Christian Garcia – VP IR David Lesar – President & CEO Mark McCollum – EVP & CFO Timothy Probert – President Global Business Lines

Bill Herbert – Simmons & Company Dan Boyd – Goldman Sachs Brad Handler – Credit Suisse Geoff Kieburtz – Weeden & Co. Michael Urban – Deutsche Bank Jim Crandell – Barclays Capital Robin Shoemaker – Citigroup Ole Slorer – Morgan Stanley

Welcome to Halliburton’s fourth quarter earnings call. (Operator Instructions) I would now like to turn the conference over to your host today, Christian Garcia, Vice President Investor Relations.

Good morning and welcome to the Halliburton fourth quarter 2009 conference call. Today’s call is being webcast and a replay will be available on Halliburton’s website for seven days. The press release announcing the fourth quarter results is available on the Halliburton website. Joining me today are David Lesar, CEO; Mark McCollum, CFO; and Timothy Probert, President Global Business Lines. With the planned retirement of David King, President of our C&P Division, Timothy is now responsible for both our Completion and Production and Drilling and Evaluation Divisions, as well as Corporate Development and Technology. We would like to thank David King for his many years of service to the company. Before turning the call over to David, I would like to remind our audience that some of today’s comments may include forward-looking statements reflecting Halliburton’s views about future events and their potential impact on performance. These matters involve risks and uncertainties that could impact operations and financial results and cause our actual results to differ from our forward-looking statements. These risks are discussed in Halliburton’s Form 10-K for the year ended December 31, 2008, our Form 10-Q for the quarter ended September 30, 2009 and recent current reports on Form 8-K. Note that we will be using the term international to refer to our operations outside the US and Canada and we will refer to the combination of US and Canada as North America. Our comments include non-GAAP financial measures. Reconciliation to the most directly comparable GAAP financial measures are included in the press release announcing the fourth quarter results and on our website.

Thank you Christian, and good morning everyone. Before discussing our fourth quarter results, I would like to give a summary of what we accomplished in 2009. First we believe we expanded our market share in all of our major product service lines, by leveraging the shift toward increasing well complexity and by deploying our integrated services strategy. Second we maintained our technology edge and continued to build our portfolio of key products that will address the industry’s challenge in the coming years. Third we increased our financial strength ending the year with $3.4 billion in cash and marketable securities which provide us the flexibility to take advantage of strategic opportunities as they arise. And by focusing on returns our average invested capital return was 12% which is above our cost of capital despite the significant reduction in industry activity we saw in 2009. So I am satisfied that our results indicate that we have successfully executed against a very challenging environment and met our objectives of strengthening the long-term health of our franchises during this last down cycle. Now before I go into some of the details on Q4, I’d like to discuss the current environment and how it impacted our Q4 results and how it may impact our business into 2010. Total revenues for the fourth quarter grew 3% from the third quarter driven primarily from growth in North America offset by a decline in our international business. Landmark software and equipment direct sales experienced their typical increase over Q3. However completion tool sales which historically benefit from remaining year end operator capital funds were impacted by the dramatic reduction in upstream capital expenditures and more proactive inventory management by our customers. We have outlined for you over the past several quarters that pricing from contract retendering activity in the Eastern Hemisphere in the first half of 2009 would exert downward pressure on our margins and our Q4 results certainly reflect this. Eastern Hemisphere margins in Q4 declined from 22% to 19%, although a part of this decline was season in nature. We have also stated that this repricing activity would push margins downward into the upper teens in 2010 and we continue to believe that this will be the case. Our North America business has also started to rebound as conditions have improved. Margins were up sequentially to 7%. Equipment utilization is starting to pick up and we are starting to get some price increases. The trends toward increasing levels of service intensity is also playing in our favor and we believe we could be poised for a much better North America market in 2010. And I don’t think anyone is better positioned than Halliburton to benefit from this. However this view requires a sustained increase in natural gas drilling activity. It will be important how we exit the heating season with storage levels in line with historical averages and have some increased recovery in industrial demand. So far the signs are mostly positive but we will certainly know more at the end of the first quarter. Our Latin America business has experienced some unique challenges. Our fourth quarter operating results were impacted by the slowdown in natural gas drilling in Mexico and though activity has picked up somewhat it has not approached the level we saw in the third quarter. Pemex has stated that 2010 capital spending will be flat with 2009 though we’ll be more focused on offshore and production optimization. At this point it looks like Pemex will assume a greater role in decisions by signing services work based more on performance than a low price IPM bid. But since it is still unclear what the scope of work will be in Mexico, we are essentially keeping our cost structure in tact to ensure that we have the flexibility to respond. This obviously impacted our Q4 margins in Latin America and will continue to do so in 2010 until we can determine which direction the Mexico market is going and at that time we’ll adjust our cost structure if its appropriate. Venezuela will be impacted in Q1 of 2010 by currency devaluations and [Pedavasis] overall spend rate. Argentina continues to be impacted by union issues. However Brazil is a bright spot as we continue to win work and grow in that country. So all in all I believe the bias in Latin America for 2010 will be toward a more challenging margin environment as the region seems to be currently over supplied with equipment. Let me now discuss our Q4 results in more detail starting with our international business, our international revenues registered an overall decline of 2% due to the impact of pricing on contract retenders, a decline in natural gas drilling activity in Mexico, and the typical weather related seasonality we see in the North Sea and Russia. Operating income was also adversely effected by a charge arising from the settlement of a significant portion of our customer receivable in Venezuela. As I said earlier, in the fourth quarter one very bright spot for us was in Brazil where revenues grew 19% sequentially due to increased drilling and testing activities. We also received an extension for our directional drilling and LWD contracts. I’m also pleased to announce that we recently won the largest package on the intensely sought after tender for gravel pack completions with Petrobras. This major completions win comes on the heels of Halliburton being awarded 100% of the frac pack completions work for Petrobras. These wins not only provide us incremental business for Brazil but also solidify our position as the deepwater completions leader. Last month we announced the signing of a technology cooperation agreement with Petrobras for reservoir research and development. The agreement will initially cover three research projects aimed at improving the efficiency and attractiveness of reservoir exploration offshore. These and other technology projects will be developed in the company’s planned new technology center in Rio. We currently feel that 2010 will be a period of transition in the international marketplace. Oil fundamentals are improving as weak hydrocarbon demand recovers and the timing and rate of reinvestment remains uneven across geographies and customers. We have not yet felt the full impact of pricing concessions that were negotiated during last year’s contract retendering process. We’re seeing our customers try to remain flexible in their spending patterns and they continue to be heavily focused on restraining inflation and oilfield services. And Timothy will give a little bit more color on that in a couple of minutes. Let me now say some things about North America, our revenues grew 12% sequentially due to increased activity. The Rockies experienced a typical weather related issue which we expect to persist somewhat into Q1. In the third quarter we reported that we believe that there was a backlog of about 1300 to 1500 drilled but uncompleted wells. Our US land results suggest that operators may have worked down a large of portion of this backlog as completion activity disproportionately picked up in Q4. A good portion of the decline in the backlog is in the Barnett Shales, where we saw a reduction to the number of uncompleted wells of approximately 38%. In the fourth quarter it appeared that smaller competitors shifted their equipment especially their pressure pumping equipment to opportunities in less challenging basins and provided us and the industry a temporary tightness in the supply of equipment to service the work in the harsher shale environment. This coupled with increasing activities from operators working down their backlog of uncompleted wells to strengthening oil basins all provided opportunities for some price increases. Pricing may continue to modestly improve throughout the first quarter but longer-term strengthening of prices will be dependent on a sustained recovery of natural gas fundamentals. For the other product lines pricing is generally stabilized across most basins. Pricing for wireline while is it improving, remains the weakest as vertically directed activity experienced the least recovery in the US. Our Gulf of Mexico business recovered from the depressed levels in the third quarter and experienced only a minor disruption from hurricanes. We have made considerable progress in expanding our offshore well construction capabilities and have benefited from the influx of deepwater rigs into the Gulf of Mexico. So we’re very excited about our prospects for 2010. However Q1 will be impacted by a number of items, one, the typical seasonal decline from lower landmark and direct equipment sales, and weather related seasonality for the North Sea, Russia, and the Iraqi mountains. Two, as I said earlier we are going to maintain our cost structure in Mexico until we have a clearer picture of the direction that Pemex will take. Third, we are continuing to ramp up our cost structure in Iraq where we are starting to build infrastructure. We now have equipment and people on the ground in Iraq, are in the process of hiring and training additional employees. We have secured contracts with the Southern Oil Company and are now discussing contracts with a number of IOCs and NOCs about starting work later this year. We expect to make investments of approximately $100 million in Iraq in 2010 with revenues from this market to come in late 2010 and beyond. Next item impacting Q1 will be mobilization costs on contracts that we won in 2009 that will start in early 2010. These contracts include mobilization for the turnkey drilling contract for South Ghawar, in Saudi Arabia, the startup of our large fluids contract that we won in Indonesia, and of course startup costs for the recently awarded completions contracts in Brazil. Although these mobilization costs will weigh on our results for the first quarter, they certainly are an indication of the robustness of activity for the remainder of 2010. We are estimating that these first quarter items will have an impact of approximately $0.07 to $0.10 on our Q1 which is certainly more than we usually experience going into a first quarter. In addition to these operational elements, we estimate that the recent Venezuela currency devaluations could translate to about a $30 million exchange loss in Q1 and Mark will discuss this in a couple of minutes. So in summary, we’ve had a very successful 2009. We expanded our market position, and we’re continuing our current strategy of investing in key segments trying to maintain our financial flexibility. Our challenge in 2010 is to retain the gains we’ve achieved while ensuring that we have organizational flexibility for any changes the market might throw at us. Let me throw it over to Mark now.

Thanks David, and good morning. Let me provide you with our fourth quarter operational results and I’ll be comparing our fourth quarter results sequentially to the third quarter of 2009. Our revenue in the fourth quarter was $3.7 billion, up 3% from the third quarter, while operating income declined 10% to $428 million. The decline in operating income resulted from lower international pricing, the impact of reduced activity in Mexico and the $15 million receivables settlement charge David mentioned earlier partially offset by higher North American activity. The charge relates to a settlement we reached with [Petavasa] to receive payment of approximately one third of our outstanding receivables in Venezuela. Our third quarter results included approximately $28 million in employee separation costs. Now I’ll highlight the segment results and note that we have excluded the receivables settlement charge and the third quarter employee separation costs in the operating income comparisons that follow. Completion and production revenue remained flat sequentially as higher stimulation and cementing activity was offset by decreased completion tool sales in the fourth quarter, a decline in North Sea vessel activity and lower international pricing. Overall completion and production operating income declined 32% from the flow through of lower completion tools and vessel revenues partially offset by higher margins in US land. Looking at completion and production on a geographic basis, North America revenue increased 14% while operating income increased significantly from higher US land activity and modest price increases. In Latin America completion and production revenue declined 8% and operating income fell substantially driven by lower gas drilling in the Burgos basin in Mexico. This decline was partially offset by higher activity in Argentina and Brazil. In Europe/Africa/CIS completion and production revenue and operating income declined 12% and 44% respectively due to seasonal decline in Russia, and reduced vessel, completion tool sales, and pipeline and process services activity in the North Sea and West Africa. The decline in vessel activity in the fourth quarter was consistent with historical seasonal patterns and our guidance we gave you last quarter. In Middle East/Asia completion and production posted sequential decreases in revenue and operating income of 11% and 47% respectively due to the timing of production enhancement projects in India and Australia, lower completion tool sales, and overall pricing in Saudi Arabia, Southeast Asia, and India. In our drilling and evaluation division revenue and operating income increased by 6% and 9% respectively on sequential growth in North America and Europe/Africa. Software and asset solutions and wireline led the product service lines with double-digit growth from third quarter levels. In North America drilling and evaluation revenue increased 9% while operating income increased over 80% as our well construction product service lines benefited from the influx of deepwater rigs in the Gulf of Mexico. In addition the division continued to benefit from the favorable mix toward horizontal drilling, notably in the Haynesville, Marcellus, and Eagle Ford shales. Drilling and evaluations Latin America revenues increased 5% while operating income declined 29%. The flow through of reduced gas drilling in Mexico was offset by increased wireline and testing jobs in Brazil. In the Europe/Africa/CIS region drilling and evaluation revenue and operating income were up 9% and 10% respectively driven by project management work in Algeria, and a better mix toward higher margin drilling fluids activity in Norway. Drilling and evaluations Middle East/Asia revenue was flat with operating income increasing by 5% as higher margin direct sales in Asia offset timing of projects and lower pricing across the Middle East. Now I’ll address some additional financial items, we continue to generate positive cash flows. In the fourth quarter our cash, equivalents, and marketable securities increased by approximately $200 million resulting in a $3.4 billion balance as of December 31, 2009. Our current net debt to total capitalization ratio continues to decline and is now 9% at the end of the year. In 2009 our focus on managing working capital levels has resulted in cash flows from operating activities of $2.4 billion, which includes the $417 million payment for the Department of Justice settlement we entered into earlier in the year. Excluding this payment operating cash flows would have exceeded the level achieved in 2008 which is notable given the significant reduction in net income in 2009. As we proceed into 2010 we’ll continue to operate within our cash flows to enable us to make the necessary investments while providing us the flexibility to adapt to changes in the marketplace. Within this objective we currently expect our capital expenditures for 2010 to be approximately $1.7 to $1.8 billion which we believe will provide the equipment necessary to support activity levels we currently expect in 2010 and coming years. As David mentioned we are anticipating an exchange loss of approximately $30 million in the first quarter of 2010 to reflect the impact of the recent devaluation of the Venezuelan currency. This estimate is based on the balance of our believer based net monetary asset position in the country at December 31, 2009 and our currency understanding of how the new two exchange rate system will work for the oil services activity. This exchange loss is nondeductible for tax purposes which results in a negative impact to our first quarter income taxes. In addition we expect to incur additional income taxes in Venezuela for our US dollar denominated monetary assets and liabilities of approximately $10 million which will also be reflected in our first quarter 2010 tax provision. So given these devaluation impacts we currently expect our first quarter 2010 effective tax rate to be in the range to 34% to 35%. Our estimated effective tax rate for the remaining quarters of 2010 is 31% to 32%. Finally we anticipate that our 2010 corporate expenses will continue to run about $50 to $55 million per quarter and we expect depreciation and amortization to be approximately $250 to $260 million per quarter or a little above $1 billion in total for 2010.

Thanks Mark, and good morning everyone. As David mentioned our current outlook for 2010 remains fluid and growth will be uneven but within geographic and customer segments. However we can make some observations on our customers’ spending patterns which provide us with an indication of the scope of a potential rebound in activity. First in the international market, our IOC customers have generally maintained consistent spending levels through the downturn and indications are that as a group their spending levels into 2010 will be flat. This assertion seems to be supported by several of the current spending surveys. The amount of work accomplished under these spending levels will benefit from cost deflation though. These customers are also exhibiting an intense focus on the quality of execution to further improve project economics. A number of NOC customers have announced healthy growth rates in their upstream capital expenditures for this coming year. We should be mindful though that the announced plans are subject to a number of external factors, political and economic, which can influence the timing of their spending patterns. Both customer segments are directing a significant portion of their spending into new frontier developments such as Iraq, deep and ultra deepwater projects and production type infrastructure. The trajectory of sanction projects moving through our internal opportunity management system indicates that after a marked decline in tender activity in Q1, 2009 tender activity gradually increased through the year. For Halliburton consistent with a typical lag from sanctioning through award to execution, will experience a number of significant project startups from the end of Q1 onwards. This together with the pattern of spending from our IOC and NOC customers suggest improving international activity in the second half of 2010 and into 2011. Turning to North America the shift towards deeper unconventional shales is well understood and it’s an important component of rising service intensity in the US drilling and completion activity. Interestingly the shift towards increasing numbers of fracture stages, at higher pressures and rates in these deeper shale basins is having a positive impact on Halliburton’s [inaudible] fleet utilization. Halliburton’s horsepower [inaudible] per job increased by 30% to 40% in 2009 and the number of crews on 24-hour operations has increased significantly in select basins. We believe this technology trend will persist as operators seek to improve productions, assisting the absorption process of over supplied equipment in 2009.

Okay, then just a quick summary and then we’ll open it up for questions. We’ve obviously seeing opportunities to increase pricing in North America as we benefit from our technology, our footprint, and the capital investments we made through 2009. In the international market as we previously have guided international margins are being impacted by the contract retendering process and this will persist throughout 2010. Our first quarter margins will be particularly effected by increased mobilization costs for project startups and the usual drop off of software and equipment sales. However we view 2010 as a fluid market, we’re excited about where we are, we believe we have successfully executed against our strategy, and certainly are well positioned to benefit as activity rebounds. Let’s go ahead and open it up for questions now.

(Operator Instructions) Your first question comes from the line of Bill Herbert – Simmons & Company Bill Herbert – Simmons & Company: I’m curious here with regards to the guidance and what that means with regard to international margins, we were looking at my model, that 17.5% margins in the fourth quarter for international it looks like given your commentary we’re down 300 to 400 basis points quarter on quarter, should Q1 be the bottom in international margins.

I think as we said in the call, we think that and I think we need to make a distinction between international and the Eastern Hemisphere, the Eastern Hemisphere we believe will bottom out in sort of the high teens area as I said this morning and that’s very consistent with where we’ve been trying to guide our investor community over the past several quarters. I think if you look at where we think margins, Eastern Hemisphere or international and the difference being you throw Latin America in there, I think we’re seeing mid 2010, it may not be as early as the second quarter, could be into the third quarter, but I think the middle quarters of 2010 will be where it bottoms out and then it should get better from there. Bill Herbert – Simmons & Company: Are you all effectively guiding towards a very low 20’s number for the first quarter.

Well if you go back to third quarter when we were at 22%, we tried to articulate at that point in time that that 22% was a bit abnormal. That 20% was really the starting point from which we were giving the guidance that we felt like it was going to fall into the mid teens. Bill Herbert – Simmons & Company: What I meant was not margin, earnings per share.

Well I don't know that we give earnings per share guidance so I’m sorry you’ll have to calculate that on your own. We continue to hold that the Eastern Hemisphere margins should fall over the next several quarters into the high teens, Latin America, until we know exactly where Pemex is going to go with their drilling plans, to be a bit more choppy but I think that overall, we’ll continue to hold the guidance that we’ve been giving over the last several quarters.

Your next question comes from the line of Dan Boyd – Goldman Sachs Dan Boyd – Goldman Sachs: I just want to start by clarifying something, on the $0.07 to $0.10 of EPS decline next quarter, does that include the devaluation in Venezuela.

No it does not. The devaluation is on top of that. We sort of see that as a non-recurring one-time event which we were taking into consideration outside of the $0.07. Dan Boyd – Goldman Sachs: And then as we move towards the second quarter and given that a lot of this comes from mobilization charges, how much of that $0.07 to $0.10 do you think you can make up. Do you think you can make up all of it and grow on top of those project startups or does it take to the third quarter.

I think if you look at the revenue stream on the startups will come into the second quarter so I think the hit is Q1, the revenue starts in Q2 and beyond and clearly the way they were bid, we’ll eventually make it all up and so I’m not concerned about that. Its just the timing with respect to the startup and obviously you’ll have some positive offset because I think certainly we’re seeing and will see a better Q1 in North America. So I think, you’ll have to sort of put it all together into your model, but we’re trying to give you enough data points to come up with your own estimates. Dan Boyd – Goldman Sachs: And one follow-up on North America, very strong incremental margins in D&E this quarter, how much of that would we attribute to mix with the US Gulf of Mexico versus maybe pure operating leverage and can we view those types of incremental margins as a leading indicator for what we could we see on the C&P side.

From the D&E perspective we certainly did see a significant improvement in Q4 over Q3 as we started to see the influx much awaited of the [older] rigs coming into the Gulf of Mexico so it did certainly have a positive impact. With respect to C&P margins, they clearly do not benefit in the same timeframe, obviously a time lag with respect to the Gulf of Mexico. Dan Boyd – Goldman Sachs: We should expect those to improve as looking at D&E as a leading indicator.

Yes, I think that’s a reasonable assumption.

Your next question comes from the line of Brad Handler – Credit Suisse Brad Handler – Credit Suisse: Could you just clarify for us in terms of international recontracting, how much of that is still going on today and therefore you’ve obviously given a lot of clarity on where you think margins are headed internationally, I guess I’m just curious about the pricing pressure as it exists today relative to where things were and how much active recontracting is going on.

I guess the retendering if you will, or repricing, that effort for the most part I believe is behind us because I think what customers were doing was taking advantage of the down dip we were seeing almost exactly at this time a year ago. Then as oil prices recovered during the year, we saw less and less of it going on. There was some lag among customers as to when they went about this process but I would say that by the end of the year it was mostly behind us, however, I think if you look at the tendering activity that took place toward the end of last year and it taking place today, that tendering activity essentially reflects the pricing that a lot of customers saw in the retendering process they went through. So I think that its going to take awhile for the margins to stabilize around what they’re going to look like on a recurring basis before we can have an opportunity to push them up. I think in talking with customers they’re more opportunistic especially those that are focused on oil basins around the world and with oil prices where they are today, I think that you’re going to see a fairly robust level of activity going forward. But its going to take a bit of time I think before we get some upward pricing momentum with respect to Eastern Hemisphere but as we indicated, we don’t see the margins ever troughing below the high teens and that’s not a bad place to start the next leg up as far as I’m concerned. Brad Handler – Credit Suisse: Could I ask an unrelated follow-up on Iraq please, can you just calibrate for us what you think in terms of contract awards relative to the upcoming election and then presuming that the setting up of a parliament passing law, oil revenue sharing law etc. Do you expect to see some contracts before that is set, i.e. in the first half of the year, or do you expect to kind of wait until things settle out in those political regards, i.e. second half of the year.

I think there’ll be a, I think its sort of yes to both questions. I think we will see contract awards from our customers but I’m not sure that they will start drilling until after they see what the election results are. I’ve spent the last couple of weeks talking with senior execs of almost every IOC and NOC that has a potential contract in Iraq. Some have got their contracts approved by the Parliament and are moving forward but I think its fair to say that the first part of this year at least as far as we’re concerned, and I suspect for most of the other service companies, is going to be a time of investment with very little revenue but everybody planning to sort of hit the starting line somewhere in the back half of 2010 and its clear that that if that happens there is not going to be enough equipment and people and infrastructure on the ground to handle everything. So its going to be a bit of a land rush once it gets started but I think most of our customers are saying they want to get the political process behind them before they’re going to start expending a significant amount of money.

Your next question comes from the line of Geoff Kieburtz – Weeden & Co. Geoff Kieburtz – Weeden & Co.: I guess it’s a definitional question but you’ve referred to high teens for international margins a few times, 19% seems like high teens, could you kind of clarify the range that high teens covers.

I guess 15% would not be high teens and 20% would be outside of the high teens, so somewhere in between there. How’s that. Geoff Kieburtz – Weeden & Co.: So 16% to 19%, we’ve got that bounded. And with back of the envelope calculation, $100 to $130 million of startup costs expecting to be hit in the first quarter, seems quite large. Is there something unusual about the nature of the contracts that you’re starting up in the first quarter, particularly considering one of them that you mentioned was Ghawar where I thought part of the theory there was that you were already on the ground with infrastructure, personnel, equipment, and so on.

Remember the list I gave also included the normal seasonal drop off of direct sales and landmark sales and that’s included in there and that’s obviously a big chunk of that $0.07 to $0.10. For instance last year the drop off from Q4 to Q1 in landmark and direct sales I think was like $0.05 or $0.06 of that. So the whole thing is not mobilization costs. We were trying to give you a sense of we have normal seasonal drop off, we have mobilization costs, that whole list, investment in Iraq, all of that was inclusive of that $0.07 to $0.10.

If you go back and study historical patterns, even at the top of the cycle, the Q4 to Q1 seasonal impacts typically are about $0.05. Geoff Kieburtz – Weeden & Co.: I misunderstood then, I thought that that was being attributed to the contract startups primarily.

Let me, maybe we weren’t clear when we did it. I think the $0.07 to $0.10 is basically seasonal drop off, maintaining our cost structure in Mexico, the mobilization costs, and the incremental investments in Iraq. All those will add up to $0.07 to $0.10. Geoff Kieburtz – Weeden & Co.: And you have mentioned a few times that completion tool sales were lower than expected in the fourth quarter, just in regards to the composition of products, you’ve got software, you’ve got other products, and then you’ve got completion tool sales, was it only the third part of that that was lower than expected in the fourth quarter.

With respect to our software sales, it was particularly strong, actually sort of Q3 to Q4 change for software was actually stronger than has been typical of our Q3 to Q4 change so obviously it all goes for a slightly larger drop as you go from Q4 to Q1. And yes, completion sales at the end of the year were a little bit more disappointing. I think partially to do with timing, Q3 was particularly strong. And as you know we are a cyclical business in that as drilling activity drops, completion activity tends to drop a quarter to a quarter and a half later. And I think to some extent this is a little bit reflective of the declines that we’ve seen in the international market.

Your next question comes from the line of Michael Urban – Deutsche Bank Michael Urban – Deutsche Bank: Your outlook in North America certainly seems more positive than what we’ve seen in the last couple of quarters and certainly more positive than what we heard from Schlumberger on Friday, it seems to me that demand alone doesn’t necessarily get us back to normal levels of storage, is it something else on the production side maybe working through the completions which you talked about, are you seeing declines in existing production finally accelerating in line with what we might have thought historically. Just wanted to get a little more color on that.

I think as we tried to allude in the call, I think we’ll know a lot more about where the US market is going to go at the end of the first quarter with wherever storage is at that point in time and sort of the emotion of where the US economy may be heading. I think that all being said, I do believe that we are better positioned in North America than a lot of the other services companies, one given our footprint, two given our ability to sell an integrated solution and an integrated approach around the production and completion on the especially the shale types of properties. And I think one of the things that people keep missing in the shale plays is yes, there’s a lot of potential production there and we don’t know how long lived the assets are but believe me to get that resource out of the ground is consuming services equipment very dramatically and as Timothy said, we have to take more horsepower to every job. We are grinding that horsepower up faster than we ever have and so I think that as we see maybe some of the smaller players get their equipment used up by going into these shale plays or as we said in the call they’re actually going away from the shale plays because it is using their equipment up, we just think we’ll have an opportunity to get the supply demand balance for equipment in a little better situation and that will give us a little pricing power at that point in time. But at the end of the day its really is going to mean a sustained sort of pull on natural gas in the US and as we say, the signs are positive right now but I think we’ll know a lot more in three months. Michael Urban – Deutsche Bank: And shifting over to the international side, I would certainly tend to agree that second half and into 2011 is much stronger, but you talked about an uneven recovery, what markets would you see being recovering faster, or more quickly and where does, what markets might it take a little while longer.

A couple of general points, first of all with respect to major projects which have been deferred, take some time to come back to steam so to speak and so it is going to take a quarter or so to get some of these projects back on to boil. Secondly we are starting to see some indications that anywhere we have land rig activities, there are certainly some upticks in the Middle East, North Africa which is showing some positive signs and these are good leading indicators I think of some positive trends for the second half of 2010.

Plus I think there’s enough data out there, just follow the deepwater rigs and where they’re going because we’ve got a very strong deepwater position so as these rigs have come on toward the end of last year and there’s more coming on this year, clearly we will get our share of that deepwater market as it starts to develop.

Your next question comes from the line of Jim Crandell – Barclays Capital Jim Crandell – Barclays Capital: Let me go back to Iraq and start there, do you think that you’re, there’s apparently so much business here that could come in the second half, other companies have reentered Iraq either well before you or just before you, do you consider your recent entry back into Iraq to be an impediment on winning some of these contracts.

No, absolutely not. I think that if there’s more discussion around and actuality of what’s on the ground in there and I think our view is there’s going to be plenty of work for everyone. I think most of our customers really have not decided on a contracting philosophy at this point in time. I think it will tend to be an IPM or a turnkey drilling sort of a market because I believe our customers will want to limit the number of their people and service people on the ground around security issues. And certainly there has been a company or so that may be has been ahead of us with respect to infrastructure but I just don’t see it holding us back. And I don’t think that anybody will get any real appreciable level of revenues in there probably until the back half of this year. But then it could really take off but as I said, I think there’s going to be enough work for everybody. Jim Crandell – Barclays Capital: Is the work that you’re doing for South Oil, is that IPM work or is that just providing discreet services on one of their fields.

That’s discreet services. Jim Crandell – Barclays Capital: Could you address the whole area of deepwater, Schlumberger’s call I think used some wording like they were very pleased with how they were doing on deepwater tenders and maybe specifically addressed it to [inaudible] and how you feel they’re doing so far in the deepwater area.

We’ve got some 28 rigs which are destined to arrive in 2010 and sort of a like number, slightly less 25 or so in 2011. And we are very pleased with our position in deepwater through well construction, through completions and production so we feel we’ve got a very good offering. We feel that we’re very well positioned and we’ve had a very good win rate so we’re equally pleased to see the degree of focus on deepwater in 2010 and 2011. Jim Crandell – Barclays Capital: On Iraq, is it your impression in talking with the companies that they tend to view the first phase of work as sort of a first tranche of work which might encompass, might be like a two year contract and really each contract at least to be major fields on average could be even well over a billion dollars.

I think the discussion we’re having is everyone is trying to get their 10% increment met so they can start getting cost recovery and that is where it kicks in. Actually the discussions we’re having is not sort of time based contracts but it’s a well based contract so we want to bring, company X will say we want to bring two rigs in and knock out 10 wells and we believe that will get us our 10% increment. Then we will sit back and do a lot more well engineering, a lot more planning, to get up to these higher increments where their bonus payments will kick in. So I see it as a two-phase type of effort but I don’t think its going to be as time based as it is going to be basically a volume based contract.

Your next question comes from the line of Robin Shoemaker – Citigroup Robin Shoemaker – Citigroup: Wanted to go back to North America for a minute, in terms of the drilled but uncompleted wells where you saw some of the backlog work down and clearly it seems that you benefited from that in the fourth quarter, do you continue to see that in the current quarter and do you see any situation similar to what we had before where wells are being drilled but still not completed or adding to that backlog.

At the end of Q3 we thought there was around 1300 to 1500 drilled but uncompleted wells. And if you take a look at the North America completion activity from Q3 to Q4, that was up about 19% though rig activity was only up about 14%. So that suggests that 400 or 500 were probably knocked out during the course of Q4. And certainly we will have seen some more knocked out during the course of January so we kind of feel right now that the drilled but not completed is sort of starting to get back down to sort of what you might consider to be more normal levels by the time we get towards the end of Q1. We won’t know obviously until we get the data but that’s the way it would seem to us at the present. Robin Shoemaker – Citigroup: And you’re not seeing any more situations where wells are being drilled but completion is deferred.

That’s not evident this quarter. Robin Shoemaker – Citigroup: And then on the pressure pumping capacity the wear and tear that you described on these harsh fracs, is part of your CapEx for 2010 that you mentioned going to replace or is there a significant piece of additional pressure pumping capacity for North America that’s part of that given this issue you discussed.

I think what we’re doing is we’re actually reconfiguring the pumping fleet and what we’re building and we are building almost exclusively now what we call our HT2000 unit which is a very heavy and high horsepower unit specifically made to operate in these heavy shale environments and so that’s really going to be where the focus of the capital spend is for 2010. But its also fair to say that if you look at sort of the retirements we had last year and using up of equipment, I also think that the supply of pressure pumping equipment as an industry is going down a lot faster than people think, hence, basically the heavy call that we’re seeing on equipment today especially in the shales. Robin Shoemaker – Citigroup: And some pricing power that’s associated—

And the beginning of some pricing power specifically in the shale plays.

Your final question comes from the line of Ole Slorer – Morgan Stanley Ole Slorer – Morgan Stanley: Just to follow-up on these 1300 to 1500 uncompleted wells that have seen 400 to 500 completions in the fourth quarter, there’s been I think a general surprise in the natural gas markets to the extent of production holding up despite the rig count falling, could you share your views on what impact this particular event have played in your mind to trigger that production sustainability.

Well certainly we have also been surprised at how well production has held up. I think certainly a quarter or so ago we would have predicted a different outcome. But I think that clearly working this backlog off during the course of Q4 and Q1 is a net positive at the end of the day. Obviously its caused some tightening of supply and it is after all kind of a one-time event in that once its gone its largely gone. So we would consider it to be a net positive. With respect to the overall supply side, clearly you see a range of models out there and we’re certainly surprised last month with last month’s data. It remains to be seen how we will continue to see that going forward. I’m afraid its anyone’s guess at the moment. Ole Slorer – Morgan Stanley: So you wouldn’t necessarily believe that come February March data that we could get a surprise the other way given that this inventory is then worked off and there’s no incremental impact, you don’t think it’s a big enough event to move the needle.

Its possible, but I think we sort of certainly need to see a little bit more data and we clearly would hope to see some incremental demand and as David mentioned with respect to the overall health of the US natural gas business that’s what we’re going to need to see as we exit Q1 and I think the whole matter is a little bit of an unknown at the moment. Ole Slorer – Morgan Stanley: You did a very good job of outlining everything that sequentially would go negative seasonality into the first quarter as well as the startup costs and all of it adding up to $0.07 to $0.10, but if we look outside North America are there any positive offsets such as larger contracts starting in Brazil or West Africa or deepwater or North Africa or anywhere else for that matter that could offset this on the top line.

I think we have a number of significant startups. As I was explaining the tender activity increased nicely and steadily during the course of 2009 after a very slow Q1 and all these projects have startup dates which are either in the end of Q1 or into Q2 and so really it’s a question of timing. One of the effects that we tend to see as a service company is what I call I call rubber banding effect where projects just simply do tend to err on the side of delay rather than coming forward. But there does come a point when psychology changes and those projects tend to happen on time again. And so I think it’s a question of how our customers see their sense of urgency with respect to the projects and that will determine whether or not we see them earlier which would create some upside, or later which would be fairly consistent with what we’ve outlined to you. Ole Slorer – Morgan Stanley: But are you trying to say that we should be looking at an outlook that there’ll be $0.07 to $0.10 down outside North America sequentially and any mitigating factor would all have to be with North America pressure pumping.

I think we’ve tried to do our best to outline how we see the international markets at present. We outlined what we see in Latin America, we’ve outlined what we see in the Eastern Hemisphere so with respect to any material changes North America probably has the greater visibility at the present time for upside. Ole Slorer – Morgan Stanley: And finally one question on North America, you mentioned that equipment is being trued up at a rapid clip in the pressure pumping market, something that we completely agree with, against that backdrop do you think that [inaudible] margin in the completion side is acceptable. What would be a margin that would just allow you to generate the return on capital that you need in order to keep on investing in the North America pumping capacity.

In sort of a simple way, we look at our cost of capital of being around 10% or 11% so we’ve got to be convinced that anything we buy or build is going to be able to exceed that cost of capital over the life of that particular asset. And as you know we’ve been very, very focused on returns on our business, returns for our shareholders, and I think we have done a very good job through the past several years and including 2009 in hitting those capital goals. So if we didn’t feel positive about getting that return we would not be building this stuff, so I think you can take some comfort in that.

That will do it for us, before we close I would like to announce that Halliburton’s first quarter 2010 earnings conference call will be held on Monday, April 19, 2010 at 9:00 am US Eastern time. Thank you for your participation in today’s call.