Ladies and gentlemen thank you for standing by and welcome to the Schlumberger Earnings Conference Call. For the conference, all the participant lines are in a listen-only mode. There will be an opportunity for your questions; instructions will be given at that time. And as a reminder today's call is being recorded. I'll turn the conference now over to the Vice President of Investor Relations, Mr. Simon Farrant. Please go ahead sir.

Thank you. Good morning and welcome to the Schlumberger Limited second quarter 2015 results conference call. Today's call is being hosted from London where the Schlumberger Limited board meeting took place yesterday. Joining us on the call are Paal Kibsgaard, Chairman and Chief Executive Officer and Simon Ayat, Chief Financial Officer. Our prepared comments will be provided by Simon and Paul. Simon will first review the financial results and then Paul will discuss the operational and technical highlights. However, before we begin with the opening remarks, I would like to remind our 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 questions after the prepared statements. I will now turn the call over to Simon. Simon Ayat - Chief Financial Officer & Executive Vice President: Thank you Simon. Ladies and gentlemen thank you for participating in this conference call. Second quarter earnings per share from continuing operations excluding charges and credits was $0.88. This represents decreases of $0.18 sequentially and $0.49 when compared to the same quarter last year. Our second quarter revenue of $9 billion decreased 12% sequentially. Despite the very challenging environment, pre-tax operating margins only declined by 49 basis points sequentially. This resulted in decremental margins of just 23%, which is a result of continued strong and proactive cost management across the entire organization. Sequential highlights by product group were as follows: second quarter reservoir characterization revenue of $2.4 billion decreased 5% sequentially. This decrease was largely driven by Wireline and Testing as a result of lower exploration spending. Pre-tax operating margins decreased 84 basis points to 26.5% as an impact of the lower exploration activities was…

Thank you, Simon, and good morning everyone. Schlumberger revenue decreased 12% sequentially in the second quarter, driven by a significant reduction in land activity in the U.S. as the rig count decline accelerated, and by further pricing erosion in both North America and the international area. North America revenue fell 27% sequentially while international revenue was 5% lower, as customer budget cuts and pricing concessions impacted results for a full quarter. Despite the challenging market conditions, overall pre-tax operating margins were maintained well above the levels of previous downturns as we continue to proactively manage costs and resources, carefully navigate the commercial landscape and further accelerate our transformation program throughout the organization. The success of this approach can be seen in a double-digit pre-tax operating margin in North America and an international margin of 24.5%, which is 35 basis points up sequentially and 44 basis points up year-over-year. In the first half of 2015, year-over-year revenue has now dropped 26% in North America and 14% internationally. These levels exceed those of the 2009 downturn in both pace and size. Still, we have delivered first half decremental margins of 37% in North America and just 18% in the international area. These decremental margins represents a marked improvement over the equivalent figures from the last downturn which were in excess of 70%, particularly as we begin to approach what we believe is the market bottom. While the market remains tough, we also believe we have been successful in adapting to a rapidly changing situation as far as the size of our work force is concerned. The absence of charges in the second quarter is evidence of this, as the adjustments made in the second quarter were absorbed in our normal operating costs. In terms of corporate financial performance, we also generated almost…

And first, with the line of Ole Slorer with Morgan Stanley. Please go ahead. Ole H. Slorer - Morgan Stanley & Co. LLC: And thank you very much, and I think you're going to make it a difficult weekend for some of your peers since they ponder what they're going to say next week. But...

Thank you. Ole H. Slorer - Morgan Stanley & Co. LLC: I wonder whether we could revisit your macro view. Are you more confident or less confident that the oil markets are tightening than what you were a quarter ago, given the most recent IEA report and some of the resolutions around previously sanctioned countries?

Well, I think our view on the macro and our confidence in the tightening I think is relatively unchanged. We've been saying now, I think, for a number of quarters, that we see solid oil demand growth. And again, this was revised upwards again this year to 1.4 million barrels during the second quarter. And we've also said that, with a certain lag, the large cuts in E&P investments are going to show up in the supply numbers. And we see it in particular in non-NAM and OPEC, which has showed a gradual weakening over the first six months of this year. U.S. monthly sequential production is flattening and the core OPEC spare capacity was also down to only 2.3 million barrels in June, a million barrels per day. So I think the tightening that we've been foreshadowing, we are still relatively confident that that will happen in the second half of the year. Ole H. Slorer - Morgan Stanley & Co. LLC: Yeah, good. On the environment, as you highlighted, pricing is still tough. I mean, we're at the trough. But clearly, the trough means, probably, average pricing still rolling down. And how do you see the say, some of the second half pricing and macro headwinds relative to the momentum that you have created within the organization? It's very clear from what you're delivering here that some of the initiatives that you initiated, maybe a year ago are really starting to deliver. But how much more can we expect given what you're already doing?

Well, I mean, you're asking whether our results are sustainable, I guess, right? So I mean, if... Ole H. Slorer - Morgan Stanley & Co. LLC: Yeah, I mean, the headwinds relative to the internal momentum, how should we think about it?

Well, if we take the pricing part of the question first, I would agree with you that there is going to be a further impact on pricing in the second half of the year. We haven't seen the full impact of that. But I would say that there is probably still more relative impact in North America than what it is in the international markets. There is going to be impact in both regions in Q3 beyond where we are in Q2, but I think that's relatively larger in North America. As to our ability to offset this, the transformation and the general way that we are managing the company and the focus we have on cost and resource management, through this, we are going to continue to create a financial leverage over the coming years. And we are going to take that leverage out in two forms. We will take it out through market share gains by being able to be even more competitive on price. And secondly, we'll take the other part out through very strong incrementals when we grow. Or, alternatively, very strong decrementals when we shrink. So what we talked about in 2014 at the Investor Day in terms of what the transformation represents for the company, say, in the next five-year horizon, it is there. We are accelerating the impact from it. And we see this leverage as something that we will continuously take out in the coming years. So fundamentally, I think the performance that we are posting is sustainable. It's not going to be a straight line. But overall, what we are doing now is not a fluke. Ole H. Slorer - Morgan Stanley & Co. LLC: Okay, very impressive. Thank you very much. And Simon, congratulations with the free cash conversion. I'll hand it back. Simon Ayat - Chief Financial Officer & Executive Vice President: Thank you.

Thanks.

Our next question is from Jim Wicklund with Credit Suisse. Please go ahead. James Wicklund - Credit Suisse Securities (USA) LLC (Broker): Good morning guys.

Good morning. James Wicklund - Credit Suisse Securities (USA) LLC (Broker): How do you see the performance-based work evolving in the U.S.? I know you've won projects internationally in the quarter in your SPM work in Ecuador and other places, internationally. But can you talk about the issues with growing that business model in the U.S.?

That's a good question. So I think, I would mention two specific things here. I think, firstly, what is very positive at this stage is that customers are, more and more, starting to buy in to the fact that we have technologies and workflows that can create more value. That is what we've been investing in for the past five years and that is how we wanted to try to create technical differentiation in the largely commoditized North American market. So with the dialogues we have with customers, both on geoengineering completions, on refracturing, in terms of more sophisticated fracturing fluid systems like broadband, it is very clear that the appetites to use new technology and more sophisticated technology is growing. Now, some of the customers would take on that technology on a more of a standard type of contract, where we will still get a premium over what basic commodity type of technologies we'll give, while other customers will also like to go into a more risk-based contract setup. We are fine either way. We are looking to create technology differentiation, and I'm very optimistic about our ability to continue to push that forward in the coming quarters, even in this business environment. James Wicklund - Credit Suisse Securities (USA) LLC (Broker): Okay. That's helpful. And my follow-up, if I could, there has been a great deal made about the slowdown in deepwater project development, FID delays and major oil companies moving to onshore. Yesterday, we saw Conoco break a contract on almost a new rig. Can you talk about what Schlumberger sees in terms of the progress in deepwater development and how that's changed what you expect to see going forward, if you would, whatever, over the next couple of years?

Well, the immediate thing we see is, obviously, an impact on deepwater drilling activity. And this is largely focused in on the exploration side of deepwater. And that's a, it's a pretty significant reduction in that. Now, that is already incorporated or absorbed in our results where they stand today. In terms of the deepwater projects, I think, yes, there are some projects that are being delayed and some projects being canceled, if possible, but I think in general, these are long-term investments, many of them are already deeply committed. So we don't see any kind of dramatic impact at this stage on the projects that are in the pipeline. Now, going forward, in terms of sanctioning new projects, I think it's going to be very important for the industry to be able to – the service industry together with our customers to be able to come up with technical solutions and field development plans that significantly reduces cost per barrel. And if we can do that, which is the overall objective for the industry, I think we can make many of the pending deepwater projects also economically viable in the future. James Wicklund - Credit Suisse Securities (USA) LLC (Broker): Okay gentleman. Thank you very much.

Thank you Jim.

Our next question is from Angie Sedita with UBS. Please go ahead.

Thanks guys. I echo, certainly a good quarter, particularly with the decremental margins. So Paal, can you talk a little bit more about the decrementals? Obviously strong in North America and international, but specific to North America, can you talk about at least for the Q2 the impact of the transformation efforts versus new technology versus the head count? And also, are you seeing better uptakes from the new technologies this cycle than in prior downturns?

Yes. I think, basically, all the elements that you listed are the contributing factors to the lower decrementals. So obviously, we have a clean quarter this quarter. There are no charges in it, so this is basically straight-line business performance in the second quarter. And like you said, the overall impact on transformation, which we started several years earlier in North America, is part of driving this. We started our transformation and reorganization back in 2010. I would say our North American organization has also been very proactive when it comes to cost and resource management. And as we just talked about earlier on one of the questions there, the uptake of new technology, both in North America and international, the rate of uptake, given the downturn, is actually quite strong and actually much higher than what we have seen in any previous downturns. So I think that comes down to the fact that a lot of the technologies – new technology we now have out have very clear cost and efficiency angles to them, which means that they sell equally easy in the downturn as they do in the upturn.

Okay. That's helpful. I appreciate the clarity. And then, you referenced it briefly in your remarks regarding the international outlook for 2016, which is, obviously, very preliminary, but based on your recent conversations and thinking through your viewpoints on supply/demand for crude, if we are in a $65 Brent world, what would your preliminary thoughts or color be on E&P CapEx on the international markets and do you have any color on the region?

Well, I think it's too early to make any firm predictions on E&P CapEx investments internationally next year. I would just say that we are relatively confident in the tightening of the supply/demand balance of the second half of the year. That would, under normal circumstances, lead to some uptick in the oil price. And if we see some improvement in the oil price in the second half of this year, I don't think there is going to be any huge impact on the current year budget, but I think it's a positive indicator that we might have some increase next year. I don't think the increase in 2016 is going to be large, but I think there is a good chance that E&P investment levels next year will be higher than what we've seen in 2015.

Great. Thanks. I'll turn it over.

Thank you.

And we'll go to David Anderson with Barclays Capital. Please go ahead.

Yeah, thank you. Paal, I just want to ask about Iran. Obviously, assuming there is an Iran deal goes through, I just wanted to know if you could highlight a little bit of Schlumberger's service opportunities that opens up over the next few years. And would you expect IOCs to start moving aggressively in there?

Well, I think what the IOCs are going to do, I think, you are going to have to ask them. I don't know. Our position and our view on Iran is the following: we have fully exited Iran. When the sanctions are lifted and when it is permissible, we will evaluate going back in. So beyond that, I don't really have anything more to say about what we will do, but it's coming down to, firstly, that the sanction needs to be officially lifted, which they are not yet done.

Okay. And then, as a quick follow-up on the offshore. Can I get a little bit more detail? You've talked a few times about exploration spending coming down. I was just wondering if you can just help me understand how you see this exploration cycle playing out, say over the next 12 months. Do you think exploration can bottom by the fourth quarter? And then, at these costs, you talked about risk reduction in some of these contracts, do you think you could start seeing some sort of impact, some sort of turnaround in there by mid-2016, or something along those lines?

I would say, potentially. We see the exploration spend down potentially around 30% again this year. That's including seismic, probably around the same level. So that is obviously a dramatic reduction if you look at what we already saw in 2014, right? So yes, we might not be too far away from bottom on exploration spend. But again, I don't see any dramatic turnaround immediately. We could potentially start seeing something towards the second half of 2016, if there is a kind of a gradual uptick of the oil price to at least plus/minus $70. But nothing on the horizon, as we see today. It's still a very tough market. And we see this very, very clearly in some of our key high tech product lines, where our exploration revenue over the past six quarters has actually dropped by 35%. So I don't think we are too far away from bottom because there's not that much left to cut. But the comeback I think is still a little bit out in time. But if you look at the level of spend today versus what is required for the industry to replace reserves and to find new oil field developments, we are obviously way under-investing. So this is not a sustainable situation. So the uptick will have to come. It's just that we don't see it on the immediate horizon.

Great, thanks. Simon Ayat - Chief Financial Officer & Executive Vice President: Thank you.

Thank you.

Our next question is from James West with Evercore ISI. Please go ahead.

Hey. Good morning Paal, or good afternoon, I guess, Paal, and congratulations on a well executed quarter. I had a question really related to the technology and technology uptake. It seems like this cycle is somewhat different than we've seen in previous cycles, where the technology uptake is actually greater. Last year, I think 27% of your revenues were from new technologies. Do you have a sense of – can you give us a number of what in terms of revenues, you're seeing in terms of new technology today, or maybe the first half of this year?

Yeah, so what we've seen so far this year, in terms of new technology as a percentage of our total technologies or the total revenue, is 22%. Now, this is slightly lower than the 25% target that we laid out last year. But given where we are in the cycle, this is dramatically higher than what we have seen in any previous cycle, right? So yes, we are selling a significantly higher rate of new technology in this part of the cycle versus previous. And as I said earlier, this is down to, I think, the fact that we have a very flush new technology portfolio and offering, and I think we have been doing a better job in clearly demonstrating to our customers what these new technologies bring, in terms of lower cost per barrel, in terms of efficiency, in terms of higher production. And this is, again, why I think the uptake, although it's slightly down from where it was in the second half of 2014, it is still holding up very, very well.

Okay, thanks. And then kind of an unrelated follow-up here. On the third quarter in particular, clearly, we are going to see continued declines in revenue internationally and probably some margin degradation. In North America, do you still expect to see a significant revenue degradation and marked degradation as well? Could you give us some clarity on kind of how we should think about 3Q, and is 3Q the bottom?

Okay, well, let's start up with the beginning. So in terms of revenue, we expect that the sequential drop is going to slow in Q3, and it could potentially represent bottom when it comes to revenue. Now, if you look at Q1, we saw a 19% sequential decline, in Q2, we saw a 12% sequential decline in revenue. So for the third quarter, we expect something in the range of 5%, 6% further decline in sequential revenue.

Okay.

Now, if you look at the two main parts of the world, in North America, we do expect a slight increase on activity on land. But again, we see this being offset by weakening also offshore activity and further pricing pressure, both on land and offshore and internationally no major change. We think the overall weak activity is going to continue and also there's going to be sustained pricing pressure. In addition, we have the slowing down of activity for part of Q3 in the Middle East and also the maintenance fees in the North Sea. Now, if you look at this cycle, so far we have proactively managed costs to protect margins. And I think we demonstrated that we are pretty quick on our feet and we can manage this very, very well. At this stage, our structure cost and our field capacity is really tailored to our Q2 activity level. But for now, we have decided to preserve our current structure for Q3, and this is in order to be ready for increased activity as we go forward. So provided this is for a limited period of time, we are prepared to live with the temporary margin impact that carrying these slightly elevated levels of resources is going to have. It's not going to be a huge impact on margins, but it's going to be a little bit more than what we could have managed if we were to cut even deeper. So if you look at EPS, it's going to come down in Q3, and I think the current consensus of $0.77 is a pretty realistic number.

Okay, perfect. Thanks, Paal.

Our next question is from Bill Herbert with Simmons & Company. Please go ahead. William A. Herbert - Simmons & Company International: Good morning. Going back to an earlier question, but I wanted to be more specific with regard to discussing the attempt at improved alignment with customers. Looking at three buckets, if you could talk specifically about refracking in terms of uptake, number of projects wins, what have you, engineering completions in the similar vein? And also on the deepwater front, getting more aligned and paid on the AFE versus NPT?

Okay, so if we start off with the land part, right? So on geoengineering completions in North America, we have over the past quarter engaged and are in contract – either we have signed contracts or either in contract discussions with several customers – on doing consistently geoengineering completions for them. And with refracturing, we are already engaged with eight different customers in North America land on doing refracturing for them. So both of these elements are picking up nicely. As I said earlier, some of the customers would like to go with traditional contracts where they just pay us a technology premium for what we bring, and others are still considering whether to go into a performance-based setup. And either way, we are fine. The main thing, as I said, we are looking to create technology differentiation. And again, this is going quite well. William A. Herbert - Simmons & Company International: If there is any resistance to your underwriting the cost of a refrac or an engineering completions, what is it exactly? What would be the resistance on the part of a customer from actually allowing you to do that?

Well, I think the only resistance will be the fact that when they see that we are prepared to do it, it must be a pretty good business proposition. And I think when they look at this in more detail, they'll figure out that there is no need for us to carry the cost because they happily will carry the cost because it's a good investment. So I think that's really the main – so there is no resistance. It's just a reflection of, do they want to capture more of the value themselves or would they like to outsource all the risk and potentially much more of the upside to us? William A. Herbert - Simmons & Company International: And at this juncture with regard to the uptake on the land front, is it an even split between standard contracts and more of the underwritten contracts?

I think at this stage, I would say it is probably more so standard contracts with the pricing premium rather than having to underwrite it. We offer underwriting to all of them but most of them actually do take more of a standard type of contract. William A. Herbert - Simmons & Company International: Okay. And any comments on the deepwater front?

Well, in terms of changing the business model on deepwater and being, I would say, more compensated on performance rather than standard type of contracts, it is not that much movement on that front. We are discussing with some of our larger customers various types of framework. We haven't concluded any of these yet, but I would say there have been good kind of productive discussions. It takes a bit more time. These are larger projects. It's a bit more complicated to do than kind of the single well things we can do on land. But I would say we have good discussions and a good dialogue, and I think there is openness from our customers to invite us to the table and basically have us participate more, but nothing really material in terms of new contracts signed yet. William A. Herbert - Simmons & Company International: Okay. And last one for me, your final sort of comment or one of them with regard to your opening narrative was referencing your balance sheet strength and your free cash flow generation, thus allowing you to take increased advantage of market opportunities. Can you elaborate on that? I assume in part that means acquisitions?

Simon, you want to comment on our use of free cash flow? Simon Ayat - Chief Financial Officer & Executive Vice President: You know our priority to cash is still as we always declared. We will fuel the growth of the business and you've seen a slowdown on the CapEx because of times. But obviously, we continue to invest in SPM and multiclient. As far as acquisition, we do small ones on regular basis, and this is also funded through cash. We don't borrow for that kind of acquisition, but we will remain to be opportunistic on that front. But as I said, smaller acquisition that regular as far as to our use of cash. William A. Herbert - Simmons & Company International: Okay. Thank you.

Thank you very much.

Our next question is from Kurt Hallead with RBC Capital Markets. Please go ahead.

Hey, good morning. I guess good afternoon where you guys are. Congratulations on a very well executed run, Paal, over the last 12 months.

Thank you very much.

Welcome. You indicated here that you're carrying a cost structure that is sized for kind of second quarter activity and willing to kind of deal with some near-term margin dynamics related with that cost structure if activity comes in a little bit more. I don't want to be too presumptuous, but then I would assume that you wouldn't want to sit for too much longer than one quarter with some sort of a margin drag. So can we maybe infer from your comments you're expecting a increase in activity, generally speaking, in the fourth quarter, that would be for North America, and then maybe international as soon as the first quarter of next year?

Yeah, I think you can read into this that – firstly, I think, we are pleased with how we've handled the downturn so far. We decided to be rather decisive in rightsizing the workforce for the downturn we are facing, and that includes both rightsizing and streamlining the support structure as well as the field capacity. So I think what you can read into the comments on the fact that we are prepared to carry slightly more costs into Q3, and this is not a significant part, it's slightly more, that is that we are indeed looking to be ready for growth in activity. Now, I can't say 100% certain that it's going to come in Q4 or Q1, but what we're saying is that we believe we are getting close to bottom. We believe that we have demonstrated very clearly our ability to manage cost and resources, and in the event the upturn is a couple of quarters away, we are prepared to carry the cost, and I think that would be a much better management of our resources to enable us to be well prepared and positioned for the growth, and in the event it's pushed out a bit more, we can also do further adjustments, that's relatively easy. We have shown that we can do it. So yes, you can infer that we are looking and searching for the uptick and that we think that we are pretty close to bottom.

Okay. That's great color. I appreciate that. Now, in the context of the margin performance in the international markets for the second quarter and we roll through into the third quarter, how can – like if I look from the outside in, I would have to say to myself, if you did so well in the second quarter, I assume you can do probably equally as well in the third quarter, right, because you're sized for it, you've been positioned for it. So why would margins come down internationally in the third quarter versus the second quarter?

Well, I can't say that they would or they wouldn't. I mean, obviously we would still like to maintain them where they are. We will internationally as well carry, I would say, slightly more resources than what is necessary for the third quarter. We see revenue coming down still a little bit from the second quarter level, and we could have shed some more resources to be prepared for that. I think the only reason why the margins would come down I would say, in general, would be that we are carrying slightly more resources. There is also a further pricing effect that comes into it. But obviously offsetting this is, is the continued impact from transformation, right? So I would say if we decided to go forward and completely align resources to activity, we should be able to absorb a large part of the pricing. I think the way we are going now, you could potentially see a little bit of margin drop in Q3, but that will be more by design. The fact that we are willing to carry a bit more resources, rather than not being able to effectively maintain it.

All right, that's great. And if I just – just on the pricing front, on the international dynamics, what area are you seeing the most pricing in terms of geographic and what product lines are coming under the most pressure right now?

In the international market?

Yes.

Well, obviously, the product line that has been the most effective so far is WesternGeco on the seismic side, which has been now going on for a good, about, six-odd quarters, right? So I think our team in WesternGeco has done a tremendous job in streamlining the cost structure, improving how we operate our fleets. So we are very well positioned to kind of maximize our performance on the marine seismic business the way it is today. But that's probably where we have seen the most. In terms of geography, you see it more or less everywhere, both on land and offshore, actually. But we've seen it in some of the large markets in Latin America, Sub-Saharan Africa, the North Sea, even on land in the Middle East we have a significant pricing pressures, so we are navigating the landscape and we are – we have to give concessions, but we try to trade the concessions for something in return, either better terms and conditions, more integration opportunities, higher market share. And whatever is left to be offset, we are trying to offset with the leverage we are creating from the transformation.

Hey, that's great, Paal. I appreciate it. Thank you.

Thank you.

And we'll go to Jim Crandell with Cowen. Please go ahead. Jim D. Crandell - Cowen & Co. LLC: Good morning Paal. What impact is the pending merger of Halliburton and Baker Hughes having on the awarding of business outside of North America?

It's a bit difficult for me to say what the impact is. I mean that's more of a customer question, right? I think it obviously creates a bit of uncertainty from our customers. Firstly, is the transaction going to go through? If it goes through then it's from three to two players. If it doesn't go through, then obviously that warrants a different approach to how they potentially would like to award. So I think it creates uncertainty from the customer side as to how they go about awarding in tender situation, and it has probably also led to potentially slightly lower rate of tendering in this part of the cycle. This is the ideal time for most of our customers to tender given the fact that they know activity is down. So I think it's – that is probably one impact that it has. If you look at our performance, I'm actually very pleased with our tender win rate in the first half of the year. I think we have done very well. I'm pleased with some of the key wins that we have taken on, and for me that should bode well, I think, for market share evolution in the second half of this year and into 2016. Jim D. Crandell - Cowen & Co. LLC: And do you think you've won market share year-to-date internationally in the areas that you compete with Halliburton and Baker?

Yeah, there is nothing in our revenue numbers in H1 as of yet, but if you look at the amount of contract volume we have won, I believe we have won a higher share of the contracts out for bid than what our current market share is, which means that over time, we should gain share. Jim D. Crandell - Cowen & Co. LLC: Okay, good.

As these contracts are implemented, yeah. Jim D. Crandell - Cowen & Co. LLC: Okay, good. And as a follow-up question, I have on the U.S. pressure pumping business, in this kind of environment that we're in today, are there many instances where customers are willing to differentiate and pay for technology?

Well, if you look at the total business volume in North America land, it is not a high percentage yet. But I would say it's a growing number of customers that are willing to have a much more open technology discussion with us. And they see the importance, I think, of moving away focus entirely from driving down the well costs to driving down the cost per barrel for the production that they have. And the only way to do that now going forward as we are nearing the assumed total of how cheaply you can drill and complete these wells you're going to have to get more production out of them. And I think it's very evident that the only way to get that done is through new technology and new workload. Jim D. Crandell - Cowen & Co. LLC: Okay, thank you.

Thank you.

Our next question is from Doug Becker with Bank of America Merrill Lynch. Please go ahead.

Thanks. Paal, maybe sticking with the pressure pumping topic. You highlighted unsustainability of where that business stands right now. How do you expect this to play out? Does the capacity simply shift to stronger hands, or do you see some meaningful capacity reductions?

No, I think what you find in any of these commoditized markets, if companies go under, there might be a temporary impact on capacity, as the capacity shifts hands. But most likely, whatever capacity is in the market today will likely resurface with some other ownership, once those type of transactions are sorted out, right? So I don't think it's going to be a permanent capacity reduction from companies potentially going under. I think these assets will shift hands and resurface with different ownership.

That makes sense. Then maybe a quick one for Simon. In the past, you've mentioned getting payback on severance costs within a year. Is that on track, and does this simplistically mean cost savings of something around $750 million in 2015? And I'm just arriving at that number by summing up the severance costs from fourth quarter to second quarter. Simon Ayat - Chief Financial Officer & Executive Vice President: So it is on track. It is, as we confirm, within one year. I'm not too sure about your number, but your logic is correct. If you take what we have declared, as far as the payments are concerned, this will be recovered less than a year.

Okay. And are the remaining head count reductions more concentrated in North America or internationally? Simon Ayat - Chief Financial Officer & Executive Vice President: We are almost completed with what we have done. There is no more reduction.

Got it. Has that skewed more North America or internationally? Simon Ayat - Chief Financial Officer & Executive Vice President: Well, North America was a – percentage-wise was higher, but it was global, yes. Global.

Understood. Thank you very much. Simon Ayat - Chief Financial Officer & Executive Vice President: Thank you.

And ladies and gentlemen, due to time constraints, that will be our last question. I'll turn it back to the presenters for any closing remarks.

All right, thank you. So before we close, I would like to summarize the three most important points that we have discussed this morning. First, the market evolution in the second quarter was the continuation of what we saw in the first quarter, with North America land rig count falling further and with pricing pressure increasing in both North America and international markets. In response to this, we have proactively managed what remains under our control and subsequently delivered our best cost and cash performance so far in any downturn. Second, our strong performance has been amplified by the acceleration of our transformation program, which is being actively implemented throughout our global organization, and which has enabled us to increase pre-tax operating margins in the international areas and maintain double-digit margins in North America. Third, we believe that we now have seen the bottom of the rig count decline in North America and that North America land activity will see a slow increase in the second half of this year, while service pricing is expected to decline further in the third quarter as the fight for market share continues to play out. In the international markets, we expect no upward revision to E&P CapEx spend for remainder of 2015, as the trend of low exploration activity, tight management of development spend, and sustained pricing pressure is likely set to continue. Based on this, the third quarter could potentially represent the bottom of the cycle in terms of earnings per share, as the pace of the revenue drop is set to slow and as we continue our steadfast efforts to maximize operating margins in both North America and international markets. And with the streamlining of our cost and resource base undertaken in the past nine months, together with the acceleration of our transformation program, we remain very optimistic about our ability to deliver unmatched incremental margins as soon as E&P investments start to show any signs of growth. That concludes today's call. Thank you very much for attending.

Ladies and gentlemen, this conference is available for replay. It starts today at 11:00 AM Eastern Daylight Time. It will last until August 17 at midnight. You may access the replay at any time by dialing 800-475-6701. International parties, please dial 320-365-3844. The access code is 358215. Those numbers again, 800-475-6701 or 320-365-3844. The access code, 358215. That does conclude your conference for today. Thank you for your participation. You may now disconnect.