Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Paul Patterson - Glenrock Associates.
Paul Patterson - Glenrock Associates
I want to touch base with you on the DD&A reduction, the expense reduction as a result of the ceiling test. Could you sort of a quantify what that impact is for this year, I guess on an annual basis?
Steve Bietz
Just to update you on that, our DD&A rate will drop roughly $0.50, our DD&A rate kind of on a go forward basis will be kind of in that $1.52 range effective April 1.
Paul Patterson - Glenrock Associates
Okay and so basically we just take the Mcfe equivalent and multiply that by the production element, we’ll get an idea of what that pretax benefit of that would be; correct?
Steve Bietz
That would be correct, yes
Paul Patterson - Glenrock Associates
Okay. Now, the second thing is that, obviously you guys have got lower prices here and you guys have lower production than when you guys first initiated guidance and yet you’re reiterating it. What are the offsetting factors we should be thinking about other than obviously this DD&A benefit?
Terry Hildestand
DD&A was a big piece of that, Paul. In addition to that, we’re seeing the pipeline earnings up a little bit. We’re seeing increased storage. I mentioned in the script and just some minor changes from some of our other business units.
Paul Patterson - Glenrock Associates
Okay. Then I guess on the production, when we’re looking at 2010, what should we be thinking about in terms of your production in E&P a year out or so?
Steve Bietz
I think it’s probably a little premature and certainly we are working on putting together our thoughts for next year and kind of watch what the pricing environment does between now and the end of this year and we’re going to react accordingly. So, I really don’t have a lot of good direction for you right now.
Paul Patterson - Glenrock Associates
Okay and then on the Wygen plant, can you give us a little bit more of the fuel. I don’t remember seeing an actual cost that you guys are paying for it. If you could just give us a little more flavor for that?
Dave Goodin
Paul, we didn’t disclose the purchase price for that, other than I’ll say it’s competitive in the marketplace right now and we did file a certificate of public convenience and necessity with the Wyoming Public Service Commission.
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