Good day and welcome to today's teleconference. At this time all participants are in a listen-only mode, later you will have the opportunity to ask questions during our Q&A session. Please note today's call may be recorded and it's my pleasure to turn today's conference over to Doug Fears. Please go ahead, sir.

Thank you Sara and good morning to everyone, welcome to Helmerich & Payne's conference call and webcast to discuss the company's third quarter earnings. With us today are Hans Helmerich, President and CEO, Executive Vice Presidents, John Lindsay and Alan Orr and Juan Pablo Tardio, Director of Investor Relations, as you know and have heard before much of the information provided today involves risk and uncertainties that could significantly impact expected results, and that are discussed in our most recent 10-K and 10-Qs. We'll 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. In that press release today, we reported net income of just over $53 million or $0.50 per diluted share from operating revenues of approximately $388 million for the third quarter ended June 30, 2009, included in that number is $0.01 of after tax gains from the sale of drilling equipment. No longer included in our quarterly income numbers is equity affiliate income. During last year's third quarter, though, net income was over $125 million or $1.18 per diluted share which included approximately $0.05 per share of equity affiliate income. Also included in last year's third quarter number were about $0.13 per share from the sale of portfolio securities and drilling equipment and a charge of $0.07 per share from the end-process research and development write-off corresponding to the acquisition of TerraVici Drilling Solutions. As mentioned in the press release today, we recently completed the private placement of $200 million of senior unsecured 6.1% fixed rate notes due July, 2016. The company will make five equal annual principal payments of $40 million each beginning on the third anniversary of the closing date of…

Thanks, Doug. Good morning everyone. We were reluctant to call bottom to the dramatic plunge in the US land industry rig count on our last quarterly call and in fact the rig count continued to drift downward until just only recently. As we discussed then, the concern centered around the downward pressure on natural gas prices which since just a year ago have fallen by over 70%. Those worries remain as shale plays continue to contribute to brimming supplies as underground storage approaches capacity limits and faltering demand shows no real prospect of a short term turnaround. If someone back in September could have predicted that 1,000 rigs looking for gas would rapidly be idled, the reasonable assumption would have been that by now we might be seeing better prospects for improved gas pricing. That still needs to happen. Because clearly better natural gas prices represent the key driver for sustainable rig count recovery. That said, there are two powerful trends that bring encouragement to the big picture for us, gas depletion and the changing profile of the average gas well. In short, depletion is approaching a 40% annualized rate and the average gas well more and more requires a drilling rig with advanced technology and performance capabilities. Even in an energy environment that is challenging as any that we've seen in the last 30 years, we can identify some so called green shoots of encouragement; John will provide additional details on these items but just to quickly mention some. We are encouraged that our US land fleet utilization seems to have stabilized, while all customers are cautious and many remain on the sidelines, the wholesale retreat has ceased. We see this as an opportunity to appeal to new customers who may not have tried our FlexRig before for lack…

Thank you, Hans and good morning. In contrast to our last call in April we are encouraged by the past several weeks of discussions with customers that they may be signaling a bottom in the rig counts. Additionally, the spot market is beginning to emerge again in the US and we are actively bidding for projects, albeit primarily with smaller operators. There still isn't great confidence in gas prices but operators are beginning to high grade their fleets. We are hopeful that HP is able to pick up market share in the US and international because of current availability of FlexRigs and our track record of reducing our customer’s well cycle times and delivering best values. As I discussed the three operating segments, there are some improvements in the markets, but we're still in a very competitive environment. In our US land segment as of today, 113 existing US land rigs were contracted; only 23 of the 113 contracted rigs are currently operating in the spot market including 19 FlexRigs. The remaining 90 active rigs including 82 new builds are under term contracts. Of the 82 new builds that remain under term contracts 74 are operating, seven are generating revenue due to requested delivery delays and one is in transition to its first location. Four of the 74 rigs that are operating are on reduced stand-by rates. Excluding the four contracted rigs that are now assigned to our new international operation in Mexico, 95 land rigs remain idle in the US. I will give more details on the Mexico operation in a moment. The 95 stacked rigs consist of 62 FlexRigs and the other 33 are mobile and conventional rigs. The number of active rigs during the third quarter averaged 102.2 as compared to 139.2 during the previous quarter. This…

Thank you, John. We'd now like to open the call to questions.

(Operator Instructions) We will go first to the site of Pierre Conner with Capital One. Your line is open. Please go ahead.

Wondered if you could expand a little bit more on the Mexico, the two pieces of it, are there future opportunities in the near term with some of the other IPM operators and then what can you bracket us around sort of rates or margins on those rigs?

Well, Pierre, hi, this is John, we'd love to be able to tell you all we could about that but as you know, it's one of the most attractive markets today and also very competitive and so we're restrained in what we can say both in terms of discretion and also in terms of our customer there, but I will say that I do think the early work in all the big IPM players tended to hook for the lowest possible price, but that often followed with less then best-in-class performance. I think as the whole field kind of steps back and says gosh, the opportunity here is really performance oriented and performance driven, then we're seeing much more interest, and so that's very encouraging. So, I think in the earlier work oftentimes the other services perform fine but the drilling rig was a point of bottleneck, if you will, and I believe all the players there are looking for how do we drive performance and to do that it gets back to having a high performing drilling rig, but…

John, unless you want to add anything, I think we're constrained by talking very much about (inaudible) anything else we haven't already disclosed on it.

Okay. No, I understand, but I thought I'd try. Maybe on some other things, just some guidance, CapEx spend for the year and some assumption of next year assuming no additional changes on international opportunities.

This is Doug. For '09, Pierre, it's hard to tell just because of some timing issues, probably won't exceed 900 for '09. Juan Pablo, have thoughts on 2010, you want to…

Well, we're still in the process of trying to prepare that, but as you can imagine, it's expected to be significantly lower than the 2009 number. I'm not sure how much more I can provide at this point.

Near just sort of maintenance CapEx levels would run at what sort of maintenance CapEx out of that?

That would depend on the activity as you know, but we've thrown out a number of $100 million. That's probably a fair estimate in terms of a maintenance type CapEx.

And then the last one is back to Hans on a macro question about the upgrade into the fleet to expand a little more. We have seen a rig count increase, but it's all oily and my assumptions are there shallow, you know, they're small operators, there's some opportunities that I guess John mentioned up, people upgrading their fleets, but how much more inroads can you make if we're really drilling shallow straight hole oil wells, West Texas kind of thing?

Well, that's a fair question, Pierre, but as you know from following us and I think it's reflected in picking up 17 new customers that haven't used the FlexRig, they're in some cases working the type of wells that you're describing and what they have found and what we've demonstrated clearly in the Permian Basin and South Texas and other areas where the work seems to fit a description of being more conventional, the outperformance is still a very important value proposition to the operator. So it doesn't require, I think sometimes we get pegged for well, the FlexRig is great but you only need it when it's just a very difficult, very challenging well and we're on a very high number percentage-wise of those types of wells. But what our customer is also seeing is just the day-in/day-out performance is very suitable to the more bread and butter vertical drilling and it still drives an important value proposition. So I don't want you and your peers to think that well, we have to wait until, just the very most difficult drilling returns and comes back. I think what you'll see is that we get a disproportionate share of even this early phase of recovery.

Pierre might just give you an example of that Hans outlined West Texas, as little as a year ago some of the wells that we were drilling there I think they're in the 8,000 to 10,000 foot range that were 16 to 18 day well cycles and today with Flex4M we're drilling those wells and well cycle times six or seven days and as we have said before, it's not all the rig. The rig is a catalyst for many other technologies to really enhance the drilling capabilities overall and those are straight holes. I mean those are vertical wells. They're not directional and so I think it does offer some expansion opportunities.

Thank you. And we'll move next to the site of Mike Drickamer with Morgan Keegan. Your line is open. Please go ahead.

I understand you can't say much about Mexico, but can you confirm that's it just a straight day work contract, there's no other aspect there's where you assume any kind of risk or anything?

No, we really can't confirm that. So, yes, it's really back to we're just limited, Mike in, what we can say.

Doug talking about the funds you received from PDVSA am I correct to assume that all debts flowed through the balance sheet, nothing went through the income sheet?

That is correct. I believe, if any, it was just a small amount, was it not?

Yes. It was approximately only three million went through the income statement.

So kind of going forward, until you collect all this $97 million, everything goes through the balance sheet, correct?

Well, if we collect revenues that we did not book in the second and third fiscal quarter, as that cash is collected then that's booked into revenue and income. The rest of it, all the billings up and through the first quarter of this year were booked as income and hit the receivable, hit the balance sheet. So you're going to get both types if we continue to get paid.

Okay. So that's really a matter of which invoice they choose to pay versus you can't recognize anything until everything's collected?

Yes, it's really on the specific invoice type basis that we recognize their payments.

Thank you. And next we'll move to the site of John Daniel with Simmons & Company. Your line is open. Please go ahead.

A couple for you guys. The first is you mentioned about the reduced stand-by rates on some of the idle but contracted rigs. Can you give us a sense as to what the difference is? And the reason I ask is that one of your customers mentioned to me that they will be starting work on a few of their idle rigs in January, so, just trying to see if all else being equal the margins would improve. Simmons & Company: A couple for you guys. The first is you mentioned about the reduced stand-by rates on some of the idle but contracted rigs. Can you give us a sense as to what the difference is? And the reason I ask is that one of your customers mentioned to me that they will be starting work on a few of their idle rigs in January, so, just trying to see if all else being equal the margins would improve.

Essentially, John, we have said in the past our goal is to remain at present value neutral and that's what we're trying to do. I mean we've got a lower, an example; we've got lower expenses that enables the dayrate to be lowered obviously. We are just trying to maintain that net present value neutral position. It’s really all over the board because some rigs are with crews, some are without crews, but overall it's keeping us whole.

Keeping you even, okay. Simmons & Company: Keeping you even, okay.

Yes.

On the last call you mentioned that some of the FlexRigs down in Latin America were operating at, I think it was 50% more efficient levels than some of the existing rigs in country, that is, your competitors reducing rigs. Given if that efficiency still holds why do you think the customers have been slow to start work down there on those other two, two rigs? Simmons & Company: On the last call you mentioned that some of the FlexRigs down in Latin America were operating at, I think it was 50% more efficient levels than some of the existing rigs in country, that is, your competitors reducing rigs. Given if that efficiency still holds why do you think the customers have been slow to start work down there on those other two, two rigs?

I think in some cases the competitor rigs get laid down. I’m not going to go into any specifics as far as country, but I know of examples where multiple competitor rigs have been released and the FlexRigs are continuing to work. Now it's not 100% related to the FlexRig coming up and in picking up all the additional work obviously a lot of that's market driven. But there are examples where just as the same we have here in the States that the older rigs get stacked and they don't go back to work and FlexRigs are replacing and in some cases you've got two rigs replacing three conventional rigs or in some cases even four conventional rigs. Again, I think it's the timing of having our FlexRigs starting up in South America is obviously coincidental with a big pullback. So, I think, as we begin to see operator high-grade and picking up additional rigs we'll see that happen.

Have you had any of the customers down there talk about incremental FlexRig orders as you look out a year from now? Simmons & Company: Have you had any of the customers down there talk about incremental FlexRig orders as you look out a year from now?

Yes, we have. These things never move as quickly as we think they're going to but yes, I would suspect that. I wouldn't be surprised to see additional FlexRigs working in South America as well as other parts of the world. I think people are recognizing it and having FlexRigs available today in the spot market make a big difference.

One final housekeeping one for Doug, on the private placement you just did, how much of that 200 million will be used for debt reduction? Simmons & Company: One final housekeeping one for Doug, on the private placement you just did, how much of that 200 million will be used for debt reduction?

Well, right now what we're doing is paying down some of the revolving debt. I think we put a little bit over 100 million to pay down revolving debt immediately and then there's 25 million coming due in August of the private placement we did in 2002 and then we have another 364 day bank facility totaling 105 million that comes due in January. We'll pay that down. So that's (inaudible) like I said, just added liquidity.

Thank you. And we'll move next to the site of Mark Brown with Pritchard Capital Partners. Your line is open.

I was wondering if, based on your comments that you're starting to hear more and more inquiries from customers and spot market but at the same time the discussions previously on the call about high grading their fleet, you know, where do you see the overall rig count trending over the next six, 12, 18 months? And are you saying you see that flat where the complexion of the rig count changes to be more of the high-end rigs but because they can replace three to four conventional rigs that the drilling capability is maintained?

Well, I think what you're suggesting, Mark, in your question is right, that there will be fewer rigs or there will be a downward pressure in this recovery because you have the efficiency that you talked about. So that puts us in a good position. I can remember going back several years we always said we didn't need a rig count to go to 1,500 or 2,000 or 2,500, that we really felt the opportunity was in providing this business model of addressing the cycle times and value propositions. So as we look forward, you know, might we have a 1,200 rig count for a period of time before it improves? Yeah, I think that's a real possibility. As I mentioned, you're still going to have to deal with the depletion rates and the average gas well that are real and then even the shale plays are very drilling centric, so they require lots of drilling and that puts even added emphasis on the efficiency and kind of gas factory approach. But I think what you're remembering from our earlier calls about this notion of people will move to high grading their fleet and the focus will be on performance and efficiency is still the right one.

The 17 customers that have tried Flex or new customers trying FlexRigs for the first time, what plays or what regions of the countries are those in? Are they more in the shallow oil wells that you alluded to earlier or more in the shale plays?

It's primarily, we've seen Haynesville, East Texas, Balkan, South Texas, the Marcellus. We've really seen a pretty good mix. And again, I think, I pointed out earlier that a lot of this was stressed towards upgrade and high grading rigs. So, I think we'll have a chance to potentially see that happening, but it's all kinds of wells; it's difficult wells. Some of the wells are more plain Jane straight vertical work, but it's a situation where the customer has either on the same lease with one of the customers we're working with and they are seeing their times -- their competitors times being much quicker and so obviously they want to get into that. In some cases they can't because they have longer term contracts that they have to wait until those contracts expire.

Thank you. And we'll move next to the site of Waqar Syed with Tristone Capital. Your line is open. Please go ahead.

A couple of questions, have there been instances where you are replacing your competitors high-spec or hi-tech rigs?

Waqar, I can't sit here and tell you, I'm not going to say yes or no because I can't remember right off the top of my head. I remember getting some feedback over the last year or so where some competitors were struggling but whether some of those rigs were early terminated and we replaced, I really can't tell you an exact example.

Okay. Second, there was some local newspapers in Venezuela reported that PDVSA and you guys have come to resolution and that some of your rigs could be going back to work shortly, would you care to comment on that?

I think we said a lot about Venezuela already, Waqar, and we saw that article. I think the best characterization is we're making progress and we are hoping to see that progress continue and we have always said that that's a country that we have a great history in and would like to see things return to normal and go back to work. But I think at this stage we're still in the making progress part of the effort.

I think we said a lot about Venezuela already, Waqar, and we saw that article. I think the best characterization is we're making progress and we are hoping to see that progress continue and we have always said that that's a country that we have a great history in and would like to see things return to normal and go back to work. But I think at this stage we're still in the making progress part of the effort.

Okay. Would you need to be paid all $97 million to put another rig to work or at what stage do you say okay, you know what, I think, on the right track, so let's go ahead and start putting some rigs back to work?

Well, we're probably not going to give a lot of granularity on that except to say, you know, we've just said we need to be caught up. We need to be paid for the work we've performed and I think they're aware of our willingness and appetite to continue work but really we've always said we need to be caught up.

Well, we're probably not going to give a lot of granularity on that except to say, you know, we've just said we need to be caught up. We need to be paid for the work we've performed and I think they're aware of our willingness and appetite to continue work but really we've always said we need to be caught up.

Sure. And then how many rigs do you have in the Marcellus right now?

We have one that's currently operating, Waqar, and we've got several other deals that we're working on. But we have one that's been operating now. I want to say, you know, 30 to 60 days, something like that. It's been a good startup. It's a FlexRig 3. We've got some opportunities I think for additional Flex 3s as well as the Flex4S, the skid type rig. We've been encouraged by their early performance.

We have one that's currently operating, Waqar, and we've got several other deals that we're working on. But we have one that's been operating now. I want to say, you know, 30 to 60 days, something like that. It's been a good startup. It's a FlexRig 3. We've got some opportunities I think for additional Flex 3s as well as the Flex4S, the skid type rig. We've been encouraged by their early performance.

Do you have to make any modifications to you’re the FlexRig 3s to enable them to move easily between locations that have smaller loads or anything or is it pretty the same standard rig that you have in maybe Texas that can move there?

It's the same standard FlexRig 3. Now there are going to be some areas I would suspect whether it be in West Virginia or other areas and maybe even possibly in Pennsylvania, we're in Pennsylvania now. That you could possibly see some modifications of loads, but in the areas that we are working now and you can imagine the topography changes pretty dramatically from area-to-area, and the areas that we have been now it has not been a problem. We have seen very efficient rig moves and really haven't had to make any modifications. Obviously if you're taking your rig out of Texas or Louisiana, you're going to in some of these areas you're going to need modifications in terms of winterization, but as far as just mobilization, we haven't seen anything.

Okay. And then just the final question is, do you have any early sense on what rig would be the preferred over the long term, the skid type or the normal rig?

In the Marcellus?

In the Marcellus, yes.

We said this all along. I really think that the offering we have, the FlexRig 3, the Flex 4S, the Flex 4M, you know, the Super Single, really what we've seen in our discussions is an application for all three of those rig types. It's kind of hard to say at this stage which one we would have the most of, but clearly the FlexRig 3 has been a model that has been accepted in really pretty much all of the areas that we work.

Thank you. (Operator Instructions). We will move next to the site of Joe Hill with Tudor Pickering, your line is open. Please go ahead.

Hans, I think you said spot rates are running about 35% less than the contracted rates today?

In our average contract, yeah, that's right.

Okay. So if I kind of do a back of the envelope on that I'm thinking that looks like about 16,000?

Yeah. That still little low, but in the range.

On average again we've got a pretty wide range because of different application, rig types and needs but, you know, the range today would be higher than that.

Okay. Okay. Thank you. And I know you don't really want to talk too much about the Schlumberger IPM work, but could you tell us whether or not Burgos (Connors peck) or somewhere else?

No. We can't identify that. I think the thing that and I don't know if Mike is still on the line, but I might have misunderstood his risk question and we're really not taking any or assuming any additional risks than we would have traditionally in other places we operate, but yeah, we can't go into other contractual detail or even geographical detail.

Okay. So it's not a turnkey, then?

That's correct.

Thank you and we'll move next to the site of (Jason Zhang) with BMO Capital Markets. Your line is open. Please go ahead.

Hi. Just one quick question. I'm wondering where, I know the rigs were recently idle, but before they were idle where were the rigs working that are going to Mexico?

I believe all of those were in Texas.

Thank you and we'll move next to the site of [Chase Moville] with JP Morgan. Your line is open. Please go ahead.

Hey, guys, couple of quick questions for you all. Let's see, the 11 rigs that you have in Venezuela, what are the plans for those?

Well, we have said that those rigs are very well suited for the work they have been doing down there. They can, we don't have any FlexRigs in Venezuela. Those tend to be the larger 2,000 - 3,000 horsepower rigs and so, our hope is to kind of get squared up and put those rigs back to work. So there are no plans today to move those rigs.

Okay. And then if you'd look at say turn to year-end 2010 and kind of looking at your potential, international land market, kind of the mix between US and international, what kind of a shift would you expect to see by then? I mean I know that you all are really pushing, the FlexRigs internationally and just kind of wondering what kind of in-roads that you all expect to make by then?

Well, it's a good question and what we have said before is when you look at the last three years where we had this great opportunity and this big growth ramp, the domestic market just had so much potential and you saw how well we did there, but the net effect of that was that it didn't provide us the same opportunity to grow our international business. So I guess the thing that we would say is the last three, three and a half years have not been a very good test of the attractiveness of the FlexRig or the potential of FlexRig in international markets. And I think the better test is what you've set up in your question is what does it look like at the end of 2010? And I don't have a number or we've never really tried to make a hard goal of what percentage of the fleet do we want operating internationally. If you go back several years, maybe ten, we had as many as half of our rigs in terms of top line revenue in the international market. One of the things that we point out is this is the first time we've really been able to go to international customers and provide immediate available rigs. That's a two edged sword, of course, but it's a positive to them because we are not saying hey you have to get into our manufacturing queue. You have to wait until your rigs are available and then you have to commit to three years. I mean we're looking aggressively to expand that footprint today. So I would be very disappointed if in your question the end of 2010 we haven't seen additional expansion. I think we will see that.

Okay. That's some great color. Thanks, guys. That's it for me.

Thank you. And we'll move next to the site of (Robert Ford) with Weiss advisers. Your line is open. Please go ahead.

Of the $41 million of early contract termination revenue and delay penalty revenues you collected in the quarter, how much was termination revenue and how much was delay penalty revenue?

32, 33 million of that was early termination related revenue. The rest was delay related.

Okay. How much of the delay related revenue do you expect to collect over the next quarter or two?

Of the $70 million that we have remaining for both concepts about 30% going forward beginning in the fourth fiscal quarter is related to delays and the rest, 70% is related to early termination and 30% is related to delays.

Okay. This is the first I've heard of these delay penalty revenues. When did this first surface?

Well, I think, Robert, the theory has been we have wanted to cooperate and work with customers and accommodate, but at the same time with the starting point that we have a real long term contract and we have obligation to investor and to our board in making sure we capture the economic value of that. So part of as you know, I mean an early term provided that relief, but then also these delays provided some flexibility and relief too, it was important to us to be compensated on a net present value for that contract. So to push it to the right, we needed to see some associated cash to make that work for us.

Okay. And just the reason I bring it up, guys, is there's a perception out there today that you received an extra nine million of termination revenue that we didn't know about and so people are thinking they needed to back that out and that you're actually coming in light for the quarter, but in reality your early termination revenue was as expected.

No, that's right.

Okay. And then turning to Venezuela, I'm still little confused on this one. We've collected 48 million since the last call, three million ran through the P&L for the third fiscal quarter. So, do I expect 45 to run through the P&L this quarter or only if you can turn it into dollars and repatriate it?

Robert, this is Doug. Just looking back, I'm not sure I totally understand your question, but I think you're trying to get a sense for proportionality of how much of the collection that is coming and the future is going to hit the P&L.

Exactly and the timing.

And that's a hard number to give you. The answer is don't know exactly how that's going to flow. My guess it's going to be, generally high proportion of just balance sheet hit for a while and then of course, these later billings that we've had over the last six months will come down the road. That would be my guess. And we saw the extreme of that, this last one we had a very small number, less than 10% that actually had to do with the last six months. So the more we collect I'm guessing that proportionality will change.

Thank you and we'll go to the site of Mike Drickamer with Morgan Keegan for a follow-up. Your line is open. Please go ahead.

I just want to follow up on the tax issue. You discussed how you're still accruing for taxes in Venezuela even though you are not accruing those revenues. Just for clarification purples, are you guys actually paying cash taxes in Venezuela right now?

I don't believe so, but it would be taxes that we would really owe. I think at the end of the day we will not be in a tax paying position in Venezuela. We just don't know that until year-end. But in visiting and discussing that internally before, I think we're going to be pretty close to a non-taxable situation in Venezuela, but we'll see.

Now are you non-taxable because you have been paid or are you non-taxable for other reasons?

For other reasons.

Okay. Yeah, can't imagine, having to pay taxes on money if they're not paying you.

Well, believe it or not that can happen. As Venezuela you can have just about anything happen, but that can happen, Mike.

Thank you. And we'll move to the site of (Jamie Stone) with Barron Capital. Your line is open. Please go ahead.

Hi. Good morning, guys. Going back to Venezuela, how much of your balances in Venezuela are over six months in arrears at this point?

Well, I think we said that 80% of the 97 million is over 90 days and I don't have the number just handy right now if you did over 60.

I know I asked over 180 days.

Oh, six months.

Six months.

I don't know that we have that handy.

I guess the reason I'm asking that is you got 45 million in this quarter that was on revenues earned prior to the beginning of the second quarter. And so I'm trying to understand how big is the remaining balance that is revenues that were earned prior to the second quarter and therefore, won't, as you collect, assuming you're likely to collect your oldest invoices first, that won't flow through the P&L and therefore, we've got to get another, is it $30 million, $40 million, $50 million in before you really start seeing the 2Q, 3Q receivables come in? I know you can't time which invoices they pay, but assuming that, you're negotiating stuff that was, oldest first and moving forward, I'm just trying to get that sense, because it seems like as you get into 2010 you may actually start to see a much bigger set of collections coming out of Venezuela, related to the 2Q, 3Q thing you saw in this last quarter or likely to see in the current quarter?

We've got a group here guessing that there's probably 35 million of the 97 million that is connected with the last six of the last two quarters. Is that right? Isn't that what you're saying? Will that be good enough…

35 million to 40 million that would still be in receivables and that would be paid first and then whatever comes after that.

So but still receivables, it's the revenue that was earned prior to the 2Q.

We're going to have to get with you offline on that one.

Okay. But you understand what I'm trying to get to?

Well, you're trying to time the P&L hit.

Well, and I'm trying to understand how much is left in the receivable category, because you haven't been booking anything for the last two quarters. So as of the balance sheet… [Multiple Speakers]

How much is official receivables?

Both. I'm just trying to and understand both of those things. Well I'll get with you offline and then the second question I had is of the money you've paid, you've been paid this 48 million, are you currently sitting with all of that equivalent in Bolivars?

Mostly all of that, yes, is in our Bolivars account.

Okay. And what is the likelihood of convertibility to dollars?

Good question. We're working on that and I don't have a sense and feel for that. Our hope is that it's high, but so far it's been a long time that we've applied for that and it just hasn't happened yet.

Thank you and we'll return to the site of Mike Drickamer with Morgan Keegan for another follow-up. Your line is open. Please go ahead.

I'm sorry, but now I'm confused on the receivable issue in Venezuela as well. All of the 97 million should have been accrued prior to the second quarter, right because you're not booking any revenue, so you're also not booking any receivables for what was earned in the second and third quarter, correct?

No, sir, that's not correct. The 97 is what PDVSA owes us, but not all of that is on the accounts receivable books. Only those receivables that are left from prior to the second quarter of '09 is an official accounts receivable number. And our folks here I think if I were to take a poll, they would say of that 97 there's about 35 million to 40 million that would actually on our books as receivables. The remainder of that, the other 45 million to 50 million are the revenues of the second and third quarter, that were not booked and therefore did not show up on the booked receivables, but they still owe us.

Okay. That makes sense. I was confused on where you were referring to the total sum as receivables. I thought that was what came directly off the balance sheet line there.

Well, it can be very confusing, Mike. So I could have mis-communicated, but I appreciate the question for clarity.

Thank you. And it appears that we have no further questions in the queue at this time.

Thank you, Sara. We appreciate everybody joining us today. Our fiscal year Earnings Call is now scheduled for November 19th, 2009. We hope that all of you will join us then. Thank you for joining us today. Have a good day.

This does conclude today's tell conference. Thank you for your participation. You may disconnect at any time and have a wonderful day.