Christian Garcia – VP IR David Lesar –CEO Mark McCollum – CFO Tim Probert – EVP Strategy and Corporate Development

David Anderson – UBS Charles Minervino – Goldman Sachs Geoff Kieburtz – Citigroup Scott Gill – Simmons & Company Dan Pickering – Tudor Pickering Holt Ole Storer – Morgan Stanley Jim Crandell – Lehman Brothers Kurt Hallead – RBC Capital Markets Brad Handler – Wachovia Capital Markets Michael LaMotte – J.P. Morgan

Good day ladies and gentlemen and welcome to the Halliburton first quarter 2008 earnings conference call. (Operator instructions). I would now like to introduce your host for today’s conference, Mr. Christian Garcia, Vice President of Investor Relations. Mr. Garcia, you may begin.

Good morning and welcome to the Halliburton first quarter 2008 conference call. Today’s call is being webcast and the replay will be available on Halliburton’s website for seven days. A podcast download will also be available. The press release announcing the first quarter results is available on the Halliburton website. Joining me today are Dave Lesar, CEO, Mark McCollum, CFO and Tim Probert, Executive Vice President Strategy and Corporate Development. In today’s call Dave will provide opening remarks, Mark will discuss our overall financial performance, followed by Tim who will provide comments on our operations and business outlook. We will welcome questions after we complete our prepared remarks. Before turning the call over to Dave I’d like to remind our audience that some of today’s comments may include forward looking statements reflecting Halliburton’s views about future events and their potential impact performance. These matters involve risks and uncertainties that could impact operations and financial results and cause our actual results to differ from our forward looking statements. These risks are discussed in Halliburton’s form 10K for the year ended December 31, 2007 and recent current reports on form 8K. In addition, please refer to the table in the Halliburton press release that reconciles past reported results to adjusted results for the non GAAP disclosures. Also note that in our prepared remarks we will be using the term international to refer to our operations outside the US and Canada and we will refer to the US and Canada as North America. Now I’ll turn the call over to Dave Lesar. Dave.

Thank you Christian and good morning everyone. It isn’t often that a business as complex as ours that things go about as predicted, but this was one of those quarters for Halliburton. I will first comment on our first quarter results for both North America and the international markets. I will then talk about where we see things heading for the second quarter and onwards. We had two non-recurring items in the first quarter that essentially offset each other, a gain on the sale of a joint venture interest and a write off on the last required well to be drilled on a 1996 investment in an oil and gas property. My comments will exclude the impact of both of these items. We said in our fourth quarter call that despite the pressures in the US market and the traditional seasonal fall off of our international business that we saw business remaining strong well into the future. We still strongly believe that this is the case. In Q1 we achieved the following results: total revenue for the quarter was $4 billion which represents growth of 18% over the first quarter of 2007. All of our service lines showed strong revenue growth over the prior year with completion tools, drill bits, sperry and landmark each generating growth rates above 20%. We posted quarterly record revenue for cementing, sperry and drill bits and we continue to make good progress in developing a balanced service portfolio. We said in our fourth quarter call that sequential revenue and operating income would likely be down in both North America and internationally. And overall our revenue was down 4% sequentially. However, North America revenue was flat sequentially as the rebound in Canadian activity and excellent performance by our drilling and evaluation segment which was up 5%…

Thanks Dave and good morning. I’ll be comparing our first quarter results sequentially to the fourth quarter. Halliburton’s revenue in the first quarter was $4 billion, down $150 million or 4% from the fourth quarter. This is consistent with the company’s typical seasonal patterns for the beginning of the year. We registered good growth rates for sperry drilling services, drill bits and cementing. On a geographic basis, Latin American revenue grew 4% and as Dave pointed out, North America revenue was essentially flat from the prior quarter. All other regions showed seasonal declines. Operating income decreased by $60 million from the fourth quarter or 7%. Our first quarter included $23 million for impairment charges on the oil and gas property and a $35 million gain related to the sale of the joint venture interest. Our fourth quarter 2007 numbers included $34 million in oil and gas impairment charges and $12 million of executive separation cost. Operating income margins declined by 70 basis points from the prior quarter due to the seasonal slowdowns and price declines in our US fracturing business, offset in part by these special items. Now I’ll highlight the segment results. Completion and production revenue decreased $98 million or 4% from the fourth quarter, while operating income declined $42 million or 7% from the fourth quarter. Included in the segment’s operating income is the gain on the sale of the joint venture interest. We experienced lower sequential revenue for production enhancement and completion tools which were partially offset by higher activity in cementing. Looking at completion and production on a geographic basis, Latin America revenue increased 19% and operating income increased by 38% sequentially. The growth in revenue and operating income was driven by higher vessel utilization in Mexico, recovery from the fourth quarter union strike in Argentina…

Thanks Mark and good morning everyone. As Dave mentioned the second half of this year suggests more robust drilling activity in North America given the strong commodity prices. The past few months have seen announcements from our customers regarding increased activity in newly targeted shale developments. This recent surge in new plays has been enabled by developments in fracturing and horizontal drilling technologies that have increased recovery rates and improved shale gas economics and continues the established trend towards unconventional production in North America. Ultimately production from each shale development requires a high level of reservoir understanding as the shale’s composition and behavior can changed during drilling, completion and even production. In the Marcellus and Woodford shales for example, we’ve worked with our customers using techniques such as our proprietary shale eval service to provide enhanced understanding of the reservoir and to improve completion efficiencies from less than 25% to over 75%. Dave also touched on our US pricing environment, but let me share with you some thoughts on what we expect to see going forward. We previously anticipated US rig count growth in the 3.5-4.5% range and this estimate is likely to be exceeded given the current commodity prices. We continue to see an increase in fracturing intensity. We anticipated that capacity additions for the North America stimulation market would be in the 10% range for the year. We’re monitoring this closely and estimate that the industry’ s capacity is now likely to grow 12-15% as equipment returns from overseas due to an improving outlook in the US and the possibility of a few small entrants into the market. The prospects of increased drilling activity, increased service intensity indicate to us that the additional capacity from our revised estimate can be meaningfully absorbed and the overall market outlook provides…

Thank you Tim. As we’ve indicated, our results this quarter are what we expected. I believe we’ve engineered a soft landing in a very tough pricing environment in North America. And now with our customers rethinking their drilling plans, we are poised to take advantage of any increased activity in this market. We think the pricing environment will continue to be competitive in the second quarter but are very well positioned with our leading technology and execution capabilities. We are even more confident today that pricing will stabilize and that will occur earlier than we had previously anticipated. Internationally we are pleased with our performance with revenue growth rates above our target of 20% with sustainable operating margins. As we have discussed in our previous calls, Latin America will be our fastest growing region and the first quarter’s results bear this out. We recently saw two significant contract wins internationally, which is continuing evidence of the success of our growth strategy. Our outlook for Halliburton remains very favorable and we expect to see strong global demand for our products and services through the end of the decade. Let’s go ahead and open it up for questions now.

(Operator instructions). Our first question comes from David Anderson of UBS. David Anderson – UBS: Thank you. Tim you were just talking about the offshore sector and how it’s kind of poised to start to pick up in the end part of the year. Can you talk specifically about rotary steerable and your plans there? I guess if you could comment about how much capacity you have in these tools and kind of where you were last year and what you plan to do out over the next several years.

I think as we look back, clearly there has been some shortage in supply of rotary steerables into the industry causing some spot shortages in certain areas. I think as we look forward we’ve got very good visibility of the rigs that are arriving, where they’re going and I think that the industry is clearly ensuring that it’s going to supply the industry as required. So no I don’t see any particular challenges there in the delivery of rotary steerables. Of course, looking at the offshore sector, that is the highest usage sector for rotary steerables, very high indeed in fact. So we can expect to see them utilized very broadly in these new rigs that are arriving. David Anderson – UBS: Is there any particular market that uses rotary steerable more like say the Gulf of Mexico at X percent versus I don’t know say like Australia at another percent?

I think any offshore environment where drilling is complex will use rotary steerables today. David Anderson – UBS: Okay and then Dave outside North America you’ve talked about positioning yourself very well for the growth, your growth prospects, are there any regions that you expect to be reallocating capital towards this year in advance of 2009? In other words, are there any changes in your patterns that you foresee?

I think Dave if you look at demand across the globe today outside the US, you know there’s increased demand essentially wherever you look. Obviously our business in Latin America is one that needs to have additional capital allocated to it, but we knew that coming into the year and that was part of our plan. So as Mark has indicated, our capital plan pretty much is on schedule and the capital is going to where we originally thought it would go. David Anderson – UBS: Okay, so you don’t really see any kind of changes over the last couple years going forward then?

I think you know if you look at a couple of the weak spots I mentioned, obviously we will continue to keep an eye on them. I think project delays and some difficulties attracting rigs and some weather issues in the North Sea is a place that we are keeping our eye on. And then I think with some of the issues around geopolitics and some of the financial stresses that we’re seeing. And Nigeria obviously is another area that we’re focused on. But I think you know as we’ve indicated in past calls, the focus for international capital build up is in Eastern hemisphere and focused on sperry and wire line and completion products. David Anderson – UBS: Okay, that’s great and then one last question if you don’t mind. You were talking about some pricing pressures internationally, can you give a little bit of more specifics on those pricing pressures, what is that caused from? Is that just from your peers, is that smaller upstarts coming on the market and is there a particular region you’re seeing that in?

No, I think the issue in the international market is that it’s a longer term contracting market. So you are essentially either in or out and can be in our out for a number of years. And that means that you have to get your initial bids right and have to get your foot in the door on some of these larger projects. And then you have a base of business to essentially build your market share and your operations in a particular country from that base. So it’s really the traditional larger service companies that we’re competing against. But I think as the stakes have gotten bigger and the projects have gotten bigger and longer, getting it right on the front end is very important. David Anderson – UBS: Great, thank you very much.

Thank you our next question comes from Charles Minervino of Goldman Sachs. Charles Minervino – Goldman Sachs: Hi, good morning. Just had a question on, a couple questions on the Manifa announcement. First, was there really a specific technology competency that drove the award of that contract or was it more the group of services that you were offering?

With respect to Manifa, I think when you take a look at the components of technology, there is a broader range of technology which are utilized in the scope of the project. However, I think we have to say that by far the largest value relates to drilling and logging well drilling related activities. Charles Minervino – Goldman Sachs: Okay and then I also noticed that the stimulation services are part of that contract, how critical was that in terms of the award of the contract? Was that a big component there as well?

It was a component but not a significant component compared to that of the sort of well construction activities, no. Charles Minervino – Goldman Sachs: Okay and just a couple other questions on stimulation. Can you give us some color on how big offshore stimulation work is for you maybe as a percentage of total revenues or as a percentage of C&P revenues?

You know that’s not sort of a breakdown that we typically provide. What I can say is that you know really clearly the largest single component of our stimulation business is in North America. We operate on a global basis and in some cases that will be offshore and some cases it will be onshore. But you know the North America represents the largest single sort of concentration of activity. Charles Minervino – Goldman Sachs: I guess what I’m trying to get at is you know are we going to see, is this a theme that we’re going to see going forward of more stimulation work where we see above average growth in the international markets from stimulation?

I think as we all know you know the sort of hydrocarbons are getting harder to find and they’re getting harder to extract and we certainly feel that stimulation technologies will be a very important feature of the portfolio going forward in all international markets, yeah. Charles Minervino – Goldman Sachs: Great, thank you.

Thank you our next question comes from Geoff Kieburtz of Citigroup. Geoff Kieburtz – Citigroup: I guess what I wanted to ask was whether you would talk at all about your, the reasons for your interest in Expro or whether we’re just going to skip that subject this morning?

Geoff I think that if you’ve listened to our discussion about M&A activity over the past several years, we’ve said that we would look for niche acquisitions, geographic expansion outside the US and new potential product lines for Halliburton, all of which need to be accretive to the shareholders and I think Expro would fall into potentially a couple of those. But I don’t think it’s worth us debating it or discussing it on the call any further than that. We’ll obviously update all of you when we’ve made a conclusion on it. Geoff Kieburtz – Citigroup: I guess you touched on the one thing David, I was trying to understand as to whether, you know if something happened would Expro add a new business line to Halliburton?

Yes Geoff, it certainly would as I think you probably know, Expro is very well established in the flow management arena which is an area which really Halliburton does not participate significantly. So that’s clearly one of the attractions. Geoff Kieburtz – Citigroup: Okay, great. And Tim I’d like to come back on your comment about the revised estimate of the capacity additions in the stimulation market for North America. I think you said you know had though 10%, we’re now thinking 12-15%, the difference being capacity coming back into the market?

Yeah I think there are a couple of markets internationally Geoff clearly which are oversupplied, Russia is one of those for example. And we don’t think that with the North America market improving that it’s reasonable to assume that markets will remain oversupplied for a long period of time. In fact we’re actually moving the spread out of Russia into another international location in response to that. With respect to capacity in North America in general, I think we feel that we want to keep you updated in terms of the changes which will help you understand what’s taking place in North America, we really don’t see that as being a significant move but nonetheless wanted to keep you posted so that you’re aware of our thoughts with respect to what it takes to continue to stabilize pricing in North America.

Also Geoff I think it’s important to understand that a lot of this potential horsepower that we see being added to US is really with the new entrants of the smaller players, most of which we don’t compete against. Geoff Kieburtz – Citigroup: Okay. I guess what I found a little bit surprising and maybe there’s another consideration here but that with the US market apparently still in some degree of price erosion that it is, the market, the surpluses elsewhere are going to go to, it suggests there are no other stimulation market in the world that is stronger than the US. Is that correct or is there something else going on that…

No I think Geoff, the issue is a lot of these folks that have put equipment into these what are now oversupplied markets, can’t access a lot of the other markets that are available outside the US. You know setting up in Algeria, going offshore West Africa, offshore Middle East, Australia, places like that. And also I think people have begun to get pretty excited about some of these new potential shale developments. You’ve seen a lot in the press lately about the Marcellus shale so I think you’re seeing some people out to try to pre-position themselves in some of these up and coming shale plays to be able to take advantage of the opportunities as they come along. So don’t go away from this thinking that we see a dramatic overcapacity. As Tim said, what we see is that there is going to be enough demand in the US going forward to absorb the capacity and not have any material degradation on pricing. But also I think it’s the natural way for new entrants or those that are at the little bit at the lower end of the technology curve to find the easiest to access markets. And as the US appears to now be popping up faster than people thought and Canada appears to be coming on maybe faster than people thought, I think it’s actually natural that people would look back to the US as a place to expand their capacity. Geoff Kieburtz – Citigroup: Okay, great, thank you.

Thank you our next question comes from Scott Gill of Simmons. Scott Gill – Simmons & Company: Yes, good morning. I guess Dave for you, earlier when someone asked about Expro you were talking about your rationale for making acquisitions. I was wondering if we could kind of talk a little bit about the land rig business, we’ve seen Weatherford leverage land rigs in Russia for IPM work and there’s a release out today that Schlumberger is looking at Saxon and can you talk a little bit about how you see land rigs potentially within Halliburton’s portfolio as it relates to future IPM work?

Obviously rigs are an important component of completing major integrated projects. Our preferred approach has been to develop relationships with key providers of rigs in order for us to have an opportunity to complete those jobs effectively. That’s worked very well for us to this point and to this point Scott we really don’t see changing that approach. Scott Gill – Simmons & Company: Okay and then Tim lastly the question I have just following up on Geoff’s questioning, do you have any quantitative way to kind of capture frac intensity here in this US market? In other words if the rig count’s up 5%, is there some formula you use to kind of gauge how much of that overall frac business would be up?

Yeah we monitor that closely internally. I think what we told you on our last call was during the course of 2007 we thought that the amount of horsepower per job had gone up by about 10%. We expect that trend to continue, we’ll monitor it closely, we have one quarter’s worth of data this year under our belt. I think it’s probably a little bit premature at this moment to sort of make detailed projections. But suffice it to say that we continue to expect that trend to continue. Scott Gill – Simmons & Company: Okay, thank you.

Thank you our next question comes from Dan Pickering of Tudor Pickering Holt. Dan Pickering – Tudor Pickering Holt: Good morning guys. Tim and Dave could you walk us through, coming back to the Expro question, I think we know mechanically that if Halliburton were to be successful in a bid you’ve got to pay more than the Candover guys by 12-13, 14%. That’s about $4 billion. Tell us how you think about $4 billion in an acquisition whether it be Expro or elsewhere on a return basis relative to share repurchase, buying back Halliburton stock.

Dan, we really don’t have any additional details to provide today on that particular proposed acquisition. Dan Pickering – Tudor Pickering Holt: Okay how do you think about share repurchase relative to acquisition?

Dan, this is Mark, I think as I’ve said in my earlier comments that we always, when we look at the use of our excess cash, you know evaluate closely the returns that could come back to our shareholders on acquisitions versus doing share repurchase and what’s the best use of our cash. And we’ll certainly factor the available cash that we have into any evaluation that we do on the Expro deal once we complete our due diligence and determine what the relative values are. Dan Pickering – Tudor Pickering Holt: Okay, North Sea, you indicated you thought that the rest of the year might be slightly softer, is that a sale of products issue, is it a vessel utilization issue, what’s kind of the, what are the driving components of that commentary?

The UK sector in particular is a little bit of a challenge in terms of rig supply and is very susceptible to any sort of minor disruption. So it’s really kind of a commentary on the fact that until we get new rig deliveries finalized for the North Sea and you know a more aggressive activity scenario, we’re going to see an environment which is going to be somewhat muted. Dan Pickering – Tudor Pickering Holt: Okay so Tim it’s not worse it’s just not better?

That’s correct. Dan Pickering – Tudor Pickering Holt: Okay, thank you.

Thank you our next question comes from Ole Storer of Morgan Stanley. Ole Storer – Morgan Stanley: Thank you very much. Just wanted to touch back on your international growth projections, you’re comfortably ahead of the targets that you set. Does it mean that you are implicitly lowering your year over year growth expectations for the rest of the year? Should we look at your guidance for the rest of the year in isolation of what happened in the first quarter?

No I think that you know we have said for the past several years that we would expect to grow our international business over 20% over a period of two or three years and we certainly have hit that mark the last couple of years. And I think that we had a very good year over year increase in Q4 to Q1, so no we are not implicitly reducing our growth rates, it’s just that Q1 was a great start on the year. But we remain very excited about our opportunities in the international market and fully anticipate and believe that we could hit that long term plus 20% growth rate. Ole Storer – Morgan Stanley: So do you expect that 20% plus for the rest of the year?

I think the guidance we’ve given here is in the range of 20% and that’s probably as best as we can say on the call Ole. Ole Storer – Morgan Stanley: Okay, thank you. On North America, you highlighted that the 50% of your international activity offshore, what would that ratio be for North America?

Well North America is obviously going to be quite different. You know we’ve got a very large and robust onshore market in North America and obviously a fair amount of onshore activity in Latin America too. So don’t have numbers at my fingertips but significantly less offshore activity in the Western Hemisphere than the Eastern Hemisphere operations.

Although if you think about the big offshore basins in North America, obviously it’s the Gulf of Mexico and we have a market leading position in the completions and production end of that business. And we also have a very good market share in the ever expanding offshore Brazil market. Ole Storer – Morgan Stanley: What percentage of North America revenue would roughly be represented by the Gulf of Mexico?

You know that’s just not data I have at my fingertips I’m afraid Ole. Ole Storer – Morgan Stanley: Okay. Just one follow up question on delays that you highlighted, is it just the North Sea where you are seeing a project delays because of scheduling as is on rigs or are you seeing it elsewhere as well?

I think it’s true to say that there are, really the market is very, very tight and you know projects are not necessarily always starting exactly on time as rigs may be delayed completing one program and moving to the next. Typically these things do take place, we normally factor them into our planning. However I have to say that probably we’re seeing a greater degree of delays today than we have typically seen, not just in the North Sea but also in Asia for example as well. So you know I think it’s just a feature of the environment that we’re going to be in until we see some significant new rig deliveries in late 2008 and into 2009. Ole Storer – Morgan Stanley: So does that mean that the project that you announced to have equipment ready for by your customers are getting postponed because of scheduling as is on rigs?

Well particularly on the well construction side you know equipment assets are still in relative short supply so those are very mobile assets and we’ll utilize them on a real time basis to make sure we maximize revenue opportunity. Ole Storer – Morgan Stanley: Okay well thank you very much.

Thank you our next question comes from Jim Crandell of Lehman Brothers. Jim Crandell – Lehman Brothers: Good morning. Tim or Dave, you had hosted a dinner about a month back for one of the largest independent that operates in the shale plays and what he said was at least a little bit surprising to me that they didn’t use any of the big three pressure pumping companies, they considered these long multi stage fracs or commodity business and they basically knew as much about the business as the large pressure pumping companies and even represented that other companies felt the same way. Can you comment on what you feel is if there is any technology to add in these shale plays, it seems like activity is going pretty rapidly there and what you might be doing to try to change that perception?

Yeah I think I can I think one of the things that you’re hearing obviously is that there’s a significant increase in the water frac market and it’s growing, has been growing quite quickly as the shale plays are being developed. I think one of the issues that a number of our sort of enlightened customers see at least is that there’s a significant choking affect of the formation changes that take place which impedes the hydrocarbon flow following conventional water frac treatments. And so it’s really important to ensure that you have a package of chemistry that really enables you to prolong that production potential. So we’ve certainly found we have a service we call it our aqua stem service in frac Jim, which is really used to overcome that effect. It’s got very good traction with our customer base and is used really quite broadly now. Jim Crandell – Lehman Brothers: Okay. And a follow up question on the stimulation business. We now have 12 or so maybe even more publicly held companies who probably can’t wait for the market to increase, at least the other nine that aren’t the big three so that they can start adding capacity again. If you look at yourselves as the market leader and figure that the three major companies have maybe lost 25-30 points of market share since 03, what’s your plan on how you might counteract this?

Well I think Jim, a couple things, one, you know we do sort of command the technology heights with respect to the fracturing business and I think it’s continuing to bring out technology and process and it allows our customer to get the highest production at the lowest net cost for that production, which doesn’t mean necessarily that we’re the cheapest and in fact in many cases and we continue to see it in the rollovers of the contracts in Q1, we got work awarded to us where we were not the low bidder. And so I think our customers do recognize the differentiated technologies, service quality, performance that they get from Halliburton and I think even the bigger service companies. So yes I think there will be more equipment in the business but we believe that every frac spread, every cementing unit, every piece of pressure pumping equipment that we can bring into the market, there’s a market there for that equipment. Jim Crandell – Lehman Brothers: Okay and one other topic it involves IPM. In particular here I’m referring to Menifa and the big job you won in Mexico, can you characterize pricing on those jobs and how competitive pricing is on the IPM work. Certainly you have some competitors that you’re bidding against in each one who are claiming that you’re very aggressive on pricing to get into the IPM business in these areas.

We have a very broad based project management, integrated project management business. We operating in nine or ten countries around the globe and have been doing so for a number of years Jim. So I think the number of companies that can offer and operate a well integrated project are very few. So no, I don’t feel that the pricing in those cases is particularly aggressive. With respect to general large international projects, our customers are obviously exercising their ability to put together large tranches of work and as Dave pointed out earlier, these in some cases give you the opportunity to be there for multiple years or not be there for multiple years. And I think that large companies such as ourselves do a very good job particularly on the well construction side of introducing new technologies to our customers during the course of the contracts which gives us a very good opportunity to provide additional opportunities for them to improve efficiency and for us to improve margins.

Yeah I think Jim just let me add one more thing and I think it’s an important aspect of the investment that we made a number of years ago in our global footprint because a large level of the cost on these bigger projects are logistical costs and footprint costs. And if you have a large project for a number of years you can set up your logistics in a way, you can set up your manufacturing staging and get the economies of scale from your local footprint that you wouldn’t otherwise be able to get. And all that actually means your costs are lower than somehow who maybe is looking at going into a larger project doesn’t have that footprint and logistical capabilities. So just to reiterate what Tim said, you know not only do we have a strategy to grow our revenues at more than 20% a year, it’s at sustainable margins. And I think we’ve demonstrated over the past couple of years that we can continue to move our margins up and make them sustainable in the non-North America markets and get the growth rates we want. So I think that you know we have a model that we apply and I think it’s been successful and other companies have different situations and they have to play the hands, the cards that they got. Jim Crandell – Lehman Brothers: Okay, that’s a good answer Dave, that’s helpful, thank you.

Thank you our next question comes from Kurt Hallead of RBC Capital Markets. Kurt Hallead – RBC Capital Markets: Good morning. I think you may have partially answered what I’m going to ask, I’m going to see if there’s a different tact here. I was a little bit confused, you referenced the fact that you said international margins were not peaking and then you referenced that there’s some element of pricing pressures on the international market as it relates to kind of giving these initial awards on these projects. And I’m just trying to see if you can help me connect the dots between what you just said about sustainable margins, margins not peaking and then having some interim issues on that margin front.

Yeah I think, you know, the focus that Wall Street, a lot of you on this call as well as all of us in the service industry put on these mega projects as they become available, I think by definition means that being successful on one is important to companies. And certainly it has been to us. So I think that attracts an element of price competition that maybe we hadn’t seen before. But I don’t see that as inconsistent at all about our ability to continue to grow the margins for reasons I talked about. The longer term contracts give you better logistical support. It gives you lower manufacturing costs because you can feed your plants at the rate that you need it. You can leverage your economies of scale and the footprint in a particular country that you might be in. And because you are on the contract you have the ability to up sell new technology as it becomes available. And so I think if you look at the [Carais] project for instance, we, that was a very competitive bid when it went in but as we have spent money on and developed new technologies that we’ve been able to offer to our customer, they have seen the benefit of that technology and are willing to pay for it. And by virtue of being on that project, we’ve been able to be successful in that and I don’t see any reason why that model can’t continue. Kurt Hallead – RBC Capital Markets: Great, thank you.

Thank you our next question comes from Brad Handler of Wachovia. Brad Handler – Wachovia Capital Markets: Thanks, good morning guys. Could you please speak to a couple of the issues related to margin in North America in the next quarter or two? I guess you mentioned some steps you were taking to manage your costs, have you already implemented fuel surcharges, do you have any response back from customers about it?

On the fuel surcharge, you know that’s obviously as diesel prices and all other sort of energy related prices have really kicked up in Q1, we are having those discussions with clients. I don’t think from a competitive standpoint it would behoove me to talk about the level of success we’ve had in getting our customers to pay for that. But I think that it will help mitigate the issue going forward. As Tim indicated and I indicated, you know we had a fair number of year old contracts rollover in Q1 and they essentially got some of the reduced pricing that we saw coming out of Q4. But as Tim has indicated in his comments, some of the latter price increases or price negotiations that we’ve been having, sort of within the last week or two would indicate that that has started to stabilize and moderate. And outside of the fracturing business has in fact stabilized and in some places we’re seeing and being able to get some price increases as this point in time. So I think that we’ll see maybe one more quarter of sort of compression on the margins due to another full quarter with the new pricing that came out of Q4 last year plus some of the rollover pricing from Q1. But in the back half of the year we would expect to have seen it stabilize or maybe even increase at that point.

Okay we’ll take one more question.

Thank you our final question comes from Michael LaMotte of J.P. Morgan. Michael LaMotte – J.P. Morgan: Thanks for squeezing me in. If I could get to the capacity question again on pumping, can one of you tell me what the payback looks like now on new build equipment? Are we still looking at about plus or minus eight years? Cash on cash return.

Let me just talk about that, I think there is one fundamental assumption that you have to make in any payback equation and that is the utilization of your equipment. And clearly you know there are a wide variety of utilization factors which are being experienced in the industry at the moment. So clearly it’s a business which we like, it’s one which is very profitable for us. But it’s one also in which we have very high levels of utilization. I think the anecdotal evidence is is that that is not uniform across the industry. So really just want to sort of introduce that fact to you in terms of the analysis of any payback.

Yeah I think Mike, just to give you a ballpark estimate, obviously we’re not going to give you exact numbers, where I think the in pressure pumping maybe the cash on cash payback in the industry is probably in the seven to nine year category that you put. Ours is actually in the two to three year payback because of the more aggressive utilization we have on our equipment. Michael LaMotte – J.P. Morgan: Okay, I guess where I’m going with the line of questioning is, you know while we’re all encouraged to hear about sort of the bottoming out of margins and pricing, what is it that’s going to get actually you know prices to increase over the next two, four, six quarters in that business? Is it technology penetration? It’s just not sort of asset inflation two to three year payback is great, what’s to really push the margins higher in pumping?

I think you’re going to see a suite of new products, new technologies which will assist our customers in the development of these new shale plays. So technology is going to be a key factor. And clearly the delivery and the execution is also a key factor. You know completion efficiency is very important to our customers and you know the anecdotal information is is that completion efficiency for a large segment of the industry is rather low. So the combination of technology, the ability to execute and deliver high completion efficiency numbers are going to be the key to delivering price increments in the course of the balance of 2008 and into 2009. Michael LaMotte – J.P. Morgan: Okay and then if I could squeeze in one more on sperry, with the tightness in the D&M market with growth in horizontal both domestically with shale and overseas, is it possible that and I can throw in a third, you’re obviously sort of the richness of the technology portfolio now within sperry, is it possible that that business line really becomes the principle driver over the next 12 months of incremental earnings?

I think the, it’s a great observation, certainly outside North America or outside the US market, it clearly is going to be the driver of revenue for us because of the footprint, the reputation and the technology portfolio that sperry has. And of course the other reason is is a lot of the incremental revenue going forward are going to come from these new rigs which a lot of the revenues streamed to the service industry is going to come from the drilling and evaluation side first before it moves into the completion and production side where we also have great opportunities. But I think it should be sperry led or certainly drilling and evaluation led as we look out over the next couple of years. Michael LaMotte – J.P. Morgan: That’s helpful, thanks guys.

Okay, let’s close up the call. Thank you everyone for participating.

Ladies and gentlemen, thank you for your participation in today’s conference, this concludes the program, you may all disconnect. Thank you and have a nice day.