Welcome to the Oil States International Incorporated first quarter 2014 earnings conference call. My name is Adrian, and I'll be your operator for today's call. (Operator Instructions) I'll now turn the call over to Patricia Gil. Patricia Gil, you may begin.

Thanks, Adrian. Welcome to Oil States' first quarter 2014 earnings conference call. Our call today will be led by Cindy Taylor, Oil States' President and Chief Executive Officer; Bradley Dodson, Executive Vice President of Accommodations; and Lloyd Hajdik, Senior Vice President and Chief Financial Officer. Before we begin, we would like to caution listeners regarding forward-looking statements. To the extent that our remarks today contain information other than historical information, please note that we are relying on the Safe Harbor protections supported by federal law. Any such remarks should be weighed in the context of the many factors that affect our business, including those risks disclosed in our Form 10-K and other SEC filings. I will now turn the call over to Cindy.

Thank you, Patricia. Good morning, to all of you, and thank you for joining our earnings conference call today. We reported first quarter results last night that were largely in line with our guidance, despite harsh winter weather experienced across much of the United State during the first quarter, along with unfavorable movements in both the Canadian and Australian currencies relative to the U.S. dollar, which impacted our accommodations business. Our Accommodations segment reported results that reflected softer occupancy levels, primarily in Australia, and weaker foreign currency translated results, partially offset by greater contributions from the Canadian mobile camp, due to the winter busy season. The Accommodations segment now has a name, Civeo Corporation, and Bradley will take you through a detailed explanation of the quarterly results and give you a full update on the proposed spin-off later in the call. Our Offshore Products segment reported EBITDA of $43 million on revenues of $212 million during the quarter, representing an EBITDA margin percentage of 20.3%. Strong order flow in this segment continued during the quarter. Our book-to-bill ratio was slightly above 1x and backlog exited March at $578 million, which remains near record levels for this segment. Activity drivers for Offshore Products correlate closely with global deepwater field production development, bidding and quoting opportunities for this business continue to be very robust and prospects are focused on our proprietary product lines. In our Well Site Services segment, we reported strong quarterly revenue and margins, as our completion services business recovered from severe winter weather late in the quarter and exited March with momentum going into the second quarter, as completion activity continues to ramp up in North America. Further, our land drilling business effectively raised full utilization by the end of the quarter with all of our 34 rigs working. During the first quarter, we continue to opportunistically repurchase our common stock under our authorized share repurchase program. We also made significant progress towards the spin-off of the Accommodations segment, which we expect to complete by the end of the second quarter. At this time, Lloyd will take you through more details of our consolidated results and financial position; then Bradley will discuss the results of the Accommodations segment, including an update on the proposed spin-off. I will provide a detailed discussion of the remaining business segments and give you our thoughts on the current market outlook.

Thanks, Cindy. During the first quarter of 2014, we reported operating income of $114 million on revenues of $658 million. Our net income from continuing operations for the first quarter of 2014 totaled $71 million or $1.32 per diluted share, which included $0.02 fully diluted share after-tax impact from third-party transaction costs incurred in connection with proposed spin-off transaction. Excluding these transaction costs, net income from continuing operations would have totaled $72 million or $1.34 per diluted share. The fourth quarter 2013 results were $133 million of operating income on revenues of $675 million. Net income from continuing operations for the fourth quarter of 2013 was $78 million or $1.40 per diluted share, which included $0.07 of after-tax expenses, mainly related to a loss on debt extinguishment reported with the repurchase of $34 million of our 5 and one-eight percent bonds, along with the transaction cost incurred. Excluding these items, net income from continuing operations in the fourth quarter of 2013 was $82 million or $1.47 per diluted share. Our gross and net debt levels totaled $973 million and $518 million, respectively, at March 31, 2014. This represented a net debt to book capitalization ratio of approximately 17% and our leverage ratio was 1.3x at March 31. As of the end of the first quarter, we had total liquidity of approximately $1.5 billion comprised of $995 million available under our credit facilities and $455 million in cash on hand. During the first quarter of 2014, we reported strong cash flow from operations of $105 million and we invested $103 million in capital expenditures, primarily related to the ongoing expansion of the Canadian Accommodations business, the addition of incremental proprietary completion services equipment deployed to service the active U.S. shale plays and ongoing facility expansions in the Offshore Products segment. In…

Thank you, Lloyd. Sequentially, our Accommodations segment revenues were flat at $253 million and EBITDA decreased to $96 million. Our results were impacted primarily by the weaker Canadian and Australian dollar exchange rates, which were sequentially down 5% and 3%, respectively. The weakening of the Canadian and Australian currencies relative to the U.S. dollar sequentially reduced our revenues by approximately $12 million and our EBITDA by approximately $5 million. EBITDA was also negatively impacted in the first quarter by higher propane heating costs in Canada, due to the severe winter weather. Operationally, our results were impacted by lower occupancy levels at our Australian villages, partially offset by stronger seasonal revenues and EBITDA from our Canadian mobile camps, which carry lower EBITDA margin. Australian results for the quarter reflected the reduction in customer commitments, mentioned in the Form 10, and lower overall customer spending due to weak met coal price. Occupancy in our Canadian lodges remained strong and result reflected flat RevPAR in Canada on a constant currency basis. During the first quarter of 2014, our average available rooms totaled 21,130 rooms, and we reported RevPAR of $94 or $98 on a constant currency basis, both of which were slightly down from the $99 in the fourth quarter of 2013. Looking at the rest of 2014. As we discussed on last earnings call, we expect the second quarter results for Accommodations to be the low point for the year with improvements in the second half. For the second quarter of 2014, Accommodations revenues are expected to range between $210 million and $215 million, considering stable results from our Canadian lodges, offset by lower occupancy levels at our Australian villages and the seasonal impact of spring breakup in Canada on our mobile camp activities and on certain Canadian lodges. EBITDA margins for…

Thanks, Bradley. In our Offshore Products segment, we generated $212 million of revenues and reported $43 million of EBITDA during the quarter. While revenues came in slightly below our guidance range, our reported EBITDA margin of 20% was at the top end of our guidance for the first quarter. Certain projects were delayed and slipped into the second quarter due to changes in engineering scope and delays in the procurement and materials needed for these projects. We realized good order flow during the quarter and booked $220 million of new orders. Reported backlog at March 31, 2014, totaled $578 million. And our book-to-bill ratio for the quarter was maintained at slightly above 1x. Backlog additions during the first quarter included connector products destined for Norway, the Mediterranean, and the Gulf of Mexico along with orders for fixed platform and drilling products worldwide. For the second quarter revenues are projected to increase to account for certain projects that experience slippage in the first quarter along with higher activity levels and is expected to range between $240 million and $250 million. EBITDA margins, as always, will depend upon our actual revenue mix, project execution success and overhead absorption during the quarter, but are forecasted to be in the range of 19% to 20%. Despite a harsh winter weather experienced across much of the United State, our completions services business recovered late in the quarter. And our Well Site Services segment generated revenues over $193 million and EBITDA of $63 million in the first quarter of 2014, both of which were at the higher end of our guidance range for this segment. These results compared to revenues and EBITDA of $187 million and $66 million respectively in the fourth quarter of 2013. Revenue for the first quarter increased 3% quarter-over-quarter, largely due to…

(Operator Instructions) And we have Jim Wicklund from Credit Suisse on line with the question.

Where did the name Civeo come from? I Googled it and can't find anything, but you guys on it.

That's a good thing.

We're working with our marketing teams and some outside brand advisors. We looked at what we were trying to create in terms of the meaning behind the brand. And as you can imagine in trying to find a name and brands that has not been trademark in both the U.S., Canada and Australia was fairly difficult. The concept that we were working around were really the idea that we are trying to create a place for our guests and our customers and employees where they can rest, recharge, reconnect with home and with each other. And with that we use the two Latin words which mean community and to be well and combined them to create the name Civeo.

I'm embarrassed. I took five years of Latin and didn't get that. Thank you for that. Good job. Bradley, on Australia, you had the one big customer that you were renegotiating with. Has all that been finalized now?

It's all finalized. We finalized that last year actually and the impact was felt beginning March 1. So we had one month of impact in the first quarter. We'll have the full quarter impact in the second quarter and that is all contemplated in the revenue and margin guidance that we gave.

And if I could on my last follow-up. We've been talking for a while about the eventual potential of LNG in Canada and maybe acquisitions or more encroachment into the LNG business on the northwest shelf of Australia. Can you give us some general ideas of timelines about when that work might be awarded regardless of who gets it?

Well, I'll address Canada first. The Canadian LNG opportunity is exciting for us on a multitude of levels. In terms of the lodge type work, we're currently in the process of landbanking to secure land in the area, in the hopes that some of our customers do move forward with the projects in Kitimat or the Kitimat area on the West Coast of British Columbia. In addition to that, obviously, if those give up idea and move forward then there will be mobile camp work, both for the drilling and the pipeline work, so our full suite of services in Canada could benefit from the LNG moving forward. In terms of timing, it's all customers-dependent at this point. As you know us well, we are, particularly for large new investments, we are looking for customer commitments before we commit our capital and we will pursue that strategy here. So we're executing on our strategy exactly the way we always have. We are working on the land banking and we are making progress there. The next stage will be getting a customer commitment to support the initial investment and we're optimistic. But nothing has been announced at this point.

And we have Jeff Spittel from Clarkson Capital on line for question.

Bradley, maybe if we could start off with Australia, and I guess the source for optimism with stabilization in the back half of the year and maybe even some modest improvement. Is any of that derived from maybe a little bit better outlook in the met coal market with some of the production cuts that have kicked in lately?

Well, there is implicit in our guidance that revenue and margins will improve in the back half of the year. That Australia will stabilize in the second quarter and in itself will show improvement in the back half of the year. Part of that is, is there are some -- well, it's a difficult market in the met coal market. There are opportunities. We're working to capture some of those and hopeful that those will translate into better results in the back half. It's not currency improvements. So there is inflicted in our guidance that there will be an improvement in the met coal side of things in back half of the year.

And Cindy, turning to the completions business, we've seen a nice steady uptick in the average revenue per ticket. I'm assuming a lot of that is based on mix and well intensity. Is there potential if we continue to see the rig count in addition to the well count ramp throughout the year, maybe in certain basins to see a pricing component that could add a tailwind as well?

It's possible. As you'll recall our margins were very resilient throughout 2013 and continue to be so in early 2014. However, what that is, as it's typical in the market, when the demand accelerates, you do have some opportunity for pricing, although I don't think we would except that until the back half or the second half of this year, at this particular point in time. However there, if you've been tracking our reported revenue per ticket that has accelerated continually quite frankly for the last three years or so which we think is a lot focused on our technology offering, new products that we've brought to market and clearly mix weighted towards the more intense completion projects across the United States and North America.

And we have Marshall Adkins, Raymond James on line with the question.

Sounds like you're implying. You're not getting pricing yet, could you give us a little more color on the product lines and geography that you're having the most success in, in the completion side, because obviously given the weather you guys rocked it this quarter there?

Well, I think we were not alone in January and February, biting our fingernails. But just like everybody else march once weather finally cleared, as we said it would, activity did began to accelerate. We're not going to be alone when we tell you that kind of the South Texas, Permian region revenues were up stronger in the first quarter than our other basins. And even though the Permian were impacted by weather, obviously that's where your rig count growth was and some acceleration there. But that was the greatest contributor to, I would say, the moves, if you will in Q1. Now, that weather is clear though we're really looking at other basins to get some acceleration the Northeast market in particular, tracking close to our expectation that has some bias to the upside. And the Rockies is a very strong region for us. The only thing, caveat we got to give there, is we'll be watching road ban impact, but thus far things are progressing nicely. And for us some investments in the Gulf Coast region have given us more deepwater offshore opportunities that we're focused on. And March was very strong for us in the offshore region as well. So hopefully that adds some color. And again, when I talk about pricing, we had a very favorable pricing mix and we continue to have that outlook again as the complex completions proportionally accelerate and we move and get further penetration in the Gulf of Mexico that makes us favorable. I put that in contrast to absolute across the product line across every geography 5% price increases, we're not seeing that. The markets coming out of the first quarter really has not dictated that at this stage.

And any particular product lines jump out is doing meaningfully better than the others?

I mean, again I will talk to mix, but we'll always focus on our more proprietary equipment, our isolation equipment, our new ball launch system, some of the Tempress technology, the IE, the extended-reach technology that we've brought into the market. And then just generally higher pressure, higher temperature type equipment is going to be in high demand in these complex -- zipper-fracs, a number of things along those lines are getting proportionally greater demand and that's where we're focusing our CapEx dollars and our R&D efforts.

Last one for me. FPSO markets, some of these things have been pushed back. What's your outlook for that over the next year?

Everybody is obviously very focused on the macro there and Brazil was getting a lot of focus for that reason. We have said, if you'll recall, in past conversations, I think most everybody has on this call there was such a euphoria around FPSO investments over the next five-year time, that we always cautioned everybody that that rate of growth was unlikely at one point, it was like 150% forward five years compared to the last five years. I think that has moderated, but we always thought it would. And so I guess my reaction there when I think about FPSOs in subsea content, we're still very excited about that. There have been deferrals and delays, lots of rebidding and reengineering to get project economics in line, but they're still out there, and we've been saying this for quite some time. We held a strong backlog through 2013 without a lot of these major projects. There are still there. They should come into award activity. It's always a question of when, but when we look at our bidding and quoting activity, we're still very bullish on the subsea space, the FPSO space and interestingly there's quite a lot of TLP bids out there as well. Again, these play into our highly proprietary product lines and give us enthusiasm to certainly maintain our outlook that we will continue to have a book-to-bill of at least 1 throughout the year of 2014. That is our best outlook today, Marshall.

And we have Jeff Tillery from Tudor Pickering, on line with the question.

Bradley on the accommodations business, curious if you could provide just some color on kind of regional margins in the first quarter, how you guys have reported into Form 10. I guess that's my first question?

Well we're in the process or will be in the process once we get done with the spin, providing the first quarter Q, that will breakout all of that. And so without having done, to carve out financials, it will be hard to give specific numbers on that, until we have all of that work done, but in terms of the margins, generally speaking the U.S. business was fairly consistent with the fourth quarter. The Canadian business was modestly down. The Australian business was down slightly. So directionally that's where it was headed.

And as I think about it for the full year, just big picture, I think about Canada being kind of flattish from a margin profile and then the drivers for Australia being kind of absorption. And I guess the EBITDA margins last year were mid-50s. I've begin about order of magnitude kind of 1,000 basis point margin decline year over year, so kind of mid-to-high 40%, is that a reasonable line of thinking for Australia?

Well, as I said in my comments, what we're expecting right now is second quarter to be the low point as a whole and that really carries across both Canada and Australia in terms of margin. And then that we expect there to be margin improvement throughout the balance of the year.

And then on the last call you had given kind of guidepost on revenue for the business in aggregate. Have your thoughts around full-year revenue changed at all?

Well, we've got first quarter actuals out there. We've guided the second quarter and right now what we've got is we expect revenues to improve Q3 over Q2 and Q4 over Q3. That is built off of the fact that we think that the Australian business will bottom-out in the second quarter and then improve sequentially throughout the year. And likewise, with the seasonal impact in Canada, the second quarter is expected to be lower and then improve in as we start to see the recovery from the seasonal aspect. Not to mention the fact that the second half of the year will benefit from the McClelland Lake rooms becoming operational and starting to generate results.

And Cindy, when I think about the Offshore Products business for the full year, is it reasonable to think about kind of second half of the year, kind of nearly as good as what we see in the second quarter? I mean obviously Q2 is aided by some deferrals from the first quarter, but I think about kind of plus or minus flat second half of the year with two. Is that reasonable?

Right now, our backlog has held steady at a very flat with a book-to-bill of 1. That is always a great indicator of how we're going to do. There just like anything else, as you know, individual projects had different timing that come into your revenue stream, but there is nothing that I see today that is telling me that the back half would be materially different than the first half.

And your next question comes from John Daniel from Simmons & Company. John Daniel - Simmons & Company: Bradley, just want to follow on Jeff's line of questions if I could on the Accommodations business. And I know you don't want to get too specific, but just as we think about the margins in the back half, is it appropriate to keep margins model below the Q1 levels, which has generally been the case historically?

Well, right now, consistent with our past practices we're giving one quarters' worth the guidance. Given where we are in this year for the Accommodations business we've augmented that and say that we expect the margins to improve, but have not quantified it any further than that. John Daniel - Simmons & Company: Given that you're at 100% utilization on the drilling side, does it make sense to build new rigs this year? And if so how many might you guys build?

This probably won't shock you, but we're really looking to optimize our operations and our fleet. And we will make upgrades to our fleet. There has been opportunities to do that and make them more useful for our customer base in the region. However, what the market is demanding right now is, as you know, a very high specification rig. There are many companies out there that are willing to step-in and do that. And so I think our focus right now is on asset optimization and returns on invested capital of the business. John Daniel - Simmons & Company: And then just, a last one really for me is, on the completion services. Cindy, there is some movement in RevPAR ticket, in a number of tickets. I'm assuming the RevPAR ticket jump was just mix related and the reason for the decline in tickets was Q1 weather related. Any color there?

I'm just going to say, I agree. You got it. John Daniel - Simmons & Company: And then last one, any share repurchases in April?

I'm trying to even think back to our timing. But rather than misspeak, I'll just not speak on that comment.

And your next question comes from Chuck Minervino from Susquehanna.

Bradley, question on the second quarter margin guidance there. Would you mind giving us a little bit more color, how much of that you think is seasonality versus maybe kind of just the step down in occupancy levels, just to help us gauge kind of how to think about that going forward?

The margin guidance has implicit in it a larger, as you'd expect, impact on the occupancy decline in Australia, impacting the consolidated margin guidance. There is some seasonality to it. It would be in line with historical results from Canada, in terms of step down sequentially from Q1 to Q2, as you'd expect. And as I mentioned, the U.S. business is fairly steady state at this point.

In the U.S. business, just given the pick up in drilling activity and completion activity and all that, do you see any prospects for the U.S. business to start picking up here for the remainder of the year?

There is that potential. At this point, it's a little early for me to really say, that it will come to fruition. But there are some green shoots, if you will.

And then I was wondering if you could give us also an update, in the Form 10, they mentioned 5,500 rooms expected to roll-off contract in '14 and about 6,773 to roll-off in '15. I was just curious, if there has been a kind of material change in those numbers that that's worth noting?

Most of the roll-off in '14 is related to Australia. And right now there is no prospect, if they will see a material improvement in that in '14. The '15 roll-off is both in Canada and Australia. And at this point, it's too early for those conversations to occur in terms of renewals on that side of re-contracting on that side.

And then just a question for Lloyd. If I get this right, you're going to get that payment in from Civeo and it looks like your debt levels will be fairly low or your net debt level will be almost non-existent at that point. If that's right, can you just talk about capital structure of Oil States as a remaining company going forward post-spin?

Chuck, like I mentioned in my comments, we're going to go out with a $600 million revolver for Oil States. And again, it largely depends on future share repurchase, it will drive the levels of our borrowing under the revolver.

And we have Sean Meakim from Barclays on line with a question.

Bradley, just wanted to talk a little bit about the opportunity for M&A, as it relates to some of your customers' insourced assets once the spin-off is complete. Can you talk a little bit about the timing? Is it something where those opportunities maybe kind of on hold until a decision has been made on the REIT and the spin-out is complete or are those opportunities that you're actively kind of looking at or maybe having conversations?

Well, in terms of our overall growth strategy. The spin-off, the intent, as Cindy has mentioned many times, is that we continue to pursue all of the business lines growth strategies and not allow the spin-off to impact those effort, and that is consistent. The ability or the desire to buy customer rooms has always been there. And since we have not done one, it's not been one that we've been successful on yet, but we continue to pursue it.

So nothing kind of specific to the spin-off or the REIT that would kind of delay or hamper your ability to complete one, if the opportunity presented itself?

No.

And Cindy, on the rig fleet, great to see the utilization numbers. Given how strong the Permian is turning over to the horizontal, could you just give us a little more color on kind of what's been the driver of, is it just new customers, kind of some smaller customers looking for more vertical well, looking to drill more vertical wells? And then do you see this level of utilization somewhere closer to 100% being sustainable on a going-forward basis, given what's happening in the Permian?

I'll just give you a little color. Over the last five years, we've had various transitions in our customer base. And at one point in time, virtually all of our customers were large independents or majors. And I said last year to various people that I thought it was a transitional year where, as you know, many of the customer base in the Permian was refocusing their activity from vertical well to the horizontal rig. They are bringing in new 2,000 horsepower all AC rigs. And in the process, we had weaker utilization and probably averaged in the range of 75% last year. But I view the economics very good for the type of drilling that we do and realized that a portion of our fleet can drill a horizontal. They're not 2,000 horsepower all AC rig, but they can drill horizontal. And I did expect that there will be some customer transition that occur during that process and that's exactly what happened. Now, I'd tell you, it's about 50-50, in terms of who the rigs went to work for i.e., legacy larger independent and some private companies, but these are companies that we have worked for off and on throughout our operating history. So I don't think you should be concerned about resource, longevity or credit quality, if that is the suggestion in your question.

And we have Daniel Burke from Johnson Rice on line with the question.

I apologize, if I missed this, but maybe one for Bradley. Bradley, what specifically are the drivers of improvement in Australia in the second half of this year?

We expect that we'll be able to put additional rooms to work in the back half of the year. It won't be earth shattering, but we do believe that the second quarter results will be the low point both for that part of our business as well as the business as a whole.

And can you parse the comment on additional rooms, maybe Bowen Basin versus x Bowen Basin?

We have not parsed it any further than that. No.

So one other one, I was never quite clear that the termination compensation that you received from the client in Australia, do we see that in Q1 somehow or do we see that ongoing in any way in Q2? I was never quite clear how that mechanism works?

Revenues received from the termination payments were recognized partially in March and will be recognized going forward. The termination payments are recognized from a revenue standpoint over the balance of those contracts in terms of their term.

And so you book revenue, is there associated cost that comes through?

No.

And what's the duration that those payments will continue?

Well, the revenue recognition will continue through the end of the contracts, one, which goes through '15; and one, goes through '16.

Maybe I can tag in and add a little more color. I'll ask Bradley to follow-up if necessary. These are not termination payments per se. It's a contract restructuring, where they're restructuring some of their room needs in more than one facility. And so to Bradley's point, if you're freeing up room, we do expect to be able to refill some of those rooms with other customers and other activity. And I just want to be clear, when you say, are there any costs, there is nothing per se attached to those contract renegotiation structuring. However, you're going to have lower utilization in the facilities, until we backfill with other work and other customers, so that does have the margin impact that you were seeing and that we guided to in Q2, if that is helpful.

And we have Kurt Hallead from RBC Capital Markets on line with the question.

Cindy, a question for you. Once we get the Accommodations spin -- and nice name by the way, Bradley, Civeo, very clever.

Thank you.

Once the spin occurs, I just wondered if you might be able to give us some initial thoughts on your growth strategy for Oil States moving forward, where you may see some -- generally where you may see some opportunities, whether or not is it North American land centric, what your offshore dynamics may be? And once again, I know, you don't want to get specific and wouldn't get specific on a call like this, but I'm just curious what your thoughts are post-spin?

Well, I'll give you an overview and this probably won't shock you either. But at the end of the day, we're going to be a much more focused energy services company, what I think are very attractive drivers. And then deepwater capital equipment space and then also on high-technology completions in North America and both of those have some pretty good tailwinds right now. And there's no doubt about it. But I'll also tell you that both business lines are heavily technology-focused, so anything that we will do, both organic investments and M&A investments are going to be to further leverage the technology space and reputation that we have in the marketplace. We've done that for last 15 years. You're not likely to see that change, but as it relates to Offshore Products, as you know, a lot of the smaller companies specialized acquisition targets that are there, we've done several things that are probably indicative of things we'd like to do going forward, the Piper Valve, Acute technology, QCS to name a few. I would just point out to you that, again, as I streamline more focused companies, those acquisitions and the size of them have had a little more impact and meaning than they had pre-spin-off of the Accommodations business. To some degree, I think those types of contributions almost get lost, but they really help us affect our long-term strategy in the deepwater environment. As it relates to North America, we have done consolidating acquisitions maybe less of late, because the things that we are seeing are more commoditized offering that we have quite frankly resisted. And we really want to focus on higher technology product offerings to meet the needs of our customer base. And so we'll continue to do that. And it will be, obviously, very opportunity-dependant. Again, given the size of the company and the opportunity set, I think somebody talked about our overall capital structure, you were asking Lloyd about that, we have a lot of optionality, as I will call it, to invest in the business, and that may mean continued share repurchases during a period that we don't have M&A growth opportunities. But you're going to see more of the same, I would say for us, it's just going to be a bit different given the platform that we have moving forward.

Now, I was also curious too, Cindy, given the cycle history that you have, a lot of noise in the first quarter, seems like there's a lot of pent-up demand coming out of that. What do you think the sustainability is as we get through 2014? And I mean that in the context, do you think we're in acceleration mode in aggregate when you look at this cycle versus maybe prior or do you think its kind of more of the slow, steady state dynamic that's pretty much been in place for the last a year plus?

We're clearly in an acceleration mode. I mean if you do the math on our guidance, its suggesting a sequential growth on revenues and the EBITDA in the range of 10% to 15%, which is pretty good quarter-to-quarter. And we're not atypical of the outlook that is out there. And so clearly, our customers are excited, and they're well-capitalized, they're moving forward, and I would say that is without a natural gas driver despite higher gas prices and very low storage. I don't think anybody in their guidance is really anticipating a lot of investments in gas. And so again, I've been in this business too long, sustainability beyond this year is going to depend on crude oil prices, which is very dependent upon the rate of storage-build in the U.S. And then ultimately, what are we going to do with gas. And are we going to be an LNG exporter and have other alternative uses for it. That's the long-term answer. And look my visibility is as good as anybody else, 2014 looks great. Customer conversations look great. And again, I think we've positioned our company to participate fully because of the technology focused that we have oriented our actions toward.

And then maybe just one final follow-up, just in the context you mentioned natural gas not being in most companies' guidance, which is true. Two things, you get the sense that the E&P companies are still looking for, say, the 24-month strip to be in that $4.50 to $5.00 range. And maybe ask this question as well is do you think if natural gas gets into that $4.50 to $5.00 range, that we might start to see some basin-on-basin competition for oil field services assets or do you think that the companies will just try to add -- you know what I'm trying to get a here?

No, I get what you're trying to get. I mean, right now, I think there is going to be kind of a release of spare capacity that has been in the market for -- every product line is different. But you hear about, certainly our customers and service company talking about pressure pumping, releasing stock capacity, bringing on new capacity. And I don't really anticipate basin-on-basin competition yet. I don't see that. Just because again, I don't think my customers are really planning to make material investments to natural gas right now. Now, the first market, not surprising that I anticipate will move, it's going to be the Northeast market. And the price range you gave, I think is rational, but it's generally going to be more of the purer play gas company that I think moves there. Right now, the focus is so much on liquids that it's just hard to envision that you're going to see a major broad-based shift this year.

And we have no further questions at this time.

Great. Well, thanks to all of you for participating in the call. We are incredibly busy and active and very focused on completing the spin-off here and getting you a view of just what the two separate companies look like. And we very much look forward to having discussions with all of our investors as we progress through the quarter. And I know Bradley and his new management team will be eager to get out in front of you and tell the broader story about Civeo. So thanks again and we look forward continuing our dialogue as we progress through the quarter. Thanks. Have a great weekend.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you participating. And you may now disconnect.