -- right now, there -- it appears to me there's so much opportunity in different markets. We're almost limited only by our own imagination. So we are working a lot of the different fronts on the newbuild front.

Our final question is from Robert MacKenzie from FBR. Robert MacKenzie - FBR Capital Markets & Co., Research Division: [indiscernible] to me and apology to the presenters earlier. I had to hop off for a moment. Have you talked about demand for the Dick Favor and the Gus Androes in the Middle East?

No. We have not, but Roger would love to or Simon would love to.

The number of opportunities we're currently discussing with operators for both of those units at the moment, I think it's a little bit premature to say that they're ready to be converted into firm contracts, but there's a number of opportunities at both of those units in the second part of the year. Robert MacKenzie - FBR Capital Markets & Co., Research Division: Okay. That fairly -- is fairly near term you think?

I wouldn't like to be drawn on that. I'd rather just say the second part of the year at this stage. Robert MacKenzie - FBR Capital Markets & Co., Research Division: And then follow-up is we've seen several fixtures for standard international jackups in the $130s to low $140,000 day range. How broad do you expect that kind of rate structure to proliferate for some of the older rigs?

Well, in the Middle East, I think there are 3 distinct sort of categories of rigs, the standard entry point, which is a little bit low on the range you've described. I think for the high capability, new generation premium type rig, that's around about the 150s. And then for special requirements, HPHT, et cetera, you're seeing rates around the 200 mark and beyond.

Okay. With that, I'd like to thank everyone for your participation on today's call, and please make a note that Noble plans to record its third quarter 2012 results on October 17 with the call to be scheduled for the morning of October 18. We'll confirm those dates, and I'll call details 3 weeks prior. Again, I'd like to thank everyone for your participation. Crissy, thank you for today's coordinating the call. Good day, everyone.

And this concludes today's conference call. You may now disconnect.