Bone Spring Details
Duane Grubert – Susquehanna Financial Group: In terms of the interference that you’ve talked about in the Bone Spring, could you give us a little more detail. Did that involve a discovery during a frac job or how the production behaved or exactly what was that?
John S. Richardson – President and COO: It’s not a new phenomenon Duane. I mean, we’ve seen this – lot of shale plays see this, I know the Bakken does specifically, but as we frac the wells primarily we do see a pressure front move through and since these are open hole – well, these are packers plus completion you have drilling mud of course behind the system. When that front moves though it seems that you can’t get drilling mud in the wells, you have to go and clean them out. I think it’s not new to us, but as we’ve gone back through and looked at the in-fill drilling, as I mentioned last time, we are now going back to second and third wells on these leases. We probably didn’t anticipate that very well. We did see some that pressure front move through. We usually shut the wells and even when an offset operator fracs a well that we’ll communicate with each other, shut the wells and let them buildup pressure to producing wells for a few days than do the frac job. And we did that on this time, but with these interior wells we just didn’t really anticipate that very well. We have now started staggering our wells. We do have that option with two sands or three sands present. We’ll now stagger our wells from sand to sand with a different target as we drill them and that’s done a lot to mitigate the problem.
Duane Grubert – Susquehanna Financial Group: There is still leasing going on out there in the Bone Spring’s area, I just wondered is there a lot of best practice sharing across companies or are people still pretty proprietary about the way they complete things.
James T. McManus, II – Chairman and CEO: There are more conferences, there are more actually the Bone Spring that would be in a fairly developed play there is not as much sharing of t technology I think in the Bone Spring, particularly people sort of know what to expect and then, and so but we still do share data with companies you have a close relationship with particularly now we are beginning to see more of the partner having more partners in your well where everybody was just mainly drilling 100% wells there for a while. So you are seeing sharing that way.
NGL Side Outlook
Holly Stewart – Howard Weil: First question James maybe just give us a little bit of help on the NGL side. I mean what do we need to see there seems like a big pickup throughout the rest of the year. so maybe just help us understand what’s going on the NGL side?
James T. McManus, II – Chairman and CEO: There’s several large facilities of fractionation coming on at the middle of the year our marketing group slipped out and we think it starts to alleviate itself ethane rejection as we mentioned in the first quarter was, we would call it severe it was worse than what we anticipated and we anticipate to be pretty close to what we anticipated. But we see facilities coming on to correct that in the middle of the year and I think that’s pretty consistent with the way other Permian players of unit.
Holly Stewart – Howard Weil: So maybe, I mean I know you guys don’t give quarter-to-quarter guidance, but maybe kind of continue with that second half of the year pickup on the NGL side is that what you think about it?
James T. McManus, II – Chairman and CEO: Yeah, definitely.
Holly Stewart – Howard Weil: Then, I guess maybe kind of sticking with that hole kind of quarterly thought process you talk about some weather impact in the San Juan. How does that mean we should think about second quarter volumes in terms of the gas side?
James T. McManus, II – Chairman and CEO: Well, I think we would expect those to start to improve. We don’t have a lot of growth in gas per se, but we expect to snap back from the part that we lost in the coal.
John S. Richardson – President and COO: Let me add. The impact there was sort of two-fold. One is not so much our gathering system, but we did see high line pressures from our gatherers, that impacted us. The other thing is, in lot of these areas we have a wintering time as you know and we can’t get back and to workover wells. We did see some wells go down on in the first quarter, we couldn’t get into work on them, so the combination of those two things sort of put us a little bit behind. Now gas, we anticipate making that up as we go through the rest of the year…
Holly Stewart – Howard Weil: Then maybe moving on to the comments within the release on the Wolfberry, the slick water stimulations, why the change there, maybe just a little bit of color and then any adjustment to cost, and then is this a permanent change going forward?
James T. McManus, II – Chairman and CEO: Holly, I am going to ask John to add a little color. I think we think it’s going to be a permanent change because the results are so much better. The formation just tends to respond much better from a productivity standpoint. As we outlined, our initial IP rates 30 day rate, 60 day rates, all of our rates look in even at 90 days are better on the slick water frac and the traditional frac we have been using and so the question is going to be whether we are getting acceleration here or whether we eventually modify the reserves and we don’t have enough time for that, we don’t have long enough to determine yet whether we are just accelerating. But the acceleration is enough increase in the overall return to keep going on slick-water. I will let Johnny comment a little bit about some of the logistics, that’s one of the reasons that we slowed down at the end of last year, as we were looking to change over to this process, John.
John S. Richardson – President and COO: Yeah, Holly and let me, the results as James pointed out are very compelling. This is the trick, but we are beginning to pursue its paid dividends, it does take more water, so you have a longer lead time. We actually have shifted our wells if you looked at our plan at the original part of the year and you saw the dots on the map, you’d say that after the first quarter those dots are in a different place and what we’ve done is we’ve located our wells back to where we have a little better infrastructure. If we were out in a remote area, I think you would see capital increase, but hopefully we will mitigate that. It takes more water to do this, about three times more water and you do have the more water to dispose on the back side. Of course you are going to produce that water. So we are going to move back into areas where we have more infrastructure where we can — we have the larger frac ponds that are required, the larger flow back ponds. James mentioned that was one of the reasons we just weren’t equipped for the shift earlier in the year and late last year. So now we are getting ourselves realigned. We’ve got some catch-up to do. And then going forward, I mean, with shales, particularly in a shale dominated area, the slick water with its procedure and how it actually stimulates the formation is just a superior treatment and we’re going to move towards that treatment recipe…
James T. McManus, II – Chairman and CEO: Holly, in terms of – just to give a little flavor on that, in terms of IP, we’re 48% higher on IP, 58% higher on 30 day performance and 59% higher on 90 day performance. So it’s really quite a difference there and we just think economically we want to do them this way from now on. There’s no reason to not.
Holly Stewart – Howard Weil: Well, then maybe just a follow-up to that, how long before – how much time do you need before you start thinking about changing assumptions?
John S. Richardson – President and COO: Well, I think part of this is already factored in the guidance production increase. Now, James I think addressed the long-term recovery, the ultimate reserves, so we’ll need little more time to understand if this is going to hold up over time or whether it is a sort of an acceleration. I don’t think we’ve seen enough data to and neither has the industry I think to make that assumption.
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