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DryShips' CEO Discusses Q2 2012 Results - Earnings Call Transcript

Slide eight; on this slide we present our tanker CapEx. On the back of a full vessel financing package we executed in the first quarter with ABN AMRO and the Import-Export Bank of Korea, we're pleased to announce another ECA backed financing package for three of our tankers. We signed a term sheet with ABN AMRO, Korea Development Bank and Korea Trade Insurance Corporation or KSURE for $107.7 million senior secured term loan facility to finance the tankers Alicante, Mareta and Bordeira.

This financing has very competitive pricing in light of today’s solid banking market and has a six year maturity and 12 year repayment profile. As you can see, our tanker newbuilding program is nearly fully financed and we signed both our commercial lending partners and especially our new found friends Korean ECA’s who have been invaluable in this process.

Slide nine. This slide details a secured debt profile of the drybulk and tanker segments as of June 30, 2012. On a related topic, I want to reconfirm that currently we’re in technical breach of some of our drybulk loans. Most specifically, we have accumulated shortfalls on our VMC required ratios amounting to approximately $145 million at the end of June of 2012. We are in discussions with the effective banks to remediate above breaches by way of providing additional collateral whether in the form of cash or shares. So we’ll keep you updated in this respect.

This marks the end of the financial section; I'll now turn the call over to Pankaj for the company update.

Pankaj Khanna

Good morning, turning to slide 11. We are pleased to report the signing of letters of intent with three major oil companies for three of our drillships including two of our Newbuilding. The additional backlog from these three contracts is approximately $2.2 billion over three years. Assuming these contracts materialize, our total backlog was nearly double from $2.6 billion to $4.8 billion and will provide Ocean Rig with substantial cash flow visibility and growth.

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