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

Good morning, ladies and gentlemen, and welcome to Transocean's fourth quarter 2007 earnings conference call. A copy of the fourth 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 on this morning’s call are Bob Long, Our Chief Executive Officer; Jon Marshall, Chief Operating Officer; Jean Cahuzac, Executive Vice President Assets; Steven Newman, Executive Vice President Performance; Greg Cauthen, Senior Vice President and Chief Financial Officer; and David Mullen, Senior Vice President of Marketing and Planning. 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 relating 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 that 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, www.deepwater.com under investor relations, non-GAAP financial measures and reconciliations. For your convenience, non-GAAP financial measures and reconciliation tables are included with today's press release. Our website also includes schedules detailing operating and maintenance costs, other revenue, deferred revenue and revenue efficiency and investor relations financial reports. Finally under news and events and webcasts and presentations we posted slides detailing average contracted dayrate by rig type, out-of-service rigs months, operating and maintenance costs, trends and contract background. That concludes the preliminary details; I’ll now turn the call over to Bob.

Good morning and welcome to our first earning’s call following the merger. We’ll follow our standard format so after a few overview comments from me, Greg will give you some more insight into the numbers and then David Mullen will give you a bit of color on the markets. I think we had a very good quarter although any kind of comparisons are difficult to make because of the accounting required by the merger. Greg will give you some insight into the numbers in a minute and I’ll apologize in advance for the length of his remarks but I think you’ll appreciate his explanations and the guidance he’ll give you for 2008. I’m happy to be able to report that our merger integration efforts are proceeding very well. Jon Marshall and I together with others in senior management recently completed a long trip to visit each of our business units in division management and it’s clear that there is a lot of respect from everyone for the expertise, experience and capability that all hands from both legacy companies are bringing to the table. I don’t think that the dynamics could be any better. We also seem to be on track to achieve our goal of systems conversions by mid-year and are slightly ahead of our original targets on synergy savings. Looking at the market we continue to enjoy excellent fundamentals. The deepwater market in particular remains substantially supply constrained. We spent some time in India during our recent travels and it’s clear from both the government and customers that there’s an urgent requirement for more deepwater rigs in India. In Brazil, all of you are aware of the recent announced discoveries in [Tupi and Jupiter] and the tremendous prospective demand that could be generated. [inaudible] is currently out for bids…

Thanks Bob and good morning to everyone. On November 27 we closed the merger with Global Sante Fe in the reclassification of Transocean shares and in the process distributed approximately $15 billion to the Global Sante Fe and Transocean shareholders. These transactions make understanding our results for the fourth quarter complicated and as a result my comments will first focus on reconciling our results to street estimates, second provide additional insight into the results for the quarter and finally provide you with our outlook for 2008. In the fourth quarter of 2007 we had net income of $1,056 million or $4.17 per diluted share. This compares to net income of $973 million or $4.63 per diluted shares are restated in the third quarter of 2007. Net income for the fourth quarter 2007 includes the following. Approximately one month of operations of Global Sante Fe, the impact of reporting Global Sante Fe’s assets and liabilities at fair market value as required by US GAAP, interest expense related to debt used to fund the merger and reclassification, and various merger related costs primarily related to legacy Transocean employees. In addition diluted EPS for the fourth quarter includes the impact of the shares issued in the merger and reclassification. As the reclassification is treated as a reverse stock split under US GAAP all historical shares for purposes of calculation EPS are restated by applying the .6996 reclassification exchange factor. Thus the historical weighted average diluted shares in October and November for purposes of calculating fourth quarter EPS in all other historical periods have now been restated. This results in an average diluted share count in the fourth quarter of 254 million shares. Alternatively, if the reclassification had been treated as a share buyback the non restated average share count would have been 309…

Thanks Greg and good morning to everybody. We had a very busy period in contract activity since the last earnings call with a number of contract commitments on the existing fleet with start dates in 2010. We continue to see a lot of customer interest in new build opportunities and I expect in the coming quarters that a number of these will translate in to commitments. Turning to our existing fleet I’ll start with the discussion of our high specification fleet which includes our deepwater and harsh environment rigs. The Discoverer Spirit contract was extended for an additional three years with [Anadarko] with a forward start date of 2010 extending the contract till late 2013 at a dayrate of $520,000 per day. The GSF Explorer was awarded a two-year contract with a consortium of operators in South East Asia at a rate of $510,000 per day with an expected contract commencement in late 2009. And the Deepwater Millennium contract was extended for an additional three years with [Anadarko] at a rate of $535,000 per day with a start date of mid-2010 extending the contract commitment till 2013. The fixtures I’ve just mentioned support the view of an extended up cycle for high specification units where we continue to see unsatisfied demand in the mature deepwater petroleum basins. We see substantial incremental demand growth for appraisal and subsequent development work following some very significant discoveries such as the sub salt in Brazil, the lower tertiary system in the Gulf of Mexico, the deepwater offshore eastern India and a number of discoveries in the sub salt and block 31 in Angola. All these serve to demonstrate the huge upside potential of these deepwater basins. The recent sub salt discoveries in Brazil and the lower tertiary discovery in the Gulf of Mexico are…

Thanks David, with that I think we’re finally ready to entertain some questions.

Your first question comes from Kurt Hallead - RBC Capital Markets

Good morning. Thanks for all the detail, be really helpful. I just wanted to follow-up initially Greg, you’d referenced your interest expense start and end kind of ranges, I think I might have misheard. You’re starting at what, you said 125 and ending at 75? Is that what you said?

Yes.

And that’s on a net interest basis?

That’s net of interest income and also net of capitalized interest which will grow slightly during the year as we continue to invest in new builds. Now realize that with our converts which are very low coupon and also at the beginning of the year about $7 billion of our debt is floating rate debt and LIBOR has really come down here lately, so we’re just assuming sort of a flat LIBOR, so it will be dependent on what LIBOR actually does with that much floating rate debt.

And then did you reference your depreciation for the year?

Yes we did, it should be roughly $380 million for the year. It’ll go up a little bit per quarter naturally but then come down a little bit as the rig sales occur during the year so it will start and end the year at the same quarterly run rate.

Okay great and then from a market standpoint, I think the deepwater has strength there as is pretty self evident, on the jackup market I think over the last nine or 12 months we’ve seen the rate range kind of decline here and I just wanted to get a sense of what I’m hearing is that ’08 should be fine from the supply demand balance standpoint. Still question marks remain on ’09. So do you get the sense that the market is getting more sensitive to maybe taking rates down another leg here to secure work through ’09 and avoid the next wave of supply or are you guys getting a sense that ’09 could surprise people and be stronger than expected?

We continue to be positively surprised with the jackup market. It’s in terms of what we see with fixtures in the past quarter, what we see coming up in the near term, we see a combination of long term fixtures at good day rates. We see some short term fixtures which we’ve anchored in the past quarter at very good dayrates. So I would say that we continue to be positively surprised by this market. I would caveat by saying we’ve never had long term visibility on the jackup demand side. The visibility we do have is typically six months and that remains positive.

I would say Kurt that I don’t think we’re seeing any reductions in dayrates. I don’t think we’ve seen any significant increases in dayrates although some of the short term contracts might actually be a bit higher than I would have expected, but we’re not seeing any general overall push to lower jackup rates.

Okay and then I guess there was a recent transaction, your Scorpion going for $228 million a rig, I’m sure that was above most of the US publically traded company’s price ranges, but is there a recognition now maybe here in the market place that – or a recognition maybe on your front that maybe a $200 million plus price tag for a new jackup rig is now feasible?

I’m not sure that I can comment really on that. We haven’t been in the market for new jackups so I guess I couldn’t answer your question really.

Well I guess along the lines of what you’ve referenced earlier Bob about the fact that you may be, focused on the high end of the jackup market and a lot of these new rigs are at that high end. I was just kind of curious as to whether or not you may look to high grade it that way.

I guess we’re always looking at opportunities but I think we’d be careful that the prices that seem to be out there for jackups today, so that’s not a priority for us at the present time.

Okay great, thanks.

Your next question comes from Angie Sedita - Lehman Brothers

Thanks, good morning guys. Nice quarter out of the gate, nice to see a solid quarter. First question I had is we obviously saw a nice contract signing by ocean rig recently with a $600,000 plus rate contract, big rate but for three year term, given the availability you have on the Nautilus and the DD I, do you think we’re going to see more of these types of rates not just for short term contracts but more term here.

Yes it demonstrates the value that the market places on early availability. So I think, yes, it’s a market rate.

Do you see any advantage in keeping some of your rigs free, high spec rigs free, closer to those dates or would you be willing to contract them at today’s prices?

At the right dayrate and for the right term we’re very happy to continue to contract our rigs.

Okay great. On the Galaxy II I saw that it took a short term contract, went from 300 to 200 and then into the shipyard, as the tightness in the North Sea market changed at all and would you expect that rate to go back to a similar rate?

Yes, this was the question of filling the gap. We’re talking to an operator on a long term opportunity there so it has an SPS scheduled and I would anticipate that we’ll see something come out on that fairly soon.

Okay and then finally you already have between the two companies a pretty impressive new build construction program under way, are you still seeking out additional contracts for construction or are you happy at today’s program level?

We’re in advanced discussions on the second joint venture rig. We have the rig at the HHI yard and we continue to dialogue with customers and we see very strong interest in new builds so I wouldn’t be surprised if you saw something happen there within the next year.

Great thanks, that’s all I have.

Your next question comes from Waqar Syed – Tristone Capital Waqar Syed – Tristone Capital: Thank you. Bob could you quantify the incremental demand that could come in from the Tubi Jupiter discoveries in offshore Brazil and then are you seeing any interest in your client’s drilling for similar kind of prospects offshore West Africa?

I think lots of different people have come out with efforts to project the number of rigs that could be required to develop Tubi and it depends on what is finally resolved in terms of what those reserves actually are, but numbers really spread all over the map on that. I’m not sure that we’re any better at trying to really estimate how many rigs might be needed to develop it. It depends on how quickly Petronas wants to develop it. I think it’s clear that it could generate significant increase in demand and increase in interest in that whole play, but trying to quantify the number of rigs is probably just a numbers game and I’m not sure would tell you anything. As far as West Africa, I’ll let David comment on that.

There has been a number of discoveries sub salt in West Africa. There’s not an awful lot released with respect to the geology so I don’t know how the geology mirrors West Africa and Brazil. Ostensibly it’s the same sedimentary systems so there should be some similarities there. Clearly all this sub salt is unfolding a totally new petroleum system and it just gives greater weight to the deepwater basins. We see the lower tertiary system in Gulf of Mexico. The sub salt in Brazil and now sub salt in Angola which I’m sure will extend to greater areas in West Africa. Wagar Syed – Tristone Capital: Good and other last question is on the shipyards. Are you hearing not just for your own rigs but for industry wide, are you hearing of any delays or any issues with the shipyards that are building quite a few rigs over the next couple of years?

I been talking first about the [front] ocean rigs, as you know we are building eight rigs, one in Singapore and seven or Korea. And as you can imagine, we have assigned dedicated teams to monitor the progress of this new construction. At this stage all projects are on time and on budget as far as the Transocean rates are concerned. We’d like to highlight however that the most challenging part of any project remains integration and commissioning of equipment which has not yet started. The approach that we’ve taken is based on the past experience we acquired with the last round of new build in the late 90’s and based on this experience we have assigned full time Transocean people in all our main vendor facilities to monitor the manufacturing of major components and systems and we have established regular visits to all critical vendors’ shops. This seems to work pretty well as we have been able to correct at an early stage a few issues which would have had a negative impact if not identified on time. So in summary, at this stage I’m confident that we have assigned [inaudible] technical resources to this project and that with the right management focus we should deliver these rigs on time and on budget. I’m consciously optimistic on that. Regarding our competitors, you’ve seen some announcement that delays may be related to commissioning and I can’t really comment on where they are exactly. As I mentioned before, commissioning is key and having the right resources to monitor the commissioning is certainly required for success. Wagar Syed – Tristone Capital: Great. Thank you very much, thanks for your answer.

Your next question comes from Robert MacKenzie - Friedman, Billings, Ramsey

Hi, I wanted to touch on Angie’s question a little bit more. With the recent fixture of a competitive rig, well over 600,000 a day for three years, do you think that sets a new market for your big rigs?

We’d like to think so but I wouldn’t get too optimistic about that. There’s a lot of different dynamics and really as David indicated there’s a very significant premium in the market for prompt delivery. So you can’t really use that as a marker necessarily to say what rates our new builds are going to be or what rates our rigs that are available in 2010 type time horizon are going to be. It certainly a marker I think that most of the industry is going to be looking at on any capacity that’s available with prompt delivery and those would be the few rigs that might be available in late 2008. But beyond that, I think you need to be careful. We can hope but we’ll have to see how things develop in the later years.

In the context of that then Bob, you mentioned you’re seeing demand for rigs with availability in 2010 faster and sooner than you expected, what percentage of your fleet might you consider deferring contracts on in an attempt to get perhaps better returns at a later date?

Well you need to be careful with the dynamics in the market. If you hold a lot of rigs off the market hoping that things will get better, then you’ve got to have a lot capacity available and nothing is going to drive it to get better. What’s going to drive the rates on the long forward start contracts higher is eventually getting a lot of that capacity contracted and if you don’t do that then my guess would be that there’s not going to be a catalyst to drive the rates higher. So there’s not a really crisp way to answer your question. We monitor this market and we look at opportunities and frankly it’s difficult to turn down dayrates on these rigs with three or four year type contracts starting in 2010 at rates that are substantially in excess of $500,000 a day providing pretty significant returns. So there’s a lot of different dynamics there.

Okay, thanks.

Your next question comes from Judson Bailey - Jefferies & Company, Inc. Judson Bailey - Jefferies & Company, Inc.: Thank you good morning. Bob could you comment on availability in the yards. What’s the earliest slot you have available and do you have any remaining options, I can’t remember from the various contracts you’ve gotten into, if you have any remaining options for an earlier delivery and then could you maybe comment on the cost of building one of your Discover class drill ships today.

I think on the cost front, we’re estimating that a new rig ordered today would be around $725 million to $750 million. Deliveries I expect would be probably first to first quarter 2011 and not sure where we stand on options, Jean?

When you look at yard availability, it’s not only the shipyards availability which needs to be considered but also the delivery time for drilling equipment and other components of the rigs. But I would say that in short term we would have some possibility to secure some slots for delivery early Q1 2011 and then it’s a question of monitoring the situation and see what’s available on a continuous basis. Judson Bailey - Jefferies & Company, Inc.: Okay and one last question for Greg, you gave a number for EPS for the fourth quarter taking out the one time items of 279, what tax rate were you using for that, I didn’t catch that?

It’s a little complicated. That takes out the prior year’s discrete tax items but does include in the quarterly rate the unusual items in the quarter so the normal affective tax rate is 12.5% but then there’s another $26 million in the quarter that is a cash items relates to ’07 but you could argue whether it all relates to the quarter or not. So that’s still in there but so it’s a combination of that 12.5% less the $26 million net and that’s net of the $17 million revenue adjustment I talked about. A little complicated quarter on taxes. Judson Bailey - Jefferies & Company, Inc.: Thank you.

Your next question comes from Dan Pickering - Pickering Energy

Morning, Bob I want to come back to the new build question. In your earlier comments you talked about a supply constrained market with a – and it’s going to be that way for a long time. Historically you’ve been a new builder with contracts in hand; I think the Global Sante Fe folks were a little more willing to invest without a contract. Given such a strong market and the fact that it seems like speculators will soak up those shipyard slots does it push you to consider speculative new building or new building without a contract?

No. I’d still have no appetite at all for ordering new rigs on speculation with a three, three and a half year delivery despite how good we think the market is going to be. Adding capacity to this market particularly right now while we have some discussions going on with some customers about potential new builds, both on the current ones we have under construction without contracts and on additional ones, we are preferably, we’re trying to interest customers in first contracting the existing capacity that we have coming available in 2010 and 2011. In some instances just because of their requirements, they prefer to look at a new build. And I think we’re going to get some opportunities to add additional new builds with contracts so I have no interest at all with building on speculation.

Good answer, I like that and the interest in the new builds with contracts, is that coming from publically traded companies, are they national oil companies, where is that demand showing up?

We’ll just let you see that once we announce the contracts if we get it Dan.

Okay and then jumping over and talking a little bit about the jackup rigs that you just sold, I think the buyer is talking about putting some money in these rigs and taking them to international market, so you’ve talked about your exiting the shallow water Gulf, but they’re talking about international demand and with spending a little bit of money, just can you reconcile for us, you didn’t want to spend that money on these rigs, why has it worked for them, that doesn’t work for you?

I’m not sure, there could be a lot of factors there Dan in terms of outlook and risk profile on the market but we look out there and while we see a good jackup market today and continuing increases in demand, everybody is aware of all of the new capacity that’s going to be coming into the market. If you take a look at what we got for a sales price and look at what we think it would cost to make those rigs really competitive in an international market, you wind up with a cost basis for those rigs. It’s almost comparable to a new build and it’s a 25 or 30 year-old rig so we just concluded that that didn’t seem to particularly make sense. Particularly given the fact that we would prefer to have a focus on the high end of the market and completely fully competitive rigs. So kind of put all of that into the pot and decided it was a fair price.

Okay and last question for Greg, you gave a fair amount of detail on the cost side with relationship to the various business segments, is that something that we’re going to see going forward or is that just the help you’re giving us as we transition from the two separate companies to the one company?

We’ll do that going forward; we’ll try to make my comments a little brief, shorter in the future. But we’ll try to give that same level of guidance because we understand our cost structure is complicated and that guidance is helpful.

Great, thank you. Appreciated the detail.

Your next question comes from Ian MacPherson - Simmons & Company Ian MacPherson - Simmons & Company: Bob, my first question would really just be on a conceptual level for deepwater dayrates. New build costs are going higher, steel price is higher, no relief for shipyard deliveries, operating costs are going way higher, what would prevent leading edge dayrates for deepwater rigs to go higher from your perspective in connection with all those factors?

That’s a little bit of a difficult question to answer in terms of what really drives the dayrates but from our perspective on a new build, since we don’t build on speculation and we generally have a criteria that says we want a certain amount of surer payback in the initial five-year contract, if you accept all of your assumptions about increasing costs to build then that would clearly drive an increased dayrate requirement in order to meet our payback criteria so from our perspective, building to a contract, your conclusion is probably accurate, assuming that your assumptions about all those costs going up are accurate. But beyond that I’m not sure I could comment much. Ian MacPherson - Simmons & Company: I think the cost assumptions I’m talking about are fairly empirical. That being said, new builds aren’t really setting the leading edge rates; it’s the worn rigs with earlier availability that are. So I’m wondering if the new build costs and the industry level operating cost squeeze is influencing the way you’re bidding leading edge dayrates for existing rigs or if those factors are really detached?

One thing when you think about the existing rigs and bidding rates for a forward start contract we are generally requiring cost escalation protection from today. So the rates that we bid aren’t particularly influenced by our view of future costs for most of the cases when we’re bidding these forward start contracts because we’re putting in the contract to get protection. That probably means that the dayrate when the contract commences is going to be significantly above what the headline dayrate is at the time we sign it but we’ll just have to wait and see what cost actually does in order to see what that dayrate is going to affectively be at the time the contract starts. Ian MacPherson - Simmons & Company: Really, okay thanks. Just a quick follow-up for Greg. I’m sorry if I missed this in your remarks with respect to the O&M cost guidance for the year, 5.1 to 5.3, did you break out [amounts] for CMI and ADTI?

All I broke out is that for all of our low margin activities, CMI, ADTI, our legacy Transocean integrated services and then the recharge revenues, reimburseables from customers, that’s about $1.1 billion of revenue we expect for 2008 and a little over $1 billion for costs for all that. Ian MacPherson - Simmons & Company: Okay, thank you.

Your next question comes from Roger Read - Natexis Bleichroeder

Good morning gentlemen. Quick question following up on the disposal of the three jackups and your talk about the cost to upgrade those rigs, clearly there must be other jackup rigs in your fleet that are going to meet that same hurdles ultimately as they face significant upgrades or need to mobilize to a different market. What do you do down the road about either building or buying additional jackups and I’m going to assume you’re probably going to buy, and are there any floating rigs in your fleet on that other deepwater category that meet a similar situation to the jackups where you might be facing a near term question about significant capital expenditures to keep those rigs in the market.

I don’t think that there’s any extraordinary situations in terms of our floating fleet. You’re probably aware that over the past few years we have sold a fair number of our really lower end, less competitive floating rigs. In terms of what we do with the jackups, whether we buy or build, its extremely unlikely that we would build a new jackup because we would apply our same criteria of meeting a contract to build it and since so many other people are willing to build jackups on speculation and there’s so much capacity coming in the market, there aren’t really any operators out there that are willing to give us a term contract that meets our payback criteria for a new build jackup. Whether we ultimately buy some existing newer jackups is an open question. We’re always looking at opportunities. Right now we don’t particularly see any but it’s hard to say what the future’s going to bring.

That’s fair and Greg one question for you and thanks for the specificity on the guidance, but did you give us an idea of what capitalized interest ought to be. I’m assuming the interest expense you gave us was a net number Q1 through Q4.

Yes, it should range at the beginning of the year from about $30 million and then by the end of the year about $35 million a quarter.

Alright, thank you.

Your next question comes from [Analyst] - Lehman Brothers [Analyst] – Lehman Brothers: Good morning gentlemen. My question is to Greg, I was hoping you could provide some color as to plans to repay debt, [inaudible] 2008 as well as refinance your outstanding bridge.

As we’ve talked about when we launched the merger transaction our strategy, our capital structure guidelines going forward are going to be pegged off of our backlog and our target or guideline debt is to have our total debt, $5 billion less than our free cash flow backlog. Today our free cash flow backlog is roughly $16 billion. Our debt as at the end of ’07 was $17 billion. So we’re going to focus or free cash flow for ’08 and most of ’09 on paying down that debt till we get within that guideline. Now that guideline is flexible so over the next couple of years if our backlog increases, we may be able to consider pausing that debt reduction earlier. If the backlog decreases we may continue to apply cash flows to reduce debt. So we deliberately made that a flexible guideline to take into account the backlog. In terms of the bridge, we’re in the process of refinancing about another $1.5 billion of the bridge into a term bank loan. And then the remaining $1.5 billion of the bridge will pay off out of cash flows primarily in the second and third quarter of this year. So by the third quarter the bridge will be totally paid off. [Analyst] – Lehman Brothers: Okay, great. Thanks a lot.

Your next question comes from [Ted Iva] - Bear Stearns [Ted Iva] - Bear Stearns: Yes, thanks for your earnings and congratulations. My question was really just related to the last question and actually and I guess you’re basically saying then you won’t need to come to the capital markets this year, is that correct?

That’s correct. [Ted Iva] - Bear Stearns: Okay, that’s my question. Thank you.

Okay, I’d like to thank everybody for joining us on this first call after the merger and we appreciate the interest in the company. Thank you very much.