Good morning. My name is [Regina] and I will be your conference operator today. At this time, I would like to welcome everyone to the Weatherford International fourth quarter 2010 earnings conference call. All lines have been places on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer session. (Operator Instructions). Thank you. I would now like to turn the conference over to Mr. Bernard Duroc-Danner, Chairman, President and Chief Executive Officer. Please go ahead, sir.

Good morning. I'll turn it first to Andy for prepared comments and then I'll have my own prepared comments afterwards, as usual. Andy?

Good morning. For the final quarter of 2010 we report EPS of $0.21 before excluded items. This is a $0.03 improvement over last quarter but below our $0.23 guidance. The reported number excludes the following items, which add up to a $210 million after tax loss. Book tax expense of $158 million, primarily as the result of a tax restructuring to migrate our Latin America legal entities out from under our US holding structure. Of this amount, $54 million was a cash expense. We expect this move to further strengthen the efficiency of our global tax planning efforts. $34 million after-tax charge for tender premiums on the extinguishment of a portion of our senior note that's due in 2012 and 2013 -- recall that this tender, completed in October, straddled Q3 and Q4. A $21 million after-tax reserve taken against accounts receivable balances in Venezuela -- while we believe we are contractually entitled to the full dollar amount of our invoices and are working with our customers to recover these amounts, this decision was taken in the context of the country's economic prognosis. $12 million in after-tax severance costs related to restructuring initiatives and a non-cash after-tax benefit of $15 million related to the settlement of the TNK put. We settled the put in November for $47 million in cash, which was $15 million lower than the fair value at which the liability was recorded in September of this year. We incurred no net cost related to our sanctioned country in FCPA matters this quarter. A reconciliation of all these items can be found on our website at weatherford.com. As compared to Q3, the field contributed a $0.05 sequential step-up in earnings with internation operations flat and North America accounting for the entire increase. Included in these results are $50…

Thank you, Andy. Looking at Q4, we had areas of satisfaction and areas of disappointment this quarter. We had satisfaction in growth and capital efficiency. Top line growth was excellent in areas of over-performance. The fourth quarter has showed very strong revenue growth at $2.9 billion, which is the highest quarter revenues in our company's history. Furthermore, the 14.5 to Q3 on Q4 percentage increase is also the highest quarterly growth rate in the company's history. The growth was organic, not acquired revenues and consistent with our historical record. The growth was evenly split between North America and international at roughly the same rate. In spite of over $360 million of organic growth to finance, we generated in the quarter about $110 million of free cash flow from operations. As Andy pointed out, use of proceeds went to finance acquisitions, the closing of TNK put and refinancing costs associated with our bond tenders. Capital discipline operations remains a priority. We're also disappointed in margin expansion. Incremental margins were seriously held back by asset write-offs, particularly in the eastern hemisphere. Write-offs amounted to over $0.05, almost entirely inventory related, and made more material by our supply chain initiatives rationalizing facilities. In addition, Australia, and more specifically, Queensland, torrential rains and related shutdowns suppress margins by about $0.01. Australia is historically our largest operation in Asia Pacific, typically about 20% larger than the next runner up in that part of the world, which is China. The third factor holding back margins in the eastern hemisphere are continued delays in finalizing the mobilization of a number of operations, primarily Algeria, Bangladesh, Iraq, Libya and Turkmenistan. We are seeing progress now being made in the course of Q1. Geographically, NAM, again, [being] much of the quarter. Both the US and Canada were very strong.…

(Operator Instructions). Your first question comes from the line of Ole Slorer - Morgan Stanley.

Could you give us a little bit of a flavor for your talking about a gathering of the momentum of the recovery in 2011? Clearly you had very strong sequential revenue growth in the fourth quarter. So are you talking about more of a margin leverage here or could you just quantify a little bit your optimism on revenue relative to bottom line leverage?

The comment is both a comment on market and also on what I think we may capture within that market. The comment on market is both a tone comment, better tone. It's also a specific comment in so far as a number of very specific inquiries, tenders, projects that are coming up pretty much all over the world. There are differences depending on the region. It is about as strong as I've seen it in two years. So the comment on our own ability to capture some of it is just specific country-by-country. The most important comment of the two is the one on the market overall.

So would you say there's been a radical change in the type of conversations that you're having with your average international customer and what is to do with the year-end budgeting season or has it been a gradual -- can you give a little bit more on just when you go into the offices now [inaudible] customers? How, if at all, has the conversation changed as of late?

I think probably the rhythm of quarterly earnings makes it sound a bit more radical than it really is. There has been a gradual build up in the client optimism, client -- I would say stability in thinking as opposed to changing their minds. So the tone has gradually improved and the improvement in the tone has led to specific inquiries and specific projects and specific tenders and specific awards. It's a continuous process. I wouldn't call it radical. I would just say that it's a little bit -- when does daybreak start really? You see it coming up and you see a little bit of light. At some point, it is daybreak. It's a continuous function, not a discrete one. Here is a little bit the same thing, which is that now we've reached a level, I think, in client drive and determination to where what was a better tone is becoming specific operating projects and specific commitments and so forth. So it's not radical. I think it is the normal evolution of a gestation time and now we move to the action phase.

Just on the North America, a little different -- you highlighted that you have a different mix than your mean competitors, therefore, you see the outlook a little differently. Can you qualify that a little bit by talking about your geographic difference in North America, Canada versus the US or are you talking about your product line differences with more artificial lift relative to pressure pumping? Could you just be a little bit more specific exactly on that comment?

It is exactly what you said. First, we, for historical reasons, tend to be more Canadian than our peers. The balance in US and Canada is a little bit different than our fears. Fact number two, and I think it's well known, although we have a stimulation business, which is a good stimulation business, it is not comparable in size and intensity to ones of our peers. So, therefore, the evolution of our prognosis in the US market and Canadian market is a little bit different. It beats at the drums of all the other product lines. So into 2011 I think you're likely to see for us a continued progression in all the other product lines. There's volume and pricing independently. What happens is the balance is supply and demand in a shale market. Yes, indeed, artificial lift is our largest product line in the United States. For example, I think reasonably well known that about 25% of everything we sell in the United States is artificial lift as it has always been the case. So, yes, it stands to reason our prognosis there would be a little bit different. Indeed, it has been a bit -- although the results have been good in North America, it's been a bit slower in terms of our progression in price and volume. That's simply because the rhythm of evolution of those product lines is not quite as vertical and [violent] as it has been in the stimulation market.

Your next question comes from the line of Bill Herbert - Simmons & Company. Bill Herbert - Simmons & Company: So, Bernard, one of the things that struck me with regard to your commentary was the fact that, if I heard you correctly, you've called for a gradual improvement in MENA and yet top line was up 13% quarter-on-quarter in the fourth quarter. Are we being a little bit subdued with regard to the outlook for MENA or how should I take your commentary?

Probably nothing more than I think we are being subdued or we're being careful. Often in the fourth quarter you do have, and MENA in particular, delivery of products that tends to make the number a little bit higher. But having said this, I think in general we tend to be more careful if only because in the past three or four quarters our clients have been slow. Bill Herbert - Simmons & Company: Then, I guess this is a question for both you and Andy and that is a combination of what I would call the asset right sizing, if you will, in the fourth quarter, moreover with your significant revenue growth generated in the fourth improving visibility thus likely continue traction for 2011. Andy and Bernard, how should we think about the margin progression as 2011 unfolds for eastern hemisphere?

Look. I'll take [inaudible] let Andy provide his answer. We should expect in eastern hemisphere incrementals on and around about 35%. Now, will they be smooth and -- well, as you might have noticed, Bill, things have not been smooth. So I’m not going to promise that they'll be smooth from there on. We will try to. In general, that's what economics of the fixed variable cost structure and volume absorption and sort of the tapering off of the mobilization costs in the numerator while the denominator, the base of business is increasing. What all of this suggests is that 35% should be about right. Now, I'll turn it to Andy if he wants to add to this.

Yes, Bill, so look, the seasonality we have to just give a little respect for first quarter. In Russia -- .

North Sea, actually.

-- North Sea and the continued challenges in Australia, which most of that weather stuff has continued through January. So I think those will hamper the overall incremental margins that you see in Q1 but the way we see things is then that sets up for strong incrementals sequentially in each of Q2 through Q4.

My comment, Bill, was actually a yearly comment. I wasn't trying to slice it in quarters but when the year is over -- now, a year is a long time. If the incrementals were -- in the eastern hemisphere were less than the 35% then I think the word disappointed would be right. It was a yearly comment. Bill Herbert - Simmons & Company: Then, finally, to the riddle, now this Mexico, on the one hand you've got yourselves and Tenaris who are longstanding Mexican hands, if you will. You're actually more optimistic about the outlook for Mexico in 2011 than some of your more prominent peers. What's the disconnect here? Why do you feel better about Mexico and seemingly a number of other parties are much more discomfited of the outlook here?

First of all, I think probaly one would say that Tenaris, which is thumbs up in De La Cruz, they're the most constructive, at least they have been. Maybe they'll change their minds. We sort of stand a little bit in the middle. We're not raging bulls. I use the word cautiously optimistic. That's first thing. But then I'll stand by my words. [From this] a combination of things, Bill. One has to look at the basis from which we are sort of rebooting in Mexico. It's a very low basis. It's a little bit like looking at a US market over a year, 1.5 years ago, whenever we hit the low point and being sort of cautiously optimistic about the outlook when the price of hydrocarbons was materially higher. It's got a little bit of the same phenomenon. So it stands to reason that it ought to be better. That's one. Two, there are specific circumstances. These circumstances I think that much of the budgetary let's call it adjustment that our client had to go through is just about finished. It's a matter of weeks. In other words, the constraints they're under is just about sponged up. In other words, they have gone through the belt tightening that was required by the congressional authorities. They've got a budgetary turnaround. That's factor number two. Factor number three, there is genuinely, best I can tell, a great interest with our client in that country to reform, bring in some foreign interest in some contractual form, not necessarily the traditional ones, and that also is constructive. So you throw the fact that we're coming -- well, then throw the fact that we're coming from a very low base, item two, so that you almost have to be better. Item two, the issues of overspending, the [plaguedom] is pretty much behind them. Item three, the intent is to do things a little bit maybe with more creativity. The fact, lastly, that decline rates remain what they are whether you're looking at the southern basin or the northern basin, whether [inaudible] De La Cruz, whether you're looking at [Cantarel and KMZ] and the offshore and the deporter place, all of this the intent is definitely to be more active. You put all of that together. Where do we end up? We end up being cautiously optimistic. So I think it's the right position to have. Bill Herbert - Simmons & Company: Yes, you also failed to mention one thing, which is $90 oil. That also helps, too.

It does. It does, of course. It does as a back drop. As a back drop it does, obviously. The volume pursue it even more critical. Bill Herbert - Simmons & Company: But with regard to distilling this into top line, I think you guys peaked out Q4 '08 or '09 actually at about $416 million a quarter in terms of top line and then I think you were treading water at about $100 million a quarter in Q3. What do you think we should expect for '11, Andy, in terms of top line out of Mexico?

Cirque of $600 million. If it stays then I think the upside to that is maybe at $700 million but we'll see.

Your next question comes from the line of Brad Handler - Credit Suisse.

Could you -- I guess I was trying to sort out from your commentary, so maybe I'll ask you to retrace a bit but could you update us on the status of several of those projects that I think we heard about in the last quarter call as well as being startup initiatives? So I couldn't tell if there was some disappointment that some of those hadn't progressed more in the fourth quarter but there's not change in outlook as you're still optimistic that those translate to revenues very shortly. But if you could just hit on a couple and maybe, yes, gauge if some are moving more slowly than others or something.

Yes, I'll probably -- what I will do, Brad, because this being a limited time call, I'll probably throw this on the largest one at the end of the day, not because it's necessarily the happiest story but it's the largest one. [So that's not escaping.] That would be Algeria. As a reminder, in Algeria, after some delays because our client went through a reorganization, a number of different integrated project contracts were signed with four large companies. We were one of the four. Happily we had the largest commitments, which was five strings. Our peers had four, three and two if I recall correctly. Now, of the five strings, four of the five have been in country. My goodness, they've been in country since Q3 and so you can understand the mobilization burden with the equipment and the people and everything else that it involves. It's not only rigs. It's everything else. So it is the whole gamut of integration and it is destined for a gas field called [Bechine], which is a high-pressure, high-temperature field. So it has a lot of equipment. So all the equipment and the organization was there and we didn't have the ability to deploy a single one on well sites. Why? Let's just call it client delays and the like and these are that. I will add it is not specific to Weatherford but it is the general situation. I will say that given the fact that we have the largest contract, having five and our peers having four, three and two, and due to the fact that we are the smaller of the four, we have the biggest contract with the smallest of the four. So you can understand it has the biggest effect on us. We made some progress in Q4…

Maybe unrelated follow-up -- as it relates to some of your cost savings initiatives, maybe you can give us a broader update for targets for, I guess I'll call them sort of permanent cost savings as a function of your manufacturing initiatives and some of the personnel severance, the reallocation that's resulting in some of the asset write downs. You know I think what I’m speaking to. You can update, Andy, maybe broadly on sort of how your targets have evolved and maybe how to think about that structurally for 2011 and beyond.

Yes, Brad, as we look at the operations, clearly we have made the decision to hold on to and maintain our cost structure in the international markets since the end of '08. We think right now that that looks like -- that that was a good thing to do as we look at the operating leverage within the company. While we are always looking for ways to be more efficient -- and I’m talking here operations ex-supply chain -- we're not looking from that side of a cost cutting exercise. We're looking at how to deploy that and how to use it to grow more quickly and more efficiently. So the absorption affects there. On the supply chain side one of the things that have hampered the financial performance throughout '09 and '10 was under-absorption on the manufacturing side. These swings is to give you a sense of it in high-volume times -- think back to '07, '08 when those are positive variances, meaning contributing to and you're over-absorbed on your costs. It has a meaningful boost and improvement to a significant portion of your business. We've had the opposite effect in terms of under-absorption and it has been material. So I think that what you will see there in the absorption and the contribution to margins is a meaningful source of supporting our 35% incrementals as we look through '11.

I understand. But if I may just try again, I thought there was an initiative announced a few quarters ago that related to where manufacturing locations would be placed and how to sort of -- I guess it is how to manage the supply chain. There were some back office initiatives as well. That's sort of where my question was more directed. I don't know. There were some targets I think even at that time. I didn't know if there was an update on that.

Brad is right. I think it's got embedded in there, the overall supply chain initiative. The other way to express it when it comes to the supply chain, Brad, is that on average we have run in 2010 -- my numbers are going to -- they may not be accurate but they're close -- somewhere between $50 million to $75 million of unfavorable absorption numbers, so $50 million to $75 million, I can't remember, somewhere in between for the whole year. We run a lot of manufacturing. I think the -- in the course of the year, 2010, we've closed out some facilities. We've moved from assets, which is not healthy absorption phenomenon either, not so much the actual closure but just the work involved in moving things around is not one that is particularly helpful when trying to optimize. The through process in 2011 -- I think it's reasonable -- is that at a minimum we absorbed completely, meaning there is no unfavorable absorption. Part of it has to do with volume but part of it has to do with the productivity of the supply chain. Then the thought for the following year is that the over-absorption swings to produce as much as we under-absorbed, meaning that in 2012 we'd be looking at a 50% to 75% over-absorbed number. So we're 50% to 75% under-absorbed in 2010. We're expecting to be either over or under-absorbed in 2011 and we're planning to be over-absorbed by $50 million, $75 million in 2012. These are simplistic numbers. I'm probably off to a degree but I give you some sense of metrics so it might be helpful.

Your next question comes from the line of Kurt Hallead - RBC Capital Markets.

Bernard and Andy and as you map out 2011 and get a peak out into 2012, obviously there's always going to be situations that are unforeseen and kind of throw a wrench in the plan. How have you guys risk assessed your outlook for 2011? If you could walk through varying regions, where do you think there is some risk to your outlook and where do you think there is some greater opportunity than where you're currently looking for? Maybe we can start with Latin America and then specifically go talk about Russia and finish up with Iraq, if you may.

I'd say, actually, that Latin America and Russia are probably the ones that are the least likely to surprise or disappoint. You'll say how do I know there won't be some catastrophic events? No, I don't know that, neither does anyone else. But based on contractual information, meaning contracts that we have in hand and are executing, whether in Brazil, in Argentina, in Peru, in Columbia, the modest turn in Mexico, then you turn to Russia, which is a contractual commitment -- in my prepared comments I tried to convey that what we see as being constructive is both the production phase, the development drilling phase and the exploration phase in Russia. I see those two markets as being about as reliable as anything you can have in my industry. I would add, also, the North Sea, now, as another market which looks also sufficiently broad based and solid in that look that it would take an actual catastrophe, like we have in Australia, to change the outlook in 2011. Probably the outlook in those markets and our own position there is a little better than we presented to give us some measure of cushion for the other ones where I am more cautious. I'm obviously more cautious than [Melise], as one of your peers pointed out a few questions ago. Why? Because some of the markets that are moving in the Middle East, be it Algeria or be it Iraq, are markets which are giant markets, particularly Iraq. But they're not markets where either security is something one can easily get comfortable with and/or where the development is highly predictable. I would add that the other markets, such as Saudi Arabia and Abu Dhabi and so forth, are more subdued in outlooks probably as a reflection of the fact that markets like Iraq and Algeria are so stout. So in those markets you have to treated with the respect they deserve because they're giant markets. At the same time, one has to cautious simply because of the operating challenge. So I would say the Middle East in general, which will have ultimately a very large impact, not only on the industry but on Weatherford also, always has historically -- sort of our areas of great strength -- is a market that one ought to look at carefully in 2011 simply because the countries that are moving it are not -- they're not [current]. [They're known in a] situation to be terribly predictable. That sort of sums up my views.

The pricing improvement you referenced in Russia, my general understanding, that's all been agreed to as per the end of November, so that's pretty much locked and ready to go?

Yes, it is.

Then from a product line standpoint, once again focusing specifically in Russia, what product lines had the best upside in pricing going in 2011?

For competitive reasons I wouldn't want to tell you this, Kurt. I'd rather have that commentary offline, if you don't mind.

Your next question comes from the line of Angie Sedita - UBS.

You have a pretty impressive moving of CapEx in 2011 over 2010, up 40%. Can you give us some color there on what regions that CapEx will go to, product lines, et cetera?

It's international really overwhelmingly. It's going to be -- no surprises there. It's going to be disproportionately places like Latin America, Russia and I would say the Middle East. I've just finished saying I’m cautious on the Middle East. If you look at the CapEx commitments you see a little bit of a different view. It simply means that we're just being careful not to overpromise, overcommit in the part of the world where it can be sometimes low. But the capital investment does reflect a commitment to the Middle East above and beyond what we did in 2010 -- Latin America, Russia, Middle East. [crosstalk]

It's not really drilling. It was traditionally only drilling but actually it is very broad with some significant capital investments also on the intervention and production side of the business.

Then pretty impressive move in revenues in Latin America and you mentioned some contract awards in both Brazil and Columbia. Could you give us some color there and expectations for potentially additional awards and when would you expect to hit your run rate on those contracts that have already been awarded?

On the last question, I think by mid-year we'll be at our run rate, meaning, let's say, the end of Q2. It's simplistic of an answer but it's close enough on Brazil and Columbia. In Brazil it's very broad based. It goes from your traditional drilling product lines, such as liner hangars [into] the running services and directional all the way to the production site. I think I mentioned at another time that -- just a few weeks ago I commissioned a brand new artificial manufacturing facility just outside of Rio De Janeiro, very large and brand new and that facility is entirely booked up. Not only the Brazilian business but a big chunk of it is the Brazilian market. That's [because it exists]. It is a rather large facility. So it is very broad based in case of Brazil. It is, of course, offshore. There is some land market or some business a [kilometer] offshore. With respect to Columbia, Columbia is far more drilling in terms of exposure. It is your traditional integrated projects with strings together with all the other products and service lines all the way through the completion and stimulation phases in that market. So that's -- those are the differences between the two markets. There will be further -- well, we hope there will be further contractual commitments in both markets but those commitments would basically impact the second half of this year as the existing contractual commitments are the ones building up volume the first half of this year.

Then, finally, on Iraq, similar kind of commentary; your pace of revenue growth in 2011 when you would expect to hit your run rate based on current awards. Also, any color on margin expectations as we go through the year and are you seeing any additional awards specifically in discrete sales, et cetera?

We are. We're seeing a lot of direct awards and direct sales. There are the contracts that make the news and there are the rest. So we're getting a lot of direct awards both in the south and in the north. We are going to move from the eight to nine strings that we are right now to about a 12-string level in the course of this year. I would say that we probably will reach the first level having all the contracts that we presently have executed on will reach that first level of maturity sometime in I would say late Q2, early Q3. In Iraq there will be further contracts given out I suspect simply because this is a market which is moving very rapidly. In fact, the market is moving at times faster than the operating infrastructure would allow it to move. It's a very, very fast unfolding situation. Margins in Iraq, Angie, for us are really quite good. I just said the mobilization expenses aside but you can isolate that quite well to be honest with yourself. When you look at the overall business, the margins are really quite good. Once mobilization expenses are fully absorbed, which in our case they will be certainly by Q2, by the end of Q2, I think you'll find that Iraq is a good market understanding, also, that we've been very careful in the contractual commitments that we have taken up. There are many, many contractual commitments available in Iraq, not necessarily that you can pick and choose. No, it's very competitive. But there are battles you may wish to fight and battles you may not wish to fight. So we've been very careful. Remember, Angie, we've been the first ones back in Iraq back in 2006. So this is a market and operation that we tend to know reasonably well.

Then the discrete sales, are you seeing that with the NOCs or are you seeing it with the IOCs as far as additional awards.

Really IOCs predominantly, although some of the IOCs in Iraq are NOCs, INOCs, too many acronyms. Remember, some of the players are not the IOCs that you typically know. Some of the players would be NOCs that are right in their home countries but they're playing there in the international arena. But these are the types of clients that are providing discrete sales. This is not really [SOC, MOC] or subsidiaries of the national Iraqi Oil Company. It is not.

Your next question comes from the line of Marshall Adkins - Raymond James.

Andy, could you walk me through in a little more detail the inventory write offs? What products were they in and kind of give us a little more detail on the regions?

Yes, so as Bernard mentioned, of the $50 million of asset write offs were $0.05. About $30 million of that fell in the east. A tiny piece fell in Latin America and the balance are about -- a bit less than $20 million fell into North America. Where we see this is -- well, just think easily about what product lines of ours carry inventory, the product based businesses, artificial lift, completions and a component of well construction.

So if we had a breakdown, mainly artificial lift, does that make sense?

No, more in completion and well construction.

Artificial lift would not have been more than 20%, 25%, about 20%, 25% on it.

Along those lines, a lot of your competitors that sell products have extreme seasonality and they're all looking for a down quarter next quarter. It seems to me like you're not looking for as big of a seasonal impact maybe as your peers. Is that a fair assumption? I guess, should we be looking for a significant downturn in Q1 due to seasonality in the product sales.

Nothing beyond what's already covered in our guidance but I'd remind you that we don't have a lot of -- software sales are not large component at year-end for us like they might be for some of our peers.

I would say one thing, Marshall, which is not seasonal per se, but it's climactic. Australia was what it was. Australia will continue to be equally bad for us in Q1. So that's that. Australia obviously will dry up just as soon as it stops raining and that market will turn. That will be probably the only thing in Q1 that will be sort of similar to Q4.

Was that full Q4? Didn't it kind of hit in December.

It hit really late November and in December. It did. So the impact was a little -- I call it $0.01. It was a little under $0.01. I expect it in Q1 it will be a little above $0.01. These are -- Marshall, they are too fine of a distinction to be worthy of your time. It is true as I mentioned in my comments, Australia is our largest geographic market just before China and Asia Pacific and we're very big in CBM play. [Inaudible], it shouldn't be a surprise to anyone simply because we tend to be very large in all land unconventional, not of heavy oil, of course, CBM and shale. This is true around the world. This is one of our specialties, land unconventional. So this is normal that [inaudible] is one of our places. Having said this, it will not go on forever. The rains will subside and so forth.

Your next question comes from the line of Stephen Gengaro -- Jefferies.

Sort of following up on the prior question, when we sort of look at the first quarter numbers that you provided, how would you sort of walk through the pluses and minuses? I imagine North America is a positive but can you sort of put a little more detail around that?

Yes, I don't want to get too specific on each of those pieces, Stephen, but look, North America, on Canadian seasonality up and also sequential improvement in the United States. We expect an improvement at the operating income line in terms of the dollars there in Latin America. In the east I think that the things you have going against you, again, are China/Australia, which Bernard just spoke about, North Sea, Norway, in particular, and Russia.

Seasonality.

Seasonality only. So the question is can the remaining operations make up for that, again, without the inventory write offs? Yes, we think they can but I think that a good effort at the operating income line in the eastern hemisphere from Q4 to Q1 is flat to slightly up.

Then just the other question I would ask as it pertains to the North America markets and maybe the world, too, but particularly North America, are there any product lines or anything that you'd like to add? Are there any things out there that kind of excite you at this point from a sort of product line perspective that maybe Weatherford doesn't have right now?

We wouldn't want to add any product lines, Stephen, particularly. The only one that is glaring by its absence is bits and, in all due respect, in a prior life I was responsible at the end of the day for bit [inaudible] which ended up a national oil well today. It is not something that we view as necessary. Let me be very direct in my answer. So I think we do not have any particular interest in any new product lines. We always have interest in deepening what we have in our existing product lines. That's a different story. But I don't see the need to add product lines. We're happy with the breadth we have which absent of bits and also [inaudible] is about as broad as anyone could possible want. So I'd rather do what we do better and deepen also our exposure to the product lines that we presently have organically or there are some acquisitions, of course. We're very content with that. One last question because there is another call after us. One last question, Operator, please.

Your next question comes from the line of Robin Shoemaker - Citigroup.

I wanted to ask you -- we're hearing a lot in the US the laterals are getting longer, more frac stages per well, more oil, less gas. I wanted to ask how Weatherford, specifically, in terms of new incubating technologies or recently launched technologies, captures that trend in the market given your small footprint in pressure pumping. I noticed a recent article in one of your publications about the application of rotary-steerable in the shale play. Could you update us on that?

Too long of an answer would be deserved. I would say first of all that it is true. We have a smaller footprint in stimulation, materially smaller. It is also true that by luck or by craft we've deployed that footprint entirely, not only on shales. There is nothing in dry gas but also on wet gas or gas with condensate plays. We have almost exclusive presence there, nowhere else. There is just one. Second, yes, we have the full complement of product line as applicable to the shales and to the long laterals and so forth from the directional to micro seismic. In a different setting I would argue we probably have the industry's best and I will refrain from saying that now because it is not the place or the time. But there are some developments on and around directional that would be particularly useful for those plays. I'm grateful for the question, Robin, but, again, for competitive reasons I'd rather not discuss it in a public setting.

Look at the international shale plays. You mentioned your Australian business but we keep hearing about other shale, either shale plays, tight sands, coal bed. Where are you most optimistic that the international market will develop into a meaningful opportunity for -- .

Let me just -- I think it's a very important thing and so far it's gotten the attention of IOCs. I think second there will be a lot of geophysical poking around, if there is a proper term, of shale around the world by the same IOCs. I think what will result from the poking around will probably be encouraging. But I do think that the next issue is the political issue of how you put up with the infrastructure acquired for shale development. Quantity is not only a province in [Siam]. Quantity is a water and the enormous footprint that is implied. So net-net, when you put everything together -- and, Robin, this is, again, a question deserving much more time -- I would look at Asia as more potential for development in shale rather than Central Europe in near term. I'm not suggesting Central Europe won't happen, no, no. I think it will. I just think that the infrastructure implications will be such that it'll take quite a bit longer. Having been myself in European extraction, I have a sense of how difficult sometimes things can be in those particular markets. So I think shale is terribly important internationally, absolutely. Lots and lots of work being done on the coring side, if you will, on and around both sides. I think that at the end of the day it becomes something important for all of us. I would look at Asia probably as a place which will have the first meaningful impact on Iran international shale. Thank you, Robin, and thank you, everyone, for listening and I will turn down the conference call. Thank you. Bye-bye.

Ladies and gentlemen, this concludes today's conference call. Thank you all for participating and you may now disconnect.