Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Paul Patterson - Glenrock Associates
Paul Patterson - Glenrock Associates
The ceiling test write-off how should we expect that to impact DD&A going forward?
Steve Bietz
As far as the DD&A rate on a go forward basis, if you look at the write-off it should reduce our DD&A rate I think its about $0.16 per Mcf equivalent on a go forward basis.
Paul Patterson - Glenrock Associates
The reduction in the drilling in the Bakken, what’s causing that, if you could just elaborate a bit on that.
Unspecified Company Representative
We’re going to be adjusting our rigs that are working the field to one rig here shortly and look to drill with that for the balance of 2009. Part of the driver there, we’re looking to maximize the value of our acreage in the areas that are most prolific so we think that with that rig working we’ll be able to really maximize that value of that Southern acreage before any of our lease terms would expire there.
Paul Patterson - Glenrock Associates
Is there any change in the outlook in terms of what the production coming our of the Bakken is or—
Unspecified Company Representative
I guess our guidance includes the effects of the increased production from Bakken for next year.
Paul Patterson - Glenrock Associates
But does the property seem, do you have the same assessment of the property that you had previously?
Unspecified Company Representative
We’re still very encouraged by the property particularly the Southern acreage, we’re going to dedicate a fair amount of capital to its development this year and on into the future. We’re just recognizing there is a pretty low oil price right now so we’re kind of pushing some of that drilling out as well.
Paul Patterson - Glenrock Associates
The other sector, O&M was a benefit of about $6 million in the quarter, what was that? Is that sort of an abnormal thing or it is a normal thing? The delta between 2007 and 2008--
Doran Schwartz
Basically the primary reason behind that is each year annually we have a review of our cap of insurance company and the insurance programs that are included in that company and due to the favorable experience that we’re having with those programs, it reduced our O&M expense.
Paul Patterson - Glenrock Associates
What’s causing that? Is that something that is going to be continuing in 2009 or how do we think about that?
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