Good day, ladies and gentlemen, and welcome to the Halliburton first quarter 2013 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator instructions.] As a reminder, this conference may be recorded. I’d now like to introduce your host for today's conference, Kelly Youngblood. Sir, you may begin.

Thanks, operator. Good morning, and welcome to the Halliburton first quarter 2013 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 Halliburton website. Joining me today are Dave Lesar, CEO; Jeff Miller, COO; and Mark McCollum, CFO. Tim Probert, president of strategy and corporate development will also be available today for follow-up calls. 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 materially differ from our forward-looking statements. These risks are discussed in Halliburton's Form 10-K for the year ended December 31, 2012 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 fourth quarter results, which, as I have mentioned, can be found on our website. In our discussion today, we will be excluding the impact of these items on our financial results unless otherwise noted. We welcome questions after we complete our prepared remarks. We ask that you please limit yourself to one question and one related follow-up to allow more time for others who have questions. Now, I'll turn the call over to Dave. Dave?

Thank you, Kelly, and good morning to everyone. Let me begin by saying that our results for the first quarter played out pretty much as we said it would on our last call. Our international operations were impacted by the normal seasonal drop off in the first quarter, but revenues and operating income expanded significantly compared to the prior year as we outgrew our primary competitors. Sequentially, our North America margins improved substantially as we worked through the guar issue and got our equipment back to work as customers refreshed their budgets. Total company revenue of $7 billion was a record for a Halliburton first quarter, and operating income was $902 million. Our Sperry Drilling, Mult-Chem, and Baroid product lines achieved record revenues this quarter and from an operating income perspective, Baroid and drill bits also set new records. I’m very pleased with our results in North America, where we saw nearly a 400 basis point sequential improvement to our margins as we work through our remaining high-priced guar inventory, saw activity levels rebound from the dramatic drop off seen at the end of the fourth quarter, and began to see cost savings materialize from our Battle Red and Frac of the Future initiatives. The U.S. land rig count averaged 3% lower in the first quarter versus the prior quarter. However, despite reduced overall rig activity, horizontal rigs were up sequentially, and we expect this trend to continue, especially in areas like the Permian Basin. Coupled with the increased adoption of pad drilling and 24-hour operations, we expect to see even higher service intensity. We believe that the oil directed rig count will grow moderately from current levels as our customers continue to evaluate the pace which they can more efficiently drill in complete wells. We believe this continued shift…

Thanks, Dave, and good morning everyone. Let me begin with an overview of our first quarter results. Latin America revenues grew 21% compared to the same quarter last year, driven by an expanding revenue base in Mexico, Brazil, and Venezuela, and from a product line perspective, the growth was driven by Sperry Drilling, Baroid Fluids, and consulting and project management. Year over year, operating income was down 11%, primarily due to activity delays and higher costs in Argentina and mobilization costs for the recent contract wins in Brazil. In addition to the deep water Brazil wins David discussed already, we had several highlights with unconventional activity in Latin America this quarter. In Argentina, we provided integrated completion services for an independent operator on the largest volume shale well ever pumped in the country. This quarter also marked the first international application of PermStim, our premium guar alternative, where we designed a customer fluid treatment on a shale well in north Mexico. The eastern hemisphere headline is that compared to the first quarter of 2012, revenue grew by 21% and operating income increased 39%. And though we experienced the typical sequential decline in revenue and margin during the first quarter, we did not see the severity of weather disruption typically experienced during the first quarter. In the Middle East Asia region, compared to prior year, revenue and operating income increased 25% and 51% respectively. We saw the largest growth in the Australia, China, and Saudi Arabia markets. This improved performance reflects the successful startup and execution of contract awards throughout 2012. Specific to Saudi Arabia, we saw over 30% revenue growth relative to the first quarter of 2012, and it’s expected to be one of our top growth areas in 2013. Notably during the quarter, we received a direct award for…

Thanks, Jeff, and good morning everyone. Our results for the first quarter reflect a $637 million net of tax accrual to increase our contingency reserve related to the Macondo multidistrict litigation. The accrual this quarter is in addition to the $191 million net of tax accrual made in the first quarter of 2012. Over the past month or so, we’ve participated in court-facilitated settlement discussions with some of the parties included in the multidistrict litigation, with the goal of resolving a substantial portion of the private claims against us in this matter. These discussions are at an advanced stage, although they’ve not yet resulted in a settlement, and the accrual is based on where we are in the negotiations at the present time. Our most recent offering includes both stock and cash, with the cash components payable over an extended period of time. We’re pursuing these settlement discussions in earnest, because we believe that an early and reasonably valued resolution is in the best interest of our shareholders. However, a settlement of this magnitude is complex, and requires the other settling parties to be reasonable on their part too. From a litigation standpoint, we continue to believe that we have substantial legal arguments and defenses against any liability, and that BP is contractually required to indemnify us as described more fully in our public filings. Therefore, if our settlement discussions are not successful, we’re fully prepared to see this matter to conclusion in the courts. As the [MBL] trial and other investigations progress, we’re constantly monitoring and evaluating developments and it’s possible that we may need to adjust our reserve estimate up or down in the future. Our reserve estimate also does not include any potential recoveries from our insurers. Because we’re engaged in ongoing settlement discussions and active trial…

Okay, thanks, Mark. So in summary, we’re very proud of our strong year over year international growth, which was the highest in our peer group and a solid proof point that we are executing well against our strategy. Our overall international outlook for the year has not changed. We expect revenues will grow in the area of the low teens, and expect full year margins will average in the upper teens. Specifically, for Latin America, we had some temporary activity declines and one-off charges across the region, but it doesn’t change our outlook for the full year. The North America headwinds from last year are largely behind us, and we are optimistic about activity levels and continued margin improvement for the remainder of the year. And lastly, with respect to ongoing Macondo settlement discussions, we are working hard to come to a reasonable settlement that will be in the best interest of our shareholders. So at that point, let’s open it up for questions.

[Operator instructions.] Our first question comes from James West of Barclays. Your line is now open.

Dave, when I saw you back in January and February, there were two things that really stuck out in my mind from our conversations. One was that on the international side you talked about the opportunity set being really the largest you’d ever seen. And then number two, that this was really the time to test pricing in the international markets. I’m wondering if we could kind of revisit that, if you could talk about that opportunity set. Is it still as large as you thought a couple of months ago? And then really the second is on the pricing side, are you starting to see some more pricing discipline from your competition? Or are you starting to see pricing rise?

Yeah, I think with respect to the first comment, the opportunity set in the international markets remains as large as it has been, and I think the largest set that we’ve certainly seen within recent history. So those opportunities haven’t gone away. I think the other point that I should make is that with the Brazil tendering process behind us, the opportunity set is a whole lot of sort of medium-sized types of opportunities. It’s not any big mega types of tenders out there. Which gives us and our competitors, I think, an opportunity to sort of test where we are in terms of pricing. If you look at where we are bidding today, and where we’re winning work, I think we certainly have hit the bottom in terms of international pricing. Believe me, it’s still competitive. But I believe that we’re seeing that it is starting to turn up.

Okay, and then maybe just one follow up on Mexico. We’ve got some contract retendering that has to go through. How long is that process expected to take before you can get back to work there?

There are a couple of big things that happen sort of mid year. So I would expect that through the process we’ll see some sorting out of budgets early, at the end of Q1, and then tenders mid year. It’s probably later in the year, before budgets are refreshed and back to work. But I would expect during the balance of this year we’d see that.

I think one other thing I might add is that on these contracts we’ve gotten extensions on a number of them, but it’s been at a rig count that’s less than what we had been working at while we wait on these tenders to come forward. And that’s really part of the reason that the margins have got squeezed. But as I said, we look at that as sort of a one-off issue.

Our next question comes from Waqar Syed of Goldman Sachs. Your line is now open.

My question relates to North America. It seems the margin improvement was much higher than we expected. It feels better than what you expected as well. Could you provide, Mark, what was the source of the upward surprise in margins in the first quarter?

As we look at it, we thought probably just given a lower level of activity expected in Q1 that we would only get a couple hundred basis points from guar savings. I think the Street knows that we had said that we thought we could get 400 to 450 basis points of improvement in our North America margins from the turn in our guar inventories. We, I think in the first quarter, just given the higher activity levels, got about 300 basis points of that savings on guar, which leaves the remaining 100 or so for the second quarter, which I talked about in my prepared comments. The rest of it, really when you look at it, is activity-related. Very strong activity for us. We got our crews back to work much faster than we thought we would on the pressure pumping side. When you look across our drilling and evaluation divisions, they did extremely well. We saw almost 200 basis points of marginal improvement across D&E as well. So all the activity increase for us just well exceeded the pressure that we saw from continued pricing that we had from rolling some of our pressure pumping contracts in the first quarter.

And this is the first time that I’ve heard you guys be positive on the pricing front as well. What gives you that confidence that pricing could pick up later in the year?

The conversations that we’re having with clients these days are becoming more geared towards making better wells, which leads very quickly into a discussion around chemistry and chemistry application. And those are applications of our technology, and so maybe not today, but that’s the leading edge of the right discussion to have with a company like Halliburton, because we do make better wells when we use that technology.

Our next question comes from Jeff Tillery of Tudor Pickering. Your line is now open. Jeff Tillery - Tudor, Pickering, Holt & Co. : The reported rig counts, we can see activity has trended pretty flattish over the last month in the U.S. Just wanted to hear kind of your discussion, your viewpoint, on activity second and third quarter, and what gives you confidence there will be uptick from here?

A combination of things. We see increases in pad drilling. That obviously drives service intensity for us. You heard my discussion around leading edge of technology application. And those things combined start to take us to more efficient operations where we’re using our equipment. The second thing is really alignment with the clients that appreciate our efficiency level. And so as we position our equipment in the basins and with the clients that want that sort of efficiency, we expect to see improvement. So in spite of, say, rig count modestly increasing, both our share of it and the speed with which that activity happens can increase.

When you look at the well count, yeah, overall it didn’t look that great, but the horizontal rig count was up. If you look inside of that, the rig count went up with the customers whom we work for. A lot of the majors. And then thirdly, we focus more dramatically on well count. And when we look at activity across the quarter, well count was up and so was our service intensity around stage counts. And so that drives improved performance, as Jeff said, when you’re aligned with the right customers doing the right type of work with good technology. Jeff Tillery - Tudor, Pickering, Holt & Co. : And my second question is just as you look out, if you think about exiting this year, North American margins were quite a bit better than I had thought. We’re going to see international margin improve during the course of the year. I would still expect international margins to exceed North America to exit the year. Do you agree with that?

No, I wouldn’t necessarily agree with that. I think it will be a horse race as the year progresses. Certainly North America is getting better, but we’ve still got excess capacity in the North America market that we’ll be dealing with, so there is some pricing pressure that they’re facing. Right now, as the international operations expand and on their base and the improvement that we see, I think that they could actually eclipse the North America margin in the year. But it will be very, very close.

Our next question comes from Angie Sedita of UBS. Your line is now open.

Just to be clear, when you’re talking about North America and modest price increases as customers adopt new technology. Is this specifically in frac? Or in other product lines?

This is all product lines. So this is about making better wells, which is a function of well construction and completions. But I will say these are the leading edge of discussions around how to do it. So very encouraged by the discussions, which means there’s an appreciation for the technology of how better producing wells are made.

And then on North American frac capacity, assuming that we do see another 6-7% growth in the rig count in 2013, and as we’ve discussed here, growth in the well count and, i.e., rig efficiencies, do you believe that the frac market could actually be balanced by early 2014 or even late 2013?

Really Q1 played out very close to what we thought it would, maybe a little bit better activity. We always thought, as we looked ahead, that there still would be some excess capacity in the frac market, maybe in the 10-15% level, too much frac capacity. That could get absorbed very, very quickly in the early part of 2014 based on what we’re seeing.

And our next question comes from Bill Herbert of Simmons & Co. Your line is now open. Bill Herbert - Simmons & Co.: Back to North America here real quickly. You guys have addressed this in some facets, but not necessarily in others. I guess my question is you came into the year with a decent inventory [of drill bit], uncompleted wells. That helped propel better completions activity versus drilling activity in Q1. Drilling activity hasn’t been all that brisk year to date. And yet you guys are waxing confident about the runway remaining for the next quarter or so. At least that’s my interpretation. Can you give us some more granularity as to which markets look better? Which markets look worse? And specific discussions you’re having with customers? Because it sounds like the visibility you see is more nebulous to the market.

Let me take this one. I think it’s not a matter of geography. It really is a matter of your customer base. And we’ve said for years we only deal with what we call the fair way players in the U.S., North America market. These are the folks that are going to keep rigs up and their budgets up, through thick and thin, but also are those that are dealing with some of the lowest lease cost opportunities there. So we pride ourselves on our ability to sort of pick and choose who we work for, and we do that. And so it really doesn’t matter where they’re working. And I really wouldn’t get too concentrated and focused on geography. It’s really what our customer base is. And I think has Mark has said, our customers that we’re working for are increasing their rig counts. They’re increasing their budgets, and we sort of know what their plans are for the remainder of this year. And that’s what gives us the increasing confidence of our position in North America from a margin accretion standpoint, notwithstanding the fact that there are a lot of other companies and customers out there that may not feel so confident. We just happen to feel really strong and really confident about the customer base that we have. Bill Herbert - Simmons & Co. : And then the follow up is on international. Your guidance sort of low teens for the year. You’ve got a 21% year over year increase for the first quarter in terms of revenue growth, which implies a pretty good slowdown with year over year growth relative to Q1 for the balance of the year. Is that conservatism? Or is that based upon conviction that the year over year rate of growth is actually going to slow that much? It’s still commendable, but slower than Q1.

It is truly slower than Q1, but I think that as we look year over year, Q1 in 2012 was a bit more dramatically down. And so we knew that Q1 probably would be a little bit higher percentage. As we look ahead also we think that particularly in Latin America things are going to move a little bit slower, possibly, than some would forecast. So maybe it has a little bit of conservatism in it, but we think it’s a pretty fair forecast, just based on, historically, what you see customers do from this point forward. And remember, last year we saw some pretty significant growth sequentially in our international markets coming off of Q1. So it really is in comparison to last year.

Our next question comes from Kurt Hallead of RBC. Your line is now open.

Dave, a question for you. There was a lot of chatter the last couple of days, at least from one of your competitors, getting very optimistic about the acceleration in the international marketplace as you get through the second half of the year. And I think a lot of that is being driven by the prospects of the Saudis to pick up rigs. I know you’re pretty close to the situation out there, very close. I wonder if you can put it into context for us compared to what transpired in Saudi in ‘06/’07 into ’08, how you would compare that to what you see happening now, and then what kind of impact you would expect that to have on capacity and pricing and opportunities going out late ’13 and into ’14?

Well, I think, sort of on a broad scale, as I indicated before, we are very excited about the potential in the eastern hemisphere markets at this point in time. And we are very optimistic, specifically, about opportunities in Saudi Arabia. If you look at the myriad of areas that Aramco was looking at increasing: gas drilling, work over areas, the whole area of lump sum turnkey projects. And we’re embedded with Aramco in all of those. So I think if you look at the opportunities in the Red Sea, where we recently won some work with Saudi Aramco. So we’re very excited about that market in particular, and obviously we’ll get more than our share of that market as it comes around. We’re in active negotiations with them right now about several projects. Obviously, we can’t talk about them until they’re awarded, but we’re very optimistic about where we stand on them. So I believe that Saudi is a bit of a microcosm of what we see the whole international market playing out as, which is very positive over the next several years.

And maybe in that context, is there a parallel we can draw to what transpired in ’06, ’07 and the acceleration in bus and margins and activity and pricing and everything else that drove the sector for a good two, two and a half year period?

I certainly hope so.

Our next question comes from Jim Wicklund of Credit Suisse. Your line is now open.

Jeff, you talk about service intensity. And we all know that rig count is becoming increasingly passé as a metric. And I understand the improvements in technology in your customer base that drive your business. But have you all come up with a number? Is service intensity growing by 5%? 10%? Is there a number that you all are kind of looking to put on that?

We look at different metrics, so numbers of stages and different things that we see out there. And so when we look at it, we see it improving. I’m not going to give you, necessarily, a particular metric, but we’re forecasting a 9-10% improvement in efficiency of rigs, which gets to what drives the underlying numbers of stages, numbers of activity.

And I know we talked a little bit about rig count and all, but spending. Do you think that North America spending will go up this year, through the rest of the year? There’s been a great deal of question as to whether the rig count is going to move. And like I said, rig count doesn’t matter. And the number of sources we have for footage and wells are kind of sparse. What do you think spending is going to do for the industry overall for North America for the rest of the year?

I think the actual spending is probably going to be flat, and I think that’s a function of spending the money faster, which our clients will be able to do. So I don’t see a big increase in actual spend, necessarily, across the board.

Our next question comes from Scott Gruber of Sanford Bernstein. Your line is now open.

We’ve seen Halliburton definitely take the lead here in pushing for more 24-hour work and pumping in the states. It’s obviously great for asset turns and margins. But you can also complete more stages when you work around the clock. Have you guys gone out and looked at the efficiency gain which is being realized by your pumping fleet, or maybe the pumping fleet as a whole here in the U.S., and how that will impact tightening of the market?

You know, our strategy has been to implement our Q10 pump capability. We’ve [feathered] that end of the market, sort of ratably, as we’ve retired equipment. But we believe we will see probably a 20% improvement in our efficiency on the back of our technology. So when I think about capital efficiency and capital required to address our piece of the market, I believe it will be more competitive than others, certainly in that space.

Let me just add one more comment. Obviously the impact of 24-hour operations adds to the efficiency of the industry, but it also eats up your equipment two or three times faster than your traditional way of doing pressure pumping does. So that in itself also will lend to the consumption of any excess capacity that’s in the market, just because the useful life of your equipment tends to require you to have more maintenance and more ongoing cost. But it does grind the equipment up faster and that tends to take some of the equipment out of the market a lot faster than it might historically have.

And that 20% figure, that’s primarily related to less backup capacity? Or is that a combination of less backup capacity and more stages executed per week, per month?

That’s, actually, in our view, the same thing, stages less horsepower.

The Q10 runs at higher rate of horsepower than traditional pumps and so if you just look through it, you just need 20% less, based on what we’re seeing it run in the marketplace. It means fewer trucks.

If I could ask a quick question on Mexico. You mentioned a little bit slower going here in terms of growth rate in Latin America. What’s your outlook for gas-related activity in Mexico, particularly in the Burgos. You know, Mexico is importing more low-cost gas here from the U.S.

I think it’s still a bit of a science experiment in northern Mexico right now. As we’ve talked about over the last couple of calls, we’ve done some fracs. I think we did the first frac in northern Mexico. And the results have not been made public on that. So we won’t do that today. But I think you can consider it as sort of a prospective science experiment at this point in time. But we are optimistic about what might develop as we go forward.

Our next question comes from David Anderson of JPMorgan. Your line is now open.

Everyone seems to be downplaying the potential improvement in natural gas activity. You did on this call as well. [unintelligible] price has been down about $4 for over a month, and I’m just kind of wondering, some of your [competitors] are starting to lock in hedges. Why won’t we start to see activity increasing soon. You talk about your customer base. You stuck with those guys. I’m just kind of curious what they’re saying. What do they need to see to start getting out there again.

I think you’re right. For $4 plus gas, where they can lock hedges in, is getting to the point where a lot of these fair way players actually can be quite profitable from a return standpoint on these. I think what we want to convey today is that we’re not counting on that in the projection we’re doing of where we see the market going the balance of the year. Obviously if gas prices do stay in the above-$4 level, I think that only adds to the potential optimism that we have about 2013 and 2014.

That number could really change in the second half of the year if it stays here and if your customers start coming back. We should see even more [upset] to your margins.

Yes, that would be our feeling, for sure.

We often hear your competitors complain about your pricing. It also seems a bit like sour grapes considering you guys have a lower cost structure out there. I was wondering if you could just give us a sense as to how much lower you think your costs are compared to your competitors? And also, how far along are you in the Battle Red initiative and some of these other cost initiatives?

We’re not going to comment from a competitive standpoint on where we think we are relative to cost. I think we’re making progress on the two initiatives you describe, Frac of the Future and Battle Red. We’ll plan to give you a better update on that next quarter. But they do drive efficiency for us in the ability to obviously manage our bus. As I said in my prepared comments, I don’t plan to comment on the tit for tat, back and forth around pricing, just because it’s anecdotal. Our commitment is to make a return on the equipment we put in the market and that’s my commitment. And so that’s what we’re doing.

Our next question comes from Brad Handler of Jefferies. Your line is now open.

I guess I’ll stay with North America too to start. And this is a bit of a leading question. If you are as committed as you are, and you have a process where the Q10 pump is rolling out, in principal you cannot retire the older pumps as aggressively and build into an opportunity to work with these good customers of yours that might be growing their bus. Is there any change in philosophy, I suppose, about the retirement strategy of your existing equipment?

No. I mean, the new technology is more efficient. It also has better maintenance cycles. So it’s the right thing to do. And so what we plan to do is continue with what we had said in terms of capital discipline throughout the year. And at this point in the year, we’re well into the year.

I appreciate your spending wouldn’t change. I just don’t know if the retirement intentions might have softened perhaps? I guess just to clarify the question.

I think the way that I would characterize it, from the earlier question, if gas activity were to take off dramatically on us, and we recognized that we weren’t putting enough, it would be easier to dial up our manufacturing just a little bit to get more Q10s out. We’ve been trying to be very disciplined in how the Q10s are coming out. We’ve talked about reducing capex, staying with it, and generating some additional cash flow this year. That’s an adjustment that we can make if we felt like the forecast could lend itself to basically turn out more units rather than keeping the old stuff out of the field and deferring those efficiency gains that we’re trying to capture.

If I could ask an unrelated one on Brazil, so the contracts have been signed. Help us a little bit with the ramp, the incremental revenue ramp. Does that take several quarters? Should we see full run rates only in 2014? Or does that happen relatively more quickly?

I would say to look more to 2014 for the full ramp on that. We will feather equipment in as we sort of go through the year. But don’t expect full on, really, until the equipment’s in place and ready to go.

Our next question comes from Jim Crandell from Cowen Securities. Your line is now open.

Given your somewhat optimistic view on gas drilling for 2014, and given the lead times involved, are you close to the point, or are you almost at the point, where you might consider new equipment building in domestic pressure pumping?

I think that’s one of the huge advantages we have by manufacturing our own pumping equipment, is we don’t have the real extended lead times that our competitors might have with respect to when they order up and can dial up their spend there. So I think we really have the luxury of waiting until probably the second and third quarter of this year to take a look at the market before we have to make a decision as to whether or not we want to ramp up production that could come on stream in 2014. And I think that’s part of the reason that we have the higher returns, is that we have more granularity around our ability to control manufacturing.

For follow up, my question is on the formation evaluation, both LWD and wireline bus worldwide. If you just exclude Brazil for a second, I know that increasing penetration in this market has been key to your overall goal of improving margins internationally. Can you comment, and maybe even include the deep water Gulf of Mexico? Do you feel in both LWD and wireline you’ve gained share of the market in the past year?

Yeah, I think in the last year we have gained some share. And I think it’s demonstrated by some of the markets where we’re working today. So with our sort of full [FE] suite of services, we’re working in east Africa today and some of the more challenging environments there. We’re seeing, as I mentioned, progress in Angola. We’ve won some important contracts [unintelligible] to work in Asia. So yes, we’re making the progress that I would expect and partly just demonstrating our capability to deliver in these deep water markets.

I think we have time for one more question.

Our final question comes from Doug Becker of Bank of America Merrill Lynch. Your line is now open.

Dave, I was hoping to get your last thoughts on Halliburton’s exposure to the artificial lift market. You have a clear focus on mature fields. And particularly just in light of GE’s announced acquisition of Lufkin.

If you look at our portfolio, artificial lift is one that clearly was a hole in the portfolio that we have. We made the acquisition a year ago of Global, and now have an offering in artificial lift. It actually, I think, as we said in either the Q3 or Q4 call last year, has exceeded beyond our wildest imagination in terms of financial performance. And it sort of gives us a window into what the opportunities in that market will be. So we’re glad to be in the business, albeit in a small way right now, but I think that what we’ve demonstrated over the years is that when we get focused on a market and put the capital to it, that we basically are going to be a player. Now, [unintelligible] is going to be basically in [ESP]. At this point in time, rod lift and things like that we don’t view as critical to our ability to compete long run in the mature field area. But I think that having the ESP offering is something that rounds out what we have and was an important acquisition for us to build on.

And Mark, what’s the potential for significantly accelerating the share repurchase program, particularly if a significant portion of the Macondo settlement is paid in stock? Does that alter the thinking?

Certainly a settlement on Macondo gives us more certainty as to what we could do with our cash going forward. I think everyone recognizes we’ve had a cash placeholder on the balance sheet as it were to hold in anticipation of what the ultimately exposure on Macondo might be. I think having an earlier resolution of it, if we are successful in settlement discussions, would give us some certainty, then, as to what we could do. We typically need $750 to $800 million of cash to run the business. And beyond that, everything else creates an opportunity. And so I think you hit it right. If something were to happen, that would create a lot of opportunity for us to do some interesting things.

Thank you. And at this time, I’d like to turn the call back to management for any closing remarks.

No, operator, you can go ahead and close out the call.

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude today’s program. You can now disconnect. Everyone have a great day.