Rick Hubbell - President and CEO Ben Palmer - Chief Financial Officer Jim Landers - Vice President, Corporate Finance.

Neal Dingmann - SunTrust Jeff Tillery - Tudor Pickering & Holt Rob MacKenzie - IBERIA Capital Partners John Daniel - Simmons & Co. Marc Bianchi - Cowen Doug Dyer - Heartland Advisors Daniel Burke - Johnson Rice Ben Swomley - Morgan Stanley.

Please standby. Good morning. And thank you for joining us for RPC, Inc.'s First Quarter 2014 Earnings Conference Call. Today's call will be hosted by Rick Hubbell, President and CEO; and Ben Palmer, Chief Financial Officer. Also present is Jim Landers, Vice President of Corporate Finance.

At this time, all participants are in a listen-only mode and following the presentation we will conduct the question-and-answer session, and instructions will be provided at that time for you to queue up for questions. I would like to advise everyone that this conference is being recorded.

And Jim will get us started by reading the forward-looking disclaimer. Please go ahead, sir..

Thank you, Lisa, and good morning, everybody. Before we begin our call today, I want to remind you that in order to talk about company, we are going to mention a few things that are not historical facts. Some of the statements that we will make on this call could be forward-looking in nature and reflect a number of known and unknown risks.

I'd like to refer you to our press release issued today, along with our 2013 10-K and other public filings that outline those risks, all of which are available on our website which is www.rpc.net. Also in today's earnings release and conference call, we’ll be referring to EBITDA, which is a non-GAAP measure of operating performance.

RPC uses EBITDA as a measure of operating performance because it allows us to compare performance consistently over various periods without regard to changes in our capital structure. We're also required to use EBITDA to report compliance with financial covenants under our revolving credit facility.

Our press release today and also our website provide a reconciliation of EBITDA to net income, which is the nearest GAAP financial measure. Please review that disclosure if you're interested in seeing how we calculate it. If you haven't received the copy of our press release and would like one please visit our website, again, www.rpc.net for a copy.

I will now turn the call over to our President and CEO, Rick Hubbell..

Jim, thank you. This morning we issued our earnings press release for RPC's first quarter of 2014. Following my comments, Ben Palmer will discuss our financial results in more detail. RPC’s revenues for the quarter increased 17.8%, compared to the first quarter of 2013.

Our revenues increased due to higher activity levels in several of our largest service lines, greater service intensity and a larger fleet of revenue producing equipment partially offset by lower pricing for our services. On a sequential basis, our revenues increased by approximately 3% despite a slow start to the year and winter weather.

These two was due to higher service intensity and higher activity levels in many of our service lines. First quarter operating profit, EBITDA and net income improved sequentially and year-over-year. Our CFO, Ben Palmer will now review our financial results in more detail..

Thanks, Rick. For the first quarter revenues increased to $501.7 million, compared to revenues of $425.8 million in the prior year. These higher revenues resulted primarily from higher activity levels in most of our largest service lines.

EBITDA for the first quarter increased 9.2% to $120.8 million, compared to $110.6 million for the same period last year. Operating profit for the quarter increased 14% to $65.2 million, compared to $57.2 million in the prior year. Our diluted earnings per share were $0.18, compared to $0.16 in the prior year.

Although, we generated higher revenues compared to the prior quarter and prior year, winter weather had a more significant impact on our revenues during the first quarter as usual. In several of our markets we experience customer activity delays and other logistical issues because of these conditions.

We estimate our revenues were negatively impacted during the quarter by approximately 5% and that profitability was impacted by slightly higher percentage.

Cost of revenues increased from $268.2 million in the first quarter of the prior year to $330 million due to higher activity levels and greater service intensity within our pressure pumping service line.

Cost of revenues as a percentage of revenues increased from 63% in the prior year first quarter to 65.8% due primarily to lower pricing for our services and increased materials and supplies expense due to job mix.

We also incurred higher transportation expenses during the first quarter because of rail interruptions which required us to use more expensive trucking for timely delivery of raw materials to meet certain customer job needs.

Selling, general and administrative expenses during the quarter were $48.7 million, compared to $44.9 million in the prior year. SG&A expenses as a percentage of revenues decreased slightly from 10.5% last year to 9.7% this year.

Depreciation and amortization were $55.5 million during the first quarter of this year, an increase of 5.1%, compared to $52.8 million in the prior year. Our Technical Services segment revenues for the quarter increased 18.5% compared to the prior year.

Operating profit for this segment increased to $64.9 million or 13.9% of revenues, compared to $58.5 million or 14.8% of revenues during the same period in the prior year.

Revenues and operating profit increased due to higher activity levels in most of the service lines within this segment, as well as greater service intensity including increase raw material usage in pressure pumping.

Our first quarter Support Services segment revenues increased 9.2% and our operating profit increased 19.2%, compared to the same period in the prior year. This improvement was due primarily to higher activity levels within the rental tool service line, the service line -- the highest or largest service line within this segment.

On a sequential basis, RPC's first quarter revenues increased to $501.7 million from $487 million. Cost of revenues increased from $318.9 million in the prior quarter to $330 million due primarily to increased activity levels.

Cost of revenues as a percentage of revenues increased slightly from 65.5% in the fourth quarter to 65.8% in the first quarter. SG&A expenses as a percentage of revenues were 9.7% in the first quarter, a slight increase compared to 9.4% in the fourth quarter of 2013.

RPC's effective tax rate decreased to 39.4% in the first quarter compared to 42.3% due to a state income tax true-up adjustment of approximately $1.3 million recorded in the fourth quarter of ‘13.

RPC's sequential EBITDA increased slightly from $119.4 million in the fourth quarter to $120.8 million in the first quarter, while our EBITDA margin was similar in both quarters.

Our Technical Services segment generated revenues of $467 million, a 3% increased to revenues of $453.5 million in the prior quarter and an operating profit of $64.9 million, compared to $65.4 million in the fourth quarter. Our operating margin in this segment decreased from 14.4% of revenues in the fourth quarter to 13.9%.

Revenues in the Support Services segment increased 3.8% due to improved activity in many of these service lines. Support Services operating profit increased to $7.5 million in the first quarter, compared to $6.9 million in the fourth quarter.

Our operating margin in this segment increased from 20.5% of revenues in the fourth quarter, 21.5% in the first quarter. RPC’s pressure pumping fleet during the quarter remained at 710,000 hydraulic horsepower. For the first quarter of 2014 capital expenditures were only $37.9 million, a decrease of $3.9 million compared to the fourth quarter.

Projected 2014 capital expenditures have been increased to $375 million. Incorporated in this amount is a new pressure pumping expansion plan which will add approximately 170,000 horsepower to our fleet. We anticipate receiving the bulk of this equipment and placing it in service by the beginning of 2015.

Following receipt of this equipment and the previously discussed 30,000 hydraulic horsepower to be delivered, total available horsepower will be 920,000. It is currently anticipated that the equipment will be deployed throughout our existing pressure pumping locations.

We’re also continuing our pressure pumping refurbishment program and in 2014, approximately 50 pumps will be refurbished to like-new condition. RPC’s outstanding debt under its credit facility at the end of the first quarter was $80.8 million.

However, we had $44 million in cash on the balance sheet at the end of the quarter, a significant portion of which was available the following day to pay down debt. Our ratio of debt-to-total capitalization was 7.6%. And with that, I’ll turn it back over to Rick for some closing remarks..

Thanks Ben. We are moderately pleased with the first quarter financial performance. Although the beginning of the quarter was slow, our monthly results showed a nice progression and in March, RPC generated record revenues.

However operating environment continues to be volatile because among other things, unconventional completions are by nature difficult to execute and disruptions negatively impacted our financial results. We are pleasantly surprised by the recent increase in the prices of natural gas and natural gas liquids.

And while we cannot predict the price of these commodities, we believe that these price levels support additional customer activities. We also continue to see growing service intensity associated with long duration, unconventional work, particularly in the Permian Basin where our largest fleet pressure pumping equipment resides.

They effectively compete in this evolving market. We are expanding our fleet of pressure pumping equipment, developing more efficient staffing models and improving our logistic procedures.

We will continue the models to monitor the market and be mindful that we are in a cyclical and volatile industry while maintaining a conservative balance sheet and focusing on generating strong returns of capital. I’d like to thank you for joining us this morning and we’d be happy to take any questions you may have..

Thank you, sir. (Operator Instructions) We’ll take our first question from Neal Dingmann with SunTrust..

Good morning, gentlemen. Say….

Hey Neal..

Guys, the question is more on margins, how much that’s differing sort of play-by-play. Obviously, we continue to hear lot about the Permian. Just your thoughts, I know again, you are obviously centered on the Permian and Eagle Ford with your thought.

I guess, two questions here, Jim, would be, one, just how different margins run play-by-play or we’ve seen something kind of that they run a little bit closer than they have been.

And then I guess, my follow-up to that would be just as far as -- I know on last call we talked about, maybe you’re going to the TMS or some of these other players, if you still have some plans like that?.

Neal, hey, this is Jim. Yeah, margins are different play-by-play to put it in your vernacular. The areas that have still been a little bit weaker for us are -- they had been little bit weaker for us, still are. And things are -- margins are stronger for us in the Permian, just because of utilization.

Pricing hasn’t improved yet but that’s sort of bifurcation among better regions and less good regions is still there. We’re still interested in TMS and we got an update on that recently. The exploratory wells that they are drilling seem to be taking long time.

But things are probably coming to fruition and people are coming up with good well designs and frac designs and we anticipate working there very soon, now with a new physical location necessarily but we can serve it out of Kilgore to the west and out of lumpier Louisiana to the South..

Jim, with that just your frac there, would you do rental tools in some other areas when you talk about moving there in some other areas?.

It would be many of our completion services which would be frac and those are frac intensive or horsepower intensive. Frac designs, as far as I know right now as well as probably some coil tubing..

Very good. Thank you..

Okay. Thanks Neal..

Our next question comes from Jeff Tillery with Tudor Pickering & Holt..

Wondered -- on the capacity issues, I guess, question number one, the incremental CapEx would imply something in the order of kind of $1,000 per horsepower.

Is that basically what it’s costing? And I’m just curious to hear, kind of, lead times in delivery schedule?.

That is about the right number with the ancillary equipment we are ordering. Delivery schedules, we in our comment said that we expect that most of it will be here by the beginning of ‘15. We hope to get it earlier but obviously it’s depending upon a lot of different factor. So there’s receiving it, there’s testing it, accruing it and all that.

So we’re working with the manufacturers to firm up the delivery schedules. So we do think we’ll get some, perhaps during the third quarter and fourth quarter that we expected it will be again placed in service and working early in ‘15..

And if I think about kind of possibility in the segment today and just looking at what the revenue intensity and revenue realization for your stimulation equipment was last year.

Looking somewhere in kind of two and half year payback at current pricing levels, is that about right?.

At current pricing levels..

At current margin levels, I guess?.

That sounds reasonable. That type of payback obviously is not too bad. And our decision, I guess is based more on the fact that we expect -- we expect to see improvement over the next few quarters. So but your estimate is probably pretty accurate currently..

And then if I think about the progression of the businesses at the course of the year, so Q1, in the release you talked about kind of 5% revenue impact from the weather disruptions.

Is it fair to think about basically taking Q1 actual revenue, adding that 5% and then think about that as a new base from which, kind of, to bake in any incremental activity changes to the course of Q2.

That we could see or no, high single digits revenue increases in Q2 sequentially?.

Jeff, this is Jim. Yeah, that’s as reasonable an estimate as any that’s something that we’re using as a baseline as well. And we are not people that normally beat our chest. But what we tried to make clear in our comments was that March was really strong, early in the quarter it was really weak, business was volatile, all those things.

It is difficult to predict but we certainly feel very good about the strength that we saw late in the quarter and so we will see. We certainly haven’t taken our late in the quarter run rate and not assuming that we are going to continue at that pace.

But it’s difficult to predict, difficult to predict but we feel good that it is headed in the right direction..

And last question I have on, the comments in release just around material cost increases.

I presume that’s kind of both transport as well as kind of the proppant costs as well, is that fair that the general cost pressure you guys are feeling?.

Yeah. Jeff, this is Jim. I think maybe there are two things. One is that proppant was not more expensive in the first quarter. But we see it becoming more expensive kind of as we speak. So we see cost pressures upward on proppant. Guar was fine for us. So that’s the actual costs of the material. First quarter was strange.

Our Board people talked about it too, but there were rare shortages. We had to use trucking which we ordinarily wouldn’t have done and that increased cost during the first quarter..

And then as you think about the progression on margins, what sort of incremental margin expectations is kind of reasonable for Q2? I mean, intuitively, the weather disruptions, recovery, should it carry high incrementals but then some of the cost pressures lower that.

So, should I think about something in kind of the 30% to 40% incremental margin range for technical services?.

Yeah, that’s about it right, Jeff, based on what we know..

All right. Thank you guys very much..

Okay. Thanks..

Sure..

We’ll take our next question from Rob MacKenzie with IBERIA Capital Partners..

Thanks, guys. I wanted to actually come back to that last question little bit and revisit it, Jim in your answer. My presumption is, is that in the first quarter, the weather impact have caused 5% hit to revenue, probably had fairly high decremental margin because you incurred a fair bit of cost without the associated revenue.

Why wouldn’t the swing back in the incremental margin on that recovery be higher than the 30% to 40% range?.

Rob, it’s a good point and it should be. I mean, I have to reiterate what you said and give a little more detail. When you don’t work because of weather then it really hurts you financially because you are prepared to work tomorrow. Let’s say, so if you have your cruise lined up and your proppant and everything else and you don’t.

It’s very different from a secular business slowdown where you realize things are slowing down and you reduce your costs. So the decremental margins were more than 5% for sure, or the decline was 25% on the profit point of view.

Maybe, we are just thinking a little bit conservative here due to the continued volatile nature of some of the work that’s going on and so we are kind of handicapping what incremental margins should be..

All things being equal, it should be higher. But again, as Jim pointed out, lot of volatility, lot of uncertainty, lot of things that are getting worked out. First quarter, we talked about these extra transportation costs that’s currently impacted the quarter that we can -- there is no way that we can accurately predict.

It will happen again but how much, to what extent, how often those kinds of things are going to happen. They are just, they are ongoing issues.

I think the industry is trying to work real hard to smooth some of that out, take some of those disruptions out, get our work to be a little more steady, that would help the customers and would help us but it’s an ongoing process. So, modeling it at incremental margins of 33% or modeling at 80%, somebody could argue either way.

But I think the earlier comments probably were appropriate at this point, lower incremental margins because we just don’t know for sure..

Okay. Fair enough. Next, I wanted to address a related topic and that’s pricing, come back to that conversation if you can. Halliburton talked in their conference calls about starting to see some cost recovery. Net pricing -- it won’t give us some cost recovery in 1Q.

Where do you all stand on trying to maybe even get ahead of some of this potential cost inflation and recover that going forward?.

Well, Rob, we’ll start and end every answer by saying pricing did not improve during first quarter, net pricing did not improve. It didn’t decline either but it didn’t improve. In one of our service lines, rental tools, we’ve issued new price book and are working through that and starting a new price book in some of the other service lines.

So we think that that will get, you call it cost recovery and you will definitely be able to obtain that. All signs are there for spot market pricing begin to improve. It just has not yet and it just continues to be the issue..

I think the cost recovery is something that we are focused on. It didn’t have a big impact on us in the first quarter.

But I think as things tightened, we see activity levels picking up as Jim alluded to, hopefully pricing will firm a bit and whether that’s from upfront pricing, whether that’s from cost recovery capabilities, we will just have to see and that will shake out over time. But we do see things.

Again, activity was very, very strong in March and it’s headed in the right direction. So we expect that that capability, cost recovery, price improvement will improve here in the next quarter one..

Great. Thank you. And if you don’t mind bearing with me for stretching the rules here for one more..

Okay, Rob..

The new equipment you are adding, can you give us any more color on how that might step into the fleet?.

Timing..

Yes..

Timing arrangement. It will not -- it may contribute some to a noticeable amount in the fourth quarter but again, it’s a little bit early as we’ve all experienced, there can be delays. So if one wanted to, I think we believe, another reason we are doing this, we believe we are little early.

Historically, we’ve been pretty good about anticipating getting out in front on the ordering and so we are shutting down little earlier than others. So we talked about how low our CapEx was in the first quarter and even in the fourth quarter. So we see that it is time so to ramp that backup.

So we think we are early, so we think hopefully that will help with the delivery schedules but I expect in terms of contribution to results, it may contribute some and this is the -- the 30,000 horsepower will be coming in….

June, July..

Yeah. Obviously coming in on that timeframe. This larger incremental expansion plan we talked about this morning, we expect it will contribute some to the fourth quarter, but -- and bigger percentage, we are not sure.

So we are at this point saying it’s going to be about early ’15 that will be -- it will be clearly feasible and make a big contribution..

And it’s all coming in one batch?.

Now that will be at least a couple batches..

Okay. Thank you..

On the new expansion plan, yes..

We will take our next question from John Daniel with Simmons & Co..

Thank you, guys..

Hey John..

Jim, first one for me, what percent of Q1 revs did the month of March represent?.

It was big..

Can you provide some color because I know that your answer would obviously help us with not just you but everybody? No one is really seemed to ask that question to anyone yet..

We always want to be helpful, John. Let me -- it was -- I mean, it was way more than a third, but it was less than 50%, I mean….

Closer to 50 or closer to 40?.

It was closer to 40..

Thank you, okay. A fairly big order of new equipment which I suspect will cause or it’s probably giving cause to some, just given that pricing hasn’t changed and margins are still somewhat subpar relative to where they were a couple of years ago. And you haven’t seen any pricing yet.

So I guess the first question is, as you look out on the job board here, how far are you guys booked?.

Let me first comment on the margins. I think we’ve been talking about for the last -- over the time period that you’re talking about, again that the percentage margins will be coming down.

We talked about the fact that we had record revenues in March, so it’s -- I expect it will be difficult and maybe impossible to get back to historical percentage margins. I mean, there is just so much more business that the dynamics in the industry has changed that I don’t think will get back to that point.

But activity levels, again very high, our customers are driving us toward efficiency. We will be driving them towards providing us more steady work and were compensating us for disruptions that will take some time so, but we do see things improving a bit..

I am not trying to take a slap, but you guys are anyone. Just I am trying to understand something here, when you look at the job board, I am guessing you guys are booked down for three to six months depending on which part of the country you are in.

Is that a reasonable supposition?.

Yes. Depending on the part of the country we are looking at, yes, especially we talk all the time to you about the Permian. So there are -- I mean, there are couple of things at play, I mean job orders booked up. We know enough oilfields and now that you better not try to predict anything.

But also I am there for continued higher activity and pricing at some point. The thing that has struck us over the past six months or so is the huge increase in service intensity and activity levels putting aside financials result for moment. Places like the Permian have gone from majority vertical to soon if not now majority horizontals.

Places like the Eagle Ford are very business. North Dakota with all its issues has some very service intensive things and we think that’s the view. We think that’s the new norm and we want to be prepared to play there.

I mean, we’ve got the balance sheet to step up to kind of level where we can continue to survive and thrive in a more service intensive environment. Now there are challenges, labor is a big one, but we’ve got to work through those as well.

So we are biting off something here, but that’s where we see the business going and we want to be among the winners..

And let me add to that if I may is this idea about, we are -- there is a lot of customer commitments and being booked up today is different than it was several years ago too with these unconventionals as we all know. Again, there is disruptions.

You can be fully committed and not be worked fully utilized because your customers are not working as much as you would like them to be. So there is lots of room there again to smooth out some of the disruptions, smooth out some of the headwinds from the customers to do the level of activity that they are promising.

And I think we are making some progress there and that’s getting better..

And that’s fine. And clearly, the visibility is good unless you wouldn’t be ordering equipment.

But my question -- well, I am trying to get this question is, as you look at the jobs that might be out on the calendar three months, four months from now, are they already priced, is there set price for that job three months now or/and do you just some of that price three months once you actually go and do the work?.

I think it varies. We are not making long-term commitments on pricing at this point..

Okay Fair enough. And so the jobs that would be out there, all right. I was just trying to get sense if the jobs are priced higher on the boards three months from now.

So while you are not seeing the small pricing than your results today if you got a reasonable expectation for the pricing when those jobs get completed late Q2, early Q3, and I guess the answer is no.

Does that make sense, Jim?.

In other words, the jobs are booked, but the pricing is not yet firm, that’s the answer, but we feel good about what it’s going to be..

Fair enough, okay.

A couple of quick ones for me, and then I will let turnover, plans for coil tubing expansion, how many units would be the first one? And then second, given the higher wear and tear issues on the frac, lots of people talk about that now, do you envision any fleet retirement in the next 12 to 18 months now turn it over?.

The second question on the fleet retirement is no. That’s all that is being handle to the refur program, I think we are not in front on that. Meaning, we are working on the oldest equipment first that we are not planning to retire anything and we will continue on that refur program that again bring some out almost like new.

So we don’t expect our capacity to change due to retirements..

And John on the first question, no more adds to the coil tubing fleet this year..

Okay. Thanks, guys..

Okay. Thanks..

We will take our next question from Marc Bianchi with Cowen..

Hey, good morning, guys..

Good morning, Marc..

Just a question for me on the equipment you’re adding. Beginning of 2015 seems like a fairly long lead time.

I am curious what are the factors that are keeping you from getting that equipment earlier? Maybe you could kind of walk us through maybe some of the bottlenecks that may exist?.

Well, I am still not clarify, we are going to get sooner, we don’t believe that it will materially contribute until early ’15. They just takes time to tech delivery test, absolutely ahead of time will be staffing and training and those sorts of things. So it will contribute some to fourth quarter.

But we are just saying the bulk of it will began to meaningfully contribute by early in ’15. We may here over the next few weeks that may get firmed up and it may be a little bit sooner, but at this point, we are rejecting that kind of timeframe..

Okay..

It’s about six month order to receive timeframe at this point and that's about right, we don’t want to place rush orders and pay too much, we want to plan for it, we want to, like Ben just said, we want to plan for having the crews ready to go when the equipment comes.

So it’s not an urgency -- it’s not urgent enough that we want to do anything ill-advise in terms of paying too much, we are not being ready..

And our experience it has been it always seems to coming later than we anticipate it’s going to. So we are just kind of recognizing that..

Okay. That's helpful.

Could you comment on just a completion that you are seeing in the Permian in terms of any new entrance coming to the market or existing players that are migrating fleets and crews into the market that maybe impacting the ability to push pricing?.

Mark, this is Jim. I’m not aware of any real new start-up pressure pumping companies, really any new ones, anywhere including the Permian.

One thing that we have noticed talk about in 2013 and has not change as the fact that some of the equipment is owned by the people who have a lot of debt and they can’t maintain the equipment, so the equipment is getting worn out.

We have recently learned about some smaller companies that are interested in selling their equipment, getting rid of their equipment. So we don’t think that the overall fleet has grown or is growing right at this time.

But there is still, I mean, it’s a very simple and now outdated metric, but the rig count hasn’t been changed and rigs are more productive we know that, but the rig count hasn’t changed. So we haven’t yet completely fixed the supply demand and balance has been going on since sort of the first or second quarter of 2012.

So that's still the short-term issue..

Got it. Okay. Thanks, guys. I will turn it back..

Okay, Mark. Thank you..

We will take our next question from Doug Dyer with Heartland Advisors..

Gentlemen, when you talk about the potential for profit pricing to go up, is there more potential for pricing advances in sand or more in ceramics?.

Doug, this is Jim. Thanks for the question, good one. Perhaps more, I am going to caveat this answer, perhaps more in just natural sand because that's what our customers are using right now and so there might be more demand right this moment for that. But those choices on the type of proppant that a customer uses change pretty quickly.

So it’s a good question. I am afraid I don’t have great answer about the different kinds of proppant and how those prices might move..

All right.

And earlier in the call, when you talked about trucking, when you were talking about trucking sand to the site, is there kind of a logistical problem right now?.

Yes. What that comment was, was again, it was specifically about South Texas due to some of the rail interruptions and we had the truck actually all the way from the supplier to the basin. So typically that could have been brought in by other methods, but we had to truck it, kind of, on the last minute basis. So the cost was much higher than normal..

All right. Thank you very much..

Okay, Doug. Thanks..

(Operator instructions) And we will take our next question from Daniel Burke with Johnson Rice..

Good morning, guys..

Hey, Dan..

You guys have referenced the month of March a handful of times, was there anything about the March tempo you enjoyed that was unsustainable or you’d call out, I mean, were you catching up on any type of weather backlog that induced to an efficiency level that will be hard to maintain in the second quarter?.

Daniel, this is Jim. We actually referenced March 1 and we referenced over time in response to questions but we are happy to talk about it significant. But there was nothing. A standard but very appropriate answer is that there was nothing in March that was out of the ordinary..

Yeah, it was strong..

Okay. Great. And then the other one I had left was, you have also mentioned sand a couple of times. You have some interest in the sand business.

It is much as you are, you are up in the CapEx budget for the year, any incremental capital you all are devoting in that direction?.

Nothing of note..

Okay. All right. Well, fair enough. Thanks guys for the time..

Okay, Daniel. Thank you..

We’ll take our next question from Ben Swomley with Morgan Stanley..

Hi. Good morning..

How you are doing?.

Before my other questions, a quick follow-up on some of the proppant questions, you mentioned that customers can change pretty quickly, the type of proppant they are using, have you seen that recently, have you seen a big shift from one type to another?.

Yes, sometimes even they are doing the same job..

Okay..

So what are you looking for? If you are looking for an industry trend, I think it’s normal with our customers. Just -- we look at our statistics from month-to-month and sometimes it is amazing overall, how much it can shift and it’s just depending upon customer requirements and preferences and it may shift back.

I don’t know that we could yet give any overall industry direction on that. It is just customer specific..

Yeah, Ben, we are with you. It is just hard for us to analyze internally, as it is to external people to analyze..

And I am wondering maybe if you have some insight on whether, when customers do shift and if they shift back frequently even during the middle of a job, is that in response to technical challenges that they encounter while completing the well or is that driven by sort of experimentation and trying to optimize the completion?.

It is not -- and again, I am not speaking as an expert. It is not due to technical challenges. It might be due to wanting to experiment and figure and try something else out and kind of see what’s going on and trying to optimize things from that point of view to test the efficacy of different kinds of proppant.

In general, there is a trend or not a trend but another impact or another cause is that sometimes a customer chooses cheaper proppant just to get the well completed with the knowledge that its not quite as good as something else doing it for cost reasons and knowing that they may have to re-frac the well sooner rather than later as an example on other things.

But they make a very rational choice but rational choice to use a cheaper kind of proppant for certain completion..

That makes sense. Shifting gears to the new equipment, another question on that front.

Do you have a specific customer in mind or are there two or three customers maybe that you think you can really place that equipment with or are you just adding to the sort of position if activity should increase?.

This is Ben. I think the way to describe that is we indicated that currently, at the present time it can be changed once the equipment is here or we know when it’s coming. We’re currently anticipating that we’re going to distribute it throughout our existing locations.

We do have specific customers in mind that we’ve had conversations with that we feel strongly enough to factor that into the amount of equipment we wanted to acquire. But with that being said, none of this is coming in under any sort of contract or formal absolute commitment.

We just yet see that activity levels are going up, service intensity is going up. So we think there’s going to be the ability to absorb the equipment and put it to good work. And we think there will be sufficient opportunities out there to choose from over the coming months.

But so no firm, again contracts or commitments to this point to specific customers..

All right. And one last one if I can. On the coil tubing side, I think you said earlier in the call that there was no incremental capital allocated there.

What do you see in terms of competitive dynamics?.

Sequentially, there is probably a little bit of pricing pressure, little bit of utilization but sequentially there is not a whole lot going on. That’s of note. I mean, in other words net pricing is kind of staying the same utilization.

Utilization in the first quarter was down a little bit compared to fourth quarter because of the weather issues that we’ve cited. But in general, it’s very flat. .

I think a little more competitive -- that's little more competitive compression pumping at this point..

At this point?.

Yeah..

Okay. All right. Thanks so much..

Okay. Thanks..

We’ll take our next question from Rob MacKenzie with IBERIA Capital Partners..

Thanks guys.

A quick follow-up for you Jim and I apologize if you mentioned this earlier, did you run through what percentage of the revenue was split between coil tubing thru tubing, and pressure pumping this quarter?.

No Rob, I didn’t but I’ll be happy to right now. It is in the same order as last quarter but the numbers have changed a little bit. The largest service line is pressure pumping at 57% of revenue. The second largest service line is Thru Tubing Solutions which is that 15% of revenue. Coil tubing, I’m rounding here. Coil tubing is 9% of revenue.

Rental tools is 4.5% or 5% of revenue. Snubbing this quarter was a little over 3% of revenue and I got that out of order. Nitrogen was 3.5% of revenue..

Got it. Okay. Thanks.

And follow-up coming back to the March topic, what are you seeing so far in April, would you say it’s consistent with the activity levels in March?.

Never been kind of busy closing the books for the quarter, but April looks fine, yes..

Great. Thanks. I’ll turn it back..

Okay. Thanks, Rob..

Our next question comes from John Daniel with Simmons & Co..

Just a quick one for me Jim on goodwill. Just looking at the press release, there is a slight uptick.

Did you guys do any acquisitions recently?.

We did a small one in the fourth quarter and then there was just a little bit of adjustment to that in the first quarter..

Okay.

Can you say what product line that was?.

Coil tubing..

There was a little bit of coil tubing and some downhole tool technology..

Right..

Okay.

Is it safe to say that the strategy for this year will be organic as opposed to acquisition?.

Probably, and we’ve discussed this John a lot of times. There are lot of opportunities right now to look at. RPC tends not to be all that acquisitive, but you never know there are lot of opportunities to look at. That’s certainly all I can tell you..

That’s fine. You did mention early in the call about the people lining up to sell some frac assets or companies, whatever might be.

And I just wondered if that’s let me call it (Indiscernible) and if that’s appealing or if you prefer the technology side and just some color around that would be helpful?.

Okay. Well, from an acquisition standpoint, I think it’s just being more opportunistic. And that acquisition as you can see from the numbers is again not really large. We would been have the ability to bring it in and grow it. We’d like that, but other pressure pumping companies, lot of things go in to that.

If the crews are located in the right place, there maybe some potential there, but often times they maybe located where we don’t them or need them. So that has less value for us, but we tend to stay open-minded. .

Thank you for the color..

All right. Thanks, John..

And there are no further questions. I'd like to turn the conference back over to Jim Landers for any additional or closing remarks..

Okay. Well, thank you, Lisa. And we appreciate everybody who called in today and to listen to us and we appreciate the questions and we’ll see everybody soon. Thanks.

And this does conclude today's teleconference. And the conference will be replayed on our website at www.rpc.net within two hours following the completion of the call. Again, that is www.rpc.net. Thank you for your participation..