Good morning and thank you for joining us for RPC Inc's Fourth Quarter, 2008 Conference Call. Today’s call will be hosted by Rick Hubbell, President and CEO; and Ben Palmer, Chief Financial Officer. Also present, is Jim Landers, RES Vice President of Corporate Finance. Jim will get us started by reading the forward-looking disclaimer.

Thank you and good morning. 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've made on this call, could be forward-looking in nature and reflect a number of known and unknown risks. I'd like to refer you to our press release issued today, along with our 2007 10-K and other public filings that outline those risks, all of which can be found on our website at www.rpc.net. And I also need to inform you that in today's earnings release and conference call, we'll be referring to EBITDA, which is a non-GAAP 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 a reconciliation of EBITDA to net income, the nearest GAAP financial measure. So, I invite you to review that disclosure, if you are interested in seeing how it's calculated. If you have not received our press release, please call us at 404-321-2140 and we'll provide one to you immediately. I will 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, 2008. 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. First the fourth quarter of 2008, was characterized by a relatively high although decreasing activity levels and increasing competitive pressures. While the equipment we added during the past several years has allowed RPC’s to generate record revenues. Higher material cost, in a difficult pricing environment, is increasingly impairing our ability to maintain historical profits loans. As I stated during our last quarterly conference call, current macro-economic factors including the credit crisis, the steep decline in oil and gas prices and the depressed economy are impacting our company. Like every other industry throughout the country, we faced very uncertain economic times. With that overview, I’ll turn it over to our CFO, Ben Palmer.

Thanks, Rick. For the quarter ended December 31 2008, revenues increased 22.4% to $227.8 million compared to the prior year. This increase was due primarily to more revenue producing equipment. EBITDA after the fourth quarter was $67.2 million, an increase of 14.6%. Operating profits for the quarter was $36.7 million compared to $34.7 million in the prior year. Operating profit includes an increase in depreciation of $7.8 million compared to the prior year. Net income was $20.4 million or $0.21 diluted earnings per share both of which were comparable to 2007. Cost of revenues for the fourth quarter was 57.5% of revenues compared to 54.3% in the prior year. This increase as the percentage of revenues was primarily due to lower pricing, coupled with the high cost critical materials and partially offset by positive leverage on our utilization of our workforce. Our selling, general and administrative expenses during the quarter increased 5.5% from $28.6 million last year to $30.1 million this year because of increased personnel and other cost to support higher activity levels. As a percentage of revenues however these costs decreased from 15.3% last year to 13.2% due primarily to leverage of these costs over the higher revenues. Depreciation and amortization increased from $23.7 million last year to $33.5 million this year due to the large amount of equipment placed in service during 2008. Our technical services segment revenues increased 19.5% due to higher capacity and a favorable job mix. Operating profit however decreased 25.1% from $29.2 million to $23.4 million this year because of intense pricing pressures and higher cost of profit. Revenues in our support services segment which comprised mainly of our rental tool service line increased 38.3% and operating profit increased 112% compared to prior year. This revenue increase was due to higher capacity and…

Ben, thank you. In summary while the natural gas spot price averaged $9.13 in ‘08. The price of natural gas averaged only $5.99 in December. Also during the past 6 months the average monthly price of West Texas intermediate has flown from $133 per barrel in July to $41 in December. These lower commodities prices coupled with the global economic prices make it difficult to secure financing for new projects or the investment necessary to address, accelerate and decline rates in existing wells. Our economy in the oil and gas industry face a Test 22 if the current conditions in the markets lead to a period of a under investment in oil field, then even the short-lived economic downturn could have much longer current implications. The end result could be it’s a return to tighter commodity supplies and significantly higher prices. As a result of the economic situations, we face. Our managers are refocusing their efforts to operate our service lines as efficiently as possible and to implement contingency plan in the event demand and oil pricing deteriorate much further. RBC is committed to being a long-term value added service provider and we remain vigilant in this uncertain environment. We are proud of our employees and their performance during 2008. Their dedication and hard work is the reason for our success. I’d like to thank you for joining us this morning for the conference call and at this time we are happy to entertain any questions you may have.

Your first question comes from the line of Jeff Tillery with Tudor Pickering Holt.

Hi, good morning.

Hey Jeff

Good morning.

As you think about the first quarter. Obviously US activity is going to be down considerably. When speaking about your regions, West Texas and Oklahoma being significant regions for you guys and overall US rig countdown more than 20%, is there any reason your activity would perform much differentially either better or worse?

Jeff, this is Jim probably not. You outlined some important regions for us. What we didn’t talk about necessarily in the press release and the conference call script is that as you point out, activity levels are down, unconventional activity is down somewhat less and as you know we have a presence in some of those areas. So, if you mix all that together you'd probably get us performing about where the rig count is.

Okay. That’s helpful. Can you talk a little bit more about pricing? Just where would pricing for, I know you guys haven’t been ready in the past to talk about specific businesses, but just for RPC in aggregate where would you put pricing currently versus what it averaged in Q4?

Currently as in the end of January.

Yeah. Just where we are today.

So, we’re talking about, we're obviously in January. That’s kind of hard to say. It definitely is down some. I'm not able to quantify.

I think he's trying to find his place obviously with activity levels, changing and declining. Everybody is trying to find the right points. So, it’s difficult to quantify on this one.

Okay. And the support services segment has been a positive surprise versus what I have expected the last couple of quarters. Can you just talk about what drove the increase in the fourth quarter, as well as do you think Q4 is the base line that we should be looking at?

Jeff just by way of reminder and for others the majority of support services is our rental tools business and has performed well so thanks for noticing that. We got some people who are working hard and we have increased the capacity over the years and it has done well. That business moves with the rig count because it relates more to drilling activity. So I think not sure I called fourth quarter of ’08 of base line. I think I would think about our support services segment more as moving with the rig count fluctuations.

Had another way out there is nothing unusual in the fourth quarter, it’s just through strong performance, but many of the service lines that are in that segments, so from that perspective certainly that’s a good base number from which to project on.

And so with the increase in top line that segment in the fourth quarter approaching 20%, is that attributable to capacity being added, you guys being in the new area or just the current foot print running better?

It’s a bit of all of that, there wasn’t a significant increase in capacity during the quarter. I think it’s been fairly steady I think it was just normal progression. There was nothing unusual about it.

And then my last question you mentioned then in CAPEX down significantly in ’09. Like on the last call, you talked about $65 million to $75 million is being arranged from various CAPEX. Should we think about your CAPEX going all the way down to maintenance levels or something in between there and where it was in 2008?

Right now, we are trying to manage the maintenance CAPEX or something just about that, but and I think it’ll be closer to the lower number than certainly where we were in 2008.

Okay, thank you very much.

Sure.

Thank you Jeff.

Your next question comes from the line of Mike Drickamer with Morgan Keegan.

Rick, you mentioned in your prepared comments that your managers are refocusing on as efficient as possible operations. Can you discuss what steps are being taken with that? Are you closing bases, or reducing headcount?

We've done all those things. Primarily we are shifting our equipment to other locations. We haven’t closed any base per se we have reduced the capacity in a few. And then we have reduced headcount.

Now if we geographically look at where you're moving capacity out of, is this areas like the Rocky Mountains, are you moving at more towards the resource place. What's going on, geographically?

No, you are exactly right. We are moving out of the Rockies in to other areas.

Okay. Thanks a lot.

All right, thank you.

Thank you Mike.

Your next question is from Rob MacKenzie with FBR Capital Market.

Good morning, guys.

Good morning.

Good morning Rob.

Questions for you, if I were to say to you that Northern or US revenues, will be down 30% in 2009 - 2008. How should we think about margin compression for each of your different service lines and more specifically just the two main categories you report in that environment?

Well. That would put us at revenues somewhere of $150 million in round numbers.

Right. How should we think about margin compression?

Yeah, yeah, I understand. It’s good question Rob. Yeah it depends on, why does revenue go down? And we are not turning down the question. We probably don’t have a great answer for you at this point. The answer will come as we see what the first quarter looks like and not just, what the revenue is but why revenue changes and what kind of cost control measures to put in place. It may not sound all that relevant, but it is, we have been working a lot on our materials and supplies cost working on proppant which is such a big deal for us and that is something and making some successes there. We have some positive variances in the fourth quarter, because fuel prices are going down.

Yeah.

So, none of those things answer your question Rob. I think that things are just too fluid right now.

Yeah I think on the support service is that clearly that’s a much more fixed price business that’s one reason for the rapid expansion in the operating profit percentage, especially, sequentially from third to fourth quarter. So I would expect, if the revenues decline that much in support services, you are going to see, a much more significant decline in the margin. And again in the technical service segments, it’s going to spend so much on our, again the mix of the business and the types of jobs we are getting part of the illusion.

Sure just trying to get an answer. Can you give us the feeling for how much of your cost structure you have taken out so far with your initiatives and how much more you have currently planned and in terms of reducing your cost base?

We don’t have really have that quantified and probably would share that lot of our compensation is variable. Clearly if profitability goes around that can be, that certainly will reduce our cost. We’re looking at all aspect of the business, we are looking at all aspects of our compensation programs and as Rick indicated there is some movement of equipment around and so, I think we are in the very, very early throws of it. We have our plans and how much we cut. We’re going to look at it regularly but we are not making a decision right now, we don’t have a list and a number and say that’s what we are going to do and we are going to do it in 90 days. We are going to try to be prudent about it and not get ahead of ourselves be aggressive enough but not just try to hit a particular number.

Okay

This is a certainly pretty rapid downturn, we’ve been through these before, this is not new to us, so unfortunately we have a counter check list that we go through but as Ben said we don’t want to do too much and on the other side we don’t want to do too little. So it’s a delicate balancing process. I think the quicker and harder it goes down the stronger it’s going to come back. When that occurs so we don’t want to run from those despite our fate.

Sure and then I guess my next question to follow up is can you comment on pricing pressure the magnitude of it in the various product lines, obviously we’ve heard a lot about pricing pressure in the pressure pumping market, and the stimulation market. Can you go through what you are seeing there and elsewhere please?

Clearly pressure pumping is having the most pressure. Many of our other ones have actually held out reasonably well in the general downward pressure but the most erosion occurred in pressure pumping in terms of quantifying Jim do you want to give any color to that?

Yeah it’s hard to say that so much of it is business mix drop, but the general industry terms we’ve all heard out apply to us as well which is what we are seeing right now is sort of a 15% plus pricing decrease which comes in our operations to increase discounts on our price book. And I think that’s about what it is too.

One opportunity for us actually which Jim referred to is sourcing in some of our critical proppants. We have made some nice progress in that regard. We are being able to get our hands on some hard demand proppant. We've actually been able to get what we think, would be some decent pricing so that should provide some support on the margin side for us. And so we’re pleased about that. And we’ve seen some competitors in some areas drop out.

That’s true.

So, that was actually interesting, you mentioned that as well, that was one of my other question, this is on proppant. That was something particularly first as been a high strength of ceramic proppants that was very, very tight. What are you seeing there in terms of a supply of that listening up?

Not really seen anything domestic as yet, a little bit, there is little bit of that supply. So Dave I’m not sure it’s necessarily deposits bringing up of whether we’ve just been able to secure some sources, find some sources that we previously didn’t have, but we are trying to get creative and, I think we have had some success and I’m looking forward to what I can do for it.

Yes, that’s a bright spot for us we made some progress there, so we are happy about that.

Okay, thanks guys, I'll turn it back

All right thanks.

Your next question is from Tom Escott with Pritchard Capital.

Good morning.

Hi, Tom

Good morning.

I’m following-up on a couple of points that were touched on here, the profit issue you just mentioned. You said you've been getting fair pricing on some proppants, are you buying? Is this the imported present quota that you are getting, coming and is it that you are getting 10% off, 20% off, where you were last fall? Can you help us to quantify it?

Tom, this is Jim. I think we have to leave the comments vague for competitive reasons. It’s not much decreased price but that increased availability of high demand stopped. And as you know many times today winning a job in pressure pumping, one of the items on the check list is ‘Do you have a proppant?’ Not, are you trying to get it; but do you have it. So, that’s what we are referring to. Overall the bottom-line is going to be enhanced from what otherwise would be due to our efforts. I’m afraid that just, that are not sure specifics of where it’s coming from and what we're getting.

Okay. Also you mentioned, you’ve got a lot of, I think you call it contingency plans in place. Have you already cut 10 counts already and then in addition to that, what’s your plan to cut headcount in the next 90 days?

Well Tom, we have cut a little bit, not much and we’ll just address Tom, we don’t have any set numbers that we're trying to hit. We’ll just see how business unfolds and we’ll manage our workforce to whatever that level is. We’re taking a hard look at the business. There have been some reductions that have taken place. You can see on our SG&A line. I think that the layoffs that Rick has referred to primarily in more location specific, operating location specific, some on the support SG&A side and occurred to date. Again, if you look at, we were talking earlier, if you go back to just like four years ago, I think our SG&A as a percentage of revenues was certainly at a very high teens and even 20% or 21% of revenues. This latest quarter we’re down at 13%. So that indicates we've gotten a lot of good leverage on our increased revenues. That doesn’t mean there aren’t additional opportunities in that line, but the question is going to be again how far is this thing going to fall, how long it’s going to stay down and we don’t want to get ahead of ourselves. But we’re clearly, our managers have been looking and we will continue to apply the pressure for them to look at reducing, finding every opportunity to reduce cost, be it headcount, be it other types of costs that we have that might be considered variable or unnecessary that’s what we are more focused on right now than just trying to find hedge to cut.

Okay. I see you've raised the dividend nearly $1 million a quarter. It seems to be a positive signal amongst all of this, difficult economic outlook. Is that a signal that you are regardless to help bad things, again you are expecting free cash flow to continue to be ample, if you will be able to cover all obligations despite how bad the downturn is?

Yes, we believe we will be able to manage the business to cover the dividend and we’re looking out a lot at the long term with a pattern that we developed and as always we will adjust to the circumstances but we still think that’s long term. Our business is well positioned and oil and gas industry is well positioned. There is going to be a lot of the work to be done over the coming years to supply commodity to both the US and the whole world economy. So we still feel good about things in the long term.

And there are many things we can do to reward our shareholders and dividends and stock buybacks are the two that we have chosen.

Okay, thank you.

Thank you, Tom.

Thanks Tom.

Your next question is from John Daniel with Simmons and Company.

Hey guys, just a quick housekeeping question. Can you tell us where your current pumping horsepower is today and how much is coming online in '09 and understand a cutting CAPEX but are there still deliveries to be received?

290 as where we were in and which is concerned with third quarter that it’ll change, if any and in `09, there is non-specifically plan right now. So, I wouldn’t expect that number to change much.

Okay, thanks.

Thanks, John.

Your next question comes from the line of Bill Dezellem with Tieton Capital Management.

Thank you. We have a group of questions. First of all, you in the past have referenced long-term contracts or bigger contracts that you have tried to win. If you have anything notable in this quarter on the contract win front?

Well I don’t, when we referred to the long-term contract that is not guaranteed work per se. It’s more of a longer-term arrangement, where if the customer has the work particularly, we might get, so as our customers cut back, that contract really is not binding. But to answer to your question there were none in the fourth quarter that we're significant yet none that would move the needle, certainly we had some successes, but none of individually to discuss.

When you aggregate them together, individually they may not have been significant but when you aggregate them what were they in total?

No, we do not necessarily give you a number to plug into a model or anything like that.

And then accounting question: if you have idle equipment or equipment that you park for a period of time, do you change the depreciation rate on that equipment?

No.

No, we do not.

Okay

And we're not idle in the equipment per se.

All right, and then the final question.

Rick indicated that we have not stacked any amount of equipment which is a true statement and I indicated that even if we did stack equipment, I’m just confirming if we did stack equipment we would not stop this projection.

Great thank you. And then the next question I’m asking because I guess I’m a little slow here as I’m not fully following on the cost to goods front and the release there was a reference to the higher proppants cost and when I first read that before the call, my initial thought was that that seems contrary to a lower level of activity and then here on the call I think you referenced some success at lowering your profits cost. There seem to be some things pointing in different directions here would you please try to clear up my misunderstanding.

Sure I probably don’t have a misunderstanding obviously it’s a fluid situation proppant costs overall have been increasing in recent quarters because of the high demand. I think that will continue during the fourth quarter but as we indicated we have had some recent success at being able to put in to source high demand profit at better prices. Now I guess to answer your question that’s probably more of a going forward, there was maybe some impact in the fourth quarter but that’s more of a going forward than an impact on the fourth quarter because we really talked mostly beginning last quarter that we were looking for additional sources to supply those have begun to be delivered and so we will realize more benefits in that quarter.

Would it be fair to say that the higher cost proppants of the past, those were in inventory and that’s what you ultimately pulled out of inventory in the fourth quarter led to the higher cost and what you are buying now is essentially creating a lower cost inventory if you will run through the cost to good sold in future quarters?

It’s a fair statement.

Great and thank you all.

Sure. Thank you.

Thank you.

At this time there are no questions.

Okay well this is Jim Landers. I just want to thank everybody for listening and also for your questions. We enjoyed the discussion. Have a good day and thanks again.

Thank you. This concludes today's RPC Inc. fourth quarter 2008 conference call.