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Exam Code: HPE2-W05 Practice exam 2022 by team
HPE2-W05 Implementing Aruba IntroSpect

Exam ID : HPE2-W02
Exam type : Web based
Exam duration : 1 hour 15 minutes
Exam length : 50 questions
Passing score : 70%
Delivery languages Brazilian Portuguese, Russian, German, French, Simplified Chinese, Korean, Japanese, English, Latin American Spanish
Supporting resources These recommended resources help you prepare for the exam:
Selling Aruba Products and Solutions, Rev. 18.41

This exam assesses knowledge of Aruba customers and the Aruba Portfolio required to sell HPE Aruba products and solutions.

This exam has 50 questions. Here are types of questions to expect:
Multiple choice (multiple responses)
Multiple choice (single response)

25% Understand the Business Opportunity with Aruba
Explain the value and differentiating features of Aruba
Describe the technology and markets (such as Internet of Things, mobility, data and apps, cloud, software-defined) that are influencing companies’ business transformations
Describe addressable markets for Aruba solutions

40% Understand How to Position Aruba Mobile First Solutions
Describe how key features and functionalities of Aruba Mobile First solutions help customers meet business requirements and compete more effectively in their marketplace
Describe Aruba Mobile First solutions' differentiating features and the relevant competitive landscape

35% Qualify Aruba Opportunities
Explain key use cases for Aruba Mobile First Solutions and position the appropriate solution for a particular use case
Qualify opportunities for selling Aruba Mobile First Solutions to new and existing customers
Recognize Aruba opportunities in vertical markets: Financial Services, K-12, Higher Ed, Retail, Healthcare, Hospitality, and Enterprise
Identify and overcome barriers and objections by distinguishing Aruba Mobile First solutions

Implementing Aruba IntroSpect
HP Implementing answers
Killexams : HP Implementing answers - BingNews Search results Killexams : HP Implementing answers - BingNews Killexams : GOP, farmers looking past overtime tax credit, focused on holding threshold

NEW SCOTLAND — Top state and federal Republican officials on Monday pushed back against a substantial subsidy for farm owners that is intended to cover overtime costs for their workers, asserting the answer is to instead avoid lowering the overtime threshold.

"It's not about changing it to 40 hours and trying to slap Band-Aids on it," U.S. Rep. Lee Zeldin, a Long Island Republican and GOP nominee for governor, said during a news conference at Stanton's Feura Farm, a family run business in southern Albany County. "We're here today to stand up to do the right thing, not come to fix partially, temporarily the wrong thing if this goes forward. It's not too late to for the state to act to defend its farms." 

The state's three-person "Farm Laborers Wage Board" is expected to deliver a report to state Department of Labor Commissioner Roberta Reardon on Sept. 6, affirming its January recommendation to require farm workers — non-management — to be entitled to overtime for work after 40 hours a week. Reardon would have 45 days to make a decision on the recommendation. 

The proposal calls for lowering the current 60-hour threshold, which was adopted in 2020. Before then there was no limit on the hours a farm laborer could work without having the right to overtime. The wage board has suggested to implement the new standard over a 10-year phase in, beginning in 2024 and and arriving to the 40-hour work week by 2032.

In April, the state Legislature passed a budget that included a subsidy centered around the expected lowering of the overtime threshold to 40 hours. It would pay farm owners, every six months, the difference between the latest overtime threshold and the current 60-hour cap.

In other words, if an owner has a laborer work 59 hours in a week and the current threshold is 50 hours, the state would cover the difference in regular and time-and-a-half wage for those nine hours. The intent is to reimburse farmers for their overtime costs. 

"How much more can we subsidize? And for how long?" said event organizer, Assemblyman Chris Tague, R-Schoharie, the ranking member of the Assembly's Standing Committee on Agriculture.

Farms in New York received $144 million in subsidies from the federal government in 2019. About 1-in-5 farms in the state receive a subsidy, according to the Environmental Working Group, a Washington, D.C.-based organization that logs farm subsidies.

The states where farms receive the most in government subsidies, in the Midwest and South, are given up to $2 billion annually. The same states also are known for yielding the most crops and have particularly low minimum wage rates.

Zeldin, Tague and U.S. Rep. Elise Stefanik, R-Schuylerville, expressed concern for losing migrant workers to other states where, with no overtime threshold, they may be able to make more money. 

"It's a war on rural America," said Stefanik, explaining her view on Democratic leadership's policy actions.

Stefanik said she is thinking about inflation, but opposed plans to raise taxes to pay for government subsidies. Her comments came the day after the Democratic-led federal Inflation Reduction Act passed the U.S. Senate.  

In Stefanik's 21st Congressional District, farms received over $15 million in federal subsidies in 2019. Only the similarly rural western New York districts of Reps. Tom Reed and Chris Collins accounted for more subsidies.

The event's host, Stanton's Feura Farm, pushed back against a government subsidy to help pay for the cost of overtime. 

"My philosophy and our farm in general is we don't take anything from the government," owner Tim Stanton told the Times Union. "If this goes through, we probably won't take the tax credit because I don't believe it's right that other people should be subsidizing me." 

Stanton's family farm, in its current iteration, opened in 1986. (The family says it's been farming since 1787.) Stanton, himself, received relatively small commodity or conservation subsidies, totaling to about $89,000, from the federal government between 1995 and 2009, according to Environmental Working Group data. The data begin in 1995. It does not appear the farm currently receives any federal government subsidy. 

If the overtime threshold is lowered, he said, the farm would likely no longer produce raspberries, blueberries and beans because they are labor-intensive crops. 

Advocates of ensuring farm workers have a right to a 40-hour work week say improved working conditions could make the job more attractive. Farms like Stanton's rely on migrant workers, like those on a visa, to do its more labor-intensive work. 

"They won't do the work that these migrant workers do," Stanton said about the local labor pool. "That's why the migrant workers are here. No one will pick vegetables all day or fruit all day from this country. It just does not happen." 

Farm owners, the Farm Bureau and Republican officials have long pushed back against standard hours or work and pay for farm laborers.

In the 1930s, when President Franklin D. Roosevelt was attempting to pass his New Deal legislation that included a minimum wage and 40-hour work week for all workers, the Farm Bureau pushed against it. Farm laborers would eventually be carved out of the deal as a part of a compromise with Southern Democrats. 

The New York Civil Liberties Union, which has been among the most vocal advocates of lowering the overtime threshold, is urging adoption of the 40-hour week rule. 

"Farm workers have already waited over 80 years for an end to the racist exclusion that has stolen countless hours of overtime pay," Lisa Zucker, an attorney with the NYCLU, said in a statement. "The Department of Labor must prevent another generation of workers from suffering by accepting the Wage Board’s recommendation, and with Gov. (Kathy) Hochul’s more than dollar-for-dollar refundable tax credit, there is no reason that the overtime threshold cannot be lowered to 40 hours in 2024, eradicating this racist Jim Crow policy once and for all.”

Tague attributed the hesitation from Hochul and Democratic lawmakers to support the cause of farmers because of their fear to cross organized labor. 

"The truth behind this whole thing: big, organized labor is pushing it," Tague said. "And that means votes." 

Tague and his colleagues were also focused on votes Monday. The event doubled as a campaign rally for Zeldin and other electoral hopefuls were in attendance.

"Our farmers, farm workers are all getting collectively screwed right now," Zeldin said. He predicted that after Election Day, "there will be people who say, 'I guess they shouldn't have screwed the farmers on Sept. 6.'"

Mon, 08 Aug 2022 13:03:00 -0500 en-US text/html
Killexams : Personality and experience separate Democrats in secretary of the state race

Two young voters emerged Thursday from behind the front door of a home on Thompson Road in West Hartford to find an extremely enthusiastic Democrat seeking to become Connecticut’s top elections official.

“So first of all, I love your flag,” said Maritza Bond, New Haven’s health director and a candidate for secretary of the state, referring to the blue Central Connecticut State University flag waving out front. “My boys go to Central.”

On the same day in Norwalk, Mercyn Fernandez, owner of a new Ecuadorian bakery on River Street in Norwalk, posed for selfies with the other Democrat hoping to win the same position. For state Rep. Stephanie Thomas, D-Norwalk, the endorsed Democrat, Thursday’s conversation and photos across a glass covered case of fresh pastries was hometown cooking.

As the two Democrats work to lock in their support in the final days before the primary Tuesday, few, if any, policy differences separate them as they both espouse strong voter access enhancements and creative business services; the office is the state’s business registry in addition to overseeing elections.

The race between Bond, 45, of New Haven, and Thomas, 53, of Norwalk is about who can turn out more voters to the polls during a sleepy August primary. And as is clear on the campaign trail, the two candidates show very different personalities.

Bond, director of the public health department in New Haven, walks fast and speaks quickly with a nonstop flow of ideas. Thomas, owner of a consulting business for nonprofit organizations and a first-term state Representative, speaks softly, in more measured tones and exudes calm composure.

One of the two candidates will make history as the first woman of color nominated by a major party in Connecticut for secretary of the state. It is believed that Bond, whose family is from Puerto Rico, would be the first Democratic Party nominee of Hispanic origin for any statewide constitutional office.

The winner will face the winner of a Republican primary that pits state Rep. Terrie Wood, R-Darien, against Dominic Rapini of Branford, the endorsed Republican.

Bond sought out reliable primary voters and newly registered Democrats in West Hartford, a party stronghold whose delegation was key to Thomas winning the nomination by surprise in a May convention in Hartford. The young woman at the door tells Bond her dad is the head women’s soccer coach at Central Connecticut State, where Bond’s sons, 24 and 19, are enrolled.

“I kicked off my campaign with my two young adult boys, because you guys are the future generation,” said Bond, dressed in a Navy-blue dress and hot pink sneakers. “I want to be sure that we continue to really protect our democracy by increasing voter engagement so that we can have better turnout.”

The competition for the open seat for statewide constitutional office comes at a consequential time for elections in Connecticut and beyond following unprecedented attempts to dispute the results of the 2020 presidential election.

Thomas and Bond are both insider-outsiders. While they both hold government positions, neither has a long history in politics and neither was well known to the party establishment before this election. Two much higher-profile Democrats who lost to Thomas at the convention chose not to run in the primary.

As the party endorsed candidate, Thomas has the benefit of appearing on the ballot on “Row A” above Bond, who has come up with the tagline “Row B for Bond.” Erick Russell, of New Haven, the Democratic endorsed candidate for state treasurer, joined her on the tour of small businesses.

Thomas asked Fernandez whether she and her husband encountered any difficulties starting their business, Sabor Ambateno Bakery. Before Fernandez could answer, her daughter chimed in to say it was a cumbersome process.

“Before I opened my business, I worked for a small business where I worked my way up from intern to president,” Thomas said. “So, I just have a good sense of how businesses need help.”

A sharply negative ad

The battle between Bond and Thomas had largely been cordial until accurate days, when Bond released an ad that targets Thomas over missing key votes for labor — ratifying the 3-year state employees’ contract — and for an election reform.

“It’s a factual video. The voters have the right to know the truth about individuals’ positions,” Bond said Thursday, defending the ad.

Bond has earned the support of many labor unions including the Connecticut AFL-CIO, Connecticut Employees Union Independent, UAW Region 9A, A&R Employees Union and UNITE HERE Local 34.

Responding to the attack in Norwalk Thursday, Thomas said “I'm disappointed that for a job based on integrity, and fighting misinformation, that a fellow Democrat would put out a blatantly misleading ad.”

Thomas has received the endorsement of many sitting state legislators and Democratic leadership, including Senate Majority Leader Bob Duff who made an appearance during her tour of Norwalk businesses Thursday.

“Stephanie is a hard worker, and she’s smart, capable and cares so much about our community,” Duff said.

Selling their experience

With Thomas and Bond agreeing on many issues including early voting and expanded access to mail-in voting in Connecticut, they are highlighting their professional backgrounds as the main differentiator between them.

“My distinct experience is government executive management, which she does not have,” Bond said Thursday, adding she manages approximately 100 employees in her current role and oversees a budget similar in size to the Secretary of State’s Office.

Bond, whose campaign has spotlighted her response to COVID as New Haven’s top health official, previously worked as Bridgeport’s health director and as the director of the Eastern Connecticut Area Health Education Center.

“She has the strongest skills, having served for over 20 years, if I’m not wrong, as an administrator of a large department with tons of responsibility, large budgets, and her personal commitment to democracy is really important to me,” said Evelyn Mantilla, 59, a former state Representative from Hartford who now lives in West Hartord and joined Bond Thursday.

Thomas highlighted her experience as a business owner and in the state legislature, where she serves as vice chair of the Government Administration and Elections Committee, co-sponsoring legislation to expand absentee voting and implement automatic voter registration. “I’ve been a longtime advocate for voting issues,” she said.

“I tell people all the time, and I said it at the convention in my speech, if you want to see how I will serve as secretary of the state, look at how I run my campaign.”

Former Secretary of the State Denise Merrill announced more than a year before the primary she would not seek a fourth term, and later resigned, citing her husband’s health. Merrill has endorsed Thomas in the race.

Sat, 06 Aug 2022 07:14:00 -0500 en-US text/html
Killexams : Are There Ninjas in YOUR Boardroom? How To Prevent Being Blindsided

A ninja (忍者?) or shinobi (忍び?) was a covert agent or mercenary in feudal Japan who specialized in unorthodox warfare. The functions of the ninja included espionage, sabotage, infiltration, and assassination, and open combat in certain situations…

--Source: Wikipedia

Former HP CEO Leo Apotheker was ousted after 11 months in his role.

Jack Griffin, the former CEO of Time, Inc. after five months.

And Michael Woodford, former CEO of Olympus , was shown the door 3 weeks.

While each case in different, one fact remains the same: these CEOs didn’t manage their Board. Instead, they were blindsided. The Board behaved in a way the CEO hadn’t anticipated, he was considered non-crucial to the success of the company, and it was sayonara from there.

Boardroom Ninjas are becoming more prevalent. And they’re blindsiding CEOs more often.

The three most common reasons for Boardroom Blindsiding are:

1-CEO/Board conflict isn’t discovered and dealt with immediately.

2-Board members have differing agendas.

3-Board members provide varying value.

Yes, as the CEO you report to the Board. And you can manage Boardroom Ninjas efficiently and effectively by becoming a Boardroom Samurai.

Their covert methods of waging war contrasted the ninja with the samurai, who observed strict rules about honor and combat.[2]

--Source: Wikipedia

Ninja bad. Samurai good. Ok, let’s move on.

Know Your Ninjas

A ninja succeeds because they are efficient, effective, and unseen. You’ll do the same, yet you’ll use candor to be so upfront and visible that the result will either be disarming while building trust and respect. Boardroom Ninjas are sneaky and destructive. Boardroom Samurais are transparent, ask the tough questions, and continuously monitor progress.

First, ask the following questions of each Board member in a private one-on-one meeting (not as a group).

1) What is most important for the company over the next 2 years: ensuring long term profitability or increasing short term revenue growth?

2) What sacrifices should we make now to [based on the answer above: ensure long term profitability/increase short term growth]?

3) Are you getting the info you need at Board meetings to help us increase shareholder value and guide the company’s growth? If not, what would you additional info would you like to receive?

4) How specifically would you like to see me grow as a leader?

5) How specifically would you like to see our key executives grow as leaders?

6) What should our top 3 priorities be this quarter? This year? Next year?

From the above you’ll learn:

  • The Board member’s own agenda for the company
  • Any grievances the Board member has with you or your executive team (plus where they want to see performance improvement)
  • How much value the Board member will be bringing in the future

Prevent Or Neutralize Attack

Connect with the leader. Every Board has a tribal leader, and it may be someone not in the Chairman or Lead Director role. Who is the leader of your Board? If you have a potential executive exit, or are considering a new key strategy or alliance, let them know first. Then ask their advice. This engages their ego and emotions.

When you engage someone’s ego and emotions two terrific benefits result: first, they want to be the wise advice giver, so they’ll tell you what they’d do were they in your shoes, and second, they will be invested in your following their advice. Ask their help in implementing their advice and check in with them on your progress.

Check in twice annually. If you check in with your Board members twice annually (see Know Your Ninjas above) you’ll significantly reduce the chances of Boardroom Blindsiding. Then follow up so they see progress.

Report well. Provide high visibility to your Board via clear and concise reporting, and short info updates between Board meetings (5 bullets on progress and wins, 5 bullets on opportunities/concerns). At the end of this blog you'll find a very high level framework for Board reporting for a software company. Yours will vary, but the key is to identify and report consistently on key success metrics for your Board can easily monitor the business progress at each meeting.

The key is to continually build and manage the Board’s confidence in you, and to ensure you only spend about 3-5% of your time on Board management. Your value is in building the company, not preventing attacks.

What are your Board management challenges?

Where have you succeeded with tricky Board issues?

Christine Comaford combines neuroscience and business strategy to help CEOs achieve rapid growth and create high performance teams. Follow her on twitter: @comaford. Her current NY Times bestselling book is entitled SmartTribes: How Teams Become Brilliant Together.

 Join her tribe and get free webinars, neuroscience resources, and more by clicking here.


For each department:

- Goals achieved last quarter

- Goals not achieved last quarter and why

- Goals to be achieved this quarter

Details per department:

Sales/Business Development:

- Deals closed and high level terms of each deal

- Spec for ideal client/partner in each client/partnership category

- Sales strategy

- Why deals were lost: Did the sale go to a competitor? Who? What was their

proposition and why was it better than ours? Was the sale lost because a new

decision maker joined the fray? Why didn’t we know about this in advance?

Client Care:

- # of inquiries responded to for the month, % breakdown of clients vs. prospects

- Average time to resolution on each client inquiry

- % of clients who have contacted client service repeatedly and how often

- Strategy for up-selling/down-selling/cross-selling in this function


- Technology used, integration issues, expertise needed

- Scalability, robustness, extensibility proof

- Testing approach, hosting/co-location approach and vendor

- Release schedule and key features per release


- Lead generation and qualification: the sales funnel (leads being pursued) and the

amount of time it takes a lead to move into the sales pipeline (and become a

prospect), time it takes a prospect to become a client

- Client acquisition, retention, optimization (up-selling) strategies

- Key marketing activities: mailings, conferences, trade shows, press coverage

recent past and upcoming

- Product management issues, if any

- Web site revs upcoming and high level details


- Stock options to be approved for issuance

- Head count (perm and temp) today and projected for quarter

- Burn rate today and ramping over next 3 quarters

- Any current or potential employee issues

- Balance Sheet, P&L, Statement of Cash Flows

Thu, 04 Aug 2022 07:57:00 -0500 Christine Comaford en text/html
Killexams : Helmerich & Payne, Inc. (HP) CEO John Lindsay on Q3 2022 Results - Earnings Call Transcript

Helmerich & Payne, Inc. (NYSE:HP) Q3 2022 Earnings Conference Call July 28, 2022 11:00 AM ET

Company Participants

Dave Wilson - Vice President of Investor Relations

John Lindsay - President & Chief Executive Officer

Mark Smith - Chief Financial Officer

Conference Call Participants

Derek Podhaizer - Barclays

Douglas Becker - Benchmark Research

Keith Mackey - RBC

Andrew Herring - JP Morgan

Tom Carstairs - Stifel Research

John Daniel - Daniel Energy Partners


Good day, everyone and welcome to today's Helmerich & Payne Fiscal Third Quarter Earnings Call. At this time all participants are in a listen only mode. Later you will have the opportunity to ask questions during the question-and-answer session. [Operator Instructions] Please note this call may be recorded and I will be sending by should you need any assistance.

It is now my pleasure to turn today's call over to Vice President of Investor Relations, Dave Wilson, please go ahead.

Dave Wilson

Thank you, Ashley, and welcome everyone to Helmerich & Payne Conference Call Webcast for the Third Quarter of Fiscal Year 2022. With us today are John Lindsey, President and CEO; and Mark Smith, Senior Vice President and CFO. Both John, and Mark will be sharing some comments with us afterwards, we'll open the call for questions. Before we begin our prepared remarks today, I'll remind everyone that this call will include forward looking statements as defined under the securities laws. Such statements are based upon current information and management's expectations as of this date, and they're not guaranteed the future performance.

Reporting statements involve certain risks, uncertainties and assumptions that are difficult to predict. As such are actual outcomes and results could differ materially. You can learn more about these risks in our annual report on Form 10-K, or quarterly reports on Form 10-Q and or other SEC filings. You should not place undue reliance on forward looking statements and we undertake no obligation to publicly update these forward-looking statements. We will also make reference to certain non-GAAP financial measures such as segment direct margin and other operating statistics. You'll find the GAAP reconciliation, comments and calculations in yesterday's press release.

With that said, I'll now turn the call over to John Lindsay.

John Lindsay

Thank you, Dave. Good morning, everyone. And thank you for joining our call today. I'm pleased with our performance during the quarter. The operational and financial results continue to reflect the benefits of our strategic initiatives we've been working on for several years now. In particular, the efforts by our sales and operations teams to Excellerate pricing and margin growth in our North America solutions segment. On our earnings call last February, and again in April, we discussed how rig pricing needed to reach $30,000 per day. And in our third fiscal quarter, we had roughly 20% of our fleet average revenue per day at or above that level.

This is a great start. But we also recognize that pricing needs to move further to achieve gross margins of 50% or greater to generate returns that fully reflect the value we deliver to customers with our flex fleet rigs complementary technology solutions. As intended, we saw a modest growth in rig count and exited the quarter with 175 rigs contracted in our North American solution segment. Fiscal discipline and contractual churn allowed us to re contract rigs without incurring additional reactivation costs and to redeploy them at significantly higher rates.

Our rapidly improving contract economics are driven by both H&P’s value proposition to customers as well as a market that's very tight for available super spec rigs. We believe the drilling solutions and outcomes we provide are increasingly being recognized and coveted by customers. It's encouraging to seek capital discipline in our industry. And when combined with the supply chain and labor constraints, we expect this could put a damper on the industry's ability to reactivate idled super spec rigs at significant scale during the buying season.

By the last two years that has been in calendar Q4, and Q1. This will likely perpetuate the supply demand tightness for super spec rigs and provide momentum for future improvements and contract economics. We are already seeing some customers inquiring about rig availability for the fourth calendar quarter of this year. They are realizing that the market for readily available H&P flex rigs is extremely tight. We're seeing some customers looking to add incremental rigs for 2023. The needs are typically in the range of one to four rigs. And there are some looking to replace a lower performing regular to flex rigs. But we are unable to comment on the number of rigs that we can add specifically today. It is important to underscore that going forward, we will apply the same discipline focus on financial returns and we're receiving commensurate compensation for the value we are providing.

Along those lines march -- mark will provide some high-level remarks on our fiscal 2023 CapEx response to potential future demand for our rigs in our idle super spec electrically. We continue to hear about the benefits our customers experience from our digital technology solutions, especially when combined with our uniform flex rigs fleet. As horizontal wells continue to trend toward greater complexity and longer lateral length, drilling efficiency and reliability are important factors that differentiate our premium super spec service offering.

On the international front activity is taking higher with further improvements in our South American operations and the potential for more activity in coming quarters. In the Middle East, preparations are underway to export some of our super spec capacity as part of our hubs strategy. Current plans have one rig moving overseas in the coming months with additional risks possible, depending on the speed of the opportunities that developed in the Middle East, compared to other competing international locations. Establishing our Middle East hub is an important step and expanding our presence in that region as part of a longer-term growth strategy.

Our scale and digital technology not only enhanced profitability in our North American solution segment, but we believe these are also crucial elements in our goal to grow internationally. There is a scarcity of digital solutions being applied in key energy producing regions around the globe, and developing ways to integrate new technologies will ultimately lead to Excellerate economic returns for all our stakeholders over time. In our offshore Gulf of Mexico segment, our people continue to deliver great value for our customers. As mentioned on the last call, we are implementing pricing improvements offshore and have made significant progress. We expect the margin contribution to continue to Excellerate going forward at moderately higher levels.

In closing, it is encouraging to see the industry rebound. But it should also remind us of past cycles driven by elevated commodity price was and how the drilling industry repeatedly responded by adding capacity, which then led to an oversupplied market. So far, the cycle seems different from both an operator and a service industry perspective. The plan at H&P is straightforward safety above all, value creation for customers and margin growth, getting paid for the value we provide. I'm encouraged by the achievements through the dedication of our employees, their passion and their service attitude they bring to the company. We all strive to deliver excellence each day to enhance the value we provide to our customers and our shareholders. As we move forward, I'm confident our shared values and commitments will endure and enable the company to maintain its leadership position within the oil service industry.

And now I'll turn the call over to Mark.

Mark Smith

Thanks, John. Today, I will review our fiscal third quarter 2022. operating results provide guidance for the fourth quarter of a full fiscal year ‘22 guidance is appropriate. Look forward a bit to fiscal year 2023. And comment on our financial position. Let me start with highlights for the recently completed third quarter ended June 30 2022. The company generated quarterly revenues of $550 million versus $468 million in the previous quarter. As expected, the quarterly increase in revenue was due primarily to increase revenue per day in North America solutions segment. As we have continued to increase pricing for drilling activity.

Total direct operating costs incurred were $377 million for the third quarter versus $341 million for the previous quarter. The sequential increase is attributable in part to the higher average North American solutions segment to recap and compare it to the second quarter. General and Administrative expenses totaled approximately $45 million for the third quarter, lower than our previous quarter but still in line with our expectations. During the third quarter, we incurred losses of $17 million related to the fair market value of our add non drilling investment, which is reported as a part of gains and losses on investment securities in our consolidated statement of operations. Our fiscal year to date gains on the NOC investment are approximately $48 million.

To summarize this quarter's results, due in part to the execution of our strategies to align pricing with value delivered, as well as disciplined cost management we had our first positive net income quarter in 10 quarters. Agency earned a profit of $0.16 per diluted share versus incurring a loss of $0.05 in the previous quarter. Third quarter earnings per share were negatively impacted by net $0.11 per share of select items as highlighted in our press release, including the loss on investment securities that I just mentioned. Absent the select items adjusted diluted earnings per share was $0.27 in the third fiscal quarter versus an adjusted loss of $0.17.

During the second fiscal quarter, capital expenditures for the third quarter of fiscal ‘22 or $70 million sequentially ahead of last quarter is $60 million. This is lower than our expectations for the third quarter. But we are still comfortable with the annual range of $250 million to $270 million that was previously provided. H&P generated approximately $98 million in operating cash flow during the third quarter, which is up over $70 million on a sequential basis from the $23 million in the previous quarter. I'll have additional comments about our cash flows and working capital later in these remarks.

Starting to our free segments beginning with the North America solutions segment, we averaged 174 contracted flex rigs during the third quarter up from an average of 164 flex rigs in fiscal Q2. We exited the third fiscal quarter with 175 contracted rigs which was in line with our previous guidance. We added four rigs to our active rig count in the third quarter, including three walking flex rig, drilling rig conversions that were completed in fiscal Q3. Revenues were sequentially higher by $77 million due to pricing increases for our flex rigs in the spot market as John mentioned, and as we discussed on the second fiscal quarter call. Segment direct margin was $168 million and just above the top end of our April guidances coincidently higher than second quarter fiscal ‘20 to $114 million.

Overall effects from the North America solutions segment increase in a sequential basis due primarily to the increase in average rig count. In addition, reactivation costs of 6.5 million were incurred during Q3 compared to $14.2 million in the prior quarter. Roughly half of these reactivation costs were for the three walking rigs conversions added this quarter for the balance related to additional reactivation costs for rigs deployed at the end of the March quarter. Total segment per day expenses, excluding reconditioning costs and excluding reimbursable decreased to 15,490 per day in the third quarter from 50,030 per day in the second quarter.

Looking ahead to the fourth quarter of fiscal ‘22 for North American solutions, as of today's call, we have 176 flex rigs contracted, and we expect to continue at that level through the end of the fourth fiscal quarter of 2022. As we stated last quarter, and much like our competitors are doing and we intend to maintain, remain within our CapEx budget for the fiscal year which translates to holding the line on rig reactivations. Our current revenue backlog from our North America solutions fleet is roughly $629 million for rigs under term contract. Approximately 65% of the US active fleet is on a term contract. And we added approximately 10 rigs to our term roster early in the quarter which had previously been under negotiation for some time. Between now in calendar year in we have over 60 rigs rolling off of term contracts, which we expect to reprice in the current market.

The tight super spec rig supply dynamic is eating pricing momentum, and we expect the percentage of the US fleet on term to decrease to between 50% and 60%. During the next few quarters. As I mentioned last quarter significant inflationary pressures in calendar 2022, together with supply chain constraints are increasing consumable inventory costs. Such increases are included in our fourth guidance. Note that these costs for consumption and materials and supplies inventory did they make up less than 25% of the daily operating cost on a rig with a balance, primarily driven by labor.

In addition to the inflationary pressures on costs, constraints on supply chain capacity are increasing. In regard to supply chain access to parts and materials, we continue to utilize our proactive approach of detailed inventory planning, scale leverage, and healthy vendor partner relationships to alleviate supply chain challenges. In order to avoid a material impact or ongoing operations. We remain in close communication with our suppliers and have placed advanced orders for items in higher risk categories.

Approximately 70% to 75% of our daily costs are labor related. We implemented a wage rate increase in December 2021. Our turnover rates remain consistent with our historical turnover rates. To date, we have not experienced any loss of drilling time nor lost contracts due to crewing issues. We are monitoring and field labor rates as well as job required out of pocket expenditures. And as needed we'll respond to market conditions to assist in talent retention and attraction. As a reminder, our contracts are structured the past three labor related increases over a 5% threshold. We have commenced some early reactivation activities for rigs to deploy in fiscal year 2023 to minimize supply chain constraints where possible and are for planning.

Specifically, we are incurring costs already components of some of the rigs expected to be deployed in the first quarter of fiscal 2023. Reactivation costs will continue to increase to give an inflation but also because the average idle super seconds is stacked for two plus years. Our expectation is that reactivation effects costs will approximate well approximately $1 million per rig moving forward. In the North America solution segment, we expect direct margins range between 185 million to 205 million inclusive of the effect of about 6 million in early reactivation costs for the fourth fiscal quarter.

Regarding our international solutions segment, international solutions business activity increased to nine active rigs at the end of the third fiscal quarter. As expected, we added two rigs in the Vaca Muerta region of Argentina this quarter in and of the second rig in Colombia. Also as expected, we incurred expenses associated with the rig startups that I just mentioned as well as investments made to establish our Middle East hub. As we look forward to the fourth quarter of fiscal ’22, for international, we expect to add two more rigs in the Vaca Muerta region of Argentina this quarter as well as a third rig in Colombia. These additions will bring our total active international rig count to 12 at the end of the fourth fiscal quarter if the projected startup timing is adhered to. We also expect to incur more expenses as we further develop our Middle East, inclusive of preparation to export a super spec flex rig that will be targeted at regional drilling opportunities.

Aside from any foreign exchange impacts, we expect to have between 4 million to 7 million direct margin contribution in the fourth quarter, due in part to sequentially higher average activity, reduce startup expenses and read rate increases. Turning to our Gulf of Mexico, offshore Gulf of Mexico segment, we still have four of our seven offshore platform rigs contracted and two of our three management contracts on customer owned rigs are still unfilled drilling rates. Offshore generated direct margin of about 8.7 million very the quarter which was toward the high end of our expectations. As we look toward the fourth quarter of fiscal ’22, for the offshore segment, we expected total offshore that we expect that offshore will generate between 9 million to 11 million of direct margin. A sequential increase resulting from contractual pricing increases on our active Gulf of Mexico platform rigs and management contracts as John mentioned earlier.

Now, let me look forward to the fourth fiscal quarter update full fiscal year ‘22 guidance as appropriate and look ahead to fiscal ‘23 planning. As mentioned, we still expect capital expenditures for the full fiscal year drains between $250 million to $270 million with remaining spend and approximately 85 million at the midpoint to be incurred in the last fiscal quarter. As a reminder, the timing of some spending has pushed in the second half of the fiscal year as key suppliers continue to rebuild capacity that was taken offline during COVID restrictions and the coinciding energy downturn.

Looking forward to our fiscal 2023, which begins October 1, while our budget process is still at an early stage, we have done some preliminary work to help frame up expectations going forward. With that said, you should think about our North America solutions segment CapEx three buckets, maintenance, reactivation and conversion. Our bucket of maintenance capex costs will likely push to the high end of our historical range of 750,000 to a million proactive rig due to inflationary costs increases. The rig specific reactivation CapEx budget and the emergence for 2023 as we get deeper into the idled stack of rigs. Here one-time capital expenditures will be incurred to overhaul componentry that we optimally utilize in the protracted downturn.

For example, to delay an overhaul expenditure we swapped out like equipment from idle rigs during the downturn that had more time remaining before an overhaul was required. This was done in an effort in an effort to save capital and defend their conservative balance sheet. Such discreet reactivation CapEx could range from $1 million to $4 million for each rig reactivation fiscal 2023 depending on the particular componentry involved. Over the next few months, we will refine our planning for next fiscal year with the intent of only reactivating rigs for pricing in terms and ensure return on the significant effects and CapEx investments required to bring the rigs back online. The final bucket one should consider is a conversion bucket which relates to the continuation of our walking reconversion program. Consistent with how we have been converting rigs to walking route capability depending on customer demand and projected returns, we will likely do so in fiscal 2023 at a pace of approximately one per month. Our expectations for general and administrative expenses for the full fiscal ‘22 year are still expected to be just over $180 million.

Items impacting your tax provision and income are at levels that result in the wide variability in the estimated effective tax rate, and therefore the effective tax rate for upcoming quarters may be volatile. With that being said the US statutory rate for fiscal year ‘21 is 21%. In addition, we are expecting incremental state and foreign income taxes in permanent both the tax differences to impact our provision. There is no change to the previously guided range of anticipated cash tax of 5 million to 20 million for this fiscal year. Now looking at our financial position, homework and pain had cash and short-term investments of approximately 333 million in June 30 2022 versus an equivalent 350 million in March 31 ‘22.

The expected sequential decrease was largely attributable to our investment in Galileo and the quarter for 33 million as mentioned during the previous quarter call. Including a revolving credit facility availability, liquidity was approximately 1.1 billion at June 30. Our debt to capital at quarter end was about 17%. And our net debt was 209 million approximately. We currently expect our trailing 12 months of gross leverage churn to reach our goal of less than two times outstanding debt by September 30 2022. Following our resumption as positive cash flow generation from operations in fiscal Q2, the growth of that generation in the third quarter stems primarily from a result of the good pricing work discussed earlier.

And also due to less reactivation expenditures as recounts remained relatively steady in North America solutions segment as planning on the working capital front. Our accounts receivable in March 31, the 330 million grew by 68 million to approximately 398 million to June 30. The preponderance of our AR today continues to be less than 60 days outstanding from billing date. Although absolutely Della receivables are up primarily for price increases in North America solutions. Several additional international rigs working and Gene pricing increases in the offshore segments.

During the third fiscal quarter, we had a couple of significant cash related transactions. First, as mentioned in last quarters call, we invested approximately 33 million in Galileo. Second, we build our legacy Schlumberger stock for approximately 22 million in pretax proceeds, we still expect to in the fiscal year with between 350 million and 400 million of cash and short-term investments on hand. Although we expect to be toward the bottom half of that range due in part to some working capital lockup from accounts receivables as I mentioned. As we expected, the growth in account early in the fiscal year provided a platform for cash generation in the second half of the year. To that point in the recently completed third quarter, we fully covered our maintenance CapEx with cash flow from operations as well as funded our regular dividend.

Further, our disciplined capital planning and operational execution excellence sets the stage for cash increasing going forward. Cash returns to shareholders remains a top priority with our existing dividend, and we have a desire to augment these returns in the future. Additional returns are not yet determined by our board of directors but could consist of an assessment of our long-standing regular dividend, a potential variable type dividend, and opportunistic share buybacks. As mentioned in the press release, their financial stewardship compels us to take a measured approach in balance our maintenance CapEx requirements, growth capital opportunities for both us reactivations and international expansion and potential additional shareholder returns. More to come on this for fiscal 2023, in the coming quarters call.

Note, this concludes our prepared comments for the third fiscal quarter. Let me now turn the call over to Ashley for questions.

Question-and-Answer Session


[Operator Instructions] And we'll take our first question from Derek Podhaizer with Barclays. Please go ahead Your line is open.

Derek Podhaizer

Hey, good morning, guys. Just wanted to get more of a sense on how many rigs you could add to the market next year. I know your conversations with your customers. You mentioned in the skidding to walking conversion program in the breakdown of the CapEx about one per month call that 12. Just what else do you think you can add to the market just based on your conversations and based on the demand that they're all within keeping in your framework of generating the returns based on the amount of CapEx and OpEx needs to be to deploy to player. I just love a little more color on that.

John Lindsay

Yes, Derek. I can give you some sense of that, as Mark said, we're really not in a position other than to just mentioned the 12 walking conversions, assuming the demand and the margins returns are there. One way to think about it is what you expect the rig count to do and the super spec space. Next year and really, I would say starting in calendar Q4 of this year, because again, as I said earlier, that that's kind of been the buying season over the last two years. So if you think about if you make an assumption that 75 rigs to 100 rigs get added over, that 12 month period starting in Q4, if you look at our 25% market share, that would be a reasonable range to think about. But again, I think the main point I want to get across is we're not making decisions based on market share. We're making decisions based on the returns that we can generate from these rigs and just making certain that we're getting reasonable rates of returns over a long period of time. So Derek, that answer your question?

Derek Podhaizer

Yes, no, that's helpful. And then the -- you mentioned that 30,000 per day at or above that level 20% of your fleets on that. Based on the visibility you had and the rigs coming up on term in the contract turn, how can we double that to 40%? Explain that just cadence and how long it would take to get the whole fleet up to that 30 at 30 or above on our blog day rate?

John Lindsay

Yes. And if it's not clear in, in prepared remarks, but that 20% was effective the end of our fiscal Q3, that's not where we are today, necessarily. So that's our Q3 fiscal Q3 number, we don't have we have pretty, pretty clear insight into that it does take, a couple of quarters to get there. And so, I don't think they've really said anything about what that timing would be. I think, reasonably speaking over, two or three, two or three quarter, probably process wise wouldn't would enable us to get to that, to that level of pricing, low, low 30 pricing.

I think that's exactly right, couple more quarters, because as you said, that was in June 30, number you gave in prepared remarks. And in here, we are not far beyond that. And we're already seeing meaningful accretion to that number a month later.

Derek Podhaizer

Got it. That's very helpful. Appreciate the color guys sort of back.

John Lindsay

Thanks, Derek.


And we'll pick a next question from the Douglas Becker with Benchmark Research. Please go ahead. Your line is open.

Douglas Becker

Thanks. John, wanted to get your thoughts on a conceptual question. Investors historically have thought about gain rates reaching a soft ceiling, when it comes back to reactivation costs or upgrade costs? It seems like spot rates are getting above some of those levels. We've done a leading-edge basis, but just want to get your thoughts on, is that a still a relevant framework to think about pricing? Or have we moved into a different dynamic?

John Lindsay

Yes, I think the historical pricing the context there. It's really different today for a lot of reasons. But, I think, when you consider the investments that we have in specifically in the super spec capacity fleet. I think most people want to compare today versus a 2014 time period, as an example. And as we said, in our previous call that was last time we had 50% gross margins, but we didn't have 230 super spec rigs in the fleet at that time. So it's a much, much different situation.

Mark Smith

Yes, John, I would just add to that. Doug, that as I mentioned, in 2014, we didn't have a super spec rig. So going into ‘16 and beyond, we invested a lot of money in this the upgrading of the fleet resulting in the industry's largest supersonic fleet, and also resulting in a lot of benefits for our customers. Along the way, we add in a very oftentimes, what we would consider to be sub optimal returns on invested capital compared to what are working or what our weighted average cost of capital is. So as we were just trying to get back to numbers that makes sense financially, and this 50% margin is what will get us there, we're on the journey to get to that.

Separately, simultaneously, the rigs we built back then $20 million in fees, or even seven 20 million in 2014. Today, rough estimates say that somewhere between 30 million to 35 million. So a lot of capital still to be deployed to the idle assets that have been there two and a half, two years plus, which means that we get to the buying season at the end of this calendar year. At the beginning of calendar ’23, they've been sitting there two and a half years. So a lot of capital deployed for what we estimate to be nearly 150 super spec rigs in that two and a half year idle tenure by the time we get to the end of this calendar year. Have that else done.

Douglas Becker

Now that provides some good context, maybe more succinctly. It doesn't sound like you expect a meaningful increase in capacity if spot rates are 35,000 a day or higher because of the framework you've just laid out. Is that fair to say?

John Lindsay

Then again, [indiscernible].

Mark Smith

Sure, just trying to gauge it. rectification if we see $37,000 a day spa day rate? Do we see a big influx of capacity coming into the market?

John Lindsay

Yes, I think the capacity that is that is out there, as we described, we're estimating around 130 super spec rigs. We know, there's other drillers that are looking at doing some upgrades to SER tech rigs. And in order to satisfy demand. Guy, I would be surprised personally to see all of those rigs reactivated in 2023 for a number of reasons that we've already talked about related to just the supply chain and the capability to be able to provide the equipment sets required to get those rigs back into working back to working condition, because we as an industry we've utilized equipment sets off of those rigs that have been idle now, as Mark said, rover will be for over two and a half years. And so I, personally, I don't think there's going to be a response we've had some people ask about new bills. And I just think that, based on what Mark just said in terms of a $30 million to $35 million price tag for a new rig. I don't think that's going to be the case, either.

Douglas Becker

Yes, take midpoint $32.5 million, if you're making $15 a day margin, that's a six-year payback. Or if you're making 20,000 a day margin, that's a four-and-a-half-year payback. And then with the customer base today, that has little appetite to contract up beyond their fiscal budget year. So yes, I think the supply chain thing, as John mentioned is actually a significant hurdle. For any, we're working with our scale and leverage with our suppliers to make sure that we can put rigs back to work and also keep the active fleet in good working condition. And that's an effort that's a lot different today than it was at any time over the last 10 years.

John Lindsay

Great. And Doug, it really goes back to just to capital discipline, we've talked about that that's really the rallying cry within the industry. Our customers are demonstrating it. The service industry is displaying that and there's no reason to rush, even if the supply chain was there, there's no reason to rush to try to capture all this, any additional market share that you might be able to capture, one of the things that that we experienced in this last quarter, and you heard us talk about churn, we actually had 18 rigs that were given back to us for various reasons. Customers, going through their budget too fast, acreage position, the list goes on and on. 18 rigs that were, 18 points of demand, that historically speaking as an industry, we would have tried to satisfy that demand for reactivating something. And so, last quarter, we said, we're going to 175. And in Q3, we're going to finish the year at 176, we're within our capital budget, that wouldn't have been the case in previous cycles, we would have continued to try to capture additional share. So I think that's a really distinct difference in our industry, which I think is really healthy, it's healthy on the operator side and healthy on the overall services side as well.

Douglas Becker

Thank you very much.

John Lindsay

Thank you.


Next question is from the line of Keith Mackey with RBC, please go ahead. Your line is open.

Keith Mackey

Hi, good morning, and thanks for taking my questions. Just wanted to maybe start out with the contracting nature. Are you seeing any increased appetite for longer term contracts from customers that are not necessarily associated with conversion or upgrade or those hot rigs or whatever you'd like to call them still on shorter term durations?

John Lindsay

Keith, I would say it's a mix. We have customers that are that are interested in terming up rigs or a portion of their fleet, particularly larger customers that may have 10 rigs or 15 rigs running. I'm making this up 10 rigs or 15 rigs running. They don't necessarily want to turn up every rig but they may want to turn up summary. From our perspective, as Mark said, we've got 60 rigs approximately that are rolling off term. Next couple of scholars. And, we'll be looking at those very, very closely in terms of whether those remain in term or rollover into spot, I would say most of those rigs are going to probably go into more of a spot, spot type market. But I think it's really a mix that we see customers across the board, some that want to lock up on term, some that would prefer to play the spot market.

Keith Mackey

Got it? Thanks for that.

John Lindsay

I would just add for us at this time, with the upward momentum and pricing and the supply demand dynamics of the sector, trying to get to the returns that we have been discussing. Putting more of our market into the upward mobility of the spot pricing makes sense.

Keith Mackey

Got it, that's helpful. Just curious if you can give us a little bit more detail on the number of rigs you have that could be reactivated within that one to 4 million CapEx range. And maybe just your little more on your confidence in being able to get additional rigs to the market in early fiscal or calendar 2023 given the supply chain?

Mark Smith

Well, we have from a reactivation standpoint, when we got into some of the supply chain work that we're doing in this fourth quarter to get ready for putting some rigs back to work. But it's too soon to know definitively how many will put into the market. As John mentioned, we're being very cognizant about capital discipline, one and two, we're not going to try to meet every demand point that comes our way because we know there will be the existence of churn in the market. In other words, rigs freeing up for whatever reason, whatever reason, it may be a contractor. I mean, an H&P running out of budget and the H&P running out of acreage. Many dynamics, we will meet every single demand for me to that makes sense. So we're still trying to balance. I don't know the last two years in the buying season at the end of the calendar year Q4 before the calendar Q1, 40 rigs and 44 rigs, these are the last two buying seasons for us to be at and we don't see that level of addition coming. You have to remember that in those two seasons, we were coming off from substantially low bottom through both the OPEC price change and the pandemic that began in March of 2020. So a substantial bottom to come back up from we're approaching numbers from March 1, 2020. Today from an activity level standpoint, so don't see the quantum of additions. So differently do not see the quantum of additions coming, that we had the last few buying seasons. So I don't know specifically what that'll be yet. We are working, though, to know what every single one of our approximately 54 remaining is in perspective takes. But not ready to comment on delineating the numbers for all for those.

Keith Mackey

Got it? No, that's helpful. Thanks very much. I'll turn it back.

Mark Smith

Thank you.


And we'll take our next question from Andrew Herring with JP Morgan, please go ahead.

Andrew Herring

Thank you. Good morning. So I'm going to turn to the international outlook. So it sounds like in the near term, you're reactivating a few rigs or adding a few rigs in Argentina, and Colombia, and then transferring one into the Middle East. As many of you can comment on the outlook on some Middle East growth in activity. Do you think customers are looking for more demand before the end of calendar ‘22? And initial insights into what we might expect in 2023?

Mark Smith

I'll start, John, if you want to chime in. I think little as we think about it, we're looking more over the next two to three years in our planning horizon. So if you think about we're always looking at a five year planning horizon, we consider the Middle East scale to be more mid cycle in that horizon. So we're preparing really our Middle East hub, which is to be able to if you just simply have an operating presence in the structure and the Gulf Coast countries so that we can respond to demand points that we see coming in at midcycle horizon. We are excited about several opportunities we have part and parcel to the brand presence that we that we've benefited from after the addenda I can bet in the last year. We're participating in many bid tenders in the region with NRCS and IOCs. alike. So it's a little too early to say if we might be successful in one of those tenders. And if we are, that sort of thing is say three rigs to six rigs per for bidding effort. So if we were fortunate enough to win to that might be 6 rigs to 12 rigs in the next couple of years is that the way to think about it. And in particular, the flex rigs that we have, are with our we've drilled more shale wells than anyone else has globally, frankly. And taking that expertise, especially in some of the burgeoning gas plays in the region, is a really good way to help the customer achieve their goals. So those are the sorts of things we're interested in. John, any, any other comments?

John Lindsay

No, I think I think we've talked about unconventional opportunity for really, we've talked about it internationally for many years. We're starting to see evidence that we're hoping is going to come to fruition. So I would just add to that. And I think our fleet is really designed for unconventional work. The performance, reliability, and the technology solutions that we have all of those are really complementary to that opportunity set.

Andrew Herring

Great, thank you. That's very helpful. And as a follow up, then on the economics internationally, understanding it might be a little early to comment on the Middle East. But assuming these will be more creative contracts, you're talking about comparing the US to prior cycle. To what extent is that helpful in our modeling for internationally comparing to prior year margins you've been able to achieve on these risks? With a higher technology, can we see that exceed those levels, just any common you could, help us kind of gauge where we can see margins tend to be helpful?

John Lindsay

Well, each one of these dinners, for example that were participating in the economics have to be to be right for us. Our own history over the last couple of years International is not a we're not looking to that as any sort of guidance because of the crazy volatility and actually a wind down to zero rigs working because of the pandemic. But as we move forward, these things have to be accretive and we look at the financial returns through time. We also look though, at the ability to build scale. So if we want an initial bid with three rigs, we will be looking beyond that singular bid as an as a potential new entry point for a new customer for H&P. And looking to see what the potential might be for that customer to scale that up. And, and really get better absorption rates like we do here in the US through our scale. So we're looking at a lot of different components. But I think, easy to say that it would have to be financially free.

Andrew Herring

Thanks. That’s all for me. I’ll turn in back.


Hi, we'll take our next question from Tom Carstairs with Stifel Research, please go ahead. Your line is open.

Tom Carstairs

Good morning. I want to know when it comes to the remaining inventory of ITIL and redeploy able, super separating said, fleet of 54. There's been a lot of emphasis placed on what you're trying to achieve with regards to converting the psychology around pricing, hitting new levels for leading edge day rate and the associated gross margin. But on the terms and conditions side. Are you now expecting or do you think he might be able to get some minimal term or take or pay conditions may be an early termination provision, just wondering how good the remainder of the reactivation contracts might be that we could say?

Mark Smith

Well, in the US, we will. As I mentioned earlier, we see a movement down from 65% to 40% to 50% to 60% range for term. And for everything we enter into in the US on in term, Tom, we do get that taker pay cancellation provision. Having said that, where we are today, financially is much different than where we were coming out of a couple of two or three of the more accurate downturns. What I mean by that we have one death is due in 2031. We have a base dividend at 65 versus low lower than it was going into the pandemic. We have an substantial amount of cash on hand and look to a creep. So our capital structure requirements for such taker paper visions are less necessary than they might have been in prior cycles. But we still always like to have some defensiveness, which is why we're still going to remain within that 50% to 60% target range. But give up some term to try to capitalize on the supply demand dynamic that is creating this push up in pricing and therefore margins for us. John, any other.

John Lindsay

Yes, it's always about balance. There will be some of our walking conversions, or probably most of our walking conversions that that we will have a term contract commitment. But as I said earlier, Mark mentioned we're going to have 60 rigs rolling off of term contract over the next couple of quarters. And I would imagine most of those are going to roll into a spot market. So we will have some certainty on returns on a larger recommission are the conversions. But as Mark said we're positioned really well to be able to manage through that.

Tom Carstairs

Got it helpful. Clarifications. And then I just wanted to get give us an update on auto slide, that the percentage of your average active rig fleet for the quarter of 174 rigs, what percentage of that count, used auto slide at any point over the course of the quarter?

John Lindsay

I think we're around 25%. I believe that I believe that's right. And, we continue to have had uptake, it's been really well received in terms of providing automated directional drilling capacity. And as the rig count grows, it's even more important because we're bringing a lot of directional drillers back into the space. And obviously, they don't have, they don't have the experience that that a lot of operators would like to have. But just being able to automate that process, directional drilling processes is a huge win. And then we were also able to tie that into a commercial performance-based model. That's really a win, win situation for each, H&P, and for our customer.

Tom Carstairs

And would you say that the 25% that used auto side at some point. Does that 25% contain the entirety of the 20% of the fleet for the quarter that realize average revenue per day 30,000 or greater?

John Lindsay

We don't have. That's a great question. I don't have that that data. I do know that there is a portion of that is included in that. But I don't have the data for if it's only 20%, or some subset of that.

Tom Carstairs

Right. I assume the overlap would be high. It's not a perfect Eclipse. But okay, thanks for taking my questions.


Another question from John Daniel of Daniel Energy Partners, please go ahead.

John Daniel

Guys, thanks for including me. John, and Mark, I think most of us have talked ourselves into believing this is a multi-year upcycle. And assuming and hoping that's right. I'm just curious as you look at the pricing, we keep hearing about the low mid 30s in terms of leading edge. But the rig count, if we actually, as an industry add, call it 50 to 100 range over the next 12 months. Where does pricing go to?

John Lindsay

Well, John, obviously there's pricing has moved very, very quickly. It needed to move very, very quickly. There was a huge disconnect and in the value proposition that we provide the investments that we have and the margin generation. And if you just look at previous cycles, obviously we since 2014, we have not been able to get back to that. So, right now we're seeing leading edge mid-30s. Our goal, as we've already said, is to get to the get to the low 30s. And that's really our focus right now on getting to 50% gross margin. It's really hard to say past that, that John, I mean, we all read the same materials after that And, there's a lot of people that are surmising where it's going. And obviously, we've got a pretty good glimpse into that. But right now, we're just we're just sticking to, to, to the goals that we've laid out there. And we'll see. We'll see where it lands.

John Daniel

At this point, have you had any shareholders that have advocated pushing activity over price?

John Lindsay

No, we haven't been unanimous.

John Daniel

Yes, got it.

John Lindsay

We, I think there's some that, haven't didn't completely follow from our last call that we said, hey, we're recounts, going to be at the most 176 rigs this fiscal year. And that was called a quarter ago. And, but again, we're really pleased because at the beginning of the year, we thought that same 250 million to 270 million was 160 rigs, we're able to get 176 out of it. So created some great efficiencies there. But, expect to continue to see that from us. And I think that's what shareholders want. That's what investors want. Very much like, what are our customers are doing.

John Daniel

I got two quick ones. And I'll wrap up if you said this, I apologize, but kind of you have a range of where you might exit calendar Q4 in terms of a contracted read count calendar Q4.

John Lindsay

Now, as we said, we're working on reactivations, it's a little too far out to know the definitive demand points. And as we alluded to earlier, we will not meet every one of them.

John Daniel


John Lindsay

So still too early, John,

John Daniel

Fair enough, that you would expect to be above 176, I presume? And calendar Q4.

Mark Smith

We would be. And it's again I think going back to the question as John a minute ago, I think some folks who were maybe not heard the 176 for the September 30 goal in holding rigs tight, in CapEx tight which is helping the dynamics of supply demand and helping pricing. I think that was more on the analyst side. But when we speak to investors and long-term investors, there's not a single one of them that we've talked to you that with any sort of share, over margin. So we're going to be very cognizant of that theme, as we think about your last question and figuring out how many rigs to put in the market and in our first fiscal quarter, to get to a 1231.

John Daniel

Yes. Okay. Well, I'm glad your shareholders are thinking wisely. You've been very generous with your time. It's coming up on the end of the hour, and I'll turn it over for anyone else and follow up with David afterwards. Thanks. Thank you.

John Lindsay

Thanks, John.


No further questions, at this time. I'll turn the call back over to John Lindsay for any closing remarks.

John Lindsay

Thank you, Ashley. And thanks to all of you for joining us today. We know there are a lot of earnings calls going on today, and we really appreciate your time. I will tell you the H&P team, we've already said it we're laser focused on delivering value to customers and to shareholders. We aim to deliver value to customers through top tier performance, safety and reliability and to our shareholders, continued improvement in our margin growth and our return. So thank you again for your time and have a great day.


Thank you. This does conclude today's program. Thank you for your participation. You may disconnect your lines.

Thu, 28 Jul 2022 11:20:00 -0500 en text/html
Killexams : Cyber insurance price hike hits local governments hard

Horry County, South Carolina, officials were in for a shock earlier this year, when they discovered their cyber insurance premium would be spiking from $70,000 last year to about $210,000.

And if they couldn’t satisfy the insurance company’s requirements and prove they had the robust controls needed to protect and defend themselves against cyberattacks, they learned, they wouldn’t be able to get their $5 million policy renewed at all.

“The insurance companies have you over a barrel. There was not a lot of negotiation,” said Tim Oliver, the county’s chief information officer.

Across the United States, many local governments and states — as well as private companies — are in the same boat. They’re discovering their cyber insurance premiums have skyrocketed and that they must meet stricter guidelines if they want to get coverage or renew their policies.

“Cyber insurance used to be very cheap,” said Alan Shark, executive director of the CompTIA Public Technology Institute, a Washington, D.C.-based nonprofit that provides consulting services to local governments. “But things have changed, and insurance companies are increasing rates dramatically and raising the bar and making it harder to get insurance. Some local governments may no longer be able to get it.”

Insurance industry officials say the higher premiums for both public and private organizations are a result of rising demand for coverage amid more frequent and costly cybercrime incidents — often ransomware attacks. That means insurers have had to pay out more, which has led them to raise premiums and tighten standards for getting a policy. Some companies also have lowered caps on coverage or limited how many policies they write.

Last August, for example, American International Group, one of the country’s largest writers of cyber insurance, announced that rates for its clients had increased nearly 40% globally and that it was tightening the terms of its policies to address increasing cyber losses.

In the past three years, the number of cyber insurance claims reported in the United States rose by 100% a year, according to a May report by Fitch Ratings, a credit rating agency. In 2021, insurers paid 8,100 claims.

To reduce risk and potential losses, insurers are becoming more diligent during the application process about which safeguards and technology an organization uses to protect itself against cyberattacks, according to Loretta Worters, spokesperson for the Insurance Information Institute, an industry trade group.

“If a government entity or any business really has such vulnerabilities and fails to address them, it will likely result in either a higher premium or non-renewal of coverage,” Worters wrote in an email.

Companies now want to ensure organizations have updated software and firewall protections, a backup system, cyber training for staff and testing for vulnerabilities, among other requirements.

They also are requiring organizations to use multi-factor authentication systemwide, including for remote work. Such security technology confirms a user’s identity before they log in, usually through a randomized one-time password or number sent to a smartphone or email address.

Cyber insurance typically covers a variety of services, such as providing forensic expertise to investigate the attack, legal support, hardware replacement, data recovery and notification of people whose personal data may have been breached. Some policies also include ransom negotiations with the hackers and payment of the ransom.

The insurance changes largely spring from the explosion of ransomware, which hijacks computer systems, encrypts the data and holds it hostage until the victims pay a ransom or restore the system on their own. It typically spreads through phishing, in which hackers email malicious links or attachments and people unwittingly click on them, unleashing malware.

In 2020, ransomware attacks accounted for 75% of cyber insurance claims in the U.S., according to AM Best, a credit rating agency.

In the past several years, there has been a rash of ransomware attacks on cities, county governments, school districts, police agencies and health care systems. Local governments, especially smaller ones, can be easy prey because they may have fewer resources and staff with cybersecurity expertise.

In 2021, there were at least 77 successful attacks on local and state governments and another 88 on school districts, colleges and universities, according to Brett Callow, a threat analyst for cybersecurity company, Emsisoft. This year, as of late June, there were at least 28 attacks on governments and 33 on schools.

In Baltimore, where thousands of computers were crippled in a massive ransomware attack in 2019, it wound up costing the city at least $18 million — a combination of lost or delayed revenue and the expense of restoring systems.

The city, which didn’t pay the ransom and didn’t have cyber insurance, decided to spend about $835,000 for one year to buy $20 million worth to cover any additional disruptions to its networks. It continued to purchase cyber insurance annually.

Other local governments choose to pay the ransom because they need their data back quickly and think it’s the best option. Some figure it would be too costly and time-consuming to start over from scratch and rebuild everything.

Many local governments see cyber insurance as a necessity in case they’re attacked, which makes it even more disconcerting that their premiums have shot up and there are new requirements, according to Rita Reynolds, chief information officer at the National Association of Counties.

In the past year and a half, Reynolds said, instead of answering a few questions from their cyber insurance company when it was time to renew, counties now are being asked to fill out lengthy questionnaires about their security practices.

“Insurance companies are saying higher standards are needed at a higher cost and lower coverage,” she said. “It’s kind of like a perfect storm.”

Reynolds said these new requirements aren’t necessarily a negative as counties try to keep up their cyber defenses, but officials were surprised at how fast it’s happened.

“It caught a lot of us a little off guard,” she said. “Some of the things the insurance companies want are fairly easy to implement, but others can be costly and take time. You can’t just flip a switch.”

Counties want to be secure from cyberattacks and agree that they should be doing all they can to have the proper protections, Reynolds said. But those who don’t — or can’t — may find themselves unable to renew or get cyber insurance.

“Counties are scrambling,” Reynolds said. “And no matter what you have in place, the premiums have doubled, and sometimes tripled.”

Some local governments are switching to self-insurance, in which officials set aside a pot of money in reserve to be used in case of a cyberattack, according to Reynolds. Some are joining insurance pools with similar organizations and shopping for preferable rates.

Oliver, the South Carolina official, said his county didn’t find out about changes in its policy’s requirements until two months before it was time to renew. Fortunately, he said, officials were able to answer “yes” to all the initial questions about security protections. If they hadn’t, they would have been turned down.

Officials then spent the next two months responding to the company’s second questionnaire, which was dozens of pages long, Oliver said. The county was able to resolve issues and make fixes to meet the requirements.

The county council had to approve a budget resolution allowing officials to transfer money from another account to pay the $210,000 premium because it had budgeted only $70,000 for cyber insurance, he added.

Oliver said he is fortunate that his county, with a population of about 365,000 and about 3,000 employees, has four staffers dedicated to cybersecurity and the resources to pay for the insurance and meet the cyber defense requirements.

But smaller counties, which may not even have an information technology staff, may be unable to do either, he noted.

“They may be out of luck,” he said. “If they can’t get cyber insurance, the only option for a lot of these smaller organizations may be to cross their fingers and hope that they don’t get hit.”

In Lehigh County, Pennsylvania, with a population of about 375,000, officials also have had a stressful time getting their cyber insurance policy renewed, said Chief Information Officer Bob Kennedy. About a week before Christmas 2020, they learned that they wouldn’t be renewed because they didn’t have multi-factor authentication on all the computers accessed by staffers remotely.

Fortunately, Kennedy said, the county already was planning to make those changes and had purchased the necessary software. It was able to speed up the timeline and negotiate with the insurer to allow it make the changes in February 2021 rather than January. The premium rose 30%. And this year, he noted, the premium nearly doubled from $82,000 to $158,000.  

“A lot of things they’re mandating are good things. There’s not too many hoops,” Kennedy said. “But the increased pricing is more of a problem. It’s requiring us to pay premiums that are going up year after year, even if you meet all those requirements.”

In the end, with all of the worry about cyber insurance, there may be a silver lining for local governments, said Reynolds, of the association of counties.

“They are becoming much more savvy about what they need to do,” she said. “With every challenge there’s an opportunity. And in this case, it’s an opportunity for them to Excellerate their cyber defenses.”

This article was first posted on Stateline, an initiative of The Pew Charitable Trusts.

Wed, 27 Jul 2022 05:20:00 -0500 en text/html
Killexams : HP Reverb Review – An Impressive Headset Stuck with Windows VR Controllers

Reverb is HP’s second VR headset, and this time around the company is aiming mainly at the enterprise market, but not shying away from selling individual units at a consumer price point. As the highest resolution headset presently available at that consumer price point, it has a unique selling point among all others, though the usual compromises of Windows Mixed Reality still apply.

HP Reverb Review

Photo by Road to VR

To be up front, the HP Reverb headset itself is a solid improvement over its predecessor by most measures. The new design is comfortable and feels higher quality. The new displays and lenses offer a considerably better looking image. And on-board audio is a huge plus. However, while its hardware has improved in many ways, it’s still a ‘Windows Mixed Reality’ headset, which means it shares the same irksome controllers as all Windows VR headsets.

Reverb’s headlining feature is its high-resolution LCD displays, which are significantly more pixel dense than any headset in its class. On paper, we’re talking about 2,160 × 2,160 per display, which is a big step up over the next highest resolution headsets in the same class—the Valve Index, showcasing a resolution of 1,440 × 1,600 per display (also LCD, which means full RGB sub-pixels), and HTC Vive Pro’s dual 1,440 × 1,600 AMOLEDs, which feature an RGBG PenTile pixel matrix. Among the three, Reverb has a little more than twice the total number of pixels.

Photo by Road to VR

There’s no doubt that Reverb’s displays are very sharp, and very pixel dense. It’s impossible to focus on a single pixel, and the screen door effect (unlit spaces between pixels) is on the verge of being difficult to see. It has the best resolving power of any headset in its class, which means textures, edges, and text are especially crisp.

This is an example of a display with mura which shows varying brightness across the display; a perfect display would have perfectly consistent brightness from corner to corner.

Unfortunately, overall clarity is held back in a large way by plainly visible mura. At a glance, mura can look similar to the screen door effect (in the way that it’s ‘locked’ to your face and reduces clarity) but is actually a different artifact resulting from poor consistency in color and brightness across the display. It ends up looking like the display is somewhat cloudy.

As HP is mostly pushing Reverb for enterprise, they probably aren’t terribly concerned with this—after all, text legibility (a major selling point for enterprise customers) gets a big boost from the headset’s high resolution whether or not mura is present. For anyone interested in Reverb for visual immersion though, the mura unfortunately hampers where it might be otherwise.

There’s also a few other curious visual artifacts. There’s a considerable amount of chromatic aberration outside of the lenses’ sweet spot. There’s also subtle—but noticeable—pupil swim (varying distortion across the lens that appears as motion as your eye moves across the lens). In most headsets, these are both significantly reduced via software corrections, and I’m somewhat hopeful that they could be improved with better lens correction profiles for Reverb in the future. While I couldn’t spot any obvious ghosting or black smear, interestingly Reverb shows red smear, which is something I’ve never seen before. It’s the same thing you’d expect with black smear (where dark/black colors can bleed into brighter colors when you move your head, especially white), but in Reverb it manifests most when red (or any color substantially composed of red, including white) shares a boundary with a dark/black color. In my testing this hasn’t led to any significant annoyance but, as ever, it could be bothersome in some specific content.

From a field of view standpoint, HP claims 114 degrees diagonally for Reverb, which is higher than what’s typically quoted for headsets like the Rift (~100) and Vive (~110). Nobody in the industry really seems to agree what amounts to a valid field of view measurement though, and to my eyes, Reverb’s field of view falls somewhere between the two. So whether you call it 105 or 114, Reverb is in the same field of view class as most other PC VR headsets. These are Fresnel lenses, which means they are susceptible to god rays, which are about as apparent on Reverb as with accurate headsets like the Rift S, and a bit less prevalent than the original Rift and Vive.

Photo by Road to VR

Reverb’s other big feature is its major ergonomic redesign. HP has ditched the halo headstrap approach seen on every other Windows VR headset and instead opted for a much more (original) Rift-like design, including on-ear headphones. At least to my head, Reverb’s ergonomics feel like a big improvement over HP’s original Windows VR headset.

I found it quite easy to use for an hour or more while maintaining comfort. As with all headsets of this design, the trick is knowing how to fit it right (which isn’t usually intuitive). New users are always tempted to tighten the side straps and clamp the headset onto their face like a vice, but the key is to find the spot where the rear ring can grip the crown of your head, then tighten the top strap to ‘lift’ the visor so that it’s held up by ‘hanging’ from the top strap rather than by sheer friction against your face. The side straps should be as loose as possible while still maintaining stability.

Photo by Road to VR

I was able to get Reverb to feel very comfortable, but I’m a little thinking that the headset won’t easily accommodate larger heads or noses. Personally speaking, I don’t fall on either ends of the spectrum for head or nose size, so I’m guessing I’m fairly average in that department. Even so, I had Reverb’s side straps as loose as they would possibly go in order to get it to fit well. If I had a bigger head, the straps themselves wouldn’t have more room to accommodate; all the extra space would be made up by further stretching the springs in the side struts, which would put more pressure on my face than is ideal.

I also felt like I was pushing the limits of the headphones and the nose gap. The best fit for the headphones is to have them all the way in their bottom position; if there were a greater distance between the top of my head and my ears, or if I preferred the top strap adjustment more tightly, the headphones wouldn’t be able to extend far enough down to be centered on my ears.

With the nose gap, I was feeling a bit of pressure on the bridge of my nose, and actually opted to remove the nose gasket entirely (the piece of rubber that blocks light), which gave me just enough room to not feel like the headset was in constant contact with the bridge of my nose. If you have a larger nose or a greater distance between the center of your eye and your nose’s bridge, you might find the nose gap on Reverb annoyingly small.

Photo by Road to VR

As with most other Windows VR headsets, Reverb lacks a hardware IPD adjustment, which means only those near to the headset’s fixed IPD setting will have ideal alignment between their eyes and the optical center of the lenses. We’ve reached out to HP to confirm the headset’s fixed IPD measurement, though I expect it to fall very close to 64mm. If you are far from the headset’s fixed figure, you’ll unfortunately lose out on some clarity.

So, if it fits, Reverb from a hardware standpoint is a pretty solid headset, and the singular choice for anyone prioritizing resolution over anything else. However, Reverb can’t escape the caveats that come with all Windows VR headsets.

Mostly that’s the controllers and their tracking. Reverb uses the same Windows VR controllers as every other Windows VR headset except for Samsung (which has slightly different controllers). Yes, they work, but they are the worst 6DOF controllers on the market. They’re flimsy, bulky, and not very ergonomic. They actually track quite well from a performance standpoint, but their tracking coverage hardly extends outside of your field of view, which means they lose tracking any time your hands linger outside of the sensor’s reach, even if that means just letting them hang naturally down by your sides.

Photo by Road to VR

The tracking coverage issue is primarily driven by the tracking system used in every Windows VR headset: a two-camera inside-out system. HP says Reverb’s tracking is identical to the first generation headsets, and as such, Reverb’s two cameras lose controller tracking as often as its Windows VR contemporaries. Luckily, the headtracking itself is pretty darn good (on par with Rift S in my experience so far), and so is controller tracking performance when near the headset’s field of view. For content where your hands are almost always in your field of view (or only leave it briefly), Windows VR controller tracking can work just fine. In fact, Reverb holds up very well when playing Beat Saber on its highest difficulty because your hands don’t spend much time outside of the field of view before entering it again (to slice a block). But there’s tons of content where you hands won’t be consistently held in the headset’s field of view, and that’s when things can get annoying.

Photo by Road to VR

For all of its downsides, the Windows VR tracking system also means that Reverb gets room-scale 360 tracking out of the box and doesn’t rely on any external sensors. That’s great because it means relatively easy setup, and support for large tracking volumes.

The compromises on the controller design and tracking were easy to swallow considering how inexpensively you could find a Windows VR headset ($250 new in box is not uncommon). But Reverb has introduced itself as the new premium option among Windows VR headsets at $600, which shines a much brighter light on the baggage that comes with every Windows VR headset to date.

While Windows Mixed Reality—which is built into Windows and comes with its very own VR spatial desktop—is the native platform for Reverb and all other Windows VR headsets, there’s an official plugin that makes it compatible with most SteamVR content, which vastly expands the range of content available on the headset.

Disclosure: HP provided Road to VR with a Reverb headset.

Sun, 16 Aug 2020 09:53:00 -0500 Ben Lang en-US text/html
Killexams : SPB 2022 Q2 Artificial Intelligence & Biometric Privacy Quarterly Review Newsletter

Wednesday, August 3, 2022

Q2 did not disappoint in the AI and biometric privacy space, with a number of noteworthy litigation, legislative, and regulatory developments having taken place in these two rapidly developing areas of law. Read on to see what has transpired over the last quarter and what you should keep your eyes on as we head into the second half of 2022.

Biometric Privacy Cases to Keep on Your Radar

Cothron v. White Castle System, Inc., No. 128004 (Ill. Sup. Ct.): As many familiar with BIPA know, currently pending before the Illinois Supreme Court is Cothron v. White Castle System, Inc. (covered extensively by SPB team member Kristin Bryan in CPW articles hereherehere, and here), which is set to provide much-needed certainty regarding the issue of claim accrual in BIPA class action litigation. “Claim accrual” involves when a claim “accrues” or occurs—either only at the time of the first violation or, alternatively, each and every time a defendant violates Illinois’s biometric privacy statute. If the Cothron Court rules that BIPA violations constitute separate, independent claims, then the associated statutory damages of $1,000 to $5,000 per violation would compound with each successive failure to comply with Illinois’s biometric privacy law. Under this scenario, liability exposure would likely expand exponentially for BIPA claims. As such, companies should pay close attention to how the Illinois Supreme Court decides the Cothron appeal, as the ruling could result in yet another drastic shift in the biometric privacy landscape. In the interim, companies should consult with counsel and re-assess their compliance with BIPA to ensure they are satisfying the full range of requirements to mitigate potential class action litigation risks.

Mahmood v. Berbix Inc., No. 1:22-cv-2456 (N.D. Ill.): “Selfie” identity verification has become extremely popular due to the benefits offered by this verification method in significantly reducing fraud and facilitating a fast, accurate verification process. At the same time, companies that develop and supply this technology have also become an increasingly common target for BIPA class action suits. In Mahmood v. Berbix Inc., the plaintiff filed a putative class action against Berbix Inc. for alleged BIPA violations after being required to upload a photo of her driver’s license and a “selfie” to rent a car, the manufacturer of which used Berbix’s identity verification service. This case is worth keeping an eye on, as the litigation will likely provide valuable insights on the contours of the extraterritoriality defense applicable in certain BIPA disputes where the alleged violations of Illinois’s biometric privacy statute do not occur “primarily and substantially” within the borders of the Prairie State. 

Coss v. Snap Inc., No. 1:22-cv-02480 (N.D. Ill.): In early May, Snap Inc., the owner of popular social media platform Snapchat, was sued for alleged BIPA violations in connection with its “Face Lenses” feature, an augmented reality (“AR”) experience that uses innovative technology to modify and enhance users’ facial features to transform their appearance in photos and videos posted online. According to the complaint, Snap’s Lenses feature scans users’ faces and creates a detailed map or digital depiction of their facial features, during which time Snap collects their biometric data. This is another case worth watching, as the overlapping space between increasingly-popular image/video enhancement tools and efforts to ensure the privacy and security of biometric data is likely to lead to additional litigation moving forward. 

Hess v. 7-Eleven, Inc., No. 1:22-cv-02131 (N.D. Ill.): On April 25, four 7-Eleven customers filed a class action lawsuit against 7-Eleven, alleging that—unbeknownst to consumers—the company collects facial geometry data through cameras and video surveillance systems in violation of BIPA. According to the complaint, numerous 7-Eleven locations use systems provided by Clickit, an intelligent video solution provider, to collect biometric data. Hess is an example of the high volume of BIPA class actions targeting retailers of all types and the wide variety of allegations that are being asserted against them in connection with purported violations of Illinois’s biometric privacy statute. As such, all retail brands—even those that have put practices in place to comply with BIPA—should consult with experienced biometric counsel to re-assess the effectiveness of their biometric privacy compliance programs and mitigate growing BIPA risks to the greatest extent possible, as the retail industry will continue to remain one of the primary targets for BIPA suits for the foreseeable future.

Theriot v. Louis Vuitton N.A., Inc., No. 1:22-cv-02944 (S.D.N.Y.): In April, shoppers filed a class action against Louis Vuitton in a New York federal court for alleged BIPA violations in connection with company’s virtual try-on (“VTO”) tool made available to visitors of its website. The complaint alleges that the company’s technology scans users’ face geometry, producing complete facial scans and images of customers’ faces—all without giving notice or obtaining consent when visitors try on its designer eyewear using the tool. As VTO facial recognition class actions continue to be a hot trend in BIPA litigation (as discussed in more detail below), retailers and other companies that utilize this “try before you buy” technology should ensure they are strictly complying with the mandates of BIPA to mitigate the significant class action risks associated with these tools.

New and Emerging Biometric Privacy Trends

BIPA VTO Litigation Wave Not Over Yet: BIPA litigation in 2021 was marked by a wave of class action suits filed against retailers—including fashion, eyewear, and makeup brands—in connection with virtual try-on (“VTO”) tools offered to online shoppers. As the name suggests, VTO tools, also known as “virtual mirrors,” allow shoppers to “try on” products using their camera-equipped devices, such as home computers, tablets, or mobile phones. Importantly, VTO technology is powered by a combination of AI and AR, as opposed to traditional facial recognition technology used to identify or verify an individual’s identity. Despite this, many brands found themselves the targets of BIPA class litigation, with plaintiffs arguing that their VTO technology performed scans of face geometry, thus bringing the tools under the scope of BIPA. While the pace of filings has slowed somewhat in 2022, VTO technology continues to be a main target for class actions, including a number of suits filed against retailers that utilize these tools during Q2.

Increase in BIPA Suits Targeting Third-Party Vendors: Another notable trend seen during Q2 was a marked increase in the number of BIPA class actions targeting third-party vendors that offer biometric technology software and solutions, such as identity verification tools and employee timeclocks. Of note, these vendors do not maintain any direct relationship with the individuals who claim their biometric data was collected or used in violation of BIPA, but rather whose technology is merely utilized by their clients to facilitate the use of biometric data in commercial operations. Just two examples of this trend are the Berbix class action discussed above, as well as the Ronquillo case discussed below.

Contactless Fingerprinting Makes Strides Towards Adoption: While research around contactless fingerprinting technology is not new, accurate advancements are drawing the attention and interest of law enforcement. The development of new, more advanced technologies used for identity verification purposes is on the rise, especially in the wake of COVID-19 and its associated health and safety concerns. Soon, phone cameras will be capable of scanning and capturing a person’s fingerprint—easily identifying all the lines and swirls on their fingertips—all without even having to touch a screen. While this technology may raise concerns amongst civil liberty and privacy groups, law enforcement is already looking into ways to harness its potential—and you can be sure the private sector will be soon to follow.

Significant Biometric Privacy Class Action Decisions & Related Developments

Zellmer v. Facebook, Inc., No. 3:18-cv-1880, 2022 U.S. Dist. LEXIS 60239 (N.D. Cal. Apr. 1, 2022): A California federal court issued a notable BIPA opinion in Zellmer v. Facebook, Inc. (covered by SPB team members Kristin Bryan and David Oberly in this CPW article), which could have significant implications moving forward for companies seeking to limit their scope of liability exposure in BIPA class action litigation. In Zellmer, the court granted summary judgment to Facebook on the Section 15(b) notice and consent claim asserted in the case, finding that non-users were precluded as a matter of law from maintaining an actionable claim under Section 15(b). The court reasoned that a Section 15(b) claim could not exist for non-users because it would be patently unreasonable to construe BIPA to require companies to provide notice to, and obtain consent from, non-users who were for all practical purposes total strangers to the company, and with whom the company maintained no relationship whatsoever. Rather, a Section 15(b) claim can be in play only where there is at least a minimum level of known contact between a person and the entity that might be collecting biometric information. While the opinion itself was short—comprising only eight pages—the Zellmer court’s reasoning may have a noteworthy impact on the scope of Section 15(b) claims moving forward. 

Sosa v. Onfido, Inc. No. 1:20-cv-04247, 2022 U.S. Dist. LEXIS 74672 (N.D. Ill. Apr. 25, 2022): In Sosa v. Onfido, Inc. , an Illinois federal court rejected the argument that BIPA exempts biometric data extracted from photographs, finding instead that faceprints derived through photographic means can constitute “biometric identifiers” regulated by Illinois’s biometric privacy statute. The Onfido opinion is significant, as it likely shuts the door on a defense that has, until now, been broadly utilized by a wide range of targets of BIPA class action suits. 

Ronquillo v. Doctor’s Assocs., LLC, 1:21-cv-04903, 2022 U.S. Dist. LEXIS 62730 (N.D. Ill. Apr. 4, 2022): As courts continue to expand the scope of BIPA class action liability exposure, they have been especially unforgiving to third-party technology vendors—despite the challenges that these non-consumer facing entities have with satisfying the requirements of Illinois’s biometrics law. Such was the case for HP Inc., which in early April saw its motion to dismiss a BIPA class action denied by an Illinois federal court—even though the company lacked any kind of direct relationship with the individual who filed suit. In Ronquillo, an employee at Subway restaurants brought suit against HP and Doctor’s Associates, LLC (“DAL”), alleging that the defendants captured and stored her fingerprints without her informed consent through a Subway point-of-sale system to clock in and out of work, and to unlock cash registers. DAL and HP took the position that they did not actively collect employees’ biometric data; rather, at most, they merely possessed such data. As such, according to DAL and HP, they fell outside the scope of the biometrics law. The court disagreed, finding that in making this argument, the defendants were “attempt[ing] to rewrite the complaint to avoid its actual allegations, which allow for the reasonable inference that DAL and HP played more than a passive role in the process.” Id. at *8. While also noting that it was leaving the question of whether the plaintiff would actually be able to provide DAL’s and HP’s role in collecting her biometric data for another day and with a more developed record, the court concluded that, at least at the motion to dismiss stage, the complaint sufficiently alleged that Section 15(b) applied to DAL and HP. In addition, the court also expressly rejected the argument that Section 15(b) did not apply to third-party vendors of technology used by employers to obtain workers’ biometric data, finding that there was nothing in BIPA’s text that the law was intended to apply only to employers, but not to parties without any direct relationship to the plaintiff. Importantly, the Ronquillo decision deals a significant blow to one of the third-party vendors’ primary arguments against BIPA liability while at the same time demonstrating how courts continue to interpret the statutory text of BIPA in an extremely broad, plaintiff-friendly manner.

Johnson v. Mitek Sys., Inc., No. 0:22-cv-01830, 2022 U.S. Dist. LEXIS 80851 (N.D. Ill. May 4, 2022): While arbitration continues to remain a powerful defense in BIPA class actions, not all attempts at dismissing BIPA claims through the pursuit of motions to compel arbitration are successful. Such was the case in Johnson v. Mitek Sys., Inc., where ID verification firm Mitek Systems, Inc. recently lost its bid to force BIPA plaintiffs to resolve their claims out of court and through individual, binding arbitration. Mitek arose in connection with the company’s age and identity verification service, which was used by rental car service HyreCar and required the plaintiff to upload his driver’s license and photograph. According to the plaintiff, this verification process was completed with the assistance of facial recognition technology, which unlawfully collected her biometric data without providing notice or obtaining his consent. The court denied Mitek’s motion to compel arbitration, finding that the company was not a party to the arbitration agreement between the rental company and its customer and further that the third-party beneficiary exception to the general rule that non-signatories to an arbitration agreement cannot be bound by such contracts was inapplicable to force arbitration against the plaintiff. The Mitek decision should serve as a reminder for all companies that use biometric data in their operations to ensure they have a robust arbitration agreement of their own in place and to avoid relying solely on the agreements of their clients or vendors.

Rogers v. BNSF Ry. Co., No. 1:19-cv-03083, 2022 U.S. Dist. LEXIS 10934 (N.D. Ill. June 21, 2022): At the same time (and just the opposite of Ronquillo), courts continue to cast a wide liability net for allegedly improper biometric data collection and possession practices, ensnaring even those companies whose involvement with biometrics systems is tenuous at best. Such was the case for BNSF Railway Company, which hired external security contractors to operate its biometric-powered access control system at its Illinois rail facilities and later found itself the defendant in a BIPA class action. In June, an Illinois federal judge refused to certify an interlocutory appeal filed by BNSF following the court’s denial of its motion for summary judgment, which had rejected the railroad’s preemption argument and found that a jury must decide whether the railroad’s connection with its fingerprint access control technology operated by its third-party vendor was sufficient to trigger liability for improper biometric data collection and possession practices under BIPA Sections 15(a) and 15(b). The company had sought a Seventh Circuit review of the district court’s decision involving the issues concerning federal preemption and vicarious liability, but the district court refused to allow the appeal to proceed, basing its decision primarily on what it characterized as a “misreading of [the district court’s] ruling” and a failure to raise the arguments it looked to assert on appeal in its prior summary judgment briefing.

Barton v. Walmart Inc., No. 1:21-cv-04329 (N.D. Ill. May 31, 2022): In May, an Illinois federal court refused to dismiss a class action involving allegations that Walmart violated BIPA by requiring Illinois warehouse workers to use voice recognition software. In Barton, Walmart workers alleged that they were required to submit their voiceprints by practicing into biometric-powered inventory computer systems known as “Pick Task-Voice Template Words.” Walmart, however, contended that its voice system did not identify specific employees by their voices but instead only recognized words spoken into the headsets. According to Walmart, the identification of specific worker identities came from workers’ employee numbers that were manually entered into the system—not based on their voice patterns. The Barton decision further underscores the lack of clarity regarding the precise definition of “biometric identifiers” under BIPA, which will remain one of the most hotly-contested issues in BIPA class litigation for the foreseeable future—and until courts provide more guidance on this key matter.

Rivera v. Google Inc., No. 2019-CH-00990 (Ill. Cir. Ct. Cook Cnty.): In late April, Google settled its longstanding Rivera BIPA dispute, agreeing to pay $100 million to resolve allegations that it improperly collected individuals’ facial biometric data through its cloud-based Google Photos feature in violation of Illinois’s biometric privacy statute. While notably less than 2020’s record-breaking $650 million BIPA settlement involving one of the world’s largest social media companies, the $100 million figure agreed to by Google to put an end to the Rivera litigation will only give plaintiff’s attorneys even more motivation to pursue BIPA class action litigation for the foreseeable future. And, although the size of the Rivera settlement is not by any means indicative of normal settlement figures in BIPA cases, the plaintiff’s lawyers will almost certainly use this settlement as a measuring stick to value other BIPA disputes—likely causing inflated settlement figures moving forward, at least in the immediate term. Importantly, this settlement should serve as a cautionary tale and reminder of the critical need for companies to maintain comprehensive, flexible biometric privacy programs to minimize potential liability exposure.

Artificial Intelligence & Biometric Privacy Legislative/Regulatory Developments

Majority of Biometric Privacy Bills Fail (With One Notable Exception): While the number of biometric privacy bills introduced by state and municipal legislatures in 2022 increased significantly as compared to the year prior, the vast majority of those proposals failed during the legislative process and did not make their way into law. With that said, one piece of proposed legislation remains currently pending that could bring wholesale changes to the biometric privacy legal landscape if enacted this year. That legislation, California’s HB 1189, provides for a private right of action almost identical to that of BIPA, which would likely bring with it a tsunami of class litigation to California on part with what has taken place in Illinois for several years now. Not only that, HB 1189 is one of several “hybrid” biometric privacy bills introduced in 2022 that blend traditional biometric privacy legal principles and other compliance requirements and limitations which, until now, were ordinarily confined exclusively to broader, comprehensive state consumer privacy statutes. Importantly, these hybrid requirements would significantly increase compliance burdens for all companies that collect and use biometric data while also ushering in a correspondingly-high increase in liability exposure risks. 

EEOC Issues Guidance on Use of Artificial Intelligence by Employers: On May 12, 2022, the U.S. Equal Employment Opportunity Commission (“EEOC”) issued important guidance regarding the use of algorithms and AI in the context of hiring and employment decisions. The guidance follows on the heels of the EEOC’s Initiative on Artificial Intelligence and Algorithmic Fairness, which was launched by the Commission in late 2021. The guidance itself provides a detailed discussion regarding how employers’ reliance on AI and algorithmic decision-making in the employment context may run afoul of the Americans with Disabilities Act (“ADA”). In addition, the guidance also provides several recommended “promising practices” for employers to consider to mitigate the risk of discriminating against individuals with disabilities when using algorithmic decision-making tools and similar AI technologies. All employers that are currently using AI for any purpose—or intend to do so in the future—should familiarize themselves with the guidance if they have not already done so.

CFPB Issues Guidance on Use of Artificial Intelligence by Creditors: Also in May, the federal Consumer Financial Protection Bureau (“CFPB”) issued guidance of its own, Circular 2022-03, “Adverse action notification requirements in connection with credit decisions based on complex algorithms,” focusing on the need for creditors to comply with the Equal Opportunity Credit Act’s (“ECOA”) requirement to provide a statement of specific reasons to applicants against whom adverse action is taken when making credit decisions based on complex algorithms. Importantly, the CFPB clarifies that compliance is required even when using algorithms—sometimes referred to as “black-box” models, that prevent creditors from accurately identifying the specific reasons for denying credit or taking other adverse actions. The guidance illustrates that the EEOC and its adverse action requirements will be enforced by the CFPB irrespective of the technology that is utilized by creditors and that creditors cannot excuse their noncompliance based on the mere fact that its technology used to evaluate applications is too complicated or opaque in its decision-making to understanding. The recently-issued guidance, along with a statement issued by CFPB Director Rohit Chopra in conjunction with the Circular, provides a key window into the aggressive tact that the CFPB will likely take in enforcing improper AI practices that may run afoul of the ECOA. All creditors (and other entities subject to the CFPB’s jurisdiction) that currently use AI—or intend to do so in the future—should familiarize themselves with the guidance if they have not already done so.

Federal Trade Commission Back at Full Strength: On May 11, 2022, privacy law expert and then-head of Georgetown University Law School’s Center on Privacy and Technology, Alvaro Bedoya, was confirmed as the existing FTC Commissioner. Bedoya replaces former FTC Commissioner Rohit Chopra, who now heads the Consumer Financial Protection Bureau (“CFPB”). Bedoya is an expert in facial recognition and is widely recognized for his role in co-authoring a 2016 study that is credited as the impetus for a number of accurate state and local laws limiting the use of facial recognition by the public sector. During his late 2021 confirmation hearing testimony, Bedoya advocated for increased FTC scrutiny over facial biometrics and its privacy-related impacts, especially as it relates to minorities, noting its reputation for misuse and abuse. At the same time, he also noted his support for potential FTC privacy rulemaking. With the FTC now back at full strength and with a Democratic majority, companies should anticipate an aggressive privacy enforcement agenda by the Commission, including increased scrutiny of both facial recognition practices and potential bias and discrimination concerns relating to AI and algorithmic decision-making.

FTC Issues Report to Congress on Use of AI to Combat Online Harms: On June 16, 2022, the FTC issued a report to Congress, Combatting Online Harms Through Innovation, warning about the use of AI to combat online problems and urging lawmakers to exercise “great caution” about relying on AI as a policy solution. While the Report does not break any new ground in terms of how the FTC may pursue investigations or enforcement actions against private sector organizations that utilize AI in their day-to-day operations, the Report nonetheless provides several key takeaways for all entities that currently rely on this advanced form of technology or intend to do so in the future. To learn more about the Report and its major takeaways, read our accurate CPW blog post here.

Automated Decision-Making and Profiling Conspicuously Absent From Initial Draft CPRA Regulations: The California Privacy Rights Act (“CPRA”) places significant power in the hands of the California Privacy Protection Agency (“CPPA”) to shape the future of privacy regulation in the United States, including with respect to how automated decision-making and profiling is regulated throughout the country. For this reason, the CPPA focused a significant amount of its preliminary rulemaking activities on these two interrelated issues. These efforts began last fall when automated decision-making and profiling were included as part of nine syllabus on which the CPPA sought public comment. In May, the CPPA held stakeholder sessions over the course of three days, during which time three hours were devoted exclusively to allowing stakeholders to comment on issues relating to automated decision-making and profiling. Notably, however, the CPPA’s draft CPRA Regulations—issued at the end of May—do not address automated decision-making or profiling in any fashion whatsoever. With that said, companies should anticipate that these issues will be addressed in subsequent iterations of the Regulations.

Connecticut Enacts New Privacy Statute Encompassing Biometric Data: On May 10, 2222, Connecticut Governor Ned Lamont officially signed into law Public Act No. 22-15, “An Act Concerning Personal Data Privacy and Online Monitoring.” More commonly referred to as the “Connecticut Privacy Act,” the statute becomes the fifth law of its kind to be enacted in the U.S. and will go into effect on July 1, 2023. In addition to affording Connecticut consumers a range of new privacy rights, the law also governs the collection and use of “biometric data,” which is defined as any data generated by automatic measurements of an individual’s biological characteristics, such as a fingerprint, voiceprint, eye retinas, irises, or other unique biological patterns or characteristics that are used to identify a specific individual.

FTC Investigates In May, Oregon Senator Wyden urged the FTC to investigate the identity verification company for potential deceptive practices which may have misled consumers and government agencies. A company experiencing growth in the midst of the pandemic, uses a mixture of selfies, document scans, and other methods to verify identities online. is currently the subject of other government investigation. Senators are particularly concerned about the potential confusion between two different types of technology – one which involves a one-time comparison of two images to confirm an applicant’s identity and involves one-to-many recognition, where millions of innocent people have their photos included as a comparison in a digital “line up.” Wyden and others fear that the company made “multiple misleading statements” about “superior” facial recognition use, which may be potentially damaging to consumer understanding.

EU’s Artificial Intelligence Act Receives Support From Privacy Advocates: In April 2021, the European Commission released the initial draft version of its proposed Artificial Intelligence Act (“AIA”), which seeks to implement a first-of-its-kind comprehensive regulatory scheme for AI technologies. Like the EU’s General Data Protection Regulation (“GDPR”), the territorial scope of the AIA would be expansive, governing not just EU organizations that utilize AI but also companies located outside the EU that operate AI within the EU, as well as organizations whose operation of AI impacts EU residents. Recently, European Digital Rights (“EDRi”) and dozens of other privacy advocacy organizations penned an open letter not just supporting efforts to enact the AIA but to expand the legislation to include a ban on remote biometric identification (“RBI”) systems, such as facial recognition, in all public spaces. Companies that currently deploy AI in their operations—or may do so in the future—should keep tabs on future developments regarding the AI Act moving forward, which will have wide-reaching implications extending far beyond the EU if the legal framework becomes law.  

The Final Word

While Q2 provided us with a number of significant developments in the areas of AI and biometric privacy, companies are sure to see many additional litigation, legislative, and regulatory developments during the second half of 2022 as well.

© Copyright 2022 Squire Patton Boggs (US) LLPNational Law Review, Volume XII, Number 215

Wed, 03 Aug 2022 02:54:00 -0500 en text/html
Killexams : U.S. energy companies troll Biden over tweet telling them to cut prices at the gas pump

The U.S. Oil & Gas Association took a hit at President Biden after he tweeted on Saturday that “companies running gas stations” should simply “bring down the price you are charging at the pump,” telling him that he should “please make sure the WH intern who posted this tweet registers for Econ 101 for the fall semester.”

“Working on it Mr. President. In the meantime – have a Happy 4th and please make sure the WH intern who posted this tweet registers for Econ 101 for the fall semester…,” the tweeted. 

On Sunday, Biden tweeted that “companies running gas stations” should take note that “this is a time of war and global peril.”

“My message to the companies running gas stations and setting prices at the pump is simple: this is a time of war and global peril,” Biden tweeted on Saturday. “Bring down the price you are charging at the pump to reflect the cost you’re paying for the product. And do it now.”

Biden’s tweet comes as gas prices are averaging at $4.812 nationwide, which is up 5 cents from one month ago. In some states, however, prices are much higher.

In California, the average price per gallon of gas is $6.244 and in Illinois, it’s $5.325.

Biden has attempted to deflect blame for the increase in gas prices to Russian President Vladimir Putin, dubbing it the “Putin’s Price Hike,” a term used repeatedly by the White House, despite his campaign promise to always take responsibility and not blame others.

The call for action from Biden follows a failed proposal from the Oval Office to implement a 90-day gas tax holiday, which was dismissed by even Democratic lawmakers as outlandish.

During the presidential campaign, Biden vowed to sacrifice the energy boom, low prices, and even jobs for the sake of his green agenda. 

In the December 2019 Democratic debate, moderator Tim Alberta asked: “Three consecutive American presidents have enjoyed stints of explosive economic growth due to a boom in oil and natural gas production. As president, would you be willing to sacrifice some of that growth, even knowing potentially that it could displace thousands, maybe hundreds of thousands of blue-collar workers in the interest of transitioning to that greener economy?”

“The answer is yes,” the former vice president said.

Biden canceled the Keystone XL pipeline, which would have delivered about 870,000 barrels of oil per day from Canada to Texas refineries, and “paused” oil and gas leases on federal lands during his first hours in office. Texas Gov. Greg Abbott recently warned of a discretionary Environmental Protection Agency rule that, if imposed, would raise gas prices even further. 

During the presidential campaign, Biden vowed to sacrifice the energy boom, low prices, and even jobs for the sake of his green agenda. 

In the December 2019 Democratic debate, moderator Tim Alberta asked: “Three consecutive American presidents have enjoyed stints of explosive economic growth due to a boom in oil and natural gas production. As president, would you be willing to sacrifice some of that growth, even knowing potentially that it could displace thousands, maybe hundreds of thousands of blue-collar workers in the interest of transitioning to that greener economy?”

“The answer is yes,” the former vice president said.

Biden canceled the Keystone XL pipeline, which would have delivered about 870,000 barrels of oil per day from Canada to Texas refineries, and “paused” oil and gas leases on federal lands during his first hours in office. Texas Gov. Greg Abbott recently warned of a discretionary Environmental Protection Agency rule that, if imposed, would raise gas prices even further. 

Biden has veered between embracing high gas prices as the price of an “incredible transition” to a “green” economy, to blaming Vladimir Putin, to blaming energy producers, and now blaming gas station owners, who only make a few cents per gallon of gas they sell.

Sun, 03 Jul 2022 18:25:00 -0500 en-US text/html
Killexams : Talos Energy, Inc. (TALO) CEO Timothy Duncan on Q2 2022 Results - Earnings Call Transcript

Talos Energy, Inc. (NYSE:TALO) Q2 2022 Earnings Conference Call August 5, 2022 10:00 AM ET

Company Participants

Sergio Maiworm - VP, Finance, IR & Treasurer

Timothy Duncan - Founder, President, CEO & Director

Shannon Young - EVP & CFO

Robin Fielder - EVP, Low Carbon Strategy & Chief Sustainability Officer

Conference Call Participants

Subhasish Chandra - The Benchmark Company

Cameron Lochridge - Stephens Inc.

Michael Scialla - Stifel, Nicolaus & Company


Good morning, and welcome to the Talos Energy Second Quarter 2020 Earnings Call. [Operator Instructions].

I would now like to turn the conference over to Sergio Maiworm. Please go ahead.

Sergio Maiworm

Thank you, operator. Good morning, everyone, and welcome to our second quarter 2022 earnings conference call. Joining me today to discuss our results are Tim Duncan, President and Chief Executive Officer; Shane Young, Executive Vice President and Chief Financial Officer; and Robin Fielder, Executive Vice President, Low Carbon Strategy and Chief Sustainability Officer.

Before we get started, I'd like to take this opportunity to remind you that our remarks today will include forward-looking statements. actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause these results to differ materially are set forth in yesterday's press release and in our Form 10-Q for the quarter ending June 30, 2022, filed with the SEC yesterday.

Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. During this call, we may present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures was included in yesterday's earnings press release, which was filed with the SEC and which is also available on our website at

And now I'd like to turn the call over to Tim.

Timothy Duncan

Thank you, Sergio. As I mentioned in our earnings release, it was a great quarter for our company that included record revenues, strong margins and significant free cash flow facilitating rapid debt repayment.

This quarter, we achieved our lowest leverage multiple and our highest liquidity in the company's history, positioning Talos well for the second half of the year that will focus on our deepwater drilling campaign, continued growth in our CCS business and ongoing debt reduction. All of these developments are continuing to strengthen the company for sustainable and profitable growth, enhancing a solid credit profile and positioning the company to build long-term shareholder value.

I'll first address quarterly results and accurate updates from our Upstream business. We delivered a record quarter, which included over $500 million in revenues, nearly 80% adjusted EBITDA margins before adjusting for financial hedges and over a $130 million of free cash flow after hedges and before changes in working capital.

Shane will provide more details on our financial performance during the quarter in his prepared remarks. But I want to recognize our team for their strong cost control efforts and a diligent focus on ongoing operations that generated strong earnings despite an inflationary macro environment.

As we have discussed in previous calls and in our Analyst Day, our intention is to use constructive commodity environment to accelerate higher impact drilling opportunities in our portfolio starting in the second half of 2022 and throughout 2023. These opportunities exemplify how we utilize our core skill set and organic growth strategy to leverage our existing acreage set, proprietary seismic reprocessing expertise and well-positioned operating infrastructure to unlock meaningful additional resources with attractive economic returns, even when accounting for the risk of an occasional dry hole along the way.

The projects we are undertaking later this year and early next year are both operated and non-operated opportunities that we expect will provide reserve and production growth over the next 12 to 18 months. On the operating front, we expect to take possession of our contracted Seadrill Sevan Louisiana deepwater drilling rig in the coming days and launching our open water drilling campaign, which will run through the remainder of 2022 and into 2023.

As previously announced, we extended the rig contract to take additional slots, allowing us to perform 6 straight operations in which we plan to target at least 4 prospects totaling 65 million to a 100 million barrels equivalent of gross resource potential. With an individual potential well rates between 5,000 and 15,000 barrels equivalent a day gross. All of those were in proximity to our owned and operated facilities, which will help accelerate first oil and deliver attractive economics on those projects.

We have recently brought in industry partners into our Lime Rock, Venice and Rigolets prospects, allowing us to reach our target working interest of 60% on each of these wells. This has multiple benefits for us. First, it provides industry validation on our drilling program. Second, we have a better diversity of our capital allocation and concentration risk. And third, it allows us to further monetize the value of our physical infrastructure by receiving a production handling fee on the production volumes owned by our partners that will flow through our facilities.

We're excited to begin this campaign and expect these projects to provide a solid foundation for the future as we expect to bring successful wells into production over the coming 12 to 18 months. Separately, we are also participating in a number of non-operated projects. Most notably, we expect to spud the Puma West appraisal well early in the fourth quarter this year with our partners, BP and Chevron. That well has been permitted to a depth of 26,000 feet and will be drilled with the Diamond Ocean BlackHornet rig following the completion of other rig operations BP is currently undertaking.

We are also actively working to finalize a 5-block exploration unit in the Green Canyon and Walker Ridge areas with another large Gulf of Mexico operator that will lead to a high-impact exploration well in 2023, targeting both subsalt myosin and Wilcox targets across nearly a 30,000-acre unit. More details on that opportunity will be provided in due course, but we are proud of our track record of pulling our acreage together with some of the most sophisticated Gulf of Mexico explorers and producers to better execute our drilling inventory, and we hope to announce additional partnerships in the months to come.

In Mexico, at our Zama project, we're continuing to work with both our Block 7 partners as well as Pemex to finalize a field development plan ahead of the March 2023 submission deadline. Simultaneously, we are also discussing the formation of an integrated project team or IPT, which is common in international projects and would provide a variety of roles in the project for all of the partners and enhanced governance rights for all the parties.

In our opinion, that will significantly benefit the Zama project going forward. While the project has experienced significant delays during the unitization discussions. we're encouraged that the project is advancing towards the submission of the final field development plan. The approval of the FTP is the last major hurdle before final investment decision can be taken on this project by all the partners.

As a reminder, the contingent resource of Zama as prepared by an independent third-party engineering report was over 700 million barrels equivalent gross. So progress here still represents meaningful value for Talos' shareholders as we continue to move toward FID. Once the project distinction, we would expect to be able to book proved reserves that in this case, would represent multiple years of reserve replacement, and we would have more certainty around final development time lines, financing and ultimately, first oil.

Each step we were able to achieve in the coming months is important as we move closer to realizing significant value from this important discovery. Navigating Zama has not been easy to say the least, but I would like to reiterate that we are doing everything we can to maximize the value of this discovery for our shareholders.

Finally, on the upstream front, we have begun the process of mobilizing our HP-1 facility for the regulatory required dry dock maintenance to satisfy Coast Guard requirements, a process that we expect will defer approximately 6,000 to 9,000 barrels equivalent a day net in the third quarter, but at the same time, ensuring long-term high uptime in our tornado and Phoenix deals. This downtime has already been included in our full year 2022 guidance, that is now expected to be isolated in the third quarter instead of being spread across the second and third quarters as we had initially expected. In the end, the delay has allowed us to take advantage of a strong commodity prices over the full second quarter.

Moving into our carbon capture business. I want to applaud the Talos Low Carbon Solutions team for delivering an important transaction in May that brought Chevron into our Bayou Bend CCS joint venture, joining us alongside Carbonvert. Financial terms for the transactions delivered upfront cash as well as a material capital cost payments by Chevron that we'll expect to cover all the expenses for the project through the project's FID, and that capital is being put to good use as we finalize plans to drill our stratigraphic well test in the fourth quarter.

The strat well will allow us to collect rock property data that will provide critical information for our Class 6 permit for permanent CO2 sequestration. We are excited to have a major partner like Chevron and Bayou Bend. Not only do they provide critical sequestration experience and an unquestioned balance sheet to the project, we believe it's also another strong endorsement of the solid platform we are building as one of the CCS leaders in the United States.

Our overall portfolio today includes close to 1 billion metric tons of storage capacity across our 4 project areas in Texas and Louisiana, all operated by Talos, all with strong partners and all in key industrial regions, where we are aggressively working to secure long-term anchor customers. We're very proud of our rapid success in this new business unit, and we're working hard to enhance our leadership by continuing to advance these projects as well as expanding our storage footprint in these core areas in the future.

Lastly, I'll also quickly address accurate developments in Washington with the proposed Inflation Reduction Act of 2022, but I'll not comment on any political views. While we recognize this bill may be subject to change and acknowledge the remaining process for potential passage into law, we think it's important to highlight the potential impacts for Talos if this bill were to pass in its current form. As no other company in the small and medium cap E&P space in the U.S. has both the level of exposure to offshore Gulf of Mexico and to carbon capture and sequestration, and both of these areas are key focus areas of this proposed bill.

On the upstream front, if signed into law, as is initially proposed, the Inflation Reduction Act would reinstate Lease Sale 257 from last November, in which we were one of the most active bidders and want deepwater blocks. This bill would also ensure future lease sales in a prescriptive manner and remove more the regulatory uncertainty.

On the carbon capture side, the bill proposes an increase of the 45Q credit from $50 a ton to $85 a ton and introduces direct pay mechanisms, both of which we believe are key attractors for potential industrial partners around our projects and moving towards long-term carbon sequestration solutions. We believe this bill will be meaningful for Talos in both of our business lines and we're closely monitoring future developments.

With those key updates, I'll turn it over to Shane to address some of the financial details of the quarter.

Shannon Young

Thank you, Tim, and thank you, everybody, for joining our second quarter earnings call this morning. I will focus my remarks today on the following 3 areas: first, our strong financial results in the second quarter; second, the strength of our balance sheet, which we believe positions us with significant financial as well as strategic flexibility for the future. And finally, I'll provide some insights into the outlook for the third quarter as well as the balance of the year.

During the second quarter, we generated revenues of $519 million from production of 65,400 barrels of oil equivalent per day. Realized prices were approximately a $108 per barrel and $8 per Mcf before the impact of financial hedges. This represents the company's highest ever quarterly revenue over our 10-year history. On the cost front, our lease operating expenses were $88 million, equating to approximately $14.70 per barrel equivalent, inclusive of $11.5 million of HP-1 dry dock preparatory costs and approximately $12.80 per barrel equivalent, excluding those nonrecurring costs.

Cash G&A for the quarter was $18 million or approximately $3 per barrel equivalent. Despite broad inflationary pressures, our continued focus on efficiency and cost controls have kept our per barrel expenses in check year-to-date. For the second quarter, we generated adjusted EBITDA of $251 million. Before the impact of cash settlements on financial hedges, adjusted EBITDA was $411 million for the quarter. These equate to EBITDA margins of 70% and 79% or $42 and $69 per barrel equivalent, respectively. Net income for the quarter was a $195 million or $2.33 per diluted share.

Adjusted net income for the quarter was a $101 million or $1.20 per diluted share. Capital spending during the second quarter totaled $86 million. Free cash flow before changes in working capital was a $134 million, resulting in free cash flow of $226 million for the first half of 2022, allowing for significant deleveraging year-to-date.

Turning to our balance sheet strength. With the strong financial performance during the quarter, Talos repaid $146 million of debt between our credit facility borrowings and the retirement of the final $6 million of our 7.5% notes, a legacy of the 2018 Stone merger. As of June 30, we reached a leverage multiple of 1x and available liquidity of over $700 million. Both of these are best in the company's history.

Cumulatively, over the past 15 months, we have reduced our net debt by nearly $350 million or approximately $4.20 per share of net debt reduction. Over the same period, commodity prices have increased significantly. The combination of these 2 factors has significantly increased the intrinsic value of Talos' shares. We expect to continue reducing our debt levels during the remainder of 2022, even with our capital program being significantly weighted towards the second half of the year. We are pleased with the free cash flow generation of the business in accurate quarters and expect to accelerate those strong trends into 2023 as our legacy hedges roll off.

It is important to note that while strong commodity prices have been a positive tailwind, the $350 million of net debt reduction since the first quarter of 2021 and associated improvement in our leverage ratios were based on average unhedged prices in the mid-70s per barrel in the high 4s per Mcf. Even more, including the impact of our legacy hedges, those blended realized prices to tallows have averaged in the mid-50s per barrel in the mid-3s per Mcf. Therefore, we are excited about the long-term cash flow profile of the business on mid-cycle pricing and see our exposure to higher commodity prices increasing in the coming quarters as our weighted average pricing increases.

Lastly, I'll address our financial outlook for the remainder of the year. For the third quarter, we expect production to be reduced by between 6,000 and 9,000 barrels of oil equivalent per day as a result of the scheduled HP-1 dry-dock process that has just begun.

Additionally, we expect 4,000 to 5,000 barrels of oil equivalent per day impact from third-party midstream downtime at Pompano and other miscellaneous planned downtime activities during the quarter. On the cost side, the HP-1 dry dock should have a similar impact on lease operating expense in the third quarter as we experienced in the second quarter. For the full year, we expect capital expenditures to be within our guidance range, albeit near the high end due to further inflationary pressures and expectations for nonoperated capital project timing. The balance of capital spend for the year should be split roughly evenly over the third and fourth quarters.

With that, I will hand the call back over to Tim.

Timothy Duncan

Thank you, Shane. I want to reiterate my admiration for our team that works tirelessly to continuously help Talos create significant value for our shareholders. We've done a fantastic job controlling costs in an inflationary environment, allowing us to aggressively pay down debt, leading to our lowest leverage metric and record levels of liquidity.

We have a series of drilling and development catalysts that we are ready to begin working on this month and a growing CCS business that recently attracted a material partner. I truly believe the tremendous value we have created and are continuing to create for our shareholders is not currently being recognized by the market in our stock. But I'm fully convinced that it will be soon.

We will not falter in that pursuit. We will continue to execute on our operational and strategic fronts. Now more than ever, we are excited about the momentum and the direction of the company as we move into the second half of the year.

With that operator, we'll open up the line for Q&A.

Question-and-Answer Session


[Operator Instructions]. Our first question will come from Subash Chandra with the Benchmark Company.

Subhasish Chandra

So Tim, I have to ask the EnVen Reuters story. What are your comments there?

Timothy Duncan

I think you can go back and we can look at previous calls, and I think we get a question about M&A almost every call, and I think we have a fairly standard response and be the standard response here. And it's a big part of our inorganic strategy. We're always in the market. We're always looking. We've talked about looking at deals inside the Gulf of Mexico, which is where we start because we think we can affect synergies. We're familiar with a lot of the assets. We've also talked about even the potential of being outside the basin if we think we can transfer our skill sets.

I think the biggest thing we want to look for is that it's accretive and that can mean a lot of different things. It's accretive in terms of how we use sources and uses. It's accretive in terms of the assets and synergies. Is there upside? Certainly, how do we buy it? Is it accretive to free cash flow generation. So there's a lot of boxes we want to check when we're looking at deals. We're surprised at the robust market. I think there's more things on the market as we look at where we are right now than we thought we might be at the beginning of the year. So we're excited about how hard we're working on that part of our business.

Now I'm not going to comment on any specific deal. I think that's -- it's going to be tough to bake me into that. But I would just tell you that we're focused on everything we're doing there, and we're focused on a lot of opportunities.

Subhasish Chandra

So the IRA or whatever Inflation Reduction Act, so obviously there's some good elements in there. The one thing I would sort of want to get your thoughts on was so Congress can override a federal judge on the lease sale -- of reinstating the lease sale?

Timothy Duncan

Yes. Look, I mean, I think there's -- there are particularities in this. And that I think we're all trying to understand a little bit. I mean that's a question that I have as well. We need to see how that process plays out. But I think the broader commentary on this thing is -- and Robin is here, I'm going to let her talk of 45Q because I think we're talking about this piece of legislation, if you will, and the reconciliation bill.

And as if it goes through in its current form, I think it really does, and I said this in my prepared remarks, I think it really does impact us more than any E&P sector, carbon company that I can think of, certainly maybe with the majors as well because we rely on and we participate in lease sales.

And I would tell you, in that particular sale, and look, I hear your question, we're going to find out, figure out what the answer is. But not only were we one of the most active bidders, I can tell you couple of those prospects that we bid on it immediately into our portfolio. And so -- and then certainly future lease sales. That's been something that I think people have seen as a risk factor and it will be nice to take that risk factor off the table and have predictable lease sales again.

So certainly, that part of the legislation is extremely interesting to us. And then in 45Q, we're seeing advancements in Robin. you want to have a couple of comments on those advancements.

Robin Fielder

Sure. There's certainly a lot of positive provisions in this proposed act that would both extend and enhance the existing 45Q IRS tax code and allow those taxpayers claiming that credit for CO2 sequestration also have a direct pay option. So we think this is a very encouraging development, not just for some of the projects that we may try to claim the 45Q, but for many of our large industrial partners or customer base who are looking to see this enhancement in order to move forward on their projects. And so we'll continue to work with all of our stakeholders along the Gulf Coast and in other regions as we try to put together these low-cost decarbonization projects.

Subhasish Chandra

Yes, I didn't catch the direct pay. That's awesome. And then just finally, I guess on the -- as we approach January and the refi period, how are you thinking about it? I mean, my quotes might be a bit stale, but it looks like the bonds are sub at this point. I don't want to jinx it, but how are you thinking about the path to refining or repaying.

Sergio Maiworm

Yes, look, I'll start. I'm going to hand it over to Shane on this itself. Shane will give you some thoughts on the strategy. But obviously, it starts with getting your leverage that down to something that the market really is attracted with. And so Sam, why don't you talk about how your thoughts on the refi?

Shannon Young

Yes. Look, our goal for 2022, I think you've seen it consistently both in the first quarter and the second quarter, and I think you'll continue to see for the rest of the year is to be in a position as we exit this year to deliver the best credit profile that we can deliver to the marketplace.

I think that's sort of our job number one, and that will put us in the best position to effect a refinancing when the market is right. I think the thing we don't control is the market itself, but I think your guys and others out there would tell us that it's been a tough market over the last quarter or so. And so we need that to firm back up. And look, there are cycles in the capital markets and the 2020 was a particularly rough time. But when the market window opened up, we went ahead and took advantage of it. And so look, we're going to -- fortunately, we're going to have a lot more runway this time to look at that. And in 2023, we hope to address the existing note.

Yes. We think -- you never know with the credit agencies, and we try to visit with them from time to time, certainly let them know about our progress. But I think if you look at just the additional level of debt repayments and where we are on a leverage that, and frankly, as Shane mentioned in his remarks, over $4 a share on debt repayments and auto liquidity equity owner. I think we put ourselves in a nice spot. The cost of that debt was fairly expensive, as you mentioned, it's trading lower. We'd like to push it even lower.

And so we think the decisions we made in terms of what our goals were for the year with respect to be prepared to refinance those notes. We're all the right calls, and I think the teams executed on [indiscernible].


Our next question will come from Cameron Lochridge with Stephens.

Cameron Lochridge

So I wanted to start on carbon capture. Obviously, a lot of exciting developments, which we outlined in the Inflation Reduction Act. You talked about the 45Q, the direct pay. I was wondering if you guys had any indication on whether or not there's any sort of talk in Washington around state premise on the Class 6 permitting? I know that's something that is -- the permitting process is the longest lead item, right? And so any update there that you can share would be helpful.

Robin Fielder

All right, Cameron, thanks for the question. So -- you're right. Both the state of Texas and Louisiana are seeking primacy there. Right now, that jurisdiction for these Class 6 wells and that those associated permits resides with the EPA. So it's with that agency and both the state of Louisiana and Texas have been in discussion with EPA about that potential.

And even as we prepare to file our very first Class 6 permit, we are talking with all the associated agencies as far as what's necessary and what sort of documentation and what sort of supplemental data that we want to make sure we have in place before we hit Summit to make sure we've got a very robust application form that is easy to get through, and we can help accelerate that time line.

So we're highly supportive of the states and then being able to leverage their vast resources when it comes to knowledge of the subsurface and particularly an injection and disposal wells. And so we're going to continue to advocate for that and work with all the agencies as we progress these projects.

Timothy Duncan

Yes. I think I would add and just -- I think Robin made a great remark there. In the long term, I think putting this into the state's hands makes sense, and I think will be the most efficient process.

But I do think in the near term, it's really about the application you put together and the data in that application. So again, the team is working to go execute on the first stratigraphic test in the area where we're going to collect a lot of rock property [indiscernible] oil and gas guy to go put a whole pour in a wet sand it's not -- it's against my better nature, but that's the data we need to collect.

So I think it's going to be interesting. So we're focused on the robustness of our application. We think if folks have delays in their classics permit, it may be about the robustness of the application. And that's the best we can do right now while the politics works itself out. But yes, in the long run, running this to the state, I think, would be a benefit.

Cameron Lochridge

That's helpful. I guess as my follow-up, switching to the balance sheet and cash flow. I mean, the leverage reduction has been rapid and robust over the past several quarters. I mean you're now -- you're tracking to end the year below the 1 to 1.5x target. In the past, we've talked about shareholder returns and once that leverage comes down, potentially implementing some form of dividend or buyback program. Any update there on what you can share, just discussions you're having with the Board and anything on that in would be helpful.

Timothy Duncan

Yes. Look, I'll start and Shane may weigh in as well. I mean, obviously, we think our stock is way undervalued and so you can think about what's the best way to use free cash flow and when you have a lot of it. But I -- we talked about it all the time. But I would continue to go back and say the cost of our debt too expensive. And we really think that we think about the long term, driving that cost down as a first priority leading to that next priority of returning capital back to shareholders is the way we've been continuing to think about it.

Yes. Look, I think that's right. We've -- the game plan has been really since last year is to drive the leverage that down. Pre-pandemic we sort of thought 1 to 1.5x is a very comfortable place to be. And frankly, it would serve us well your client already started there as we went into the pandemic. And coming out of it, we wanted to get back into that range. But I think as we've thought about it, we've recalibrated that to say it's probably onetime or less now and then sort of the new world order.

So we're there or we're touching on that. That's great, and we intend to kind of stay in that zone. But I think the order of operations has been get the leverage that into a great place and really have it as a position of strength, get the notes refinanced and then focus on shareholder return strategies.


[Operator Instructions]. Our next question will come from Michael Scialla with Stifel.

Michael Scialla

I want to see if we could get a little help on some of the numbers, Shane, you mentioned the impact of the downtime you're anticipating for third quarter. So we just take those numbers and subtract from kind of the second quarter level of 65,000 BOE per day to get a third quarter number and then add them back for the fourth quarter. So you're back to the 65% in the fourth quarter. Is that the best way to look at it at this point?

Timothy Duncan

Look, that's a good starting point. I mean the second quarter was relatively clean. Obviously, we had some things in the first quarter that were disrupted, the second quarter, relatively clean. And then again, those are the known downtimes that we have coming up. The big variable as always is the storm season. And so again, I'm always -- the third quarter is always tricky. And we sort of bake in into our own guidance, some views on how the overall season will look and sort of spread that out throughout and look, sometimes, we're positively surprised in other times, like 2 years ago. I mean it's just -- you end up with some negative surprises on that.

So -- but I think as a starting point, that's a good way to get started thinking about it, and then you might have a view on hurricane season that you layer on top of that as well.

Sergio Maiworm

Yes. And keeping in mind that we have to go look at the data, but I just memory would serve me that I think we've had some hurricane downtime. And again, maybe not material, but we've had it in each of the last several fourth quarters because it tends to be kind of the trailing season. So just again, Mike, as you do your modelling keep that in mind.

Michael Scialla

And then I guess on the OpEx side, it sounds like third quarter is going to be similar to second quarter and then that would step down in the fourth quarter. Is that right?

Timothy Duncan

Yes. Look, I think we'll have exactly like you said, we'll have a similar level of HP-1 dry dock maintenance expenditure that's going to flow through in the third quarter based on our outlook. That obviously goes away after that. So I think you're right. That's probably a pretty constructive way of thinking about the next 2 quarters.

And look, typically, we do some of our repairs and maintenance. You're seeing a little more higher run rate, for example, on P&A and the CapEx side in the second quarter because we typically have our best weather. So we're going to do a lot of work when the sun shines, if you will. And so some of that tails off as you get late to the third and fourth quarters as well.

Michael Scialla

Okay. And then I want to see if you talk at all about the exploration unit you're looking to form the Walker Ridge and Green Canyon area. Do you know what your working interest would be there yet? And is this a prospect Talos that you guys have generated or has the larger partners done that and maybe timing of a well or do you need more size of there? Anything more you could say on that?

Timothy Duncan

Well, look, there's not -- I was hoping to get that one kind of right across the line by the time we get to the earnings call, Michael, and I just didn't quite do it. I would tell you it's a large player. If you go to the Analyst Day slide, you port through all of them, you might find a graphic on it. It's a prospect that we've worked on for several years, and we like it. It covers a large area. We needed to kind of tie up multiple blocks, and we did that with another large operator in the Gulf of Mexico. So we'll -- as we roll out more decks and we go to more conferences and we get those landed up, we'll talk about it.

But it brings up a different theme really of how you monetize the value of a large acreage position, which we've talked about and you guys know that we have, and we talked about that in the Analyst Day as well. And so it's not about a single block. It's not about a single 2 blocks. Even if you look at the Puma West area, what makes that interesting area is we aggregated BP and Chevron into 3 or 4 different blocks. And then we were lucky enough to have a discovery and now we're appraising that discovery.

The question then becomes, what can you do in other areas where you have a portfolio of [indiscernible] prospects, for example, can we have those in different areas. And some of those we have on our own, some of those we bid with joint parties, and sometimes you have neighboring blocks that have other operators. How do you pull your acreage into a position that you could execute on its value and create these catalysts. And so that's going to be an example of one.

Again, as we get more details, we'll roll that out. Hopefully, we have more examples of that later in the year or early next year. And so you're setting yourself up not only for the program we want to execute with the operated rigs that we have, but the program we're trying to execute in '23 and '24. And that's what makes our basin different than maybe some of the onshore basins where you're just adding a rig, subtracting a rig, you're just prosecuting on the acreage that you have. We're prosecuting against the entire basin, if you will, and how do you figure out how to pull together the best ideas over a long period of time. And then if those work, ultimately, that's how you maintain a sustainable business.

So these smaller little JVs are important because they help set up what we're trying to accomplish in the future. So we'll give more details. You'll see it on future decks, but just kind of letting the market understand that we're focused on, it was really the main point of adding that to the earnings release and to the script.


Our next question will be a follow-up from Cameron Lochridge with Stephens.

Cameron Lochridge

I'm back. You can't get rid of me. I just wanted to be clear on something. I know in the release, we said that the HP1 dry dock as well as some of the other downtime, which factored into prior guidance of 60,000 to 64,000 barrels a day for the year. I know hurricanes no one can predict that, right? But barring any like absolutely crazy hurricane season. Is that still a good range, 60,000 to 64,000 for the year?

Timothy Duncan

Yes. Look, we didn't make any changes to our guidance, so that would obviously imply that it is. And you look at the first half of the year and even with some pretty impactful downtime on a third-party pipeline north of the Phoenix field in the first quarter, I think we're on the -- obviously averaging somewhere around for the year, 64% or so.

Again, we're going to have real downtime in the third quarter. We've known that it's baked in and then let's see how things come back in the fourth quarter. But we didn't feel like we needed to change the guidance today, and so we didn't. I think the team has done a heck of a job on cost control on that side of the guidance. And then a lot of times, offshore and the capital guidance is a function of timing on some of these big rigs, and I think we've got better clarity on timing. And then obviously, on the CCS side, we've got some reimbursements from Chevron.

So we've kept guidance the same and I think that implied that kind of answers the question.


This concludes our question and answer session. I'd like to turn the conference back over to Tim Duncan for any closing remarks.

Timothy Duncan

Thanks for turning it back, and we appreciate everybody listening into the call. I mean when we go back and look at what we were trying to accomplish for the year, we talked about -- we were comfortable with -- we were going to generate a significant amount of free cash flow. I think the team did a great job in the second quarter, taking advantage of the price environment. Our operating costs were lower than anticipated. Our CapEx cost for the quarter was lower than anticipated and it allowed us to really accelerate some debt repayments.

So we're happy about that. We're excited about the catalysts we've put into the system, and we're going to drill a lot of wells in the next 12 months, and we're excited to see about those results and where that leads us as we get into kind of the second half of '23 as we get into '24, and we have less hedge volumes. And so that opens up quite a bit of price upside for us. We're thrilled with what we're doing on the CCS side. I mean to bring in a major partner like Chevron, who we think is going to really advocate for what we're trying to do in that particular area gets us excited about how we're going to develop the other areas in our portfolio. So the teams worked hard. We think we're highly undervalued.

This is a company that we think has got a lot of momentum, and we hope everybody continues to support us and pay attention, and we look forward to getting on the road and seeing and visiting with most of you. So thanks for attending the call, and we'll talk to you next quarter.


The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.

Fri, 05 Aug 2022 09:15:00 -0500 en text/html
Killexams : Personality and experience separate Democrats in secretary of the state race

Two young voters emerged Thursday from behind the front door of a home on Thompson Road in West Hartford to find an extremely enthusiastic Democrat seeking to become Connecticut’s top elections official.

“So first of all, I love your flag,” said Maritza Bond, New Haven’s health director and a candidate for secretary of the state, referring to the blue Central Connecticut State University flag waving out front. “My boys go to Central.”

On the same day in Norwalk, Mercyn Fernandez, owner of a new Ecuadorian bakery on River Street in Norwalk, posed for selfies with the other Democrat hoping to win the same position. For state Rep. Stephanie Thomas, D-Norwalk, the endorsed Democrat, Thursday’s conversation and photos across a glass covered case of fresh pastries was hometown cooking.

As the two Democrats work to lock in their support in the final days before the primary Tuesday, few, if any, policy differences separate them as they both espouse strong voter access enhancements and creative business services; the office is the state’s business registry in addition to overseeing elections.

The race between Bond, 45, of New Haven, and Thomas, 53, of Norwalk is about who can turn out more voters to the polls during a sleepy August primary. And as is clear on the campaign trail, the two candidates show very different personalities.

Bond, director of the public health department in New Haven, walks fast and speaks quickly with a nonstop flow of ideas. Thomas, owner of a consulting business for nonprofit organizations and a first-term state Representative, speaks softly, in more measured tones and exudes calm composure.

One of the two candidates will make history as the first woman of color nominated by a major party in Connecticut for secretary of the state. It is believed that Bond, whose family is from Puerto Rico, would be the first Democratic Party nominee of Hispanic origin for any statewide constitutional office.

The winner will face the winner of a Republican primary that pits state Rep. Terrie Wood, R-Darien, against Dominic Rapini of Branford, the endorsed Republican.

Bond sought out reliable primary voters and newly registered Democrats in West Hartford, a party stronghold whose delegation was key to Thomas winning the nomination by surprise in a May convention in Hartford. The young woman at the door tells Bond her dad is the head women’s soccer coach at Central Connecticut State, where Bond’s sons, 24 and 19, are enrolled.

“I kicked off my campaign with my two young adult boys, because you guys are the future generation,” said Bond, dressed in a Navy-blue dress and hot pink sneakers. “I want to be sure that we continue to really protect our democracy by increasing voter engagement so that we can have better turnout.”

The competition for the open seat for statewide constitutional office comes at a consequential time for elections in Connecticut and beyond following unprecedented attempts to dispute the results of the 2020 presidential election.

Thomas and Bond are both insider-outsiders. While they both hold government positions, neither has a long history in politics and neither was well known to the party establishment before this election. Two much higher-profile Democrats who lost to Thomas at the convention chose not to run in the primary.

As the party endorsed candidate, Thomas has the benefit of appearing on the ballot on “Row A” above Bond, who has come up with the tagline “Row B for Bond.” Erick Russell, of New Haven, the Democratic endorsed candidate for state treasurer, joined her on the tour of small businesses.

Thomas asked Fernandez whether she and her husband encountered any difficulties starting their business, Sabor Ambateno Bakery. Before Fernandez could answer, her daughter chimed in to say it was a cumbersome process.

“Before I opened my business, I worked for a small business where I worked my way up from intern to president,” Thomas said. “So, I just have a good sense of how businesses need help.”

A sharply negative ad

The battle between Bond and Thomas had largely been cordial until accurate days, when Bond released an ad that targets Thomas over missing key votes for labor — ratifying the 3-year state employees’ contract — and for an election reform.

“It’s a factual video. The voters have the right to know the truth about individuals’ positions,” Bond said Thursday, defending the ad.

Bond has earned the support of many labor unions including the Connecticut AFL-CIO, Connecticut Employees Union Independent, UAW Region 9A, A&R Employees Union and UNITE HERE Local 34.

Responding to the attack in Norwalk Thursday, Thomas said “I'm disappointed that for a job based on integrity, and fighting misinformation, that a fellow Democrat would put out a blatantly misleading ad.”

Thomas has received the endorsement of many sitting state legislators and Democratic leadership, including Senate Majority Leader Bob Duff who made an appearance during her tour of Norwalk businesses Thursday.

“Stephanie is a hard worker, and she’s smart, capable and cares so much about our community,” Duff said.

Selling their experience

With Thomas and Bond agreeing on many issues including early voting and expanded access to mail-in voting in Connecticut, they are highlighting their professional backgrounds as the main differentiator between them.

“My distinct experience is government executive management, which she does not have,” Bond said Thursday, adding she manages approximately 100 employees in her current role and oversees a budget similar in size to the Secretary of State’s Office.

Bond, whose campaign has spotlighted her response to COVID as New Haven’s top health official, previously worked as Bridgeport’s health director and as the director of the Eastern Connecticut Area Health Education Center.

“She has the strongest skills, having served for over 20 years, if I’m not wrong, as an administrator of a large department with tons of responsibility, large budgets, and her personal commitment to democracy is really important to me,” said Evelyn Mantilla, 59, a former state Representative from Hartford who now lives in West Hartord and joined Bond Thursday.

Thomas highlighted her experience as a business owner and in the state legislature, where she serves as vice chair of the Government Administration and Elections Committee, co-sponsoring legislation to expand absentee voting and implement automatic voter registration. “I’ve been a longtime advocate for voting issues,” she said.

“I tell people all the time, and I said it at the convention in my speech, if you want to see how I will serve as secretary of the state, look at how I run my campaign.”

Former Secretary of the State Denise Merrill announced more than a year before the primary she would not seek a fourth term, and later resigned, citing her husband’s health. Merrill has endorsed Thomas in the race.

Fri, 05 Aug 2022 21:03:00 -0500 en-US text/html
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