respectively. During the three and nine months ended September 30, 2023, there were 92.3 and 204.8 days in which we earned revenue on a standby basis, respectively.
(3)Average number of operating rigs is calculated by dividing the total number of rig operating days in the period by the total number of calendar days in the period.
(4)Average revenue per operating day represents total contract drilling revenues earned during the period divided by rig operating days in the period. Excluded in calculating average revenue per operating day are revenues associated with the reimbursement of (i) out-of-pocket costs paid by customers of $4.2 million and $3.0 million during the three months ended September 30, 2024 and 2023, respectively, and $14.4 million and $10.0 million during the nine months ended September 30, 2024 and 2023, respectively and (ii) early termination revenues of $0.7 million during the three months ended September 30, 2023 and $5.9 million during the nine months ended September 30, 2023.
(5)Average cost per operating day represents operating costs incurred during the period divided by rig operating days in the period. The following costs are excluded in calculating average cost per operating day: (i) out-of-pocket costs paid by customers of $4.2 million and $3.0 million during the three months ended September 30, 2024 and 2023, respectively, and $14.4 million and $10.0 million during the nine months ended September 30, 2024 and 2023, respectively; (ii) overhead costs of $1.0 million and $0.4 million during the three months ended September 30, 2024 and 2023, respectively, and $2.3 million and $1.8 million during the nine months ended September 30, 2024 and 2023, respectively; and (iii) rig decommissioning costs of zero and $0.8 million during the three months ended September 30, 2024 and 2023, respectively, and zero and $4.3 million during the nine months ended September 30, 2024 and 2023, respectively.
Cautionary Statement Regarding Forward Looking Statements.
This filing contains various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) which are subject to the “safe harbor” created by those sections. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. All statements other than statements of historical facts are “forward-looking statements” for purposes of these provisions. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “project,” “predict,” “potential,” and similar expressions intended to identify forward-looking statements. Forward-looking statements include, without limitation, the status of the Company’s negotiations with holders of Convertible Notes and the Company’s anticipated results of operations. Forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors include, among others, the Company’s ability to reach any agreement with holders of its Convertible Notes, oil and natural gas commodity prices, domestic spending by our customers, industry volatility, competition in our industry, and other factors as described in the Company’s filings with the Securities and Exchange Commission, including the detailed factors discussed under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as supplemented in the Company’s Quarterly Report on Form 10-Q for the fiscal quarters ended March 31, 2024 and June 30, 2024. Furthermore, such forward-looking statements speak only as of the date of this release. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. Risks or uncertainties (i) that are not currently known to us, (ii) that we currently deem to be immaterial, or (iii) that could apply to any company, could also materially adversely affect our business, financial condition, or future results. Additional information concerning certain factors is contained in the Company’s Securities and Exchange Commission filings, including but not limited to the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K.