Total Energy Services Inc.

Daniel Halyk – President and Chief Executive Officer Yulia Gorbach – Vice President-Finance and Chief Financial Officer

Dana Benner – AltaCorp Capital Scott Treadwell – TD Securities Jon Morrison – CIBC World Markets John Bereznicki – Canaccord Genuity Ian Gillies – FirstEnergy Mike Miller – BMO Capital Markets

Thank you. Good afternoon and welcome to Total Energy Services third quarter 2015 conference call.

Present with me this afternoon is Yulia Gorbach, Total's Vice President of Finance and CFO. We will review with you Total’s financial and operating highlights for the three months ended September 30, 2015, we will then provide an outlook for our business and open up the phone lines for any questions.

Yulia, please proceed.

Thank you, Dan. During the course of this conference call, information may be provided containing forward-looking information concerning Total’s projected operating results, anticipated capital expenditure trends and projected drilling activity in the oil and gas industry.

Actual events or results may differ materially from those reflected in Total’s forward-looking statements due to a number of risks, uncertainties and other factors affecting Total’s business and the oil and gas service industry in general. These risks, uncertainties and other factors are described under the heading Risk Factors and elsewhere in Total’s most recently filed annual information form and other documents filed with Canadian Provincial Securities Authorities that are available to the public at www.sedar.com.

Our discussions during this conference call are qualified with the reference to the notes to the financial highlights contained in the new releases issued earlier today. Unless otherwise indicated, all financial information in this conference call is presented in Canadian dollars.

Total's financial results for the three months ended September 30, 2015 reflects continued challenging North American Energy Services industry condition. Consolidated revenues for the third quarter of 2015 were $66.7 million, a 38% decrease from the third quarter of 2014.

Compression and process services division contributed 69% of 2015 third quarter revenue. Rentals and transportation services 24% and contract drilling services 7% as compared to relative contributions of 57%, 28% and 15% in 2014.

Revenue per spud to release operating day in our contract drilling division during the third was $15,801 and 19% decrease from $19,418 per day, realized during 2014, lower pricing was primary reason for this decrease. Divisional EBITDA was $1.2 million for the third quarter of 2015, compared to $4.4 million for 2014, with EBITDA margins remaining flat year-over-year due to cost management.

Within rental and transportation services division revenue per utilized piece of rental equipment for the third quarter of 2015 decreased 5% compared to the same period in 2014. The mix of rental equipment operating as well as relatively larger heavy truck fleet offset somewhat the impact of severe pricing pressure in this division.

Divisional EBITDA for the third quarter of 2015 was $4.2 million, or 28.7% of revenue compared to $11.9 million or 40% of revenue in 2014. Unlike our contract drilling division, this division has a relatively higher fixed cost structure that pressured margin during the periods of lower activity, but also provides significant earnings leverage on activity levels improved.

Third quarter revenue within our compression and process service division decreased 25% in the third quarter of 2015, compared to the prior year period. This division generated $7.4 million of third quarter EBITDA in 2015 compared to $9.7 million in 2014, EBITDA margins were relatively flat year-over-year in this division.

Consolidated gross margins for the third quarter of 2015 was 25% of revenue compared to 30% over the third quarter of 2014, this decline was due to our inability to fully offset price in decline with cost savings particularly within our rental and transportation services division, without compromising the quality of our equipment and services, as well our compression and process services division consecutive 69% of consolidated third quarter revenue in 2015 compared to 57% in 2014, as this division historically has lower gross margin than contract drilling services and rentals and transportation services division, that increased contribution negatively impacted consolidated gross margin. Consolidated cash flow before changes in non-cash working capital item was negative $0.1 million for the third quarter of 2015, as compared to $24.2 million in 2014, the decrease in cash flow was due to lower operating earnings and the payment of $10.2 million of income taxes during the third quarter of 2015, as compared to nominal income tax payments being made during the third quarter of 2014.

The increase in tax payments was due primarily to the timing of taxation of company’s limited partnership which has resulted in $12.7 million of cash taxes being paid during the first nine months of 2015 that relate to 2014 taxable income. Also included in income taxes paid during the third quarter of 2015 is $6.9 million that was remitted following the receipt of federal reassessment relating to Total’s 2009 conversion from an income trust to a corporate structure, this $6.9 million remittance represents the entire amount that is required to be paid pending final adjudication of Total’s deal of all federal and provincial reassessment received in regard to this matter.

Total Energy has received legal and tax advice confirming that its filing position is strong and therefore no provision has been made for these reassessment. And the $6.9 million remittance has been recorded as income taxes receivable.

Consolidated EBITDA for the third quarter of 2015, was $11.1 million, a 55% decrease from 2014, lower activity levels in all divisions combined with 13% at which point declined in year-over-year EBITDA margins in rental and transportation services division, contributed to the decrease, consolidated net income for the three months ended September 30, 2015 was $1.6 million, after recording $1.9 million unrealized loss on holdings of marketable securities compared to $11.8 million of net income generated in 2014. Total Energy financial condition remains very strong, with $92.6 million of positive working capital including $9.4 million or $0.30 per share of cash, and no net debt as of September 30, 2015.

Company’s $65 million operating facility remains undrawn today and this secured by cash inventory and receivables. However this can bank debt consists of $49.2 million term loan that is secured by approximately 65% of our own real estate portfolio.

This debt bears interest at a sixth annual rate or 3.06% and requires monthly principal and interest payment of $278,800 at the end of five year term in May of 2020 approximately $40.2 million of principle will be outstanding under this term loan issuing on the regular month of payment completed. With the exceptional real estate that secures our term loan both Total’s capital assets are available to support future borrowings as this might be required.

Thank you, Yulia. Current industry conditions are as difficult as we have ever experienced.

However, I’m pleased that we’ve remain profitable despite low equipment utilization and after incurring significant cost relating to downsizing operations and pursuing consolidation opportunities including an unrealized loss of $1.9 million during the third quarter on our holdings of marketable securities. Unlike many in our industry we do not cargo so called one-time cost related to right-sizing our operations, as we view these costs to be part of the ordinary course of managing our business as well we take no pleasure in highlighting the difficult decisions that must be made during these difficult times that such decisions involve real people with real families.

That said the cost associated with these difficult decisions will enhance Total’s ability to successfully navigate the business cycle on a go forward basis. Substantially lower activity levels coupled with excess industry capacity have resulted in a very challenging operating environment that is expected to continue for the foreseeable future.

In such an environment we will seek to work with our stakeholders, increase operating efficiencies and reduce our operating costs so is to make the various markets in which we participate competitive from a global perspective. We hope the Alberta government shares the same perspective as it conducts its oil and gas royalty review and looks to implement other policy initiatives that will impact the Canadian energy industry.

We also seek to strike a strategic balance between equipment utilization and price and we have been continued to declined pursue business opportunities that are not profitable. Simply put we’ll not wear out our equipment for nothing.

Over our 18 year corporate history, we have experienced several downturns and we see such downturns as a normal part of the business cycle as such for making capital advancement decisions our analysis is predicated on full business cycle not to prevailing industry conditions at the time in investment decision has made. This approach to investing our owner’s capital has served us well thus far our announced capital expenditure budget for 2015 is $19.4 million of which $16.6 million had been expanded to the end of September.

As such, we have minimal capital expenditure commitments remaining. We strongly believe that the North American energy services industry must consolidate to provide the efficiencies in economies of scale necessary to compete in an increasingly global market.

We believe this need for rationalization will become more apparent over the next few quarters. However we’ll remain disciplined in the deployment of the owner’s capital as we continue to look to use our financial capacity and flexibility to pursue opportunities that will provide acceptable risk adjusted returns over the life of the investment.

Simply put, we will not put our company at risk. Simply in order to do with yields.

Finally I wish to assure all of our stakeholders that our commitment to providing quality equipment and service remains uncompromised despite the many challenges and uncertainties faced by our industry. Total Energy’s financial and operational strength not only allows us to decline or pursue work that is not profitable but it also provides comfort to our customers, suppliers and employees that we’re able to stand behind our commitments and deliver on our promises.

We look forward to continuing to work with all stakeholders to ensure the safe and efficient conduct of our collective operations. I’d like now like to open up the phone lines for any questions.

Afternoon all.

Hi, Dana.

I want to start with gas compression, the margins actually went up despite the fact that your revenues were down pretty impressive and would love to get any additional color on how – how you did that?

Well, I think, our – first of all, we’re pleased with all three of our divisions for solid cost management and becoming more efficient. I mentioned Dana there is tough decisions we’re making, but those are translating into increased deficiencies.

Obviously – and the employees that we have today are going to be the 18 and with the 18 comes efficiencies on the production side. So a lot of the benefit we see is based on having a very streamlined efficient workforce.

And again just going through our cost structures and working hard to be as efficient as we can.

Right.

From U.S dollars, sales would also be in there translated into Canadian, but the primary reason would be the cost management.

All right, backlog having come down, how much can we read into that in terms of near term weakness, do you get the sense that maybe the crossing of that number maybe close at hand or again any additional color would be helpful?

We’re hesitant to get forecast, but what we will say – first of all orders can be lumpy, I think the third quarter we saw across all business divisions, initial I would say optimism going into the quarter and we saw some [indiscernible] towards the end, interestingly within our compression of process group, we’ve received more orders in October than we did all of Q3, whether that continues will see, but again there is a little lumpiness there. So today’s backlog is higher than quarter end.

So, take that for what it’s worth.

Right. Moving maybe there would be a lots of questions from lots of people, so I’ll just pick up a few here, your U.S.

strategy – obviously you’ve given what’s happened in the business, given the regulatory environment and the political environment, you’ve maybe U.S. more of priority and how are you thinking about that these days?

Well, I was visiting the U.S. last week.

Okay.

We’re not to going to sit around and hope that Alberta gets it right for example. You know we have [indiscernible] we have a moratorium on buying Alberta based business and particularly ones that we can’t move the equipment and until we see some clarity, which is ultimately going to dictate our customers’ capital budget, so we’re not interested in buying Alberta.

All right, I guess one of the elephants in the room is M&A unlike others who have set back you did – you did try to make an attempt in that fashion and receded quickly from that, there are obviously a lots of moving parts to these things. And what’s tolerable within capital markets and defense mechanisms et cetera may be evolving we’ll see, but this is probably a good opportunity for you to maybe update us all on your thoughts.

Well, first of all, we think consolidation and rationalization is critical period. Secondly, we’re disciplined and everything is relative.

And when we presented the proposal – well, try to we felt very strongly that was a very, very fair deal. And frankly the markets have got worse, not better since then.

So that – well the lack of reception we got, we weren’t going to get engaged in a protracted fight to fight for shareholders rights of the third party that’s not my job. I’m paid to investor owners’ capital.

And if we didn’t have a willing and engaged partner there, we weren’t going to sit there and spend a bunch of time and money fighting for shareholder rights. So that particular opportunity – they’ll have to figure out what they want to do.

We remain a large shareholder. We’re not particularly happy with that investment right now.

I’m not going to comment on what we’re going to do with it on a go forward basis. But there is a lot of good opportunities out there and a lot of willing parties that want to sit down in good face with reasonable expectations and talk about how to make our industry better and that’s what I am focused on.

That’s a very eloquent answer. One last question from me is on the issue of impairments that we’re seeing them all across the States, almost irrespective of sub-sector.

And yet you drive on with an impairment free set of financials. So it’s probably again a good opportunity for you, help us to all understand how you’re able to do that?

Well, we are disciplined. And so we’ve – this quarter obviously auditors are interested in the impairment issues.

We’ve done a lot of the work that we typically would do at year-end now and we’re very comfortable with the caring values of our asset based and we do not expect to incur any capital asset impairments and again it's being disciplined and you can argue there are non-cash isn’t that someone pays for it at some point, it also goes to rectificational issues and they were proud of the fact we’ve never return down any of our capital assets, acquisitions good will period and again it requires the intestinal fortitude not to jump on the bandwagon when times are booming, that’s really where in my view auditors should have their talents up it's not now, there is no one doing too many stupid things right now, 18 months ago. That’s when the auditor should be focused on asset valuations not in the trough of cycle, but our view is things are going to settle out here over the next few quarters, there is going to be a lot of good acquisition and consolidation opportunities we’re going to use the strength of our balance sheet and our abilities to generate substantial cash at low utilizations, not wearing our stuff out running in a machine operation use that operational financial strength to come out of this down term stronger and that’s what we’re focused and we’ve got our laser like focus on that right now, Dana.

All right, well it's good to see the fire in the belly is not diminished one [indiscernible] I I’ll turn it back.

I think it’s ever been.

Thanks, afternoon all.

Afternoon.

I wanted to talk about your point about not taking work it didn’t meet your expectations obviously the rentals and compression rentals would be the two areas, without sort of putting numbers on it, how much of this sort of the drop unavailable or the drop in rented horsepower and this sort of I guess sort of modest decrease in utilization with duty, your selectivity and how much of it was just sort of a market driver?

On the compression and rental fleet Scott, and this is why I know some analysts don’t include our gain on sale of PP&E, most of that is compression rental disposition, so year-to-date, we’ve had significant proceeds of disposal part pretty timing equipment for nine months it's about $31 million, the vast majority of that is disposition and also the proceeds dispositions on compression rental packages that have been sold on purchase options, that’s a normal part of our business, so first of all, our overall compression rental fleet is shrunk because the buy outs. Secondly what we’ve seen and commented during our second quarter call is there is a big backup in natural gas in Northwest Alberta because of infrastructure constraints and frankly a lot of the rental returns were NOMADs and ironically as much as in the short-term that hurts us in the medium-term that benefits us because it demonstrate the extreme mobility of those packages some of those units have been out for years on a month-to-month basis and they can be returned by the customer on a dime.

Flip side is as these bottlenecks, sort themselves out you can redeploy that horsepower on a dime. So we expect the NOMAD – this business environment really has been on one hand its negative short-term but it’s really in our minds and frankly our customer mind showing the value proposition of the NOMAD.

The skidded stuff is just so expensive to move you can’t and the other thing is list and it’s a tough environment but our high level assessment on the compression side is lot of it simply there is no place for gas to coal in Northwest Alberta and frankly you don’t need compression if you are not moving up. That said where we see some good activities on the infrastructure build side in North America and frankly that will probably help us sold here on a go forward basis and ultimately release some of the bottlenecks that the field is seeing.

On the – your second question was on our rental and transportation group.

Yes.

So the rig count dropped in Q2 came up a bit in Q3 pricing in that business is as tough as I’ve ever seen and so there is a lot of strategic factors that we consider when we price equipment and services and profit is the underlying objective we will be strategic in certain situations I’m not going to get a lot of detail but ultimately the bottom line factor that you have to consider in the medium-term is profitability. And I can tell you the pricing that’s going on both in the rentals and the rig side we’ll lead to train wrecks the good thing about the rental and transportation side is those happen fairly quickly and I expect while you are already seeing a few insolvency some public most private that’s going to accelerate and the difference this downturn is I think a lot of banks were open winter with safe situations it’s not going to save them this year in our view and so particularly trucks they go down fast and we’re sitting here in large part watching some unsustainable situations and ultimately we’re going to be around when they fail.

And that’s [indiscernible] my assessment of things. And we’re not going to wear our equipment out for nothing.

Okay.

So we want to apologize for below average short [ph] industry utilization rates, we’d rather be this year. But the end of the day, you can’t subsidies someone else’s capital program.

Yes, absolutely. Just the only other question I had was on the G&A side, and then obviously I don’t need you to break out one time cost.

But would it be fair to say that you would expect G&A as an absolute dollar to drop in Q4, just assuming that revenue numbers are in the ballpark of where they were for Q3?

Yes.

Okay.

I think that’s fair assessment.

Perfect. That’s all I’ve got.

I’ll turn it back. Thanks very much guys.

Thank you.

Afternoon all.

Hi, Jon.

Dan have you had any material contract cancellations or potential re-pricing of previous tenders that you had won within compression process at this point?

We have one we talked briefly about in Q2, that’s ongoing.

Okay.

And we’re having some discussions, but nothing other than that.

Have you seen a material change in the cost, net to you guys the fabricating assembler compression package today? I guess I’m think of steel, compressors engines on a net Canadian dollar basis, have you seen a reduction?

Well a lot of components are U.S. dollar priced, drivers, coolers, compressors.

So that goes up that said, that’s pretty much a flow through. The flip side is on a labor and steel side dump [ph] on relative to U.S.

side, we’re definitely becoming more competitive and frankly seeing a little bit more international demand based on that. But obviously U.S.

dollar components are higher. But again we bid based on what the prevailing exchange rate is at the time we got to procure that equipment.

Just to follow-on Scot’s earlier question. Do you expect rental horsepower to start to flatten off in terms of deployed utilized equipment in the coming period excluding those contract buyers from customers that you mentioned?

For the same reason, we don’t give guidance generally, customer intentions are difficult at any time to predict. So whether there is more buyouts, whether you get a swap [ph] going out on ramped.

What I will say generally is our experience within our compression rental business has been very positive or disciplined. We don’t build compression rental equipment on spec for a new build there has to be a signed contract with minimum conditions including term, and to the extent that those conditions are not made upfront, I personally sign off on any unit that’s build outside those parameters, now not going to get into those.

The point being as we tightly managed our investments, because there is a significant capital investment there. You can put a value ballpark of say 1,200 horsepower or $1,200 per horsepower.

We’re carrying tens of millions of dollars of equipment in our compression rental fleet, so we don’t take that lightly. But it’s been a good investment overtime for us.

Like I said, a big chunk of our rental fleet is no match which are ideally suited for rental applications, particularly short term turnarounds and so we’re very comfortable with the investment risks that we’ve taken so far in our compression rental fleet.

This pricing within broader Canadian service rental market, seem to fit any sort of a trough in the past few months. I guess what I’m trying to reconcile is, the fairly, impressive margin resiliency within that platform relative to what you described is the worst market conditions you’ve ever seen, and some of the messaging that we’ve heard from pricing discounts has been pervasive.

Well, scale matters, first of all. And that’s one of the reasons we try to initiate for a second time.

Well first time is kind of a mutual thing we thought, for second time is significant consolidation opportunity. Scale matters, you’re spreading your cost over a larger asset base, you can definitely achieve efficiencies.

The flip side is, we’re also seeing market exists in terms of insolvency. So there is select markets that we compete in both above and below the border, where we’re already seeing the competitive landscape tighten up.

And that’s going to continue. Whether we’ve hit bottom or not, I’m not going to give a forecast, but the longer this drags on the more people will go broke and the better of the remaining companies will be coming out of this, [indiscernible] right now.

Have the discounts you’ve seen in trucking been astronomically different than the majority of service rentals?

There’s some crazy stuff going on all over the place

In terms of the way that you’re treating RNM within contract drilling, is it astronomically different today than what it was in year ago? Again so what I’m asking is, are you leaning on ideal assets for inventory in critical spares this point or maintaining at in the exact same from that you where a year ago.

What we do is we – first of all we don’t expense or we don’t capitalize expenses. So there’s been no changes there.

We tend to expense, what others might capitalize. What we’re also not going to do though is rope soap and dope.

You are not going to have it sitting on rigs that have no prospect, to go into the work and buy new. So we are that’s more of an inventory, not a capital asset management.

So definitely inventory management across all positions, are being very efficient. We’re also equipment that is not going to work for a while, we park it, we properly decommission in the sense that, so it is preserved properly.

And before it goes back to work, it is properly re-commissioned. So we have not taken anything out of our fleet, but we’ve definitely preserved things.

For example, you take insurance, you narrow it down for fire, earthquake, theft, but not offering until you need it. But that is one phone call.

So you cost manage until you are ready put that piece of equipment back to work. That’s no different, we will ever do.

The reality is not we’re not going to project 100% new regularization in Q1. So why would you have a 100%of your fleet paying full – I’d call it non preserved cost, if you don’t expect to devote work.

So it is fair to assume that you could put all [indiscernible] rigs to work, if you have demand other than working capital [indiscernible]inventory…

Absolutely, we would have no out of the ordinary capital cost, associated with firing up, any of our equipment period.

Do you have a sense of what we should we be thinking about for base maintenance spending in 2016 at this point?

We’ll put our budget out in January. You can take what we did this year and I will be surprised, if we need a whole bunch more that is the beauty of 18% and 22% utilization in rigs and rentals respectively.

You are not wearing a hoot [ph].

Perfect, appreciate the color, that is all I had.

Thanks.

Good afternoon. Most of my questions have been answered, just a quick accounting question that $1.9 million on realized loss.

Where would that flow to as a P&L?

Finance cost, John it is in finance cost.

Got it, got it okay. That’s it from me, thanks a lot.

No, problem.

Good afternoon. I was just curious, if there has been any material change in the parts and service piece of the business in compression and just whether that may make you either less or more optimistic on that backlog going forward?

Well first of all we don’t report any parts and service orders in backlog. What I will say is we’re very happy with how our compression group is rolling out their parts and service expansion for doing a good job and again in this tougher market you are seeing customers gravitate towards strong suppliers, so that is definitely benefitting us.

But, yes, there is no parts and service or overhaul orders, which can be significant in our – that’s simply our backlog that we report in and processed in compression is simply a new sales number.

Yes, I guess what I was referring to is whether there has been a material change in, whether customers are using that parts and services piece and not maintaining our equipment was good for their improved backlog, moving forward.

I think – I wouldn’t say there is anything unusual there, Ian.

Okay. And the other piece I wanted to hit on was in the rentals business, I mean the fleet size has been relatively unchanged over the last kind of six to seven quarters and have you guys scrabble the fleet and whether it may be worthwhile to actually retire some of the equipment in that fleet, just because they may be redundant assets et cetera?

We have already been doing that.

Okay.

So we add new stuff, we sell old stuff.

Happens to be the same number of pieces.

So, okay.

All the surfaces moving parts, but we like to sell when oil is $104.00 and we tend to get good recoveries, if you look at our gain, loss and sale of capital PP&E over the years, minimal and like we’ve said, to some of the analysts, most of that will be compression, rental equipment sales. And that’s kind of the ordinary course of business.

When we sell old rental equipment within our rental transportation that is outside the normal course. And if we ever had a material proceed from that, we would carve that out.

But at the end of the day, and we do actually back it out and if you go to the segment that notes you can see for the three months ended September 30, 2015. We have $69,000 gain on sale of PP&E within our rental transportation group.

The 10,000 pieces approximate add new, sell the oldest, but when you see in this market, we are getting a gain tells you two things number one our book value is solid, because we are not selling our good stuff. And gain that is why, when you see that to answer the first question that Dana had impairment, why we are not worried about our caring values.

Okay, perfect thanks very much, that is good color. And I guess last question from me is are you able to provide any sort of detail and maybe your rate of change, how much your equipment fleet has growing in the U.S.

compared to 3Q 2014 last year. Given your comments on what the moratorium for Alberta businesses at this point.

I’m hesitant to comment specifically for competitive reasons what I can tell you as we are relocating equipment not at the Alberta into the U.S. I’m not going to say how much what types and where.

We’re also actively looking at different opportunities sell through the border. But it’s comes down there too.

Okay.

So they are leasing the same thing, but certainly the uncertainty in Alberta right now is unprecedented you got the macro environment plus a royalty review plus, higher corporate taxes plus, handing environmental legislation that we don’t know what that means which is equaling very uncertain for our customers. And we’re not prepared to make investments until we see some color.

Okay. Thanks very much guys.

That’s all from me.

You’re welcome.

Hey, Dan and Yuliya, thanks for taking the question. You guys moved or I guess your other assets did move from long-term to current.

So would it be fair to characterize that as a reflection that you don’t intend to hold those assets for longer than one year.

I’m not going to comment on what our intentions are Michael. I’ll let you take whatever in…

Fair enough. Thanks.

Hi, good afternoon guys. Just kind of quickly the – quickly you alluded to that’s kind of parted and preserved that user term.

How does one make the decision to go through the cost and time and hiring and presumably training and all this kind of stuff to reactivate that. Especially, obviously, you got a deal with the seasonality of it, maybe things to get a little bit Q1.

How do you kind of make that decision, do you have – do you want kind of something long-term or at least similar long-term with customers before you’d go through [indiscernible] expensive doing that. Or do you kind of say okay, maybe somebody only needs to tell middle of March and we will take our chance to ask that.

Let’s before ask me.

The reality Mike, as we can move very quickly. So first of all, if you preserved that properly upfront, which is – there is some cost to do that.

We expense all of that. So we don’t capitalize any of that.

So we expense it, but if you do it properly upfront your recommissioning is not a big deal. And secondly, I guess one of the ironic benefits of the current environment is labors not an issue.

At some point when we go from 185 rigs to 650 rigs labors can be a huge issue but if we go from a 185 rigs to 350 rigs this winter and your guess is better than mine what we’re going to go, what we’re foreseeing right now is it will not be difficult for us to commission any of our equipment. And again we put the proper dollars into decommissioning it properly and at the end of the day our rule is we are not going to commission equipment that’s not ready to go, and that’s one of the things while having a good strong financial position is that equipment will be ready to go when we commit to do work.

And so are we going to commit to do work that we can’t make money at, no. But if we have customers, I think the customer basis increasingly becoming sensitive to where the industry, that in our view simply Mike is we’re in this together now listen but things are little more balanced, you have the give and take the pendulum swinging we’re in an environment frankly we’re as the industry we have to get as sufficient as we can but the end of the day service companies and the oil companies are not – that there is running as efficient as they can and we still can’t make money in this environment our view is part the equipment.

Don’t subsidize the drilling program if it doesn’t make sense. So and that’s kind of where we’re at the end of the day our customers are becoming more efficient we’re certainly becoming more efficient ultimately cost are coming down and it’s our customers decision whether you want to go.

But we won’t work unless we can see some profit there but our cost to and time to get up and running are not going to be a barrier to securing work.

Okay. Now that’s terrific answer thank you.

You’re welcome.

Thank you, operator. If there no more questions, I want to thank everyone for participating in our Q3 conference call and we look forward to speaking with you at our year end call.

Thanks and have a great afternoon.