Atidrip Modak: Got it. Thanks for that. And then you mentioned rationalization of the North American onshore footprint. Is this something that became more specific during this quarter that brought future challenges to light or was this contemplated for some time now? And maybe also talk about the competitive landscape elsewhere, what kind of structural revenue EBITDA impact does that net out to?
Quinn Fanning: Sure. And so this is not — the U.S. Land TRS kind of slipping down our operations, that’s not — that’s something that’s new for us. We’ve been working on that for several quarters. We’ve closed some facilities. We’ve been reducing some of our footprint. It was just really exacerbated in this quarter because we really kind of had the — and I don’t want to say the stars all aligned here because that sounds like an excuse. But what we really had was we just had a number of a series of things that kind of happened all concurrently, and it wouldn’t normally be that way. We had some well test operations in Mexico. We had rigs in the Gulf of Mexico that were in a completions phase, not in a drilling phase. So it probably put a brighter light on the U.S. Land, impact, than what it normally would have.
Fundamentally, it’s a highly competitive marketplace. I can tell you an area like the Permian. There are 34 TRS providers today. And these aren’t the big guys. These are small privately held companies. And as we alluded to in the call, they really appear to be chasing market share and not chasing pricing. And they’re not showing the level of discipline that we see around the pressure pumpers or some of the drilling guys. So, we’re continuing to try to flex our operational footprint to the right size. The other thing that we do bring to this and I alluded to it when I answered the question for Luke. We do have technology that we can deploy into this, whether it’s around cementation, improving some efficiencies around those kind of things. So we’re trying to get that balance of providing some higher value added services that we can get paid for and get credit for, so to speak, in U.S. Land, but not trying to be competing in a highly commoditized business.
That’s we’re trying to balance in there, and we’ll continue to move those assets, to other parts of the world, because we can redeploy them in places like the Middle East or Asia in particular.
Operator: Our next question comes from Arun Jayaram with JPMorgan. Please go ahead. Your line is open.
Arun Jayaram: I wanted to follow up on the 4Q kind of earnings power of the Company, which you highlighted around an EBITDA outlook around 80 million. As we think about 2024, do you think that this represents a good baseline for the kind of given some of the challenges you cited? Is that a good baseline for thinking about 2024? And would you expect to see some growth on top of that, just given further expansion of activity, particularly in international offshore markets?
Mike Jardon: I guess in terms of what the business has currently constituted can do and in terms of adjusted EBITDA if you back out the LWI related issues, $75 million, $80 million in the second and third quarter. Fourth quarter is typically, a good quarter for us. First quarter tends to be the weakest of the year. So, the $75 million to $80 million, I would say, is kind of normalized performance where we sit today. And we’re in the budget season today. We represent our budget to the Board in mid-December, so I would expect we’ll give guidance sometime between first of the year and, I guess, at the latest when we report fourth quarter results. So that’s when we can speak specifically to 2024. But we’ll have, obviously, a bit of a revenue headwind if we have LWI out of the mix at least for a couple of quarters potentially.
As I mentioned, that was a $50 million to $75 million revenue contributor on paper before we had this incident. But the business is trending in a positive direction. I think as we’ve talked about in previous calls, we have a relatively significant revenue contribution from Eni Congo project, which will continue for delivery in the first half of 2024, at least on that project, we’d expect a revenue step down as we move into an O&M phase. So the margin should be better during that. But even with LWI out of the mix and the Eni Congo change in phases, we think we’ll see good growth in 2024 tough to put a finer point on it before we finalize our budget.
Quinn Fanning: Yes. And I guess, Arun, all I would add to that is we continue to see positive customer engagements, technical inquiries, bidding, tendering activity, those type of things. And the softness that we’ve had here in Q3, when you look at the numbers, LWI notwithstanding, it was an NLA related issue and it was just kind of the timing of a number of those projects. We still continue to see good solid activity everywhere, and customer engagement and customer sentiment, I think, continues to be positive overall. So I don’t see any difference in. I still believe in the fundamentals of offshore international, and that’s where we’re really well positioned for.
Arun Jayaram: Understood. And just my follow-up, as we think about pricing for well construction in 2024, you highlighted how you saw some reduced activity in the Gulf of Mexico, the U.S. and Mexican side and the Caribbean, does that potentially impact any thoughts on potential for pricing gains as we think about 2024?
Mike Jardon: No, because it really, it was not — normally, you would have 65% of our activity would be drilling related and 35% would be completions related in a quarter, and it was flip flopped this time. It really just happened to be how the rigs were. So, it wasn’t like rigs were stacked or those kind of things. It just happened to be where they in a drilling mode or a completions mode. And for us, we have a greater service intensity when we’re in a, when the customer is in a drilling mode as opposed to completions. So it wasn’t a fundamental change in the market. It just happened to be how things kind of stacked up. To be honest, as I’ve looked through the history of well construction over the last 8 or 10 years, we’ve never seen that phenomenon.
It just happened to kind of line up within this quarter. So, I don’t think that that’s going to, that’s not going to have a pricing effect. You take the activity in the Caribbean. We have very strong market share there. We didn’t lose share. There wasn’t a change in share. It just happened to be — there were several rigs that were on maintenance in the quarter, and that’s not a typical event. So, it’s just more kind of how the activity sets lined up.
