Patterson-UTI Energy Inc (PTEN) 2002 Q2 法說會逐字稿

Good morning ladies and gentlemen and thank you for standing by. Welcome to the Patterson-UTI Energy quarterly earnings conference call. At this time all participants are in a listen-only mode. Following the formal presentation instructions will be given for the question and answer session. If anyone needs assistance at any time during the conference, please press the star followed by the zero. As a reminder this conference is being recorded, Thursday, July 18, 2002. I would now like to turn the conference over to Patterson-UTI Energy. Please go ahead.

Good morning and welcome to today's conference call to discuss the results of the second quarter ended June 30, 2002. Participating in the call will be Mark Seigel, Chairman of Patterson-UTI, Cloyce Talbott, Chief Executive Officer, Glenn Patterson, President and Chief Operating Officer, J.D. Nelson, Chief Financial Officer and John Vollmer, Senior Vice President, Corporate Development.

The statements made in this conference call which state the Company's or management's intentions, believed expectations or predictions for the future are forward looking statements. It's important to know that actual results could differ materially from those discussed in such forward-looking statements. Important factors that could cause actual results to differ materially include, but are not limited to: declines in oil and natural gas prices that could adversely affect demand for the Company services and their associated effect on day rates, regularisation and planned capital expenditures, adverse industry conditions, difficulty in integrating acquisitions, demand for oil and natural gas, and ability to retain management and field personnel.

Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company's SEC filings, including, but not limited to the report on form 10-K for the year ended December 31, 2001, and form 10-Q for the 2002 reporting periods. Copies of these filings may be obtained by contacting the company or the SEC. And now I would like to turn the call to Mr. Seigel for some opening remarks and then to be followed by questions and answers. Mr. Seigel

Thank you Jeff . We're pleased to welcome all of you to our quarterly conference call this morning. As I'm sure most of you know, we announced our earnings for the second quarter. As we reported, the Company, excluding certain charges which I'll discuss a little below, reported a net loss of $1 million, or one cent per share, versus net income of 56.6 million or 71 cents per share for the comparable period a year ago. Revenue for the quarter was 125.4 million compared to 287.6 million for the comparable three-month period in 2001, again excluding certain charges which we'll discuss in a moment. Net income for the 6 month period was 2.9 million or 4 cents a share versus net income of 93 million for $1.18 per share for the 6 month of the comparable period last year. Revenue for the 6 month period was $253 million compared to $526 million again for the comparable period. I would add that revenue basically between the first and second quarters was relatively flat.

We also noted that we're taking a pre-tax charge of 4.7 million, which is 2.8 million on an after-tax basis. In this quarter due to the recent failure -- financial failure of a workers compensation carrier which had provided coverage for us between 1992 and March of 2001. As a result of the financial failure of this insurance carrier, we expect to incur additional charges -- additional costs, pardon me, related to the worker's compensation claims for incidents that were covered -- that occurred during the coverage period. This charge is obviously, excluded from the results above. The Company said that the net loss for the quarter including the charge was 3.8 million or 5 cents per share and its net income for the six-month period including the charge was 90,000 and basically flat on a per share basis.

During the second quarter of the year -- the prior year, we incurred a $13.1 million pre-tax charge, 8.1 million after-tax in connection with the Patterson-UTI merger from last year. That amount is also excluded. In looking at our results [INAUDIBLE] reported that the decline in drilling activity that began in August 2001 continued in the 1st quarter of this year until only March, when our U.S. working rig count bottomed at 90 rigs. Our can activity level then increased and in the second quarter we averaged 115 rigs working in the U.S. and foreign Canada. For the weekend ended July 12 we averaged 123 rigs working, including 116 in the U.S. and seven in Canada.

Continuing from [INAUDIBLE], we also previously stated that we are continuing to retain our most experienced field personnel and improve our equipment in anticipation of further increases in demand for drilling services. Although this continues to have the effect of increasing our costs and reducing our margins, we are confident that our operations will benefit as the industry improves. And from my perspective, from mid-May through June, the second quarter in contract language marked by relative stability in activities levels and pricing. Although we're no longer operating in a declining market for utilization of rigs, we believe that the current level of drilling activity will be inadequate to overcome reported decreases in natural gas production arising from the effects of depletion.

Although supply decrease have been noted by many industry observers, above average natural gas storage levels raise concerns about the direction of natural gas prices and these concerns are heightened by changes in the reporting of such storage levels. We expect the current level of activity to continue through the summer months until the effect of the declining supply becomes ever more apparent as winter approaches. We believe that significantly increased drilling will ultimately be necessary to offset the decreasing supply of natural gas. That really is the summary of our earnings release.

In terms of just characterizing the second quarter, as we said in our press release, and as we reported in our April 24th report for the 1st quarter, the low point really occurred in activity in early March. We found ourselves with a nice rebound by mid-April, which we commented about on that April 24th, 1st quarter report. It was pretty flat thereafter, which was kind kind of disappointing to us because we had expected and been somewhat optimistic about a further increase from that level. As I mentioned before, our revenue for second quarter was relatively flat with our revenue for the first quarter. We did experience some margin erosion as some of the higher priced contracts rolled off and we staffed up to put additional rigs to work and then didn't find the increase in rig activity that we had hoped for. With that I think what we'd like to do is turn it over to questions and respond more to your thoughts and questions than just make further speeches. Operator.

Thank you sir . Ladies and gentlemen, at this time we'll begin the question and answer session. If you have a question, please press the star followed by the 1 on your push button phone . If you'd like to decline from the polling process, please press the star followed by the two. You will hear a three-tone prompt acknowledging your selection. Your questions will be pulled in the order they are received. And if you are using speaker equipment please lift your handset before pressing the numbers. One moment please for the first question. The first question comes from Jim Rollyson with Raymond James & Associates. Please go ahead.

Hey, good morning guys.

Hey Jim.

Couple things. First off, on Canada, Jean just spent awhile talking about Canada and how soft it was in the quarter, but more importantly the outlook for it going forward, they're starting to apparently put some rigs back to work and it shows up in your numbers that you've gone from four to seven. What are you seeing for bookings for later this summer and going ahead to this winter?

Let me turn that question over to Cloyce.

Jim, this is Cloyce. We have jobs for 11 out of the 16 rigs that we have up there. We have seven working and four that are waiting to move, but in various stages, whether waiting weather or locations or whatever.

So it looks -- looks pretty good. What about pricing?

Pricing is pretty stable up there just about -- you know, we have a much more stable pricing back in Canada, it didn't go as high and doesn't come as low as we have in the U.S.

Right. And then in the U.S., you've obviously, seen your rig count bottom and pick up. Your -- I guess your current level is not a whole lot above your average. Where are you expecting that to go maybe for the 3rd quarter based on what you're seeing? And I guess, if you could share what you are seeing.

Jim, we're -- this is Mark -- we're We're seeing a fair amount of people who are experiencing some delays in being able to get a rig to work because of weather conditions, the ports are flooding obviously in Texas, have been well reported nationally, so we expect that there will be an incremental increase in this 3rd quarter. We yet have not got the full impact of it. We think in part due to the weather conditions. But we're not expecting, as the press release says, a very, very significant jump in 3rd quarter.

Right, so it may be another, you know, 10, 15 rigs relative to your second quarter between the U.S. and Canada all combined?

Somewhere probably in that -- I think you just stated what would translate to an average of about 130 for the quarter. That would make some sense.

Sure. And then, I guess, based on the fact that the rig count is not accelerating that rapidly, thus far pricing's probably not moving up. Do you expect your top line number to come down much from just from rollovers, or do you think you've gotten to where that's stabilized?

Jim, what we're seeing right now is we think that the margin quarter to quarter from second to third would be very similar between the two quarters.

Right.

Roughly in that kind of 1850 range, 1800 to 1900, somewhere in there.

O.K., and then lastly -- I just, I'll let somebody else -- your pressure pumping business, you know, despite all the weakness, you only saw your jobs go down about 7% sequentially and I guess your pricing was down about 4%. That seems, you know, generally pretty strong given the softness. What are you seeing there as you move forward the rest of the year?

Yeah, second quarter pressure pumping did better than we would have thought when we were looking at it in January, February, March, they held in stronger. As they typically do, there's a, you know, seasonal increase that occurred somewhere in the late May through early July timeframe, and they are seeing that increase. And, you know, we think that probably somewhere in the 80% of last year levels for 3rd and 4th quarter in terms of revenue. We'd probably see what we see at this point.

Similar margins? It looks like pricing is still holding up, too.

Yeah, maybe down just a little bit.

Sure.

You know, from the impact of, you know, things that occurred earlier in the year, but generally the margins should be similar to last year [INAUDIBLE].

Alright, well thanks

Thank you.

Thank you. The next question comes from Dustin Kente with Simmons and Company. Please go ahead.

Yes, actually this is Scott Gill with Simmons and Company . Good morning.

Hey Scott.

Mark, maybe I don't understand the language here in the press release and what you went over earlier on. With respect to worker's comp cost, you took the charge. Can you give us some guidance as to how much the incremental operating costs going forward are going to be as a result of this?

Yeah, thank you for the question, Scott. It's not a expectation of an incremental change in our costs and it's not even a historic look back at our costs. We felt that we had insured to a insurance carrier against certain costs that we never expected to be obliged to pay. Which were historical costs that date back from, as we said, before 1991 -- 2001. What's occurred is the state has put this insurance company in receivership. And so we are concerned and believe that we will ultimately be exposed to certain claims that we would not have otherwise been exposed to and which would have otherwise been paid for by the carrier.

And so the charge is not a going forward expense in terms of routine operating expenses or regular operating expenses. It's a pure look back and an expectation that for worker's comp claims that occurred during the coverage period, we're going to find ourselves having to pay an obligation which we had thought we had moved over to an insurance company through the proper acquisition of insurance.

O.K.

And let me just say one more thing on the same topic. We currently have our workman's comp insurance through Liberty Mutual, an A+ rated company by AmVest, and so this is a problem which we don't expect on a going forward basis.

O.K., well that was my follow-up to that part of it . Last question I have here Mark. Nice uptick in activity from trough levels, some of your competitors not seeing the same amount of increase. Can you just give us a description as to why you think your activity is up versus its peers? Is it geographic, customer specific, or is this, you know, something else?

I would say that probably we experience a slightly greater down tick in activity up to that March period, than others did . And I think that what's gone on since then, basically, has been kind of an equalsation among the various players in the market, consistent with the equipment that each of us maintains. Probably there's some improvement as you mention due to customer and geographic location, but I really fundamentally think that we, meaning Patterson-UTI, have accepted more of the downturn as a percent of market than others.

And Mark, just to follow on to that, maybe Cloyce can help answer this. As you were, you know, looking back at March and April, did you in March see the big upswing coming in activity? And then in April did you see that the activity plateaued? And I guess, you know, my question then is today you're saying that you expect it to be flat, you know, kind of through the balance of July and August. Is that based upon your ability to forecast activity?

I'll hapilly let Cloyce answer it and I'm anxious to hear his answer. Frankly, my reaction to it is that, you know, we watch the rig count on a daily basis. Our own rig count on a daily basis. We're all in constant conversations about the direction of activity and how fast it will be going up or if it's stable or how fast it was coming down in the past. And we're all trying to estimate that and make payroll, personnel decisions that are relevant to it. As everybody on the call probably is well aware, personnel becomes one of the most challenging issues as the number of rigs working expands. And so you're in a very interesting managerial challenge of deciding how fast to cut payroll when you don't get as fast an increase as you would hope for, realizing that you're going to want to hire those people as soon as the activity level does go up. And so you're reluctant to quickly fire people you've just hired in anticipation of an increase and vice verse .

So the answer is we're always talking about it, we're always doing it. The point in the press release about saying that July, August, was not expected to see that big a rebound was our attempt at kind of giving you the best thinking that the management group is capable of doing as we look forward. But, you know, it's a real dicey proposition because as you can -- as you know, activity levels can change week to week very quickly. Cloyce?

Scott, what I think it is, it's really the customer base that we all work for now. And a lot of them are smaller independents and they watch the gas price real closely and they're torn between drilling and getting their wells on so they can sell at a higher price for their natural gas later on. And the fact that storage mapped out in a short term, their gas prices are going to be low for a short period of time. And I think that's what happens when -- commodity prices are plenty good for people to drill when you have $3.50 gas, $25 oil. But I think it's the perception that the price of national gas might be -- going to go down for a short period of time, and they delay drilling for a little while. I really think it has more to do with maybe our customer base than really pricing, you know. The independents, I like to say, have checkbooks, not budgets

O.K., thank you Cloyce .

Thank you. The next question comes from Neal McAtee with Morgan, Keegan. Please go ahead.

Hi, good morning. My questions are all on the same line, anything [INAUDIBLE] out there, Cloyce or Mark, that you're seeing that -- I mean I would think even if they're concerned about oil prices with the Cal. 03 at 350 a fifth and Cal. 4 at $4, I would think if they're looking past that they might be drilling. And, I mean, are their checkbooks, Cloyce, you know, I've heard you say that before, their checkbooks just not that flush right now even at $3 or $2.80, $2.90 current gas that they're not moving forward or are they not looking out very long-term or anything else out there?

Neal, this is Mark Seigel. I'll just take a shot at it and let Cloyce [INAUDIBLE]. I think they're concerned about when their well comes on-line. What the gas prices are then, because they're so well aware of the depletion short term, that they're scared that if storage fills up and gas prices decline that they could come on-line at a bad period of time and see their first six months of production under a bad price tag. I think that there's a pretty strong disconnect between those players looking at futures prices and making decisions to drill. Cloyce?

I just feel the same way, Neil. What happens with the steep decline rates that we have now, you know, you have first year decline rates probably on most the wells that we drill are 50% or greater. And if in particular from an independent standpoint, that they haven't hedged or gauged, if they drill at the wrong period of time, and they get, you know, six months of the year in that cheap price, they effectively drill an uneconomic well. With such steep decline rates and I think that's really what the problem is. I think $3.50 gas is plenty good for people to drill if they just knew they was going to get $3.50. You know my feeling, I always thought I didn't even need to fill in the [INAUDIBLE], that's probably not going to happen.

Alright, thanks guys .

Thank you. The next question, comes from James Lewis of Morgan Stanley. Please go ahead.

Hi there. I have a question turning back to the Company itself. In terms of your daily cash operating costs for drilling. I realize that they've gone up substantially because of underabsorption of some of the personnel that you have. But I'm interested at 7,200 a day, that's currently running about $400 a day higher than it was at the activity bottom in late '98, early '99. And I'm just wondering first of all, what kind of activity level you think you need to get to to get that daily operating cost back down to say the $6500 level. And second of all, if there's anything going on with your costs that implies that you probably won't be able to drive costs back down toward 6,000 and as you get more employment on your rigs.

Jim, I think it's fair to say that all of us want to push those costs down think of that as being our challenge. I would say that management as a group understands the costs are higher than we want them to be. And we've said it kind of I think in two press releases consecutively, that we've kept more personnel, anticipating a significant uptick in activity levels significantly above this kind of 120, 130 rig kind of set of numbers that are currently being reported. With that, let he let me turn it back to John to give you some kind of numerical numbers, if he can.

Hey Jim, you know, going into the quarter and the escalations we were seeing in rig count, you know, we probably would have guessed that if we ran about the same number of rigs as the 1st quarter, which is 117, that we'd have about the same cost per day. When we ran 119, we didn't. It was a couple hundred dollars higher. I think Mark spoke to a couple things earlier in the conversation that indicate what that related to. On the rig count, it was moving up very quickly, particularly in early April as we talked about in that conference call, and that continued and we brought some people back, and in retrospect, maybe a few more than we would have had we known that the rig count was going to stabilize as it did. Thus impacting our costs. We can't perfectly predict week to week rig counts, but we do need to react to our customers so as the rig count goes up, that we get our fair share of that. I think that's what drove the increase.

Relative to your comment about the future profitability and cost per day. If you think back from 1999 to 2001, I think it's been well reported by all the numbers that we really increased what we pay people quite a bit and that was necessary to get the rigs running that we did in 2001 at the peak. For offsetting increase in payroll is something a little over 40% to compete with the Wal-Marts, the McDonalds and the other people to work in our difficult environment. We, back in January, cut back wages 10% in addition to getting rid of a lot of people in the interest of trying to keep more people on hand because we believe that the count would -- the rig count would move up in the relatively short term. Again, we just had the help of [INAUDIBLE] but we are carrying more people than we would if we believed our rig count was going to remain in the 120s for an extended period of time.

So, back to the broad question is, rigs -- more rigs run, you know, I feel -- we feel confident that our cost per day will go back down similarly to what we saw in the last upturn. There have not been further payroll increases. We haven't seen indication that we're going to need to in the next up turn and broadly our other costs are, you know, similar to what they were at that time.

O.K., so it's just a matter of probably being marginally overstaffed at this point and the fact that the pay increases that happened during the last up cycle have not been anywhere near fully rolled back during this down cycle?

That is correct.

Okay. Thanks.

Thank you. The next question comes from Mark Urness with Salomon Smith Barney . Please go ahead.

Actually guys it's Rob McKenzie.

Hey Rob.

Hey. Just wanted to roll all your comments together here and see if you guys will take a stab at comparing what 3rd quarter might look like relative to consensus in terms of earnings?

You know, we don't have a crystal ball, Rob, nor do you. But I think from where the rig count is today, you know, we'll pick up a few more rigs in Canada, we think that the wetness problems in the Texas area will work themselves out, we'll pick up a few rigs there. You know, beginning of this first couple weeks with quarter averages somewhere in the kind of 120 rigs range, it since moved up since we've gotten away from the holidays as we mentioned earlier. You know, somewhere around 130 rigs for the quarter would indicate that we exit the quarter somewhere, you know, 135, maybe 140, you know, at the high end and that's clearly a guess on my part.

Sure.

You know, as we get into 4th quarter and people start -- I guess withdrawals. Now if the reported declines in production, you know, continues, the prices should be good, people should be getting back to work more quickly. And, you know, we don't know, but it wouldn't shock us if we averaged somewhere in the 150 range for the 4th quarter. But I'd like to repeat that that's clearly a guess on our part.

Sure.

Margin-wise, the reason we think margins will probably be relatively flat in the 3rd quarter is because right now there's not a lot of momentum in terms of rig utilization. You know, we stepped up from the 90 to where we are, we're adding a few incremental rigs. But it takes, you know, momentum in that for pricing to move and that's going to take more than 125 or 130 running. We do get margin expansion, we believe as we stated earlier, as you run more rigs, just simply by more cost efficiency. So, you know as we, you know, kind of look into the 4th quarter we would hope that we do begin to see some of that margin expansion that might get us up, you know, something north of $2000 a day, maybe somewhere around $2200, but that's very much an estimate.

I mean I think market is real important. I'm sure most of the analyst community like yourself is very familiar -- most of the analyst community is very familiar with the fact that, you know, we've been operating at about a 37% kind of utilization in the first two quarters. Those are not the percentage utilizations which usually give rise to significant increases in pricing. If they get up above some level, there's been talk in the industry about whether that's a 40%, 50% or 60% threshold. We think it's lower than it's been historically. But 37% is significantly lower.

Right, and it also depends on how you define utilization too, I'm sure.

Yes. There's a whole series, when you're talking about storage numbers a lot, and, you know, the difference between, you know, AGA and EIA kind of storage numbers is one of the facts that's been, you know, we think rallying the market.

Do you think that's the biggest impact now? Because we've been struggling. I know you addressed it earlier with why we've had this in a I guess two-month plus plateau here in terms of rig activity when you're seeing, you know, throughout that period, you know, on average, you know, $3 plus cash prices.

[INAUDIBLE] in some sense maybe activity level has been postponed by 30, 60, 90 days and there's been just a -- in effect a postponement while people take a wait-and-see attitude. Maybe, I think, you know, in the oil and gas industry may be talking the American economy.

O.K. Great.

Thank you. The next question comes from James West with Lehman Brothers. Please go ahead. Mr. West, if you're on speaker, could you lift up your handset, please? I do show his line is still active. Ladies and gentlemen if there are any additional questions, please press the star followed by 1 on your push button phone. As a reminder, if you're on speaker equipment you will need to lift your handset before pressing the numbers. One moment please for the next question. And I show no further questions. Actually Mr. West just queued back up. Mr. West, please go ahead.

Hi this is Jim Crandell. [ laughter ]

Hey Jim.

Hey. A couple of specific questions and a general question. How many of your rigs currently are warm stocked or actively marketed?

Cloyce, you want to give that? Jim I think we could work, we work approximately, if my recollection is correct, 287 rigs, the maximum number we had operating in the uptick of basically 3rd quarter of last year. We don't feel that there's any of those rigs which we couldn't put back to work in less than 30 or 60 days. So there's none of those rigs that we believe have -- we have not cold stacked any of those rigs. We haven't caniblized any of those rigs. In fact, if anything, we've used this downtown as an opportunity to do needed repairs and maintenance on those rigs that may have been somewhat deferred when activity levels were at their highest points. And so, to the contrary, we feel like we've got in effect a very significant fleet ready to go to work.

So you're saying that all those -- essentially all those 287 rigs Mark are equipped with drill pipe?

Yes. We got plenty of drill pipes Jim .

You do. Okay.

We kept taking our drill pipe -- that's on all of our capital expenditures, where we probably have 600,000, 6, 700,000 feet of new drill pipes that we have not put on a rig. So, we've got a lot of that. One thing that might help clarify a little bit, right now if I understand your question correctly, we probably have rigs with crews of about 145 right now.

Okay. A couple more of broader questions. How many rigs do you think you would need to have active or how many rigs would need to be in the land rig count before you would start to see day rates move up on a broad basis?

Jim, that's the $64,000 question. In my mind, in '97, people talked about having to hit a 70% kind of utilization to get to a real change in day rates. In the kind of 2000/2001 period, it seems to me that we wound up seeing significant increases at kind of a 55 to 60% kind of level. It wouldn't surprise me this time if we saw the same kinds of increases in prizes on a 50 to 55% kind of level of utilization. But that's very subjective because obviously, markets are impacted by the perception of the players in the markets as well as the actual numbers in it. So it sort of depends on the steepness of the rise.

So Mark, that's 50 to 55% utilization of your essentially 300 rig fleet?

yeah. I might have been -- that may be -- Jim, you know, is it 45 to 55, is it 50 to 60, I'm actually -- it's very hard to make those judgements at this point . O.K.

The last question, Mark, and even a little bit broader question, let's just say if natural gas prices did not have the explosion that they had the last cycle and if we peeked, would we still have sustained period where we saw gas prices in the $3 to $4 per NCF area? How would you expect demand for land drilling rigs, drilling for natural gas, to compare with the left cycle, i.e.,, how much of the left cycle utilization that you saw was due to the surge in gas prices that took you up to $5 to $9 per NCF for a 6 month period?

Jim, I think if we were to see a price stack of $3.50 to $4.50 for natural gas on a relatively consistent basis and I deliberately moved your numbers up by 50 cents. I think we would see very sustained activity. I think what is in effect concerning the marketplace, and our customers, is the possibility of under $3 gas owing to a high and early fill. I think they're worried about coming on deck with production and in effect producing into a under $3 market. If you told them, this is kind of Cloyce's comment about in effect a floor or a ceiling, they had caught maybe $3.75 as a floor and call it $4.50, $5 as a ceiling, I think they'd be thrilled and our activity levels would be I think, consistent with 3rd quarter of '01.

Yeah, I happen to agree with your comment, Mark but I'm wondering, my question relates to how good things could get in the upcycle. Do you believe that if you saw a sustained 3 50 to 4.50 prices that there's no reason that the number of rigs that you could have working in this coming cycle could combine Patterson plus UPI, could approximate what you had working last cycle?

More.

More.

Yeah, we felt that there were customers with good prospects that didn't drill them because they saw the price eroding. And we think that there was a capability of going to a higher level. We've increased our rig fleet, as you know, post Patterson-UTI merger, by an approximate 25 additional rigs. And so that's really reflective of the fact that we believe that demand this time could be significantly higher.

O.K. And if Cloyce or Glenn, in your conversations with people out in the field, do you sense that any of the independents feel that their prospect constrained at this point in time?

Well, I'm sure that there's some of them where their prospect is strained, but we're seeing a lot of customers, you know, seeking us to take a piece of the the deals. I've seen more of that this go-round than I've ever seen before. So it makes me think the prospects are out there. Maybe there's just not quite enough capital out there to get them drilling as fast as they want to drill Jim .

And are you inclined to do this at all?

We do some occasionally, but it's a very rare occasion when we do that.

We're not looking Jim, to increase our PNP operation. We kind of had a rule that we will spend no more than we take out.

Got you. Okay. That does it. Thank you.

Thank you. Operator if there's no other questions -- are there any other questions, let me ask it that way.

I show no further questions.

Well thank you then. We'd like to thank all the participants for their questions and all the people for listening to us. Appreciate all of your interest in our company. Thank you very much.

Thank you sir. Ladies and gentlemen, this concludes the Patterson-UTI Energy quarterly earnings conference call. If you'd like to listen to a replay of today's conference, you may do so by dialing 1-800-405-2236 or 303-590-3000. The access code is 482406. Once again, your dial in numbers are 1-800-405-2236 and 303-590-3000 with access code 482406. It will be available through the 20th of July. Thank you for your participation, and you may now disconnect.