Good morning, ladies and gentlemen, and welcome to the Oil States International first quarter earnings conference call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to Mr. Bradley Dodson. Mr. Dodson, you may begin.

Thank you. Welcome to the Oil States first quarter 2009 earnings conference call. Our call today will be led by Cindy Taylor, Oil States President and Chief Executive Officer. Before we begin, we would like to caution listeners regarding forward-looking statements. To the extent the remarks today contain information other than historical information, we are relying on the Safe Harbor protections afforded 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 our other SEC filings. I will now turn it over to Cindy.

Thank you, Bradley, and thanks to all of you for dialing into our call this morning. Like many companies in our industry, we are managing through a downturn in activity triggered by the economic recession. Despite these market conditions, Oil States posted first quarter 2009 earnings, which surpassed First Call estimates and our previous guidance range. However, we experienced significantly lower results from our businesses that are leveraged to North American natural gas, drilling and completion activity, namely our drilling operations, rental tools, and OCTG distribution. This weakness was partially offset by our oil sands accommodations and deepwater capital equipment businesses, which tend to be a bit longer cycle and have better contract coverage or backlog. For the quarter, Oil States reported revenue of $667.1 million, EBITDA of $113.4 million, and earnings per share of $1.13. Our liquidity position continues to improve as we generate profitable operations and proactively manage our cost structure and our capital spending. We are also benefiting from reductions in our working capital. Throughout the remainder of this call, we will update you on our market outlook, our liquidity and our capital spending plans for 2009. At this time, Bradley will take you through more details of our consolidated results and financial position, and then I will conclude our prepared remarks with a discussion of each of our segments and close with our market outlook.

Thank you, Cindy. For the first quarter of 2009, we reported operating income of $84.9 million on revenues of $667.1 million. Our net income for the first quarter of 2009 totaled $56.1 million or $1.13 per diluted share. The comparable first quarter 2008 results were $101.3 million of operating income, on revenues of $601.2 million. This year-over-year decrease in profitability was primarily due to the 27% year-over-year decline in North American drilling activity. Depreciation and amortization in the first quarter of 2009 totaled $28 million compared to $22.7 million in the first quarter of 2008. This increase was due to CapEx and acquisitions made over the last 12 months. Depreciation and amortization is expected to be $29 million in the second quarter of 2009. Net interest expense totaled $3.9 million in the current quarter and $5.8 million in the first quarter of 2008. Both of these numbers include the non-cash interest expense related to our convertible notes recorded as a result of the retrospective adoption of APB 14-1. Second quarter 2009 net interest expense is expected to be $3.9 million. The effective tax rate in the quarter was 31.1% compared to 32.6% in the first quarter of 2008. The lower effective tax rate in the current quarter was primarily due to higher foreign sourced income, which was taxed at lower statutory rates. We expect the effective tax rate in the second quarter to be approximately 30.6%. During the first quarter, we reported cash flow from operations of approximately $98 million and spent approximately $33 million on CapEx in the quarter. During the quarter, we received $21 million from the full repayment of the Boots & Coots subordinated notes. And as a result, our net debt at the end of the first quarter was $341.5 million compared to $423.8 million at year-end. As of March 31, 2009, our debt-to-cap ratio was 23% and our total debt-to-LTM-EBITDA was less than one time. As of March 31, 2009, the company had $265 million of availability under our credit facility, which has grown subsequent to the end of the quarter to over $320 million of availability today. Our current CapEx forecast for 2009 is $139 million, which is down 44% from the $247 million spent in 2008. At this time, I’d like to turn the discussion back over to Cindy who will review the activities of each business segment. Please note throughout the segmental discussion, we will be excluding the goodwill impairments taken in the fourth quarter of 2008. Cindy?

Thank you. Our Well Site Services segment generated revenues of $230.8 million and EBITDA of $73.3 million in the first quarter of 2009 compared to $235.7 million and $80.1 million respectively in the fourth quarter of 2008. The sequential declines in revenue and EBITDA were primarily due to significantly lower North America drilling and completion activity. We continued to enjoy strong utilization levels in our major oil sands lodge facilities. During the first quarter of 2009, accommodations generated $141.8 million of revenues and $56.7 million of EBITDA compared to $94.6 million of revenues and $35.3 million of EBITDA generated in the fourth quarter of 2008. Our results benefited from increased oil sands accommodations activity coupled with the seasonal uplift in Canada. Our rental tools businesses generated $71.7 million of revenues and $13.6 million of EBITDA in the first quarter of 2009 compared to revenue of $97 million and EBITDA of $30.5 million in the fourth quarter of 2008. Our rental tool business was negatively impacted by the precipitous decline in North American drilling activity and $2.8 million in one-time cost related to severance, consolidation and integration efforts. Our drilling revenues and EBITDA were $17.3 million and $3 million respectively, compared to $44 million of revenues and $14.2 million of EBITDA generated in the fourth quarter of 2008. The sequential decline in revenues and EBITDA was primarily the result of reduced utilization in all of our drilling markets. Our overall utilization decreased to 32% from 79% in the fourth quarter of 2008, with those declines accelerating during the quarter. If I can turn our attention to Offshore Products, in this segment we reported revenues of $128 million and EBITDA of $23.9 million in the first quarter of 2009 compared to $141.4 million of revenues and EBITDA of $25.6 million in the…

Thank you. (Operator instructions) Our first question comes from John Daniel from Simmons & Company. Please go ahead. John Daniel – Simmons & Company: Good morning.

Good morning, John.

Good morning, John. John Daniel – Simmons & Company: I just have a couple quick ones for you. The first is on the rental business. At this point, have you completed the facility consolidations?

We are not complete, but they are substantially in progress. We’ve addressed the headcount issues generally that we had to, although they are continuing and we’ve had to make further adjustments subsequent to the end of the quarter. Any continuing time delays are really associated with building the facilities where we have intended to consolidate existing multiple facilities in a given region. John Daniel – Simmons & Company: Okay, all right. And then just moving over to the tubulars, I think on the last call you mentioned that something like 80% or more of the inventories were committed. At this point, have any of your customers walked away from the commitments?

No, our customer base is a very strong customer base, and they have – we are working diligently with them really to try to work through, as I stated, the excess inventory that’s in the market. We’re doing everything that we can to assist with that effort to help them manage through those commitments that have been made. Clearly, our inventory turns have slowed from what we experienced last year, because even though the commitments are in place, they are not drilling as many wells. So what you find there is just a slower rate of inventory turns. John Daniel – Simmons & Company: Okay, fair enough. That’s it. Thanks a lot.

Thanks, John.

Our next question comes from Victor Marchon from RBC Capital Markets. Please go ahead. Victor Marchon – RBC Capital Markets: Thank you, and good morning.

Good morning.

Good morning, Victor. Victor Marchon – RBC Capital Markets: Just on the Tubular Services as well, the first question, is there a sense that for your inventory the drawdowns will pick up some pace in the second quarter relative to the first?

That’s a great question. And what you don’t see and which is what we look at and have continually since we started this downturn is not only inventory on the ground, but inventory that is in transit, i.e., committed by us and then open purchase orders, which are obviously commitments. And so what you are not seeing is the significant rate of decline of the open purchase orders that we have. You just see what’s booked in inventory that's received and on the ground for us. We had predicted that we would not see any significant turn in inventory until late in the quarter, generally March. That’s essentially what did happen. If I recall the number right, I think our inventory was down about $27 million for the quarter. If you caught Bradley’s comment, our availability has increased fairly significantly subsequent to the quarter. A part of that – not all of it, but part of that is due to further inventory reductions in the Tubular Services segment. Victor Marchon – RBC Capital Markets: Okay. Thank you. And just a question if I can on the Offshore Products margins. Cindy, it seems from your commentary that the mix in backlog has remained relatively consistent. Would that be fair to assume that margins going forward will still at least in the near-term be plus or minus to where you guys have typically guided that, mid to high-teen range?

Yes, we believe as well. Victor Marchon – RBC Capital Markets: Great. That’s all I had. Thank you, guys.

Thank you, Victor.

Thank you, Victor.

Our next question comes from Jeff Tillery from Tudor, Pickering, Holt. Please go ahead. Jeff Tillery – Tudor, Pickering, Holt: Hi, good morning.

Good morning, Jeff.

Good morning, Jeff. Jeff Tillery – Tudor, Pickering, Holt: In your commentary on the outlook for rental tools, I think you said sequentially revenue down 15% to 20%. So that would imply activity going down probably not as hard a rig count, but it seems that you also stated [ph] you are not seeing that much in the way of sequential pricing erosion. Is that fair?

Well, the thing – there is a lot of mysteries around rental. And that’s one of the things. It’s a little harder for us to forecast. But generally speaking, the rental tools activity and margins lagged the rig count declines a bit, because we are more concentrated on the complacent [ph] side of the business that we really saw more than acceleration of that decline later in the quarter than earlier. But clearly, the rig count today is lower than the average for the first quarter. So we do think it’s going to be down and will be impacted by seasonal declines obviously in Canada. To counter that, we did have some one-time cost that we will – we may still have continuing costs on the severance side, but we certainly had a higher level in the first quarter than we expect in the second quarter and kind of some one-time events there. We haven’t seen a tremendous amount of pricing pressure, but it’s mix, because a lot of the work that we are doing where there is activity remaining within the resource plays where our equipment and our revenue content is actually higher than what it is in some of the more lower pressure areas and vertically drilled areas. So, mix plays a part to your pricing question, more so than if there is not customer pressure on pricing. Clearly, there is. But generally speaking, those factors for us give us a reasonable outlook for rental tools. But we are clearly going to be sequentially down from where we were. We think we’ve been proactive and aggressive on cost management and control. And that helps mitigate some of that downward impacts that we would otherwise experience. My other little comment and caveat that’s been harder for us to predict, there are a certain number of our customers that are drilling wells and postponing the completion efforts associated with that, there is a certain amount of completion backlog that’s developing. So we’re not perfectly matching the rig count declines at this stage, but the general trend, of course, suggests that we will. Jeff Tillery – Tudor, Pickering, Holt: All right. That’s very helpful. Exxon’s co-project, it looks like it's one of the oil sands projects that is moving forward. Could you talk about – I guess historically what does Exxon knew from accommodations perspective? Do they own or lease? And then if they were to lease, just what does the opportunity look like either from a room perspective or revenue perspective, however you want to look at it?

Well, obviously, the Pearl Project is one of the most exciting potential projects in the oil sands region in the near term. We are enclosed dialog and negotiations with Imperial on their efforts and obviously hope to be a prime supplier of accommodations and services to them. A lot of times I think your question may be leading – you're right, a lot of times they manage their own projects. My however on that is that they already have some of their early contractors and managers in our Wapasu Creek facility. So they know firsthand what services that we can deliver to them and are confined as such that we would be in a very good position I think to assist them with the early stages of that development. So all I can tell you is that I think we are in a good position relative to that opportunity. And we do think, consistent with what we have heard from them, that they will make some further announcements by the end of the second quarter relative to that project. Jeff Tillery – Tudor, Pickering, Holt: And then my last question, just a detail question for Bradley. Could you give us the oil sands revenue and EBITDA breakdown in the quarter? And then, if you are discussing it, just how much – how significant the Fort Hills facility sale was to the Q1 numbers?

Sure. Oil sands and accommodations contributed $115 million of revenues and $52 million of EBITDA in the first quarter of 2009. We disclosed that there is a year-over-year increase in manufacturing revenues in accommodations as a whole, up $36 million in the quarter. That includes the Fort Hills Project, but it also includes several fabrication projects we did in the Gulf Coast. So it’s not exclusively Fort Hills. And the margin on that was a little less than $10 million. Jeff Tillery – Tudor, Pickering, Holt: Okay. Thank you very much.

Thanks, Jeff.

Our next question comes from Arun Jayaram from Credit Suisse. Please go ahead. Arun Jayaram – Credit Suisse: Hi, good morning. Arun Jayaram, Credit Suisse. Mr. Tillery stole all my questions.

We thought that you could think of others. Arun Jayaram – Credit Suisse: I’ll be quick. On the Offshore Products side, Cindy, I know backlog is coming down. How much visibility do you have for the balance of the year in terms of revenues and margins?

Well, we had a very strong historic level of backlog as we entered the year. And generally 80% to 85% of our backlog turns to sales. So 2009 feels obviously pretty good with respect to the backlog. We are obviously focused on backlog development. We have a strong level of confidence in the long-term nature of operations and activities in deepwater. There clearly had been some delays. We are not an exception to that. But I think for us more particularly, we are aggressively working through some of our drilling rig equipment and our vessel backlog to make contract delivery time frame. And that is one area that we don’t see really building back to levels that we’ve seen. I don’t think that’s any surprise to anywhere, anybody. The flipside of that, there are some very good key projects out in the marketplace on the production infrastructure side, both floating production stability as well as the subsea pipeline work that we are optimistic about. It’s my opinion based on what we hear in discussions with our customers though that a lot of those projects will likely not come to market until later this year. So we have obviously experienced some backlog declines, given those two comments. But again, our overall outlook remains very positive for deepwater offshore development. Arun Jayaram – Credit Suisse: And then margins were quite a bit better than I have modeled in. Is that, do you think, sustainable for the balance of the year? There seems some pricing pressure.

It is sustainable as long as we can maintain the utilization levels in our facilities. So again, backlog development is key. A lot of times – you know, performance can be impacted, whether it’s at more of a routine product that we’re supplying or whether that’s newly engineered higher pressure, higher temperature type equipment that’s first time or one time type activity. So to some extent, we are a little bit better off right now because we are doing a lot of flex-joint work, as an example, subsea pipeline type work, which is kind of our bread and butter and had historically, in a way, been more predictable from a margin perspective. Arun Jayaram – Credit Suisse: Secondly, on the Fort Hills Project, how important from a percent of revenue is that to you guys in terms of further expansion of that project or continuation of that project?

Well, it’s again one of the key projects in the region. I would put it second in importance right now to Fort Hills. Part of that is just because of the timing that we anticipate the Fort Hills Project has obviously been delayed because of various partner issues, not to mention the pending merger between Petro-Canada and Suncor. So we think we kind of put that on the back burner at this stage based on conversations with them. However, it’s a very meaningful, long-term project. And we believe that we have worked very well with the Fort Hills consortium to date and we have tried to protect our opportunities and our right to manage and lead the accommodations and logistics support supplying that operation, should it move forward in the long-term. Arun Jayaram – Credit Suisse: Okay. Cindy, last question is the consensus in terms of earnings for Q2 is in the $0.43 range. Historically you’ve provided some range for earnings guidance. Do you feel comfortable with that number, or how are you thinking about Q2 in terms of EPS?

Well – and I’ll tell you, if we had given a guidance range, it would have been so broad that it wouldn’t have been terribly helpful to you. But what we’ve always said and are trying to do is, if we have better information than the market, we try to give it to you to the extent that we can. There is a lot of variability right now on the North American businesses, which I think we have covered on the call. We did give you some sense of what we expect our gross margins to be in Tubular Services, but we acknowledge that fairly broad at 4% to 6%, but that’s the best deal that we have right now. Again, rental tools, we are – particularly rental tools because of the size of the operations. There are certain dynamics now where customers are drilling some wells, deferring completions, and so little bit harder to get our arms around exactly what the activity will be there. But clearly where we feel the greatest variability for us is in those North American operations. And again, if I had a very good feel for what that guidance was, I would give it to you. I just don’t. Arun Jayaram – Credit Suisse: Okay. Thanks, Cindy.

Our next question comes from Joe Gibney from Capital One Southcoast. Please go ahead. Joe Gibney – Capital One Southcoast: Thanks. Good morning, everybody.

Hi, Joe. Joe Gibney – Capital One Southcoast: All my questions have been answered. Good quarter.

Thank you, Joe.

Thank you.

Our next question comes from Dan Boyd from Goldman Sachs. Please go ahead. Dan Boyd – Goldman Sachs: Hi, thanks.

Hi, Dan. Dan Boyd – Goldman Sachs: Hi. Cindy, I was hoping to follow up on that guidance question a little bit, really looking at rental tools. You provided a range for where you think revenue could be next year. And then on the profitability side, there are some one-time costs that are going away. Can you help us with any visibility on where margins might be or how we should think about margins for rental tools next quarter?

Bradley is kind of flipping his book to help me out just a little bit there. But we are obviously projecting further revenue decline from where we are now. And part of our difficulty right now, even in forecasting margins, again if we give you an indication, it’s going to be broad, largely because we have made so many cost adjustments in the business and facilitated a lot of the integration that is – I think we are doing all the right things, but to precisely estimate that in terms of impact, it’s fairly difficult at this stage. But I think, kind of broadly speaking, that because of our cost initiative that we should be able to sustain relatively similar margins quarter-over-quarter, albeit they could easily be down a couple of hundred basis points. But it’s not anything that should fall out of bed on if we don’t think based on the cost initiatives that we have in place. Dan Boyd – Goldman Sachs: Okay. That’s actually very helpful. And it sounds like that that’s based on pricing declines subsiding somewhat to what you have seen to date?

Again, there are pockets of pressure all over the place, but mix is playing an element. You know, even if you look at our drilling rig fleet, our revenue sequentially was up on a day rate basis, which is counterintuitive. But the fact is a lot of our lower end equipment, if not being utilized, it’s been laid down and so that mix has played a factor and the same thing impacts our rental tool business. Dan Boyd – Goldman Sachs: Okay. I really appreciate the color. That’s helpful.

Our next question comes from David Griffith [ph] from Copia Capital [ph]. Please go ahead. David Griffith – Copia Capital: Hi, it’s David Griffith with Copia. How are you guys doing?

Hi, Dave, how are you? David Griffith – Copia Capital: Doing well. I was hoping you could kind of walk through the CapEx guidance for the year? And has that changed from your prior guidance? And is there room for you to potentially take out any further CapEx?

It’s down slightly. I think our guidance on the last call was roughly $147 million. So it’s down a little bit. We are looking at every AFE in CapEx project and scrutinizing them. Thus for – does that meet our return criteria? Is this the right time to spend the money? Is this the right place to be spending the money? So we are looking at that very diligently at the divisional level and then obviously here at corporate as well. If I had to guess on our $139 million forecast for ’09, we typically – you know, some of that is always going to slide out, just given timing. So I think there's probably room for that to move a little bit lower in terms of when we spend the money. The majority of it continues to be in Canada, the accommodations business. We’ve got some additional projects that are underway to complete the expansion, in particular of Wapasu and there are a handful of projects where we can spend some CapEx and start to – and source some of the services that we do for those oil sands lodges and prove our operating cost structure will good paybacks that are sub-two years. So I think those are the kind of projects I think that we will continue to do. I think you would want us to do as well. So – David Griffith – Copia Capital: Okay. And what type of – (inaudible) to kind of materialize here at the end of the second quarter, what kind of CapEx spend would you be – you think you’d be talking about on that type of project?

It could be very significant. We are in a lot of negotiations right now. I wouldn’t want to quantify that. But clearly, opportunities in the oil sands that are capital-intensive could have a significant change for us. And we’d be thrilled to have it because it’s backed by, one, a very strong customer, and two, longer term contracts. David Griffith – Copia Capital: And have your return requirements, those type of projects, have those changed from how you have thought about those projects in the past?

I don’t think they have necessarily changed but – in terms of quantitative. I think qualitatively we’ve obviously come full circle. We started off in 2005 with Beaver River and the Athabasca Lodge, both of which we kicked off with anchor tenants involved where we got just with our anchor tenant contract, which typically were two to three years, we got substantial payback on the initial investments. And when we went to Wapasu Creek Lodge, we decided that there was – we could see the activity. We had four or five projects that we felt comfortable we are going to move forward. And at that time, which was late 2006, I believe, we announced we were going to move forward with that anyway, as the reason being that we have been kind of in six months of back and forth with the customer trying to get that anchor contract – anchor tenant contract in place and decided, you know what, you are going to need – we know that you’re going to need the rooms. You’ve got other clients and they are going to need the rooms. We’re going to move forward with Wapasu Creek on a speculative basis. That turned out to be the right decision. Obviously things have – fast-forward three years, things have changed significantly. And we are back to situation where we’ve got good positions in terms of where our four major lodges are. If we are going to put incremental capital work, we’re going to expect to get longer-term contracts to support that. David Griffith – Copia Capital: And then my last question is regarding uses of cash. Obviously you guys are going to generate a lot of free cash flow this year as cash comes out of working capital and the Tubular Services inventory gets worked [ph] down. Just want to talk to you about potential uses of cash and how you kind of prioritize those right now. And also was hoping you could say for me again what the balance of the revolver is at the end of the quarter and then how much of that revolver do you think you will be able to pay down kind of by the end of the year.

Okay. Well, right now – I think we are still in a position right now where we think having liquidity, having some dry powder, those to give investors comfort that we have a very strong balance sheet to weather the storm. But also we think there are going to be organic and potentially acquisition opportunities later in the year. Our first use of cash will be to pay down the debt on the revolver. The revolver balance at the end of the first quarter was approximately $217 million, $218 million. We have a little bit of other debt that you’ve got to convert, which, as we mentioned, is now being recorded under APB 14-1, which bifurcated the debt component of that convert and the equity component retrospectively back to the date of issuance. Where I think the revolver balance could go, as we mentioned, it’s down another almost $60 million of – little over $60 million since quarter-end, as we continued to generate profits and reduce that tubular inventory amongst other things, also the seasonal declines in Canada. I think we will generate pretty significant free cash flow where we could pay down a significant portion of the revolver this year, particularly in Canada. David Griffith – Copia Capital: Okay, great. Thank you very much.

Borrowing another project, make a project there [ph]. David Griffith – Copia Capital: Well, that would be a welcome development.

Absolutely.

We think so too. David Griffith – Copia Capital: Thank you.

(Operator instructions) And I’m showing that there is no further questions.

Thank you, Jamie. And thanks to all of you for joining our call today. I know it’s been a grueling couple of weeks for each and every one of you. We appreciate that you took the time to join us today. Thank you.

Thank you. Ladies and gentlemen, this concludes the Oil States International first quarter earnings conference call. Thank you for participating. You may all disconnect.