Dawson Geophysical Company (DWSN) Q4 2007 Earnings Report, Transcript and Summary

Good morning, my name is Kristy and I will be yourconference operator today. At this time, I would like to welcome everyone tothe Dawson Geophysical Q4 Year-End Conference Call. All lines have been placedon mute to prevent any background noise. After the speakers' remarks, therewill be a question-and-answer session (Operator Instructions). Thank you. Mr. Jumper, you may begin your conference.

Thank you, Kristy. Good morning and welcome to DawsonGeophysical Company's fourth quarter and fiscal year-end 2007 earnings andoperations conference call. As Kristy said, my name is Steve Jumper, Presidentand Chief Executive Officer of the company. Joining me on the call are Christina Hagan, Executive VicePresident and Chief Financial Officer; Decker Dawson, Founder and Chairman ofthe Board; and Ray Tobias, Executive Vice President and Chief OperatingOfficer. Today's call will be presented in three segments. Followingopening remarks, Chris will discuss our financial results; I will then returnfor an operations update; and then open call for questions. The call isscheduled for 30 minutes and we will not provide any guidance. At this point, I will turn control of the call over to ChrisHagen, our CFO, to discuss our financial results.

Thanks, Steve. First I will go over our Safe Harborprovision wordings here. In accordance with the Safe Harbor provision of thePrivate Securities Litigation Reform Act of 1995, Dawson Geophysical Companycautions that statements made today in this conference call which areforward-looking and which provide other than historical information involverisks and uncertainties that may materially affect the company's actual resultsof operations. These risks include, but are not limited to, dependence uponenergy industry spending; the volatility of oil and gas prices; weatherinterruptions; the ability to manage growth; the ability to obtain land accessrights of play; and the availability of capital resources. A discussion of these and other factors including risks anduncertainties is set forth in the Company's Form 10-K for the fiscal yearending September 30, 2006. Dawson Geophysical Company disclaims any intentionor obligations to revise any forward-looking statements whether as a result ofnew information, future events, or otherwise. During this conference call,Dawson will make references to EBITDA, which is a non-GAAP financial measure. A reconciliation of this non-GAAP measure to the applicableGAAP measure can be found in Dawson's current earnings release, a copy of whichis located on its website, www.dawson3d.com. At this time, I would like to talkabout our press release. This morning, we reported record revenues of $257,763,000for our fiscal year ending September 30, 2007, compared to $168,550,000 forfiscal 2006, an increase of 53%. Net income for fiscal 2007 was $27,158,000compared to $15,855,000 in fiscal 2006, an increase of 71%. Earnings per share for fiscal 2007 were $3.57 compared to$2.11 in fiscal 2006. Cash flow provided by operating activities increased 100%from $25,743,000 in fiscal 2006 to $51,427,000 in fiscal 2007. The company'sEBITDA for fiscal 2007 was $62,706,000 compared to $38,551,000 in fiscal 2006,an increase of 63%. For the fourth quarter 2007, we reported record revenues of$75,537,000 compared to $51,491,000 for the comparable 2006 period, an increaseof 47%. Net income for the fourth quarter of fiscal 2007 was$8,794,000 compared to $4,963,000 in the comparable 2006 period, an increase of77%. Earnings per share were $1.15 for the fourth quarter of fiscal 2007compared to $0.66 per share in the fourth quarter of 2006. EBITDA increased 60%in the fourth quarter from $12,145,000 in fiscal 2006 to $19,377,000 in thesame period of fiscal 2007. Now I will turn it back to you, Steve.

Thank you, Chris. Continued demand by exploration andproduction companies for seismic services fueled our fourth quarter andyear-end results. Our growth in revenue, EBITDA, and earnings for the fourthquarter and fiscal year were primarily due to the addition of the three seismicdata acquisition crews during fiscal 2007, along with pricing and productivityimprovements realized from the expanded capabilities of existing crews. We continue to see a high level of third-party charges,which are recorded as revenue, related to specialized services required tooperate in areas of limited access. We are reimbursed for these expenses by ourclients. Demand for the company's services remain at an all-time high as aresult of continued exploration activities on behalf of our client companies. Although our clients may cancel their service contracts onshort notice, our order book reflects commitments well into calendar 2008 forall 15 crews. Operations are currently active on projects in West Texas, SouthTexas, New Mexico, the Barnett Shale play of the Fort Worth basin, theFayetteville Shale play in Arkansas, the Rocky Mountains, Oklahoma, and theAppalachian Basin. We operate under a balance of turnkey and term agreements.Capital investments of $54,591,000 in fiscal 2007 were used in part to completethe fielding of three additional data acquisition crews, to expand channelcount on existing crews, to purchase additional energy source units, and toreplace two I/O System II MRX recording systems on existing crews with ARAMARIES recording systems. The company's Board of Directors has approved an initialfiscal 2008 capital investment budget of $30 million. The capital budget willbe used to add to the company's energy source fleet, purchase additionalrecording channels, make technical improvements in various phases of thecompany's operations, and meet maintenance capital requirements. These investments will enable the company to maintain itscompetitive position as it responds to client desire for higher-resolutionsubsurface images. During fiscal 2007, we replaced an I/O System II MRXrecording system with a 5,000-channel ARAM ARIES system on an existing crew inSeptember of 2006, and have since increased its capacity to 6,500 channels. Wecontinued operation of the 13th crew deployed in October of 2007, equipped withan existing I/O System II MRX recording system. We deployed the 14th crew in April of 2007, equipped with a10,000-channel ARAM ARIES recording system. This represents the company'slargest crew as measured by channel count in our 55-year history. We replacedan I/O System II MRX recording system on an existing crew with a 9,500-channelARAM ARIES recording system in July of '07. We deployed the 15th crew in September of 2007, equippedwith a 5,000-channel ARAM ARIES recording system. We took delivery in August ofa 5,000-channel ARAM ARIES recording system which will replaced an I/O SystemII MRX on an existing crew in November and which will be increased to 7,500channels. We increased channel count from approximately 70,000 to inexcess of 102,000, and as I just previously mentioned, growing in fiscal 2008.We added 113,928 geophones to the company. We took delivery of 18 vibratorenergy source units, increasing the total count to 113 units company-wide. Wecurrently have 10 more units on order. We added 119 vehicles to our fleet. We added GPS navigationand tracking systems to the vibrator energy source units on two crews forimproved efficiency and accuracy of source point location. We added dataprocessing services to the Oklahoma City offices. Our data processing groupcontinues to increase market share. With the addition of the newest crew in September, wecurrently operate 15 crews across the lower 48 states. Of the 15 crews, six areequipped with ARAM ARIES recording systems; six with I/O System II RSRrecording systems; and three with I/O System II cable-based recording systems.From time to time, one crew will be equipped with a 30,000-channel Q-Landrecording system under the company's agreement with WesternGeco, a Schlumbergersubsidiary. We are currently working the Q-Land crew in New Mexico. Wewill continue to be subject to the level of spending by our client companies,who are primarily in search of natural gas and therefore reliant upon naturalgas prices. We have in recent weeks seen an increase in the interest forseismic services related to oil exploration. Channel count growth will continueas demand for higher-resolution seismic surveys and better images dictates. Asstated previously, the determining factors affecting our results on a quarterlybasis will be weather, downtime, and our ability to secure land access permitsin a timely manner. Historically, the first quarter of our fiscal year has beenour most difficult, with shorter days, weather issues, and the holiday season.With record results behind us, where do we go from here? Our mission isunswerving, continue to build relationships that deliver value to our clients,our employees, and our shareholders. For 55 years, our company has been as good as its word. Wehave helped our E&P company, to identify oil and natural gas reservoirs. Wehave worked with them to reduce their finding and development costs and we haveworked with them as a partner to help them achieve their explorationobjectives. As 2007 comes to a close and we enter 2008, our task is nodifferent. Commodity prices will continue to fluctuate, new challenges willemerge, and the oil and gas industry will continue to evolve. However, ourfocus on delivering value to our clients will not change. At this point, we will open the call up for questions.Kristy, we are ready for questions.

(Operator Instructions) Your first question comes fromCollin Gerry with Raymond James.

Hi, good morning.

Good morning Collin.

Great quarter, again. I wanted to home in on some of theissues that you brought up, one being the geographic expansion that was kind oftalked about over the last few quarters. As you look forward, do you see thatsome of these newer markets, some of the ones that you mentioned, are thosegoing to continue to take maybe even a bigger slice of the revenue pie, asopposed to kind of your historic West Texas market? Kind of walk us through how you see the geographic mixplaying out over the next, call it, 12 to 18 months.

Well, interestingly enough, in the last quarter or so goingback, we have actually had more activity in West Texas than we have had inrecent years. We have operated anywhere from four to six crews in the WestTexas, Eastern New Mexico region on and off for the last quarter or so. TheAppalachian Basin is an area that continues to show a lot of promise. We believe that we'll have expanded operations in theAppalachian Basin sometime in '08. It's a difficult operating environment. Itis difficult in terms of access and using dynamite as an energy source, but weare very optimistic about the prospects in the Appalachian Basin. The Rocky Mountain region, all the way up, including theNorth Dakota region, appears to be very active. And we think we will continueto see increased activity in the Rockies. We're still think, we will be veryactive in Eastern New Mexico and into Arkansas. Another area that appears to behaving quite a bit of interest and potential growth and market is South Texas. We have seen quite a few interest in more South Texas work.The Barnett Shale region continues to or the Barnett Shale, the Fort WorthBasin, I should say, continues to be very active. We are seeing some interestin the Southeast part of the U.S. So that is a long-winded way to say that even though we havea third of our resources or so in the West Texas, Eastern New Mexico area, wethink we will continue to expand. We will continue our operations in theseareas across the country, with probably increased activity in the Rockies andthe Appalachian Basin, and if I had to pick two regions that I thought had thenear-term growth potential for us.

Okay, that's helpful, thanks. Then I want to switch gears alittle bit to you mentioned at the arrangement you have with WesternGeco. Andyou mentioned that that was partly employed during the quarter, or it'scurrently being employed in New Mexico. Can you help us understand kind of what the financial impacthas been of that arrangement since you entered into it last year? And kind of,is that something that you see pursuing more so in the future?

Well, we certainly have an interest in pursuing it, Collin.We’ve been working under this agreement for about a year and half, I wouldguess. And we have done the first project that we acquired was actually forWesternGeco was a multi-client data library job in West Texas. And then thatQ-Land system was not in operation for a while, and we took that crew back towork as an I/O System II. They have since gone back in the last month and areoperating in Eastern New Mexico as a Q-Land project. We hope to keep that crewworking long-term as a Q-Land crew. We think there is potential to do that. Aswe have said before, we like the technology. We think there are some, it is notjust the crew channel count that is the issue it is the Q-Land process from thedesign phase all the way through the data processing phase. Of course, our role in that is to provide the people, therolling stock, and the energy source units. It has been a good deal for uswe’ve enjoyed the relationship. We have enjoyed being a part of the technology.We think it has some growth potential will it be our mainline business in thefuture? I don't think so. But I think our goal is to keep that crew working on acontinual basis from now on. And I think we have an opportunity to do that withthe resources WesternGeco is putting forth to market the technology, and theresources we are putting forth. We think that has strong possibilities.

Okay, and then final question, just kind related to thebigger picture. Obviously, you all put up some stellar quarters in the last fewquarters. I kind of want to get your sense of if you look going forward, whatdo you see as the biggest risks to maybe keeping that operational kind ofstatus quo going forward? You have mentioned kind of the permitting issues in some ofthese newer plays as being an issue. Kind of help us understand some of therisks that you see going forward.

Well, short term, our risks are certainly around weather andpermit delays, anything that can affect our day-to-day operation. Long term, Iwould have to say our biggest risk would be natural gas pricing, as anoverwhelming majority of our work right now is related to the exploration fornatural gas and if there were to be some catastrophic event in the long-termnatural gas markets. I think we would certainly feel an impact of that. We’ve hadsome as everybody is well aware some recent fluctuations in natural gaspricing. But we have been somewhat immune to that on a short-term basis. Ibelieve that is because of the expenditures that these companies make, theinvestment they make into their acreage position, and the lag time it takes toget a seismic project permitted, acquired, processed, and to the point whereyou're ready to drill a prospect. The stuff that we're acquiring right now is stuff that willbe drilled sometime next year and it is very difficult to start and stopseismic projects once they are rolling it is a long-term investment and so, Ithink that long term, our biggest risk would have to be natural gas pricing. Ithink we are starting to fill some of that with work related to oilexploration. We are seeing an increase in New Mexico and through theRockies and into South Texas on some interest in oil exploration. That isstarting to come alive again, and so I think that will help offset some ofthat. But if I had to pick one, Collin, it would be natural gas pricing at thispoint.

All right. Sounds good. Thanks, Steve.

Your next question comes from Pierre Conner with Capital OneSouthcoast.

Good morning, everybody.

Good morning, Pierre.

Hi, Steve, you mentioned the potential difficulties in thisnext quarter associated with the daylight, the weather, the holidays. So, Iwanted to expand or maybe particularly, I think you had two crews in Wyoming,vibrator truck crews. Do you anticipate those attempting to operate through thefirst fiscal quarter and second quarter? Or do those move out of that area dueto weather?

They should be there through the wintertime. I don't thinkwinter anything in particular concerns us at all, Pierre. It is a quarter thatI am not attempting to give any guidance or any indication of what the quarteris going to look like at all. We feel very good about the quarter and about our prospectsall through '08. But on a historical basis, we have been subject to a littlemore weather downtime in Q1. The days are shorter and so your productivity isdown a little bit. We do have the holiday season, where we will be down quite abit towards the end of the year for our guys to be involved with their familiesat holiday time. So, having said that, we feel real good about where we are.

Okay, no, I appreciate it. I was just thinking those inparticular, if the plan was to move them elsewhere.

No, they will be up there through the wintertime and we willbe in the Appalachian Basin through the wintertime.

Same thing? Okay.

In both places, yes; and we will be fully operationalthrough the wintertime as well.

Okay. Related to this crew that you converted from SystemII, or I guess you are in the process, maybe this is happening right now, theadditional ARIES channel. Does that specifically give you an efficiency gain onthat crew? Does it impact cost or margins in any way, I guess? Or isthis a longer-term marketing for you to begin to have more of this particularset of type of system?

It has an immediate impact in efficiency. The data output,the actual seismic data itself between an I/O System II and an ARAM system areidentical. I mean, for all intents and purposes they are identical. You can'tsee the difference. So, the quality of the product is the same. The ARAM ARIES offers us a couple of things that we can'tget with the MRX System. One is channel count capability. We can take thissystem up to 10,000 channels and beyond and operate very efficiently, becauseof the ground electronics and the speed at which the system, the platform uponwhich the system operates is much faster. And so, it allows us to increase the channel count of thecrew. As we increase channel count, we do two things. We increase the valuethat we’re providing; and with increased value we get stronger pricing.

Right.

And we increased efficiencies. Having the ability to movechannels and to have greater flexibility on how the system can be configuredfor projects, I think, helps us both ways. And so, it has a long-term effect in that it is thedirection that we are going with our current systems, and it allows us to dowhat we want to do and what we think the industry is going to do going forward,and that is increase channel count demand and increase the size of therecording capacity. But on a short-term basis, is it provides both efficienciesand the opportunity to do some jobs that we quite honestly could not performwith the I/O System II.

Okay. I'm sorry, head back to the Rockies for a quickquestion. Just I got questions and feedback about this. From what you arehearing, are you seeing any crews that are coming out of Canada to come andcompete in the Rockies at all, or any technology?

Pierre, that happens every year. It typically is more ofspringtime, summertime deal, where they are coming out after the fall. And theywill come in and they will work the northern states for a while and then goback. It is something that we have dealt with for a long time, andwe will continue to deal with. I don't think it has a major impact or anyimpact really at all on our operation.

Okay, that's helpful. Last ones are for Chris, actually.Maybe, I don't know, you don't want to give the details of it, but just roughlysequentially on the amount of pass-through charges/revenues, were theyessentially the same sequentially?

Well, they did go up a little bit; just as in prior year,the fourth quarter did recognize a little bit more. But that's not asdramatically probably as last year, but fourth quarter was sequentially higherthan in third.

Okay, that impacts margins a little bit?

Right.

And then maybe related, I suppose, is a little fluctuationin the tax rate here in the fourth quarter versus prior. And so was thereanything discrete in there? Just adjustments at year-end?

Of course, under the deferred tax piece from June toSeptember, we are looking at the results of the capital expenditures that wemade during the quarter. And in the current part there, we continue to beimpacted by the Texas margin tax as well as the state taxes of where we areworking. So, that does have an impact. If you remember, though, in the third quarter, we had acatch-up in that current piece; so it did taper off just a little bit in thefourth quarter.

Can you give us a feel for what the sort of core number taxrate is go-forward, just to try to narrow it down?

I think we are about, I think, we are zeroing in on it. Itis going to fluctuate, though, based on where we are working and where thedifferent, what states we are working in and how intensely we are working instates that have a more intense tax rate.

Margin tax? Okay, all right. Very good, I will turn it backand let someone else go. Thanks.

The next question comes from Gary Lenhoff with IronworksCapital.

Good morning. Thank you. Steve, can you may be provide somebroad color on how much of the pricing improvement that you are enjoying in thecurrent market is pure pricing, if you will, versus the enhanced technicalcapabilities that you are bringing to your customers?

Gary, I don't have that broken out. That’s a tough one toquantify, because what we are doing today is different from what we did a yearago, which is somewhat different from what we did the year before that. So to break out exactly how much is just pure pricing thatis related to demand and how much of it is revenue improvement related toefficiencies is something I just don't have the numbers in front of me toreally talk about. I will say that the pricing in our industry is still strong.We are still able to price out additional services that we provide. We are ableto negotiate some level of weather downtime protection from our clients, whichis an area that has improved dramatically in the last several years. We are getting some level of price improvement, but I wouldsay that the majority of our improvement is probably related to channel count,the size of the crew, and the pricing that is related to the productimprovement and the value provided more than just straight demand-drivenpricing. You know, we have seismic is interesting in that we havelong-term visibility and long-term demand and occasional short-term weakness.You know, with our inability to get projects ready. So, we are always pricingout ahead of our projects and ahead of ourselves, and so we don't get theopportunity to have real short-term, it is very rare that we have short-termdemand increases. Most of our growth is long term and long-term projected.Most of our growth going forward, I think, will continue to be channel countincrease and pricing related to the value of the improved product. If you look at the history of the seismic industry, in theearly '80s there were something in the order of 700 crews or so working across,I don't know if it was specific to North America or the lower 48. Butnonetheless, there were 700 crews and about 50,000 channels industry wide. Andwhere we are today is about 58 or 60 crews operating in the lower 48 and weoperate over 100,000 channels. And so the point of that is the crews are increasing, thechannel count is increasing. Along with that comes a natural pricingimprovement and natural efficiencies. So I think that is where the majority ofthe growth has been and will continue to be.

Okay, that is very helpful. And second question, of the $30million in CapEx that you have had approved for next year, how much of that ispure maintenance, just to maintain your current capabilities?

I don't really have that number in front of me, Gary.

Ballpark?

I don't know. Maybe I am looking here hold on. Probablywhat? $4 million, $5 million, $6 million, somewhere in that range, maybe up to$10 million, somewhere along in last it kind of varies. The majority of ourcapital will be spent this year on channels, energy sources, and relatedtechnology. And the maintenance capital requirements are going to be based onreplacement vehicles and continued build of cables related to channel countgrowth.

Okay, great. Again, thank you very much.

Your next question comes from Byron Pope with Tudor,Pickering.

Good morning. Wanted to get your thoughts on, Steve, youmentioned roughly 58 to 60 crews working the U.S. onshore market today. Thathas grown kind of midteens growth rate the past couple of years. You mentionedin the press release that demand is pretty robust into calendar 2008 for youguys. As you look out 2008 versus 2007, do you see enough incremental demand tosupport that type of crew count growth in the U.S. over the next year or so?

Every quarter, Byron, I think it is more and more difficultto evaluate what the crew count is going to be, just based on personnel issues.We’ve got some personnel issues in the industry, and we are having to trainpeople at a very high rate. I don't really know what the crew count is going todo going forward. I don't know that we will add any. I don't at this point, Idon't know what the lower 48 capacity is going to be a year from now in termsof crew count. But I will stand by the fact that I think our growth isgoing to continue to be in channel count. I think it’s quite possible at somepoint in the future that crew count may actually decline and channel count willcontinue to increase, as has been the history of our industry in the last 30years. And I think that is a distinct possibility. In the near term, I think wewill continue to operate the 15 that we have. We have talked about a few places where we will increasechannel count and recording capabilities and energy sources on existing crews.And the increase of energy sources and channel count do several things. Theyincrease the pricing related to value of the crew and the product. And thenthey improve efficiencies in both turnkey and term agreements. Both improved efficiencies help us in the long term in termsof revenue generation. So, I don't know what our crew count number will be in'08. But, I can say with some level of comfort that we will continue to seechannel count increases. What will happen across the industry in the lower 48is difficult for me to assess at this point.

Okay. And then just again looking out on the horizon, youhave had almost a step function increase in operating margins the past coupleof years. Is it fair to think about pricing improvements and productivityenhancements as enough to offset any potential margin pressure you may see frombecoming more active over time in some of these areas like Appalachia andRockies, where you have more third party charges? Is it fair to think about directionally margins should be headingstill higher as we look forward?

Well, we are certainly working that direction. Going back tothe question that Pierre asked earlier, he asked Chris a question about thisthird-party charge. I would say that our third-party charges as a percentage ofrevenue, while they have been up substantially, have actually somewhat leveledout in the last four or five quarters. So, I think we’re starting to see some flattening in thethird-party charges as a percentage of revenues. So, I think, we have a betterhandle on where that is going. But to answer your question, yes, I think we have theability to improve efficiencies and improve pricing with channel count goingforward that should be able to overcome any of the margin pressures that arerelated to third-party charges.

Okay.

Here again, that is not we are subject to the weather andthe count time and all these other kinds of things. But I think the safestthing for me to say is I feel very, very good about our position and where weare headed forward.

Okay. And then last question, just one of curiosity, youmentioned in recent weeks you had seen an increase in an interest for shootingseismic for oil plays. Could you say where those are? Is that out in the Permian?

Well, it is Permian related and some South Texas relatedwork and then there's some isolated areas of the Rockies. But I don't thinkthat is a huge impact at this point. I don't think that’s any type of shift orstep change of any type. But it was interesting for us to notice that we arebeginning to get more inquiries related to oil exploration. And that issomething that quite honestly, I hope it stays. I hope we continue to grow inthat area. It has been a long time coming. So I think, there has always been some level of oilexploration, but our emphasis in the past several years has been so weightedtowards natural gas and I think will continue to be so. I think that will continue to be the major driver in theshort term, for sure. But, we have found it interesting that we are starting toget some projects where they are specifically related to oil exploration anddevelopment projects.

Okay. Thank you. Appreciate it.

Next question comes from Walter Ramsley from WalrusPartners.

Hello.

Hello.

Mr. Ramsley your line is open. Mr. Ramsley actually withdrewhis question. We have a question from Mara Fenokian with Greenwood Investments.

Hi guys, I just wanted to find out what your thoughts are ingeneral about WesternGeco's Q-Land technology? I know that I/O has also fullwave technology. I think VectorSeis, and Sercel has something like that aswell. And this technology has been on market for quite some timeright now. I was wondering what is the adoption, if you see more interestlately in this technology and whether you see your future related to thistechnology?

Okay. Thank you for the question. The early part of yourquestion asked about WesternGeco's Q-Land technology and how it relates to I/Oand their VectorSeis and some technologies that Sercel has developed. And Iwould say to you that they are quite different. The VectorSeis and the technology that you mentioned,referenced from Sercel are in fact full wave technologies, where they areacquiring the conventional seismic wave along with two correspondingseismic-type wave movements. And so, it does record all three components of amulti-component project and it is a digital sensor. And so the VectorSeis will increase channel count. They areattempting or they are taking VectorSeis to a cable format that is referred toas their fireplot technology, but it is quite different in its objectives andthe way it operates compared to the Q-Land. The Q-Land is a digital sensor and it is a pure conventionaldetector of P-wave conventional seismic technology. It is a single sensor,there is only one sensor active. It does implement a very high channel count,20,000 up to 30,000 channels and it has been on the market for quite some time,primarily overseas in Northern Africa and the Middle East and has just recentlymade a movement into the lower 48 market here with us. I think all those technologies that you mentioned have someadvantages. They all have purposes and they all will be a part of our industrygoing forward. I think in the short term, we will continue to see increasedchannel count. The demand is going to be for more channels operating on crewsto give us a better image and I think that is where we will see the main partof our growth come into play. We are watching these other technologies, we will be a partof technology growth. Looking forward, I think we will continue to look at someof the wireless technologies. I think the next change that occurs in coststructure and efficiency and economics of the seismic industry will be relatedto wireless technology, but we'll continue to do what we do, utilizing thetechnologies we have. In the meantime, we will be a part of the WesternGecotechnology and we will watch these other technologies very closely.

Okay. Thank you.

Thank you.

There are no further questions at this time. Mr. Jumper, doyou have any closing remarks?

I just want to tell everybody, thank you for yourparticipation and interest in our Company. I certainly want to thank all of ouremployees for their efforts in providing value with our services. I want tothank our loyal client base for their continued support. And thanks to ourvalued shareholders. A replay of this call will be available on our website atwww.dawson3d.com. We look forward to talking with you again at the end of Q1,probably sometime in February, I would think. Between now and then, we wish all of you a happy holidayseason and look forward to talking to you again in the future. Thank you.

This concludes today's Dawson Geophysical quarter four2007-conference call. You may now disconnect.