Welcome to today’s teleconference. At this time, all participants are in a listen-only mode. (Operator instructions). This conference call is being recorded. I will now turn the program over to Doug Fears, CFO. Please go ahead, sir.

Thank you, Heather and good morning, everyone. Welcome to Helmerich & Paynes’conference call and webcast to discuss the Company’s third quarter earnings. With us today are Hans Helmerich, President and CEO, Executive Vice President John Lindsay and Alan Orr, and Juan Pablo Tardio, Director of Investor Relations. As you know, much of the information provided today involves risks and uncertainties that could significantly impact expected results and that are discussed in our most recent 10-K. We will also be making reference to certain non-GAAP financial measures such as segment operating income and operating statistics. You may find the GAAP reconciliation comments and calculations on the last page of today's press release. This morning Helmerich & Payne reported net income of $125.4 million or $0.18 per diluted share for its third quarter ended June 30, 2008 compared with net income of $115.4 million or $1.09 per diluted share during last year's third fiscal quarter. Included in this year's third quarter net income are $0.09 per share of after tax gains from the sale of portfolio securities and $0.40 per share from the sale of drilling equipment and insurance segment. As well as the charge equivalent to $0.07 per share from the in process research and development write-off corresponding to the previously announced acquisition of TerraVici Drilling Solutions. Included in net income for the third quarter of fiscal 2007 were gains of $0.21 per share from portfolio and equipment sales and insurance settlements. As we’ve stated in the release all three of our drilling segments recorded improved results over the second fiscal quarter. John will give you more details, but the continued growth results primarily from newly constructed FlexRigs continuing to move to the field while utilization and average rig margins continued at high levels. Also as mentioned in the report the company announced signing the 18 long-term contracts for 18 new FlexRigs bringing to 50 the total number of new rig contracts announced for this fiscal year. John and Hans will touch more on the new build program and the current demand from the rigs. As a result of these orders our capital expenditure estimate for fiscal 2008 has moved up slightly to about $800 million, our capital budget for fiscal 2009 has not yet been completed. During the third quarter we’ve sold 170,000 shares of our Schlumberger holdings and now on 967,500 shares of Schlumberger and 8 million shares of Atwood Oceanic. Our portfolio pre-tax market value currently is approximately $480 million. I would now like to turn the call over to Hans Helmerich, President and CEO and after Hans and John have made their comments, we will open the call up for questions. Hans?

Thanks Doug. Good morning. The first nine months of our 2008 fiscal year have seen tremendous volatility in oil and gas prices. Since a year ago, oil prices have short of 88% before giving up 10% in the last month, natural gas prices were up a 111% over the same period so reasonably dropping by over 30%. The energy business is no stranger to price volatility. The last big runup in natural gas prices was followed by an industry rig building boom in 2005 and 2006. Some observers believe the industry is already kicked off another new build expansion this summer. Certainly the future level of natural gas pricing will influence the scale of new build opportunities. At the same time we have customers that have sponsored significant upgrades to their rig roster throughout a range of various gas pricing. We believe, this is part of a multi-year re-tooling effort that occurring in part because the new demand placed on the industry fleet exceeds it’s profile of largely older, less capable rigs. Exceeding the customers’ expectations and consistently delivering superior field results continues to drive record breaking demand for our FlexRigs. With that I’m going to ask John to make his comments. Exceeding the customers’ expectations and consistently delivering superior field results continues to drive record breaking demand for our FlexRigs. With that I’m going to ask John to make his comments. Exceeding the customers’ expectations and consistently delivering superior field results continues to drive record breaking demand for our FlexRigs. With that I’m going to ask John to make his comments. John Lindsay – Executive Vice President, US and International Operations: Good morning. Today’s announcement of 18 additional new FlexRigs provides a fiscal year-to-date total of 50 new FlexRigs for H&P. keep in mind all 50 contracts are supported…

Thank you, John. And now, we would like to open the call to questions please.

(Operator Instructions). We'll take our first question from Pierre Connor from Capital One. Please go ahead.

Good morning gentlemen.

Good morning.

Congratulations on the additional orders. Good to see. I guess my first question it relates to that and in terms of the design that – customers are looking-forward there's more and more comment about specific, unique, etcetera. So wanted to just open it up and let you talk about if you've been pushing the envelope a little bit on designed and then in particular there’s been commentary about very unique designs for something like the Marcellus. So without giving away the competitive advantage to someone else might be designing something where do we go from here in terms of specif built rigs?

Well, I'll take a shot at that, Pierre, and then John can add on. One advantage we have -- and it gets back to my comments about continuity -- we have been designing and making improvements in our product for ten years. And, so as we look at different areas and you mentioned some. Today we have the capability and I think as we look and I think as we take the Marsalis, we think it’s going to more than just one rig type but we think that we have designed enhancements already in-house that will address some of the challenges of that field. We also think that field will be suitable for some skid rig designs that we have lot of success with already so I think answering your question this way I think we are in very good shape with what we are able to do design wise and ready to go today for that effort.

And maybe if John was going to follow on with that it be hold in sort of what would be your interest you know I think that potentially on shore in Mexico it would be a fairly dramatic difference in types of rigs you know with somewhat coil tubing drilling capability built in and do you have an interest in pursuing that as well or with what you have in variations you can meet what you want.

This is John. You know we looked at coil tubing and think that there is application for coil tubing I think one of the things that we immediately see is the fact that we drill wells and with FlexRigs and more pressure it puts on other technologies and we have been very successful in doing that. If you just look at the rig types you know Flex Three has really been the workforce in our fleet since 2002 and customers continue to really be satisfied with Flex Three design at the 1,500 horse power rig and it drilled 18, 000 foot at times even 20,000 and 21,000 foot range. So it’s very adaptable to a wide depth range. And then of course Flex4s with the fast move packages, the skid capability, really captured another market share, if you will, for us. If you look at the 33 rigs in the last 90 days, a little over half of those are Flex3 and the other half are various combinations of Flex4s. In addition to that. We have casing running that we’re providing in some cases. We have air packages. We’ve got high mobility moving packages, skid capability, there’s a lot of different things that we’re doing. Kind of building on what Hans said, it’s been a continuous improvement on each of the different generations of rigs that we’ve put together.

No, I’m sorry, go ahead.

I hope that answers your question.

It does. I mean I think the threes are well suited for something like Hainesville, fours for Marcellus and what I hear is that you’re obviously continuing to evaluate other potential to fit the purpose. One last one related to that. All my questions around this potential continued expansion. Is, I would anticipate there’s more and to that extent what becomes your constraint again on additional construction? Be it components, etcetera.

Well, I think that the big driver Pierre, is having the market demand, I mean, when -- and not to try to circle back to a continuity theme, but typically but typically, the tradeoff in trying to have manufacturing continuity is you can either have the customer request the product and in our case all the rigs we’re talking about in our new builds are three year term. So we have that type of customer demand. Or typically the trade off is well you sell select and you determine your own output. Well, we’ve been able to achieve the continuity we spoke of even having customers sponsor under term contracts. Everything that we’re producing so that’s going to be the very first piece. And then we’ve demonstrated the capability of going to a four rig per month cadence. We have the capability of doing that. Again, it will be driven by what the market is telling us to do. You mentioned and I think it’s an area we excel in, supply chain management. I think we have a group of guys that just do an outstanding job and I think we’re in good shape in that regards. So that’s kind of our approach to it and our hope is to be able to keep the business model that allows us to have that kind of customer sponsorship.

Let some other guys get a chance. I appreciate very much.

Thanks Pierre.

Our next question comes from John Daniel from Simmons and Company. Please go ahead.

Hi, guys. One question for you. It seems like your competitors are becoming more aggressive with their new build programs and many have announced three year contracts. Have you seen bidding get more competitive? And given that they are getting similar duration contracts, could we assume that customers view their rigs as similar quality as the FlexRig?

Well I will let John throw into this as well. We would like to see it be more competitive. Because we have led in both term and day rate. And I am assuming, you’re right that there are folks signing three year deals, we know of cases. The customer feeds back to us gosh we have opportunities to do something in a two year term or a one year term. And we know that they’ve said to our competitors you’re going charge that day rate, we’ll just go to a FlexRig. I mean you have to bring in some lower number for us to be interested. Again, that’s anecdotal, John. But I think what pulse we have on this is we’re still leading that effort.

And John, I would agree with what Hans said. I think in general, again, this is feedback we get from our customers, is that our competitors are usually willing to do a deal in less than three years and that’s one of the things that they comment on but in general most of our customers really don’t have a big concern with three year term contracts. In fact, we have a large portion of term contracts that are four year and in some cases even longer than four year and I think in addition to the term contract it’s the pricing. Our pricing is still substantially higher in lot of cases in our competition but there is no doubt that the competition is going down the new build path and I think that’s great for the industry and its great for H&P and we welcome the challenge. And the object is to continue to get better in that’s what we are seeing in our fleet.

And we’d love to see, John, all our competitors require a three year term, require full day rates. We think this is the part of the cycle where people willing to invest capital and new ideas back into business are to have some reward for doing that.

One follow up if I may. The contracts that you sign it is safe to assume that you get pass through for labor costs if they should rise over the term of the contract?

Yes, we have inflationary protection both on labor and not only labor but also oil filled inflation, parts and supplies, which we call PPI index. And again, I think, we’re making a substantial investment and we’re protecting our investment from a margin perspective.

Thank you.

Thank you.

We will take our next question from Arun Jayaram from Credit Suisse. Please go ahead.

Hi, good morning guys. Hans, I was wondering if you could comment on what you’re seeing from the major oils, a customer group you’ve historically done very well with. We’ve seen some pretty interesting property transactions with BP and Exxon and Shell in North America, I just wanted comment on what you’re seeing from those customers?

Well, I think that, you’re right they appear to be more interested in some of the domestic share on gas price and we take some encouragement from that, I can let John if there is anything more update than that, we haven’t I don’t think released customer list from this recent new build order. But it’s people that both majors and super independent that is continue to prefer the FlexRig. We still continue to have the concepts with majors and super majors that are contracting rigs in they are big customers of ours. But I think we are also continually encouraged by some of the smaller players that have begun to contract FlexRigs. And so we would expect that anywhere -- our current base of customers have some expansion opportunities that we’re going to be included in the mix.

That’s helpful. And then John, I was just wondering if you could maybe elaborate on what are seeing in South America that you’re obviously adding some builds I believe for Oxey. But I was just wondering if you could comment what are seeing in Latin America and particular in Venezuela?

I think Venezuela is just kind of more of the same, we have 11 rigs and it looks like the rigs are going to continue to be busy, there is obviously a demand for the services there, I don’t see its our fleet there. Receivables seem to be in good shape and its just kind of clicking along, things are going, I think, we are encouraged by Latin America in general and some growth opportunities. We’re moving FlexRigs in and they’re mobilizing now and there’s a lot of excitement in the organization to see the growth down there. But really it just seems like things are continuing on the same path that we had been on.

Okay. And then, last question in order to achieve that four rig kind of per month cadence what kind of operational adjustments do you need to make in terms of your manufacturing capacity in order to achieve that?

Well, we have and been at that pace and so there is really not big stride in terms of what you have to do on the ground to be able to go there. It gets back to what I mentioned earlier. We’re trying to be responsive to our customers and when we say the demand that would drive a four rig per month cadence, we would move there. So, I think from this is what I hear you asking you know are there certain hurdles that has to be over come to achieve that cadence and the answer is we have those well addressed.

Okay, that’s fair. I appreciate it, thanks Hans.

Thank you.

We will take our next question from Mike Breard of Hodges Capital. Please go ahead.

That’s a great quarter. I wonder if you could just give us little more color on the [Teravicke]. Have they actually done test wells? Just maybe a little idea on what’s going on there?

We are in a testing period its not commercial as you know Mike and so it’s going to be something we keep folks informed as we make progress. So as we look really to 2010 we are scheduled to achieve commerciality what we began to we’ll give everybody more color on what we have to do and frankly we kind of formulate on our own game plan.

Ok thank you and one last question in the 18 rig that you just had ordered when will that be delivered I mean the last rig of the 18?

Mike, this is Juan Pablo. I believe our last rig at this point is scheduled to be delivered at the end of fiscal ‘09.

Okay, thank you.

We will take our next question from Mike Drickamer of Morgan Keegan. Please go ahead.

Hi, good morning guys. Great quarter.

Thanks.

With 32 rigs now still left to be delivered of the -- I guess 127 total, what are you guys quoting new customers as a lead time for ordering another rig right now?

Well we are pausing because we are hesitating and give a lot of granularity with how competitive this is Mike in terms of saying well here are the slots that we have open and here because we have several conversations going on today and we know it’s a very competitive space. So, I think we are going to take a pass on giving you a whole lot of specifics on that.

Can we say it least say 9-12 months?

Yeah. I think if you wanted one in that time frame where we could make space for you in that time frame.

I would appreciate that guys. Let’s go in another direction then. Looking at you know you guys start this new build program in 2005. First rigs I believe went into field in 2006. They should be rolling off contract here, I guess in 2009. Can you remind me how many of those rigs are going to roll off contract in 2009?

Yes, beginning in our second fiscal quarter we’ll have three rig roll off and then in the following quarter Mike so the third quarter 8 and then end up the year with 9 coming off. So, 20 rigs in our fiscal ‘09 year.

Okay. And then obviously does rigs were put on contract before we saw the big increase in rates in say the ‘06 and ‘07 time frame. If you look at where those rigs are priced relative to leading edge rates, how much of a differential there?

Well, we are going to make the cases, there is large differential. You’re right. Your sense of that is correct. Those were bid at a time on the early end of this. And so, they would have room to go up. I’m going to let John give you if he wants to a better number of how much head room there is in a rollover for those contracts.

Well, there is, it comes back to the original comment about the numbers and how much of it we want to share. There is a pretty large gap. One thing I do want to mention. The contract rate that we had at the time, today those contract rates are probable on average $2,500 a day higher as a result of what we’ve discussed all along which is we have cost protection we have cost passwords. That’s one thing to keep in mind. Those day rates are probably right at the $20,000 a day range today as opposed to being in some cases 21,000 as high teens. So, that’s part of the advantage to having the inflationary protection. So, there’s several thousand dollars difference you know where the market is today. And we’re 20, 25, 27, $28,000 a day. So, there’s an opportunity there.

All right, guys. That’s going to be it from me. Thanks a lot.

Thanks, Mike.

We’ll take our next question from Dan Boyd of Goldman Sachs. Please go ahead.

Hi, good morning. Just kind of building on that one of where margins on, are expand the most recent round of new builds, can you compared those to where some of the contracts you signed earlier this year. And can you confirm sounds like its maybe $3,000 or $4,000 below the peak you received on some new builds contracts maybe in ‘06?

Good morning. Today’s is well; today’s pricing is very similar to what we would have seen in the peak on some of the new builds. It’s really difficult to nail it down, Dan, because we’re talking about a lot of different rigs, rig types, rig models, and customers have different requests. One of the things we’ve been pretty consistent on this, our returns, our in that high teens range. And we continue to see that. And so it’s rather that be dealing with day rates, probably prefer to stick to the returns.

Okay. Fair enough. Can you also talk, looks like you have 18 contracts here with, what is it, eight different customers. Are you seeing a different mix in the type of E&P company or the size of the E&P company that’s inquiring and willing to sign three year contracts?

I mentioned I touched on it briefly earlier. We do still have that same solid base of customers whether they’ll be majors and large independents. But we have had a lot of interest from some smaller operators, and again, I think that’s encouraging because there seems to be kind of a light bulb if you will effect. People are starting to catch on to what we’ve been talking about in terms of the value proposition. You can pay more per day, which you can get lower total well cost and no wells delivered per year and so we’re encouraged by that and so if we have expanded our customer base and I would that we’ll continue to have opportunities to do that.

Okay lastly, given the big build out in the US, can we assume that the international adding additional rigs at the new international it can might be on hold for a moment?

You know, it’s not the approach we were taking And you’ve heard us say before Dan, and we’ve taken an approach that says we look that says we look at this as an opportunity set. And a year ago when there was a lot of investor interest in more international expansion we looked at domestic and international business opportunities as an opportunity set then. So, we have several active conversations going internationally today where people are interested in FlexRig technology. And we still have to see a larger footprint there. At the same time our strong buyers is going to be where the best returns and what makes the most sense from an investors perspective so that’s the balancing that we don’t really have a goal in terms of here’s the fleet split we want and we’re going to drive that fleet split kind of no matter what. And so it’s being responsive to the market. But just from your question, I wouldn’t want to leave the impression that we’re on hold there because we’ve got lots of active conversations working today.

It’s fair to characterize that the returns as similar in both markets, but maybe the risk profile of adding to the US fleet as being lower?

I think that there is -- what are seeing is that both returns and risk is more attractive in the US today and I can give you an example comes Nebraska is an area that we have people on the ground very interested in that market should be an attractive long term market that clearly is risk has gone up and the returns have gone down and as business that work frankly we do not have do but we are open to hopefully improving over the years because it is a market that holds a lot of potential so it is that kind of trade off and we are trying to do the best we can in terms of how do you risk rate these countries and we are able to get the kind of returns that make sense. We have got the people and the experience of being in international markets and there is not a blocking position someone else has out there we are not invited to the table and given an opportunity to look at things. So, it gets down to that type of thing you hit on which is the risk reward.

I appreciate that.

Thank you.

Our next question from Doug Becker of Banc of America. Please go ahead.

Thanks. Hans, we are just hoping if you could look a little bit further out and do you anticipate seeing customer demand just to find expanding you manufacturing capacity beyond four rigs per month?

Well, we believe Doug as you know and just kind of this multi year retooling campaign that is underway and we do not know how smooth or steady it will be but to your question you know we have looked at what is the right production cadence. What fits the best? And I was very proud of our guys and being able to run in that 2007 timeframe 12 consecutive months at four rigs per month. We did that on budget, we did it on budget or we did it on time we’re given better at this. So, kind of I hear your question being well, could you go to five? That’s something that we’d be willing to examine again based on what the customer demand is. As you’ve heard us say before, a large part of our brand leadership is the field execution, having the people, training them, making sure that when we hit the ground, we’re exceeding customer expectations. So, you can’t so just for the manufacturing end of it. You have to solve for the field end of it. And again kudos to our guys and how they have performed in that regard. Those are the moving parts to the question. But it’s something that we’re constantly under examination with.

Is it fair to say that it does really feel and that’s the bigger constraint in then say in manufacturing in?

Well, it’s fair to say that what we’re most sensitive to because we haven’t had problems in attracting crews and train in folks but that’s what we’re most to watchful of in terms of the formula we are talking about.

Okay. And then, just a quick house keeping item mentioned that some of the legacy rigs will be returning how many you are expecting return to the market in the up coming quarter?

We have four stack now, I would expect one, one of those four to return in this quarter.

Okay. And then, kind of reconciling that with the revenue per day guidance, one legacy rig returning doesn’t seem like that would be enough to keep rates flat sequentially. Is there another moving part there that I’m missing?

Yes, Doug, this is Juan Pablo. From quarter to quarter, the change is going to be more than one. We had an average of -- I don’t recall the exact number seven or eight in the prior quarter now we are going to have number that significantly lower than that we expect in this quarter. So quarter to quarter the change will be significant.

Got you. Okay, thank you.

Thank you.

(Operator Instructions). We will take a follow up question from Pierre Connor of Capital One. Please go ahead.

Actually gentlemen, Doug exactly asked the question which was just clarification on John’s commentary about additional rigs coming into the fleet, maybe to be more specific I don’t know if you would venture out as to an average number of rigs that you can see operating in this quarter?

In this current quarter, I think we are going to average 177 rigs which is what we have running right now.

Okay.

We should average about 177.

Okay. That helps with your comments on Doug’s question to explain it. Thanks very much gentlemen.

We will take our next question from Jason Ferguson of Merrill Lynch. Please go ahead.

Hey, good morning.

Good moring.

Just one last follow up on the manufacturing capability, I think you established, you’re pretty confident doing four per month but is there any concern with your competitors talking now more confidently about AC rig systems and top drives that is you might run into possibly constraints on component parts?

Well, that gets us back to our supply chain management and having a sense of where all those moving parts are and one of the things that we have are, and it gets back to kind of some of the themes we’ve struck on this call the continuity makes us a very attractive customer to those folks. And so we’ve -- I believe -- put ourselves in a good position going forward on that. But, I suppose hypothetically as we go further out and depending on the scope of this new built effort from the industry, and we don’t have a great feel for where that goes in ‘09. There are things that would give you encouragement. But we’ve just managed it over the years and we don’t have any reason to think we wouldn’t continue to do so.

Okay. And then just one last question on kind of your outlook, kind of cost guidance for next quarter and that’s my last one.

Jason, are you talking about operating costs?

Yes, if you would break out kind of what the $400 sequential improvement and if you expect any inflation going into the fourth quarter?

It was primarily maintenance and supply, three fourths of that was maintenance and supply cost. And that’s a hard number to predict quarter to quarter. If you just look at our costs per day, we were in that band. We were in that range that you would see if you just looked at it over the last six quarters. We were probably on the low end, if you will, of that band. And I would expect that going forward, we’re going to maintain our costs in that band. At the same time, I think we all need to recognize that as strong as the market is, we’ve not had a labor increase in over a year. So, I think there’s a potential that you could see a labor increase. But fortunately, there’s a cost pass through mechanism there. So, we should be protected on our margin. But I think there is a chance that that cost would go up. I think on the M&S side, the maintenance and supply side there’s back to supply chain we have an effective supply chain group and they do a good job and I think that we’ll be able to maintain our cost increases below what you would see oil field inflation because of that supply chain management.

Okay.

I think other things that was asked earlier about just the investment side on the rig andi think what we’ve been encouraged by is being able to bill the 127 rigs in an average cost range of $15.5 million. And that’s a fully cost at $15.5 million, I mean, it’s got the real five BOP and everything in it. And so, I think that’s also a real testimony to the engineering design and supply chain and everybody really doing a great job on this call, that’s the other cost side apart you were asking about.

Yes, okay. Thanks a lot. I’ll turn it back.

Thanks.

Thank you.

(Operator Instructions). It appears that we have no further questions at this time.

Thank you, Heather, and thank you everybody for joining us today. Have a good day.

This concludes today’s teleconference. You may disconnect at any time. Thank you and have a great day.