Royen Capital ✈️👨🏿‍✈️🇱🇷💹🛢️🌊⚽

$RIG 3Q Adj EBITDA $313mm vs est ~$298mm VAL merger received all reg approvals; closing expected Dec 1. $200mm/yr synergies reaffirmed. Wide prelim 2027 EBITDA range; $1.3B midpoint is ~8% below consensus. Good contracting tho perhaps some regional rig moves could be having an impact? RIG has done well in past year managing costs. Cost and efficiency gains from VAL merger will be key to realize beginning in 2027 - Noble realized Diamond synergies within ~1 year but RIG didn't provide guidance. Oil prices not directly driving demand b/c its mostly in spot market movements, similar to Noble's comments last week. Rig demand is tied to specific projects which are long-cycle investments -- Supply and project-specific Demand are the drivers of utilization and dayrates. Agree with the positive commentary on West Africa market. On the macro, a key to rig market will be oil majors focusing more on reserve replacement. Oil majors remaining capital disciplined although as their discretionary cash flows grow, capital budgets expected to grow for 2027 and they are talking more about exploration which is a step in the right direction. Will require some exploration and appraisal success turning into development but there are many prospects in deepwater.