Good morning, good afternoon, and welcome to Ventura Offshore's Q3 2024 Earnings Call. My name is Guilherme Coelho. I'm the CEO of Ventura Offshore, and I would like to thank you all for joining us today. Before we start to go through our quarterly results, I'd like to take this opportunity to express my gratitude to our teams offshore and onshore for their dedication and hard work, which is really what allowed us to present the solid results that we achieved yet again this quarter, and also to thank our shareholders, partners, and customers for their continued trust in Ventura Offshore.
Joining me today are Marcelo Issa, our CFO; Gunnar Eliasson, our chairperson; and Olav Hamre, our financial advisor. And we'll provide you an overview of our performance between July and September this year, and at the end, we'll open for questions.
There is an icon, a Q&A icon on your screen, and you can type in your questions. And at the end of the session, we're gonna go through the questions and answer them to the best we can. Okay, thank you. Can we move on to the next one, please? Yeah, so that's our standard disclaimer. Okay, so starting off, and just before I talk about our main highlight, just a quick reminder about our fleet status. So, as you guys know, we have four units. Both Carolina and the Victoria are operating for Petrobras in Brazil until mid-2026. The Catarina is on a four-well firm, plus a four-optional well-based contract for Eni in Indonesia. And our managed rig, the Zonda, I'm happy to announce that it has just arrived in Brazil yesterday, on the 28th.
It is now in Brazilian waters to start the acceptance tests and then her three-year contract with Petrobras, with an option for additional three years. So basically, full utilization, all rigs under contract until 2026 and beyond, assuming the option wells on the Catarina are exercised. Now diving into the key highlights of this quarter. In Q3, Ventura Offshore has delivered a strong operational result with no recordable incidents, remembering that safety is our number one core value, and a technical uptime of 97% and a financial uptime of 93.6% for the three units in operation: Carolina, Victoria, and the Catarina. We delivered an Adjusted EBITDA of $21.4 million, dollars, and a net income of $26.3 million. We received approximately $5 million of reimbursement from Petrobras for the costs incurred to clean the Carolina and the Victoria hulls from the sun coral. It's a barnacle, that we cleaned.
$8 million and a backlog of $401 million, which includes the expected Zonda management fee. And also, as already informed our subsequent events in our latest earnings call, we can now inform that we have successfully completed the acquisition of the semi-Catarina. We have concluded the raising of $105 million to finance the acquisition of the Catarina through a tap issue of the bond loan for $55 million, and $50 million gross proceeds through a private placement of common shares. And the Catarina commenced its well-based contract with Eni Indonesia. Again, it's a four-well firm and four-optional wells. So very solid results for the company. We're very happy with the results for this quarter.
I'll now hand over to Marcelo Issa, Ventura's, Ventura Offshore CFO, who will cover the financial highlights for the first half, sorry, for the Q3 of 2024. Marcelo? Next slide, please. Marcelo, we cannot hear you. Sorry, small technical issue here. So, Marcelo's gonna be joining us momentarily.
Hello, can you hear me? Oh, okay, sorry, guys. I have some internet problems. Thank you, Guilherme, and thanks to everyone for joining Ventura Earnings Call. In Q3, Ventura generated a total adjusted revenue of $51.2 million, broken down as $48 million related to the operating activities of our three-owned drilling rigs, $1.4 million of recognized mobilization fee for Catarina under ENI contract, and $1.8 million in managed fees for Zonda and Catarina.
The income statement shows $85.6 million in revenues, but it's worth highlighting that this includes $20.9 million from the amortization of non-favorable contracts, liabilities, that is a non-cash item, and $13.3 million as a reimbursement of expenses for the management vessels. Ventura remains committed to keeping OPEX low. The total OPEX for Q3 was $24.9 million, averaging $109K per day, including in this number, ancillary services provided to ENI in Indonesia.
SG&A for the quarter totaled $4.9 million. Consequently, the Adjusted EBITDA for the period stands at $21.4 million, as mentioned by Guilherme in this presentation. The final cash position in Q3 is $39.8 million. The gross interest-bearing debt in Q3 is $195 million, which includes $185 million under the existing bond loan. The increase is due to a $55 million bond tap to finance the acquisition of SSV Catarina and $9.9 million drawn under the RCF to cover the cash collateral for the performance bond under the ENI contract.
Can we go to the other slide, please?
Okay. So, as mentioned, the liquidity for the quarter stands at $39.8 million, and the restricted cash amounting to $11.8 million. The accounts receivable includes $22.4 million related to ENI contract to be received in Q4. The prepaid expenses of $20 million include $9.5 million in cash collateral for the performance bond tied to the Eni contract.
The intangible assets related to the customer relationships for third-party owned vessels saw an amortization of $1.8 million driven by the Catarina acquisition. SSV Catarina was added to the vessels and equipment at a value of $124 million, comprising $107 million for payment in cash and company shares, including rig transportation, and $17.3 million in the earn-out mechanism.
As mentioned earlier, the unfavorable contract liability was amortized by $22.9 million, leaving a remaining balance of $141 million. As mentioned, the total debt increased due to $55 million bond tap to finance the acquisition of Catarina, and $9.9 million was drawn from the RCF to cover the cash collateral for the performance bond under the Eni contract.
The increase in equity reflects the shares offered in July and $5 million issued as part of the payment for Catarina. I will now hand it back to Guilherme for some market highlights. Thank you.
Thanks, Marcelo. Sorry, guys, for a small technical glitch here, but resolved now. Okay, so I'm just gonna quickly cover the general market conditions, and then focus a bit more on Brazil. I guess the first comment, and you probably agree, oil and gas will remain essential in the foreseeable future. We're seeing some headwinds for offshore drillers worldwide, but at the same time, we feel the fundamentals haven't changed.
There is a strong market for the offshore drilling industry. I guess the upstream expenditures and global floater demand forecasted here, in this graph that you see confirm that. Ultimately, regardless of temporary air gaps, the bottom line is that without new investments in E&P, the global oil supply will drop significantly while the demand will remain strong.
So again, fundamentals haven't changed, but it is a fact that we're seeing some headwinds, and you're probably hearing that from our competitors, mostly the international drillers. But if I move to the next slide, I can talk a little bit about Brazil, and the situation in Brazil is slightly different from what we're seeing abroad.
Petrobras remains with a very strong demand for rigs. Until very recently, they were in the market for up to 10 rigs, and you see them on the left side. Two for the Roncador field, which have already been awarded and contracts signed. Three for Sépia Atapu, which are in the final stages of internal approvals and having contracts awarded. One jack-up that is ongoing. Tenders due now, mid-December on the 13th, and up to four rigs for what is called the rig pool tender.
On this rig pool tender, just as recently as this Monday, three days ago, Petrobras released the final ranking with three rigs selected for the next phase of the tendering process. So it continues pretty strong demand, nine rigs, despite this recent reduction in one rig selected in this rig pool tender. I think, and probably I'm pretty sure there will be some questions about this, but just, I mean, it's not the first time that Petrobras goes to the market with up to two, and they select one rig less, and they reserve the right to ask for the additional rig. Okay? Just in 2022, that happened. You, for those of you following the market, you might remember that eight-rig tender that Petrobras had in 2022.
Up to eight rigs, they selected seven, and two months later, they selected the eighth rig to participate and awarded them a contract that was a Valaris rig. Coincidentally, it was also a Valaris rig. I'm not saying this is gonna happen this time. We do not know. All I'm saying is that this is not uncommon. Okay? And I mean, I'm saying that the strong demand will continue to be strong. Why do we believe that? I think the main reason is in the figure right in the middle there, where you compare the rig, the Brazil rig demand, which are the green bars, and the number of contracted rigs by year. And this is the. It used to be the yellow line.
Now it's the dark green line because we've updated it to reflect the Roncador, the Roncador contracts. Okay? What's not reflected here is Sépia and the rig pool tender because those contracts have not been awarded yet. But I guess the important thing is you see the gap, right? The gap between the green bar and the dark green line. And the gap is widening in 2026 and even more so in 2027.
And this, it has to be closed if Petrobras intends to keep key fields such as Búzios being served by drilling rigs. I think Búzios is actually a very good example of this because you guys know Búzios is the most prolific field in Petrobras. This year, they've completed the first billion barrels of production since first oil, just six years ago.
They expect to have a million and a half billion barrels, a million barrels per day on this field by 2027, right? So it's, it's a huge field. Today, there are six rigs dedicated to Búzios. By 2026, all of those six rigs will have run out of contract. Okay? That's exactly, by the way, when the contracts for our own Carolina and Victoria will run out. Both are in Búzios. Okay? Petrobras will need to keep going to the market to reduce that gap and favoring, therefore, the re-contracting of rigs in Brazil. That's why we, we remain so optimistic about the re-contracting. Next slide, please. I think this optimism is underscored by this very recent five-year plan announced by Petrobras just last week. The conference call was on Friday.
An overall 8% increase in total expenditures and 5% in the exploration production expenditures compared to the previous five-year plan, $77 billion dedicated to E&P. But to be honest, more importantly than that is the fact that this is distributed evenly between 2025 and 2029. So it's showing the importance of replenishing, or replacing their reserves. Petrobras has a lot of wells to drill. That's kind of the, ultimately, that's what it is. They have a whole, over a hundred expected development wells to be drilled by the end of 2026.
And between 2024, we're right at the end of 2024, but between this year and 2028, Petrobras plans to drill 335 development wells and perform workovers on 238 wells. P&A is also huge. They account for more than 500 wells across various water depths requiring different types of rigs. I mean, I've just mentioned to you they have this tender for a jack-up. It's going to be the second jack-up.
They've already contracted the jack-up from Borr that this will operate. So there is. This is all to confirm that there remains a strong demand for rigs in country in the foreseeable future. Next slide, please. And I think that leads to the Petrobras Exploratory Program, which for me is the biggest swing factor in all of the offshore rig demand in Brazil.
Petrobras has allocated, will allocate $7.9 billion to drill 51 wells between now and 2029. But quite frankly, more important than, you know, the number of wells or even the amount that's gonna be dedicated to this is the potential of the basins where these wells will be drilled. And I'm gonna kind of focus on the two extremes of the, of the figure you see there. Up in the north, that's what we call the Equatorial Margin.
The neighboring countries there are French Guiana, Suriname, and Guyana. And I believe the geology is the same. So the 11 billion barrels of reserves that you see in Guyana, the chance of them replicating in our part of the frontier are very high. And by the way, geographically speaking, you can fit three Guyanas there. Okay? Not saying it's 33 billion.
What I'm saying is that it's a lot of places to drill. Out of this big area on the northern part of Brazil, Petrobras was able only to drill two exploratory wells in the southern part of it, in the Potiguar Basin, with two significant discoveries, Pitu and Anhangá wells. And the expectation is that, actually, the big lottery prize is further north in the Amapá area, which is the kind of the dot further up on the figure.
Now, Petrobras is still encountering some challenges to get the environmental licenses, but it's not over. Recently, the IBAMA asked for additional information, and Petrobras is working on that. To be honest, for me, it's not a question of if the license will be granted. It's more of a question of when.
And when they do, confirming big discoveries, which we do not know for a fact, but there's high expectations of that, then I think that that's going to impact tremendously the need for rigs in the future. And the second one that I'd like to call your attention to is the one on the very bottom part of the figure, Pelotas Basin. That's the southern part of Brazil. And here the attractiveness is the belief that this is the geological mirror of Namibia. Namibia, as you know, is the hottest spot for offshore drilling in West Africa. And there is a belief, again, that you have the same geology. So close to 11 billion barrels of reserves that are being announced in Namibia, you could see some of that, you know, also in this southern part of Brazil.
Now, Petrobras, in their expected number of rigs, they do factor in the 51 exploratory wells. What they do not factor in is development wells in case they're successful. That could have a tremendous impact in the rig demand, in Brazil for the future. Next slide, please. Okay. Just a quick word on the Southeast Asia market, where the Catarina is operating right now. We're seeing quite a few opportunities already out or to be announced.
I mean, if you look at Indonesia particularly, you know, Eni has announced the approval of their POD, their plan of development for several key offshore areas in Indonesia, reinforcing its commitment to develop this country as a major energy hub for them in Asia, and so besides our current campaign, Eni has also long-term deep water projects, and you see them on the screen.
We're seeing opportunities in Timor-Leste, Malaysia, and ONGC is expected to come with the possible three-rig demand in the future. So we continue to follow up this market very closely. We have our four firm wells with Eni that should take us to mid-2025. The four optional wells have not yet been exercised. I know there has been some discussion about two having been exercised.
They have not yet been exercised. Eni has until 60 days prior to the end of the contract to exercise the wells. But based on what we're hearing and seeing and talking to them informally, again, nothing official, we are very optimistic that we should keep this rig operating for Eni in Indonesia till 2026. Next one, please. Okay.
Basically, in summary, we like to see ourselves as a very well-positioned local player in the most active market in the ultra deep water in the world and still having an important footprint with international presence in Southeast Asia. We have a very long-standing and strong relationship with Petrobras, the main oil company, or the main client, if you will, if you're in deep water drilling.
And this relationship and reputation built over 27 years that we've been working here in Brazil. We have workhorse rigs fit for the Brazilian demand and becoming available as the contracted rig supply will start to reduce in Brazil. And also, we have a scalable platform to take on growth opportunities, as you've just seen with the Catarina, and industry-leading cost structure. Again, you've heard it from our seller. You've seen in our numbers.
Ventura continues to be very well-positioned to secure additional backlog for our units, offering attractive recontracting economics. With that, I close our presentation, and we will open for questions. Again, there is an icon on your screen, Q&A. You can click there, write your questions, and we'll, and I'll read them out here and answer them. Okay. We have one question so far. I'll read it out. You're writing a report that the Sépia and Atapu tender is in the final approval phase internally within Petrobras. Are you able to give some color on when you think the results will be announced? And do you think you are well-positioned for a contract? Another question is actually about that. So, so yes.
Basically, we expect that now in December, first half of December, it could slip to the second half, but I think we're optimistic that the first half of December, Petrobras will be able to announce the results. We are participating out of those nine rig opportunities I mentioned earlier. They were all aimed at rigs commencing the contract between 2025, first half of 2025, second half of 2025, and Q1 of 2026. Outside the commencement window for our own rigs, except for one slot in the Sépia Atapu, and we are participating. We're optimistic, but of course, there are other competitors also looking for that same spot. Hopefully within the next couple of weeks, three weeks, we should be able to announce, or Petrobras will be able to announce the results. If we win, we should be able to announce a new contract.
But that really is gonna depend on the results. When do you expect the next tender from Petrobras? Well, I think early next year. That would be our expectation. If you talk to some people, they're some more optimistic that would say late this year. But I think with the jack-up tender, there's just a lot happening. I don't see Petrobras having enough arms to get to the next tender this year. But I think we can be fairly comfortable that by Q1 next year, we'll see a next tender coming up. Again, I mentioned about the gap between the contracted rigs and the rig needs from Petrobras. So the next tender should be out soon. They've already filled the gap for rigs running out of contract up until Q1.
Now they're gonna be looking at, you know, filling the gap from Q2 of 2026 onwards. Next question. What do you think drives your much lower OP daily OPEX versus other floater operators? What do you think this cost level will evolve? How do you think this cost level will evolve, going forward? So, so there are, there are a few components here, and I've mentioned this before on what drives our, our much lower OPEX. One is we're, we're highly nationalized, and I'll give you the Zonda as an example. We just crewed up this rig. Rig arrived in Brazil yesterday, and we're looking at a 100% Brazilian crew for a 7th-generation dual activity rig just crewed up, right? And that, that makes a big difference.
A second difference, and I'm sure you hear this from everybody, but I mean, I've been in other places, and I can tell you here it is a fact the cost control culture in this company is part of the DNA of Ventura Offshore. You never take your first quote as your last one. You always, there's always room to negotiate, to try to find alternatives. And everybody here takes this extremely seriously. And that makes more of a difference than you can imagine at the end of the day. This is something that I take no credit for. This is something that was built by the founders of the company. And it's something that we like and we do not change. And also, we have a very strong engineering department. Very strong.
Despite us being a small company, the level of competency and excellence in our engineering department is second to none. And they're able to do a lot of things internally that others probably are forced to outsource. So I think these would be three main aspects I would mention. Could you explain how the six-generation rig market is different in Brazil compared to worldwide seeing a preference for 7Gs? Yeah. So we're seeing that bifurcation quite clearly outside of Brazil, that is happening. In Brazil, that is not the case directly. Okay. And I'll explain that. I talked about the Búzios field being the most prolific and one of the most challenging fields in Brazil, right? And this is where Petrobras decided to place both our six-generation rigs, both the Carolina and the Victoria.
Those rigs were contracted in a pool process, so they could have been taken anywhere in the different blocks that Petrobras has. And they opted to put those rigs in Búzios because they are capable of drilling there, you know, and they are, by the way, very well, as you've seen from our financial results. So first is for the Brazilian conditions, those rigs, they, they can, they can face any, any operational challenges that the, the Brazilian environment offers. That's number one. And the second thing is Petrobras has a very smart way of leveling the playing field. When they go out to the market, what they do is they ask you to tell if your rig is a single activity rig, offline activity rig, or a dual, a full-blown dual activity rig, and they add a discount factor. Okay.
That kind of varies, but generally speaking, it's a 0.9 if you're offline activity and a 0.85 if you're a single activity. And then what they do is they just apply that factor and they look at the best economic offer, right? So it might be that a 7th-generation rig, full dual activity will be the lowest bidder, even if they offer a higher rate than my rig, which is a single activity rig. And that happens. Why? Because they apply this discount factor. So it's a very smart way of leveling the playing field. They put in the efficiencies embedded or as part of this discount factor. And by this, we all compete in the same ground. Okay.
Again, we do not see that bifurcation as we are seeing abroad in Brazil because you do not need that. Petrobras, they're able to factor in the additional efficiency factors on the day rate. Do you receive any performance-based bonuses that you record in revenue? No. Our contracts have no performance-based bonuses, except for, I'm sorry, the diesel. Okay. There is a possibility of earning some bonuses if you use less diesel than what's in the contract. And the Carolina, she does achieve that. Okay. We have not yet received because it's dual. It's done on an annual basis. Okay. You're gonna see that for Q4. What do you think of the Petrobras expectation of the rig demand between 25 to 30?
Yeah, it's written 20, but it's 30 between 25 to 30 rigs, given that there are 33 rigs in Brazil. I mean, a couple of comments here. First is we see 25 as a very challenging for Petrobras to be able to, you know, cope with their whole program. I think their number is probably more towards the 30 than the 25. You're right. There are 33 rigs in Brazil. Out of the 33, bear in mind one is a jack-up. And a couple of those, they are moored rigs. I'm not sure if Petrobras is considering the shallower water rigs here.
At the end of the day, if you look at the market historically, every time there has been a reduction in operations in Brazil and a reduction in the number of rigs, the Brazilian drilling contractors remained with all their rigs operating. The international drilling contractors were the ones who suffered the blow. I'm not sure there will be a blow here. I'm actually confident that we are in a good balance of number of rigs and number of rigs in country and the number of rigs Petrobras needs. If there is a factor that you know somebody might you know one or two rigs might be out of contract, I mean I just look at it historically, right? We don't, if you go back to 2021, Transocean had two rigs. Now they have six.
Valaris had no rigs. Now they have four. Seadrill had three rigs. Now they have six. Noble had no rigs. Now they have one, actually two, with the Diamond rig as well. And Ventura was full utilization, foresee full utilization, Constellation full utilization. So if that happens, I'm not very concerned that this is gonna impact us as Ventura Offshore. Okay. So I hope that answers your questions. Oh, that was. Yeah, no, that, that is, that was the last question. So maybe I'll give it another minute if there are any further questions or follow-up from some of the answers given. Yeah. No, no. So that was the last question. So with that, we close our earnings call. I'd like to yet again thank you for your attendance and your interest in Ventura Offshore.
We talk again, in three months' time. Thank you. Have a good day.