Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Kurt Hallead - RBC Capital Markets.
Kurt Hallead - RBC Capital Markets
Andrew, I was wondering in your view how does this cycle compare to other cycles you’ve experienced in your career? Would you put this more closely aligned with the ’97 to ’99 period or more like the ’80 to ’86 period?
Andrew Gould
Actually I think it’s a bit different from both because the precipitous drop in the oil prices combined with the contraction of the general economy. So actually the biggest difference I see from both sort of the mid-80s and as well as ’97, ’98 is the speed with which everybody’s reacting. Our customers are reacting at a much faster pace than they probably did even in ’97, ’98 which was a very sharp cycle.
I mean my general comment is these cycles as I experience them are getting much sharper in their amplitude and shorter in their duration. Now of course that depends on the general economy. But I would say the big difference that I see so far is the speed with which everyone’s reacting.
Kurt Hallead - RBC Capital Markets
Just in the prior periods it always had taken longer for the international markets to adjust to the changes relative to North America and a lot of that has to do with long term contracts, but again on what you just said about your customers acting more quickly, do these contracts still provide that chance that the international markets could bleed lower and extend out into 2010? I don’t want you to get specific but just trying to get a general – I’m trying to handicap it myself, so I don’t know if we’re going to bleed lower like we did the last couple cycles or if you think ’09 is really the ultimate trough here.
Andrew Gould
I think the simple answer is I don’t know. I think that our customers they are not going to break contracts but they are going to pressure us to swap price for volume or price for duration or things like that. So where they have an opportunity they’re definitely going to act on price. But I don’t think that they’re going to break contracts.
Operator
Your next question comes from Charles Minervino - Goldman Sachs.
Charles Minervino - Goldman Sachs
Andrew, I was wondering if you could talk to us a little bit about your conversations with the national oil companies. I know they all probably have different goals and breakeven points on various projects, but if you could generally just talk about what you’re seeing from them. They’ve obviously accumulated a lot of cash over the last few years. How are you seeing them spending through this cycle?
- To read the full transcript on Seeking Alpha, click here »
