Good morning and thank you for joining us for RPC Incorporated’s First Quarter 2015 Financial Earnings 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, Vice President of Corporate Finance. At this time all participants are in a listen-only mode. Following the presentation we will conduct a question and answer session. [Operator instructions] I would like to advise everyone that this conference call is being recorded. Jim Landers will get us started by reading the forward-looking disclaimer.

Thanks Eric, and good morning everybody. Before we begin our call today, I want to remind you that in order to talk about our Company, we’re going to mention a few things that are not historical facts. Some of the statements that will be 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 2014 10-K and other public filings that outline those risks, all of which can be found on RPC’s Web site at www.rpc.net. In today’s earnings release and conference call, we have also referred 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’re also required to use EBITDA to report compliance with financial covenants under our revolving credit facility. Our press release today, and our website provide a reconciliation of EBITDA to net income, which is the nearest GAAP financial measure. Please review that disclosure if you’re interesting in seeing how it’s calculated. If you’ve not received our press release, for any reason, and would like it, please visit our Web site at www.rpc.net for a copy. 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 RPC’s first quarter of 2015. RPCs revenues decreased due to lower activity levels and pricing in all our major service lines. Our revenues for the quarter decreased approximately 19% compared to the first quarter of 2014, and approximately 36% sequentially. First quarter operating profit, net income and EBITDA, all declined sequentially and year-over-year. The first quarter of 2015 can best be characterized as a continued deterioration in the oilfield service industry. Over the last six months, the North American rig count has declined 46% to 1,048 at the end of the first quarter. As the number of working rigs decline, the demand and pricing for our services fell accordingly. While it is impossible to accurately predict when the oilfield service industry will improve, we believe that at current activity levels, pricing is nearing the floor. Our CFO, Ben Palmer, will review our financial results in more detail after which I will have the key comments about the current difficult market conditions.

Thank you, Rick. For the quarter, revenues decreased to $406.3 million compared to $501.7 million in the prior year. These lower revenues resulted from decreased activity levels and pricing in all of our major service lines. EBITDA for the first quarter, decreased by 35.5% to $77.9 million, compared to $120.8 million for the same period last year. Operating profit for the quarter decreased to $6.2 million, compared to $65.2 million in the prior year. Our diluted earnings per share were $0.04 compared to $0.18 last year. Cost of revenues decreased from $330 million in the first quarter of the prior year, to $292.4 million in the current year, due primarily to lower activity levels. In addition, we obtained price reductions from our vendors, which were partially offset by the increasingly service intensive activity in our pressure pumping service line. Cost of revenues as a percentage of revenues increased from 65.8% in the prior year to 72% due to lower pricing for our services. Selling, general and administrative expenses decreased from $48.7 million in the first quarter of the prior year to $42.6 million this year. SG&A expenses as a percentage of revenues increased from 9.7% last year to 10.5% this year due to the relatively fixed nature of these costs over the short term. Depreciation, amortization were $66 million in the first quarter of 2015, an increase of 18.9% compared to $55.5 million in the prior year. Net loss on disposition of assets were $2.2 million in the first quarter of the prior year compared to the net gain of $1 million due to a change in accounting estimate. The cost of certain components for our pressure pumping equipment that were previously capitalized are now being recorded in cost of revenues as maintenance expense upon replacement. Our technical services segment…

Thanks, Ben. As we announced this morning RPC declared a $0.05 per share dividend while we have paid higher dividends in the past, this dividend adjustment is consistent with RPC's conservative nature and helps insure our capital structure will provide RPC the flexibility to take advantage of opportunities in this changing market. During the quarter we implemented numerous cost control measures which included reducing personal by 12%, reducing certain components of compensation and reducing vendor pricing on critical supplies and components. While we did not get the full benefit of these actions throughout the first quarter, they lessened the negative impact to our results from this steep revenue decline. Oil & gas industry is cyclical. RPC and its business managers have operated in these cycles for more than 30 years. This accumulated business, this accumulated experience provides us with the knowledge to implement the steps necessary to adapt our business model with industry activity levels. The impact of this turndown on RPC and its employees is significant, as always we greatly appreciate our employee’s hard work and commitment. Thank you for joining us this morning for RPC's conference call. At this time we will open up the lines to answer any questions you may have.

[Operator Instructions] And we’ll take our first question from Chase Mulvehill with SunTrust.

This is Josh Large on for Chase. If you could provide us, what sort of EBITDA margins would you think they could bottom or decrementals kind of going forward?

Josh this is Jim, that is clearly an important question, question of the day. Something we work on a lot, we don’t have a good number for you, I’ll just say that. Let me try to give some color to what our thinking is though and it kind of refers to something Rick said. We think pricing is bottomed at this activity level, this market activity level. And we have some good indications of that, after rig count drops, goes another 200 rigs down and we have a new situation to think about which will include changing our infrastructure a lot and trying to function lower pricing levels but we think that pricing is bottomed right now. We have taken some cost cutting measures, we intend to take some more, we didn’t get the full impact of that in the first quarter but we think we will on the second quarter. So we think that EBITDA margins and certainly the second quarter will be lower than the first quarter because January was a decent month in the first quarter. It’s really hard to say where they are going to bottom out.

I’ll go ahead and say again because I think that is the question of the day. I think in this down-cycle we’ve seen something that we’ve never seen before where I think our customers have done a really good job of dropping down everybody’s prices. And quickly I guess collaboratively or whatever we’re getting it down to levels again where we’re saying that we can’t on a sustained basis go any lower. So we’re trying to work together with them to term it, what is the activity levels that we’re going to be able to sustain, business even when its good can be volatile, it’s going to continue to be volatile. So we’re trying to structure the business, structure the cost, infrastructure to align with the assumptions about the amount of activity we’re going to have going forward and again that’s very difficult to do in this environment, it’s an elusive equation but we continue to make adjustments to the business, we’ll continue to do that. We’re going to monitor it weekly and monthly and we’ll monitor it overtime. We’re not going to react every week to how busy we are or we’re not because the business is going to come back. We’re a top quality service provider and our customers want us to stay in business, they want choices. The industry, there is some consolidation going on that we all know about. So our customers want people like us around so we don’t feel like our customers who are trying to drive us out of business, there’s been several players that have recently been driven out of business and that makes sense in this environment but we’re comfortable and especially with our conservative balance sheet and capital structure, we’re certainly going to be around and thrive and so we’re working right now just to get everything lined up to the point where we are generating cash. We have no intention for any extended period of time to generate negative cash, but it’s currently quite a challenge. And so we’re doing everything we can, and working with our customers, and looking at our end structure and our cost to make sure that we continue to be very conservatively capitalized and managed. And the infrastructure’s going to be where it needs to be to, again, continue to maintain the Company and move forward. So that’s a lot, as far as the longest we’ve ever answered, especially the first question that we’ve ever received. But that is, as Jim said, the question of the day. So with that we’ll turn it back for any other questions.

So on the cost side, could you help us quantify maybe the SG&A, the full run-rate impact, and some of the pricing reductions you’ve gotten from your suppliers?

Josh its Jim again. The largest single cost everybody knows about, is proppant. Our proppant suppliers have been great partners over the past few months, and we have had cost reductions for proppant of as much as 30%. Supply and demand have helped with transportation on the trucking side. In some of our regions we’ve had short-haul trucking cost decrease by as much as 50%. We’ve had, naturally, fuel prices decline during this time, which is one reason we’re in the situation we’re in, but that’s been a benefit as well. Both as we charge our customers for fuel, and we use a lot of fuel ourselves that we’re not able to charge for. So that’s been helpful. A negative thing is rail, so that the cost of rail transportation has not gone down, in fact you can find situations in which our rail costs have actually increased. One thing we may have said or certainly need to mention if we haven’t, is that the work we’re doing is more service intense. That means more proppant per stage, and we’ve seen that even in the first quarter. So that exacerbates rail rates being high, if they are, and logistical issues. So that’s a negative on the variable cost side. Another one is personnel, Rick mentioned that we’ve had some personnel reductions during the quarter. And we’ve also changed some of our compensation structures, which helps on the variable competition side as well.

You asked about SG&A, I would say that the run rate for the remainder of the year. SG&A compared to last year is going to be down 20% to 25%, on a quarterly basis going forward. And a lot of that comes out of variable compensation, and then there are some other incremental steps that have been taken to reduce those costs. And as we said, that will continue to be monitored and adjusted, as we learn more about what kind of activity levels we’re going to, we’re able to secure.

I guess just one follow-up to the sand, is that 30% decline at the well site or at the mine?

That’s the mine. Yeah, but the trucking, I’ll say, has come down substantially, so it ends up being about the same number.

And we’ll go next to John Daniel with Simmons & Company.

About a year ago you guys were kind enough to give us the March monthly exit rates. I’m hoping that maybe this year you might be willing to do the same, specifically just thoughts on March revenue utilization? And just is that a fair run rate into Q2?

John, I do recall that. And I remember taking grief from your colleague and our mutual investors for the following three months. So we may not want to do that, or I certainly refuse to actually right now. But in any event, it would be a difficult question to answer anyway.

Let me try without quantifying, because we’re not going to do that. But I will tell you that during the first quarter it obviously was a difficult quarter. We recognized that, we took steps, we, as I said, our customers have very quickly, not just with us, but with our competitors, very quickly gotten very close to where the bottom end pricing is. And so we were able to secure late in the third quarter, a lot of work going forward. Nothing’s guaranteed, but with the expectation that we’re going to have a lot more work, but it’s in lower pricing. So whatever data we gave you for March, at this point second quarter looks, the different components of that look a lot different. And that’s where we are right now, as we need to find that balance between how much activity we’re going to have with some sort of assumed level of pricing. So what’s the right number of crews and people? And what’s the right infrastructure that we need to have to ensure that we are, whether we continue to generate positive cash flow in short terms? All things can stabilize and move up. So that’s sort of where we are.

Let me try this another way. You mention that you have good indications that pricing has bottomed, I think these are the specific words. Can you just share with us what those indications are?

The indication is that we’re not going to work for an extended period of time generating negative cash.

It would be irresponsible to, we think our peers are the same way. We know of a number of small pressure pumpers who are out of business, so there’s going to be, at some point of supply, supplier response for customers who are working. And we have to be very general about this, but a price leader in our business recently went back to customers and said, the pricing we gave you a month or two ago, we can no longer honor. And so those particular customers went out to bid again. So you only know that you’ve reached the bottom when you’ve overshot. And in that particular case, it appears that somebody overshot on the low pricing. So those are some indications.

I was just going to say I think we feel like we’ve always had a pretty good handle on our cost. We’re always learning, but I think a lot of our competitors, especially those smaller guys, have a much better - at the cost structure today than they may have before. So it becomes greater, so.

Let’s assume that a customer came to you today and asked for you to reactivate one of your idle fleets. At current pricing and current margins, would you do it?

It’s kind of hard to know a market indication, but at current overall pricing, would we work for them?

How about based on your March monthly results? Would you reactivate?

It’s a good question. The answer’s probably yes.

The next question’s from Ken Sill with Global Hunter Securities.

I’ve got a couple of questions. Could I ask one more time on the margin side, you’re not going to quantify it? But on the operating margins, given price declines and cost cuts, can we assume that we’ll be seeing negative margins for a short time here, going forward?

Yes Ken, that’s right.

And then just a kind of housekeeping question, but how much of your fleet is working on 24 hour operations now?

That’s a reasonable question. Again everything is so fluid right now, whatever we told you, I don’t think would really matter. I mean - in general our customers believe, and we believe in many cases, the 24 hour operations can create efficiencies. And certainly everybody’s looking for that right now, so it’s very fluid Jim –

It’s between 55% and 60% on 24 hour work right now. So we’ve got some customers who may want to work, want to work as efficiently as possible. And that’s certainly euphemism for low pricing, but it’s also a catalyst for 24 hour work.

You’re clearly an asset intensive like business, like pressure pumping, if you did 24 hour work, it helps margins a lot. For a given level of price but one of my thoughts of the Permian has not been a big area for 24 hour operations, do you think this downturn is going to push more of your customers to try to be more efficient in working, working as, as more intensely?

Yeah Ken, the Permian is the last basin to go towards 24 hour work. And we think that, yeah that’s definitely a trend, but it’s sort of lot of small numbers. But yes that’s definitely a trend.

Yeah, and the 24 hour works is more appropriate for net horizontal with multiple stages, as opposed to more traditional in vertical wells. I think that’s one reason West Texas has been slower to go to 24 hour, because it really doesn’t make sense on a traditional type of well.

Yeah, and then at current pricing are you guys getting enough margin to do the kind of big maintenance items that come up every three to five years, that can generally build transmission replacements, power in replacements? Or have margins been enough now that you might not undertake some of those things?

Ken I think you’re referring to our capitalized maintenance program, and the answer is yes. We are, as a policy, we don’t scrimp on maintenance. And we have the cash available and the ability to do that. So yes, we’re keeping our fleet maintained.

Okay. And then one last question is, obviously consolidation be important, is there a price as a percentage of what new assets would cost that you guys would look at consolidation, or would you be more interested in looking at an ongoing concern, or assets that are available, or would you even go that route?

Ken, we’ve been presented with a number of small distressed opportunities recently, we haven’t acquired any of them, or we’d be talking about today. I think to make that leap and decide we’re going to buy some distressed and very worn out equipment at some low fraction of replacement cost. We need a really clear view of when that equipment was going to go to work at acceptable margins. Right this moment, and late April, we don’t have that. We don’t have that clear view, so we’re just kind of sitting on the side-lines, certainly looking at things, but sitting on the side-lines, to see how things shaping up.

The next question is from David Wishnow with GMP Securities. Hearing no response we’ll go to our next question with Matthew Marietta with Stephens.

So on the cost reductions, will RPC be able to start to capture the margin on the cost reductions as you consider kind of the over supplied state of pumping equipment, the competition that’s out there. I guess what I’m trying to reconcile here is you kind of - you’ve called the bottom on pricing. And at the same time have made comments that costs are coming down, so logically, from here, are we talking about margin expansion in these businesses, or how long does it take to get to that point do you think?

Reasonable question but difficult, again, we’re working very closely with our customers. They want us to be busy, they want us to be viable. We’re trying to work with them to get the cost down as low as possible. So right now it’s not a margin improvement gain, it’s just, it’s getting a requisite amount of activity at an adequate pricing level. It’s hard to - so we’re not at that point where we’re going to be capturing any necessarily direct margin improvement from these price reductions. That’s responsible, you want to add anything Jim?

Again like Ben said, it’s a great question. It also depends on utilization, and I don’t mean rig count necessarily, I mean sort of the granular operational way of looking at things which is, we’re geared up to be busy. And on this week, we’re geared up for a certain level of activity and maybe to low level of activity, that’s fine, but can we be that busy next week? That’s kind of a key metric right now, is we’d like to be uniformly busy at whatever level that is. And again, maybe it’s a low level, but that would be helpful. Right now the work is sporadic enough that it’s hard to know that your cost are exactly the right level. And that therefore you can start to capture a little bit of margin from these cost reductions, that’s surely what we’re looking at internally.

I think I appreciate it’s an unusual environment, this is a different time.

And I appreciate that it is difficult to predict, but you’ve also - you kind of hit on this, some competitors are struggling, going out of business in some cases, we’ve heard this as well. What’s the risk here that those assets simply find new owners at lower cost basis that is - get upgraded and then join the ranks of idle and ready equipment. Can some of this equipment also become a source of cheap replacement parts that subsequently continues to drive down cost, and does this become an attractive source of cheap maintenance CapEx to a degree?

It’s possible, Matt our operations people tell us that if pressure pumping equipment is not really well-maintained. It really goes down quickly, and sitting in a yard is bad too because of things that happened. So to pull that equipment out of mothballs and get it going again would be harder, harder than you might think, certainly possible, and that’s what you’re alluding to. The other thing is that the assets that have been up for sale are not being acquired right now. So of course oil and service business will always over build, but it’s obviously a history, but that capacity coming back on the market as a viable source of competition, is not currently happening. And we don’t think it’s --.

And if you don’t mind, maybe just touching on the labor aspect of all this, when there isn’t an uptick in utilization, how difficult is it going to be to get the labor back?

We’ve been through it before, again, it also depends on how long before things - it can stabilize, and again, to improve, the longer the time period, the more difficult it would be but we’ve been through it before. We’ve been through processes of trying to add significantly to our staff and crews. And we’ve handled that reasonably well, so we’ll be planning for that. But right now, again, we’re just trying to seek what is that level of activity that we’re headed toward for the intermediate term, so we can plan accordingly. Because we don’t know, we sit around doing our planning right now. We honestly don’t say, here’s what we think the fourth quarter’s going to look like, we don’t know. We - rig count, activity levels, or drilling activity that leads to a lot of our activity, has declined very quickly, very precipitously, everybody on this call knows that. The quicker it goes down, the faster it comes back, so from our perspective it’s a positive thing. And we’re in the middle of it right now. So, and it is going to come back, it is going to be fine, we just don’t know whether that’s a few months from now or several months from now, we just don’t know. So we’re evaluating day-to-day, week-to-week, month-to-month. And trying to do the best we can.

And just a quick follow-up, a lot of our skilled workforce is trained, committed in the field but underutilized. So our first source of qualified operational ability to phrase it that way. Would be people who are working many fewer hours than they were working a year-ago, who are still with us. We hate to make the personnel cuts, we make them when we have to when things are prudent. But a benefit of not making too many, as we’ve got people ready to go, and ready to work as hard as they were working a year-ago when things get better. So is it probably the best answer?

Let me throw out this, nobody’s asked this question or whatever, just so we know. I think, it is just a point that we want to get out there in terms of the way we’re trying to manage the business and we’ll continue to manage it is, we said our debt was about $156 million at the end of the quarter. Recently its down, it’s already under a 100 and we’re going to, our plan is to drop that down very quickly to where we have little or no debt. So, again, we’re going to build, we’re going to - that’s our focus. And we think what we’ve done in the past has allowed us to be in the position we are today, and that’s the way we’re going to manage the business. We’re going to manage that debt down and prepare ourselves for the eventual recovery.

The next question is from David Wishnow with GMP Securities.

I guess we’ve kind of gone over pressure pumping - looking at the other business lines within technical services, how are those holding up?

They’ve been holding up a little bit better, but I think they - and - service lines in there but they’ve been holding up a little bit better and we think that they won’t be as impacted as pressure pumping, but they have been and we think they will continue to be. So that’s something clearly that we’re working on, again, everything is so volatile right now that it’s hard to give any specifics. But they are doing a little bit better.

And I guess, quickly, on the input cost of sand, transportation, things like that, are you guys working under any legacy contracts or anything, that maybe more expensive than if you guys run the spot market? That potential - point this year?

Not really, our contracts, they’re all subject to sort of resets based on market pricing.

The next question is from Tom Curran with FBR Capital Markets.

Hey Jim, I’m curious, when it comes to technical services 1Q margin. If you had been able to take all of the internal cost control and reduction measures that you’re now implementing as early as possible. How much could that have helped margin in 1Q?

Well, it would have helped it. Probably not a whole lot and we’ve been doing some noodling on that last night and this morning. It would have helped, I don’t have a good enough number to tell you. I’m sorry, it’s good question but –

Okay, how about, and I’m sorry if you spoke to this in the opening remarks. I was forced to join the call late. How about a rough idea when it comes to the sequential compression in technical services margin that you’ve experienced. The split between pricing and activity? It sounds like it was barely heavily pricing weighted clearly but –

Yeah, Tom, no, that question wasn’t answered. And it’s a good one. Our best answer on that is that the pricing activity declines were evenly split. There’s a little bit of an offset there because service intensity in pressure pumping increased a lot, that’s surprising, but it did. And I think some others in our group have said that too. So the calculation is a little bit difficult, but I think our best answer is that pricing in activity levels were evenly split when it comes to - or the decline rates were evenly split.

And that’s very helpful. And that was going to be my next question, that is, could you quantify for us, one or more of the metrics when it comes to demand intensity, either what you, the company specific level experience in terms of, the continued sequential uptrend and proppant consumption per well. Propannt per stage?

Sure, the service intensity measured in proppant per stage sequentially increased, let’s just say between 25% and 30%, large as that that number may sound. Stages declined, okay stages declined by a pretty good percentage, let’s just say that. But in terms of proppant per stage was really, that speaks to a response to a question earlier where I said that rail cost staying high, in fact increasing does not help, because you’re making less for the work you’re doing. But you have to get a whole lot of proppant to the site, in a very short time window. So that’s difficult, and that metric of increased service intensity speaks to it. Pricing was off 30%, 35%, I think that’s pretty much across the board what’s happened.

Jim, do you know what that netted to then in terms of proppant consumption per well, having the proppant per stage of 25% to 30% but the number of stage is sequentially down?

Proppant per well, I honestly do not have that statistic in front of me.

Last one for me, then I’ll turn it back. Just when it comes to stacking so I’m clear, have you stacked any of your horsepower yet? And what is the philosophy on stacking? How do you think about, sounds as if based on some of the comments I’ve caught thus far, you would resist it because of concerns about what it implies for the market ability, that equipment, but I don’t want to put words in your mouth, so?

Well I think we said about 15% is idled, stacked for people can mean a lot of different things. We have not cold-stacked anything yet. Meaning we expect it to be down for extreme periods of time. So we’re - it’s more, we’re setting it a side. We’re trying to set the newer equipment aside first, and so and again, we’re at 15% in that - so we’re looking to, we want to have this little - we’d like our equipment to be evenly and reasonably utilized, of course, across the basins. And so, and its 15% of that.

Just one more piece of color is that, we’ve, we had an expansion plan in 2014 and deliveries in early 2015. Some of the equipment that we’ve received has never been placed in service, because - back to your comment that you do want to utilize equipment because not utilizing is bad for it, that is very true. But we don’t care to utilize equipment when we don’t have to with these low pricing levels, it doesn’t fit with their financial return criteria to the extent that we have any control over that. So some of the equipment has not been, has not even been put in the field yet.

Maybe then just one quick follow-up. How would you guys define the difference in terms of the cost run rate between equipment that’s nearly idle, or not being utilized, and equipment that’s actually been stacked?

To respond the question, stacked equipment, the only cost would be depreciation and whatever your cost to capital is. I know that we even stacked equipment because of equipment warranties and things like that, have to have certain minimal levels of maintenance done to it.

Yeah pretty minimal.

Yeah, I’m going to call it an oil change, that maybe wrong, but that kind of thing which is pretty minimal, doesn’t take that much effort.

.:

Jim, could you just give us the product line revenue split?

Sure, my pleasure. This is for the first quarter. And this is as a percentage of consolidated revenue, pressure pumping was 54% of revenue, ThruTubing Solutions was a little over 18%, call it 18.1%, coiled tubing was 9.3%, rental tools was 3.9%. And on nitrogen service line was 3.7%, those are the top ones.

The next question is from Byron Pope with Tudor, Pickering, Holt.

I have just a - Luke’s question - because I wanted to circle back to comment that you guys made earlier about, in your prepared remarks about pricing having declined across all your service lines. And I just wanted to make sure I understand it correctly, when you talk about your confidence that pricing has bottomed. My assumption is that you were talking pressure pumping as opposed to some of your other service lines like coiled tubing and rental tools. Are you seeing signs that pricing across your portfolio is essentially at sharp levels?

Yeah Byron this is Jim, that’s a good question. Actually our specific comments about pricing bottoming related mostly to pressure pumping. Some of our other service lines just move a little bit differently during the cycle, and those declines as they’re occurring, may occur a little bit later. And then furthermore they’re probably different supply demand and dynamics for some of them. So yeah.

And then second question for me. Just, if I recall correctly, I think roughly two-thirds of your pressure pumping horsepower’s in West Texas and then in Eagle Ford. And if I think about the 15% of your fleet that’s currently idle, no reason for the geographic composition of that to be any different from the overall composition of your pressure pumping fleet. Or has it been disproportionate in the Permian or the Eagle Ford?

I would think about it more proportional Byron, that Eagle Ford has been - everything’s relative right now, but a little bit - the Eagle Ford has been busier, and the Permian has been relatively okay as well. So there’s no more of the equipment that’s idle there than other places.

Next will be John Daniel with Simmons & Company.

Just a few housekeeping things first. The $7.9 million of equipment expense, did that hit both segments? Or just technical services?

Just technical.

And can you provide some color on what type of parts are now being - what component was it? Was it the fluid ends?

Fluid ends, yes.

And then Jim, if we could get depreciation by segment, do you have that handy?

John, I’m sorry. I do not believe I have that handy. I’m going to work on that, I may have it during the call.

You mentioned on the example someone bidding too low, then coming back and changing their mind if you will, and the customers rebidding to work. When that scenario plays out, are you inclined to raise your next bid for that customer? And maybe I understand it might be a bit early to do that now, but I mean if you’ve got someone to basically screw it up on the pricing, that’s now begging for forgiveness. I’m just curious how you respond to that when the bid comes back here?

That’s a very hypothetical question, nobody’s been begging yet. So we’d like to thank maybe our people would think about that, but we’re trying to do is again price it at levels that work for us and work for the customer. So all things being equal, hopefully we would find something that we could maybe true-up the bid. And that might indicate, and we can support the fact that it needs to be higher than it was, initially.

Re-frac opportunity it’s getting a lot of talk this quarter, can you guys track that internally, when you’re not doing jobs and makes sense you do, just sort of what you’re seeing last year, in terms of re-fracs what you’re seeing today, and the outlook?

John, we’re with everybody else, thinking there’s some opportunities, used to talk about re-fracs. We’re hoping there’s some opportunity there, and we kind of built the business, certainly in West Texas, many years ago, on re-fracs just because of the good financial dynamics there. We have seen a little bit of, if we can expand it to work over, not just re-fracs, but work-over-work. We’ve seen a little bit of work there, with small diameter coil tubing in nitrogen. And we have not seen enough yet to talk about it, it’s not material. We do think the opportunity is there, I think our operations people tell us, and believe that, when the price of oil hits at some number higher than it is today, but not too much higher in number, you’ll see people start to re-frac wells. We have not seen much of it yet. And in the numbers and ideas we’ve been discussing for second quarter, there’s not any of that baked into it. So that could be some upside, nothing that we know eminently.

I don’t know if you have this handy, but do you have any sense as to what the service intensity would be, on those re-frac opportunities in terms of other fleet side, proppant volumes or is it just too early to know?

It’s too early to know. We know that it’s a small job, to be honest, it doesn’t take all that long. A lot of times it involves acid, for just in a lot of ways, just cleaning out scale and sediment that’s built up. There are other services that go along with it. If drilling a new well would have cost $7 million to $9 million, the total package on a worker might be around $2 million or so. But that’s not all factoring, that’s other things you use coil tubing that kind of thing, so.

Jim if you look out for the next two or three months, do you feel like it’s more likely that you will idle more equipment or redeploy the idle equipment?

I will say again, that right now what we’re doing is we’re seeking as much activity at acceptable pricing we can get. We had a lot of success late in March, as I indicated earlier, that’s our focus right now. So good question, but right now hard to say.

Let me answer one question. One of the questions you asked but I wasn’t unable to answer. Our total depreciation for the first quarter was around $66 million. Technical services depreciation was around $58 million, and support services was around $8 million. So there’s some rounding here, but good numbers.

The next question’s from Daniel Burke with Johnson Rice.

I wanted to go back to just to kind of just offered about seeing more success late in March. Any thoughts on what drove that success? Is it your customer base that’s got a little bit more active? What are the reasons that you guys think, otherwise you might be capturing some incremental share out there?

I think years back I was talking about the price discovery our customers have very quickly gotten to the point that they know where the bottom is. And we’re very close to that, and I think we can - they know and we can convince them it can’t go much lower than this. So I think we’ve been able to lock it up again we’re high quality service provided, they want to work with us. And if we can work at the right price, they’re more than willing to work with us. So we’re able to secure some work, and we’re going to continue to do that.

On the magnitude of the service intensity gains that you all talked about, were those comments sort of mix adjusted? Or, I guess the question is, have you seen a larger decline, or did you see in Q1 a larger decline in lower intensity vertical work that helped contribute to that trend? Or did you see that intensity at the leading edge as well?

Good question Daniel. I’m trying to see if I can say anything meaningful about that. Some of it was mix adjusted, so in other words for everybody else listening, I’m answering your question. It’s some of it the fact that vertical completion, for us, declined more in a lot of places. And that answer is, that it did have some impact, I can’t quantify how much, but it did have some.

The next question is from Ken Sill with Global Hunter Securities.

When you guys mentioned up to 30% cut in sand pricing, that’s a lot bigger than some people have been talking about. So I’m curious, one that I guess my first question is, how much of your sand is under contract, versus how much have you been buying in the spot market?

We buy it all essentially, it’s all, for the most part, spot, even though we have relationships established. But it’s over relatively short periods of time, it depends on the market, if that answers your question?

Yeah. A lot of people have gone out and signed long-term supply agreements, and committed to certain volumes. And it seemed like the sand companies were being very reluctant to cut prices there, so I was wondering if that might be some of the concerns?

They’re reluctant but the realization is, again, our customers have, again, as I said earlier, it very effectively found where that pricing level is, and we’ve accordingly gone to our vendors and said, we’ve got to get there. We’ve got to do everything we can do. And we’ve been more successful than I ever recall being able to secure those price concessions from vendors. And I think they recognize the environment we’re in.

Yeah. And I think others have said this Ken. We definitely have experienced the idea that, in the beginning of the first quarter, the sand guys did not yet understand the magnitude of what was happening, or what was getting ready to happen. Nothing against them, it’s just in a different part of the country, and just different parts of the supply chain. So in January, they didn’t understand that, but February and March, they really did start to understand it. Plus there’s still coming on, sand supply coming on. So that’s another thing to think about as well.

So they’ve been through the education process?

Yeah, a lot of them are new, just like every cycle, like every cycle they’re new pressure pumping companies have to learn things. So it’s the way it works.

[Operator Instructions]. It appears there are no further questions at this time. Mr. Landers, I’d like to turn the conference back to you for any additional or closing remarks.

Okay Eric, thank you. And thanks to everybody who called in for the questions, and we’ll be seeing a lot of you. We’ll be seeing many of you in the coming quarter, and look forward to that. And we will talk to you again soon. Have a good day.

This concludes today’s call. As a reminder, the replay of this call will be available within two hours, at www.rpc.net. Thank you for your participation.