Newpark Resources Inc. (NYSE: NR).(Interview)

Publication: Oil and Gas Investor

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COPYRIGHT 2005 Hart Publications, Inc.

Oil and Gas Investor: Describe the strategy that drives your company.

Cole: I've been with the company 35 1/2 years today. Our strategy has changed as the industry has changed. We have adapted our services and business to a changing industry. Change includes both the requirements of our customers for the service we provide and changes in the geographic area where services are provided. The whole climate of the industry is changing; you have to adapt to that.

For the past five years, our strategy has been to diversify our product offerings from our historic Gulf Coast market across North America and globally, into foreign markets. We are, by strategy, a niche player, meaning we try to find a niche market where we can differentiate ourselves, either through product development or unique kinds of service, We have three basic segments, and we're entering a fourth one at this point.

OGI: Could you offer more detail about your business segments?

Cole: Newpark operates in three distinct segments. Newpark Drilling Fluids is the largest segment and is about eight years old. It has been growing between 22% and 25% a year and is focused on a high-performance, water-based drilling fluid systems. Though we provide all types of fluid systems, our differentiation comes from the water-based FlexDrill[R] and DeepDrill[R] drilling fluid systems, which offer high performance and are friendly to the environment.

The second segment by revenue size is the matting business, which provides temporary access roads and work sites on a rental basis in a number of key markets and sells mats outside of those rental markets. It's a niche where we're the dominant player. The business started in the Louisiana and Texas coastal wetlands, and we are now expanding it to a worldwide market.

The third segment is our environmental business. Throughout North America, we provide environmental services--recycling, processing and disposal of waste, principally in the oil and gas E&P industry.

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