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Affecting the supply is continued building of new rigs by Transocean, Atwood, SeaDrill, and others. Transocean is trying to stay to building only when there's a contract ready for a newbuild, but not all companies are doing so. Atwood and SeaDrill, for instance, build on "spec" -- short for speculation -- which means they build and then try to get a contract lined up (usually within the last year before delivery). If demand slips sharply enough, then those spec newbuilds are delivered (and have to be paid for) and then are idled. And if demand slips enough, then the portions of the current fleet become idled, as well. That's the bust part of the cycle.

The RIG SVP response seems to contradict this. From what I could gather, he was suggesting when
the market slows, the UDW drilling assets then include shallower waters i.e. mid-water and deep water
in their operating space. The more capable and newer UDW rigs essentially squeeze out the
older, "normal" drilling assets that work in that space.
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