Question-and-Answer Session
Operator
(Operator instructions) Our first question will come from Brad Handler with Credit Suisse.
Brad Handler – Credit Suisse
Thanks. Good morning.
Bill Stewart
Good morning.
Jeff Smith
Good morning.
Brad Handler – Credit Suisse
Thank you, by the way, for the very thorough color on the guidance. I appreciated that very much. I’m sure others did too. Can you speak a little more to some of the trends that I know there’s a lot of conversation about with respect to the kind of the service intensity mix rising, and how that is an essential offset to recount declines. We think about the Haynesville and some of the other developing shale place. How are you guys thinking about that, maybe specifically, you can address capacity moves into the Haynesville and some of these other places in place now? So how that affects your revenues for the current fiscal quarter one versus what you had last quarter?
Bill Stewart
Well, for the first fiscal quarter one, we’ve seen very minimum activity reduction occurring, so. The envisioned, any adjustment in capacity whatsoever, these – you may see some shifting of facet over time out of some of the regions that are more mature, and to some of the regions such as the Haynesville, Lafayette Ville, Marcellus place where there are some expensive leases in place that need to drilled to maintain. And the potential for production is quite significant. But that’s going to play out, if in fact it does, beyond this current fiscal Q1.
Brad Handler – Credit Suisse
Could you speak – let me pull back then, more broadly, maybe thinking fiscal ’09 versus fiscal ’08, just how do you see that, some of the service intensity trends playing out? How important a mitigating factor is it likely to prove to be relative to potential recount reduction?
Jeff Smith
You know that’s a – Well, I mean it’s fairly clear that these gas shale areas are more service intensive. And speaking to our primary product lines in those areas, from a fracturing standpoint, they’re quite a bit more intensive. And even the unconventional type gas that we’ve been developing in North America for the last 15 or 20 years.
And they’re not all the same. They Haynesville probably would be in the most service intensive. And it’s a result of the depth of the formation and the multiple zones that are being completed in those wells. I think what we don’t know at this point is exactly how operators are going to be moving their budgets around. And as Bill said, we think if there are going to be some of our customers that continue with their activity plans in the Haynesville because of their need to hold on the leases. But that’s really not perfectly clear to us.
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