Ladies and gentlemen, thank you for standing by. Welcome to the Schlumberger Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Instructions will be given at that time. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Vice President Investor Relations, Mr. Simon Farrant. Please go ahead.

Thank you, Greg. Good morning and welcome to the Schlumberger Limited fourth quarter and full quarter 2014 results conference call. Today's call is being hosted from Houston where the Schlumberger Limited Board meeting took place yesterday. Joining us on the call are Paal Kibsgaard, Chief Executive Officer; and Simon Ayat, Chief Financial Officer. Our prepared comments will be provided by Simon and Paal. Simon will first review the financial results and then Paal will discuss the operational and technical highlights. However, before we begin with the opening remarks, I would like to remind the participants that some of the information in today's call may include forward-looking statements as well as non-GAAP financial measures. A detailed disclaimer and other important information is included in the earnings press release on our website. We welcome your comments after the prepared segments. I will now turn the call over to Simon.

Thank you, Simon. Ladies and gentlemen, thank you for participating in this conference call. Fourth quarter earnings per share from continuing operations excluding charges and credits was $1.50. This represents an increase of $0.01 sequentially and is $0.15 higher when compared to the same quarter last year. During the quarter we recorded $1.8 billion of pretax charges. These charges are primarily related to actions we have taken to meet the challenges of the current market conditions. The $806 million of charges relating to the restructuring of the WesternGeco seismic fleet are as we announced last month. We recorded $296 million of severance cost associated with the headcount reduction of approximately 9,000. This reduction which will largely be completed by the end of the first quarter will bring our headcount more in line with the currently anticipated activity levels. In Venezuela effective December 31, 2014, we changed the exchange rate we applied to our bolivar denominated transactions from 6.3 to 50 bolivar per dollar, which is in line with the SICAD II exchange rate resulting in a $472 million charge. We believe that this rate now best represents the economics of our business activity in Venezuela. Going forward, this charge will reduce the US dollar amount of local currency denominated revenues and expenses. Had we applied this exchange rate throughout all of 2014, it would have reduced our full year EPS by approximately $0.08. The last item relates to $199 million write-down of unconventional integrated project in the Eagle Ford as the result of the decline in oil prices. Fourth quarter revenue of $12.6 billion was flat sequentially. This reflected approximately $260 million of yearend software product and multi-client sales which were weaker than what we typically experienced in the fourth quarter. Pretax operating income of $2.8 billion decreased 1% sequentially…

Thank you, Simon, and good morning, everyone. In the fourth quarter we continued our strong financial performance driven by record activity in North America and in the Middle East and Asia. In other international areas, Latin America revenues improved slightly on higher activity in Venezuela and Columbia while Europe, CIS and Africa fell as the ruble weakened and the seasonal decline activity started in Russia. Europe, CIS and Africa declined further from the downward trend in oil prices which curtailed customer activity and reduced rig count in the North Sea and parts of West Africa. Overall fourth quarter revenue was flat with the previous quarter but grew 6% year-on-year. Pretax operating income decreased 1% sequentially and grew 7% year-on-year while pretax operating margins were essentially flat slipping 19 basis points sequentially but rising 13 basis points year-on-year. This performance ended the year in which Schlumberger revenue climbed to a new high in spite of significant head winds including activity challenges in a number of geo markets, geopolitical unrest in Libya and Iraq, international sanctions in Russia and reducing customer spend. Still our global footprint, broad business portfolio, and strong execution capabilities provided the required resilience to outperform even in this environment. Looking at our corporate financial performance, we generated more than $3.4 billion in free cash flow in the fourth quarter bringing the full year total to more than $6.2 billion. This represents an increase of 13% over 2013 and a conversion of 84% of the full year's earnings into free cash flow. During the quarter we continued our active stock buyback program buying back $1.1 billion in stock to keep us on track to complete the $10 billion program within the stated two and a half year period. As a further demonstration of the confidence we have in our…

[Operator Instructions] Your first question comes from the line of Ole Slorer from Morgan Stanley. Please go ahead.

Yes, thanks a lot and thanks for your insights there Paal. I wondered whether you could start with the macro here. I wondered whether you could help us understand your slight change in language from the third quarter. You highlighted both in the third quarter release and the fourth quarter release that negativity, the peer revisions, I mean, that's consistent. But on the supply side you talked in the third quarter about pipe capacity and now you are talking about increase in supply. I just wondered whether you could just elaborate a little bit and help us understand the difference in the magnitude.

Okay. So if you look at the high level macro view that we have, nothing has really changed from what we said on the Q3 call. So looking at GDP at 3% we are still looking at solid growth overall in 2015 and oil demand is also going to be up. So as we said in Q3 the issue is really on the supply side where I think it's very important that we separate the three in global production capacity and marketed supply. So if you look at the global production capacity in 2014, it grew by about 1 million barrels a day which is equal to the growth in demand. So the significant drop in oil prices is not driven by this over capacity but rather by the higher marketed supply which is coming from North America and from OPEC. So we believe that the supply side is currently going through a significant change where the key local producers have shifted focus from protecting price to now protect market share, and the consequence of this is that at least for a period of time, this is going to make the high cost producers become the new swing producers where the activity is going to be even more driven by the variations in oil price and the economics of their project. And the tool used to drive this change to the supply side is the lower oil price which is what we are seeing now. So the main new element from the Q3 call is that OPEC decided not to cut production so the reduction in the marketed supply will have to come from lower E&P investments and that is really the only offtake to our macro view.

And my second follow up would be exactly on that. You highlight this time around in your release that the two effect of lower CapEx increased declined curves from existing fields and delays in new field start-ups. So I wonder whether you could talk a little bit at a high level at what point do you see the impact of this will change market psychology on the direction of incremental capacity versus a direction of incremental demand assuming demand plays out in line with your view there.

Yes, if we assume that oil demand is going to be up by 1 million barrels, if we don't take lower investments and already reduce their capacity, the market is already heading towards a tightening. I think that's very clear. Now we don't expect the oil prices to improve significantly until there are signs of weakening supply, and the weakening supply will either first come from North America or from international. I think the signs we need to look at are different from the two regions. Given the strong growth momentum in North America I think what the market will be looking for here is the slowing year-over-year growth while given the flat investment levels in international market in 2014, capacity already reduced in 2014. So here I think we are looking for a further reduction in absolute supply. So I think these are the two main signals to look for.

And then your guess again on timing?

I am not going to guess at least not in public.

Okay, Paal, I will hand it back. Thank you very much.

Thank you.

Your next question comes from the line of David Anderson from Barclays. Please go ahead.

Good morning Paal.

Good morning.

I was just wondering, in light on your commentary around the supply response and you are talking about international and North America, there is clearly a pretty healthy debate out there about the economics of North America in unconventional. Just wondering with Schlumberger's expertise in reservoir, can you help us understand how you think about that marginal cost supplier and in particular how you see the trajectory of spending and activity levels in North America over the next several quarters?

Well I think if you look at 2015 activity in North America and you look at the third party spend surveys, it indicates about 25%, 30% reduction. So it's clearly going to be a tough year going forward, right. As to the viability of the project I think there is still a broad range of operating costs in North America land. But I would say that as a general statement the shift in OPEC from protecting price to protecting share is raising some questions around the US shale going forward and I think the new oil price dynamic is clearly going to test the resilience of several North America land producers from their ability to get financing, their ability to continue to drive cost efficiency and reduced cost of barrel and also their ability to maintain production at current level. So I think most likely we are going to face the situation in North America land with lower activity, more focus on the lower cost production areas for a while. That's our view at this stage.

And then just kind of sticking still on North America in light of the headcount and CapEx reduction and keeping in mind that you are getting more capital efficient of the transformation. I just wonder if you could help us understand your strategy during this downturn to align your capacity with activity levels. Should we expect a similar strategy that Schlumberger employed in 2009 or can we expect it to be a little bit more focused on utilization this time around?

Well, I am not going to go into the detail tactics and strategy we have on pricing and share. That's going to vary all depending on I would say the basin, the customer type and so forth. But I will say that the general rule that we have applied in recent years that below a certain contribution margin, we will rather stack the equipment than operate at the level that is unacceptable.

Okay, thank you Paal.

Thank you.

Your next question comes from the line of Bill Herbert from Simmons & Company. Please go ahead.

Thank you, good morning. Paal, so switching gears here a sec from North America to the international realm and recognizing that the early data internationally has not been as transparent as it has in North America given the litany of capital spending analysis for '15. But given where oil prices are today, certainly it seems that the indication points to a pretty hard landing in the international realm and while we share your view that the contraction internationally is going to be more benign than in North America, it's still going to be fairly consequential. So just as a starting point, is down 10% to 15% internationally within the realm of reason where we sit today?

While to think to kind of venture out and even make full year statement at this stage I think it's too early. We have very significant lack of visibility. The way we are going about managing actually both North America and internationally, is we are looking quarter by quarter now. So we have taken actions to be in line with costs versus the activity that we foresee for Q1. And we will continue to stay very closely in touch with customers to look at plans going forward to make sure that we continue to tailor resources to the projected activity. Now we are aware of the third party surveys and the 10% to 15% reduction in international spend for 2015 I think today is probably a reasonable starting point although I wouldn't confirm it from our side for the full year.

Okay. And then secondly kind of juxtaposing downturn as it were 2015 versus what prevailed in 2009, I mean clearly you are a different company coming into this downturn than you were in 2009 given the internal transformation focus. In light of that, do you think the decremental margins this time around are going to be better behaved anywhere in 2009 or basically about in line?

Well I would be very disappointed if we don't see a significant improvement in our decremental margins in this downturn versus what we saw in 2009. The -- we've had a very, very strong focus on generating incremental margins in the past four, five years, and over the past quarter we have basically converted our strong and peer expectations on incremental into equally clear expectations internally on what good decrementals are. I am not going to give you what the number is but like I said I will be very disappointed if we don't do significantly better than in 2009.

Very good, thank you sir.

Thank you.

Your next question comes from the line of Michael LaMotte from Guggenheim. Please go ahead.

Thanks. Good morning Paal. I am trying to hone in on how you're actually approaching 2015 and maybe take it from the perspective of the methods to the leadership of Schlumberger in terms of controlled business. You mentioned several things you can control, maintain the targets on the transformation program with the lack of visibility, maybe tighten up the reaction time from six months reviews to quarter-by-quarter. Is there anything else that we should be thinking about in terms of approaching the downturn of '15?

Well I think you hit on several of the things. But if I was to just kind of repeat to clarify them, what we have passed to our senior management team in the quite frequent meetings we've had over the past quarter, there are really three high level things. Firstly, the increased importance of staying very, very close to our customers. First interactively support our efforts to reduce their cost levels but also to make sure that the -- we very clearly understand their plans and changes to their plans. That's the first one. The second one is what you will alluded to do that we stay focused on what we control. And that is to proactively adjust costs to activity levels, and factoring in the benefits from the transformation. And also having a clear plan on how we are going to navigate the commercial landscape in terms of activity and pricing discussions with our customers but also very importantly to continue to focus and deliver safe and high quality operations, which is essential to our performance but also to our customer's performance. And the third one which we are also balancing into the total picture is to capture the opportunities that we see in the current environment and we see the current environment as being flushed with opportunities for us. First is to gain market share in light of our two main competitors looking to combine. Secondly to accelerate the transformation, our organization is now pulling very hard on it and we also see our customers being very open to adjust how we work with them and how we interact with them to gain some of the benefits. And then the third one is inorganic growth. We see lots of opportunities for this based on our strong cash flow and also very solid balance sheet. So these are the high level messages that we have already passed to our management team and they are currently executing.

That's very helpful. Thank you. If I can follow-up on your inorganic growth comment quickly, does the current environment change the process around acquisitions and the last few years they've been smaller, bolt-on has been used as a term to describe the strategy since Smith. Does the appetite for a larger deal change in this environment?

No, I wouldn't see that. The current environment has changed the strategic directions that we were looking to pursue. It is more about when these opportunities arise. We have a clear view of where the company is heading and what we want to do from an M&A standpoint. We have been executing a number of these things in pervious years and as we go forward now, we would look at whether the other opportunities that we have in our list become accelerated opportunities in which case we will pursue them.

Okay, thanks so much.

Thank you.

Your next question comes from the line of Angie Sedita from UBS. Please go ahead.

Thanks. Good morning guys.

Morning.

Paal, so could you talk a little bit, I mean you have the 25% reduction in your CapEx and could you give us a little bit of high level color on that cut where the cuts are coming from and I recall that in 2009, you did reduce your CapEx tied to technology but based on your opening remarks, it sounds that that would not be case to cycle and then also how flexible are you on your CapEx outlook for 2015?

Okay. Well like you say in the current full year CapEx estimate is 3 billion, but given the lack of visibility and the uncertainty, this is still subject to change. So I will also that part of the CapEx reduction is due to the efficiency gains that we are planning from the transformation. So you cannot directly translate the CapEx to a projected revenue for 2015 and I also don't think you can directly compare it to the CapEx reductions that we did in 2009. I will also say that we have significant flexibility built into our manufacturing capabilities. We are, as I mentioned, targeting market share gains in particular in the international market. So if we need more CapEx, to serve these gains, we have the flexibility to increase CapEx during the year, and also we have the opportunity and flexibility to decrease CapEx further if the impact on the transformation is even beyond what we are targeting.

All right. And then kind of an unrelated follow-up, I mean obviously your customers are coming to you and the international markets talking and looking at the contracts and where you can pull out cost out of the system, and you are seeing it in the US, how much success or have you begun conversations and where you can pull cost out of the system specifically in US frac. Is there other cost recovery opportunities besides proppants, truck, rail and what are you seeing along those lines?

Well overall or in the US?

Both, actually.

While I would -- our approach to these discussions with our customers and we are receiving invitations to engage in these discussions both international and in North America. I mean our approach is that we fully understand the need our customers have to reduce their overall costs. And we have engaged in a range of discussions where we are looking at volume discounts versus market share, further application and new technology, generally better planning and efficiency maybe less use of backup resources, better terms and conditions and it also involves general pricing discussions, right. So with the transformation, we have significant opportunity to drive costs of our system internally but some of these cost savings will also depend on our customers being open to work with us in different ways. And I would say there is a significant increase in that openness to start to realize these values and I think our discussions in general are focused on how we can create more value together, obviously in addition to general pricing discussions.

All right. And so -- I guess to add on to that, are you going back to your supply chain vendors for changes in cost reductions and proppants and other sources that you have in the US or internationally and are you able to pull cost out of your system besides the efficiency side?

No, absolutely. And over the past three years or so, we have fully centralized our shared services and supply chain organization including global category management. So we are fully leveraging firstly our buying power and secondly I would say a highly capable supply chain organization to drive a similar type of discussion with our suppliers as to the discussions we have with our customers.

Thanks. I will turn it over.

Thank you.

Your next question comes from the line of James West from Evercore. Please go ahead.

Hey, good morning Paal.

Good morning.

I wanted to just touch on the transformation program again and kind of clarify a few things there. Obviously you are looking to speed up the transformation. I wanted to know if you could give us some sense of kind of how much more quickly you can go through this? And then secondarily, does the downturn, which I know we all don't like, nobody likes downturns, but does that not make the transformation easier to be in a downturn?

In some ways it does. Because then you are performing quite well and you are busy taking on more work and growing to change to where you were both internally and in the interfaces, you have both the customers and suppliers. It's more difficult to drive change in that type of situation. When you have a shift in market conditions as you have now, we see even more interest internally and even more openness on the customer supply side to engage in doing things differently. So I would say, yes, the changing market condition provides us with more opportunity to accelerate so then the key is just how do we put resources on to this from a central management standpoint to have the various parts of the program staff and given the financial means to accelerate some of the investments that we are making to realize these gains.

Okay. Great. And then I have a follow-up not on that but unrelated. You made a comment earlier about going after market share as a result of your two major competitors combining. Have you already seen customers come to you and have you already seen market share gains? I know it is early days but is it already happening?

No I think it's a bit premature to say it's happening now. I mean the transaction is not closed yet. So I think as of now we are preparing for this. In discussions with our customers, the topic comes up, but I would say that this is more something that will take place if and when the transaction is closed.

Okay. Got it. Thanks, Paal.

Thank you.

Your next question comes from the line of Kurt Hallead from RBC. Please go ahead.

Hey, good morning Paal.

Good morning.

Just follow-up on James's question on the potential fallout from the merger. As you indicated there is nothing yet shaking loose necessarily and that will come post deal close. So you've indicated or you've emphasized at least in your prior commentary market share gains and with an emphasis on the international side. So I was wondering if you might be able to just give us a little bit of color on what you think may shake loose and how many basis points of market share gains could come out of this if not for Schlumberger specific, maybe on a broader basis?

Well if I was going to comment on the transaction firstly at the high level, I would say that the pending transaction first validates what we have been saying all along and that is that scale is essential to drive performance in the business that we are in. Now from our experience making a making a large transaction to build and leverage scale it has a series of challenges. And in general everything takes much longer than you initially think. And in addition to this, all the extra work that is involved with making such a transaction, easily distracts you from running the base business. So as I have been saying we look at this transaction as an opportunity within capital low for us and we do intend to capitalize on it, and this is again linked to the gaining of market share. In the international market I would say in many countries our market share has been limited by a glass ceiling and this glass ceiling has been put in place by our customers to make sure that there is enough work to make a third player viable. Now if the other two players were to combine into one, then I think this glass ceiling can easily be broken and that's why we are basically going through pretty much all our contracts in all the international countries we operate in and to make sure we have targeted plans for how we would look to capitalize on this market share opportunity if and when the transaction closes.

Okay. That's good. And so many topics and so little time, so just wanted to try to calibrate some things with you. You said you guys reduced headcount by 9,000 to address current activity levels, then you reference a couple of third-party E&P surveys with the US down 25% to 30% which seems low in my view and 10% to 15%, which if I were to interpret your commentary though you didn't state specifically might suggest is you think that 10% to 15% reduction in international spend is too low, or too much?

While as I said I didn't make a full year statement on this. We are going to focus on managing this year in quarters. I think the general statements I would make is that the impact on North America Land we expect to be significantly more dramatic then what you would see in the rest of the world.

Okay. And then if I just may finish with one. Just curious about your views on what's going on with the market opportunities in Brazil given all the corruption, scandals and so on and so forth. And maybe tying that back to the merger coming up here, which would give your competitor about 70% market share, if I'm not mistaken, of the recently awarded drilling package. So first and foremost, with the mess in Brazil, is that going to lead to activity declines you think in 2015? And then secondarily, how do you see the possibility of this drilling contract being re-bid one more time?

Well I think as to your -- the things going on but in Petrobras I will let Petrobras comment on those things. Our relationship with Petrobras and our working relationship continues to be very good. Now Petrobras did recently announce budget cuts for their first half of 2015 and versus a previously indication of flat spend. So there will be challenges in Brazil going into this year. As for the new contracts, the latest information we have is that the wireline and E&M contract will kick in mid-year of 2015. And what is going to happen to the market share within these contracts and I don't know. We are based on the bid happy with the contact. Now what Petrobras chooses to do in terms of market allocations we will have to revert to them.

Okay. I really appreciate it. Thanks a lot, Paal.

Thank you.

Your next question comes from the line Bill Sanchez from Howard Weil. Please go ahead.

Thanks, good morning.

Good morning.

Paal, given your quarter-to-quarter kind of look here how you are managing the business I was hoping perhaps you could help us just calibrate 1Q relative to fourth quarter? I know we didn't see quite probably the yearend product sales one would expect. You talked in your prepared comments just kind of some of the puts and takes in North America but I didn't hear much specifically around international. And just trying to see if you can help us calibrate how we should think about 4Q to 1Q here from an EPS perspective?

Okay, if you look at the first quarter, even for the first quarter there is still significant visibility challenges. Now we do expect a significant sequential drop in revenue due to, like you say, last year on product sales, the normal seasonal impact in particular in North Sea, Russia, China as well as in Marine Seismic and also the exchange rate impact in particular from Venezuela and Russia is going to felt. And the last part which is kind of new this year is further activity and pricing impact from the reduced E&P CapEx spend. So what we have done is and we have tailored our cost space for revenues to be around the levels for the first quarter of last year. So this involves a range of cost measures taken in Q4 including the release of the 9,000 people that we quoted. So I would say I am comfortable with our cost structure with respect to this base case of Q1 activity around revenue levels of Q1 of last year. Now this activity is stronger, we have means to cover it, and if it is lower we have the ability to quickly cut more.

Okay. So 1Q revenue '15 equal to 1Q revenue '14 overall?

I am not saying that the revenue is going to be that, I am saying that that's how we have tailored our cost base.

Okay. So if I just get back then to the headcount reductions then, so the reductions you have made, I guess, first, assume that this -- it seems like from the call this is strictly a North America reduction, is that in fact the case of the headcount cuts you have made so far?

No, it's not. This is a global reduction and it both a combination of I would say structure headcount as well as fee capacity headcount.

Okay. So there's still room here as your quarter-to-quarter view changes for further headcount reductions on a global basis? I guess is that a fair comment, Paal?

Yes, as Q1 evolves we will firm up our view on Q2 and the playbook we run through in Q4 to be right-sized for Q1, we will repeat if necessary during the first quarter to be right-sized for Q2.

Okay. If I could just ask one more, what should we assume right now [inaudible] of the headcount reductions that are being made currently?

Well I am not going to predict the cost here but I will tell you that normally we recover our costs in the severance within the following time here. It's probably more than this number. So I have already covered in fact [inaudible] be within the 2015.

Okay. That's helpful. Thanks, I will turn it back.

Thank you.

Your next question comes from the line of Jud Bailey from Wells Fargo. Please go ahead.

Thank you, good morning.

Good morning.

Paal, one thing that strikes us about this downturn relative to what we saw in 2008 and 2009 is the urgency of some of the large operators to cut back on their offshore spending very quickly. I would be curious to get your thoughts on deepwater activity in kind of the three main basins, Gulf of Mexico, West Africa and Brazil, how your customers are approaching that and how you see the outlook there over the next 12 to 18 months?

Well if you look at global deepwater activity, it was down I think 6%, 7% in 2014 predominantly driven by Brazil and in 2015 at this stage and I am talking about deep water activity now, we still expect another 5% to 10% decline. Where it is going to come I think is a bit early to say. The Gulf of Mexico looks likely to be reasonably flat. As I just mentioned Brazil, there seems to be potentially further cuts in Brazil and I think there is still a bit lack of visibility in Angola. But I would say, 5% to 10% decline in activity is what we expect which is more I think in line with what we absorbed in 2014. Now I think with a big saving in deepwater drilling spend it's going to come in 2015, it's going to be around the rig rate which started to come down in 2014 but I think the big saving our customers are going to get on deepwater drilling in '15 is going to come from the rig rate.

Okay. And that kind of leads into my next question is, one thing that we've heard from rig contractors is more so than in '09 we are hearing from them that operators are approaching them more so than '09 on trying to renegotiate existing contracts. I would be curious how are your customers approaching you in terms of pricing? Are they looking to try to renegotiate existing contracts? And then also do you have a sense on the ability for you to sell them new technology to save time and cost, or are they just in the mode of trying to get cost down and not really looking at that aspect of it yet?

I think on the deepwater size for our product and services, we do have discussions around trying to drive costs out of the system. But I would say our customers in this market segment in particular are still very-very focused on operational integrity and also looking at using the latest and best technologies to make sure that they drive performance through that. So we haven't really had any significant I would say price book discussions or requests for price book reduction. On the deepwater side it is more how we can work together to drive total cost down through better planning, through better execution, through less downtime, rather than specific price book discussion.

Okay. Thank you. I will turn it back.

Thank you.

Your next question comes from the line of Rob MacKenzie from Iberia Capital. Please go ahead.

Thank you. Good morning guys. I wanted to ask about technology adoption, something you highlighted again in your press release, specifically on US land. And my question is are you seeing a greater or lesser propensity of operators to adopt technology in the effort to drive down -- or drive up -- returns in this cycle? One might think you would but operators typically haven't always behaved that way.

Oh, you are right. In North America land that has been the situation. I would say that we are seeing or in 2014 we did see a growing uptake and a growing appetite to apply new technologies to drive both higher production and lower cost to improve cost per barrel. So I would say that BroadBand family of stimulation technologies is a very good example of this. Highway was one of the first and a major technology innovations on the fact side in terms of fluids for quite a while. As we introduced it in 2011, it grew very fast. But with the BroadBand family which was introduced in the early part of 2014, this is currently growing at four times the pace. So part of this is that we have engaged our customers in a slightly different way this time around for BroadBand and we have met myself and my team included with a range of our customers at the CEO, COO level to lay out firstly what the technology does but also to give them introductory offers to basically demonstrate what these technologies can do and I believe that when we introduce them in this way then the adaptation to all these organizations actually is quicker and more significant.

So when they come to you as many of them say they are doing now coming to their vendors and asking for price concessions, how does that change the conversation?

Well I think our customers still look to drive down total cost or improved cost per barrel and when they engage in these discussions there is already pretty clear on the standing of what some of these technologies have already done for them, and when we have commercial discussions these improvements and these benefits that we offer are factored into the overall situation when we discussed pricing with them.

Thank you.

That's all the time we have for the questions today. And now on behalf of the Schlumberger management team, I would like to thank you for participating in today's call. Greg will now provide the closing comments.