Gary Love – VP, Finance and CFO Bill Buckley – President and CEO

Burt Powell – BMO Capital Markets Sarah Helppi – Cormark Securities Scott Treadwell – Macquarie Capital Markets Dana Benner – Thomas Weisel Partners Roger Serin – TD Securities

Thank you Sarah, thank you very much, and good morning. Today’s conference call includes forward-looking statements that involve estimates, judgments, risks and uncertainties that may cause actual results to differ materially from those projected.

The uncertainties include among other things economic conditions, levels of drilling and pipeline activity, environmental and regulatory risk, liability claims, exchange rate fluctuations, political risk, and raw material crisis. Further information on risks that could affect the company can be found in ShawCor’s 2009 Annual Report and Annual Information Form, copies of which are available on SEDAR at www.sedar.com and it may also be found on the company’s Web site.

I will now turn the call over to Bill Buckley, ShawCor’s CEO.

Thank you Gary, and thank you ladies and gentlemen for participating in this morning’s conference call. On Friday, we released our first quarter 2010 financial results.

In the first quarter, revenue reached $225 million, this was 27% below the prior year, and reflects lower pipeline project activity. This resulted in a rather disappointed $0.14 per share in EPS in the quarter.

These results overshadow the improvement in our smaller Petrochemical and Industrial segment, which reported improved revenue and operating income on both year over year and sequential basis as a result of improving demand in industrial construction, automotive, and communications market. We expect the revenue and earnings will strengthen in the second half of 2010.

In the third quarter the company will commence production on the previously announced $185 million Papua New Guinea project as well as the $42 million Epic Energy project. In addition, in April, we received a letter of intent for the $93 million Total Laggan project, which will go into production in the fourth quarter of this year at our Leith, Scotland facility.

This latter project significantly adds to the backlog, which was negatively impacted during 2009 by effects of a global financial crisis, which delayed some major project awards. I will now ask Gary Love, our CFO, for more detail in the first quarter 2010 financial results.

Thanks Bill. As Bill noted, the first quarter earnings were $0.14 per share, down from $0.45 in the first quarter of 2009.

The main factor in the weak earnings performance was the revenue decline. At only $225 million, revenue was down 27% from the first quarter of the prior year, revenue weakness was all attributable to the pipeline segment with revenue down $85 million in that segment from the prior year.

This was due to weakness in the North American markets most exposed to well completions as well as lower project activity in Europe and the Middle East. In contrast, Asia Pacific recorded a small increase in revenue on a year-over-year basis.

At this low level of revenue, the significant under utilization of plant capacity and under absorption of fixed cost had a very negative effect on operating margins with the pipeline segment operating margin declining by almost 10 percentage points to 10.3%. The Petrochemical and Industrial segment, which saw a modest improvement in market conditions, recorded a 19% year-over-year increase in revenue and an operating margin at 9.7%, a level that was significantly better than any of the quarters in 2009.

In addition to the pipeline market weakness, exchange rate fluctuations were also a negative factor in the first quarter revenue and operating income versus the prior year. The effect of the 20% strengthening of the Canadian dollar versus the US dollar on the translation of foreign operations for Canadian dollar reporting had a negative impact on revenue of $26 million, a negative impact on operating income of $5.3 million versus the first quarter of 2009.

In the first quarter 2010, amortization at $13.4 million was reduced from the prior year with the decline due to both exchange translation, and the impact of the reduction in capital expenditures in 2009 compared to the levels that had prevailed in prior years. The other important factor in the first quarter results was the effective tax rate, which at 35.5% was higher than our expected rate of 31%.

This was a result of losses in the Middle East that do not generate an accounting tax benefit. Also affecting the tax rate was an increase in tax reserves relating to matters under dispute with certain foreign tax jurisdictions.

In the absence of these two items, the effective rate in the quarter would have been below 30%. Turning to cash flows for the first quarter, I would note the fact that working capital continued to decline in the net amount of $2.5 million.

We have now seen working capital reduce by almost $100 million over the past two quarters in line with the reduction in business activity levels. Must be recognized that we will see a significant re-investment in working capital as revenue accelerates in the second-half of 2010.

The other significant cash flows in the first quarter were capital expenditures of $11.3 million, a level that compared with $14.1 million a year ago. Capital expenditures were mainly focused on our pipe coating operations with the two main activities being the refurbishment of a concrete weight coating facility that has now been installed in Russia, and capital spending to prepare for the launch of the Epic and PNG projects in our facilities in Australia, Indonesia, and Malaysia.

Bill will now provide you his final comments on strategic developments underway at ShawCor.

Thanks Gary. We continued to make excellent progress on a number of key strategic initiatives and one of the most important is the commercialization of our new Thermotite Ultra patented offshore pipeline installation system.

This product family will meet the needs of our clients for their ultra deep water projects as well as offering significant advantages in shallower applications. We are preparing for the first commercial production of this system and expect to have coated pipe installed in the Gulf of Mexico by the end of the summer.

And I am very pleased to tell you that the Thermotite Ultra product was selected as a spotlight on new technology award winner at this year’s Offshore Technology Conference in Houston, Texas. The conference was held last week.

We believe that Ultra is a breakthrough project and is gratifying to see that the significant potential of this product is being recognized by our industry. To step up our efforts in deep water installation technology, we have commenced the construction of a new state of the art subsea testing facility and this will be located at our research centre in Toronto.

At the heart of this new facility will be a Simulated Service Vessel or SSV, capable of testing pipe coating and the associated joint protection systems to simulated water depths of up to 3000 metres. Clients require extensive qualification testing to prove out coating systems to be used on their multi-billion dollar projects and our testing facility will be operational in the second quarter of 2011 and will be unique in terms of its capabilities.

Also strategically important is our joint venture in Russia that will begin production by the end of the second quarter. It will be producing concrete weight coatings for one of the planned 48-inch diameter 90-kilometer pipeline crossing across Baydaratskaya Bay to the Yamal Peninsula.

The management and production team for the project is in place now, and equipment is being installed on site. As we look forward, international bidding activity is quite active.

We clearly have the potential to add to our backlog as 2010 progresses. This in combination with the projects already included in our backlog should result in both revenue and operating income strengthening in the second half of the year.

And with that, I will turn it back to the operator for questions. Operator?

Thanks. Gary, can you just comment what is (inaudible) utilization rate in the quarter compared to first quarter last year and the fourth quarter?

Burt sure, I guess I will speak to that in perhaps a more of a qualitative sense because we have not found it meaningful to speak to some kind of overall consolidated utilization level but if we take a look at this quarter versus first quarter of 2009, the key differences would be in Europe, Middle East, and North America. Taking North America first, small diameter facilities were probably slightly below where they were a year ago, and that is a level of utilization that is quite low by recent historical standards.

As you know, our small diameter pipe coating business probably reached its highest levels of utilization in 2007, came off modestly in 2008 and then came off significantly in 2009, and has stayed at that low level through first quarter of 2010. In terms of large diameter plants in North America, our big facility in China, utilization was comparable to the prior year.

In first quarter of 2009, we were running the Enbridge Alberta Clipper project, and in the first quarter of 2010, we were running the TCPL Cushing Extension project that facility will remain well utilized through 2010. We will complete Cushing extension but then will roll right into Keystone XL but the large diameter facility where we did see a much lower level of utilization was our Camrose facility, and both compared to the fourth quarter and to the first quarter of 2009 that will change as we get into the summer of 2010 when Camrose will also commence production of Keystone XL.

So that is one area where we do see in Canada an improved utilization situation coming up, but as I say not until the summer when we launch Keystone XL. In terms of the US, Pearland [ph] had lower levels of utilization in the first quarter of 2010 versus both Q4 and Q1 of ’09.

In terms of Europe, a big change there, in the fourth quarter of 2009, we were running the Skarv project in Europe, and we had very low utilization at our European facilities, both our installation facility in Norway, and our Leith, Scotland, anti-corrosion and concrete weight facility in Leith, Scotland. So that was one area of very weak utilization in Q1 2010.

In terms of Asia Pacific, on balance, lower utilization in the region both compared to the fourth quarter of 2009, and first quarter of 2009, slightly higher in Indonesia but lower in Malaysia, and again that will change as we move into the summer launching both Epic and Papua New Guinea.

Okay if I look at the operating margin in the quarter, in the press release you talk under-absorbed cost, under-absorbed cost, is there anything in there related to project start-ups just in terms of timing where you had stuff complete, you have got the cost against, you know there is no revenue to put it against, I am just trying to reference the delays you mentioned in your block 31, block 18, is that having an impact here?

Yes, it is because we have got – those two projects are for our installation facility in Norway and we had very low revenue. So you have got all the fixed cost and virtually no revenue and for the short timeframe involved, it is not practical to – you just have to absorb the labor cost and other fixed costs, you cannot defray it.

If we have facilities with longer duration down times, and we have done this in the past successfully, we will implement mothballing [ph] strategies, but that is clearly not the case with respect to either Leith or Orkanger, Norway because both are set to ramp up volume very, very soon. So you get a quarter like the first quarter where you have basically just got the cost and there is not a whole lot you can do about it.

Okay and just lastly, the G&A in the quarter seemed pretty high relative to where we were in the fourth quarter and I guess given the volumes, is there anything, outside of FX, is there anything else that work there?

Well G&A was basically in line with the prior year; I think it was virtually unchanged from the prior year, down from the fourth quarter. We did note in our discussion of corporate expenses, we did note that we had compared to the fourth quarter, we had some favorable adjustments to management compensation in the fourth quarter.

So that did help the fourth quarter, so that is a negative in the first quarter of 2010 versus the fourth quarter. The other thing, we have launched a new management long-term incentive program, and so we incurred probably half a million dollars of expense in the first quarter that was not in either the fourth quarter or first quarter of 2009, and then lastly, we have had a pick up in professional fees related to some corporate development and things that we have been working on, you know that is life, we expense them as they are incurred and they were a factor in the first quarter.

Okay, thanks very much.

You are welcome.

Good morning.

Good morning.

Just treading on the revenue line, I am wondering if you can put some numbers around the Angola projects that were delayed in the quarter?

Yes, both projects are reasonably significant; I am going to say off the top of the mind, somewhere in the $15 million to $20 million range each, again, I am going by memory here. So you will have to – they are in that order of a magnitude.

Sorry and that is the dollar impact to the quarter or the total value of –

No, that is the total value of the project but they will run over a couple of quarters.

Okay and in terms of the Laggan project, if this is finalized, how many quarters would you expect to be working on it?

I think that is Q4 2010 through Q4 2011 give or take a few weeks here or there. We will start with the 18-inch pipe, and then at some point in 2011, we would switch to the I think it is 30-inch or 32-inch pipe, whatever the larger diameter pipe is.

Okay and then just lastly, trying to get a handle on what to expect for Q2 in terms of the margins, obviously if you are picking up the Angola work you would expect to see better absorption but if you can maybe talk about your near-term expectations or the margins?

We would hope for an improvement. Clearly, the margins we saw in the first quarter were very low by – you would have to have – there has been a couple of quarters in recent years where we have had margins in that level, second quarter 2008 had margins at that level, I am talking now in the pipeline segment that quarter was marred by some significant project launch costs and in fact new facility launch cost.

So not really comparable – you have got to go all the way back to 2005 to see comparable revenue levels and comparable margins and I do not see that in our situation going forward. So hopefully, we have reached the cyclical low both in terms of revenue and margins.

Second quarter is going to continue to suffer from low utilization in certain areas until we get some of those bigger projects going in the summer.

Okay and if I could have just one more question, if you look out to what is planned for the second-half of this year and into 2011, is it reasonable to expect that we can see margins get back to the levels that we saw them in the latter part of last year?

Yes.

That is great, thank you.

Thanks, good morning guys.

Good morning.

Really just wanted to kind of look forward a little bit given the recent events in the Gulf of Mexico, any color from your customers or sort of internally how you think that is going to affect either bid processes or regulatory hurdles and things like that going forward in any deep water projects you have got going on?

It is still very early days of course, we were just at the OTC conference and much of the conversation down there was about the tragedy in the Gulf. First, we acknowledge that there has been a – it is a tragedy, it is a human tragedy and it is an environmental tragedy, I believe that it will lead to more regulation.

I believe it will probably lead to some curtailment of supply. I do not think it is going to impact demand, it is also that it could impact sources of supply being a little more remote could impact price of the commodity being a little higher.

For certain in our business, there is going to be – we mentioned our new SSV test facility that we are putting in place, testing requirements will probably become more stringent. Companies that have the quality record and that have the engineering capability are probably going to benefit from this.

Certain companies will probably fall off the quality and technology curve as a result of this. Those are some of the trends that we expect but as I say it is still early days and it is a tragedy, it should not have happened.

Yes, I agree with that, so just to confirm, you have not seen anything immediate [ph] from your customers putting the brakes on anything that you would consider sort of unrealistic or like I said immediate?

No, not at all. As a matter of fact, projects that are close in that we would be most concerned about and that we have inquired about appear to be proceeding as planned.

So I think any sort of regulation or controls are probably going to impact projects in the medium term rather than the short term.

Okay, thanks guys.

Thanks.

Thanks, good morning guys.

Good morning.

I wanted to I guess come back to the central issue in the quarter which is, as you put it, the under absorption of your fixed cost structure, and as an example, if I look back, I was looking in my model back for sort of a similar reference quarter, and I go back three years to the first quarter of ’07 where if we look at the pipeline segment, revenues were not all that different, a little bit less three years ago and yet margins this quarter in this segment were roughly 10% whereas they were 13.5% three years ago, and I know that lots have changed, and business mix got changed and forex, etc, etc, but I guess the question that I have is given that you have made very good progress in cutting your other costs out of the business rationalizing, etc, maybe help us understand what type of margin leverage – what is the earnings leverage ultimately in the business model assuming this healthy backlog and LOI status comes to pass and we may see a further ramp beyond the backlog.

First quarter 2007 was, if we just think about what was going on at that time, that was I think the absolute peak, the very, very top of the Western Canadian but for us our small diameter business in Western Canada and we had our small diameter plants running 24/7, we were pushed absolutely to the wall to produce enough products to satisfy the demand at the time, which seemed to be insatiable in terms of the wealth being drilled and gathering lines being put in place, and so from an absorption point of view that was, as I mentioned, the very best, and in contrast, the first quarter of 2010 is more reflective of the very worst in terms of those plants in Western Canada. That was a big factor.

We had also at the time we had some pretty volumes in Asia Pac and again less so this year. The margins move based on projects.

They move based on where the strength in revenue is, and we certainly indicated that we do see different margins in different parts of the world and that can have a big impact in any single quarter. So I think that that mix is a factor and definitely the utilization of some of our key plants also a big factor.

I cannot really speak with great optimism about improved utilization in our North American small diameter plants. I will believe it when I see it, it is certainly not there yet and it is certainly not in our backlog, so we cannot say it is coming.

I suppose it is definitely a possibility but do not want to leave anyone with the impression that it is a likely scenario at this point. But we do have some very good confidence about improved utilization in some of our larger diameter facilities, which I spoke of earlier on the Q&A session in the earlier question.

Right. Is it fair to say that given the increases in your manufacturing dates and preparation for greater level of business, maybe increased market share globally, etc that you feel you have got greater margin leverage than you would have had back then, if we think about where your business went from let us say Q1 ’07 as a starting point to where it got to, would you have more margin leverage assuming that this is on Russia business hits?

I think our competitive positions changed that is probably the more relevant factor, and we will see how that plays out in the future. Yes I think we have made the point I think in the past that we are well positioned in terms of where our plants are located.

We have added capacity, we have added quite a bit of capacity since 2007, 2006. We added that capacity in the parts of the world where we expect we will be increasingly busy in the future.

That coupled with what we would say is our strength and global competitive position and the corresponding perhaps one could say decline in the competitive position of some of our competitors, I think on balance would be the positive leverage factors (inaudible) in the future.

Okay, so I guess extending that forward and just more in the housekeeping category, have you seen any diminishment in your pricing power in any market, where there any other issues however minimal but material affecting the quarter?

No.

Could you give us a sense – you talked about the Gulf of Mexico, what would be your normalized exposure currently in the Gulf of Mexico thinking about what if for whatever reason we do not see just a diminishment in terms of the opportunities set in new areas but perhaps even ongoing drilling is curtailed in the Gulf of Mexico, what would be your exposure level?

Gulf of Mexico is a project market, the projects come in and go out and in the first quarter of 2010, I do not think we did any offshore work in the Gulf of Mexico. We have as you know our facility in Pearland and we have done a lot of insulation work in further Gulf project by project and then we have done some concrete weight coating work as well for the Gulf.

Right now we did not do any work, offshore work in the first quarter 2010. We do have some very significant opportunities in the near future.

We talked about (inaudible) that is a big project and one that is certainly very important to us now from a bid perspective and there are others. Following on that there is a series of projects as the deeper water fields start to be developed and then as well there is a I guess a transmission network expansion that Enbridge is planning also for the Gulf of Mexico to support some of those deeper developments Walker Ridge, Canoe Block [ph], etc.

So that is going to be an area we expect to do a lot of work in the future. Right now, it is at an ebb, but we expect it to be strong in the future.

Right, given that I seemed to be reasonably down in the queue, if you could just permit me a couple of more questions, small diameter market in the US, you talked about a pick up in Canada, although I think it is fair to say that there has been a ramp anywhere it has really been on the US side, so can we expect to see a more material positive impact coming out of the US small diameter market and perhaps that segues into or could it segue into a common on flex pipe from you as well?

Just to correct the impression, first quarter 2010 versus prior year US was basically unchanged, Canada was probably weaker.

Right, I am thinking sequentially.

And then compared to the fourth quarter US was marginal, not even $1 million higher versus the fourth quarter, Q1 2010 versus the fourth quarter. I am only speaking here of our pipe coating volumes but it is indicative of the whole company.

But I guess I am really looking for – I mean US drilling levels shot up in Q1 and are still a little higher.

We are not going to see the impact of that for a while.

Right but that is what I am asking, I am asking when can we expect to see a more positive impact on your US side?

I do not know. I said earlier, when we see their backlog we will start to believe it, and we will be happy to talk about it.

And just one final question, can you give us a sense for your level of optimism in terms of signing further large contracts particularly with an effect on 2011?

Dana, the major contracts that we are focused in on now are likely to come from the North West Shelf of Australia or the Gladstone Region of Australia those are LNG projects. We would expect now that major signings are going to be towards the end of this year and in the first half of next year.

Okay guys, thank you.

Yes.

Thanks, good morning, guys.

Good morning.

I am wondering, you just touched on a couple of the comments, you talked about major projects in North West Australia on the Shelf, have you got any sense of the impact of the proposed changes to the Australia tax or royalty regime?

Yes, we expect that they are going to slow down the project activity that was proposed, and that is the key word proposed in the Gladstone area. As you know there was five competing projects there, there probably is contracts in place today that would support two of those going ahead.

We think that in spite of the new tax regimes, those projects will go ahead, contracts will be either adjusted or to accommodate the tax, the demand is there, and I do not think we ever planned in our forecast that all five are going to go ahead as proposed.

I would add the offshore – the other coast line of Australia is not impacted by that and certainly the level of optimism that we are hearing from the impacts to Kal [ph] group related to excess and the Chevron group related to weak stone, they are still pushing very hard on those projects. It could be that those projects move forward more rapidly and that the Gladstone projects take a bit of a back seat that is a possible outcome.

But either one of the coasts is going to see a lot of activity over the next five years and we expect to participate in that.

Okay, you talked a little bit about confidence in seeing some larger diameter work show up. Does that confidence get you into Q2 or just sort of touching on your near term look, or is that pushed back more into the second half?

We have talked about the summer being – I guess June is in Q2 so there would be some impact on Q2 but definitely it is more of a third quarter story.

Okay that is if we get somewhere in Calgary I guess?

Well I was thinking – I am not making any forecast on the climate.

Maybe a couple of last things, you have got a growing cash, could you give us an update on some of the options other than share buybacks and obviously the increasing dividend in terms of other options and where you are in that?

We are pursuing I think a number of potential acquisitions that would be complementary to our pipeline business, would broaden our offerings in the pipeline segment, that remains the most important priority for the company, and we are going to keep pushing on that front.

Okay and just to go back to Dana’s question, when you looked at 2007 and then the pick up from the first quarter, you saw a very quick pick up in margins and you were hopeful that we are at the bottom but I am getting a sense from you that it is really going to be more like a second half ’08 in terms of margin recoveries than anything like 2009 which was much stronger. Is that a fair sense or am I just interpreting something into that?

From a third quarter 2008 rate through to the end of 2009, we had very strong margins, very strong revenues. We had a backlog going into – the backlog built up through 2007 and then into 2008, second quarter 2008 we had a backlog that sustained us for six quarters.

If you look at it, it peaked in the third quarter 2008 and that sustained us right through 2009 and generated tremendous revenues and tremendous margins. But then through 2009 that backlog eroded and it did because the world changed at the end of 2008.

First of all, you know this better than I, natural gas prices collapsed, activity in North America gas-related drilling activity collapsed, and we started to feel the impact of that later in 2009. Similar story with some of the major projects in other parts of the world, Europe, Middle East, the brakes were slammed on those projects in early 2009.

We were still working off a backlog that had been built up prior to that time and it sustained us through 2009 very well. Well, okay, we dealt the impact of the declining backlog first in the fourth quarter of 2009 but then very much so in the first quarter of 2010.

Well now the backlog is starting to change again, it is starting to rebuild and that is going to start to help us in the third quarter and then it is going to sustain us we believe for a considerable period of time.

Okay, that is the math we are doing too, I was just trying to get a sense of timing.

Yes.

Thanks guys.

Okay, very well.

Thank you operator. I would like to thank everyone for their participation today, and we look forward to talking to them again in the next quarter.