Do you think term contracts would be indicative of the peak in the cycle here or are the peak in the day rates now indicative of just concern among the E&P companies about future rig availability?

The biggest concern is rig availability and that''s the reason for all these international contracts all for 3 to 5-year terms. That''s just to get people to go to these other areas and work. The company is seeing some talk about longer-term contracts here in the gulf because people are concerned about being able to get the availability of equipment.

The market is going to get tighter as repair work needs to be done in the Gulf of Mexico. Right now, everybody is in a process of evaluating how much damage they do have to the production facilities, how much damage they have to the wells. There''s always a lot of work that has to be done after the hurricanes. But, that evaluation is taking place. So, they''re going to offer longer-term contracts in the Gulf in order to keep this equipment here.

How high can day rates go according to the company?

It''s a function of supply and demand. In the late 70s, whenever the Rowan Houston was contracted to Texaco, that was an $11 million investment and it was getting $54,000 a day. The aim is to get the replacement value of the unit per $1,000 a day and the company is somewhere between $130,000 and $150,000 a day to meet that equation. But, supply could drive it a little higher.

Could the Scooter Yeargain contract reprice with Exxon and are there any limits to how much the company can raise the rates there in January if you need to reprice?

There are constraints in that contract and the company will be negotiating that over the next few weeks. It couldn''t go to the level ofthe Bob Keller.

You are talking about undersupply of rigs of 32 to 39 units in 2006. Do you think that the markets will be able to absorb the 45, 50, 55 rigs to be built from early delivery in 2006, 2007, 2008, and 2009 without any problem at all?

The company is confident that''s going to happen. In Southeast Asia, there''s a 5-rig deficit, India 6 rigs, West Africa 5 rigs, Australia at least one rig, Mexico 2 rigs, Med 2 rigs, Gulf of Mexico 6 rigs, Middle East 5 rigs, North Sea 7 rigs. That''s not any increased demand, and that''s what everybody has not even put in the equation. The fact that as much damage as we have from these storms, the demand is going to have to come from somewhere, the additional production is going to come from somewhere, so that’s going to require additional drilling rigs around the world. So, just taking a quick snapshot, all of those new build rigs can be absorbed and that''s not really taking into consideration attrition.

A lot of rigs have been lost in the last 5 years. From 1970 to 2000 only 17 rigs were damaged by storms. In the last 5 years, the company has had 22 rigs either lost or damaged by storms severely. So, you look at attrition going forward, you look at the age of the fleet and the company is in a building cycle and wants to continue to build to replace this older equipment. So, management believes that the jack-up business is in great shape for quite a while.

If you were to build a 350 or 400-feet jack-up rig, for example, at the Keppel or PPL, when do you think is delivery time today and what is the price?

If you called fills today, you''d be looking at probably late 2008, 2009. The price for a 350 jack-up it would probably be in the range of $165 million to $175 million.