$0.3 million associated with the closure of the Company’s Houston rig yard, which the Company plans to exit during the fourth quarter of 2024. The Company expects to incur approximately $1.0 million during the third quarter of 2024 relating to this location and its full closure. Fully burdened operating costs, which exclude costs associated with the Company’s Houston rig yard, were $19,224 per day in the second quarter of 2024, compared to $19,005 in the second quarter of 2023 and $18,484 in the first quarter of 2024. Sequential increases in cost per day were primarily driven by fewer operating days absorbing fixed costs during the quarter as well as elevated rig churn.
Fully burdened rig operating margins in the second quarter of 2024 were $9,675 per day, compared to $15,462 per day in the second quarter of 2023 and $11,829 per day in the first quarter of 2024. Sequential declines in rig operating margins were driven by lower dayrates on contractual renewals as well as slightly higher operating costs per day during the second quarter of 2024. Looking forward, the Company currently expects per day operating margins in the third quarter of 2024 to fall approximately 1% sequentially driven primarily by lower average dayrates as rigs recontract in the current market environment.
Selling, general and administrative expenses in the second quarter of 2024 were $3.7 million (including $0.4 million of non-cash compensation), compared to $5.2 million (including $1.3 million of non-cash compensation) in the second quarter of 2023 and $4.3 million (including $0.3 million of non-cash compensation) in the first quarter of 2024. Included in selling, general and administrative costs were approximately $0.6 million of costs relating to special committee activities directed toward evaluating strategic alternatives, including refinancing of the Company’s outstanding Convertible Notes. Overall sequential decreases in cash selling, general and administrative expenses primarily related to reduced incentive compensation accruals partially offset by the costs associated with the strategic alternatives review. Sequential decreases in non-cash compensation expenses related to variable accounting on stock-based compensation that is tied to changes in the market price for the Company’s common stock at period end. Looking forward, the Company expects overall selling, general and administrative costs during the third quarter of 2024 to be relatively flat compared to second quarter 2024 levels.
During the second quarter of 2024, the Company recorded interest expense of $10.2 million, including $2.9 million relating to non-cash amortization of Convertible Note debt discount and debt issuance costs. The Company has excluded this non-cash amortization when presenting adjusted net loss. During the first and second quarters of 2024, the Company redeemed $3.5 million and $3.5 million, respectively, of Convertible Notes at par plus accrued interest and paid in-kind $13.3 million of interest on the Convertible Notes during the first quarter of 2024. As of June 30, 2024, accrued but unpaid interest on the Convertible Notes was $7.0 million.
Drilling Operations Update
The Company currently expects to operate approximately 13.0 net average rigs during the third quarter of 2024. The Company’s backlog of drilling contracts with original terms of six months or longer is $48.9 million. Approximately 57% of this backlog expires in 2024. This backlog excludes rigs operating on short-term pad-to-pad drilling contracts with original terms of less than six months.
Capital Expenditures and Liquidity Update
Cash outlays for capital expenditures in the second quarter of 2024, net of asset sales and recoveries, were $5.5 million, and include payments of $3.9 million relating to prior period deliveries. On June 30, 2024, there was approximately $4.1 million of accrued liabilities relating to capital expenditures for which the Company expects to make payment during the third quarter of 2024.
On June 30, 2024, the Company repurchased $3.5 million of Convertible Notes at par, plus accrued interest, pursuant to the required mandatory purchase offers under the indenture governing the Convertible Notes. The Company is required to make similar offers to repurchase $3.5 million of Convertible Notes on each of September 30, 2024, December 31, 2024, and March 31, 2025.
As of June 30, 2024, the Company had cash on hand of $5.5 million and a revolving line of credit with availability of $15.5 million. Net working capital as of June 30, 2024 was $10.0 million, representing a $0.7 million increase compared to March 31, 2024. The Company’s revolving line of credit has a maturity date of September 30, 2025. Net working