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Although management believes the expectations reflected in these statements are reasonable, they can give no assurance that they will prove to be correct. These statements are subject to certain risks, uncertainties and assumptions which are described in this morning's earnings release and also in the most recent filings with the SEC. Should one or more of these risks materialize or should underlying assumptions prove incorrect, actual results may differ materially.Please also note that this conference call may contain certain references to non-GAAP measures. You can find reconciliations to the GAAP financial measures in Form 8-K as well as in this morning's news release. Now, I'd like to turn the call over to Stacy Locke, Pioneer President and CEO. Stacy? Stacy Locke Thank you Anne and good morning appreciate everybody joining the second quarter call. With me here in San Antonio on the call are Red West, our President of the Land Drilling Division; and Joe Eustace, President of the Production Services Division; and Lorne Phillips, our Chief Financial Officer. As you can see from the press release business was clearly back on track in the second quarter. We had strong results both from the drilling division and the production services division. In total revenues were up 36% to 117 million far better than our expectations. Operating margin as a percentage of revenue was up 6% to 29% again far better than our expectations. And EBITDA was up and locking 139% to 22 million for the quarter. And for the first time in our company's history we generated over 50% of our revenues from oil based activity. This has been one of our long term strategic goals beginning in about 2005 and I think it greatly reduces the company's dependency on any one commodity line. Now turning to the drilling division, we made quite a bit of progress on adapting our fleet for the shale activity that we have seen all across the country and securing those upgrades with term contracts.
By the end of August, 35 of our 71 drilling rigs of 29% will have installed top drives and be working at 100% utilization. In addition 31 rigs will be operating under term contracts. 31 of the 46 active rigs today were operating at 65% utilization today so 31 of our 65 active rigs or 66% of the fleet are now protected with term contracts.By the end of this month all rental top drives will have been released and 8 of the 35 rigs with top drives that have been upgraded are mechanical with average day rates in excess of 17,000 per day and 5 of those mechanical rigs are backed by term contracts as well. When you termed our region and take a look at our progress, going first to the Marcellus we now have 7 rigs contracted in the Marcellus the seventh rig is finalizing preparations it will be mobilizing at the end of august all 7 of these rigs are our 60 series trailer mounted fast moving rigs they have been very well received up there operating at 100% utilization 100% of those rigs are under term contracts and by the time the seventh rig arrives there we will have 100% of the rigs with skidding systems which as we talked in prior calls is a great advantage both us and the operator that keeps more of these operating days on drilling at the day rate as opposed to more days and less cumbersome during particularly the winter months when you have weather situations so we are very pleased about that. In Bakken we have got 8 rigs even our 2 shallow rigs are not utilized there so all 8 rigs most of the Bakken oriented rigs are our 50 series rigs which is the triple 750 hook load. We got one as a million down hook load mass rig. They are 100% utilized and they are 100% under term contracts so we are very pleased with the progress we have made there. Read the rest of this transcript for free on seekingalpha.com