Question-and-Answer Session
Operator
(Operator Instructions) We will take our first question. It comes from Michael Hall with Stifel Nicolaus. Please go ahead, sir.
Michael Hall - Stifel Nicolaus
Just quickly on cost reductions, you mentioned you don't think costs can come in enough to kind of correct for the price decline. What are the stickiest parts of the cost equation in your view and maybe how much can cost declines kind of reset the break-even price the industry needs?
Marc Rowland
Sure. Well, my comments were directed, of course, to a price environment in the third and fourth quarters of '08, that built up to reflect a 1600 plus drilling count on gas side and over 200 on total rigs, when we were seeing prices in July that were in excess of $13 on NYMEX. Now with 350, that percentage reduction, of course, is much greater than the 35% to 45% or 50% that we're seeing across the service sector.
There is a lot of equipment out there but a lot of it is being laid down and coal stack particularly on drilling and on the fracture stimulation equipment side of things. Some equipment being stacked, though, doesn't reduce necessarily the operating cost of the rest of the equipment.
And until layoffs are seen and salary cost reductions actually of course diesel costs for all of our field operations including those of our service providers are down by about 50%, but it is just unlikely it is going to continue to go down further.
So putting it in the context of seeing prices decline 75% or 80% and seeing the ability probably for the service guys to get their costs down 50% or transferred into pricing down 50%, you see the gap. That is why my comment about $3.50 gas prices on NYMEX today with field prices much lower than that. It just doesn't yet reflect in the service costs what has happened more dramatically in the revenue side.
Now, we're going to continue to push our costs down, I mentioned steel prices coming down. There are some beliefs around our shop that steel prices will continue to come down some. But obviously there is a limit, with iron ore costs and transportation costs to get the steel out in the field as to what that can be.
Michael Hall - Stifel Nicolaus
And then, I am thinking about supply side of things, just industry-wide and in particular the backlog of completions and/or just kind of a backlog or of activity that is out there. Can you talk about Aubrey maybe how quickly you think that sort of backlog completion can come back on to kind of hamper declines of supply?
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