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Pricing on the Pressure Pumping
Kurt Hallead – RBC Capital Markets: I was curious – well, first and foremost I mean the improvement sequentially in North America driven by everything outside of the frac business, really underscores a pretty significant strength. You guys provided your outlook (indiscernible) and it seems like things are going to flat to maybe slightly higher as you head out into third quarter. Have we seen the worst of the frac pricing situation right now? What was the greatest intensity in the second quarter? Can you give some color on that, so that we can kind of frame the second half of the year and how these other product lines are going to potentially offset what’s happening in the frac business?
A Closer Look: Baker Hughes Earnings Cheat Sheet>>
Martin S. Craighead – President and CEO: Yeah, Kurt. You asked about couple of things there. So you asked about pricing on the pressure pumping. So let me address it this way. We have some basins that are, let’s say, the worst in pricing, which would be your NGL driven activity right now, but interestingly, I think as this quarter came to a close, it was becoming apparent that a lot of the capacity had moved out of the gas basins. As you heard us say in the call, we’re pretty much there if not all there in terms of what we want to move. That’s going to equalize the supply/demand situation. So we don’t expect any more meaningful price deterioration in the basins that have given us problems in the past. Obviously, I think the oil basins are pretty well balanced. You do have one basin that like I say is going through some rapid change given the NGL situation, but other than that, I’m a little bit more optimistic now. I’m not saying pricing isn’t going to continue to creep down overall, but it has definitely decelerated and that’s a positive. If you asked also about the pricing in our other product lines and the impact on that, it’s really a technology type of driven event Kurt, and you can go through all the different product lines. I don’t want to do that right now. The guys can probably give you some more color, but as I highlighted briefly (where do we) steerables, particularly the Curve, some of the new technology on the artificial lift and of course FracPoint and all the derivatives of that are still driving some pretty impressive price gains depending on the basin, depending on the customer, and the application. So I (don’t know) if that answers your question.
Kurt Hallead – RBC Capital Markets: It’s helpful. It’s just your commentaries being somewhat cautious on the progression on Canada, obviously, with some additional pressures on fracs, I was really trying to gauge your level of conviction in this 300 to 400 basis points of self-help improvement you guys had indicated over the last couple of quarters in North America and I’m just trying to (wanting) to get your conviction on whether or not you’d be able to fully recognize that 300 to 400 basis points as we get into the second half of the year.
Peter Ragauss – SVP and CFO: This is Peter. We don’t have that much conviction since we have delivered most of that already. I think it came a little bit earlier. We had quite a few good quick wins. The utilization of our workforce is a lot higher than it was say even two quarters ago. We are running more 24-hour frac fleets. Our logistics and freight costs have come down sequentially. So we feel pretty – in fact we are there very much on meeting that self-help. It doesn’t mean there isn’t more that we have identified that can’t benefit us in later quarters. A lot of that has to do with customer mix and utilization, which I think takes a little bit longer to realize, but as far as the reduction in costs and getting more efficient, we’ve achieved quite a bit of it already.
Kurt Hallead – RBC Capital Markets: Maybe if I can, one follow-up here, on use of cash on a go forward basis, how would you prioritize that?
Martin S. Craighead – President and CEO: Initially to pay down our commercial paper, which is about a little over $1 billion right now. So that’s the obvious one. We’ve had quite a bit of increase in working capital in the first half of the year as we’ve taken on proppants, guar, et cetera. So we want to pay some of that working capital down. But we’re still cash negative for the year and I think what we want to do is continue to get ourselves into cash positive position before we start worrying about increasing returns and that sort of thing.
James West – Barclays Capital: Congratulations on a solid quarter. Quick question on the international side. Martin, particularly on Latin America we’ve seen obviously some pretty big contracts go through in Brazil or at least are in the process of being finalized. There’s been a lot of market share shifts. It looks like in that market and I recognize those will go into effect until probably the end of this year or early 2013, but how is Baker Hughes set up for this change because if I’m reading – if my (Portuguese) is correct that I’m reading this contract, so it looks like you have given up some market share and I recognize that you guys were thinking about it as new market share probably as margin versus some that might think about it as revenue, but is there a potential that we might see Latin America going into the next year slip in terms of top line type growth or am I overstating kind of the changes in Brazil?
Martin S. Craighead – President and CEO: Well, you know, James, there is a whole lot of rhetoric around that, so I want to limit my comments. But I’ll put it this way. The contract you referred to I know pretty well is fortunate enough to be involved in our drilling segment when that contract was awarded to us five, six, seven years ago, I really can’t remember now, and it’s a meaningful piece of business for us. There’s going to be a likely shift in share but our presence there will still be significant, and I think that some of the rhetoric, what’s lost in all the rhetoric, I should say is the fact that there is no guarantee of share, you have to earn the share. What the contract provide you is a opportunity and performance is everything for Petrobras, it’s everything obviously in those basins. So I got to tell you, I haven’t lost any sleep and it’s bit of a non-event in terms of the way the decisions were made. We felt comfortable with our pitch given our time there, our cost structure, our infrastructure, our knowledge of the reservoir, so I think what you may want to take away is you’ve seen in parts of Mexico, you saw it in Saudi Arabia five or six years ago, the only winner here actually might be the customer.
James West – Barclays Capital: So if I articulate kind of how you (done that) contract and worked out the last five or six years, your performance has been excellent if I remember correctly.
Martin S. Craighead – President and CEO: Both operationally and financially, and by the way we just received an extension well into next year, no changes in pricing and activity for us. So like I say, down there you get what you deserve and we’re not worried.
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