Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Richard Paget - Morgan Joseph.
Richard Paget - Morgan Joseph
I’m wondering if we can get a little more information about pricing on the mineral side. I know in some cases you had longer term contracts and I’m wondering if you’re renegotiating the pricing on some of those and then, with the bids going out now, how are they looking?
Andrew Schmitt
Well, that’s a big debate right now in terms of the current pricing we’re using to quote customers owned. My guess is, that probably our guys will probably try to move them up a little bit from here, because they’ve really been down about 10% to 15%; what do you Jerry?
Jerry Fanska
I think that’s right.
Andrew Schmitt
If you look at the activity decline in earnings Richard, you got about a 50% decline in revenue; were down about 77% where you see a combination of utilization and then typically the amount you see over and above the utilization is going to reflect the margin erosion there, offset somewhat by efficiency.
So I think we’ll try to push them up a little bit. It’ll certainly depend on the number of companies that call and what size programs they ask us to quote, but these prices are too low at this level. We’re not going to make a lot of money if we’re going to stay at these prices for an extended period of time.
Richard Paget - Morgan Joseph
So with your current cost structure, I mean sequential margin improvement, is pricing going to erode that further or this is kind of a good level to think about here?
Andrew Schmitt
I think this is a pretty good level to sit at. We’d like to move them up, but I don’t know that that’s possible at this point. If you look at the EBITDA margins in the mineral exploration business is 23%, it was 31% last year. So I wouldn’t bake anything into those numbers, given the fact that we don’t expect it to take off like a rocket next year.
Our Latin American affiliate prices are probably locked with the longer term contract. We tend to have shorter term in our wholly-owned contract, but I’m sure if the gas ?and have an opportunity to grow business for year? that’ll be the number they will given them.
Richard Paget - Morgan Joseph
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