Independence Contract Drilling Inc (ICD) 2023 Q4 法說會逐字稿

Good day and welcome to the Independence Contract Drilling Inc. fourth quarter and year end 2023 financial results and conference call. All participants will be in listen-only mode. (Operator Instructions) After today's presentation, there will be an opportunity to ask questions. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Phillip Choyce, Executive Vice President and Chief Financial Officer. Please go ahead.

美好的一天，歡迎來到 Independence Contract Drilling Inc. 第四季和 2023 年底財務業績和電話會議。所有參與者將處於僅聽模式。（操作員說明）今天的演示結束後，將有機會提問。（操作員說明）請注意此事件正在被記錄。我現在將會議交給執行副總裁兼財務長 Phillip Choyce。請繼續。

Good morning, everyone, and thank you for joining us today to discuss ICD's Fourth Quarter 2023 results. With me today is Anthony Gallegos, our President and Chief Executive Officer. For we begin, I would like to remind all participants that our comments today will include forward-looking statements which are subject to certain risks and uncertainties. A number of factors and uncertainties could cause actual results in future periods to differ materially from what we talk about today.

大家早安，感謝您今天加入我們討論 ICD 2023 年第四季的業績。今天和我在一起的是我們的總裁兼執行長安東尼·加列戈斯。首先，我想提醒所有參與者，我們今天的評論將包括前瞻性陳述，這些陳述將受到某些風險和不確定性的影響。許多因素和不確定性可能導致未來時期的實際結果與我們今天談論的結果有重大差異。

For a complete discussion of these risks, we encourage you to read the company's earnings release and our documents on file with the SEC. In addition, we refer to non-GAAP measures during the call please refer to the earnings release and our public filings for a full reconciliation of net loss, adjusted net loss, EBITDA and adjusted EBITDA, and for definitions of our non-GAAP measures and with that, I'll turn it over to Anthony for opening remarks.

為了全面討論這些風險，我們鼓勵您閱讀公司的收益報告以及我們向 SEC 備案的文件。此外，我們在電話會議期間提到了非GAAP 衡量標準，請參閱收益發布和我們的公開文件，以了解淨虧損、調整後淨虧損、EBITDA 和調整後EBITDA 的全面對賬，以及我們的非GAAP 衡量標準和接下來，我將把它交給安東尼致開幕詞。

Hello, everyone. Thank you for joining us for our fourth quarter 2023 earnings conference call. During my prepared remarks, I'll talk about the current super-spec rig market and the progress we've made on some important strategic initiatives. Also, I'll close out by talking about our plans for 2024, but first, just a few comments. Looking back on the fourth quarter and full year in which ICD achieves meaningful accomplishments. Most important, we continued our fleet evolution towards 300 series specification and this trend was turbocharged in the back part of the year. To provide some context, we initiated our 200 to 300 series conversion program about 18 months ago, and at the beginning of 2023, we had completed only one conversion and only 50% of our operating rigs met 300 series specifications since the beginning of 2023. However, we have transformed our operating fleet.

大家好。感謝您參加我們的 2023 年第四季財報電話會議。在我準備好的發言中，我將討論目前的超規格鑽機市場以及我們在一些重要戰略舉措上取得的進展。另外，我將透過談論我們 2024 年的計劃來結束，但首先，我只想發表一些評論。回顧第四季和全年ICD所取得的有意義的成就。最重要的是，我們繼續將機隊朝 300 系列規格發展，這一趨勢在今年下半年得到了進一步加強。為了提供一些背景信息，我們大約 18 個月前啟動了 200 至 300 系列轉換計劃，到 2023 年初，我們只完成了一次轉換，自 2023 年初以來，我們的作業鑽機只有 50% 符合 300 系列規格。然而，我們已經改變了我們的營運機隊。

Today, 90% of our operating rigs meet 300 series specifications with five conversions having occurred since September first. Today, all but one of our former 200 Series rigs operating today is a 300 series rig and budgeted for the remaining 200 series rig to be converted later this year, depending on customer requirement. I'd be remiss if I did not point out that we have received full cash payback or more during the initial contract term on the CapEx required for all of our 200 to 300 series conversions to date. And this fleet transformation paid significant dividends for ICD in 2023 as we navigated a severely depressed Haynesville gas market and an overall decline in the Permian rig count as well. In fact, as of today, we have increased our Permian rig count by over 40% compared to the beginning of 2023, even while the overall rig count in the basin declined 15%, along with our reputation for operational excellence and customer service, our ability to efficiently execute our 200 to 300 series conversions drove this significant market outperformance as we entered 2024 our conversion strategy is continuing to pay dividends on contract renewals and extensions for example, we just executed several multi-year contract extensions with one of the Permian's largest operators and signed another term contract with a new Permian customer. The majority of these contract extensions involve 300 Series rigs that were converted by us in 2023.

如今，我們 90% 的作業鑽機符合 300 系列規格，自 9 月 1 日以來進行了五次轉換。如今，除了一台正在運行的前 200 系列鑽機外，所有鑽機都是 300 系列鑽機，並根據客戶要求，為今年稍後轉換剩餘的 200 系列鑽機制定了預算。如果我沒有指出我們在初始合約期間已收到全部現金回報或更多的現金回報，那麼我們迄今為止所有 200 至 300 系列轉換所需的資本支出就是我的失職。隨著我們應對海恩斯維爾天然氣市場的嚴重蕭條以及二疊紀鑽機數量的整體下降，這種船隊轉型在 2023 年為 ICD 帶來了巨大的紅利。事實上，截至今天，與 2023 年初相比，我們的二疊紀鑽機數量增加了 40% 以上，儘管該盆地的鑽機總數下降了 15%，而且我們在卓越運營和客戶服務方面的聲譽、進入2024年，高效執行200 至300 系列轉換的能力推動了這一顯著的市場表現，我們的轉換策略將繼續在合約續約和延期上帶來紅利，例如，我們剛剛與二疊紀最大的石油公司之一執行了幾次多年合約延期運營商並與新的二疊紀客戶簽署了另一份定期合約。這些延期合約大部分涉及我們於 2023 年改裝的 300 系列鑽孔機。

In 2023, we also began to take advantage of the par paydown opportunity in our indenture by paying down a total of $15 million worth of convertible notes, including a $5 million paydown in the fourth quarter. We have mentioned in the past that positioning the company for a potential refinancing of our convertible notes is a high priority for us. As you may have noticed in our press release today, although our convertible notes do not mature until March of 2026. The refinancing window for these notes will open later this year, and we have appointed a special committee of independent directors to proactively begin the process of reviewing and evaluating opportunities regarding the notes and any other strategic opportunities that can be considered in connection with that review.

2023 年，我們也開始利用契約中的面額償還機會，償還了價值總計 1,500 萬美元的可轉換票據，其中包括第四季償還的 500 萬美元。我們過去曾提到，為我們的可轉換票據進行潛在的再融資定位公司是我們的首要任務。正如您可能在我們今天的新聞稿中註意到的那樣，儘管我們的可轉換票據要到 2026 年 3 月才會到期。這些票據的再融資窗口將於今年稍後開放，我們已經任命了一個由獨立董事組成的特別委員會，以主動開始審查和評估有關票據的機會以及與該審查有關的任何其他戰略機會。

Moving on to our fourth quarter results. Philip will provide more details during his prepared comments, but I wanted to make a few. While our margins came in on the higher end of our guidance, our overall results came in at the low end almost entirely due to higher rig reactivation expenses much, much of which was related to higher labor and related expenses originally earmarked to perform maintenance and upgrade CapEx on rig reactivations that ultimately did not mature material as the offset, of course, is that outlays for CapEx during the fourth quarter was only $2.7 million.

接下來是我們第四季的業績。菲利普將在他準備好的評論中提供更多細節，但我想做一些。雖然我們的利潤率處於指導值的較高端，但我們的整體業績卻處於低端，幾乎完全是由於鑽機重新啟動費用較高，其中很大一部分與最初指定用於執行維護和升級的勞動力和相關費用增加有關鑽機重新激活的資本支出最終沒有成熟材料，當然，第四季度的資本支出支出僅為 270 萬美元。

Now I'd like to talk about the market for super-spec rigs in our target markets, including what we are seeing from a dayrate perspective and what has changed from our last conference call. Obviously, our Permian market has held up pretty well based on ICD's increased rig utilization in that basin.

現在我想談談我們目標市場中的超規格鑽機市場，包括我們從每日費率角度看到的情況以及自上次電話會議以來發生的變化。顯然，由於 ICD 在該盆地鑽機利用率的增加，我們的二疊紀市場保持得相當不錯。

But let me begin with our gas-directed Haynesville market. It's no secret that the Haynesville market was severely depressed throughout 2023, but early in Q4 of last year. As we entered the winter season, we started to see some small opportunities for rig adds in 2024. And fortunately, the combination of further declines in commodity prices driven by a very warm winter has pause. These opportunities with these factors, combined with duck inventory builds in the area and customer consolidation Our expectation today, unfortunately, is for further decline in the Haynesville rig count overall. And for ICD, we had three rigs working in the Haynesville at the beginning of this year. However, two of our customers with whom we were anticipating contract extensions notified us that they were not going to continue their programs.

但讓我從我們以天然氣為導向的海恩斯維爾市場開始。眾所周知，海恩斯維爾市場在 2023 年全年（但去年第四季初）都嚴重低迷。隨著進入冬季，我們開始看到 2024 年增加鑽機的一些小機會。幸運的是，由暖冬推動的大宗商品價格進一步下跌已經暫停。這些機會與這些因素相結合，再加上該地區鴨子庫存的增加和客戶整合，不幸的是，我們今天的預期是海恩斯維爾鑽機總數進一步下降。對於 ICD，今年年初我們在海恩斯維爾部署了三台鑽機。然而，我們預計會延長合約的兩位客戶通知我們，他們不會繼續他們的計劃。

We've already relocated one of these rigs to West Texas including completing a 200 to 300 series conversion during the rig move and placing it on a six-month contract with a new customer all with zero off-rate time. While movement of this rig did cannibalize an opportunity we previously had earmarked for an incremental rig at the rig is performing exceptionally well and we feel we have a very good opportunity to add a second rig with that customer later this year, assuming their plans remain in place for the second Haynesville rig where we received notice, we have been successful in placing that rig on a follow-on opportunity with a different customer, but it is a short term program and we are continuing to market the rig for follow-on opportunities. The takeaway of all this is that we expect to run two or so rigs in the Haynesville for the foreseeable future and are scaling our operations accordingly.

我們已經將其中一台鑽機搬遷到了西德克薩斯州，包括在鑽機搬遷期間完成了200 至300 系列的轉換，並將其與新客戶簽訂了為期六個月的合同，所有合同均為零折扣時間。雖然該鑽機的移動確實蠶食了我們之前指定的增量鑽機的機會，但該鑽機的性能非常好，我們認為我們有一個很好的機會在今年晚些時候與該客戶一起添加第二台鑽機，假設他們的計劃仍然存在第二個海恩斯維爾鑽機的位置，我們收到通知，我們已成功將該鑽機放置在與其他客戶的後續機會中，但這是一個短期計劃，我們將繼續推銷該鑽孔機以獲得後續機會。所有這一切的結論是，我們預計在可預見的未來在海恩斯維爾運行兩個左右的鑽機，並相應地擴大我們的業務規模。

Our West Texas market, on the other hand, has held up much better. And we obviously have been successful in adding rigs across our customer base, increase an increasing term contract exposure where it makes sense. And we currently have 14 rigs running in West Texas. However, capital discipline and increasing consolidation of E&P companies kept a lid on the overall rig count in the Permian Basin during the second half of 2023. And all indications today are for a flattish overall rig count in the Permian during the first half of this year. We also expect continued elevated churn and rig movement within this overall flat rig count driven by rebalancing of fleets following the closings of recent E&P consolidation transactions. Thus, the incremental rig adds for ICD in the Permian are going to be from predominantly directed toward high-grade opportunities, displacing lower spec and or underperforming competitor rigs.

另一方面，我們的西德克薩斯市場表現要好得多。顯然，我們已經成功地在客戶群中增加了鑽機，並在有意義的情況下增加了定期合約的風險。目前，我們有 14 台鑽孔機在德克薩斯州西部運行。然而，資本紀律和勘探與生產公司的不斷整合限制了 2023 年下半年二疊紀盆地的鑽機總數。今天的所有跡像都表明，今年上半年二疊紀地區的整體鑽機數量持平。我們也預計，在近期勘探與生產整合交易結束後，由於船隊重新平衡，整體扁平鑽機數量中的流失和鑽機移動將持續增加。因此，二疊紀 ICD 新增的鑽孔機將主要針對高品位機會，取代較低規格和/或表現不佳的競爭對手鑽孔機。

These opportunities are very competitive. But so far, we have been successful in winning more than our fair share in light of the flattish rig count overall at around 600 rigs, day rates in general have moved sideways, which is what we expect for the first half of 2024 day rates and daily margins for super-spec rigs are still healthy, but obviously lower than they were a year ago. This is more pronounced for incremental rig adds with new customers, for example, compared to when we renew or rollover a contract with existing customers. And as you might expect, there's more day rate pressure in the Haynesville than in the Permian spot market day rates on competitive awards can be up to a couple of thousand dollars per day lower in rollover rates owing to efficiencies earn and friction costs of changing out rigs that are performing at today's required level of performance.

這些機會競爭非常激烈。但到目前為止，我們已經成功地贏得了超過我們公平份額的份額，因為鑽機數量總體持平，約為600 台，日費率總體呈橫向波動，這正是我們對2024 年上半年日費率的預期，超規格鑽孔機的每日利潤仍保持健康，但明顯低於一年前。例如，與我們與現有客戶續約或展期合約時相比，這對於新客戶增加的鑽孔機數量更為明顯。正如您所預料的那樣，海恩斯維爾的日費率壓力比二疊紀現貨市場的日費率更大，由於效率賺取和更換的摩擦成本，競爭性獎勵的日費率每天可低幾千美元。達到當今所需性能水平的鑽孔機。

Day rates in the Permian for our 300 series rigs have remained stable in the low $30,000 range and for our remaining 200 series rig, the high 20s, there are some competitors bidding rigs at day rates less than this, but the largest providers have held up their pricing, which is helpful. We continue to earn full cash-on-cash payback over the initial contract for any CapEx associated with a 200 to 300 series conversion in light of this backdrop, our strategic operating objectives and priorities as we move forward are as follows. While we still believe we can return to a 21 rig operating rig fleet, that goal has been pushed to the right in light of the market dynamics I just described. During the first half of 2024, our priority will be to navigate the increased churn and choppiness we are seeing in the Haynesville from customer consolidation in the Permian and focused on maximizing utilization on the rigs we currently have operating as we expect to deal with some rig movements here in the first half of this year has the effects of lower gas prices and customer consolidation and capital allocation priorities work their way through the system.

我們的300 系列鑽機在二疊紀地區的日費率一直穩定在30,000 美元的低位範圍內，而對於我們剩餘的200 系列鑽機，在20 多美元的高位範圍內，有一些競爭對手以低於此的日費率競標鑽機，但最大的供應商已經堅持了他們的定價，這很有幫助。鑑於這種背景，我們繼續在與 200 至 300 系列轉換相關的任何資本支出的初始合約中獲得全額現金回報，我們前進的策略營運目標和優先事項如下。雖然我們仍然相信我們可以恢復到擁有 21 台鑽機的鑽井船隊，但鑑於我剛才描述的市場動態，這一目標已被推遲。2024 年上半年，我們的首要任務將是應對海恩斯維爾因二疊紀客戶整合而導致的客戶流失和波動加劇，並重點關注最大限度地提高我們目前運營的鑽機利用率，因為我們預計將處理一些鑽機今年上半年的走勢受到天然氣價格下降、客戶整合和資本配置優先事項的影響。

Beyond that I expect we will see opportunities to grow our Permian Basin presence as this year plays out as the benefits of our 300 series rigs and our 200 to 300 series conversion program, combined with RICD. impact offerings, continue to bring new customers into the fold and allow us to expand existing customer relationships in the face of a likely flat overall Permian rig count. In the near term, we will likely need to continue to punch above our weight class to drive incremental rig reactivations. But I think we've shown that we're more than able to do that. Obviously, if the Permian rig count moves upward sooner, that will only increase our opportunities for rig reactivation and margin improvements in the first half of 2024, as I mentioned, given further declines in the Haynesville, we don't see a recovery in that basin until mid 2025, given a very warm winter, which is winding down large gas storage levels, significantly lower nat gas prices and the duck inventories which E&P companies have assembled, but we are leaving the door open for an eventual return when market dynamics in that basin turn more positive for drilling contractors with strong brands and reputations in the challenging operating environment, which the Haynesville presents Rolling all this up I'm confident that ICT is ready for the year, which has now started.

除此之外，我預計今年我們將看到擴大二疊紀盆地業務的機會，因為我們的 300 系列鑽孔機和 200 至 300 系列轉換計畫與 RICD 結合帶來的好處。影響產品，持續吸引新客戶，並使我們能夠在二疊紀總體鑽機數量可能持平的情況下擴大現有客戶關係。在短期內，我們可能需要繼續超越我們的重量級別，以推動增量鑽孔機重新啟動。但我認為我們已經證明我們完全有能力做到這一點。顯然，如果二疊紀鑽機數量更快增加，這只會增加我們在2024 年上半年重新啟動鑽機和提高利潤率的機會，正如我所提到的，鑑於海恩斯維爾的進一步下降，我們看不到該地區的復甦到2025 年中期，考慮到非常溫暖的冬季，大型天然氣儲存量逐漸減少，天然氣價格和勘探與生產公司組裝的鴨子庫存顯著降低，但我們為市場動態恢復時的最終回歸敞開大門。對於在海恩斯維爾提出的充滿挑戰的運營環境中擁有強大品牌和聲譽的鑽井承包商來說，該盆地變得更加積極。綜合這一切，我相信ICT 已為現在已經開始的一年做好了準備。

Overall CapEx budget net of disposals for 2024 has been set at $18.2 million and we have set our cash SG&A budget for fiscal 2024 at $15.3 million, both reflective of a flatter operating environment, which we are now experiencing. I'll make some additional concluding remarks before opening the call up for questions. But right now, I want to turn the call over to Phillip to discuss our financial results and financial outlook in more detail.

2024 年扣除處分後的總資本支出預算已定為 1,820 萬美元，我們已將 2024 財年的現金 SG&A 預算定為 1,530 萬美元，這兩者都反映了我們目前正在經歷的更平坦的營運環境。在開始提問之前，我將做一些補充總結。但現在，我想將電話轉給菲利普，更詳細地討論我們的財務表現和財務前景。

For the fourth quarter of 2023, we reported an adjusted net loss of $8.6 million or $0.61 per share and adjusted EBITDA of $9.9 million. In calculating adjusted EBITDA and loss per share. We excluded $600,000 associated with non-cash SG&A marketing expense during the quarter, which related to an amendment to some contractual assets. We also excluded $14.7 million associated with a non-cash impairment charge. Impairment charge relates to idle equipment that we didn't.

2023 年第四季度，我們報告調整後淨虧損為 860 萬美元，即每股 0.61 美元，調整後 EBITDA 為 990 萬美元。在計算調整後的 EBITDA 和每股虧損時。我們排除了本季與非現金 SG&A 行銷費用相關的 60 萬美元，這與一些合約資產的修改有關。我們也排除了與非現金減損費用相關的 1,470 萬美元。減損費用與我們沒有的閒置設備有關。

We do not believe will be usable in the company's fleet of 26 marketed rigs on a go-forward basis as well as capital spares that will be disposed of in connection with efforts to consolidate the company's yard locations. During the quarter, we operated 14.9 average rigs in line with our prior conference call guidance. Margin per day during the quarter came in at $12,313 per day at the high end of guidance. However, as Anthony mentioned, reactivation costs of $2.1 million exceeded guidance from our last conference call, and there were no early termination revenues during the quarter. SG&A costs were $5.7 million during the quarter included approximately $1.8 million of stock-based and deferred compensation expense as well as a non-cash operating expense I previously mentioned.

我們認為，未來該公司的 26 台銷售鑽機以及將在鞏固公司堆場位置的過程中處置的資本備件將無法用於該公司的船隊。本季度，我們平均營運 14.9 台鑽機，符合先前的電話會議指導。本季每日保證金為 12,313 美元，處於指導上限。然而，正如安東尼所提到的，210 萬美元的重新啟動成本超出了我們上次電話會議的指導，並且本季度沒有提前終止收入。本季的 SG&A 成本為 570 萬美元，包括約 180 萬美元的股票和遞延補償費用以及我之前提到的非現金營運費用。

Cash G&A expense during the quarter was $3.9 million, relatively flat with the third quarter and in line with guidance. Interest expense during the quarter aggregated $9.8 million. This included $2.6 million associated with non-cash amortization of deferred issuance costs and debt discount, which we excluded when presenting adjusted net income. Tax benefit for the quarter was $900,000. And during the quarter, cash payments for capital expenditures net of disposals were approximately $2.7 million.

本季現金管理費用為 390 萬美元，與第三季持平，符合指引。本季利息支出總計 980 萬美元。其中包括與遞延發行成本和債務折扣的非現金攤銷相關的 260 萬美元，我們在列報調整後淨利潤時將其排除在外。該季度的稅收優惠為 900,000 美元。本季度，扣除處置後的資本支出現金支付約為 270 萬美元。

Moving on to our balance sheet repaid $5 million of convertible notes at par at quarter end. Overall, adjusted net debt during the quarter was reduced by $4 million. Our financial liquidity at quarter end was $26.2 million, comprised of cash on hand of $5.6 million and $20.6 million of availability under our revolving credit facility.

我們的資產負債表在季度末以面額償還了 500 萬美元的可轉換票據。總體而言，本季調整後的淨債務減少了 400 萬美元。截至季末，我們的財務流動性為 2,620 萬美元，其中包括 560 萬美元的手頭現金和循環信貸額度下的 2,060 萬美元的可用資金。

Now moving on to guidance for fiscal '24 and the first quarter of 2024. As Anthony mentioned, we have set our capital expenditure budget at $18.2 million net of disposals for 2024. This includes completion of a 200 to 300 series conversion on alone 200 series rig we have operating today. Budget is based upon 17 operating rigs in the near term.

現在轉向 24 財年和 2024 年第一季的指引。正如安東尼所提到的，我們將 2024 年的資本支出預算定為 1,820 萬美元（扣除處置費用後）。這包括在我們今天運營的 200 系列鑽孔機上完成 200 至 300 系列的轉換。預算基於近期運行的 17 個鑽機。

As Anthony mentioned, we're expecting a relatively flat operating rig count for at least the first half of 2024. We expect to adjust our capital budget forward on any incremental rig adds that increase our operating rigs above 17 earlier than these expectations. I would note that due to white space created by rig churn our reported average operating day during a particular quarter will likely be below 17 until we begin reactivating additional rigs.

正如安東尼所提到的，我們預計至少在 2024 年上半年，營運鑽機數量將相對穩定。我們預計將調整我們的資本預算，以提前調整任何增量鑽機的增加，使我們的營運鑽機數量早於這些預期增加到 17 個以上。我要指出的是，由於鑽機流失造成的空白，我們報告的特定季度的平均營運日可能會低於 17 天，直到我們開始重新啟動其他鑽機為止。

We have set our cash SG&A budget for 2024 at $15.3 million, this is a reduction of approximately 8% compared to fiscal 2023 and represents consolidation of various corporate functions that occurred early in 2024. Noncash stock-based compensation during 2024 is expected to be approximately $5 million, but much of this is tied to variable accounting is driven by increases or decreases in relation to our stock price at periods end, we are budgeting interest expense in 2024 to approximate $30 million. In addition, we expect to recognize $12 million of non-cash interest expense associated with amortization of debt discount and offering costs. And finally, we expect our effective tax rate in 2024 to be approximately 5%.

我們將 2024 年的現金 SG&A 預算設定為 1530 萬美元，與 2023 財年相比減少了約 8%，代表了 2024 年初發生的各種公司職能的整合。2024 年的非現金股票薪酬預計約為 500 萬美元，但其中大部分與可變會計相關，由期末股價的上漲或下跌驅動，我們將 2024 年的利息支出預算為約 30 美元百萬。此外，我們預計將確認與債務折扣和發行成本攤銷相關的 1,200 萬美元非現金利息費用。最後，我們預計 2024 年的有效稅率約為 5%。

Now moving on to more specific guidance for the first quarter of 2024, we expect operating days to approximate 1,343 days. We expect margin per day to come in between $10,400 and $11,000 per day with a sequential decline relating to lower day rates on contract renewals.

現在轉向 2024 年第一季更具體的指導，我們預計營業天數約為 1,343 天。我們預計每日保證金將在 10,400 美元至 11,000 美元之間，連續下降與續約日費率降低有關。

Breaking out the components, we expect revenue per day to range between $30,100 and $30,400 and costs per day to range between $19,300 and $19,600 based upon cost efficiency initiatives instituted at the beginning of 2024. We are expecting positive trends in our overall cost per day compared to 2023 and resort overhead expenses will be about $800,000 during the quarter, and we've excluded those expenses from our cost per day guidance. This includes approximately $200,000 associated with relocating rigs from the Haynesville to the Permian. But first quarter cash SG&A expense to be approximately $4.4 million, which includes severance costs of approximately $400,000.

根據 2024 年初制定的成本效率舉措，我們預計每天的收入將在 30,100 美元至 30,400 美元之間，每天的成本將在 19,300 美元至 19,600 美元之間。與 2023 年相比，我們預計每日整體成本將呈現正面趨勢，本季度假村管理費用將約為 80 萬美元，我們已將這些費用排除在每日成本指引之外。其中包括將鑽井平台從海恩斯維爾遷移到二疊紀的約 20 萬美元。但第一季現金 SG&A 費用約為 440 萬美元，其中包括約 40 萬美元的遣散費。

Cash SG&A during the year is somewhat front-loaded due to year professional fees. Similar to our expectations around cost per day, we are expecting positive trends in our cash, SG&A. expense in future quarters. Based upon cost efficiency initiatives instituted at the beginning of the year. Stock-based compensation expense for the quarter should approximate $1.4 million semi, no material changes to our stock price that would impact variable awards. First quarter, we expect interest expense to approximate $10 million. And of this amount, approximately $2.7 million will relate to non-cash amortization and deferred financing costs and debt discounts. Depreciation expense for the first quarter is expected to be flat with the fourth quarter, and we expect our tax benefit during the quarter to be diminimus. With that I will turn the call back over to Anthony.

由於年度專業費用的原因，年內的現金銷售、管理及行政費用有些提前。與我們對每日成本的預期類似，我們預期現金、SG&A 的正面趨勢。未來幾季的支出。基於年初制定的成本效率措施。本季的股票薪酬支出應約為 140 萬美元，我們的股價不會發生會影響可變獎勵的重大變動。第一季度，我們預計利息支出約為 1000 萬美元。其中，約 270 萬美元將用於非現金攤提、遞延融資成本和債務折扣。第一季的折舊費用預計將與第四季持平，我們預計該季度的稅收優惠將微乎其微。這樣我就會把電話轉回安東尼。

Thanks, Phil. So wrapping all this up, I believe ICD performed very well last year as we navigated many challenges successfully in the process. We grew our Permian Basin presence and we were able to expand some key customer relationships and attained some new customers, all the while delivering world-class performance, including industry-leading HS&E results we continue to make progress on the three most important strategic initiatives we have, which include paying down debt, increasing our exposure to the 300 series market and leveraging our D. impact offering.

謝謝，菲爾。總而言之，我相信 ICD 去年表現得非常好，因為我們在過程中成功應對了許多挑戰。我們擴大了二疊紀盆地的業務，我們能夠擴大一些關鍵客戶關係並獲得一些新客戶，同時提供世界一流的業績，包括行業領先的 HS&E 結果，我們繼續在三項最重要的戰略舉措上取得進展已，其中包括償還債務、增加我們對300 系列市場的曝險以及利用我們的D. 影響力產品。

So with that, we'd like to take your questions. Operator, please open up the line for Q&A.

因此，我們願意回答您的問題。接線員，請開通問答線。

We will now begin the question-and-answer session. (Operator Instructions)

我們現在開始問答環節。（操作員說明）

Steve Ferazani, Sidoti.

史蒂夫·費拉扎尼，西多蒂。

Morning Anthony, Philip, thanks for all the color on the call. Just first, just so I can clarify the guidance. Sounds like you are setting CapEx based on 17 operating rigs, but it sounds like your guidance for Q1 is probably slightly less than 15 given the some whitespace. But can you sort of connect the two?

早安，安東尼、菲利普，感謝您在電話會議上的精彩演講。首先，我可以澄清指導。聽起來您正在根據 17 個操作鑽機設定資本支出，但考慮到一些空白，您對第一季的指導可能略低於 15。但你能把兩者連結起來嗎？

Yes.

是的。

Yeah. There's a -- we've got by when you look at our fleet status. So if we've got 17, what I call hot rigs, there's about three or four of them really are moving around on us right now. There's a couple in the Haynesville, as Anthony talked about in his prepared remarks, we've got one characterize as caught up in the consolidation that's gone on where where the customer's going to where we're moving that around. And then you always have one, we've got one. So there's four so rigs that are that we're moving around right now. So there's 17 hot rigs. And so that's really why the difference between the average rig, the rig count in the quarter and what we're dealing with as far as actual rigs move moving around.

是的。當你查看我們的機隊狀態時，我們已經度過了難關。因此，如果我們有 17 台，我稱之為熱鑽機，那麼其中大約有三到四台現在確實在我們周圍移動。正如安東尼在他準備好的演講中談到的那樣，海恩斯維爾有一對夫婦，我們有一個特點是陷入了整合，客戶要去哪裡，我們就將其轉移到哪裡。然後你總是有一個，我們也有一個。我們現在正在移動四台鑽孔機。所以有 17 台熱門鑽孔機。這就是平均鑽機數量、本季鑽機數量與我們正在處理的實際鑽機移動量之間存在差異的真正原因。

That's helpful. When I think about how you're seeing '24 play out. And we know that the warm winter obviously had a significant impact on the Haynesville. But in general, you're talking about day rates being somewhat sideways. What's your what's your risk levels for that given if the Permian's at best flattish through the first half?

這很有幫助。當我想到你如何看待「24」的結局時。我們知道，暖冬顯然對海恩斯維爾號產生了重大影響。但總的來說，您所說的日費率有些橫盤。如果二疊紀盆地在上半場最多表現持平，那麼您的風險等級是多少？

That's a good question, Steve, the risk. I mean, obviously, day rates could go higher, it could go lower. But we've been in this kind of pattern for the last three or four months where rig counts more or less moved sideways US land rig counts around 600 to five, it's down five. And that pricing has been pretty steady and also pretty level during that same period as well, where we've been able to add such as out in the Permian, it's been more on rig spec and capability as opposed to being a low bid, for example. So I feel pretty good feel pretty confident about the margin guide. The message I think we've tried to convey is we think here in the first half of the year, it's flattish and we're optimistic about the back half of the year. So that's how we think about it and feel pretty good about it.

這是一個很好的問題，史蒂夫，風險。我的意思是，顯然，日利率可能會更高，也可能會更低。但過去三、四個月我們一直處於這個模式，鑽機數量或多或少橫向移動，美國陸地鑽機數量大約是 600 比 5，下降了 5。在同一時期，定價一直相當穩定，也相當水平，我們能夠在二疊紀地區添加此類產品，更多地取決於鑽機規格和能力，而不是低價出價，對於例子。所以我感覺很好，對保證金指南很有信心。我認為我們試圖傳達的訊息是，我們認為今年上半年情況平淡，我們對今年下半年持樂觀態度。這就是我們的想法，並且感覺很好。

I might add, just if you're looking from fourth quarter to first quarter, we don't have all of our legacy contracts that were at higher day rates signed back when the market was stronger. Those have all expired or rolled over?

我可能會補充一點，如果你從第四季到第一季來看，我們並沒有在市場走強時簽回所有日費率較高的遺留合約。這些都已經過期或延期了嗎？

Yes, you highlighted the fact that obviously the Permian was softer in '23, yet you were able to move a lot of rigs there and been from the Haynesville and win contracts, what's your ability in this environment? Because clearly you have had the ability with the 300 series rigs to displace other rigs. Is that harder now?

是的，你強調了這樣一個事實，顯然二疊紀在 23 年比較軟，但你能夠從 Haynesville 搬到那裡並贏得合同，你在這種環境下有什麼能力？因為顯然您有能力使用 300 系列鑽孔機取代其他鑽孔機。現在更難了嗎？

Is that harder now I think now, obviously, we need the programs to continue. We need to have a long enough rig line in front of us for the customer to justify the kind of the friction of changing competitor out. But I think it's why you heard us pound the table now for going on two years about the need to continue to evolve our fleet toward the 300 series spec spec because in this environment we're in now the laterals are getting longer. Our customers are more interested today and adopting evaluating and adopting technology. That's why the stuff we've been doing in the background that we refer to as I see, the impact is so important and of and I think we've proven certainly over the last year that we can increase our utilization. In some cases that's coming at the expense of a competitor's rig. But I mean, that's how I think about that. So to the extent the rig lines continue. Now we've proven our ability to do that and as our expectation will continue to be able to do, it won't happen as fast as any of us would like but we'll continue to chip away at it.

我認為現在更難了，顯然，我們需要繼續實施這些計劃。我們需要在我們面前有一條足夠長的鑽機生產線，以便客戶證明更換競爭對手所帶來的摩擦是合理的。但我認為這就是為什麼您現在聽到我們在過去兩年裡一直在討論是否需要繼續將我們的機隊朝著 300 系列規格發展，因為在我們現在所處的環境中，支管越來越長。如今，我們的客戶對評估和採用技術更感興趣。這就是為什麼我們在我所提到的背景下所做的事情，其影響如此重要，而且我認為我們在去年已經證明我們可以提高我們的利用率。在某些情況下，這是以犧牲競爭對手的裝備為代價的。但我的意思是，我就是這麼想的。因此，鑽機生產線仍在繼續。現在我們已經證明了我們有能力做到這一點，正如我們的期望將繼續能夠做到的那樣，它不會像我們任何人希望的那樣快發生，但我們將繼續努力。

Don Crist, Johnson Rice.

唐克里斯特、約翰遜賴斯。

Morning, gentlemen.

早安，先生們。

How are you all doing today. Anthony, in the press release, you talked about tech packages on about half of your rigs. Can you remind us what kind of uplift that due to? And is there opportunity to kind of expand that across the rest of the operating fleet spot have today?

你們今天過得怎麼樣。安東尼，在新聞稿中，您談到了大約一半的鑽機上的技術包。您能提醒我們這是由於什麼樣的提升嗎？目前是否有機會在其他營運機隊中進行擴展？

Yes, I do think there's opportunities to continue to expand it and Don been very pleased with what we've been able to do so far. If anything, that number may be understating what we're actually doing when you think about all of the tools that are out there. But the ad the adder in the most important part of the other would be the margin uplift anywhere from a couple of hundred a day up to, in some cases a little higher than that.

是的，我確實認為有機會繼續擴大它，唐對我們迄今為止所做的事情感到非常滿意。如果有的話，當您考慮現有的所有工具時，這個數字可能低估了我們實際上在做什麼。但另一個最重要部分的廣告加法器將是利潤的提升，從每天幾百到，在某些情況下比這稍微高一點。

So I could see someone say, well, look, so the other company over there is charging a couple of thousand wells that other companies got a lot of capital invested in that. And our strategy has been to be a very fast second mover here to partner with people that probably know more about that the intricacies of it that the IT part of it than we do that have been working on this in some cases for more than a decade and leverage their capability combine it with the AC pad, optimal super-spec rig, which we have and deliver value working together to our customer so that we probably aren't able to bring as much to the bottom line or the margin per day as some of our competitors. But we essentially got very little invested in this.

所以我可以看到有人說，好吧，看，那邊的另一家公司正在收取幾千口油井的費用，其他公司在這方面投入了大量資金。我們的策略是成為一個非常快速的後發者，與那些可能比我們更了解它的複雜性的人合作，他們在某些情況下已經在這方面工作了十多年並利用他們的能力將其與我們擁有的AC 墊、最佳超規格鑽機相結合，並為我們的客戶提供共同的價值，這樣我們可能無法為我們帶來盡可能多的利潤或每天的利潤我們的一些競爭對手。但我們基本上在這方面投入很少。

Right. And on the contracting side, you know, it sounds like you signed a couple longer time contracts here in the last couple of months or so. But are you getting significant inbounds from the people that you're working for today that kind of term up for two or three years or and what is your willingness to do that today?

正確的。在合約方面，你知道，聽起來你在過去幾個月左右的時間裡在這裡簽署了幾份更長期限的合約。但是，你是否從你今天為之工作的人那裡得到了大量的報酬，這種期限長達兩三年，或者你今天願意這樣做嗎？

Yes. We're not getting a lot of inbounds in this particular case, a very important strategic client for the company. They did approach us asked us what our thoughts were around that. And as we sat here and thought about the next year or two and some of the things that we have to get done and especially around addressing the convertible notes that aren't going to mature until March 2026, we felt that it would be good and prudent for the company to put some backlog on the books. And I mean, there's a couple of two-year contracts in that mix just starting up.

是的。在這個特殊案例中，我們沒有收到太多的入站訊息，這是公司非常重要的策略客戶。他們確實找到我們詢問我們對此有何想法。當我們坐在這裡思考未來一兩年以及我們必須完成的一些事情，特別是圍繞解決 2026 年 3 月才會到期的可轉換票據時，我們認為這會很好，而且公司在賬簿上存入一些積壓訂單是謹慎的做法。我的意思是，其中有幾份兩年合約才剛開始。

So I think we made the right decision didn't have to get in fact, the day rate on the longer term, but to your term was higher than the spot market rate.

因此，我認為我們做出了正確的決定，事實上，從長遠來看，日利率並不一定要高，但從長遠來看，日利率要高於現貨市場利率。

So I hope we're in a situation where a year from now, we feel like we left money on the table because that's going to be really good for the industry and certainly is going to good for ICD, but we have gotten we did it and we would continue to evaluate it, especially as we navigate 2024 and start to chip away at some of the stuff we've got to get done.

因此，我希望我們處於這樣一種情況：一年後，我們覺得我們把錢留在了桌面上，因為這對整個行業來說確實有利，當然對 ICD 也有利，但我們已經做到了我們將繼續評估它，特別是當我們進入2024 年並開始逐步解決一些我們必須完成的事情時。

Okay. And one final one for me. One of your major competitors at a conference last week talked about some strength maybe in the fourth quarter in the gas basins. But it sounds like you're not really seeing that in the Haynesville is or is it kind of just splitting hairs there? Or do you think that there could be some uplift in the fourth quarter in the gas basins as we move forward. Obviously, that will be dependent on the strip as it progresses through the year.

好的。最後一張是給我的。你們的一位主要競爭對手在上週的一次會議上談到了天然氣盆地第四季可能會出現一些強勢。但聽起來你並沒有真正在海恩斯維爾看到這一點，或者只是在那裡吹毛求疵？或者您認為隨著我們的前進，第四季度天然氣盆地可能會出現一些上升。顯然，這將取決於該劇全年的進展。

If I could maybe he's or they have spent more time on it than we have. I'm just looking at at a very high level, Dan, and what I see with inventory levels, the ability to liquefy and export gas, you look at the data inventory levels as well. It's just hard for me to see where there's going to be any real pickup until we get into the middle part of next year, I think we've got to work through winter of 2024 relevant at 2025. I think as the strip moves up. What a lot of our customers are going to do is they're going to reach into their inventory of ducts and complete, and then they're going to have to replenish those. So that's why maybe a little bit more bearish on that longer term, still very bullish on gas US gas, what it's going to do for society, what it's going to do for our country in terms of energy security, energy transition and all of that, just I think the next 12, 18 months are going to have some headwinds.

如果可以的話，也許他或他們在這方面花費的時間比我們更多。丹，我只是關注非常高的水平，以及我所看到的庫存水平、液化和出口天然氣的能力，你也會看到數據庫存水平。在我們進入明年中期之前，我很難看到哪裡會有真正的回升，我認為我們必須在 2024 年冬季工作到 2025 年。我認為隨著條帶向上移動。我們的許多客戶要做的是，他們將進入他們的管道庫存並完成，然後他們將不得不補充這些管道。因此，這就是為什麼從長遠來看可能更加悲觀，但仍然非常看好美國天然氣，它將為社會做什麼，在能源安全、能源轉型等方面為我們國家做什麼，只是我認為接下來的12、18個月將會遇到一些阻力。

I appreciated all the color. Thanks, guys.

我欣賞所有的顏色。多謝你們。

David Strohm, Stonegate Capital.

大衛‧斯特羅姆，Stonegate Capital。

Morning. Wanted to hoping to start last quarter, we talked about some of the smaller contractors kind of pulling pricing down a little bit and tourism comment around and their capacity hopefully trying through this early half of the year. I'm just curious if you saw that come to fruition kind of where you see pricing going from here in relation to the smaller contractors capacity?

早晨。希望從上個季度開始，我們談到了一些較小的承包商將價格稍微下調了一些，以及旅遊業的評論以及他們的能力，希望能夠在今年上半年嘗試。我只是很好奇，您是否看到了這種情況的實現，您認為這裡的定價與較小的承包商產能有關？

Yes, I think last time we talked, Dave, we were pretty optimistic about the rig count actually starting to increase as we exited 2023 and then in the first half of this year and two things have occurred since then one, the rig count has been flat and there's all kinds of reasons for that. And then I think also the churn that's being created with a function of the M&A that's happening among our customers does those two things flat rig count and then the churn have created a situation where where we thought more of our smaller competitors rigs might get soaked up and an increase. Obviously, that's not happened. So it's still their good news is you do see a bifurcation in pricing. You've got the big three that are doing a really good job at standing in their ground. It gets a little bit more competitive below that, but as we have seem to have landed at a floor in terms of pricing, we've not seen any real movement on spot market pricing among that group last few months. But where you see that impact ICD in our margin per day is that as these rigs are rigs that rolled off the legacy contracts at higher day rates, they've had to reprice into a spot market that of a few thousad dollars a day less. And that what you're seeing reflected in kind of how we're thinking about the first half of this year.

是的，戴夫，我想上次我們談話時，我們對鑽機數量實際上開始增加感到非常樂觀，因為我們退出了2023 年，然後在今年上半年，自那時以來發生了兩件事，鑽機數量一直在增長。平坦，有各種各樣的原因。然後我認為，我們的客戶中發生的併​​購功能所造成的流失會造成這兩件事：平板鑽機數量，然後流失造成了一種情況，我們認為更多的小型競爭對手鑽機可能會被吸收和增加。顯然，這並沒有發生。因此，他們的好消息是你確實看到了定價的分歧。三巨頭在堅守陣地方面做得非常好。低於此水平會更具競爭力，但由於我們似乎已在定價方面達到了底線，因此過去幾個月我們沒有看到該群體現貨市場定價出現任何實際變動。但你會發現，ICD 對我們每日利潤的影響是，由於這些鑽機是以較高的日費率交付舊合約的鑽機，因此它們必須在現貨市場上重新定價，每天的價格要少幾千美元。你所看到的反映了我們對今年上半年的看法。

Understood.

明白了。

Very helpful. And then just one more from a more macro level. Are you seeing any demand fluctuations in relation to the Canadian Trans Mountain pipeline and the impact that's expected to have on the North American energy segment.

很有幫助。然後從更宏觀的層面來看還有一個。您是否看到與加拿大跨山管道有關的任何需求波動以及預計對北美能源領域的影響？

I'm not not in the lower 48. I don't follow the Canadian market, but my understanding is they're busier up there than they've been in a long time. It's very good for them. But I'm not aware of any impact. We're not working in the bucket anymore. So I don't have a good feel of what's happening up there that would be an area where maybe they might see some uplift, some benefit from it, but in the lower 48, especially in our target markets, I'm not aware of any impact.

我不是不在下48。我不關注加拿大市場，但我的理解是，那裡比很長一段時間以來更繁忙。這對他們來說非常好。但我不知道有什麼影響。我們不再在桶子裡工作了。因此，我不太清楚那裡正在發生什麼，也許他們可能會看到一些提升，並從中受益，但在 48 州以下地區，特別是在我們的目標市場，我不知道任何影響。

That's perfect. Thanks for taking my questions.

那很完美。感謝您回答我的問題。

This concludes our question and answer session. I would like to turn the conference back over to Anthony Gallegos I guess, for any closing remarks.

我們的問答環節到此結束。我想我想將會議轉回給安東尼·加列戈斯（Anthony Gallegos），並讓他發表閉幕詞。

Okay, great.

好的，太好了。

Thank you, sir. I'd like to close out the call. I want to say thank you to our many employees at ICD for their hard work and dedication. Also, I want to say thank you to our customers for their business, and we'd like to thank you for taking the time today to participate in this call. And with that, we'll sign off from here. Thank you.

謝謝你，先生。我想結束通話。我想對 ICD 的眾多員工表示感謝，感謝他們的辛勤工作和奉獻精神。另外，我想對我們的客戶表示感謝，感謝您今天抽出時間參加這次電話會議。至此，我們就從這裡結束。謝謝。

The conference has now concluded. Thank you for attending.

會議現已結束。感謝您的出席。

Today's presentation. You may now disconnect.

今天的演示。您現在可以斷開連線。