Greetings and welcome to the TETRA Technologies Incorporated, fourth quarter 2008 results. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) It is now my pleasure to introduce your host, Geoff Hertel, Chief Executive Officer for TETRA Technologies Incorporated. Thank you, Mr. Hertel, you may begin.

Welcome to the TETRA Technologies conference call, reviewing 2008 results. Joe Abell, our Chief Financial Officer and Stu Brightman, Chief Operating Officer, are in attendance this morning, who will assist me with the conference call. Since today’s press release only incorporates a couple of new pieces of information versus our February 10 release, our formal presentation will be relatively short. I must first remind you that this conference call may contain statements that are/or may be deemed to be forward-looking statements. These statements are based on certain assumptions and analyses made by TETRA and are based on a number of factors. These statements are subject to a number of risks and uncertainties, many of which are beyond the control of the company. You are cautioned that any such statements are not guarantees of future performance and that the actual results may differ materially from those projected in the forward-looking statements. Additional information on some of these risk factors maybe found in our Annual Report on Form 10-K. The only new information that you’re getting today, since our February 10, press releases the impact of the SFAS 142 impairments. I’ve asked Joe to talk about that and to give you a brief review of 2008. So Joe, from a financial perspective would you please start?

Thank you, Geoff. I’ll start by saying we have made some changes to our reporting segments beginning with this press release and our December 31, 2008 Form 10-K, which you will see soon. We will now be breaking out the production enhancement division into two reporting segments; production testing and Compressco. All prior period segment information in this division will be restated to reflect this change. We will also change the name of our well abandonment and decommissioning services segment to offshore services to better reflect the range of services we provide beyond of abandonment and decommissioning, though abandonment and decommissioning remains a core focus for us. Associated with this change, we will rename the division that houses our offshore services and Maritech segments to the offshore division. Revenue in the fourth quarter was $234 million, 6.3% below the fourth quarter of 2007 and 7.5% below the previous quarter, impacted by the hurricanes of the previous quarter. We reported a loss before discontinued operations for the quarter of $59.3 million or $0.79 per share fully diluted, compared to a $44.3 million loss or $0.60 a share fully diluted in the same period last year, and compared to $12.1 million of positive earnings or $0.16 a share in the third quarter of ‘08. The fourth quarter earnings are consistent with February 10 press release, in which we had indicated we would have goodwill impairment, had not quantified it at that time. In addition to this impairment, in that earnings release February 10, we pre-announced a $45.7 million impairment and this is pretax impairment in Maritech, in the fourth quarter related mainly to oil and gas reserve write downs as a result mainly of low year end oil and gas prices. In addition to this impairment, we had $54.4 million of pretax charges as a result of our goodwill impairment review, pursuant to SFAS 142 that included the whole write-off of goodwill associated with our fluids and offshore services segment and the write-down of some hard assets in the offshore services segment. These non-cash impairments totaled $100.1 million on a pretax basis and $0.91 a share after tax for the quarter, and $123 million or $1.10 a share for the year. These amounts can be added to reported earnings if you want to calculate an adjusted earnings amount. For the year, revenue was $1.09 billion and the loss for the year before discontinued operations was $9.7 million or $0.13 a share fully diluted. We had $57 million of cash capital expenditures in the quarter. Our debt increased by $26.3 million during the quarter to $407 million at year end. Debt to total capital was 44.1% at the end of the quarter. With that I will turn the conversation back to Geoff.

Thanks, Joe. Since much of the information in this press release today has previously been available to you, I’d like to step back and make a number of observations regarding TETRA and if I hadn’t lost so much money personally in TETRA, I would characterize the last five month as the most interesting financial environment that I’ve seen in my 41 years of involvement in the financial markets in general and the energy business in particular. During the last 18 months I’ve watched our equity value drop from something in the order of $2.3 billion to $222 million today. Approximately $1.6 billion of that evaporated in the last five month. I know I’m not tell you anything you’re not aware of, that you have been holder of the company and for those who follow us, part of that was self inflicted issues. So, it’s not all the market. However, in this market many, many energy service companies have watched their equity be estimated similarly. So, I’m not crying over our situation, instead I’m just interested in the process, because as I see it, regardless of our current situation in the situation in the equity markets we appear to be trading as of our existence were in question. So I’d like to review our current situation. First observation; over the last three or four years, we determined that we needed to spend up to $700 million of capital to grow and expand our businesses, to make them aggressively competitive. The expenditures included a large expansion in driving domestic and international growth in testing, deepwater and international growth in Fluids, property acquisitions and exploitation by Maritech, dramatic geographic expansion of Compressco and fully integrating our Fluids operation, that’s essentially spending over a $100 million on the plant. With the start up of…

Thank you. (Operator Instructions) Our first question comes from Jim Rollyson with Raymond James; please proceed with your question.

Good morning Geoff, guys.

Good morning, Jim.

Good morning.

I guess Geoff, since you detailed a lot of the forward outlook a couple of weeks ago, a couple questions coming to mind; one on the write-downs. Obviously you kind of explained pretty detailed why the write-downs happened at year end. As you look at things today, given that your stock is kind of trending at least at the moment a little lower, and oil and gas prices have come down a bit since year end, do you run into any risk of having further, similar write-downs, non-cash charges going forward?

142 is a quarter-to-quarter, essentially markdown to market more or less. So yes, you would have that implication I would think. From a Maritech side I’m not sure that we have any properties that are susceptible to that at this point in time. So, I would look for very little impact from the Maritech side. There is certainly could be some through the year; enough properties that we own that things could change, but clearly the 142 calculation is a quarter-by-quarter transaction.

Understood. As it relates to the production testing business, in a last couple of weeks ago, last call you had your comments were expecting that to slowdown domestically, but I think you hadn’t really seen much of that yet. Just wondering if that started the change given that the rig counts still falling and kind of what everybody else is seeing. Just kind of curious what the current temperature is on that business?

That’s clearly a business that over the last period of time since we last had our call, we’ve seen that deterioration as you would expect. Again, in that business we always thought that would be a question of timing, the timing has hit us. That’s also a business where we’ve said we think we’ll be very strong internationally and we’re still continuing to do well outside the U.S. and expect that will continue.

Remind me, Stu, how much of that’s international today?

It’s again the majority is still in the U.S, but the margins are significantly stronger internationally. So on a revenue basis, we probably have two thirds, 70% in the U.S., but margins disproportionately and much stronger outside the U.S.

To your question, I think we mentioned in the February 10 conference call that the two areas we expected to see some weakness in with the drilling, more than our other businesses, not that you wouldn’t have some weakness conceivably in all, but the one that would be most susceptible is the testing, which you just asked about and our onshore fluids business and interestingly the onshore fluids business, we still have not seen a tremendous drop-off in that business, but that would be the other area we would have expected to see something happen to us given the rig count.

Last one from me, any other major changes up, down. I mean you reiterated your overall underlying guidance. Just kind of curious if anything else has changed in your thought process from a couple of weeks ago?

No, not really. I think everything else is playing out as we expected and as Geoff said, we’re pleased our onshore fluids business is holding up expense it is given everything else that’s happening out in the U.S. onshore, but other than the testing starting to come down, the rest of the businesses in aggregate are performing very similar to what we would expect.

The one area that you would think conceptually would have weakened because the pricing would have been Maritech, but because Maritech has the vast amount of its production hedged this year, it’s really not bearing much from what we have anticipated seeing in the first quarter.

Great. Thanks, guys.

Our next question comes from Mike Harrison with First Analysis. Please proceed with your question.

Hi, good morning guys.

Good morning.

Just in terms Geoff, of your expectations of generating substantial free cash flow over the next couple of years. You’ve talked about some of the changes you made in Maritech to generate more cash and also talked about the capital investments being largely complete by the middle of 2009, but can you maybe give us some more details on other plans that you have over the next several quarters to improve your free cash flow and maybe some other sources of cash?

I’m not sure that we want to get into some of the things we are contemplating doing, because they would be of a competitive nature. Obviously, we have an S1 out there that if you look at that would have an impact on your cash flow positively. Again, we can’t get into that discussion. I guess that the only way I can quantify for you, beyond what you just talked about, is to say that in the February 10 press release we indicated that we would see a positive cash of roughly $80 million in the second half of this year, because we told you our debt will peak out about 480 and be back around 400 by the end of the year. So, all of those items that would get you there are essentially in place with maybe one exception and we feel very comfortable about generating that type of cash flow, but anything beyond what we’ve talked about, we’re a little reluctant to get into in this environment.

To add to what Geoff has said, we have been aggressive about cutting OpEx where we can, particularly G&A costs and managing working capital, bringing inventories down, managing accounts receivable, AP, etc.

Couple of things that we have available to us and that we’ve chosen not to do; I guess I could tell you those. At this point in time we have hedges in place as we’ve discussed. Value of those hedges are somewhere between $70 million and $100 million in terms of being able to just take them and sell them or unwind them, probably a better term. We could generate cash that way if we had to. We’re reluctant to do so. Similarly, we are in a corporate office building that we own, that we could sell and generate substantial capital if we found the right opportunities. Right now, we’ve chosen not to do that. So there’s some out of the operating side issues that we could deal with if we had to have the capital, but we don’t feel at this point in time that we need to go to those links.

In terms of the office building, I mean during the first half you’re going to be completing construction on a new building. What are the plans for the old building? Are you going to be leasing it then or…?

The office building, we’ve moved. We moved last weekend. We are out of the old one, which we had leased. Originally we own that building; we sold it and did a leaseback. We would intend eventually to do the same thing in the current building we’re in. We currently own it and in a better environment, you’d see us sell it and lease it back. Until we feel that it’s attractive do so, we will retain ownership.

The lease expires in a couple of weeks on the old building, so that is no longer our obligation.

Okay and then in terms of the debt, as you approach those maturities in 2011, should we expect to see you guys do some de-levering or as you see it right now, just expect to re-finance and still kind of maintain a capital structure similar to what we see with TETRA today?

Well, I’ll answer it one way and let Joe answer at a different way if he chooses. Our ability to grow over the next few years is going to be a function of being able to take advantage of opportunities, and I’d love to be in a position of having enough debt pay down to be able to utilize leverage to acquire some things. Not in this time period because of our debt, but as you go forward so I’d love to see the de-levering, so that we have opportunity to grow TETRA. On the other hand, and Joe can collaborate this. I think our EBITDA calculation which is what really triggers our debt, is something like 155, is that the right number?

Leverage ratio debt to trailing EBITDA, yes.

And we can go to three under our existing. So, we’re nowhere near worrying about that and consequently I would assume if we were to go back we could finance, but you certain wouldn’t want to do that in this market given the rates and all of the thing that are out there. We feel very comfortable and fortunate that we have over two years before we have to discuss that. Joe, you want to make any comments?

I have nothing to add to that. I do think we will de-lever over the latter half of the year and position ourselves to be opportunistic in 2010.

Alright and Geoff, any thoughts, I don’t know how much time you’ve had to look over the proposed budget from the Obama administration, but the changes in taxation, any thoughts on how that might effect TETRA; I’m specifically thinking of this proposed excise tax on Gulf of Mexico oil production.

Yes, I don’t think there’s any real big impact of any of that to us. I’d love to say there’s a stimulus to our businesses, but I don’t see that either. The excise tax that’s being talked about, they’re going to have to look at that very carefully because actually the shelf production which is where we are is very high cost. The deep water is a real high cost, but not maybe per barrel or MCF and therefore, before they try to enact something that they’re going to choke off activity, they are going to have to look at that a lot closer. I don’t think it’s going to have much of an impact frankly to us and I don’t really think it’s going to come out in the form it’s been proposed, but we’ll wait and see.

Alright, thanks very much.

Our next question comes from Bill Dezellman with Titan Capital Management.

Thank you. We have a group of questions. First of all, accounts receivable grew in the fourth quarter relative to the third quarter and that was on lower sequential revenues. Would you please discuss what was taking place there?

That is mainly insurance receivables related to hurricane repair work or which we have not received hurricane claims.

That’s a great segway into the insurance side. You had some challenges with the Katrina/Rita hurricanes. I think they are still litigation there. Are you feeling better about actually collecting in a normal sense meaning out of the court room with hurricane Ike?

Yes, much better. We have much greater contract clarity in our insurance policy language as a result of our experience with Rita and Katrina and without getting into the vagaries of the policy. We’ve tightened up the language where it becomes very clear, what is owed to us under what conditions. So, I don’t see the same issues at all this time. It’s just simply a matter of a matter of a massive amount of hurricane where that is haunting adjusters all at the same time and we don’t think it will be a collection problem.

I’d say it a little differently, just from my perspective. I agree with Joe, I don’t think we have any issues at all relative to collection, but you have to recognize that this is a lagging event that you’d love to think is 60 days from the time you do work and get it turned in, but it might be 150 days. So, you will see receivables on our balance sheet going forward until we claim this up and they probably will have longer tails to them than 60 days, but it’s not because of not getting payment, it’s just because of the process.

I’d say overall, our collection period and our trade receivables will hold pretty strong. We’re doing a good job as Joe mentioned earlier on top of that.

Great, thank you and then secondarily, the Arkansas plant, you noted in the release it’s a bid ahead of schedule and this is a nitpicky question, but what’s behind it being ahead of schedule?

Most of it, as we said since the beginning that we’ve allocated a very strong group of project managers; they’ve done a great job staying on top of the vendors and I think it’s just execution. We still have a lot of key activities to get done, but we’re cautiously optimistic we’ll get to that time period that Geoff talked about. We’ve really done a good job on the project execution.

And you had mentioned on this call that the onshore fluids business was holing up better than you had expected. What do you think is the reasoning for that?

Without getting into too much detail, we’ve got a couple of specific areas that are doing very well and that’s more than offset some of the areas that have been softer, so that’s the level of detail I want to get into, but so far so good.

As a result of that, would you anticipate working through your higher cost fluids inventories sooner than what you otherwise would have been anticipating or how does that affect that issue?

No, our consumption of inventory that affects the average cost is very much driven by our offshore business and that’s going to be the key driver on that.

Yes, I’d say it a little different and that is that our offshore business, when you look at it is predominantly volume fluid driven; our onshore business is predominantly service driven. So, when you look at a typical job offshore, most of the revenues are associated with the product sale and very little relative to service, that’s flip flopped onshore. So, there is a distinction difference. You’re not going to get as much volume out of our system on the onshore business as you’re going to get on the offshore.

Great. Thank you, all of you.

(Operator Instructions) Mr. Hertel, there are no further questions in queue at this time. Do you have any closing comments?

I just want to thank everybody for being on the call and we’ll talk to you at the end of the first quarter. Thank you.

This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.