Good day, ladies and gentlemen, and welcome to Halliburton First Quarter 2011 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to your host today, Christian Garcia, Senior Vice President, Investor Relations. Please begin.

Good morning, and welcome to the Halliburton's First Quarter 2011 Conference Call. Today's call is being webcast, and a replay will be available on Halliburton's website for seven days. 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, President, Strategy and Corporate Development. I would 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 on 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 10-K for the year ended December 31, 2010, and recent current reports on Form 8-K. Our comments include non-GAAP financial measures. Reconciliation to the most directly comparable GAAP financial measures are included in the press release announcing the first quarter results, which as I have mentioned, can be found on our website at www.halliburton.com. Dave?

Thank you, Christian, and good morning to everyone. The events in Japan, geopolitical turmoil in the Middle East and North Africa and worst-than-normal weather patterns impacted the global energy industry in Q1. And these events weighed on our results, particularly, causing a significant decline in our Eastern Hemisphere margins in the first quarter and magnified the seasonal drop off we historically experienced in the first quarter of the year. This sharply contrasted with the excellent performance in North America, where margins progressed, as rig activity grew modestly in the quarter. Given these factors, I am extremely pleased with our Q1 results. In my 16-plus years of experience at Halliburton, we've never had a quarter that's had so many moving parts in it. And despite these headwinds, the events that transpired have absolutely not dampened our enthusiasm for the long-term prospects of our business. And we continue to believe that the industry is on the verge of the next major up cycle. Overall revenue in the first quarter was $5.3 billion, which was a new company record. Against the prior year, revenue and operating income grew 40% and 81%, respectively, primarily, from continued growth in our North American operations. Let me now discuss our operating results in more detail, starting with North America. So there's no mistaking our view going into this discussion. Since you know what our headline is, there is, clearly, room for revenue and operating income to grow as we get further into 2011. Compared to our U.S. rig count increase of just 2%, our North America revenue and operating income grew sequentially by very nice rates of 13% and 16%, respectively. The growth came from our continued strategic investments in the North America market. Our Q1 results were impacted by abnormally harsh weather in areas such as…

Thanks, David, and good morning, everyone. Our revenue in the first quarter was $5.3 billion, up 2% from the fourth quarter. Total operating income for the first quarter was $814 million, down 17% from the previous quarter, as strong growth in North America was offset by declines in our Eastern Hemisphere business. As Dave mentioned, the first quarter results included a charge of approximately $59 million to primarily reserve from doubtful accounts receivable from the Libyan national oil companies and certain inventory that we believe has been compromised during the unrest. Now I'll be comparing our first quarter results sequentially to the fourth quarter of 2010, excluding the impact of the Q1 Libya charge. For North America, margins in the first quarter increased from the prior quarter due to stronger activity and improved pricing across most basins. March activity came in much stronger, and margin significantly improved, coming out of the winter season, assisted by higher capacity and pricing. Even with relatively stable pricing and activity, we're anticipating an increase in North America margins in the second quarter, although they could be somewhat restrained by cost inflation. Now in terms of the segment results. Completion and Production revenue increased $187 million or 6%, while operating income remained flat. Strong North America and Latin America results were offset by the declines in the Eastern Hemisphere, where we saw lower vessel and other activity in the North Sea, seasonally lower Completion Tools sales and political unrest and other disruptions in North Africa. Looking at Completion and Production on a geographic basis, North America revenues increased by 16%, while operating income grew by 19% due to higher activity in pricing and oil- and liquids-rich shale basins, where increased completions intensity continue. In Latin America, Completion and Production revenue and operating income increased 11%…

Thanks, Mark, and good morning, everyone. As Dave mentioned, we've been very pleased with the series of contract awards this quarter, which underpin our thematic growth areas. Internationally, we're seeing strong trends in the development of complex, higher-temperature and higher-pressure reservoirs. And we saw success in penetrating key deepwater basins with our High Pressure/High Temperature technologies and key wins with Chevron Thailand and Statoil in Norway. We've invested in the development of the broadest portfolio of High Pressure/High Temperature technology in the industry, allowing us to execute complex wells in the harshest offshore environment and, of course, to strengthen our position in these markets. Since the beginning of 2010, we won approximately 70% of all HP/HT services that have been tended in the North Sea. In addition, we are pleased to have been selected for the provision of a wide range of services in the Malay Basin, including directional drilling, logging-while-drilling, cementing, fluids and testing and completion services. The Malay Basin, incidentally, has the highest temperatures amongst offshore basins, and this project pushes existing technology limits with requirements exceeding 450 degrees Fahrenheit. Integration of our services has been an important differentiator for us in driving market penetration in support of our key growth themes. We have supported this with technology investment in highly efficient workflows under our Digital Asset initiative and, they're providing compelling value propositions to our customers. We recently announced the contract award for integrated drilling and well services in Norway for Fast Track development projects on up to three offshore rigs that are designed to reduce time from plan to production in half. This, together with the Shell, Majnoon and Exxon drilling package contracts awarded in Iraq, provide growing evidence of our customers' interest in our ability to integrate drilling and completions workflows to provide efficiencies for their projects. We envisioned that these types of contracts will continue to grow faster than our discrete business portfolio. Upcoming projects for Apache and Argentina and PEMEX on the Mexico side of the Eagle Ford play will also largely be delivered through our packaged and integrated services model. Contract models are evolving from fixed price contracting arrangements to models that include performance-based and various other risk-reward mechanisms, which are quite attractive to us. The integrated and packaged services model has grown significantly for us over the last two years, and our project management team is today managing over 100 strings globally. Dave?

Thanks, Tim. Just to summarize the call, going forward, I feel even more confident about the prospects of our North America business in 2011 and beyond. We believe there is room for upside in both revenue and margins, as we respond to the continued increases in service intensity. And while our Eastern Hemisphere margins were adversely impacted in the first quarter, we expect recovery in the second quarter, and as activity accelerates in the second half of the year, expect margins to return to 2010 levels. And finally, we are gaining momentum in targeted growth areas, as evidenced by us winning several large key contracts. So with that, let's open it up for questions, and we'll go from there.

[Operator Instructions] Our first question comes from David Anderson with JPMorgan.

Thanks. Dave, quick question about your margins going forward, really, on the D&E side, seems to be one of the keys to earnings growth for Halliburton, kind of 12 and 13, is getting the D&E international margins up higher. Just taking a -- stepping back, I guess, from the issues we've seen this past quarter, can you talk about whether you see some of the drivers to maturely improve these? And when do you see them kind of eclipsing the 20% mark?

Dave, this is Tim. I think a couple of points there. I mean, clearly, D&E was impacted quite significantly by the unrest in North Africa, important market for us. And as you know, we've been gearing up quite significantly in Iraq for our drilling packages there also. And the sort of delays that Dave referred to on the call, with respect to the start-up of those projects because of delays in clearing sites and getting the civils completed, were also quite impactful to us too. So I think, number one, obviously, then is the restoration of some of those activities around getting back to normality for some of those projects. Clearly, we're going to see a significant improvement in Saudi in the coming couple of quarters. We're going to see a significant impact to the Saudi activity offshore. Manifa is a significant project for us. And as you well know, the service intensity in Saudi in their offshore and onshore projects is quite high. So the combination of that, plus the mobilization for a number of the project wins, which we have made, I think, are all a contributing factors towards getting back onto a stronger trajectory for D&E margins in the second half of the year.

Is that, partly, also, a function of where we are in the cycle? I guess, would you expect the D&E -- because I know, it's in kind of the '06, '08 -- is when you really saw the D&E margins pickup. So is that sort of a function of the cycle as you kind of get more on to the exploration side as well?

Yes, most definitely. I think as exploration activities starts -- and we're, clearly, going to see a significant increase in exploration during the front end of this cycle. That's always very helpful to D&E margins.

I guess on a related note, curious about what you're hearing out there on offshore development activity. Would you expect that to start picking up over the next 12 months? And the discussions you have with operators, are they talking about moving projects forward? Is there kind of a greater sense of urgency out there right now, kind of oil prices and potential supply disruptions?

I think in general, I would say that there is an increasing confidence. Psychology of the market, as you well know, is really important. And this does create a sense of confidence in terms of the underlying commodity price. So I would say, just generally, yes, there is a stronger sense of wanting to move ahead confidently. However, we also have to say that I don't think it's actually been seen yet in terms of actually increasing overall activity or putting incremental rigs to work. But in general, to answer the first part of your question, clearly, we're pretty enthusiastic about offshore activity, in general, in the second half of this year.

Our next question comes from Doug Becker with Bank of America.

Thanks. Dave, you mentioned that international pricing is still highly competitive in most markets. Does this mean that we're still seeing pockets of weakness? And what would have to change to change your expectation about the pace of the international recovery?

Well, I think, you got to look at it sort of two ways. One, I think, we clearly see the volume increases coming at us because of the activity increases, and that will absorb the overcapacity out there. And I really wouldn't say that there's pockets on a geographic basis of sort of price competition. I would just say on any large tender today, there's plenty of competition, and significant price concessions being given. That tends, in my experience, to go away, as capacity gets absorbed and people start to focus more on margins and returns and less on getting the original contract in hand. And I think, right now, we're still in sort of the competitive phase of this, but we see sufficient volume coming at the end of this year and into next year that hopefully will absorb that capacity.

And just a quick follow up, man. In terms of -- when you think about capacity utilization, how do you think about that? Should we be looking at rig count, or is there a better way to be measuring that?

No, I think rig count is probably the best surrogate, especially, if it's a deepwater offshore rig, and then you sort of apply your service intensity multiple to that. And I think you can make a pretty good estimate of how fast industry -- spare industry capacity in oil services can get soaked up.

Our next question comes from Stephen Gengaro with Jefferies & Company. Stephen Gengaro - Jefferies & Company, Inc.: Two related questions: one, on the CapEx side. Are there any changes to your plans? And how is sort of the roll out of the equipment in North America are proceeding? And along those lines, how should we think about North America pricing, as we kind of go forward over the next several quarters?

Stephen, on the CapEx side, I think, we're still on our plan. You should expect, I think, 2011 CapEx to be, probably, close to about $3 billion. That's sort of where we've been aiming. Again, most of that CapEx, or at least a higher majority of it will be North America, as we're rolling out our pressure-pumping capacity. This year, we have got a number of infrastructure projects going on around the world as well that will be influencing that number. In terms of capacity rollout, we're on schedule. I mean, I think that you saw a little bit of that influencing our March results and why they came in so strong. And we continue to see that CapEx rolling out systematically as the year progresses. It's contracted. We know where it's going to go and work, and we're staying the course, as we speak. Your second question, I think that -- our general view because that capacity is, basically, being fully absorbed, we saw in the quarter continued increase in service intensity, we saw increases in the amount of horsepower required per job, and we saw an increase in the amount of 24 hour operations that tells you that the environment is still right to continue to move pricing. And so we are continuing to do that, particularly, with regard to making sure that we're more than covering cost inflation that's also pushing against us. And so we still believe that we can continue to move margins forward as the year progresses in North America.

Our next question comes from Dan Boyd with Goldman Sachs.

I'd like to follow up on that last comment. In looking at North America, pressure-pumping intensity versus overall service intensity, clearly, up nicely in the quarter. But can you talk about how much of that sort of revenue growth came from the pressure-pumping intensity side of it than versus the just overall increase in service intensity from some of that -- the other value-added services that you mentioned in the press release during the conference call?

Yes. I think, just a quick comment on pressure pumping, first. We, during the course of the quarter utilization levels, actually, surpassed those at 2008, which I think is another interesting data point for you. But to answer your question fully, I think we're seeing it across-the-board, whether or not it's pressure pumping, drilling and evaluation or completions activity or others for that matter. It's an across-the-board phenomenon. And I think as I've referred to in my kind of prepared comments, this sort of concept of integration is something that is working very positively for us. We believe it is a differentiator for us, and it gives us the ability to provide a platform in which we can essentially bring everything along in that portfolio at a fairly sort of even level, and benefit all elements of the company equally.

That makes sense. Can you comment or give us a little more detail on the strategic placement of frac stages that you highlight in the press release? Just how meaningful is that to the business? Where are you in evolution of that? And I assume that's something that is more unique to the integrated providers like yourself?

I think that, clearly, as Dave referred to, we're seeing a significant shift in the way in which the industry is evolving towards both the oily and liquids-rich activity. And there are significant differences in terms of the way in which we complete those wells relative to dry gas wells. And so what you're seeing is an increased degree of complexity, and frankly, an underlying commodity price, which allows you to drill longer laterals, more stages and complex completions than we've seen here too. And that's driving the service intensity change of sort of 1.4 to 1.8 relative to dry gas that Dave referenced in his call.

Our next question comes from Ole Slorer with Morgan Stanley.

Thank you very much. On the seasonality and weather number highlighted at $110 million, how much of that was domestic versus international?

Ole, none of it was domestic. It was all international. As I said, we had a slight disruption to our U.S. operations due to weather, mainly in the Rockies, the Mid-Con and the Bakken that caused a slight decrease to the margins and revenue stream with respect to Q1. But the amounts we highlighted were totally Eastern Hemisphere.

So if we add all that up, the $110 million, $105 million, and $20 million, that's $235 million to the $2.3 billion of sales internationally. So that just suggests about a 10% margin effect?

Yes. That's about right, Ole.

And you did 9.4% margin, internationally. So does that suggest that in a normal environment and today's pricing -- I mean, normal environment, we can all scratch our heads and ask what that is, of course. But does that mean that we're looking at an underlying run rate, really in the high-teens, when the role settles down again with no further pricing improvements?

I don't know. I haven't said here we're trying to do the math, but I don't know that they would work out that perfectly. I mean, clearly, there's a pricing impact that's continued to impact margins overall. As Dave indicated, pricing continues to be fairly competitive. And as contracts start, we're still having the influence of that -- of the negative pricing over the last year or so that's still creeping into the margins. So I don't think it will work out that perfect. But clearly, some of these things have an impact on margins, strictly, because of your fixed cost level that you had to incur to maintain operations even if the weather shuts things down.

Yes, but it does suggest that the underlying international activity or profitability level is quite maybe significantly better than what these numbers suggest.

Yes, I think, Ole. That's why we indicated we were confident that margins will start to increase next quarter and head back to where they were last year. And then you've got to factor in sort of where the pricing competition evolved the balance of the year. So as Mark said, I don't think it's a perfect calculation as you laid it out, but the trend would certainly be towards swinging it back to last year's margins, if not a little higher.

And how do you think about, Dave, allocation of capital-constrained equipment, whether it's directional drilling, rotary steerable. I mean, I'm sure you have a whole bunch of tools that you consider where to send around the world when you're making these kind of returns in North America. I'm a little baffled that international pricing is as competitive, when you can make these outstanding returns in North America and the market that arguably is becoming a lot more visible and transparent everyday with the order lag. How do you think about that?

Ole, I think that argument would presuppose that all equipment is created equal for all applications, and that's really not the case. What we use, how we use it, and essentially, the orientation of businesses in North America tend to be quite different than in the international market. As you know, in the international markets, they tend to be much more Drilling-and-Evaluation-led. The North America markets tend to be more production-and-completion-led. And so I think that's probably one of the underlying reasons why you don't see the sort of complete freedom of movement of assets around the globe, because they're not always completely suitable in those applications.

Of course, the other thing I'd like to say, Ole, is we were hurt, clearly, by the issues in North Africa. We can't get those assets out of Libya right now, that's part of the issue. So you've got assets that are sitting there that no service company can actually get access to.

As a closing comment, in general, the international markets tend to use a higher service intensity in international markets, even on land rigs, intensity much higher. Use Saudi as an example, Kuwait as an example. It's much more comparable, in terms of the delivery with something that we might utilize in the Gulf of Mexico than it is onshore in U.S.

Our next question comes from Bill Herbert with Simmons & Company.

Thanks. Mark, back to North America and pricing and margins for a second here. You talked about the fact that there isn't a whole lot of difficulty absorbing the incremental frac capacity that's being brought online. As pricing continues to move higher, you're going to be offset by oil service cost of goods sold inflation. And my question is how does that distill into a view on incremental margins. And last year, for the first three quarters, while you were getting pricing activity and service intensity uplift, incrementals for C&P we're between 45% and 56% quarter on quarter. We had a drop in the Q4, 28%, because of, I would assume, in part due to the drop in your Gulf of Mexico work. And then we had, again, relatively subdued incrementals in Q1 of 31%, 32%. So how should we think about incrementals, going forward?

Well, we're not going to give you any specific guidance for different reasons, Bill.

Yes.

I appreciate that. But I think that you should pick up from our comments that we do remain confident that we think that the incrementals will continue to be good, that it will continue to increase. We feel we've kind of hit the bottom on the Gulf of Mexico, obviously, with the increased permits, while it takes some time, we still expect that as the year progresses, the Gulf of Mexico will start getting back to work, and that comes at a nice consistent margin that historically has been quite good. So that will add to the mix, favorably. And then when we look at our margins, particularly, in March, where you had a month that was not influenced by weather, with stronger activity and the rig count, it just says we do expect a bump in our margins in Q2. And as we look out across the year, there's no reason in our view today to expect that, that will not continue to sort of move up as the year progresses. Now it's not going to be at the same pace as we have last year, that's certainly the case, but there is incremental opportunity if you continue to improve our margins. And of course, the second thing, part of the strategic initiatives that we're working on, that we highlighted at our Analyst Day last year, is continuing to work hard on addressing our cost structure as well, so that we can continue to be the lowest cost service provider out there.

Our next question comes from Roger Read with Morgan Keegan.

Just wanted to follow up on the issues weighing on the international margins. As you kind of look by region, obviously, Manifa is going to kick off here. You've got the trouble in North Africa. But maybe a little more detail on Latin America and the Asian markets, if you could.

Well, first of all, just on Manifa, obviously, Manifa will be a benefit. But bear in mind, that those rigs will come in sort of rapidly over the balance of this year. So we will not see a significant one-time impact of that. It will change as we go through the course of the year. You mentioned Latin America. Clearly, Brazil continues to be a positive growth environment for us. Argentina, we've referenced a couple of times, particularly, as it relates to unconventionals and the growing benefits there, particularly, as our customers derive benefit from, of course [ph], new gas pricing which is providing them some confidence to do additional work and invest incrementally. Andean countries, in particular, also, are showing some positive signs. Mexico, the brightest spot there, I think, revolves around two things for us. Number one is the southern development of the Eagle Ford, both in terms of the dry gas leg and also, the oily leg for PEMEX in Northern Mexico, which is clearly a positive for them and us. And the very good progress that we're making with our Remolino lab in Chicontepec, which if you'll recall is, PEMEX's focus on, really, adding a greater degree of G&G capability and underlying science to the development of that reservoir.

And kind of an unrelated follow up, in North America on the cost inflation side, can you kind of give us an idea of what the bigger issues there are other than the obvious one of labor?

Well, clearly, labor, yes, that most definitely is tight. That is a significant component of all of our -- in fact, the largest single component of our cost structure. And clearly, all elements of inflation are kicking in for whatever they maybe, whether they're on proppants, whether they're on transportation, you name it. There's. . .

Price has gone [ph] up quite dramatically so...

Inflationary pressures are there across-the-board, and we're working had to make sure that we contain them. And as Mark said, in terms of making sure that we're a fit into delivery of services and also recovering those inflationary factors through price increases.

Our next question comes from Bill Sanchez with Howard Weil.

There's been a lot of conversations related to the margins in the Eastern Hemisphere and with the progression, maybe, there. I was just curious, as we look more from a top line perspective, 2010 versus 2009, Eastern Hemisphere revenues were essentially flat. Can you talk about what kind of growth we're expecting on the top line Eastern Hemisphere, maybe 2011 versus 2010, as you guys see it right now, given what's going on in North Africa?

Again, I don't think that we want to give specific guidance as to what we think will be happening. We do -- as we said several times, we think activity is coming. We've seen that. We've seen our customers’ budgets as you have, increased significantly. We see a significant number of offshore rigs coming into the market. So areas like the North Sea, West Africa, we expect, as the year progresses, will begin to pick up. Tim mentioned Brazil just a second ago. I think that the issue that we're seeing right now, and part of the reason why you see the impact of just sort of year-over-year flat revenues, flat top line growth is the impact of pricing. That pricing has remained competitive, and that influence continues to mask some of the other activity-related increases that we've experienced, and we believe would be coming. And so we think that, as Dave mentioned, activity is coming and it's going to pick up as the year progresses. And that will have a pull activity-led, sort of margin pull for us in the early part of the year. And we're hopeful that as capacity utilization increases, that the market sentiment will change, that will allow us to begin to think differently about pricing, as we tender for contracts later in the year between us and our competitors, which will probably have more of an influence in 2012. But hopefully, we'll get some of that in late part of this year.

Sure. The project delays that were noted in Iraq of roughly $20 million, do you all believe that specifically just a function of your specific customers, or was that something that you think everyone in country likely experienced?

Yes. I think that if you look at -- if you had in sort of a brownfield drilling site, you have your infrastructure in place, and you probably are not as likely to have been delayed. And we didn't see delays for, instance, in a lot of our work-over activities that we were doing for various companies. But when you go to more of the greenfield opportunities, one of the things our customers are experiencing is preparing pad sites, and typically, that is out of scope of our contract. And when they're developing the roads too and these drilling sites, what they're finding is lots of unexploded ordinance, resulting from the Iraq-Iran war, and various wars that have been in there, and it's taking them substantially longer to get these drilling sites ready for us to mobilize, too. And so I think -- I would think of it more in terms of its brownfield versus greenfield. It's the greenfield projects that are tending to get pushed back a bit because of these site development issues.

Our next question comes from Kurt Hallead with RBC Capital Markets.

I just wanted to -- I know you've mentioned international margin on a number of different fronts, and just for clarity point, I just wanted to make sure I understand it, that on the international margin for 2011 -- on the year, if you look at 2011 versus 2010, are you looking at the same margin for the full year, or are you guys thinking more on the second, third and fourth quarter, that '11 would look like 2010? I just wanted to get some clarification on that, please. Thanks.

Yes. I think we're looking at the, obviously, going forward here, Kurt. I think, clearly, the first quarter has been a very challenging quarter. And I don't think that we would expect at this stage to sort of get that one to make up. So I think you're looking at it correctly by looking forward.

Second, okay, all right. And then just a follow up here on the frac capacity. What do you think is coming into the market here in 2011? And are you still seeing interests from your customers and on term contracts? Those term contracts, 12 months, 24 months, 36 months, have there been any change in the length that you're customers are trying to contract out this frac capacity?

Essentially, we could contract most of our capacity, probably about any terms we wanted to dictate at this point in time. But typically, we are keeping that relatively short. We are not doing essentially, fixed price contracts, we're doing performance-based contracts, which -- and our customers to reach certain levels of productivity, or we have the right to move that spread on to someone else. And we think that's the best way in this. Basically, there's market that doesn't have enough capacity to handle everything that's there. So we're trying to preserve our ability to be opportunistic, but make sure that as every piece of equipment comes out of the manufacturing plant we have, that it has a home to go to on day one.

I think in terms of the overall estimates or overall capacity coming to market, our estimates haven't really changed. I think, we still think that probably in the 3 million, 3.5 million-horsepower is probably what's coming into the market this year.

Our next question comes from Jim Crandell with Dahlman Rose. James Crandell - Dahlman Rose & Company, LLC: I want to ask another question on pricing, internationally. It seems to me that the anecdotal stories about pricing, not just that the commodity end, but what have heretofore been the very largest, highest margin job has gotten extremely competitive out there. And I think, Dave, you've voiced optimism that when activity comes, it will all go away, or at least it will improve. But is it true, in your opinion, that pricing conditions are worse at this time than you might see at this point in other cycles? And do you think it may not all go away just due to various company strategies that exist out there?

Jim, this is Tim. I would say, in general, yes, I think things are more competitive today than we've seen them in the last couple of years, certainly. I mean, typically, when we think about pricing, and when you think about tightening pricing, you really think about changing trajectory of the market. And I think we would agree that we haven't seen a significant trajectory change in the market. I think, what we're starting to see now are some significant signs of trajectory change. Our IOC customers and independent customers are getting more confident about their spend. And in particular, the NOC customers -- and you see that, obviously, Saudi Aramco would be a good example, KOC [Kuwait Oil Company] is another example. And also in the UAE, we're starting to see some significant changes in terms of NOC spending patterns. They don't always typically follow the natural progression of the commodity prices. But as they kick in, you're going to see a change in trajectory of the market. We're going to therefore, see a tightening of supply. And I think, that to Dave's point, as we get towards the end of this year and into 2012, we will see more stability in the pricing markets.

Our next question comes from Brad Handler with Crédit Suisse. Brad Handler - Crédit Suisse AG: Could I ask you -- let's see what's left here. Maybe Tim, you could come back to your comment about your receptiveness to performance-based and the risk-reward mechanisms and your enthusiasm about that? Are you now driving -- in tenders, are you now driving offerings to that regard, or rather, are you, generally, being pulled into offering, that sort of thing? Talk to us a little bit about that, please.

No, I think, we're very much driving towards incentive-based contacts. I think they provide good value for us. And I think that we have invested, as -- you know, Brad, quite a bit over the course of the last couple of years, in really developing efficient workflows, which can stitch together all the key elements of our operation, the key to our customers value proposition. They're not interested in just a collection of services at the well site, they want to see real value. And I think that we're delivering that value proposition, and it's making it a much easier sell for us to engage them in discussions around incentive contracting. And so I do expect that to continue over the course of the next year or two. Brad Handler - Crédit Suisse AG: To what extent are these about the timing, efficiency of well construction versus say, productivity or really production-related...

Yes, I think today, we're very much focused on time-based efficiencies, I would call them, both -- primarily in the well-construction phase. But I definitely think that over time, we have the potential to evolve those to production-based efficiencies too.

All right. Before we close, we'd like to announce that our Q2 2011 Earnings Call will be held on Monday, July 18, at 9 a.m. Eastern, 8 a.m. Central. Sean, let's close out the call.

Thank you. Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the conference. You may now disconnect. Everyone, have a good day.