Financial Data and Key Metrics Changes - The company secured $2 billion worth of contracts this year, with a total contract backlog reaching $4.7 billion, the highest in a decade [6][7] - Operational performance led to an increase in the midpoint of guidance by $55 million to $585 million for the year [7] Business Line Data and Key Metrics Changes - The fleet consists of 48 rigs, including 13 high-specification drillships, 2 semisubmersibles, and 33 jackups, with 12 of the 13 drillships being seventh-generation assets [4] - Day rates for seventh-generation drillships have been about 25% higher than the general market, with utilization rates approximately 10 percentage points higher [5] Market Data and Key Metrics Changes - The company sees a strong case for offshore drilling, particularly in deepwater, as customers increasingly turn to deepwater to meet resource needs [7] - The jackup market has maintained utilization rates above 90%, despite challenges in the Saudi market [34] Company Strategy and Development Direction - The company focuses on operational excellence, successful contracting, and astute commercial strategy to deliver long-term value for shareholders [8] - The strategy includes securing long-term contracts and managing the fleet effectively to avoid oversupply in the market [26] Management's Comments on Operating Environment and Future Outlook - Management noted a positive outlook for deepwater utilization, expecting to exit 2026 with utilization levels above 90% [16][17] - The company anticipates an increase in exploration activity and greenfield development offshore in the coming years, driven by economic viability at current oil prices [40][41] Other Important Information - The company has a strong balance sheet and is considering shareholder returns, with flexibility enhanced by the sale of Valaris 247 for over $100 million [39] - Reactivation costs for cold-stacked rigs are estimated to remain in the range of $120 million to $125 million [28] Q&A Session Summary Question: What is the overall tone from customer conversations regarding deepwater outlook? - Management reflected on the transition from uncertainty to a more positive outlook, with a good pace of contracting expected as operators prepare for future programs [10][12] Question: What are the expectations for contract announcements and pricing in the second half of next year? - Management indicated that pricing is expected to follow supply-demand dynamics, with positive pricing momentum anticipated as the market tightens [14][18] Question: Can you discuss opportunities for the DF-12 rig? - Management is focused on securing long-term contracts for the DF-12, with a strong pipeline of opportunities in Africa and other regions [19][20] Question: What is the outlook for the jackup market? - Management expressed confidence in the jackup market, highlighting strong contract coverage and growth in average day rates and operating days [33][34] Question: What is the company's stance on M&A? - Management supports consolidation in the industry but emphasized that the company already has the necessary scale and fleet quality, making M&A a secondary consideration [35][36] Question: When can shareholders expect returns? - Management stated that capital returns will be considered once sustained cash generation is achieved, with positive markers indicating flexibility for returns [38][39]

Core Points - North American Construction Group Ltd. (NACG) has secured an amended and extended five-year contract with a leading coal producer in Queensland, Australia, marking the largest contract in the company's history [1][2] - The contract has a total backlog value of approximately $2.0 billion, which represents an $800 million increase from the original contract [2] - The total contractual backlog for NACG has reached $4.0 billion as of March 31, 2025, surpassing the previous record of $3.5 billion reported on December 31, 2024 [3] Company Overview - NACG is one of the largest providers of heavy construction and mining services in Australia and Canada, with over 70 years of experience in the mining, resource, and infrastructure construction markets [6] - The MacKellar Group, a wholly owned subsidiary of NACG since 2023, specializes in heavy earthmoving equipment solutions and has a strong reputation for performance and reliability in Australia [5] Contract Details - The extended contract will expire on April 30, 2030, and does not include growth capital, with backlog values based on the existing run-rate of the mine [2] - The contract includes risk and reward mechanisms that align NACG with the coal producer to ensure effective operations [2] - The Australian operations now account for $3.0 billion of the total backlog, providing revenue visibility through 2029 at current levels [3] Leadership Statements - Joe Lambert, President and CEO of NACG, emphasized that signing the largest contract in the company's history reflects the successful partnerships and execution capabilities [4] - Barry Palmer, COO of NACG, highlighted the contract as a demonstration of the productive relationship with the customer since 2022 [4]

Financial Data and Key Metrics Changes - Total revenues for the second quarter were $615 million, a slight decrease from $621 million in the prior quarter, primarily due to the completion of a contract for Valaris DS-12 without follow-on work [29] - Adjusted EBITDA increased to $201 million from $181 million in the prior quarter, driven by a favorable arbitration outcome that provided a total benefit of $24 million [30] - Adjusted free cash flow for the quarter was $63 million, with cash and cash equivalents at $516 million, contributing to total liquidity of nearly $900 million [31][32] Business Line Data and Key Metrics Changes - The company added over $1 billion in new contract backlog, increasing total backlog to approximately $4.7 billion, the highest in a decade [5][17] - For floaters, approximately $860 million was added to the backlog, while jackups contributed $145 million [17] - The jackup fleet maintained robust contract coverage, with over 70% of available days contracted for 2026 and 60% for 2027 [11] Market Data and Key Metrics Changes - The offshore drilling market shows strong long-term fundamentals, with a healthy pipeline of more than 30 floater opportunities planned for 2026 or 2027 [10][20] - Global jackup utilization remained resilient at 90%, driven by national oil companies prioritizing energy security [11][25] - The majority of deepwater spending expected to be sanctioned in the next three years is tied to programs with breakeven prices below $50 per barrel, compared to a five-year forward price above $65 per barrel [10] Company Strategy and Development Direction - The company focuses on delivering operational excellence, executing a commercial strategy, and maintaining disciplined cost and fleet management to drive long-term shareholder value [4][12] - The strategy includes securing long-term contracts for high-specification assets and exploring short-term gap-fill opportunities [13][44] - The company is actively managing its fleet in response to market conditions, including retiring rigs when their economic benefit no longer justifies associated costs [13][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the offshore production's role in meeting global energy needs, particularly in deepwater projects [9] - There is an expectation of meaningful growth in deepwater project sanctioning in 2026 and 2027, with customers prioritizing long-cycle offshore developments [10] - Management noted a more positive outlook from customers regarding contracting and development programs compared to six months ago [82] Other Important Information - The company completed the sale for recycling of three semisubmersibles, reflecting the challenged global market for this asset class [13][14] - The company remains committed to returning capital to shareholders, with strong operational performance providing flexibility for capital returns [88][90] Q&A Session Summary Question: Insights on short-term contracts for drillships - Management indicated that average duration for short-term contracts varies and that they are well-positioned to service these opportunities across different locations [41][42] Question: Update on planned floater opportunities - Management clarified that the pipeline remains about 30 opportunities, replenished with new work, and expressed confidence in continued contract awards [52][54] Question: Thoughts on day rates for upcoming contracts - Management expects day rates to follow utilization trends, with seventh-generation rigs leading the recovery and potentially exiting 2026 with utilization above 90% [65] Question: Timing for reactivating cold stacked drillships - Management emphasized a focus on securing contracts for active rigs before considering reactivation of cold stacked units, with good opportunities for DS-12 in 2026 [68] Question: Petrobras tendering schedule - Management expressed optimism about Petrobras maintaining a stable rig count and the potential for multiple rigs to be contracted in upcoming tenders [72][76]