Newpark Resources Inc (NR)

[OilStockReport]

Liquidity and Capital Resources

Net cash provided by operating activities during the first half of 2010 totaled $7.8 million. Net income adjusted for non-cash items provided $43.8 million of cash during the period, while increases in changes in operating assets and liabilities used $36.0 million of cash. The increase in working capital during the period includes $54.2 million from increases in receivables reflecting the impact of increased revenue levels along with a $4.1 million increase in inventories, partially offset by a $15.7 million increase in accounts payable and $7.2 million in increases in accrued liabilities.

Net cash used in investing activities during the first half of 2010 was $4.7 million, consisting primarily of capital expenditures. Net cash used in financing activities during the first half of 2010 was $1.3 million, primarily reflecting net payments on our revolving credit facilities during the period.

We anticipate that our working capital requirements for our operations will fluctuate with our sales activity in the near term. Cash generated by operations along with availability under our existing credit agreement is expected to be adequate to fund our anticipated capital needs. Further, we may decide to access the public equity or debt markets for potential acquisitions, working capital or other liquidity needs, if such financings are available on acceptable terms. In May 2010, we filed a “shelf” registration statement on Form S-3 registering up to $200 million of common stock, preferred stock, debt securities and warrants, and such registration statement was declared effective on May 19, 2010.