Question-and-Answer Session
Operator
(Operator Instructions) And the first question comes from James West - Barclays Capital.
James West - Barclays Capital
Hey Dave or Bobby, on the international land drilling business right now, I know there is still pricing pressure. Could you, I guess first kind of characterize the leading edge day rates where they stand versus day rates now, how much further they are down?
And then second, I know you guys have done a good job of cutting cost and squeezing suppliers. Are we in a situation where, where the rate may come down and touch the percent margin at least as flat or maybe even the margin percentage goes up the touch?
Robert L. Parker Jr.
Sure James, from it depends on area, but overall we've seen about a 10% downdraft in day rates in renewals and what we are focused on is really now to our OpEx about the similar amount.
So from a margin perspective, I think our margins will stay, stay flat hopefully on a forecasted basis going into the fourth quarter of 2009 into 2010.
James West - Barclays Capital
On the Rental-Tool business, as you see it now still lot of discounting in that market, as the discount will at least stabilize at this point or are you seeing a still increase in discounts?
Robert L. Parker Jr.
Well, we haven't seen any increase in discounts recently, but there has been a material shift in discounts over the last two quarters.
And so what I think is going to go is going to happen moving forward is those discounts are going to stay in place for a meaningful period of time until we see a fairly substantial increase up ticking activity in North America gas drilling.
James West - Barclays Capital
Still on the rental tools, how much of that business now is -- comes international market and I know part of the strategy here is to move into some international regions, could you maybe give us some color on the timing of setting up shops elsewhere?
Robert L. Parker Jr.
Yeah, we've got about 5% of our overall revenues generated in the international group. As I mentioned in the past there is four areas that we have targeted, that's Alaska, Middle East, Brazil, and Asia Pacific. We've done some due diligence on some of those areas and we're not at present, prepared to open up any stores in 2010.
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