Good day, everyone; welcome to the third quarter 2009 results conference call for Transocean Ltd. Today's conference is being recorded. At this time for opening remarks and introductions, I'd like to turn the conference over to Mr. Gregory Panagos, Vice President of Investor Relations and Communications. Please go ahead, sir.

Thank you, Jessica. Good morning and welcome to Transocean's third quarter 2009 Earnings Call. A copy of the third quarter press release covering our financial results along with supporting statements and schedules is posted on the company's website at deepwater.com. We have also posted a file containing five charts that will be discussed during this morning's call. That file can they found on the company's website by selecting Investor Relations, Quarterly Toolkit and then PowerPoint charts. The charts included cover average contracted dayrate by rig type; out-of-service rig months; operating and maintenance costs trends; contract backlog by client rating; and free cash flow backlog and debt maturities. The quarterly toolkit also has six additional financial tables for your convenience covering revenue efficiency, deferred costs, deferred revenue, other revenue, operating and maintenance costs by rig type and contract intangible revenue. Joining me on this morning's call are Bob Long, our Chief Executive Officer; Ricardo Rosa, Senior Vice President and Chief Financial Officer; Terry Bonno, Vice President Marketing; Steven Newman, Chief Operating Officer; and Ihab Toma, Senior Vice President of Marketing and Planning. Before I turn the call over to Bob, I'd 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 we 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 may use various numerical measures on the call today that or may be considered non-GAAP financial measures under Regulation G. As I indicated earlier, you will find the required supplemental financial disclosure for these materials, including the most directly comparable GAAP measure and an associated reconciliation, on our website at www.deepwater.com under Investor Relations, Quarterly Toolkit and Non-GAAP Financial Measures and Reconciliations. Finally, in order to give more people an opportunity to ask questions, please limit your questions to one initial question and one follow-up question. Thank you. That concludes the preliminary details, I'll now turn the call over to Bob.

Thank you, Greg. Good morning, everyone, and thank you for joining us on our third quarter earnings call. Our earnings for the quarter came in at $2.19 per share or $2.65 per share after adjusting for further asset impairments at ADTI/CMI and some discreet non-U.S. tax and customs-related matters. Ricardo will comment in detail on the results in a few minutes. The contract drilling business remains difficult, particularly for jackups and midwater floaters. We now have 25 jackups idle with two of those preparing to go back to work. We have seen a clear increase in jackup inquiries, creating the possibility of some of our idle jackups going back to work in the first half of next year. However, we might see a few more idle before these additional reactivations commence, and I think we're likely to end the year with 26 jackups stacked, as we mentioned in our earlier calls. While we do have a lot of jackups stacked, I want to make it clear that we do not have a strategy of intentionally taking capacity off the market. We actively bid what we think are competitive rates in an effort to keep the rigs working. However, when a jackup goes idle, if we have no bids outstanding and know of no near-term prospects, we will not maintain full costs while hoping something comes along. We will promptly commence cold-stack procedures to get the costs down, while preserving the condition of the rig to optimize our ability to start the rig up in the future when opportunities do present themselves. In the midwater market, we still have six midwater floaters idle having stacked one additional floater, the Sedco 700 in West Africa and reactivated the Actinia in the Far East for a contracted rate of around $200,000 per day.…

Thanks, Bob and good morning everyone. In the third quarter of 2009, we generated net income of $710 million or $2.19 per diluted share. This compares to net income of $806 million or $2.49 per diluted share in the second quarter of 2009. Third quarter net income was adversely impacted by certain items totaling on a net basis, $148 million or $0.46 per share. After adjusting for these items, third quarter net income was $858 million or $2.65 per share compared to second quarter 2009 net income adjusted for similar items of $902 million or $2.79 per share. Discrete items adversely affecting third quarter net income included $132 million from charges for various litigation matters relating to activities in West Africa and Brazil; $56 million in total for an impairment of intangible assets relating to drilling management services; net losses primarily related to the early retirement of debt and GSF merger-related severance costs. All these charges were partially offset by $40 million of income related to discrete tax items and settlements of certain tax matters. Second quarter 2009 net income was adversely affected by various items totaling $96 million or $0.30 per share. Compared to the second quarter of 2009, contract drilling revenues for the third quarter were down $23 million. We stacked additional rigs during the quarter negatively impacting revenue by $128 million. This reduction was partially offset by new build rigs commencing operations, improved revenue efficiency, reduced revenue impact from shipyard out of service time and higher realized dayrate contracts. Our fleet's revenue efficiency was 95% in the third quarter compared to the 93.1% experienced in the second quarter and more in line with prior period efficiency rates. Total revenues were $2,823 million for the third quarter, $59 million lower than the $2,882 million earned in the second…

Thanks, Ricardo, and good morning to everyone. I'll move straight to the various markets and will begin with a discussion on the ultra-deepwater market. As mentioned in Bob's opening comments, we recently contracted our remaining available 2010 ultra-deepwater units: The Deepwater Horizon with BP and the Sedco Express with Noble Energy. The Deepwater Horizon just completed the deepest oil and gas well ever drilled to a true vertical depth of 35,050 feet in 4,130 feet of water on the BP Tiber discovery in the U.S. Gulf of Mexico. The three-year extension of the Horizon is an acknowledgment of the great performance of the Horizon team and is further evidence of the long-term strength of the ultra-deepwater market. This Sedco Express contract with Noble Energy is also a very exciting opportunity whereby we are collaborating with our customer in an emerging market that looks very promising. (inaudible) has also been active in many markets for ultra-deepwater capacity, especially Brazil, with the anticipated tender from Petrobras for up to 28 Brazilian built units. This tender includes three separate sections with sections one and two for shipyard owners for up to nine rigs to be built and owned by Petrobras. Section three of the tender includes up to 19 rigs including drillships, semisubmersibles or mono-column designed rigs with a maximum of 4 rigs per contract driller. Delivery of the first 3,000 meter rigs will be in 2014 with the remaining rigs staggered through to 2017. The rigs must be constructed in Brazil and the local content in construction and equipment will be between 55% and 60%. While we are currently reviewing the challenges associated with this tender, we are very interested in participating in this opportunity and increasing our presence in Brazil. Additionally, we believe that Petrobras will require more ultra-deepwater and deepwater…

Thank you, Terry. I think now we are prepared to entertain some questions.

(Operator Instructions) Our first question comes from Ian MacPherson, Simmons & Company. Ian MacPherson - Simmons & Company: First question, I guess on the jackup market. If I read the comments correctly, it sounds like the outlook is for pretty steady utilization compared to what you have right now for the foreseeable future and I would just be curious to get your take on further pressure on leading edge day rates from here, because I do think that there is a little bit of mixed opinion on that aspect of the market.

As we know, the roll-off of the current contracts of some of the jackups; if we're talking about averaging down, then those are certainly going to be less than the ones coming off contract. Leading edge rights at the moment seem to be holding pretty steady across the market. We haven't seen a deep dive in the last quarter. As articulated in the comments, we are seeing an increase in the activity and the activity actually has increased over the last quarter also. As an evidence to that, yesterday in our worldwide conference call we had several moments in the conference call where we had someone breaking in and saying, ‘oh, there's another opportunity that's just come on the wire’. So, we believe that they're going to hold steady. The opportunities are certainly picking up and we think that things have bottomed out and that they will hold steady for the next couple of quarters. Ian MacPherson - Simmons & Company: For a follow-up could I just ask you to talk about the new build opportunity that looks like it's now close at hand? Can you talk about what the sort of the contract terms and return on capital possibilities look like and if those have changed much for you compared with earlier in the cycle?

I assume you're talking about the Arctic rig, so I will let Steven answer that question.

This is something we have been working on for a couple of years now and our team has done a great job in terms of assessing the market potential in the Arctic, understanding exactly what it would take to operate up there, then developing a design that meets our requirements, our customers' requirements and the expectations of the regulatory authorities. So, we have progressed that design fairly far along, we're in very developed discussions with a customer. As Bob said in his opening remarks, we're hopeful that we'll succeed in securing a contract to actually build an Arctic class vessel by the end of the year. As you know, our capital investment criteria have always been very disciplined and will continue to be so going forward so, we would anticipate comparable economics for an incremental new build opportunity as those that we have enjoyed in the past.

Our next question comes from Omar Nokta with Dahlman Rose.

I just wanted to ask about some of the deepwater new builds; you just talked about the Arctic opportunity and working with Petrobras as well. Do you see any opportunities out there with respect to distressed rigs on order?

You mean opportunities to acquire the current rigs under construction?

Yes.

As I mentioned in my opening remarks, we are seeing more potential opportunities; I'm sure everyone is aware of the two PetroMENA rigs that has been sold, there is a third one that we're not sure what the future is going to bring for that. There are other rigs being built out there by what I would term as non-industry players that may or may not come available as we go forward. Some of them have contracts that probably will not be significant discounts or distressed sales on those, some of them do not, depending on how long they will go before the rig is ready to be delivered and what their financial resources are, then maybe opportunities develop. But there's going to be a lot of interest in those rigs I suspect by the existing drilling contractors. So, it remains to be seen whether or not any of those opportunities will develop at prices that we think are opportunistic enough to attract our attention.

Would you be willing to go into something that doesn't have a contract?

At the right price.

I just have just a quick follow-up; just wondering on your joint venture with Pacific Drilling that you started up I guess a couple years ago. Do you think that there is any scope for that to get bigger and taking into account some of the other rigs that Pacific Drilling has on order?

Well, I think we have a good relationship with our partner there and they do have, I think it is four additional rigs under construction, so, I wouldn't rule anything out. But we just have to wait and see what their intentions are and what their opportunities are with those rigs going forward.

Our next question comes from Matt Conlan with MKM Partners.

I wanted to follow-up on the jackup question. It just seems odd to me that the bottom of the jackup market is occurring with 40% to 50% margins. You stacked a lot of rigs this year simply because there wasn't any work available at any price. As new work comes available, do you expect the price competition to get more ferocious? In particular more than we saw in 2009 where there just weren't very many tenders to compete over?

In the current tendering that we're seeing right now and prices that have been publicly announced, we're really not seeing a deep dive. You're absolutely right, there's a lot of competition; but again, we're seeing pricing stability out there amongst the competitors. So, I think these are not necessarily new builds, but there is some pricing stability and there's just recently been a tender opened in India and that's been the result of that tender and it was highly competitive.

Matt, I started to give you a very crisp answer to that question. But there has been a lot of competition on the tenders that we have seen here over the last six months, it is not being unusual to have eight, ten, twelve people bidding on it now. I'm not sure that the pricing of the competitive market gets much more difficult if you have 15 or 16 bidding as opposed to 10 or 12. So, I'm not sure that we can point to anything that would indicate that there ought to be a structural change downwards in the competitive environment going forward.

Okay, well that's one terrific bottom then. Thank you very much.

Our next question comes from Jeff Tillery with Tudor Pickering Holt.

With both the midwater and the jackup markets improving, from where you stand are you more optimistic about utilization and pricing for your idle midwater rigs or for your idle jackups?

Well, I would say from a structural point of view, I am probably more optimistic about the midwater market simply because from a fundamental supply/demand standpoint, there is no new supply of midwater floaters coming in. So a turnaround in demand, which hopefully we'll see with commodity prices where they are should result fairly quickly in an improvement in that market. If you look at the jackup market, while demand does seem to have bottomed and is turning it up, we also continue to see additional supply overhang coming into the market. So there's a question about whether or not demand will increase fast enough to offset the incoming supply and my guess is the answer to that is going to be that it won't for a fair amount of time. So while we might have reached the bottom, it's going to be a long while, we think before rates are going to start to improve in the jackup side where we think we could see an improving market in the midwater floater.

And then just my last question, you've got a number of three high-spec jackups stacked in the North Sea. Have you seen a pick up for high-spec demand in the North Sea as of yet and what are the prospects for those rigs going back to work?

Jeff, yes, we actually have seen a slight pick up in tendering activity. When those rigs go back to work is going to certainly depend largely on when the operator's customers are ready to commence their programs. It looks to be a lot of the tendering activity mid-2010 and onward. So we are optimistic and we are seeing the pace pick up.

Our next question comes from Robin Shoemaker with Citi.

Bob or Steven, I wanted to ask you about this midwater and especially the conventional deepwater market which you said was soft. Are we likely to see conventional deepwater rigs bidding on midwater market opportunities? In other words, jobs under 2,000 feet of water depth, which could put some additional pressure on those kind of rates?

Robin, I think you always, in periods of soft market conditions you see rigs competing in every opportunity that they can compete in, in the context of deepwater market. So that means deepwater rigs bidding down to midwater depth ranges if they think they can find work. We haven't seen a lot of that yet and so we are hopeful that we won't see a lot of it going forward, but there is always that possibility.

So it really seems to me the problem for the conventional deepwater is the moored vessels. And what is your outlook for demand for moored conventional deepwater vessels?

Robin, this is Terry. We believe that this short-term gap exists, just because of the lack of tendering in that area. There has been some discoveries in that water depth certainly this year that we believe is going to take a little bit of time to come to market. Also, as you know, Petrobras certainly is a big user of moored deepwater rigs. So we can't rule them out either. We believe that shortly there may be some opportunities there. So we are hopeful there, we are hopeful in the West of Shetlands, U.K. market. There is a tender that's actually just been released from Total. It's got a 2012 availability. So it is certainly not something that we are going to give up on. We still believe in the strength of the deepwater market, which includes our moored units. We believe this is just a gap that has occurred in the tendering process.

Just on the Petrobras subject, my last question is, they contracted for 12 rigs as we know last year. And it looks like between delays and financing difficulties, only two of those rigs would be available by 2013, whereas all of them I think were supposed to be delivered in 2011. I maybe wrong on my facts there, but is there a likelihood that Petrobras will seek existing deepwater rigs to fill the gaps between what they had contracted for last year and what they are actually going to get out of those contracts?

Robin, we probably strongly believe that that is going to occur that we will have opportunity with existing fleet, moored and DP to fill the gap until 2014, when that first units are expected to be delivered. And also as you point out, those other units, the 12 units are late, if they arrive at all. We don't know. But what we do believe is that Petrobras right now is evaluating their needs, and they are evaluating which one of those rigs are going to show up. So I think that it's positive for all of the contract drillers with existing fleet in the near term.

We will go next to Jud Bailey with Jefferies & Company. Jud Bailey - Jefferies & Company: Thank you, good morning. A quick question on the ultra-deepwater market on one of your competitors on one of their calls suggested there's a game of chicken in the ultra-deepwater market going on between the contractors and the operators, and they're effectively delaying start up until 2011 and 2012. They see a little more spec and new build supply come on. My question is, are you effectively seeing the same thing with your customers? And the tenders that you mentioned from Total and Chevron in your prepared comments, are the start-up on those tenders in the 2011 or in 2012 timeframe or are they a little sooner than that?

Jud, thank you. What we see or what we are engaged in the conversations that we are having with our customers are that they are very much interested in the opportunity to contract ultra-deepwater units. They do have the opportunity to delay their programs and I think a lot of it's going to be predicated on their budget cycles that they're actually going through right now and how they view the stability of the commodity pricing. Do they have the ability to delay? Sure they do. If you look at the Chevron tender in Nigeria, could it be delayed because of the regulations in the industry bill that's currently under review? And the answer is, yes, it could be delayed. However, we believe that there are some strong opportunities out there. We have looked at 25 to 30 opportunities that definitely could happen or they could be a bit delayed. But the timeframe looks to be 2011-2012. Jud Bailey - Jefferies & Company: On the jackup market, you've cold stacked several jackups this year. However, it was pretty recent. So, if you were to reactivate some of those rigs, I would imagine the cost is not very high. Could you give us a sense or maybe a range on what we could be looking at for potential reactivation costs for your cold stacked units? And are there any that are up against surveys that would require maybe a little more CapEx than just simply reactivating a cold stacked unit?

It is really a rig specific case-by-case question there, Jud. There are rigs that we have put into cold stack that went in very well in good condition and would be relatively straightforward to reactivate and bring back to market. There are others that would require some extended period of shipyard time before they could go back to work. So it's really a question of what rig it is, where it is and where the opportunity is for us to be able to reactivate them. Jud Bailey - Jefferies & Company: Is there any way to just ballpark into buckets the 25 or so that are stacked? Would 10 or so fall into the difficult to reactivate and the other 15 relatively easy or is that too difficult to do?

I'm not sure we can give you a very crisp answer on that, Jud. It's something we pay a lot of attention to as we put the rigs into cold stack, but again it depends on how long the opportunity is that we are reactivating the rig for, it depends on where the opportunity is. There are just too many variables to be able to give you too much to measure that by. Jud Bailey - Jefferies & Company: And my last question was on the litigation costs. I just want to be clear. Were those inherent in your prior cost guidance or did something pop up in the third quarter that was larger than you had anticipated?

Well, we are not really prepared to comment on ongoing litigation. So, I think we'll just leave it at whatever the disclosure is in our filed statements.

We will go next to Kurt Hallead with RBC Capital Markets.

Good morning. Bob, I think you guys have delineated your whole viewpoint of all the markets with very, very great detail. So I guess what I'm asking is, when you look out to 2011 and you see the spread widen between what's available on the ultra-deepwater market and what's currently contracted, at what point here over the course of the next 12 months do you see that situation start to tighten up? Do you think we'll start to see it in the first half of 2010, the back half of 2010? And are you getting some underlying indications right now that few other customers are starting to get [fancy] about booking rigs for 2011?

Kurt, I think that it's a little bit of how I answered the last question. We believe there are solid opportunities out there that the customers are going to move forward on. We like the fact that we already see that Chevron has come out with those two 10,000 foot opportunities. And we currently have the deep seas that have contracted with Chevron, so we are optimistic about that. We also see that the opportunities that we have listed and looked at, we give them a high probability. So, yes, there are going to 27 odd ultra-deepwater rigs out there. But we believe that there's going to be also some good opportunities to put some of those rigs on.

And Kurt, I think in addition to the bids that are out there we are having discussions with some of the operators for extensions of existing contracts even though those contracts don't roll over for a while. So I think there is certainly a lot of indication of interest out there.

And I guess, the one thing that's been a little bit surprising for me on the jackup market, given all the capacity overhang, surprising that the E&P customers still are not trying to press down pricing. Do you guys have any read on why do you think that is? Because at this point, it still seems like the pendulum is still in E&P favor from a pricing standpoint.

I don't think we have got any more insight on that than we have had for the last six months. It has been a bit surprising to us and continues to be as to why rates in the jackup area have not spiraled down more quickly and further than they have. But for whatever reason they have been moving very slowly and now seem to have stabilized. Really the range hasn't come down much since our last call. So, I'm not sure if we speculated on what factors could be driving that. We'd just be guessing and you probably have good guesses as we are.

We will go next to Brian Uhlmer with Pritchard Capital.

Good morning. I have a question that hopefully can shed some light on what's going on in the shipyards that you guys are currently operating in? A lot of shippers placed orders for drillships last year, mid 2008 and not much has been seen on them, but they are still on the order books. Have they approached you for trying to sell those assets or any commentary on what you have seen in the yards as to whether or not I think those are moving forward or what your expectations are for some of those ships?

In terms of people approaching us, I would say no, we're not seeing a lot of direct approach and aggressive interest on the part of some of the builders or speculators who are building these rigs. We are starting to hear a few inquiries about potential interest, but I wouldn't call it a very aggressive approach by anybody. In terms of where the rigs are in the process of being delivered, I'm not sure we have got a lot of detail on that. But maybe, Steven, do you know anything about the shipyard status?

All I would say, Brian, is I think the results span the spectrum. You have some that are progressing a pace and the shipyards are making good progress on the projects, you have others where the owner or the person that placed the order has come back and tried to renegotiate a delay in the delivery to try and stretch out the payment requirement. So, it really spans the spectrum.

Our next question comes from [Henry Shoulter], Wexford Capital.

Another shipyard question, but more theoretical than the previous one; in this economic contraction that we have experienced there has been a lot of capacity sort of left dangling in the world of shipyards out there, the universe of shipyards, and I wonder whether you have an opinion on something that has been run by me recently to the affect that in the coming quarters, years, this capacity at the shipyards, some of it in any event may be turned towards building offshore rigs of various descriptions. Therefore there will be a continuous supply hence pricing pressure, hence day rate pressure on rigs. I wonder if you care to address that?

I think it would stretch me to conclude that a shipyard would want to speculate on getting into the business. If there isn't somebody that's going to come along and partner with them in terms of the design, the outfitting, the commissioning and the operation of the rig, I'm not sure that the shipyards by themselves are going to want to get into our business. What we have seen in the past is shipyards putting together attractive financing packages to try to incent somebody to come along and play the role of owner-operator. But to speculate that the shipyards might do this themselves I think just stretches me.

We will go on to Daniel Boyd with Goldman Sachs.

Bob, I feel like no call is complete without touching at least upon the dividend or potential for a dividend or stock buyback uses of cash. I feel like you've outlined a number of different opportunities, reinvestment opportunities for the cash here. But could you just comment on how you are thinking or your philosophy is between share repurchases and dividends, especially in light of what seems to be a sustainable multiple premium that one of your peers is receiving?

There's not much more I can say to add to what we have been saying consistently. When we look at the question of returning cash to shareholders, we consider a whole host of factors including opportunities to reinvest the cash. We made a decision in terms of the method of returning cash to shareholders prior to our last shareholder meeting, since we have to have shareholder approval for either a share repurchase or a dividend and we got approval to do a share repurchase program. Now the board has not authorized us to execute on that. We continue to look at all of the factors including our backlog and our outlook on the business and our cash flow backlog versus the thumb rule what we had established for ourselves and have not yet decided to execute on that. Once the board decides, you will see an announcement [day before] in the market. So, you'll know when and if we do decide to execute. In terms of considering a dividend, since we have to have shareholder approval for a dividend, we won't be in a position to really consider that until we have our next shareholder meeting in May. Every time we look at all those actors and think about returning cash to shareholders, we consider all alternatives including a possibility of the dividend. So, I won't rule out the possibility that in the future we could take to shareholders a recommendation if they approve a dividend. That's something that we haven't decided on yet and I can't tell you whether or not we would be likely to do that as we approach our next shareholder meeting or not. We have got some time before we have to cross that bridge.

The next question comes from Scott Burk with Oppenheimer.

I wanted to follow up on the stacking of some of the rigs you've been doing. You guys have shown a more propensity to stack rigs than some of your smaller peers, including the most recent fleet update. When you make that decision how long do you expect a rig to be cold stacked? Does having the largest fleet in the world affect your decision around them?

Well, I am not sure of having the largest fleet in the world affects the decision. Having a large fleet might affect the decision in that, if we were a very small operator stacking a number of rigs might give us concern about our infrastructure and our overhead and a whole host of factors which, given our size, doesn't really concern us as we consider stacking any individual rig. When we think about the time, we have a very detailed process and procedure for cold stacking a rig so that it is preserved and if it turns out to be cold stacked for six months, it could be started up fairly quickly and efficiently and if it turns out to be cold stacked for two years, then it doesn't deteriorate. So in terms of anticipating the time that it might be stacked, it doesn't really affect either our decision or the process that we go through to cold stack it very significantly.

So, you had mentioned that a couple of additional rigs may be stacked in the near term, but those could potentially go back to work a quarter later?

That's possible, yes.

One of your peers just reallocated their assets and their operating structure and was able to lower their tax rate by a couple of percentage points. Is this a possible strategy that you could pursue at Transocean?

Well, we are continually looking at optimizing our structures around the world. But as a Swiss company with an effective tax rate of 17% or 16%, I'm not sure that there are a lot of opportunities out there for us to significantly impact that rate going forward. Having said that we are always looking at the possibility to improve.

We will go next to Lukas Daul with SEB.

I was wondering on Brazil, when you are monitoring the tender there. Are you considering opportunities to build the rigs in Brazil or just participate on the operational side? If building, could you just give an estimate how much more would it cost to build a deepwater rig in Brazil as compared to an established yard in South Korea?

Well, we are considering building a rig in Brazil because that's the only way we can participate in this recent tender what Petrobras is requiring all the rigs to be built in Brazil. It's a bit difficult to give you much of an answer to the rest of your question because it's a little bit early. We have spent some time and are continuing to research capabilities for the yards in Brazil and there are clearly a couple of them that have the capability to build. But there is going to be a lot of these rigs built in new facilities, either upgrading of existing facilities that are down there or Greenfield shipyards that are going to be built and there are a number of Greenfield shipyards that are already being contemplated. With all of those moving parts, it's a bit difficult to estimate what the cost of building in Brazil will we versus in the far east or anywhere else. I think it's fair to say that it will be higher given the fact that customs costs and labor costs are probably higher when you look at a Brazilian build as opposed to some of the places in the far east. But whether or not that will be 10% or 30% or 50%, I don't think we're in a position to make a decision or a judgment on at this time.

Then on the idle midwater rigs that you have, are all of them ready to go back to work without any major CapEx being undertaken or does that vary across the units?

That varies considerably across the units. There are a couple of them that were stacked because they were coming up for a special survey or a life extension that would cost a significant amount of money and that was one of the factors in our decision to stack the rig in the current market condition and day rate. So, it does vary across the rigs by a fairly wide degree.

Operator, next question will have to be our last question of the call.

Thank you. Our next question comes from Arun Jayaram with Credit Suisse.

I just wanted to comment a little bit in terms of the stacking process and it sounded like you guys had lost a little of your mojo in terms of jackups, citing instances where some peers have moved some equipment into West Africa and Trinidad where you had some good equipment. Have you all changed your thoughts? It is nice to see the fact that you're putting some rigs possibly back to work. But have you changed your philosophy or contracting structure when it comes to jackups?

No, I don't think that we have changed at all. As I indicated, our approach has been to bid and to bid competitively. We think we have got a pretty good idea of what the market is that we're competing in every time an opportunity comes up and we take our best shot at winning the contract. So, we're clearly not going out there and just undercutting the market by $25,000 a day. So, we estimate what the range of the market will be and we give it our best shot to win the job. If we don't and we don't have some near-term prospects then we're not going to keep the rig fully manned and hot stacked hoping that something else comes along in a month or so. So, we proceed to cold stack them.

What markets in particular are you seeing some of the demand improvements in terms of jackups or getting some rigs back to work?

Well partly the areas that are actively tendering right now are India with these tenders that was just opened, we expect the next tender to come out seven rigs there. Also Italy has come out with two rigs, long-term tenders and also we're seeing some short-term activity in Southeast Asia. So again, the activity is picking up and we are optimistic, so those areas are active and we are seeing a little bit more activity in the UK. West Africa has been a sprinkling of opportunities but nothing significant and again, we believe that there's a lot of pent up demand there that could certainly right that West Africa market. So, those are the active opportunities. Just also to add to Bob's comment as far as losing the mojo, he's absolutely right that we were not going to undercut and some of these new build opportunities that have moved into West Africa, those were bid at a significant discount to the current market and free mobilizations to redeploy fleet. So, just as an extra added comment there.

Fair enough. Bob, obviously it's very early in terms of talking about a dividend, but are you thinking broadly about dividends perhaps differently than you did in the last cycle given the fact that you have such good visibility in terms of future free cash flow and the fact that you're getting five, eight and in some cases 10-year contracts?

Well, I think that it's a factor in our thought process as we look at the viability of a dividend having taken delivery of 10 new builds, by next year we will have taken delivery of 10 new builds. We have got a lot more long-term backlog and a lot more of sure cash flow for a very long time. That would obviously be a consideration for anyone in thinking about a dividend and sustainability. Has that changed our fundamental approach towards a dividend? I can't tell you that it does, but we're obviously smart enough to consider it as a factor.

Okay. Thank you all for listening. If you have any more questions feel free to give [Andy Rowdy] or myself a call.

This does conclude today's conference. Again we thank you for your participation.