Anthony Gallegos: Yes, I do think there’s more to come, Don. Just on the decision to move rigs in the first quarter, no doubt that was the right move. If you think about markets around the country, Haynesville has been hit the hardest, and that’s following what was a really tough 2023, as you know. Thought we had a better chance of putting those 2 rigs to work in the Permian. One went straight to work. Unfortunately, we cannibalize an opportunity, as we mentioned. But the other one, I’m really excited about the contract that we’re working on for the second rig. I expect that rig would go back up late Q2, early Q3. And I do think there are some lower spec rigs that are still under contract today. That’s going to provide some opportunities in the near term for our fleet.
And then as we look out over the balance of this year, I do think that rig count in the Permian will begin to tick up during Q3 and Q4, and that’s going to be primarily driven by private E&P activity. Those are guys that we’ve had long-standing relationships with. So look, nothing is a layup in this business anymore, but feel pretty optimistic about running flat here in Q2. And then the bias is if 1 rig is at 2, we’ll see in the back part of this year.
Operator: The next question comes from David Storms with Stonegate Capital.
David Storms: Just hoping we could touch back on the rig that you relocated to the Permian. Could you just maybe give us a little more color around what the thought process was as to — you mentioned the cannibalization. And was that customer-driven, then the 300 series rig? Was that just a timing and cost consideration? Maybe any more color you could give us there would be helpful.
Anthony Gallegos: Yes. I think it’s really just being sober and looking at the Haynesville over the balance of this year, David. And in fact, I think with one of our — we only have 2 rigs working in the Haynesville today, one just rolled from one customer to the next. And I think we’ve just won the only incremental opportunity that’s out there over the next quarter or 2. That market it’s a bit down over 20% year-to-date. I think there’s still some downdraft to come. And I was very confident that that quality of rig that we moved, the second one is such that given our — what we’re seeing in the market, the discussions we’re having with customers, I was pretty confident that we’d be able to put it to work in the Permian Basin.
So really, the decision was, do I leave it — do we leave it in the Haynesville and the odds of it going to work over the next 12 months, relatively low, or put a few chips on the table, spend some money to relocate the rig. And we felt like we would have a pretty good opportunity to put it to work in the Permian, and I think that’s what’s going to happen.
David Storms: Understood. Very helpful. And then just one more for me. Can you just talk a little bit more about the customer acquisition process when you’re competing to replace some of these lower spec rigs? Is that just also a timing thing where you’re waiting for their contracts to be up? Or are there other considerations to think about?
Anthony Gallegos: Yes, that’s part of it. There’s friction when a customer releases one rig and brings another one in. He has to demo that rig. He’s got to move another one in. Sometimes you’re starting up a rig. So it might not be quite as efficient in the first few weeks or months as it will be over the course of a couple of months with that customer. So those are things that the client has to weigh. But we’ve got some pretty exciting things that we’ve been working on year-to-date around attacking cycle times. The pressure that we fill from customers today around efficiencies and reducing days per well days on the pad, it’s as intense as I’ve ever seen it. And the quality of the equipment that we have, the quality of the people that we have to look at wringing out every last bit of efficiencies, it’s really gone well for us year-to-date.
So we’ve got data now. We’ve got things that we can show customers where we can demonstrate to them that, one, changing out the rig, the friction that’s going to be caused is worth it, but bigger picture, we’re going to help you drill a better wellbore. We’re going to help you drill that well and that pad in fewer days. And at the end of the day, reduce your cost per foot. I mean that’s the value proposition. That’s the pitch. And I think the fact that we’ve increased our rig count in the Permian by 50% over the last 15 months and not having to do that based necessarily on rate is a testament to what’s going on here at ICD today.
Operator: The next question comes from Don Crist with Johnson Rice with a follow-up.
Don Crist: Anthony, I just wanted to ask about your most recent comment. Obviously, one of your competitors has kind of moved towards performance-based contracts and is forming, for lack of a better term, more partnerships with the operators today. It sounds like you are doing some of that. But has the contracts really reflected that? Or you can get any kind of uplift from making more consistent hole or saving days, et cetera. I mean any comments around in that.
