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Parker Drilling Co. (PKD)

UBS Global Energy & Gas Conference Call

May 24, 2012 00:55 am ET


Kirk Brassfield - SVP & CFO


Angie Sedita - UBS


Angie Sedita - UBS

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Alright. Our next presenter is Parker Drilling and speaking today is Kirk Brassfield, Senior Vice President and CFO of Parker Drilling, a position he was named to in 2005. From 2001 to 2005 he served as Vice President of Finance and Accounting and prior to that the Principal Accounting Officer and Corporate Controller since 1998 at Parker. Prior to joining Parker, he served in Finance positions, a number of positions with MAPCO. With that I will turn to Kirk.

Kirk Brassfield

Well, thank you Angie and it's good to be back and good to be here at the UBS conference and definitely good to see you again. We will go through or -- I should have asked. Yeah, that way. In your handout please read through the forward-looking statement and keep in mind that what we say today is as of today and refer back to the 10-K and the 10-Qs and the other filings that have recently been issued. Just briefly divert and go through just business strategy, our operations, our financial performance and talk a little bit about Parker and then hopefully have some time to answer some questions.

We are built into five segments. This is the Rental Tool segment, the US Barge business, the US Drilling, International and Technical Services. I think our Rental Tool business as many of you maybe aware is primarily is our Quail Tool company which has been very successful. I will talk more about that as we go through the presentation. The Barge business we've owned yet since 1996, both the Barge and Quail were acquired the same year in 1996 and we have 13 rigs, 11 which were currently marketing that are on the Barge side. US drilling is a new segment that we put out there. That's going to be where our two Alaska rigs. We will go in when they get to work and also has one land rig in the United States. The international drilling, Parker has been there in the International business since the 1950s. So, we’re well versed in operating there internationally.

We’re located in around the world in really two groups, Eastern hemisphere and the Western hemisphere, Mexico, Columbia, Algeria, Kazakhstan and then the Asia-Pacific area. Then the technical services is our engineering group. The key behind the technical services is we provide our engineering expertise in building technical, very high-tech type rigs. Looking at those type of big projects where the oil company, our customer looks down the rig. It’s a big project, one of a kind type rig. And a rig typically that’s not one that Parker would own.

We go and provide the technical expertise. We help manage the construction side of the project and then what we look toward in this business, is do the O&M and manage the drilling aspects of that rig.

A little bit on just the strategic profile. You can see our three strategies there and really these three strategies that we build off our four pillars of what we say of been the best drilling service provider. And that safety, training, technology and performance. Safety obviously is very, very important. Very key to any drilling contractor, particularly important to Parker when you work around the world, you go out and bid on projects. If you don’t meet a very stringent safety requirements, you will not be allowed to bid on a project. As you can see, this is for a worldwide for all drillers, both onshore and offshore. The average is in red and as you can see from -- we consistently outperform the average and we run it below one on a TRIR rate, so this is the published rate by IADC. So as you notice in the last presentation, just focus on the US side and it was land drillers, but this is one that covers all drillers.

Training, in order to be say one of the safest drilling providers, you obviously have to training. We have facilities both in New Iberia and we also have facility in Alaska. Technology talk a little bit about the technology side of the business already we put a lot of focus on the bigger, the higher tech and drilling in more difficult locations. The picture you see is the two Alaska rigs, obviously self and close because you work in the Arctic conditions and as you can tell from this, everything will be under a warm environment and while we are looking at it, we’ll talk a little more about the Alaska rigs when we come to that page.

The other key thing, this is very important for Parker. We looked very hard and track our performance, we look at what our operator, our customer goes out and looks at a well and tracks where they think the performance should be. We follow up with the actual result of how the drilling and how the performance curve for that drilling, that well and then we sit down with the customer after every well, sit there and walk through how well we performed, where we missed. And it is the lessons learned for us but also really show because we've outperformed. We’ve got lot with our rigs in like the Barge market where that's not a custom practice and we've upgraded our rigs to the part where we can prove that we are drilling at a much more efficient rate than when our competitors are.

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