Good day, everyone, and welcome to Ensco Plc's Third Quarter 2015 Financial Results Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the call over to Mr. Sean O'Neill, Vice President of Investor Relations, who will moderate the call. Please go ahead, sir. Sean Patrick O'Neill - Vice President-Investor Relations & Communications: Welcome, everyone, to Ensco's third quarter 2015 conference call. With me today are Carl Trowell, CEO; Mark Burns, our Chief Operating Officer; Carey Lowe, EVP; Jay Swent, CFO; David Hensel, our Senior Vice President of Marketing; as well as other members of our executive management team. We issued our earnings release which is available on our website at enscoplc.com. Any comments we make about expectations are forward-looking statements and are subject to risks and uncertainties. Many factors could cause actual results to differ materially. Please refer to our earnings release and SEC filings on our website that define forward-looking statements and list risk factors and other events that could impact future results. Also, please note that the company undertakes no duty to update forward-looking statements. Now, let me turn the call over to Carl Trowell, CEO and President. Carl Trowell - President, Chief Executive Officer & Director: Thanks, Sean, and good morning, everyone. During the third quarter, our sector has continued to experience challenges from the cyclical downturn. Additional announcements of incremental CapEx cuts by customers will further reduced rig demand in 2016, and coupled with newbuild deliveries, add pressure to utilization and day rates. Our response has been decisive action in terms of further expense reductions, streamlining our business unit reporting structure, strong operational performance and several contracting wins with customers. As previously…

Thanks, Carl. As Carl mentioned, customer demand remains at lower levels driven by the cyclical downturn in the offshore drilling markets. Nevertheless, our marketing and operations teams have capitalized on pockets of customer demand around the world that have resulted in several new contracts for Ensco. For example, we recently contracted ENSCO 8505 for a multi-year contract in the U.S. Gulf of Mexico. We were able to win this work because of the versatility that the 8500 series offers to customers and the high levels of operational performance that these rigs have delivered to our customers. Similar to its sister rig, ENSCO 8503, ENSCO 8505, will use a hybrid moored-DP configuration under its new contract. The mooring upgrade is currently underway and is scheduled to be completed before the rig commences its new contract in December. This moored-DP configuration is a major advantage for customers who need to drill well programs that straddle both shallow and deepwater, offering them added flexibility, as well as our 8500 Series drilling efficiencies and capabilities such as a 2 million-pound derrick and a deck configuration well suited for plug-and-abandon and intervention work. We continue to have conversations with additional customers for well programs that sync up with the unique advantages of our 8500 Series rigs with upgraded mooring packages. During the third quarter, ENSCO 8500 and 8506 also won short-term contract extensions in the U.S. Gulf of Mexico. Moving to jackups, we finalized three-year contracts for both ENSCO 71 and ENSCO 72 in Denmark that are expected to keep the rigs working into 2018. The North Sea is a particularly strong market for Ensco where we have nine rigs under contract, and we are having active discussions with customers for our two available rigs in the region. Additionally, we contracted ENSCO 107 for 100…

Thank you. And our first question today will come from David Smith of Heikkinen Energy Advisor.

Hi. Thanks for taking my question. I wanted to ask something you alluded to earlier, and just studying prior downcycles, there's plenty of negative outcomes, but also some really positive ones, particularly for the buyers of distressed assets. Wanted to ask about your outlook for the opportunity to consolidate assets at distressed valuations, and specifically about the challenges to value an uncontracted drillship particularly if you think it might be idle for a while. Carl Trowell - President, Chief Executive Officer & Director: Good morning, David. So, first, let me start by saying we're just beginning to see the start of this cycle with distressed assets coming available, but it's important also to recognize that actually a lot of those assets that you might be thinking of as yet are not unencumbered. There are some complexities around contract positions and arbitration around a lot of them. So, the number of assets at the moment that are – distressed assets that are available is still quite limited, but of course, building. I think there is clearly an opportunity there to look at distressed assets that you will be able to pick up at a discounted rate. The question that I think everyone needs to ask is and are certainly asking themselves is – does that investment balance makes sense in the current market conditions where certainly something like a semi or a new drillship could be idle for several years because if you start to add in the cost of financing, the higher cost of stacking over the number of years that it might be idle, even at a discounted price, the economics don't always work out. So, I think that what's going to happen is there's going to be probably a lot of tire kicking, and a little bit of exploration on the first assets. And some people may sit on the sidelines during those first – the first asset sales. So, I don't think when we see the results of some of these first sales, we should read too much into it. I don't think it establishes necessarily a market precedent of what everyone is going to do. We are certainly going to look at it, but we are not rushing to do anything. We have the liquidity to act if we see the right opportunities. But what we don't want to do is do something precipitive that doesn't make a sensible investment criteria and actually blow a lot of the liquidity cushion that we have early in the cycle.

That makes a lot of sense. Thank you. And sorry if I missed this, but what is your targeted cost level for drillships when they're un-contracted? Carl Trowell - President, Chief Executive Officer & Director: Sorry. You mean, it that's stacked, warm or cold stacked?

Yeah. I guess there's different levels of stacking, but for... Carl Trowell - President, Chief Executive Officer & Director: Yes.

...something like the DS-4, for example. Carl Trowell - President, Chief Executive Officer & Director: In September, what we announced is based on the plans that we've worked up is that we can long-term warm stack a drillship for $40,000 a day or we can bring it back in the 60- to 90-day timeframe.

Great. Thank you. And would that be a reasonable level to think about for assets that are kept – drillships that are kept idle for much longer periods of time? Or could this cost get even lower? Carl Trowell - President, Chief Executive Officer & Director: I don't think at this stage. It depends. I mean, if you completely cold stacked it out, you could maybe take it lower. But with a drillship, then that's a careful consideration because the timeframe and the cost to bring it back is much higher, and its ability to be marketed is reduced. So, at this stage, our intention would be to warm stack the drillships which do not have activity, and then we would review that depending on how we saw the long-term market opportunities developing. So, I think it's a reasonable estimate at this point, but to my point early, you can take it down lower if you completely cold stack the rig, but that comes with consequences.

Thank you very much.

And the next question comes from Judson Bailey of Wells Fargo.

Thank you. Good morning. I wanted to follow up on some of the operating cost commentary. You guys have been very aggressive, very proactive in cutting costs, and you've still got a lot of initiatives that you're working as you've highlighted. You're seeing a nice step-down in operating cost again in the fourth quarter. Maybe towards Jay, Jay, can we think about cost stepping down again in the first quarter of 2016, because it sounds like you still haven't felt the benefit of all the things that you're working on, so we're just trying to think about maybe how the rest of your cost-cutting initiatives play out into 2016. Jay W. Swent III - Chief Financial Officer & Executive Vice President: I think, Jud, probably at this point, we're not really giving first quarter or first half guidance for 2016, so it would be a little premature to say anything. We're still working on internal budgets and really nailing things down. As you said, there's a lot of moving pieces right now. But as I said in my comments, I mean we've always managed costs, and we're going to continue to manage costs. So, I think you can make some assumptions about which direction we're moving in. But on the next call, we'll probably be a little more forthcoming on how you ought to think about first and second quarter.

Okay. All right. I appreciate it. And my follow-up is... Carl Trowell - President, Chief Executive Officer & Director: Jud, Jud, can I just jump in. There's another bit I'd add to that, which is – as you've seen, we were quite early to this, and we've done a lot of cost-cutting exercises and structure changes as we've gone through the last 12 and maybe even 18 months. But the big thing to remember is the other lever that we've got to pull is if we see that market conditions are weaker than we currently forecast, and some of the opportunities for which we are warm stacking and holding rigs ready don't develop, then going to warm stack or cold stack on additional rigs is also a big lever for cost. So, we can also adjust cost levels if we see conditions different than we see them today.

Okay. That's good color. Thank you. And my follow-up, I wanted to just ask you about a specific market but kind of extrapolate it maybe a little more broadly for next year. In Angola, there's been a lot of talk recently of Total maybe trying to renegotiate a number of their service and rig commitments because of, I don't know, some issues with the government. Can you comment if that's been impacting you guys and your contracts? And is this – are we going to see another kind of wave of this do you think in 2016, as the budget for the majors continue to come under pressure next year and now for national oil companies as well? Carl Trowell - President, Chief Executive Officer & Director: So, as a rule, we don't talk about specific negotiations or situations or issues with clients. And I really don't want to break that now other than just to say that the DS-8 is still on track for starting work in November with Total in Angola. It's most of its way through its acceptance testing, and we're looking forward to working with them. And that contract comes with the usual type of terms and protections that we have for our high-value contracts. If I expand it out a little bit wider, so now I'm not talking about Angola specifically, but the general market conditions, given where we are in the market, there is still a further risk of being asked for concessions by various customers. And as we have done – where we have good contracts and strong contracts in place which is the majority of our high-value, high-backlog contract, we are prepared to work with customers if we can get something in return. If we can get contract extensions, if we can get other contract awards or things that can help us reduce our cost of risk, then we will work with our long-standing customers to put something in place where we can both gain and try and manage through the current situations. What, of course, we're loathe to do and that we'll resist as much as we can is something that's completely unilateral. But the point I was really trying to make is that in the current market environment, this has not gone away and it's something that will carry forward, I think, until we see some form of stabilization on, and maybe slight uptick in oil price and people begin – and our major customers have brought their spending back within their cash flow.

Got it. Appreciate the color. Thank you.

And the next question is from J.B. Lowe of Cowen and Company. Mr. Lowe, your line has been opened. Is it possible your phone is... J.B. Lowe - Cowen & Co. LLC: Hi. Can you hear me? Hello? Hello? Can you hear me? Carl Trowell - President, Chief Executive Officer & Director: Yes, we can hear you. J.B. Lowe - Cowen & Co. LLC: Okay. Thanks. Sorry about that. I just had a quick question on kind of following up to David's question. You guys have been very successful in reducing costs on warm and cold stacked rigs. Is there a concern that between you guys and the rest of the market in general that the ability to reduce these costs on the idle or stacked side is going to allow some of these rigs to maybe stick around longer than they normally would have in the sense that instead of scrapping them, you can keep them on the books for such a low cost that you might as well keep them around until the market improves? Is there a concern that that would temper the recovery in the market once it does come around? Carl Trowell - President, Chief Executive Officer & Director: I think that there's a big difference in how certainly we and a lot of our competitors, our peer group competitors, are viewing what to do with newer, more capable rigs versus the older rigs. I think the key issue is that for lower – if I take floaters, particularly – if you take the lower gen floater, 25, 30, 35 years old with very limited market outlook and potential to recontract, then the decision is much more biased towards stack retire or scrap. And we've seen a number of these scrapped already, and as we've…

And our next question comes from Gregory Lewis of Credit Suisse. Gregory Lewis - Credit Suisse Securities (USA) LLC (Broker): Yes. Thank you and good morning. Carl Trowell - President, Chief Executive Officer & Director: Good morning, Greg. Gregory Lewis - Credit Suisse Securities (USA) LLC (Broker): Jay, as I look at the balance sheet, I noticed that account receivables kind of picked up a little bit despite revenues moving down sequentially. Is that a function of customers just being – slowing down in their payments to you guys or is that more just of a timing issue? Jay W. Swent III - Chief Financial Officer & Executive Vice President: I think it's a little bit of both, Greg, really. I mean, we do have a few customers that have slowed down a little bit in the third quarter. We received some payments early in the fourth quarter in some cases. So, I wouldn't be surprised to see the day sales receivable outstanding at year-end be a little higher than usual, but I don't think dramatically so. Gregory Lewis - Credit Suisse Securities (USA) LLC (Broker): Okay. And then in terms of – I know it's still early days on the DS-9, but in terms of the termination payment, is there any thought from the customer about potentially just getting a lump sum payment to move – just moving forward or do you think it really just kind of filters in over the next couple of years? Jay W. Swent III - Chief Financial Officer & Executive Vice President: What I think I'd say at this point, Greg, we're in discussion with the customer and probably premature to say very much about it. At the moment, we're talking about how we deal with it on a monthly basis. I'm sure at some point in the future, the customer can always change that view, but I think right now, we're probably on a month-to-month basis. Gregory Lewis - Credit Suisse Securities (USA) LLC (Broker): Okay, guys. Hey, thank you very much for the time. Jay W. Swent III - Chief Financial Officer & Executive Vice President: Thank you.

And our next question is from Praveen Narra of Raymond James. Praveen Narra - Raymond James & Associates, Inc.: Hi. Good morning, guys. On the ENSCO 8505, the day rate was obviously low but given the scope of work, I was curious if you could comment on whether that is earning a cash margin, and, I guess on that same note, kind of the willingness to enter into long-term contracts at these kind of rates? Carl Trowell - President, Chief Executive Officer & Director: Good morning, Praveen. So, first of all, let me start just by reiterating that the – it's worth remembering that the 8500-Series rigs were very economical to build and they're very efficient and economical to run. So, their day operating costs are lower than a comparable-type semi anyway. So, we're starting from that benchmark. But the nature of the work on these long-term contracts where it's going to move between intervention, drilling, work and abandonment, it's going to do some work with the riser, some without the riser and some on mooring. When it's working in some of these configurations, we can reduce the cost base even further. On top of the cost reductions we have done across the whole company, there are specifics of how we can reduce the operating cost on the operation of these contracts. So, it will be earning cash margin. And based on that, we would be prepared to enter into similar long-term contracts on the 8500-Series rigs if they came up within this pricing range. Praveen Narra - Raymond James & Associates, Inc.: Perfect. And then, you guys mentioned on M&A, and you guys do seem to be one of the ones that would be capable of being an acquirer of distressed assets, but you mentioned still a little bit…

Our next question is a follow-up from Gregory Lewis. Gregory Lewis - Credit Suisse Securities (USA) LLC (Broker): Yeah. Thanks. Sorry to hop on. I was hoping actually someone else is going to ask this question. But on the ENSCO 84 in Saudi Arabia, saw that you got the notice of termination. Was that a function of performance, a function of potentially a little bit of hole in their drilling program? If you could just provide any color on that, that will be fabulous. Carl Trowell - President, Chief Executive Officer & Director: Yeah. Greg, again, as I've said, we're always really cautious about going into specifics, but I can appreciate there's a lot of interest in this. The – it was not for performance. It was basically a review of immediate drilling needs by Saudi Aramco. Gregory Lewis - Credit Suisse Securities (USA) LLC (Broker): Okay. Thank you very much.

And the next question is from Sean Meakim of JPMorgan.

Hi. Thank you. Just had a question about – just thinking about the 8500 Series, opportunities outside of Gulf of Mexico, can you give us maybe a little bit of a sense of what the market looks like for P&A work, workover trends, just things that are – what opportunities could exist outside of Gulf of Mexico? Carl Trowell - President, Chief Executive Officer & Director: So, Sean, there are several opportunities out there that we see today to which the 8500-Series are well-suited. And in the immediate – in the near term, we feel a little bit more comfortable – careful how I say this, but we feel that there are more opportunities for us to put the 8500-Series into some contracts than maybe some other rig fleet or rig assets. And that's partially because of their flexibility and their cost to run. On second issue, there is a reasonable amount of P&A and intervention work happening as customers take advantage of rig rates and service rates. So, there is – it's the one part in the market where there's a little bit of elasticity to pricing. And the other thing to understand is that depending on the regime and the accounting regime, there are several customers out there, who actually can release crude amounts because the cost to actually P&A a well at the moment is lower than the amount they've accrued if they take advantage of the current pricing. So, we're actually seeing some customers actively trying to do it during the current market conditions.

That's very interesting. Yeah. Thank you for that. And just one more, just to think about the ENSCO 120, 121 and 122, the roll-offs from contract in 2016, can you talk a little bit about kind of how you think about strategy in terms of pursuing opportunities for those rigs? Carl Trowell - President, Chief Executive Officer & Director: Yes. The first thing is just to say that those rigs have been really good performing rigs. Now that we've really bedded in how we operate those rigs, we're very pleased with them. They've had some really good customer feedback. So, I think that we feel that we have a very good chance of re-contracting them. I think quite clearly, pricing is going to be lower than it has been. And our aim will be to be able to get them extension contracts or new contracts to keep them working, to keep them working in the North Sea area where we think it will bridge through to other activity down the line.

And is there a preference kind of prioritizing the newbuild versus the other, is there anything to that nature as you think about your strategy? Carl Trowell - President, Chief Executive Officer & Director: A little bit, but it's a little bit horses for courses. There are wells to which the 120 Series are very well suited and only they can do. And there are wells to which some of our standard duty rigs in the North Sea – take, for example, doing intervention work, infill drilling in the Southern North Sea, for example, to which our standard duty, some of our older rigs that are in the North Sea are well suited, and we're in conversations with clients about.

That's great. Yeah. Thanks for all the color. I appreciate it. Carl Trowell - President, Chief Executive Officer & Director: Okay.

And this concludes our question-and-answer session. I would like to turn the conference back over to Sean O'Neill for any closing remarks. Sean Patrick O'Neill - Vice President-Investor Relations & Communications: Well, thank you, operator, and thank you, everyone, for your interest in Ensco. Have a great day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.