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Information reported on this call speaks only as of today, February 16, 2012 and, therefore, you are advised that time sensitive information may no longer be accurate as of this time of any replay.Before we begin, let me remind you that certain statements made by management during this call may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and include known and unknown risks, uncertainties and other factors, many of which the company is unable to predict or control, that may cause the company's actual results or performance to differ materially from any future results or performance expressed or implied by those statements. These risks and uncertainties include the risk factors disclosed by the company from time to time in its filing with the SEC, including its annual report on Form 10-K and in the quarterly reports on Form 10-Q. Furthermore, as we start this call please refer to the statement regarding forward-looking statements incorporated in our press release issued yesterday, and please note that the contents of our conference call this morning are covered by those statements. I will now turn the call over to Brian Hanson. Brian Hanson Thanks, Jack, and good morning, everyone. First, I'd like to spend some time discussing the overall market and then I'll get more into specifics on our 2011 accomplishments. We covered some of this material in our December call, but I think it helps investors understand how we're thinking about our business both for 2012 and the longer term. Looking at commodity prices, we expect oil prices to remain in the current trading range of $80 to $100 per barrel for 2012. The world has approximately 2% spare capacity, which is extremely thin when considering the turmoil in North Africa, the Middle East and Iran. In addition, the aggregate natural decline of the large oil reserves around the world is approximately 10% and has been slowed to 5% to 6% thanks to new technologies designed to extend reservoir life. Reinvestment will need to increase just to offset the rate of actual decline without taking into account growth in emerging economies, such as India and China.
With oil production at approximately 85 million barrels per day, we are looking at the need to discover and bring online approximately 5 million additional barrels a day just to keep pace. And finally, when we consider the social cost to maintain stability in places like North Africa and the Middle East it appears that $80 per barrel is a required floor price, which has gone up approximately $20 per barrel over the last few years. Therefore, we're assuming that oil prices will remain at levels necessary to support continued frontier exploration in deep-water, the Arctic and other hard-to-reach places.Looking at natural gas, the precipitous drop in prices in North America over the last several quarters is clearly an issue that is likely to give pause in the near term to the way capital spending is allocated in North America. We're seeing this in most North American E&P earnings releases this past quarter. This could slow our data average sales of our North American ResSCANs this year as two of our three programs are concentrated in the Marcellus which is predominantly a gas play. The good news is, our GeoVentures business is a global portfolio so we should be well positioned to fill any softness in North American data library sales. For example, this year we have solid programs in both the equatorial margin offshore Brazil and anticipation of the next licensing round and are actively shooting a land program in Poland. In the Marine space, we expect seismic spending by all companies to increase 8% to 11% in 2012. The seismic fleet is projected to continue to grow approximately half a dozen vessels this year with four being high-end 3D. As the total number of active vessels has grown substantially over the years, our Marine group now enjoys a healthy and growing repair and replacement business which provides a stable revenue and earnings stream. Read the rest of this transcript for free on seekingalpha.com