Operating profit for the Company’s  international operations increased 172.6 percent from 2003 to 2004 due to higher rig activity, improved margin per rig day, and lower general and administrative expense resulting from reduced salary, bonus and travel expense. Rig activity improved, primarily due to improv ed demand in the Company’s largest international operation in V enezuela. Venezuelan operations improved substantially as the gov ernment-o wned oil company, PDVSA, increased their spending in an attempt to improve overall production rates following the r eduction in production caused by a workers’ strike and attempted coup in Venezuela during 2003. Despite overall improvement of conditions in Venezuela, the currency there was devalued during the year, r esulting in a loss of $1.9 million for 2004. (See MD&A Section on F oreign Currency Exchange Rate Risk for more discussion.) A dditionally , Company operations improved substantially in Bolivia and Hungary. Although operations in Chad ceased at the end of 2004, and it is anticipated that Hungary’ operations will cease during the first half of 2005, the Company expects that operations will improve in the Company’s operations located in Venezuela, Colombia and Ecuador during 2005. Late in 2004 and during the first quarter of 2005, the Company returned to the United States fiv of its 32 international land rigs. Two of the five rigs hav contracts for work as of the first quarter of 2005. Three of the five rigs were scheduled to arrive during the first quarter 2005 in the U.S. for an assessment of their viability in the U.S. market. As a result of the impro ved demand for contract drilling work in South America, and the r eduction in available Company rigs, it is anticipated that rig utilizations will improve during 2005. 

