Having said that, the adjusted EBITDA of $144 million does not reflect the full earnings potential of our offshore fleet as the mobilization activity and downtime affected accounting earnings. For the remainder of this presentation, we will be primarily focusing on our shipping segments operations. For additional information on drilling segment please refer to Ocean Rig second quarter presentation available on www.ocean-rig.com.Slide five; the chart on this slide highlights historical Panamax ship values versus spot earnings. Going forward, we do not expect to see volatility in the short-term as we continue to expect a prolonged (inaudible) period of very low earnings for both drybulk and tanker segments. Panamax spot rates are approximately $7,000 per day today while 2013 and 2014 SFA is approximately $8,500 and $10,500 per day. To give you some context, DryShips shipping segment had a blended average of $26,000 daily cash breakeven for the second quarter of 2012. These blended averages skew towards our Panamax breakeven as they are largest shipping asset class. Our cash breakeven doesn’t take into consideration equity required for our newbuilding program; suffice it to say, we expect tough road ahead. On slide six; our capital structure end of June is robust as evidenced by a modest 42% net debt to cap; only other thing to say is we have close to $750 million of cash in our balance sheet of which only de minimus balance is held in Greece. Slide seven; here we present our drybulk newbuilding program which is more or more less unfinanced; while we have been bullish in previous quarters about our ability to finance remaining vessels of bank debt, recent developments including the action of common stock in shipping have given a second thought; still we are in discussions with certain institutions to finance the remain vessels including Chinese ECA’s and leasing companies.
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. Read the rest of this transcript for free on seekingalpha.com