Since much of our remarks today will concern our expectations of future, they are subject to numerous risk factors as elaborated on in our 10-K and other filings. These comments constitute forward-looking statements within the meaning of the Securities Act of 1933. For such forward-looking statements are subject to certain risks and uncertainties as disclosed by Nabors from time to time in its filings with the Securities and Exchange Commission, as a result of these factors, we actually encourage you to look at those filings, and the results may materially differ from those that we think are going to develop.Now I will turn the call over to Tony to begin. Anthony G. Petrello Good morning. Welcome to the conference call for the second quarter. I'd like to thank everyone for participating. As Dennis said, we do have the slides posted, and I will be referring to them by page number. So before I get into the details, let me start with some macro comments, particularly those involving North America. First, let me say we would like to be cautiously optimistic about our overall outlook. But it is dependent upon a couple of factors that are not in our control or within our ability to predict, specifically commodity prices. The direction of domestic and global GDP, and there are problematic numbers out there that I'm sure you've all seen, will be a major determinant of these prices, along with the production decline rates and supply availability. Given the overall demand uncertainty and several real-time indicators we will mention, it is more prudent and very cautious and conservative over the near term. As you may recall in our fourth quarter earnings call last February, we expected a flattening to modestly declining U.S. land rig count in the second half, a moderation in the number of new build contract awards and the further deterioration of the spot market for pressure pumping. Many of those things have happened. This view was based on the lower gas -- natural gas price, leading to reduced customer cash flows and spending. In reality, the first quarter drop in gas prices caused an initial reaction that was largely offset by increased liquids-directed drilling. This gas-to-liquids offsetting continued throughout most of the second quarter. However, conditions became much worse towards the end of the second quarter as oil prices fell and the effects of declining NGL prices began to be felt.
As you can see on Slide 3, U.S. blended NGL prices are down 34% from the beginning of the year and 22% since April. This further erodes operators' cash flows and decreases drilling budgets. We see these same forces at work in Canada but not yet as impactful.The upper section of Slide 4 shows the Baker Hughes U.S. land rig count over recent cycles and, in the lower section, from its peak in mid-November to last week. Since the peak in November, we have seen a decline of 108 U.S. land rigs, 30 of which have occurred in just the last 2 weeks. This, coupled with recent customer conversations and competitive data points, support the lower end of our expectations. Let me make clear, we do not yet foresee a sharp downturn but rather a moderate drop in rig count exacerbated by competitors offering uncontracted, newly built and existing rigs at lower rates and shorter terms in order to secure work. This is similar to the situation that played out earlier in the year with regard to Pressure Pumping, but we expect the extent of land rig oversupply to be much less. Read the rest of this transcript for free on seekingalpha.com