Good day everyone. Welcome to the second quarter 2007 results conference call for Transocean, Inc. Today's call is being recorded. Now for opening remarks and introductions, I would like to turn the call over to Mr. Greg Panagos, Vice President of Investor Relations and Communications. Please go ahead, sir.

Thank you, Leanne. Good morning, ladies and gentlemen, and welcome to Transocean's second quarter 2007 earnings conference call. A copy of the second quarter press release covering our financial results along with supporting statements and schedules is posted on the company's website at 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, followed by news and events and webcasts and presentations. With me this morning are Bob Long, Our Chief Executive Officer; Jean Cahuzac, President; Steven Newman, Executive Vice President and Chief Operating Officer; Greg Cauthen, Senior Vice President and Chief Financial Officer; David Mullen, Senior Vice President of Marketing and Planning; and David Tonnel, Vice President and Controller. Before I turn the call over to Bob Long, 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 U.S. 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 will use various numerical measures in the call today which are or may be considered non-GAAP financial measures under Regulation G. 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. For your convenience, non-GAAP financial measures and reconciliation tables are included with today's press release. That concludes the preliminary details of the call. I will now turn it over to Bob.

Thanks Greg. Good morning, everyone. As you saw from the press release, we had another good quarter with earnings of $1.84 per diluted share. Greg is going to take you through the details in a minute so I'm not going to comment on the numbers. I'm also not going to comment on or answer any questions regarding our proposed merger with Global Santa Fe. We had an extensive call on that last week and there isn't much more we can add until the S-4 is filed around the beginning of next month. The contract drilling market continues to be very strong. We've seen some new record day rates for certain classes of floaters and continue to see peak rates signed for some of the new build floaters which were ordered on speculation. We still see unsatisfied demand by specification floaters and approximately 70% or so of all the deepwater rigs under construction today have already been contracted. David Mullen will comment further on the flow to market and will provide our view on the jackup market in just a few minutes, but first I'm going to turn it over to Greg to discuss the numbers.

Thanks, Bob and good morning to everyone. In the second quarter of 2007, we had net income of $549 million or $1.84 per diluted share. This compares to net income of $553 million or $1.84 per diluted share in the first quarter of 2007 or $1.77 per diluted share after adjusting for gains from sales of assets. All of my remaining comments, including our expectations, are based on Transocean as a standalone company assuming no merger with Global Santa Fe. Total revenues for the second quarter improved by $106 million to approximately $1.4 billion. $25 million of this increase in revenues resulted from the commencement of higher day rate contracts; approximately $13 million resulted from the extra day in the quarter; and $21 million reflected higher integrated services activities. The remaining revenue increase stems primarily from more operating time versus the previous quarter including a full quarter of operations in India of the reactivated C. Kirk Rhein as well as the five integrated services jackups. Second quarter revenue efficiency of almost 96%, although below the excellent results of the first quarter, is still 1 percentage point higher than the 95% we saw in 2006. As we look forward to the remainder of 2007 and 2008, we expect revenue increases due to the commencement of higher day rate contracts to continue to be very meaningful, in particular during the second half of 2007 and early part of 2008 as shown on chart 1. We should experience approximately 86 out-of-service rig months in total for the year 2007, down approximately 9% from 2006. This decrease can be largely attributed to the completion of our rig reactivated program. We project our out-of-service time to further decrease to 72 rig months in 2008 as shown on chart 2. Our reimbursable revenue in 2008 should…

Thanks Greg and good morning to everyone. We had another excellent quarter in contract activities since the May earnings call with a number of leading edge fixtures in the floater market segment. The past quarter was highlighted by our fourth new build in enhanced enterprise class drillship which is anchored by a long-term contract. We expect the enhanced enterprise class drillship will be owned by a joint venture company which in turn will be 65% owned by Transocean and 35% by an Angolan partner. With this and other fixtures since the last earnings call, our backlog has increased by approximately $400 million. The total backlog as shown on chart 4 now stands at approximately $21.4 billion and our outlook remains positive for each of our major asset classes. I will start with a discussion of our high specification fleet which includes our deepwater and harsh environment assets. Our high specification floater fleet is fully committed through to the end of 2008 and has very limited capacity available during 2009. As I mentioned earlier, we obtained a commitment for an enhanced enterprise class dual activity drillship at approximately $460,000 per day with delivery expected during the third quarter of 2010. Although this rig will have similar market leading capabilities to the other three enhanced enterprise class drillships under construction, the rig is only contracted to operate in 7,500 feet of water depth. Other positive views illustrating the strength of the high specification market and supporting our expectations on the extended cycle includes the Jack Bates being awarded a contract with ENI at $530,000 per day for a minimum period of 170 days in Southeast Asia; and Chevron's decision to exercise its option to extend the Sedco 706 contract from its current firm period of three years to five years, which should…

(Operator Instructions) Your first question comes from Kurt Hallead - RBC Capital.

I noticed on your rig status report a number of new contracts that were essentially short-term type of deals, two years; quite a few were less than that with the exception of the Falcon 100. I was wondering if you could put it in perspective, was this just the filler phase or was this some element of a change in the way some of the customers are wanting to contract rigs long term versus short term?

I think what we are pursuing here is a good balance between short-term contracts at extremely high day rates and long-term contracts at good market day rates. As you note, the Falcon 100 was a five-year term which if I'm not mistaken, is probably if not a first, it is very seldom you see a five-year term on a rig of that class. We also have been the new build at a five-year term with the potential upside to go to seven years. Contrary to that, we had the Jack Bates at a very high day rate in Southeast Asia and the 703 at what I would say is a reasonable and expected term for that class of rig in Australia. So I think you are seeing a reasonable balance between long-term deals and short-term deals. If we look a little bit outside our own space, we see in fact evidence that the operators are going even longer term on the high specification fleet. We saw a number of the speculative new builds anchor long-term deals in the four to five-year range whereas previously most of these were anchored in the three-year range. So no, I don't really see any change in the trend. I just see that we're taking an opportunity -- we have a very extensive backlog -- to anchor some short-term deals at very, very attractive day rates.

As a follow-up on your jackup commentary, so you believe that all the incremental supply of jackup rigs plus all the rollovers of existing contracts on jackup rigs will be met with demand in 2008? So there will be no surplus of jackup capacity in 2008 as you can see right now?

Let me give you a little bit more color of how that spins out. So if you look at India, ONGC has a very aggressive redevelopment plan for the Mumbai High. They have a plan to increase the recovery factor from the low 20s to the high 20s. They have an even stretch target to build that all the way up to 40%. That is going to require a huge amount of infield drilling. It's going to require that they go and find those little adjacent pockets and tie them back into the main Mumbai High structure. So we can see increased demand on the back of that alone for many years to come. Additionally you will see Reliance, you'll see Carne, you see a lot of other players coming into the fold that are looking for jackups in India. We see a very strong demand market in India. On the Arabian Gulf, we've got Saudi Aramco which has a very aggressive plan to increase the productive capacity of liquid hydrocarbons and at the same time to develop the gas reserves offshore which will also require a significant increase in jackup demand. Mexico, Pemex is intent on trying to offset the Cantrell decline to the extent possible and for the near-term the only real solution for that is jackup and shallow water floaters; longer term it's deepwater but right now they've got to focus on increasing the drilling space in the jackup area. We're seeing increased demand there. We just saw there was a recent tender for two jackups, incremental demand, and there is going to be another tender for three to four jackups coming out in Mexico. If you put all that together and you can very quickly contemplate a situation where you see the additional supply absorbed. It would be remissive of me not to mention the Gulf. We've seen the Gulf as being very soft and a large number of jackups have left the Gulf. I think the jackup market in the Gulf has reached a low but I don't think it will get any lower. At the same time, I don't see improvement in the near term so I don't think there will be any net migration or immigration of units into the Gulf. In balance, you put all of that together and I think you will see for the next 12 months a fair likelihood that we will have a balance between supply and demand.

What do you think that means in terms of a range of pricing? My understanding is the high-end rigs and the jackups were 180 to 220 on the international markets, and the standard rigs are like 150 to 170. But I do understand there was a recent rig in India signed at 125 or 145, some relatively low rate. Can you add any color on that?

Kurt, first I'll answer that question in a second but I wanted to caution, you asked about jackup market all the way through '08. If you listened to David's comments carefully, we're really not looking much beyond the next nine to 12 months. We're pretty comfortable that the supply/demand balance, all the new builds are going to be absorbed that are delivered in the remainder of '07 and into early '08. But going all the way through '08 in its entirety is a little bit further than you really ever have visibility in the jackup market. On your rate question, I'd say we've seen rates plateau and they've been plateaued with an inability to push rates higher for quite a while now in the jackup market. But by the same token, we haven't seen any indication that rates are softening. So I think the rate ranges that you mentioned, most of what we see is continuing in that band.

Your next question comes from Dan Pickering - Pickering Energy Partners.

Good morning, guys. It seems like from a utilization perspective you had a particularly good quarter. Shipyard downtime in general looked better than we expected. Have you changed your processes any here or was this just a good quarter?

As I mentioned during the first quarter, we've been working on a few initiatives over the last couple of years to keep our folks really focused on standardized processes across the fleet, rigorous execution of those processes, and then good follow-up and close out when things don't go according to plan. We've been focused on that. Our people across our operating rigs, across the fleet are doing a real good job in following through on that and I think we're starting to see the benefits of that bleed through into our regular ongoing performance.

Bob, I guess I'm going to push the envelope a little bit on your no-deal discussion topic which is the difference between the time you announced it today, the credit markets are obviously a little bit nervous about what is going on in sub-prime, et cetera. Could you remind us the debt terms that you have with Goldman Sachs and Lehman? Are those firm terms or is there any risk that your debt has any risk to it?

I will let Greg answer that and let's hope this is the one and only question on the deal.

As we said on our call and told everyone when we were on our road show, they are firm terms with Goldman and Lehman. Revisiting with all of our banks, given our solid expected investment-grade rating, there are no concerns about our ability to refinance that bridge and close this deal.

Your next question comes from Robin Shoemaker - Bear Stearns.

Bob, I wanted to just talk briefly about these two joint venture options that have not yet been exercised. I wasn't clear whether a firm contract on one or both rigs is a requisite for you to exercise that option? Because it sounds like even if it is not you've got very strong positive use of the rig market for many years. So is that a requisite to exercise those options?

Our current intent is not to exercise the option unless we get a contract. Just to clarify, we do not have two options. We have one option if we get a contract on one of the rigs we will exercise the option to enter into a 50% joint venture which has both rigs in it.

So the option expiration date is early '08, is that correct?

It is eight months from when we executed the agreement and we have the option to extend that an additional four months. The reason why we have that, if we are going to enter into an agreement with a national oil company sometimes it takes quite a period of time to finalize those agreements. That is why I'm leaving the space open until the end of the year because in truth, I think we are quite well advanced in Tanker Pacific opportunities.

My other question was that there was some discussion on another conference call, I can't remember which one, but about the potential incremental rig demand for Libya. I was wondering if you could discuss what you see as the incremental rig demand there?

Yes, there is. We've seen a lot of inquiry activity coming out of India and we see a lot of upside. The geology looks very promising. It's taking a little bit longer than we might have anticipated to get a solid basis of activity there but I think that is going to happen over the next six to 12 months. I think you are going to see Libya as a pretty strong offshore activity for many years to come. It's taken a while to get all the tender process in line but I see that happening now in the next six to 12 months.

Okay. And is this primarily a jackup or a floater market?

It's both. Right now most inquiries are actually for midwater floaters.

Your next question comes from Waqar Syed - Tristone Capital.

You provide some pretty good color on the jackup market but could you quantify the unmet incremental demand that you see right now? Could you put a number to that?

I'm not sure that we can put a specific number on that demand. We hear varying numbers of what demand might be coming out of the Middle East. It varies from 6 to 12 and most people think it's going to be the 12 or maybe more. We've seen a lot of activity in India and as David mentioned, there's a couple of rigs incremental coming out in Mexico and we know of requirements in various places around the world where there is one or two additional rigs required. But I wouldn't want to try and add all those up to you and give you a specific number.

Maybe 20, 25 range? Does that seem reasonable over the next 12 months?

I don't think I want to comment on that.

Secondly, is there going to be any additional G&A this year owing to the GSF merger?

I'm not sure I understood the question. Additional G&A?

General and administration expenses this year additional because of any legal fees or anything else that you may incur this year because of the merger?

Not material. Any costs directly attributable to the merger get capitalized as part of the merger-related costs. But there would be some costs that don't qualify for capitalization but they are not material.

Your next question comes from Ian Macpherson - Simmons & Co. Ian Macpherson - Simmons & Co.: Regarding the tightness in the market for available deepwater, fifth generation deepwater rigs as opposed to new builds, I think the first one in your fleet that comes free is the Nautilus. I'm just curious to get your sense as to what customers are looking for with respect to day rates? What you're looking for and what customers are willing to consider for those types of rigs that are working rigs with an operating track record and relatively near-term availability? When do you think the timing might be for some new fixtures along that front?

I won't be able to give you any details as to what customers we are talking to or what rate expectations we have. Suffice to say that we are in discussion with a number of customers, we're not in any particular rush to anchor a deal on the Nautilus rig because it has a very favorable delivery schedule. It's as you noted, it's early '09 and we are talking to a number of opportunities, some in the Gulf, some outside the Gulf, and we're talking about, in all cases, a fairly long-term deal. Ian Macpherson - Simmons & Co.: Okay. Now is it safe to think that that rig should command a premium day rate to what new builds are getting today? Pound for pound?

I would rather not comment on that but I would caution you to bear in mind the rig standalone is 5,500 foot water depth and I don't necessarily see it would command a premium to new build. It would depend on the trade-off of the term but it has a very favorable delivery schedule and that is what is attractive to the market right now. Ian Macpherson - Simmons & Co.: If I can get one quick follow-up on the Sedco 702, just how that progress is going and what the relatively specific start date looks like now for that rig coming out of the shipyard?

Ian, I was on the rig on Sunday. I had a good opportunity to walk through completely with the project team where they are on that. I expect we will be leaving Singapore in the next ten days or so, ten days or two weeks for about five weeks worth of offshore work to install the thrusters and conduct the sea trials. I expect the rig will be on location operating in the first half of November.

Your next question comes from Ben Dell - Bernstein.

Just a quick follow-up question on the jackup market. The rig you signed for three months at 195, that looks like a relatively short contract. It seems in Asia that people are signing shorter and shorter terms. Is that something you are seeing or is that just a specific artifact with that rig?

Sorry, which rig are you referring to?

The jackup signed for 195, the Trident 17.

No, I mean we are getting long-term deals and short-term deals. I don't believe -- the Trident 17 was for three years. One of them was a six-month extension at the end of an existing contract and it was negotiated as part of another contract. So you have to look at the two rigs together which is the Trident 16 and the Trident 17. On one of them it had a forward start date that is very far out there. It was satisfying the Petronas program on the back of two jackups which in aggregates are both very long term. They are approaching four years.

So you are not seeing any term duration or weakness in the Asian market at all?

No. In fact in the Indian market you are seeing terms that are enormously long. I mean ONGC is coming out for inquiries in the three to five-year ranges and we're saying Petronas are looking for opportunities to go very long on jackup terms as well. You have other operators that have short-term requirements like Carne with six months, Reliance with a year. I think you are seeing a pretty good mix of the national oil companies are looking for long-term position, a lot of the IOCs are looking for a relatively short-term position which is what we expect in that market. We're pleasantly surprised at the long-term requirements by the national oil companies. Pemex have come up with a number of long-term requirements between one to three years in term on jackups.

On the ONGC comments, the couple of rigs they signed recently on jackups, they signed for about $140,000 for a pretty good term. Do you believe that is the sort of level you would have to bid to get the three to five-year term?

It's a marker but do bear in mind that the two companies that bid those rates are companies that own a single rig each. They are indigenous companies, they don't really have an exposure to the international market. So I would caution you to use that as a true marker but it is a marker. Aban, at the same time which is a more significant player, they bid the rigs at significantly higher rates for the same term.

And if I could just push my luck with one merger-related question. You mentioned that you've looked at Global Santa Fe for a long time and admired them as a company and talked about it being one of the best fits and best combination. Do you mind just giving a comment on why now? It just seems that you feel that there's only 12 months of visibility on the jackup and you've obviously increased your shareholders exposure to the jackup business. I'm just wondering what was the catalyst to bring the deal together now?

I think I'm going to fall back on my initial statement and not talk about the merger-related stuff until we get our S-4 filed.

Your next question comes from Roger Read - Natexis Bleichroeder.

The only merger-related question I would have and it's not so much the merger but in terms of any asset sales, share repurchases or any other changes you might make to the company, are you pretty well locked down until the transaction is done at this point? New builds, for example, another JV with another speculative builder, that sort of thing?

No, I think that our use of capital, the only limitation that we now have is that we have suspended our stock repurchase program. But in terms of paying down debt or investment opportunities, if we develop opportunities then I think that we would pursue them.

Following along with the theme of jackup day rates in the Asian market, on the merger call, Bob, you remarked that given your jackup fleet being a little bit older than especially relative to new builds coming out, ultimately you guys would've had to make the decision to potentially unload those rigs or invest significantly in them. As you look at your rig fleet today compared to the rigs that are in the market and coming out in the market and the day rates that have been talked about in terms of the ranges here, 180 to say 240 for new builds and maybe something below that for shorter rigs, do you see this is a market where you guys probably looking forward over the next 12 months in a balanced market are 180 and lower on rolling over your rigs? Or do your rigs for the most part compete pretty well with the new rigs that are coming into the market? Where we're talking a like rig, a 350 versus a 350, not talking the 300s versus the new builds.

I think there is no real straight answer to that. The rate is obviously going to depend a lot on the term. What type of opportunity you are bidding into will depend on the suitability of the jackup you are bidding into. To a large part, jackups being bid into the gas project in Saudi Arabia, for example, the requirement is for new builds or something that is approaching the same technical spec as a new build. Jackups required for the Mumbai High redevelopment program are largely existing jackups and a lot of standard jackups that would fall into the category of jackups we own. So there is no real straight answer to that. I think we see as Bob mentioned, we see the day rates have reasonably plateaued at a good level and we're comfortable to anchor long-term deals into these day rates and at the same time take advantage of shorter term deals.

Roger, we're taking a look at the jackup market pretty carefully and when we look at what we anticipate demand to be, something like 80% or 85% of the anticipated demand is for jackups that our fleet can easily do. There's only something like 15% of the demand that we see out there that would require a fairly high spec unit. So for the most part, the majority of the available demand, our fleet is fully competitive.

Your next question comes from Thomas Curran - Wachovia. Thomas Curran – Wachovia: It looks as if with this rig status report, that a fairly recent trend of disclosing both intra contract day rates increases with an existing operator that I'm assuming reflects the impact of cost escalators as well as disclosing sublets. It reflects a number of those that we just haven't seen before. I'm wondering how much of this has been occurring over the last three quarters that you just weren't disclosing, but was clearly being reflected in your quarterly results? How much of it is still out there that might not be reflected even as of this rig status report?

We've really not made any changes in what we disclose. We do not disclose insignificant changes in day rates or if day rates pops of a couple thousand dollars because of a cost escalation or currency change. A lot of times we will wait until there is another significant change to disclose any change. But any time there is any material change in the terms of the cash we receive, we will disclose it. On sublets, if it doesn't change what we receive, we don't disclose that. If there is some kind of change of locale that does pick up the cash we receive, then we do disclose that. So there has really been no change in what has been disclosed. You just saw a quarter where there was a lot of material activity. Thomas Curran – Wachovia: So for example, in the latest fleet status reports, the sublet of the Trident 17 by Petronas to VRJ Petroleum, that is showing a $10,000 increase in the day rate. Does that increase solely reflect the reimbursement for the round-trip mobilization?

It reflects various change of locale type provisions in the contract that would include that and other things that we really don't want to get into the details of. But all of our contracts if an operator, whether they sublet it or not, moves it from the jurisdiction that it was bid to operate in to another jurisdiction that may have different cost structures, tax structures, whatever, there will be adjustments to the day rate to pick up all that. Now I will tell you most of the things are just designed to keep us whole. So although the day rate is higher, our costs have gone up too, so the profit margin is the same, but it is the day rate we're going to be getting. Thomas Curran – Wachovia: So if I understand your answer correctly, it sounds as if you believe you have been disclosing any cost escalation and/or other form of intra-contracted increase, including sublets, that you would consider significant?

It's not the sublet that triggers a disclosure; it's the change of locale, it is something that changes our day rates. Our customers have the right to sublet in the same jurisdiction, and we don't get any benefit or detriment of that. It doesn't change what we are receiving. But if they change the locale, then there is an automatic adjustment. So don't focus on sublet; just focus on the change of locale.

I think the specific answer to your question is, no, we've not changed our disclosure policy. So what we have disclosed now is what we've been disclosing. Thomas Curran – Wachovia: I understand. If that's the case, then what other factors might be driving you to report higher day rates or realized average revenue per day than the fleet status reports throughout the quarter would lead you to model on our side?

Well, I mean the normal factors, other than a new contract, are cost escalation which sometimes can be significant, especially for those contracts that reset on an annual basis. Currency, some of our contracts especially in Europe have a significant component of local currency that provide us a natural head with our local currency cost. So as there's a change in the dollar, that gets reflected. Then the other is the change of locale that would cause a contract to get uplifted. All those occur at different times in different contracts. So it's hard to predict a pattern. Sometimes, even for things that are contractual on an annual basis, there is always a discussion/negotiation with the customer, and so we usually don't report it until the customer signs off on it. Thomas Curran – Wachovia: But again, on the cost escalation front, presumably it would be making its way into the fleet status report if it were significant?

Well, that is right. That is what I'm saying; all that stuff makes its way into the fleet status report. Thomas Curran – Wachovia: I will follow up on this in more detail offline. Just one more follow-up, switching gears here. Given, Bob, that you guys are going to be adding seven more deepwater rigs upon consolidating Global Santa Fe, does that in any way potentially accelerate the point at which we should expect to see the next leg up in deepwater pricing emerge? In other words, because you're now going to have contracting power over nine more deepwater floaters, which is significant, will Transocean alone have the confidence sooner to begin pushing that leading edge rate higher earlier than say the first quarter of 2008?

I think I'm going to fall back on my initial comment that we're not going to talk about the merger or any implications of it.

Your next question comes from Angie Sedita - Lehman Brothers. Angie Sedita - Lehman Brothers : Just as a follow-up again on the jackup market, particularly in Southeast Asia which is where most of the new builds will be coming out, and you guys have certain exposure with rigs in India and Thailand and so forth. Is it a strategy for you in the coming year to take longer-term contracts to try to book up some of those rigs through 2008 and into 2009, and be willing to do that at today's rate, a flat rate? Let's say, an average jackup that you guys have in that market is 150 to 160. Would you be looking for that type of rate or be willing to take a slightly lower rate to lock up that rig for a year to two years?

Angie, I don't think we want to get that specific about our pricing and bidding strategy because we are still in a competitive market out there. I think I'm going to avoid that question. Angie Sedita - Lehman Brothers : I guess the next question will be just to lock up some of those rigs into longer-term contracts than where they are now.

I think it is fair to say that if we can achieve rates that are in the ballpark of where rates have been, we think those rates are good and provide some very attractive returns. So we would lock up rigs on a long-term basis. Angie Sedita - Lehman Brothers : Separately, maybe some color on the contract with the Sedco 601 which is a short-term contract and the outlook also for the John Shaw in the North Sea and that market which is rolling over early 2008?

I will take that. The 601 is an unusual contract. I probably can't talk too much about it because what you saw there is a filler contract for a longer-term deal. That is all I'm going to say on the 601. You can feel comfortable that we have something longer-term on the back of that. In the North Sea, the John Shaw is the first rig we've got available and we have a lot of interest in the John Shaw right now. I think we're talking to three or four operators. As you note, some time ago I made a comment about secondary market developing in the North Sea. What we've seen since that time is that secondary market has dried up and we start to see a pretty significant increase in call for tenders, bidding activity and just general requests for information on rig availability. So I feel pretty confident that we will be adding more term to what we've already got in the John Shaw. The John Shaw is not available until end of Q1 '08; I am pretty confident that you're going to see something at the back of that pretty soon. Angie Sedita - Lehman Brothers : Great. That is in the 380s now so I would assume for that class of rig, you can probably get somewhere in the mid 400?

I won't comment on the price. Angie Sedita - Lehman Brothers : Finally last comment is, Bob, you remarked on Pemex and their long-term demand for ultra-deepwater rigs. Any new color there on timing or anything else you can add?

David is very familiar with that market so I will let him comment on that.

As you may recall, they went to tender for three units. They contracted three units, two with water depth capabilities up to 7,000 feet, on to 10,000 feet and they have more recently contracted units in 5,000 to 6,000 foot range on a three-year deal. So right now Pemex have four units under contract and my sense is they are going to look for more. Angie Sedita - Lehman Brothers : Still assuming that nine to ten range ultimately as far as rigs?

Obviously it’s contingent upon exploration success. But yes, and I think it's going to take quite a while to build up that level of activity and to build up the resources, the infrastructure support that can support that level of activity. But on a yet to find reserve analysis, the geologist would tell you that the prospectivity in the Mexican side of the Gulf is every bit as good as the U.S. side of the Gulf so one could safely assume that in the out years there you could have an activity that is comparable.

Your next question comes from Arun Jayaram - Credit Suisse. Arun Jayaram - Credit Suisse : Bob, we're hearing about acute shortages of ultra-deepwater rig capacity in the Gulf of Mexico which has left some operators curtailing drilling programs. There are 16 ultra-deepwater rigs in the Gulf of Mexico. I'm just wondering if you could comment on that? How many rigs short do you think we are in the ultra-deepwater market in the Gulf?

I don't think there is that acute a shortage. I think right now looking at all the customers we're talking to, they are probably short about two or three units. However, I think what is an acute shortage is everybody would like to have earlier time rather than later time. So programs are getting pushed back into later time because of rig availability right now. Just to answer your question, yes, if you are talking about right now, there is an acute shortage. If you are talking about in the out years, the Gulf of Mexico have contracted a lot of units and they are still contracting units and I'd say they're looking for two to three more strings compared to what's fully contracted out there. But currently there is an acute shortage. Arun Jayaram - Credit Suisse : Could you add the same commentary on West Africa?

West Africa, there is more shortfall in the longer term. I mean I think you are going to see Angola and Nigeria have maybe a shortage of up to 10 units; a significant shortage. Arun Jayaram - Credit Suisse : Greg. as these dual activity patents revenue stream comes in, in terms of 2008, how much revenue do you forecast you will get from the patents?

Frankly we've signed them up so recently, I haven't recalculated that. It should be a couple of million dollars a quarter. But that is assuming no GSF merger because clearly if that merger occurs, we're going to lose that revenue stream.

We have no further questions at this time.

Perfect. Well, thank you everybody for joining us and we will talk to you again next quarter.