Helix Energy Solutions Group Inc (HLX) 2025 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Hello, my name is Dustin, and I'll be your conference operator today. At this time, I'd like to welcome you to the third quarter of 2025 Felix Energy Solutions Group Ernest conference call. (Operator Instructions) I would now like to turn the conference over to Brent Arriaga.

Please go ahead.

Good morning, everyone and thanks for joining us today on our conference call where we will be reviewing our third quarter of 2025 earnings. Participating on this call for Helix today are Owen Kratz, our CEO Scotty Sparks, our COO, Erik Staffeldt, our CFO, Ken Neikirk, our general counsel, Daniel Stuart, our Vice President commercial, and myself.

Hopefully you've had an opportunity to review our press release and the related slide presentation released last night. If you don't have a copy of these materials. Both can be accessed to the investor relations page on our website at www.helixesg.com.

The press release and slides can be accessed under the news and events tab. Before we begin our prepared remarks, Ken Neikirk will make a statement regarding forward-looking information. Ken.

During this conference call, we anticipate making certain projections and forward-looking statements based on our current expectations and assumptions as of today. Such forward-looking statements may include projections and estimates of future events, business or industry trends, or business or financial.

All statements in this conference call or in the associated presentation other than statements of historical fact are forward-looking statements that are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1,995. Our actual future results may differ materially from our projections and forward-looking statements due to a number and variety of risks, uncertainties, assumptions,

and factors, including those. Set forth in slide two of our presentation and our most recently filed annual report on Form 10, our quarterly reports on Form 10, and then our other filings with the SEC. You should not place undue reliance on forward-looking statements, and we do not undertake any duty to update any forward-looking statement. We disclaim any written or oral statements made by any third-party regarding the subject matter of this conference call.

Also during this call, certain non-GAAP financial disclosures may be made in accordance with SEC rules. The final slides of presentation provide reconciliation of certain non-GAAP measures to comparable GAAP financial measures. These reconciliations, along with this presentation, the earnings press release, our annual 10K, and a replay of this broadcast will be available under the for the Investors section of our website at www.helixg.com.

Please remember that information on this conference call speaks only as of today, October 23, 2025, and therefore you are advised that any time sensitive information may no longer be accurate as of any replay of this call.

Thanks, Ken. Good morning, everyone. Thank you for joining our call today and we hope everybody is doing well. This morning, we will review our third quarter highlights, financial performance and operations. We'll provide our view of the current market and update our guidance for the remainder of 2025.

Our teams offshore and onshore safely delivered another well executed quarter. Our safety statistics continue to remain among our best on record. Moving on to the presentation, slides six and seven provide a high-level summary of our results and key highlights for the quarter.

Our third quarter results were better than expected, producing our highest quarter results since 2014, despite the continued low-cost stacking of the SeaWorld and the lower utilization of the Q4000 in the Gulf of America. Revenues in the third quarter were $377 million with a gross profit of $66 million and a net income of $22 million compared to $302 million in revenue, $15 million in gross profits, and a net loss of $3 million in Q2.

Adjusted even though was $104 million for the quarter, and we had positive operating cash flow of $24 million, resulting in positive free cash flow of $23 million. Year-to-date we have generated revenues of $957 million, gross profit of $109 million and a net income of$ 23 million. We've adjusted EBITDA of $198 million.

Our cash and liquidity remains strong. We've increased cash and cash equivalents of $338 million and increased liquidity of $430 at quarter end. Highlights for the quarter. Brazil operating free vessels with strong utilization. ALL six trenchers and ALL three IROV boulder grabs working in the quarter. I improved results in Gulf of America shelf following a later start to the season.

Execution of a three-year contract with a minimum 150-day commitment for the key units in the Gulf of America. And our entry into a four-year agreement with [NKT] for the installation, operation, project engineering, and maintenance of the T3600 designed to be the world's most powerful subsea trencher to be operated from one of our trench and support vessels.

Slide 9 provides a more detailed review of our segment results and segment utilization. In the third quarter, we continue to operate globally with minimal operational disruption with operations in Europe, Asia Pacific, Brazil, the Gulf of America, and the US East Coast. Slide 10 provides further detail of our one intervention segment.

The Q5000 achieve high utilization working in the Gulf of America in Q3. The vessel is currently working on a multi-we program for Shell and should be highly utilized for the remainder of 2025. The Q4000 completed a multi-we P&A campaign in the Gulf of America and then due to gaps in its schedule, we pulled forward the 2026 planned regulatory docking into 2025 to facilitate a cleaner runway in 2026.

During this period of a softer Gulf of American markets, we are experiencing some gaps within the scheduling Q4 with lower rate RV decommissioning projects for a good portion of the remainder of the year prior to returning to contracted works at well intervention level rates in January of 2026. In the North Sea, the enhance had 100% utilization during the quarter working for four customers.

Due to the well-known market turmoil in the North Sea, the Seawell remained warm spec and is expected to remain warmed at a low-cost base for the remainder of 2025. In Q3, the Q7000 completed work on numerous wells for Shell on the 400-day decommissioning campaign in Brazil with 100% utilization.

The SH1 had 98% utilization working for Trident, and the vessel has now completed the Trident contract and is currently undergoing inspections and acceptance prior to commencing its three-year Petrobras contract. The SH2 had a very strong quarter with 100% utilization for Petrobras, and the stand-alone 15k IRS system was on higher in Brazil, contracted to SLB for the quarter, achieving 100% utilization.

Moving to slide 11. Slide 11 provides further detail of our robotics business. Robotics had a strong quarter. The business performed at high standards, operating several vessels during the quarter, working between trenching, RIV support, and site survey work on renewables and oil and gas related projects globally.

Robotics worked six vessels on renewables related projects within the quarter and had strong vessel utilization overall, with three vessels working on trenching projects and free vessels working on site clearance. ALL six trenchers and ALL three IROV boulder grabs were utilized.

We operated free vessel trenching spreads in Europe, including the GC3 and the North Sea enabler with jet trenches, and the JD assisted with the IP. The glow wave and the trim support vessel were working on renewable site clearance utilizing the Iro border grabs in Europe. The Bordelon completed renewables works on the US East Coast, utilizing our boulder grab prior to transition back to the Gulf of America, where she is currently undertaking RIV support works.

Also in renewables, we have the T1400-1 trencher working on a longer-term contract from a third-party client provided vessel off Taiwan and the T-1400-2 working from a third-party client provided vessel for a longer-term contract in the Mediterranean. The GC2 in the Asia Pacific region performed oil and gas support work offshore Thailand during the quarter.

Our renewables and trenching outlook remain very robust, with numerous sizable contracted works in 2025 and 2026 through to 2030, with a solid pipeline of tender activity as far out as 2032. Slide 12 provides detail of our shallow water abandonment business. In Q3, activity levels increased with 100% utilization for the Huron heavy lift barge and strong utilization for the dive vessels and lift boats.

In Q3 we had a higher number of P&A spreads working offshore, totalling 790 days of utilization compared to 614 days in Q2. Whilst 2025 continues to be a soft year on the Gulf of America shelf, we continue to believe in the long-term outlook for this segment, as well as age and customers look to reduce their decommissioning obligations.

So, in summary, whilst we have seen a softer than expected UK intervention market and some gaps in the latter half of the year for the 4,000, we are encouraged by our strong robotics and Brazil segments. We expected Q3 to be a very strong quarter, and it was. We executed it well, producing the highest resulting quarter since 2014.

I'd like to thank our employees for their efforts, delivering again safely at a high level of execution and for again securing further backlog and long-term contracts. And I'll turn the call over to Brent.

Hey Scotty. Moving to slide 14, it outlines our instruments in September. At quarter we had $338 million of cash and availability under the ABL facility of $94 million for the resulting liquidity of $430 million. Our funded debt was $315 million and we had negative net debt of $31 million at quarter.

Our balance sheet is strong and is expected to strengthen further as we anticipate generating meaningful free cash flow in the fourth quarter and have minimal debt obligations between now and 2029. I'm the call over to Eric for a discussion on our outlook.

Thanks, Brent. Our team performed well in the quarter. It's been a challenging year, but our Q3 results provide a glimpse into our earnings potential even with two of our larger assets negatively impacting results. As we enter Q4, we do expect seasonal impacts to our operations, particularly in the North Sea, Gulf of America shelf, and APAC. That said, we're tightening our guidance of certain key financial metrics in our forecast.

Revenues of $1.23 billion to $1.29 billion. EBITDA $240 million to $270 million. We have narrowed our EBITDA guidance. Our new range reflects our year-to-date actual results and the expected variability that comes with the winter season during the fourth quarter.

Pre-cash flow a range of $100 million to $140 million. The range continues to reflect the variability in working capital, specifically timing of accounts receivable with two of our blue-chip customers. We expect to have this resolved by early 2026.

From capital expenditures, we are maintaining our forecast at $70 million to $80 million. Our spend continues to be a mix of regulatory maintenance on our vessels and fleet renewal by our robotics ROVs. Our spend is committed, but deliveries may slip into 2026. These ranges involve some key assumptions and estimates, and any significant variation from these assumptions and estimates could cause results to fall outside these ranges.

As discussed, our fourth quarter results will be impacted by the winter seasonal weather in the northern hemisphere. The variability in our fourth quarter guidance range is dependent on the length and extent of operations working into the season, namely in the North Sea, well intervention and robotics business, in our Asia PA robotics operations, and in the Gulf of America shelf, providing some key assumptions for the remainder of the year by segment and region starting on slide 16.

America, the Q5000 is contracted for the remainder of the year with expected strong utilization. The Q4000 will have gaps in its schedule as it looks to perform lower revenue ROV support work prior to resuming well intervention work in January. In the UK North Sea, the well enhancer has work into November, with the extent of the season being weather dependent. The sea well continues in warm stack. In Brazil, the Q7000 continues working for Shell into Q2 2026.

The CM Helix 2 continues working for Petrobras. The CM Helix I completed its work for Trident. The vessel is currently mobilizing for Petrobras, with work expected to start this quarter. Moving to our robotic segment will be affected by seasonality, with activity levels in the North Sea and APEC expected to diminish in the winter months.

In the AEC region, the Grand Canyon II is providing ROV support and hydraulic stimulation offshore Thailand and Malaysia with expected strong utilization. In the North Sea, the Grand Canyon III, and the North Sea enabler are performing trenching projects and are expected to remain utilized for the remainder of the year. The Glomar wave is forecasted to remain on site clearance operations into December.

In the US, Lalia Mulan is back in the Gulf, providing RV support in November with potential for further work. Moving to production facilities, the HP1 is on contract for the balance of 25 with no expected change. We do have expected variability with production as the Droski field continues to deplete and the thunder hot field is still shut in.

Continuing with shallow water abandonment, we expect the business to decline in line with the winter weather arrival in the Gulf of America. Our outlook range includes variability depending on the timing and extent of the winter season. Shelf decommissioning is a call off business for giving customers' needs and continued reversion of properties through bankruptcies. Long-term, we believe in the solid foundation for this market.

Slide 17 reviewing our balance sheet. Our funded debt stands at $315 million with no significant maturities. Our year date share repurchases spend stands at $30 million in line with our stated target of minimum 25% of our expected free cash flow, with $4.6 million shares acquired. At this time, I'll turn the call back to Owen for discussion on our outlook beyond 2025 and for closing comments. Owen.

Thanks Eric. Let me begin with a few macro-observations and thoughts where Erik is positioned in the current market. We all know the oil and gas market is cyclical. It's actually composed of a series of cycles depending on market segment and region.

Exploration and drilling cycle is the start of the offshore oil and gas investment cycle, usually beginning at a time of high commodity prices or a perceived supply, demand and balance. This was our market environment as markets rebounded post-COVID.

The exploration and drilling cycle is followed by the development cycle, during which subsea construction services do well. The development cycle usually starts about 2 years or more after the drilling cycle. This is where I believe we're at now.

Drilling is currently showing softness with some support and consolidation, fleet rationalization, and a remarkable degree of capital discipline relative to past cycles. The construction market is currently strong. As production from drilling and development comes on and or commodity prices soften, CapEx budgets typically get cut. Remaining dollars freed up get directed to providing.

Well intervention gets added to remediation spending and the production enhancement cycle begins. Without getting into regional differences, we feel the industry is currently in the early but strong development cycle. As a consequence, vessel charter rates and asset values are elevated and production enhancement is flat.

Abandonment is almost a separate event and is currently increasing due to regulatory pressure, the mature nature of reserves, and excess backlog built up with concern over carried liabilities. Bringing this all together, we believe we're in a trough, but at the cusp of an upcycle. As the market progresses, it will move into the production enhancement cycle where we stand to benefit.

As we navigate this trough, we've had three challenged areas of our business in 2025. Number one, the UK North Sea, driven by government tax and regulatory policy combined with M&A consolidations. Most spending in the UK North Sea came to an abrupt slowdown in early 2025.

While we believe 2026 will be marginally better and allow us to Reinstate our second vessel rates will be competitive and work will still be slow. By 2027, we anticipate significant abandonment work will begin as producers leaving the region will be forced to do the work and remaining producers will seek to lessen the liabilities.

Number two, the Q4000. In 2026, work visibility in the Gulf of America is better than what occurred going into 2025, as 2025 was getting deferred into 2026. We do anticipate that deferrals are. Could again occur. So we're planning to hedge utilization risk by again considering a West Africa campaign for at least part of 2026 for the Q4000. Although we have work already contracted in the Gulf of Mexico for Q1.

We ex as Scotty mentioned, we accelerated a dry dock that was planned for 2026 forward into the softer market of 2025, which should allow for greater availability and flexibility on where she's deployed. This should improve Wellop's US results year over year. By 2027 we expect Gulf America demand to increase from both production enhancement and abandonment.

Third area, we continue to believe the shallow water abandonment in the Gulf of Mexico will be a large market for 2025 we right size the business. And are delivering improved results. Excuse me. It's anticipated that 2026 will be a better year, but still a slow year with more work but at reduced rates as competition for the work remains stiff.

Indications are that volume of work from boomerang properties out of the bankruptcies will build into 2027, creating a strong market. The performance of our robotics group has been a positive this year. We're seeing rates improve modestly and visibility and work remain strong, and we continue to establish ourselves as a global leader in trenching as we also support construction and wind farm projects.

Even with all these challenges of 2025, we nonetheless delivered our highest quarter since 2014. And we're still on track to deliver meaningful free cash flow. So, while we acknowledge our results for 2025 will fall short of our expectations that we had coming into the year, we still see the earnings potential in our business.

The challenge for us going into 2026 will be to manage the pressure we're getting from to reduce rates while facing rising supply chain and labor costs. We need to maintain our focus on managing our costs. With strong subsidy construction and robotics markets, we're seeing upward pressure on support material and labor costs.

Next year will be on savings in our ops and marine costs. We believe there's a meaningful opportunity in this area. In addition, we can expect further improved contributions from the Q7 if we're successful in keeping it working in Brazil without the noise of another transit from region to region at higher rate. On the downside, next year we do have both SH vessels in Brazil.

Do for their five-year special surveys. This out of service costs will meaningfully impact some of the anticipated improvements. By how much will be determined as we evaluate costs and timing during our budgeting process. Beyond this, we have a strong balance sheet with negative net debt and significant cash. We're in a position to opportunistically consider growth by acquisition.

We remain a market leader in interventions, decom, and robotics. Through the cycles, we're demonstrating our resilience, our ability to deliver results even in the challenging market environment and our positioning for the future. Back to you.

Thanks Owen operator at this time we'll take any questions. Thank you. We will now begin the question-and-answer session. (Operator Instructions) Our first question comes from the line of Greg Lewis from BTIG.

Hi, Thank you and good morning everybody, and thanks for taking my questions. Ellen, congrats on a great quarter that that this was really good to see. It kind of shows the potential in the with the company. I did have a question around the Q4000. You talked about, some of the challenges that it faced in 2025 decisions from customers to defer cancel. You highlighted the good visibility in Q1.

What should Be looking forward thinking about in terms of, I think there's a lot of optimism around the outlook for 2026, but I think one of the concerns is could we see a little bit of a repeat of customers pushing somewhere right? So just kind of, how are you thinking about maybe mid 26 in terms of, what's going to drive those decisions to get that work going or potentially delaying it another quarter or two.

Well, I'll start and let Scotty add some color to it, but there's always the potential that in this volatile market right now there's always the potential that producers will change their planned spending going in through a budgeting process, we speak primarily with the operating groups to identify the work and start to build our schedule for the following year,

but during that budgeting process, it's possible that corporate gets involved and modifies those plans. We don't always see that. We got caught short this year and we're sort of ill prepared. We sort of figured that the Gulf of America might be soft in 2025. So, we took a contract that was supposed to be a six-month contract in West Africa.

That work actually Shortened a little bit, so we wound up coming back to the Gulf a little earlier only to face the budgeting decisions to defer work out of 2025 and that's what sort of caught us up. We just, admittedly we didn't see it coming. Looking forward into 2026. It's a similar situation, but I think the visibility of the work is stronger in 206 than it was going into 2025.

The work has been deferred once, so that sort of lessens the possibility that it would be deferred twice. But as I said in my remarks, you can never rule it out. But that's why we're also looking at hedging that risk by entertaining another campaign to West Africa this year.

Yeah, I'll add to that. Thanks. We have a sizable contract to kick off in very early in January, that'll get us going for a good start of the year. And then we are at high level discussions with many operators about works into 2026 in the Gulf of America.

One of the reasons we brought forward the regulatory dry dock in from 2016 into 25 is if we do take a West Africa campaign, it'd be very difficult to do the docking in the Africa region. And we're also starting to have discussions about potential works in Guyana as well. So, a few other workplaces are opening up for us and we're looking at regional options as well.

And you have to also remember we're not a rig, you never hear of rigs going off and doing construction or decommissioning support work. We're quite a versatile unit. All those rates are lower, we can go off and do other works if the well intervention work doesn't, come to come to us.

Okay, yeah, no, that was super helpful. Thanks, Scotty. I did have a follow-up, around shallow water abandonment, clearly, I think we share your views that it's going to be a better market over time, but I did want if you could elaborate a little bit. You mentioned that you know kind of your expectations for 26 is that we are going to see, pick up an activity but maybe at reduced rates and just kind of curious if you could maybe elaborate on that comment.

Yeah, in 2022, 2023 was a banner year as Apache really absorbed all of the available capacity in the market. That drove rates and utilization to all-time highs. In 24 when they exited the market, the competition did add capacity, so that's exacerbated the situation, and we went into a period where there's actually excess supply over demand. We think that's continued through 25.

We didn't adjust well in 24 to it. We were expecting a quicker rebound, but there were provisions allowed for producers to defer their work up to three years, so that sort of kept the work from rebounding as quickly. We thought it would going into next year we do, we are seeing an increase in the volume of work, although the competition has that capacity, so I think 2026 will continue to be a highly competitive year on margin, but utilization should be strong for us.

And then going into 2027, that's when the hiatus sort of starts to expire and we see the shallow water abandonment market actually returning to what I would call a normal state following these boomerang properties, so a much stronger market by 2027.

Okay, so just so I understand, it sounded like despite maybe some of the softness in the last year or two in SWA, you did have some competitors that maybe that they add capacity or did they, was it moved to the US or was it just incremental stuff that they built into the market?

No, it was incremental spreads that were actually fabricated and put into the market. The big bottleneck in that market is actually the people, so whoever has the work sort of gets the people. We came up short in 2024 and because of our competition bidding lower rates.

As the people sort of moved away from us throughout this year we've been very successful in getting the people to come back to us, and we've increased our utilization, of course, by cutting rates. So I think we're pretty well positioned going into next year to be a strong competitor in the market.

Okay, super helpful. Thank you very much.

Thank you. Our next question comes from the line of James from Talent. The line's open.

Hey, good morning, guys, nice quarter. I was hoping maybe you could help me with the bridge to 4th quarter from third quarter in subsea robotics, so I guess it looks like you'll have some Q4 seasonality, but it looks like the. It looks like the vessels will all be utilized in in some at some level, but maybe the vessel days will be a bit lower and then if I'm reading your slides correctly,

I think you had like ALL six trenchers going in the third quarter, but you only have four in the fourth quarter, is that right? Like how? Just or maybe just speak at a high level like what kind of a drop we're looking sequentially for sub robotics.

So, we did have six trenches working in the third quarter. We will drop down to eventually four trenches in the fourth quarter. The trenches that's currently working in Taiwan, that'll get seasonal once the weather kicks in, that'll get demobilized. However, we are expecting work in Taiwan again for T1400-1 next year.

The North Sea trenches, they should be relatively busy through the quarter, but again, you will start getting affected by seasonal weather, which will bring down rates. And then the iCloud that was on the JD assisted that projects come to a close in Q3, so that will not be utilized in Q4.

Scotty, when you said it'll bring down rates, did you mean bring down utilization or do rates also soften in the fourth quarter?

Generally, when we're trenching, we have an operational full rate and then there's a lower weather rate. We still get paid for weather, but rates. So, there'll be less trenches utilized and as the weather kicks in, there'll be some lower rates coming in.

Understood, thanks. Guys, in the North Sea, I think there were two large tenders. Is there an update there? Were you unsuccessful or do we just haven't heard anything or what what's the update there?

We're very active on both of those tenders. One of them, there's a lot of technical clarifications going on, and the other one I'd say we're in quite a good position for. We're just not in a position yet to bring that out to the market, but it's in a good place.

Okay, and then maybe just.

Sorry. I think that next year we'll be going into activating the Cell again at some point. We don't know if it will be a full year or a partial year, but it's looking more and more likely we will activate the Cell in 2026. We just don't know for what length of time yet.

Okay, yeah, that's, okay, that's where I was going with that. Thank you. And just lastly, a quick clarification, the well intervention, the new contract that you announced 150 days minimum, is that a grand total of 150 days over three years or is it 150 days annually?

Now the minimum commitment over the three years is 150 days. However, in 2026, we're kicking off with that contract with quite that's the sizable work for the kickoff for the Q4000.

Okay. Great. I'll, that's it for me. Thanks, guys. I appreciate it.

Thank you.

Thank you. All right, next question comes from the line of Connor Jensen from Raymond Jakes. The line's open. Hey.

Hey guys, thanks for taking my call and like everyone else said, great quarter here. So really strong showing for robotics in Q3 and reading the forward commentary, it looks like that should continue to be solid going forward. Just wondering if you could give a high level overview next year, what you're thinking about 2026 robotics versus what we saw in 2025.

I think we should see a strong year in robotics for 2026. It should be at least be on par with what we have for 2025, and we're expecting a strong trenching season in the Mediterranean, the North Sea, and in Taiwan.

The site clearance market is looking quite robust for next year as well, so I expect to at least be on par, if not better. As we go into 2026, our trenching rates will certainly have some very large contracts in place at better rates in 2025, so it should be another good year for robotics.

Got it. That's helpful. And then any update on the chemical treatment success for Thunder Hawk? I saw you don't anticipate any revenues in 2025, but wondering if you still expect to receive some benefit in 2026 without having to do an intervention.

We've seen some positive developments on that front that leads us to question whether or not an intervention will actually be necessary, but it's still early days and we don't know. We have plans that are already. Submitted into Betsy for the various optionality of work going forward to get it back online. Our anticipation though is that we should have it back online at least by some point in the first quarter.

Got it. Thanks guys. I'll turn it back.

Thank you.

Thank you. (Operator Instructions)Our next question comes from the line of Josh Jain from Dano Energy Partners. The line's open.

Thanks. Good morning. First question, you noted, rising supply chain costs moving forward into 2026. Where are you seeing the most pressure and, could you just talk about how you're mitigating those increases?

We're seeing rising cost pressures across the board actually. It began with labor costs. They went up for this year. I don't see any recruiting from the labor costs, but also on the materials and supply side and delivery through the supply chain, we're seeing escalating costs.

So those are areas where we're going to really be focusing on trying to mitigate the cost, and that's just working with our suppliers, maybe consolidating our supplier base and just putting a little pressure on achieving a little bit of a margin gain there.

Okay, and then I wanted to talk about pricing for well intervention. So, although deepwater rig rates have come down for incremental contracts from where we were sort of last summer, there's still a GAAP between where your assets can work and you know. Sort of 710 drilling assets.

So, I'm curious if you've seen any change in pricing discussions you're having on the intervention side, or is securing backlog just more at this point about stacking programs on top of one another than really a price-li discussion?

It is also a price discussion. We have seen downward pressure on our rates similar to what the drillers have experienced in the marketplace.

Having said that, we are also able to tier our rates, so we have well intervention rates. We have rates for carrying out construction support projects and RV support projects during times of lower utilization and well intervention and similar, but we have seen downwards pressure.

We do have backlog in Brazil on longer-term contracts and for the 5,000 as well at set rates and better to what we have in this year. And it's also a bit of a regional play, sort of we might have a softness for the Q4000, Q5000 is tight, but then the rates in the North Sea will be dependent on whether or not we can activate the second vessel. So, you might see a bit of rate pressure there trying to get the second vessel into the market.

Understood. And then maybe just lastly, could you just speak in general to the market in Brazil, continue to be highly utilized there and just maybe your thoughts over the next couple of years about that market and the success that you've been having.

Yeah, I mean we have the CM Felix one and two both on the Petrobras contracts. They're going to be for three years plus options. The Q7000 on a good contract with Shell. We would hope that there's some extensions there, but then we're also starting to see quite a bit of interest in the Brazil market for the Q7000 that with Shell.

I would say Brazil in general, not just for us but for the rigs, is the most buoyant market out there at this time. So, we're quite confident of keeping our position.

Thanks, I'll turn it back. Thank you. If there are no further questions, I will now attend the call back over to Erik Staffeldt for closing remarks.

Thanks for joining us today. We very much appreciate your interest and participation and look forward to having you on our fourth quarter 2025 call in February. Thank you.

The meeting has now concluded. Thank you all for joining. He now disconnects.