Eugene M. Isenberg - Chairman of the Board, Chief Executive Officer and Chairman of Executive Committee Joseph Hudson - President of U.S. Land Drilling Business R. Clark Wood - Principal Financial & Accounting Officer and Controller Dennis A. Smith - Director of Corporate Development for Nabors Corporate Services Inc

Ole H. Slorer - Morgan Stanley, Research Division Geoff Kieburtz - Weeden & Co., LP, Research Division Jeff Tillery - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division Robin E. Shoemaker - Citigroup Inc, Research Division Marshall Adkins - Raymond James & Associates John M. Daniel - Simmons & Company International, Research Division Scott Gruber - Sanford C. Bernstein & Co., LLC., Research Division J. Marshall Adkins - Raymond James & Associates, Inc., Research Division Kevin Simpson - Miller Tabak + Co., LLC, Research Division

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Nabors Industries' Third Quarter 2011 Earnings Conference Call. [Operator Instructions] This conference is being recorded today, Wednesday, October 26, 2011. I would now like to turn the conference over to Mr. Dennis Smith, Director of Corporate Development. Please go ahead, sir. Dennis A. Smith: Thank you, Alicia. And good morning, everyone, and thank you for joining us this morning. In addition to myself, Gene is here and will give 20, 30 minutes of prepared remarks, and by which we'll follow with a question-and-answer session and try and wrap up in 1 hour or so. Tony Petrello, our President and Chief Operating Officer is also here; as is Laura Doerre, our General Counsel; Clark Wood, our Principal Accounting Officer. And I think everyone of our unit heads is here at the table with us as well this morning. Well, I just want to remind everybody that we're going to be discussing not only quarter results, but how we see our best estimates and how we see the near term and longer term going forward. And of course, those constitute forward-looking statements as defined by the SEC and are subject to a lot of risks and uncertainties going forward. And I would encourage you to refer to our filings for identifications of those factors. And with that, I will turn it over to Gene to go ahead and get started. Eugene M. Isenberg: Thanks. Again, welcome, everybody, to the conference call for the third quarter of 2011. I want to thank everybody for participating again. Thank you again for participating this morning. As usual, we have posted to the Nabors' website a series of slides that contain details about the performance of the various segments of the company, and you may care to peruse through that as you listen to the call. Nabors had a very solid third quarter driven primarily by very good results in almost every one of our business units. Land Drilling in U.S. and Canada, Well-Servicing operations, Pressure Pumping, almost everything, Canrig, everything was performing on all 12 cylinders. These results more than offset the seasonal decline in Alaska and less than stellar performance in our International operations. The largest sequential increase in operating income came from the seasonal rebound in our Canadian operations, which improved by approximately $24 million. This was particularly noteworthy since the quarter got off to a slow start due to weather-related issues. This should serve as a good indicator of the performance we expect as we enter the winter drilling season. Results in our Pressure Pumping operations were up by more than $20-odd million in the quarter as weather issues and delays in equipment arrival and also gearing up with manpower to work the equipment before the cash flow actually incurred have more or less been incorporated in or behind us. We also are beginning to realize the impact of the increased capacity we have been deploying ever since this unit was acquired. Our financial position remains strong, and our access to low-cost capital remains good, as evidenced by the mid-quarter placement of $700 million in 10-year notes at just a little over 4.6%. The proceeds from this placement were applied to the money we had pulled down on our revolver. We are decommissioning a number of rigs which we have deemed to be no longer functional or economically viable for current market operations. All these, I think, are noise, and therefore, I wouldn't consider the economic impact as anything significant. However, we're putting down, retiring 100-odd rigs in the U.S. Half of this have really not even worked in recent memory, and only 7 of these were SCR rigs. In Well-Servicing, we are retiring 84 rigs and 60-odd trucks, some of which were never actively -- very actively marketing recently. Another 13 rigs are being retired in Nabors International, including one rig mat-supported jackup. The impact of all these is about $100 million of write-downs, which I suggest, again, we ignore. Which these write-downs were partially offset by about $40-plus million worth of noncash asset gains that accounting requires from acquisitions. Before I turn to the units, let me give you my overall thoughts on the big picture as it affects our sector, and in particular, our stock. While we recognize there is a risk of slowdown in customer spending, in other words, we can't control the macro-situation, even in spite of that, I remain very, very comfortable and confident even in the short term. This confidence stems from a number of term contracts we have in our U.S. Land Drilling fleet and term contracts in our Pressure Pumping operations and the fact that 75% of our current income stems from oil, which is deeper and less likely to be volatile for the foreseeable future. Let me turn to the business units. In the U.S.A., reporting operating income of $100 million, up from approximately $99 million in the previous quarter. I guess we're at a point where $100 million is really the new power for the quarter, and I know that's very good. And we're continually getting requests for built-for-purpose rigs, and we expect we will have a considerable number of new builds over the next 12 months. And the order flow is continual as we speak. Today, we have, I guess, 216 rigs working. And demand, as I suggested earlier, seems to be unabated for built-for-purpose rigs. Margins for the quarter were de facto up about $370 million a day, which is good and is a reflection of good cost control and robust market conditions. Going forward, we expect continued income growth fueled by these new deployments and also by frankly an increase in margins, which has continued. Some of the rigs that we put out earlier on terms were a little lower than in retrospect they needed to be. And as these contracts expire, they're being replaced at higher-margin contracts. The stellar performance of our new build rigs continues to impact favorably on our ability to grow this business. Superior Well Services results of $65 million, and our Pressure Pumping operations are up approximately $20-odd million over the prior quarter. And they're approaching the level, frankly, that we had expected after we acquired this unit. The timing, I think, in retrospect was pretty good, and our business there pretty good and continuing strong although it's pretty clear that we have continued to have 1-year payouts on new investment for various arms on this. We're trying to make hay while the sun shines and do what we can to convert into multiyear contracts, term contracts. Our third quarter results were primarily driven by increase in stage processes on Well-Servicing and by deployment of additional spreads. By the end of the quarter, we had 19 crews, large crews running, which has just under 700,000 of fracking hydraulic horsepower. We also have 13 term contracts in hand, which traditionally has been unusual in this business. And frankly, we expect to increase that number. We still have 6 or more spreads to deploy, the impact of which will provide significant sequential improvements during the next 3 quarters. And I think that will mitigate the effect of almost universal increase in supply because of the high margins and short payouts. Nabors Well-Servicing posted $23 million in operating figure, a significant sequential increase over -- just under $17 million we posted in the prior quarter. The performance was largely attributable to a significant increase in truck hours, rig hours and rig rates, essentially everything, although a substantial portion of the increase was observed by wage increases, particularly in Canada. But net-net, the bottom line improved. We are beginning to see the impact of incremental capacity in this unit. In the last 9 months, we deployed 1,000 new frac tanks, which we'll continue to deploy, most of which 90% of which are on term contracts. And we have brought into play 150 tanker terminations, which aren't on term. But when the frac tanks are on term, these are essentially tied to that term. This brings the frac tank fleet to approximately 3,800 units with 500 more on order and with options for additional units, and we're marketing these full speed ahead. We have added or will soon add 2,400 horsepower rigs in California, 4 already deployed. Six more will be deployed by year end and the rest in the first quarter or early next year. The fluid hauling truck fleet now stands at 835 units. New additions are, among other things, bringing the average age down to a little over 4 years. The outlook for this unit is, I'd say, excellent. The impact of the new capacity ramped up in the Bakken Shale. And today, it had a little of conventional and unconventional oil drilling that should result in essentially continual improvement in results. We're also seeing an increased amount of P&A work, and the current volume of oil drilling should presumably[ph] the mechanical pump market long term, which also obviously worked well for our business. Turning to Canada. We are experiencing an exceptionally strong recovery in Canada after the traditionally seasonal weak second quarter with operating income increasing to almost $22 million for a loss of $2.5 million in the preceding quarter. The outlook continues to be good despite July's being -- rig count being weak due to weather. The average rig count in the first quarter almost doubled, increasing from 22.5 rig years to 42 rig years. Case rig count stands at 46 rigs. The continuing increase in this unit's drilling rig count combined with an increase in work over rig hours should fuel strong third and fourth quarter results as we get into the peak winter seasons. There are no signs of slowdown in this market. In contrary, we are processing increase or additional rigs, a significant number of which will be directed to our rapidly developing Cardium field, which is increasingly a year-round play in Canada. We are also seeing surprisingly robust activities in the British Columbia shales. I guess in terms of -- there's been a project already announced in terms of [Indiscernible] conversion from gas to oil, as well as potential exploits of LNG, et cetera. But in any event, people are moving ahead with drilling and developing, making the reserves available there, which is a pleasant surprise. Nabors Offshore. Our U.S. operations rebounded from a $1.3 million loss in the second quarter to a little bit modest profit in the first quarter. But essentially, when we start drilling there, we'll do pretty well we're with more or less the figure around $40 million if we operate for a full year there. And if they permit drilling again in, let's say, just a half year, it will be half of that $20 million for the year, et cetera. In other words, $10 million a quarter that we operate there, approximately. We are also managing a significant deepwater project there, and we'll have number of progress payments. So we'll be showing profit there. And also, we will be developing a project that we will -- that project we'll sell and operate. By the operating revenue, there's an additional project we were working on which we will own and operate. Alaska. This unit posted modest results, $3 million, down seasonally from $8 million -- $5 million in the prior quarter. We expect the fourth quarter would be very similar although these results are obscure but promises to be fairly robust increase in the first quarter of 2012 as activity picks up during the winter exploration season. Nabors has already received commitments on total to drill approximately 85% of the season's exploratory and delineation wells which speaks pretty well to our market position and performance. Long term, this area offers, I think, really significant volumetric promise in terms of the lower end of how this proves[ph] that are available and kind of a superabundance in Alaska. International results in this unit were $29 million, down from $35.5 million in the prior quarter and below our previous forecast. Those results would be flat. This is largely attributable to ongoing delays, in Iraq particularly, and the delayed restarting of 2 jackups. Repairs of which required unexpected amounts of incremental steel. Other Operating Segments. This unit was up significantly, primarily to the growth in Canrig, which continues to do outstanding bottom line delivery work. The outlook for this is particularly good. Canrig [indiscernible] combines with very lucrative, or at least attractive, third-party equipment sales that's driving this unit. Our top drives in particularly are being well received in the market. Forward results should be posted by improving market share by Ryan and Peak ramp-up for yet another robust Alaskan season. Oil and Gas. We're doing extremely well. We don't report this really on our operating income basis. We develope Oil and Gas, and whether we produce the Oil and Gas or sell it is something we look at as -- we're indifferent -- which ever provides the highest return we'll go with. Traditionally, we have been selling this stuff. So it is an operating income, but it's essentially recurring, nonrecurring income. Non-recurring accountable wise, but from a pragmatic viewpoint, it's continuing and will continue to do well here. I guess we'll be 6 or 8 months away from another significant sale there. Well, I'm obviously aware that there are macro-circumstances that could adversely impact us particularly here at commodity prices, which are not easy to predict. Global drop in G&P. I think we're less vulnerable now than we have been for a long time. For example, prior to the market slowdown in 2008, annual operating income internationally was $500 million at an annual rate, and maturing contracts were set for renewal and some didn't renew. Today, it's essentially the other way around. We're at the lower end of the things, and the potential changes are very likely to be for the upside, particularly since International is largely oil driven and the oil market is stronger, it's longer, it's deeper, it's hedgible, et cetera. Actually, in 2008, 85% of the U.S. and Canada drilling was driven by gas. Today, surprisingly, over 2/3 is derived from drilling for oil and oil content. We also have a surprisingly significant degree of contract coverage, protecting U.S. land income projections, and also surprisingly, recently, for our Pressure Pumping operations. I feel pretty good about the factors that are essentially within our control, and my best guess is that the macro-circumstances won't interfere with our achieving our own objectives, but that's my comments. Dennis A. Smith: Operator, that wraps up the formal part of our presentation. We're ready to commence with the Q&A session, please.

[Operator Instructions] First question is from the line of Ole Slorer with Morgan Stanley. Ole H. Slorer - Morgan Stanley, Research Division: So Gene, I wonder whether you could just share some color just from the leading edge day rates, whether it's the stock market or whether it's for term charter. How this -- have this been developing as of late compared to what you have in your portfolio, for example, or the market and trends in general. Eugene M. Isenberg: Okay. I'll turn it to Joe for that.

Yes. Ole, the leading edge rates are in excess of 28 in the northern area. And in the southern area, it's about 24. 24 plus and some change. So we continue to see on the new builds some improvement in day rates on the new builds. And then also in the northern areas, some of our existing conventional rigs, we also have some very attractive rates. Again, this would be pretty much in the Bakken area. So it's -- I mean, they're still pretty strong. Ole H. Slorer - Morgan Stanley, Research Division: Joe, are these spot rates or term charter rates? Or is there no big difference between the 2?

In the northern area, we have a lot of those rigs that are contracted on the new builds and on the conventional news. There's not a large spread, maybe 5%, 10% spread between the 2 in the northern area. In the southern area, there's, again, not a large spread between the new AC and how long the conventional -- or not the conventional but some of the -- that Gene mentioned, some of our term contracts lowering in on the AC rigs. And we're pushing those rates up to those areas also. Ole H. Slorer - Morgan Stanley, Research Division: It sounds as if the new business that you're looking at on average is still at a higher level than the average of your backlog. Would that be fair?

Yes. Ole H. Slorer - Morgan Stanley, Research Division: And you've decided to maybe overdo to scrap a number of the older rigs and continue to embark on at least renewal projects. Can you talk a little bit about this? Why now? And is there a technology change going on in the U.S. market?

Yes. I think the emphasis was, we looked -- I think we have approximately 25 Canada rigs in the field. As Gene mentioned, of that number, only 7 were SCR. And so again, there's not a lot of upside for those specific rigs. So when the decision was made to retire that equipment and focus on the existing upgrades in technology, going out that with our Canrig AC top drive, we've got approximately 160 to 165 AC top drives in force in the field. So not only do you have the AC rig going on, you also have the AC top drive performance. We delivered a lot of product through that. Ole H. Slorer - Morgan Stanley, Research Division: Okay. I see. And just on the International side, maybe you could give us just a little bit of a roadmap to the 130, any specific geographic region that will take you there? I mean, that is above what you had running at the Peak in 2008, for example. Eugene M. Isenberg: Yes. Basically, the majority of rigs that we start up as a [indiscernible]. We have additional rigs going up in Algeria. We're starting to build additional rigs in India. So I mean, right now, there's 15, 16 rigs in the works. So as you can imagine, at this stage, we're fairly busy right now. Ole H. Slorer - Morgan Stanley, Research Division: And so how dependent is this on, let's say, normalization of North Africa, Libya, Algeria or a stabilization of conditions in Iraq? If that was the -- how negative of an effect would it be? Eugene M. Isenberg: They're not included in any of this. They would come as a bonus. If we would start pumping in, it would be a bonus. Ole H. Slorer - Morgan Stanley, Research Division: Okay. Just finally, a question on Pressure Pumping margins. You're still a tad below that of your peers although you're showing some good improvements. Is there room to improve this further as you become more efficient in our equipment? Or are you in an environment where cost pressures and logistics pressures in sand, et cetera, are neutralizing some of this potential to further improve? R. Clark Wood: I'll answer that. I think basically, those were due to stuff that in theory should be capitalized. You're adding people. You're getting equipment before you can fully deploy it. In other words, the expenditure of personnel and equipment is before the actual cash flow. And you take in -- as you expand, you take in that hickey even though in reality it's capital for the cash flows that's going to win sooner or later. Ole H. Slorer - Morgan Stanley, Research Division: Okay. So we should see continued improvement? R. Clark Wood: Yes, unless we continue to expand our capacity at a pretty large rate. Eugene M. Isenberg: Yes, I think, also, the long-term agreements of the new -- is the new business model for Superior. And the beauty of these is as you form an alliance with your customer, that you're going to gain a lot more efficiencies not only in increasing revenues for stage count, which is better utilization of people and resources. And also, it takes a while for our infrastructure to catch up as far as material handling. And we can see some efficiencies there that we will continue to gain over the timeframe. But as you can tell, we're pretty excited about that, and we do expect our efficiencies and our margins to improve. Ole H. Slorer - Morgan Stanley, Research Division: Sounds good. So Gene, it sounds like you can get close to $0.50 a quarter then without having to rely on the elusive international recovery? Eugene M. Isenberg: Yes. International was based on oil, and that's very strong. So sooner or later, if we live long enough.

The next question is from the line of Marshall Adkins with Raymond James. Marshall Adkins - Raymond James & Associates: That was good color on the Pressure Pumping average margins. Looks like pricing and margin trends still up. But on land rig, yes, leading edge is up. But help me understand the average. For the full fleet average, should we expect that to trend up? It looked like it was kind of if you pull out the onetime thing that was a little flat. And workover seemed to see a nice jump in pricing. A lot of that may be pass-through stuff. What is the outlook there for pricing and margins as well?

Well, again, drilling first. Marshall Adkins - Raymond James & Associates: Yes, average more so than leading edge?

Yes, again, I think, Marshall, when you pull out the lump sum, the actual margin was about $350 on a quarter-to-quarter basis. J. Marshall Adkins - Raymond James & Associates, Inc., Research Division: Improvement.

Yes. So we expect for the -- obviously, as rig demand occurs and continues, we have rollovers. As Gene mentioned, we had a good strong production in our term contracts. However, with that, they have been focused, and we've spaced these out as far as renewal. And we're looking in the next year somewhere in the neighborhood, in the next 12 months, of about 95 of these, coming in at exploration point sometime in that period. So there's going to be opportunities there to improve the margins. So we expect to see continued improvement on the margin line for the rigs on a go-forward basis, yes, to answer your question. Marshall Adkins - Raymond James & Associates: Terrific. Very, very helpful. And workovers have kind of been hit or miss. What do you see there? R. Clark Wood: Well, basically, we had fairly good increase quarter-over-quarter, roughly about 10% to 12% on our rig rates on daylight rates and some increase on our 24-hour rates. As Gene pointed out earlier in this conversation, some of that, obviously, was taken up by additional cost where we had to get wage increases, particularly in California. So some of that falls through the bottom line, obviously, so that was taken up by cost increases. But over the next foreseeable future, especially on the fluid side, we continue to see improvement there. So we expect at least to do something comfortable in the next quarter. Marshall Adkins - Raymond James & Associates: Terrific. Last question for me, Gene, you didn't talk a lot about EMP. Could give us an update on what's going on there, sales, acquisitions, et cetera? Eugene M. Isenberg: Yes. Well, it's going to be mostly sales. My guess is that 6 or 8 months from now, we'll have another batch of sales where we will be selling stuff in Columbia. The project there is what we do is we develop that on sort of a recurring, nonrecurring basis. And we don't worry about operating income or capital gains or whatever. And the bulk of the margins have been in recurring, nonrecurring events. In other words, we sell the stuff. And my guess is the next lot will be 6 to 9 months from now. But that operation is continuing good. The returns there I have not really calculated, but they're extraordinarily good.

The next question is from the line of Robin Shoemaker with Citigroup. Robin E. Shoemaker - Citigroup Inc, Research Division: Gene, I just wanted to ask about your comment about Pressure Pumping making hay while the sun shines, I think, is a good one. But in terms of your current exposure to where we see the declining activity, the dry gas basins, could you describe that and what you're -- are you moving some spreads from the dry gas basins currently? Eugene M. Isenberg: Yes. We were heavily focused on natural gas before. And in the last several quarters, we have shifted quite a few resources to the oily areas, which will be Rockies, Southwest Eagle Ford, Permian, and then even some of the liquid areas in the Northeast. And if you look at our percentage of horsepower, we're probably close to 70%, 75% in the liquid areas at this point. And that's where we had a lot of the success, again, aligning with our customer on these long-term agreements. So I think our outlook is oil looks strong. Natural gas looks like it's going to be under pressure for a little while. So we will continue to focus on the liquid areas. Robin E. Shoemaker - Citigroup Inc, Research Division: Right. So no difficulties moving out from one to the other? In some cases it's customer directed, it sounds like? Eugene M. Isenberg: That's correct, yes. Robin E. Shoemaker - Citigroup Inc, Research Division: Okay. And if I may ask you this, a lot of discussion and apparently some confusion from time to time about the spot pricing for Pressure Pumping fleets as opposed to term, and you've got some of both. Of course, it varies by basin, I understand. But you would you describe what the margin difference is typically in a given basin between spot and term pricing for Pressure Pumping Services? R. Clark Wood: As you said, it can vary by basin. I would say -- again, you look at some of the softer areas and you can see a 5%, 10% difference in discount which, again, coming off on the level where it was. And it's not where it was in '09, but it's definitely a lot better than some of the more aggressive areas. So we look at it as easy, pretty easy to move resources, and we'd rather shift it to some of the more active areas to take advantage of that. Robin E. Shoemaker - Citigroup Inc, Research Division: Okay. So the term is 5% to 10% below spot in a typical basin? R. Clark Wood: No, that's not quite what I was saying. I was saying that basically, good basin versus some of the softer basins, you might see a 5%, 10% difference in discounts. Most of our terms are in the aggressive basins, which would have, again, beyond the upper end of that pricing level at this point. Robin E. Shoemaker - Citigroup Inc, Research Division: Okay. Understood. And one further question on the International. In terms of new contract pricing on land rigs fit for purpose, is this -- how would you describe the level of competitiveness on bidding in international land contracts? And of course, that again varies by region, but are you seeing pricing improvement on contract rollovers in international land? Eugene M. Isenberg: What you see slowing -- I mean, utilization, as you know, is going up in the international market. So we just now see better rates when we [indiscernible] except on the offshore side, of course. On the offshore, we don't see anything yet happening for us.

The next question is from the line of Scott Gruber with Alliance Bernstein. Scott Gruber - Sanford C. Bernstein & Co., LLC., Research Division: I want to start with the outlook for Saudi. And just to clarify, you provided good color on the jackups, but are you also seeing a material push in the rates for the land rig reactivations? Eugene M. Isenberg: I mean, I can only tell you on the last awards we have seen on the gas rigs that we have seen higher rates than we've ever seen in the past in Saudi before. So the rate’s definitely gone up but also has some of the cost of goods. But proportionally, the rates are higher than we've ever seen before. Scott Gruber - Sanford C. Bernstein & Co., LLC., Research Division: But just on the reactivations timing of putting the rigs to work, I believe in your last call, you were forecasting getting up to over 30 rigs active in Saudi like 2Q of next year. Is that still achievable? Eugene M. Isenberg: Yes. We're racing the final stages of getting the last 9 rigs back to work. And based on their starting up, by the end of the year, beginning of next quarter, so second quarter is between all rigs. R. Clark Wood: Scott, some of the modifications we did on those land rigs, the customers started the rig up and then asked that we defer modify it subsequent shutdowns, so that's kind of what's moved a little bit of this to the right. Eugene M. Isenberg: And what we typically do with Aramco, we get started because they went up to get started. But then, we take a break and we move and we take a plant shutdown, what we call it, and some of those appear the first quarter as well. That's about 5 or 6 rigs. And... R. Clark Wood: But that's part of the recent rescheduling of the timeline. Eugene M. Isenberg: Yes. But Q1 -- I mean, the truth of the fact is Saudi is maybe maximum utilization. Scott Gruber - Sanford C. Bernstein & Co., LLC., Research Division: Okay. Great. And then just on Saudi in general, is there any sense -- it doesn't sound like you've based upon your previous response. Was there any sense that they're starting to drag their feet a bit on oil-directed investment given the macro-uncertainty? Eugene M. Isenberg: I don't think so. I think that they have a very balanced -- my impression is they have a balanced portfolio between gas exploration and oil. We have rigs working in all the areas, so I don't see either area being deferred. Scott Gruber - Sanford C. Bernstein & Co., LLC., Research Division: Okay. And then a final question on Pumping. Beyond these 6 additional spreads due out early next year, how are you thinking about investing in Pumping the next year? Prices remain very healthy, obviously well above the level you need to justify the investment from a return perspective. But assuming we do see some slight moderation in pricing next year, do you continue to add at the same pace to try to keep or take some share? Obviously you're moving into Canada. Or do you moderate the pace of investment some, if prices moderate some? Just can you provide some color on how you're thinking about it strategically? Eugene M. Isenberg: Go ahead. R. Clark Wood: We're obviously very encouraged with the long-term contract success that we've had so far. And... Eugene M. Isenberg: At least term. R. Clark Wood: Term, yes. And we feel like, again, this is something that we can continue to add to and improve on. With that, we expect to continue to keep adding horsepower. We haven't firmed up our budget for 2012 at this point, but we can still see opportunities out there where we continue to add to the fleet, not only here but also in Canada. Eugene M. Isenberg: The returns on capital are still higher than are going to persist with the area. I mean, get your money back in a year, a year and a half. And that means it's not going to last forever, and that means you got to do what you can while you can. And what that means is emphasize like crazy multiyear deals where you have at least 2 years plus an incumbent's position on the period beyond that, which we're doing.

The next question is from the line of Jeff Tillery with Tudor Pickering and Holt. Jeff Tillery - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: I was hoping you can provide a little color on Canada, just where you stand from the capacity utilization standpoint. Is Q4 and Q1 essentially going to be fully up, kind of everything worked out working and just level of customer interest in new builds out there? Eugene M. Isenberg: Canada is surprisingly strong. We're also getting essentially built-for-purpose or new build requirements and there are more areas moving into a 360-day year compared to what is traditional up here. So it's strong. It's surprisingly strong. And I think our fleet is bigger than average, which is what the market is now requiring. So I think we're doing well there. And I have the distinct impression that we're doing better than our market position in expansion. So up there, it all looks pretty good. Jeff Tillery - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: Are the returns on new builds up there comparable to what you're getting in the U.S.? Eugene M. Isenberg: I think so. I think the problem had been less than a 365-day year than traditional up there, and that's moving in the right direction. Jeff Tillery - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: Okay. And then with the U.S. assets written off and being scrapped, can you give color just on how many idle rigs you have in the U.S. right now? Eugene M. Isenberg: Joe?

It is approximately... Eugene M. Isenberg: Why don't you break it down to...

We're 349 rigs stacked. R. Clark Wood: Some of the rigs you're scrapping weren't even marketed, right?

That's correct. R. Clark Wood: How many of those? About half?

Yes. R. Clark Wood: In other words, of the total amount, half were essentially taken out of service a while ago, de facto.

So that's the answer, is what we currently have stacked at this point. Jeff Tillery - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: Okay. Great. And then last question, any color in CapEx for next year? Should we expect it to be flat, up or down versus 2011?

It's down compared to 2011. R. Clark Wood: It's down, Jeff. Eugene M. Isenberg: It starts down but it never stays. R. Clark Wood: I mean, if there are opportunities, you've got plenty of money to take advantage of them. That's...

The next question is from the line of John Daniel with Simmons & Company. John M. Daniel - Simmons & Company International, Research Division: Just 2 quick ones for me. You guys have mentioned expansion into Canada in the Pressure Pumping. Does that 850 5,000 horsepower estimate incorporate the equipment that would go into Canada? Eugene M. Isenberg: It does not at this point. John M. Daniel - Simmons & Company International, Research Division: How much would you look to take to Canada and... R. Clark Wood: The first 2 spreads are going to be approximately 40,000 horsepower that starts off towards the end of this year, in the fourth quarter, early first quarter. John M. Daniel - Simmons & Company International, Research Division: And is that 40,000 per spread? Or are these 225? R. Clark Wood: No, 20 per spread. John M. Daniel - Simmons & Company International, Research Division: 20 per spread. Okay. All right. Great. And then on the Well-Servicing, I don't know if you said this, I apologize if you did, but what's the marketed Well Service rig count today? And I think there's a statement made by Steve that with respect to pricing, that's something comparable in the next quarter. I want make sure that was -- he was referring to pricing up another 8% to 10% in Q4 versus Q3, if I heard that correctly. Eugene M. Isenberg: That was Larry, but... John M. Daniel - Simmons & Company International, Research Division: Sorry, I apologize. Eugene M. Isenberg: Yes, John. Basically, the marketed -- the number of units that we've marketed is somewhere around about 470, 480. And we're -- as Gene has pointed out, we've written off a number of those rigs. But those rigs, again, were rigs that were really had never seen daylight for some period of time. And my comment on the fourth quarter was we expect to see a comparable revenue quarter as Q3.

The next question is from the line of Geoff Kieburtz with Weeden & Co. Geoff Kieburtz - Weeden & Co., LP, Research Division: Are we done with the decommissioning? R. Clark Wood: As far as the timing of the rigs? So we think... Geoff Kieburtz - Weeden & Co., LP, Research Division: Yes. R. Clark Wood: Yes. Geoff Kieburtz - Weeden & Co., LP, Research Division: Sorry, we're finished with the decommissioning? Eugene M. Isenberg: For now. Over time, there is likely to be more as we go. There's still some, but it's good for right now. Geoff Kieburtz - Weeden & Co., LP, Research Division: All right. But kind of for the foreseeable like next year or so? Or is this kind of -- are we in the midst of a calling of the fleet? R. Clark Wood: Yes. No, that's right. Geoff Kieburtz - Weeden & Co., LP, Research Division: Okay. And on the Pressure Pumping, do you have basins where you have frac equipment both on spot and on term contract? R. Clark Wood: We do at this point. And again, some of the more active basins. We have combination of both. And... Geoff Kieburtz - Weeden & Co., LP, Research Division: That's what I meant. Single basin where we could make some sort of calibration of the difference in pricing that is associated with the term contract versus a spot contract, you're sort of normalizing for the basin variations? R. Clark Wood: Yes. We have combination of both in some of the basins. Again, our focus is us to shift more to long-term agreements. But at this point, we have a combination of spot and contracts in some of those basins. Geoff Kieburtz - Weeden & Co., LP, Research Division: And when you look at that, what's kind of the ballpark difference in pricing per stage? R. Clark Wood: At this point, yes. Again, it's the more active areas. And we're probably not seeing much of a shift at this point. Again, we expect that we could see a little more spread going into the future. But at this point, in the hotspot, it's pretty consistent. Geoff Kieburtz - Weeden & Co., LP, Research Division: Okay. So no real pricing difference, term versus spot, at this juncture? R. Clark Wood: On the crews that we're working, that's correct. Geoff Kieburtz - Weeden & Co., LP, Research Division: And what kind of difference do you see in the utilization between a spot crew and a term crew? R. Clark Wood: You probably see maybe 25% less on the spot crew, and you just get those gap weeks where you finish up one project, plan on moving on the next project and maybe do some timing issues as far as going on the agreement. There's definitely -- you kind of get into a pattern where you're more efficient and can really plan ahead. Everything's kind of laid out. So usually, the spot's a little more multi-customer, and you'll have few gaps in there. It's probably 25% less. Geoff Kieburtz - Weeden & Co., LP, Research Division: And roughly, what percentage of the currently deployed capacity is on a 24/7 schedule? R. Clark Wood: It's about half the crew at this point. Part of the crews in the future, we expect to move up to 24-hour. Some of the basins will be -- there'll probably be more vertical wells, more, again, kind of daylight work. But we do see, at this point, about half moving up a little bit in the future. Dennis A. Smith: Operator, I think we're running up against our time constraints. We'll just entertain one more question, please.

Yes, sir. Last question is from the line of Kevin Simpson with Miller Tabak. Kevin Simpson - Miller Tabak + Co., LLC, Research Division: I guess the question, Gene, is for you, Gene. And so on kind of cash, kind of generation or use going forward, if the company continues to be in net consumer of cash and it kind of speaks to the budget question for next year, at this point, should investors just not see that as a priority of management to kind of begin to generate cash and bring the net debt down? Or in the hierarchy of what looks like cash flow's going to be pretty strong next year and well protected, are you going to -- do you see kind of putting a higher bar for some of the capital projects, especially in overseas and maybe looking to generate more cash? Eugene M. Isenberg: Frankly, I think I've always thought of the project -- good projects to be the cash resource. In my career, my whole career, it's never been a problem to get money for a good project. The problem has always been to get good projects, and I still feel that way. We have access to capital like crazy at surprisingly low rates, and I don't really worry about the debt ratio or anything like that. What I worry about is good projects with good payouts, and we haven't had a problem financing good projects. And I doubt that we ever will, depending on of course, our disciplined definition of a good project. Kevin Simpson - Miller Tabak + Co., LLC, Research Division: Okay. I guess the only -- I guess the one thing missing in that equation is that maybe because of the level of the debt you have, the ability to take advantage of the market's negative swings like we've seen and with the stock down so much, the flexibility to buy in shares is probably more -- not all that great relative to what it could and what it had been in the past. R. Clark Wood: Yes. But I don't think that's a -- it is a little bit of function of debt, but there are other constraints limiting how much of your shares you can buy back and maintain your credit rating kind of thing. Kevin Simpson - Miller Tabak + Co., LLC, Research Division: So it's not a question of projects versus shares, it's really other issues and -- not any different than it has been in the past, essentially? Eugene M. Isenberg: I would say that's exactly right. And I'd say we infinitely prefer to have a good return on incremental capital deployed than buying back shares. Eugene M. Isenberg: Alicia, I think with that, we'll end the call here. Thank you, ladies and gentlemen, for participating.

Ladies and gentlemen, that does conclude the conference call. You may now disconnect, and thank you for your participation.