Good morning and thank you for joining us for RPC's fourth quarter 2007 earnings conference call. Today's call will be hosted by Rick Hubbell, President and CEO, and Ben Palmer, CFO. Also present we have Jim Landers of the Corporate Finance and Investor Relations department. (Operator Instructions). Jim will begin by reading our forward looking statement. Please go ahead sir.

Thank you and good morning everyone. Before we begin our call today, I want to remind you that in order to talk about our company we are going to mention a few things that are not historical facts. Some of the statements that we make on this call could be forward-looking in nature and reflect a number of known and unknown risks. I would like to refer you to our press release issued today, along with our 2006 10-K and other public filings that outline those risks, all of which can be found on our website at www.rpc.net. I would also like to inform you in today's earnings release and conference call, we will be referring to EBITDA, which is a non-GAAP financial measure of operating performance. RPC uses EBITDA as a measure of operating performance, because it allows us to compare performance consistently over various periods without regard to changes in our capital structure. We are also required to use EBITDA to report compliance with financial covenants under our revolving credit facility. Our press release today and our website show reconciliation of EBITDA to net income, which is the nearest non-GAAP financial measure. So I invite you to review that disclosure if you are interested in seeing how it's calculated. If you've not received our press release, please call us at 404-321-2140 and we will fax or email one to you immediately. I will now turn the call over to our President and CEO, Rick Hubbell.

Jim, thank you. This morning we issued our earnings press release for the fourth quarter ended December 31, 2007. In a few minutes Ben Palmer will discuss our financial results in more detail. This time I would like to provide you with a few operational highlights. We're relatively pleased with our fourth quarter 2007 results, especially when compared with the third quarter. During the quarter we placed and serviced more equipment, including key ancillary components, which helped us generate increased revenues and cash flows in most of our top service lines. In spite of our improved sequential results, we still face a very challenging operating environment. Increased competition, lower prices for our services, and higher cost for labor and materials, all continue to negatively impact our financial results. While discounting appeared to level out during the end of the fourth quarter, we still continue to see increased competition in selected markets and service lines. As most of you know, pressure pumping continues to experience softness as the market absorbs additional capacity. Despite these issues, we believe our employees have made great strides towards integrating both the new equipment and new locations acquired as part of our long-term growth plan. It has been a challenging process in an increasingly difficult environment. With that overview, I will turn it over to our CFO, Ben Palmer.

Thanks, Rick. For the fourth quarter, our revenues increased 16.1% to $186 million, primarily due to utilizing our capacity added during the year. Operating profit for the quarter was $34.7 million compared to $47.3 million in the prior year. Net income was $20.3 million or $0.21 diluted earnings per share, compared to $29.5 million or $0.30 diluted earnings per share last year. EBITDA for the fourth quarter was $58.7 million. Cost of services rendered and goods sold for the fourth quarter was 54.3% of revenues, compared to 48.4% in the prior year. That's of course an improvement. This percentage of revenue increase is due to the negative effects of decreased pricing, increased personnel cost and increased cost of materials and supplies. Our SG&A expenses during the quarter increased 18.6% from $24.1 million last year to $28.6 million this year. This is primarily due to increased costs of new operational locations and the higher activity levels. Depreciation and amortization increased significantly from $12.8 million last year to $23.7 million this year, due to the large amount of equipment placed and serviced during the last 12 months. At this point, I would like to provide a few comments regarding our fourth quarter '07 sequential financial results. Despite a flat sequential domestic rig count during the fourth quarter, our consolidated revenues were up 15%. As we mentioned earlier, this revenue increase was primarily the result of more efficiently capturing new business with our capacity added during recent quarters. Fourth quarter costs of services rendered and goods sold as a percentage of revenues, decreased a little over two percentage points, due to greater efficiency and the utilization of our operations personal. SG&A costs as a percentage of revenues decreased one percentage point sequentially to 15.3%, as a result of leveraging these costs over the…

Ben, thank you. In summary we reported a fairly good fourth quarter and experienced some operational improvements. Despite this we still have progress to make. In my opening comments, I mentioned some external forces that have negatively impacted our financial results. In 2008, we will address these issues by focusing on managing our business lines without the distraction of executing a major capital expansion plan. This includes taking steps to make our new locations fully viable, enhance our sales and marketing efforts, and manage our expenses effectively. Additionally, we will continue to focus on capturing cross selling opportunities, ensuring our operational costs are properly aligned with our expected activity levels, capitalizing on our engineering expertise, and expanding our international business. In closing, we have been in the oil field service business for over 30 years and are quite mindful of the cyclical nature of our business. We are very aware of the current economic environment and the negative impact a recession could have on domestic oil fields production. As in previous cycles we are prepared to adjust our cost structure in order to maximize profitability and returns. I'd like to thank you for joining us for this conference call this morning. And at this time we'd be happy to entertain any questions you may have.

(Operator Instructions). Your first question comes from Robert Mackenzie with FBR.

Good morning guys.

Good morning Rob.

Good morning.

I have a question for you on the comments you made about the incremental pressure pumping capacity a little bit less coming in this quarter. Can you give us a feel for what your average, you said operating horse power was during the fourth quarter and where you expect that to be in the first quarter?

Well relative to the first quarter of next year when we had very few pumps. I think we probably had a maxed out, its like 276,000 hydraulic horsepower, so obviously the average will be somewhere just north to 270,000 hydraulic horsepower or so relative to the fourth quarter. Jim do you have more specific numbers?

Yes, Rob, –the average was around 260,000 hydraulic horsepower I think.

In the fourth quarter?

Yes, that's correct.

So you ended the third quarter with 238,000, I thought?

Right, and we ended the fourth quarter at 271,000 hydraulic horsepower. I'm just looking at some statistics here. The average was around 260,000 for the fourth quarter.

Okay, great. And then, I thought you said you're going to end the first quarter here at 276,000. I thought previously you guys are going to end at 293,000 horsepower?

Yes Rob. We may have misspoken on that. Just to clarify, by the end of the first quarter '08 we'll have taken delivery on everything, and it's around 290,000 hydraulic horsepower.

Okay. I am just glad I wasn't wrong on that. When do you expect deliveries, most of that coming towards the end of the quarter?

Kind of hard to say. I mean, lets just say that to be safe, there is also the issue of ancillary equipment that supports it and makes it operational. So, yeah, if you want to do an delivery average, you might weight it towards the end of the first quarter.

Okay. Can you comment further then on pricing trends that you're seeing in your coiled tubing business right now, a little bit of a different question for you? What are you seeing there in that market obviously with the competitive nature on pricing?

Well Rob. This Jim again. Now, that seems to be the question of the day in the industry about coiled tubing and is it the next pressure pumping. We have not seen it yet. We've seen some good utilization amongst some of our new coiled units, which are two-inches in diameter. They have some applications in horizontal direction drilling, which are useful. So, you've got a fleet of equipment with different ages and different regions and each has different applications. So it's hard to make a blanket comment, but the blanket comment is that we don't see any pricing problems in coiled tubing at this point.

How would you guys think about reacting if you were to suddenly see a surge in new capacity from some of your competition there and substantial lower prices? How would you respond to that?

Well we don't have a whole lot of coiled tubing capacity coming this year, very little in fact. If we could cancel anything we would I guess, but we just hunker down under managed costs. That's the best answer we can give you.

We have in the past, in downturns, that we would utilize the equivalent up to the point that we think it's not if we're not receiving the price coming through, but wear and tear on the equipment we would just pass it.

Okay. Going back to pressure pumping real quick. Jim, can you tell us what percentage of your revenues is pressure pumping was in the fourth quarter?

Sure. It was around 40%. Let me give you a better number, 40%.

Great. Okay, that does it for me. Thank you. I'll turn it back.

Thanks, Rob.

Thanks.

Your next question comes from Mike Drickamer - Morgan Keegan.

Good morning guys.

Good morning.

Good morning Mike.

It's been a long time since I could tell you guys, good quarter. So, good quarter on that.

Thank you. Thank you. We still have ways to go. But we appreciate it.

At least we are seeing progress and there's a lot to be said for that. Rick, real quickly I want to make sure that I understood what you're saying in your part of the presentation here. Did I understand you correctly when you said that pricing leveled out at the end of the quarter?

It did. And that's an overall comment across all of our service lines. We didn't see the decreases that we have seen either earlier in the quarter, or in the third quarter.

Okay. And just the quarter ended up being better then I expected. So what are your comments about pricing leveling out at the end of the quarter? Well, what I'm wondering about, is how the quarter progressed? Was December higher than October ,or do we see a really strong October and then decreasing throughout the quarter? I recognize that there were holidays and weather and everything else in the quarter?

No, actually each month was sequentially better, November was better than October and December was better than November.

Have we seen that trend continue in January?

Well we're just a little over halfway through in that end.

Yeah, just now at this point, this is Ben. We are seeing no appreciable change one way or another. As we said before, we are not the price setters in the market, so those ought to be subject to some of the larger players in what they do, but at this point they seem to be reasonably stable.

Okay. Kind of changing gears here and taking more a kind of macro-view? Looking at ways for companies to improve margins and deliver value in 2008, do you believe that we are going to see a lot consolidation in the industry in 2008 among your peers, and would RPC take part of that one way or another?

Well, we’d certainly entertain anything. There very well could be some consolidation, and we would certainly be interested in talking.

Okay. All right guys those are my questions. Thanks a lot.

Thank you, Mike.

Your next question comes from Jeff Tillery with Tudor Pickering.

Just on this revenue improvement sequentially, a little bit. I wanted to go a little bit further. Was there anything kind of "one-timeish" and anything with the pressure control business like a fire or a blowout, that aided Q4 result?

Jeff, this is Jim. We missed the first part of your question.

I apologize. This is regarding the revenue improvement in technical services. I just wanted to understand is there anything one-timeish like a blowout or a fire that kind of may have aided Q4?

Not in any significant way. None.

Yes. There were a couple of blowouts we worked on that were fairly high profile, one I think near Lafayette and another one in Morgan City but it didn’t move the needle enough to….

We were glad with the work, it was good work but it didn’t move the needle.

Okay, so with that said, you've got several business lines in there, the pressure pumping, the coiled tubing, and the snubbing and nitrogen businesses. Did you see kind of uniform improvement across all those businesses, or was the improvement primarily driven by utilizing the previously underutilized pumping equipment?

The later part of your statement is answered and to some extent with coiled tubing also. Snubbing had a nice improvement, but not quite as much as pressure pumping and coiled did.

But I think that in Q3, snubbing was down about 5% sequentially, and coiled down about 10% and did those essentially retrace and so you got back to where you were early into '07?

Basically, essentially yes.

Yes.

Okay, and so the lion share of improvement really was the pumping business.

Correct.

I think, as of your last call, that there was at least one frac spread in New Mexico sitting idle, and there was a Rockies frac spread that was idle. Essentially, all the equipment that you've taken delivery of now in the field, and working at utilization, I know it’s a tough market, but are you guys happy with the utilization level?

No, we still have more of an upward opportunity. Everything is not working at levels that we're pleased with, that's what we are saying. That we think we've made some nice improvements here in the fourth quarter, but there is still additional opportunities.

I know you guys in the past have been little bit hesitant to put numbers around utilization. I think you guys said on the last call that utilization was down a third in your stimulation business. Can you quantify how much you got back, did you get half way back to where you were before?, Can you just help me out with around how much utilization improvement you guys saw?

Jeff, this is Jim, it’s a tough question because it's kind of a moving target because the equipment has been delivered. So maybe I’d flush out Ben's comment a little bit more and I hope this is helpful. New Mexico had some nice improvements from the third quarter and we referenced that it wasn’t working much. Our new location in Colorado still has a lot of work to go there. So that’s where we really have a lot of improvement to make.

Any other reasons besides the Rockies where your equipments utilization is significantly below from where you guys wanted?

No. not really. And keep in mind that we can keep that equipment around, even though it was purchased with the thought in mind of being in the Rockies. If we don’t have business there we can move it somewhere else.

And from the growth capital standpoint, you guys, you spoke about the pressure pumping equipment yet to be delivered. Any other significant capital items in the other business lines from the previous capital, from the growth capital plan that is yet to be delivered?

No, as Ben said, we still have a few coiled tubing units left to go.

Okay

We have some snubbing units coming in.

Rental tool expenditures, and otherwise there is going to be some of the maintenance and just other opportunities that come up during the year that will be available, or if an opportunity comes along, then we need new equipment for that, that cannot be anticipated at this time, before we add some items.

And my last question, of the $100 million in capital expenditures for '08, roughly how much of that is maintenance capital?

That’s a hard one. Lets call it $30 - 40 million, something like that?

Okay. Thank you. Yes.

Thanks, Jeff.

Your next question comes from Tom Escott with Pritchard Capital.

Two things here. One, you said you had sequential improvement each month during the December quarter. And as we roll forward, can you give us a picture of what your frac schedule looks like? I know the schedule had gotten down fairly skinny during the fourth quarter, I guess late third quarter. And how you book your jobs out 60 and 90 days out now or what was happened with that fixture?

Well, this is Jim. That answer is a regional one. In some cases we’re, I can say that shale we were working real steadily and with the contract and that sort of thing. In other markets it's little bit lower, I mean, if I had to say an average sort of ex-Rockies, we are booked out longer than we were back in the third quarter when we last had this discussion. I honestly don’t know what, don’t know a number but it's not as skinny to use your words as of last quarter, it's getting better.

And could you attribute this to -- a lot of operators are just doing well completion that they had deferred from last fall when they were worried about that natural gas prices or is this, well I mean what is there any way you characterize qualitatively what, why they are doing that?

That’s a hard one. We’ve been having some good sales and marketing efforts. So, I like to say and do believe that some of it is just our efforts here in getting that equipment working. That‘s somewhat dedicated is what we are doing. As for people who have drilled but not completed wells, I apologize it is hard to characterize that.

I understand, and then most of it has been covered but I was going ask if CapEx drops to $100 million in ’08, you should have replaced substantial excess cash flow. Is that going to be used to pay down debt?

That’s the intention, yes.

Okay thank you, that’s all I had.

Thanks Tom.

Your next question comes from [Bill Christlum with Hyeth Capital Management]

We had a group of questions. First of all, this sequential revenue increase, was that a function of some large new contracts, that you were able to put in place or was it just simply an across-the-board improvement in utilization, a little bit here and there?

Bill this is Jim. There was no single thing, we did start some good work in the fourth quarter, some of that was some Master Service Agreements, which is sort of our pricing in contract, contractual agreements, but in general it was just kind of across-the-board getting this equipment working.

And given that you started some Master Service Agreements in the fourth quarter that would imply that the revenue actually should improve, notwithstanding pricing changes in the first quarter relative to the fourth quarter, given that you didn't get the full quarter benefit in the December quarter.

Bill this is Ben that's certainly a logical statement, but it's still the whole market that is still in a very fluid situation and very, very competitive. So it's unfortunately not quite that simple. We do expect to continue to improve things overall but it is fluid and as I said that’s very highly competitive. But there is some truth in what you have said.

And the MSA is not a contractual agreement that guarantees work. It just states the terms that if they call us for work, it's the terms of what they'll pay us.

That's helpful, and then sequentially your revenues were up 15%, would that lead to earnings per share increase of about 50%? Is that type of leverage possible or reasonable going forward?

We certainly have, again what we are saying is we still have the ability. We are challenged but we still have the ability to change it to increase revenues. And we should not have to significantly increase our costs especially on the SG&A line. And even depreciation certainly will be increasing at a slower rate, so there is that capability, yes.

And then, pricing, you had mentioned that it did level off towards the end of the quarter. I'm curious if you have some perspective as to why the pricing seem to stabilize at the end of the quarter?

No Bill, that's a hard one to come up with and yes, it did stabilize but we want to emphasize pricing is not going up at this point, maybe just the market is seeking equilibrium and maybe finding some equilibrium. Probably also less equipment was probably delivered and put into service in the market in the fourth quarter, although that's very hard to get a good grasp on.

And then lastly, just following up on the last questionnaires question, relatively to debt and debt pay-down. Would it be appropriate to believe that the $156.4 million of debt that you had at the end of the fourth quarter, if that will be the peak number that we will see externally in terms of a quarter end number going forward?

That's hard to say. It's our intention and again our belief, that we will pay it down this year. Can't guarantee you that the end of the first quarter there is going to be a lower debt level than that which was at the end of the year. But it's our intention at the end of ’08, that we'll have lower debt on our balance sheet than we did at the end of '07.

Great. Thank you all.

Thank you, Bill.

Thanks.

Your next question comes from Mike Drikamer with Morgan, Keegan.

I just wanted a follow-up on the operating margins there to try and make sure I have a reasonable assumption going forward here. Now you guys had pretty nice sequential improvement in the margins. Has all the easy margin improvement been made as far as just improving utilization? How much [easy] we'll call it? Even though I realize that really isn’t margin driven if any [easy left].

It’s a good question but it's a hard one.

Do you see income from pricing improvement, which we won’t expect in the next quarter?

No.

Right. I guess it’s an interesting question I guess there is some easy left, but how much is as you know -- I am sorry, it’s a fluid, confused situation and very competitive but…

I mean I was seeing technical….

We still have an opportunity to go further with our utilization. We do still have some additional equipment to be delivered as we talked about, which can create a nice leverage. So there is clearly opportunity. How much of that will actually fall to the bottom line certainly will also depend on pricing effect on business and things like that. But there we -- taking you back to last year, last couple of quarters we've been – everyone here has been just disappointed with where we performed and this fourth quarter indicates a nice trend upward and we're very pleased with that and still think we have lots of opportunities to be associated. So, to give you a percentage is difficult, but if we performed equally well in the first quarter, I think that we could see similar increases in our operating profit.

And I think another point is that managing this capital expansion has been a mammoth job for us, probably more difficult than we expected it to be. So that’s consumed a lot of our time, now that we're past that, then it’s more the blocking and tackling of managing our expenses better. So we could see some improvements from that.

So would it fair to characterize it then saying that you guys would be surprised if you didn’t see further margin improvement in the first quarter?

Certainly disappointed

Great. Thanks a lot guys.

Sure.

Thanks Mike.

Your next question comes from Joe Hill with Copia Capital.

Congratulations on a good quarter guys, just a couple of quick questions for you.

All right, Joe.

How often does the MSA pricing turn over?

Joe, typically the contracts are a year in length, but what our field is telling us now is that sometimes customers are renewing contracts for shorter period of times, say 90 days or so, in certain markets. And some customers are probably, I can't say this for certain but some customers are probably just working in the spot market waiting to see where pricing is going to settle out. So we run the gamut.

Okay. Is the -- I've heard that a couple of your competitors talk a lot about the sale more recently, is that a market where you guys have a year-long contract or a 90 day type of contract?

It’s a longer term contract.

Good. Okay. And my last question has to do with, the number of coils, snubbing and nitro units, you had at the end of the year?

Okay. Let's see, end of the year we had 30 coil tubing units.

Okay.

We had as we counted, 51 nitrogen units.

Okay.

And we had 32 snubbing units.

Okay. So you've actually taken the number of snubbing units down?

Well that was domestic. I guess we had a couple for, I apologize, adding international probably 34, 35.

Okay. And your, people ask a lot about frac horsepower going up. But in terms of the snubbing coil and nitrogen units moving up, what’s -- you talked about a $100 million capital budget for this year. What should we be thinking about in terms of capacity adds in those three service lines?

Okay, now lets see.

Part of the equation on the CapEx versus capacity adds is we made progress very much primarily in ’07 total all of equipment. So fairly large and so the capacity add will be relatively larger than our CapEx spend.

Okay.

Yeah. We probably have six or seven coiled tubing units coming. I apologize there were never good number for nitrogen or snubbing, excuse me, I take that back. For snubbing units we probably have three more coming.

Okay.

In ’08. Nitrogen, I am sorry, I was just trying a good number right now.

Okay, well I can circle back with you guys later.

Okay.

While in some cases these won’t all be new adds to total capacity because we may retire some older units. So we may end up with the same number of units even though the average age will be younger and probably the capacity of the work they can do will be better.

Okay. Well, I will just circle back on with Jim later and hope to get a sense of that.

Okay, Joe.

Thanks a lot guys.

Thanks to respond.

Your next question comes from Frank Saldana with Bonanza Capital.

Guys, good quarter.

Thanks Frank.

Just a couple of quick questions. I think yesterday on the BJ call there I think and as it relates to pressure pumping, they spoke about pricing, that it continued to decline. I think these are termed at an accelerating rate. I wanted to see if you guys will share that view point? And then secondly, is there any more threat or is there a threat of Canadian horsepower coming down here to look for work, I think one of their big companies up there had a [business] the other day. This was well picking up still pretty slowly. So I just want to get your thoughts on those two questions.

Frank this is Jim, we don't see pricing decreasing at an accelerating rate, we see as Rick, characterized it, pricing decreasing at a decreasing rate and kind of in fact leveling off right now, again I want to emphasize we don't see going up though. In terms of Canada, we don't really have a presence in that mart, we don't have a presence at all from pressure pumping point of view. That certainly hurt us in 2007 when Canadian equipment or equipment that was in Canada came to United States and so that I guess that continues to be a threat if Canada -- I understand Canada is getting stronger but if it stays weaker or it gets weaker that will be a threat like it was in '07.

Okay, thank you guys.

Thanks.

At this time, there are no further questions. I will turn the call back to Jim Landers for closing remarks.

Thank you operator, thanks to everyone for listening in this morning and for your questions. Have a good day.

This concludes today's RPC's fourth quarter 2007 earnings conference call. You may now disconnect.