For the quarter ended June 30, 2009, revenues decreased 40.8 percent to $127,018,000 compared to $214,689,000 in the second quarter last year. Revenues decreased compared to the prior year due primarily to dramatically lower pricing for our services coupled with modestly lower utilization of our equipment and personnel. Operating loss for the quarter was $19,498,000 compared to operating profit of $37,800,000 in the prior year. Net loss was $11,624,000 or $0.12 per diluted share, compared to net income of $22,458,000 or $0.23 diluted earnings per share last year. Earnings before interest, taxes, depreciation and amortization (EBITDA) declined by 79.9 percent to $13,486,000 compared to $67,082,000 in the prior year. (1)

Cost of revenues was $91,080,000, or 71.7 percent of revenues, during the second quarter of 2009, compared to $120,175,000, or 56.0 percent of revenues, in the prior year. The decrease in these costs was due to the variable nature of most of these expenses as well as the impact of expense reduction measures taken during 2009, including employment cost reductions and greater efficiencies in the purchase of materials and supplies. As a percentage of revenues, cost of revenues increased because of lower pricing for our services, higher materials requirements for more service-intensive work and negative leverage from direct personnel costs. Selling, general and administrative expenses decreased by 19.4 percent in the second quarter of 2009 to $23,372,000 from $29,010,000 in the prior year. This decrease was due to lower employment costs and other expenses resulting from expense reduction efforts instituted during the first six months of 2009. As a percentage of revenues, however, these costs increased to 18.4 percent in 2009 compared to 13.5 percent last year. Depreciation and amortization increased slightly to $32,376,000 during the quarter, compared to $29,177,000 last year, due to capital expenditures made during the last year. Interest expense decreased from $1,250,000 last year to $527,000 in 2009 due to reduced interest rates and a lower average balance on RPC's revolving credit facility.

For the six months ended June 30, 2009, revenues decreased 26.4 percent to $303,289,000 compared to $411,916,000 last year. Net loss was $7,158,000 or $0.07 per diluted share, compared to net income of $37,215,000 or $0.38 per diluted share last year.

"The steep decline in domestic drilling activity, which began in the third quarter of 2008, continued during the second quarter of 2009," stated Richard A. Hubbell, RPC's President and Chief Executive Officer. "The average domestic rig count during the second quarter was 934, a 49.9 percent decrease compared to the same period in 2008. RPC's revenues decreased by less than this industry benchmark, due to the relative strength in several of our specialized service lines and our relatively more significant participation in several domestic unconventional oilfield basins. Approximately 60 percent of drilling activity during the second quarter of 2009 was unconventional, compared to approximately 48 percent during the same period last year, which indicates that these markets have been relatively stronger. Although there were some signs of stability in drilling activity during the quarter, the rig count fell to levels not seen since 2003. The price of natural gas decreased 67.4 percent, and the price of oil decreased 52.0 percent during this period compared to the prior year. These commodity price declines, as well as the deep and ongoing global recession, have caused the steepest annualized decline in domestic oilfield activity in history. This industry decline and the large amount of oilfield service assets operating in North America have combined to decrease our pricing and equipment utilization drastically. We have reduced headcount, employment costs and discretionary expenses, and continue to evaluate these opportunities as the domestic oilfield market remains depressed.

"We continue to focus on maintaining a conservative balance sheet, and this focus serves us well in the current environment. Our capital expenditures during the quarter were $23.7 million, and we reduced the balance on our revolving credit facility during the quarter by $8.9 million to $123.6 million. Also, as we announced this morning, our Board of Directors voted to reduce our quarterly dividend from $0.07 per share to $0.04 per share. We believe that this step will strengthen our capital structure, allowing us to reduce our debt further in the near term. We are somewhat encouraged at this point that several of our comparable or smaller peers with more aggressive capital structures are struggling to remain viable, and the options they are facing will ultimately result in an improved operating environment for us. This, along with some signs that drilling activity may have reached a trough, give us reason to believe that the worst of this downturn may be behind us, although signs of increased activity and improved pricing have not yet emerged," concluded Hubbell.

   Summary of Segment Operating Performance    RPC's business segments are Technical Services and Support Services.   

Technical Services includes RPC's oilfield service lines that utilize people and equipment to perform value-added completion, production and maintenance services directly to a customer's well. These services are generally directed toward improving the flow of oil and natural gas from producing formations or to address well control issues. The Technical Services segment includes pressure pumping, coiled tubing, hydraulic workover services, nitrogen, downhole tools, surface pressure control equipment, well control, and fishing tool operations.

Support Services includes RPC's oilfield service lines that provide equipment for customer use or services to assist customer operations. The equipment and services offered include rental of drill pipe and related tools, pipe handling, inspection and storage services and oilfield training services.

Technical Services revenues declined 40.6 percent for the quarter compared to the prior year, impacted by competitive pricing and lower equipment utilization. Support Services revenues decreased by 42.1 percent during the quarter compared to the prior year because of decreased activity in the rental tool service line, which is the largest service line within Support Services. Operating losses in Technical and Support Services segments were realized due to lower revenues and higher costs and expenses as a percentage of revenues.