Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from Richard Roy - Citigroup.
Richard Roy - Citigroup
As it relates to the integration issues, it seems to me that in Q1 a lot of the items were one time. If you could just give us a little bit more color on what’s carried over and give some more color on what the integration issues are exactly. And then you mentioned that the gas purchase contracts are burdened for the life of the NPI. Is the life of the NPI until you stop producing on these wells or is it indefinite?
Stephen R. Brunner
I’ll handle the first part of that and then let Chuck handle the Torch related question. With regard to ongoing integration issues, really when we put these companies together we lost some technical knowledge, that’s geological engineering and also some land expertise, with the ability to exercise our program. We have closed that knowledge gap. We’ve ramped up activity significantly on the west side of our property base, the Amvest acquisition, because we can’t retain most of the key technical people. Where we have been slow in ramping up activity is actually on the east side, that’s the Newfield and EnergyQuest acquisitions. We have significant activity planned there. We are ramping up that activity. So the ongoing integration issues don’t relate to the weather or to any of the initial problems we saw. It’s simply closing the knowledge gap on the east side and ramping up our activity in that area.
I guess just a little perspective, because of the nature of our asset activity that we undertake in a quarter really impacts production in the next two quarters. So if you think about where we were in Q4 2007 and Q1 2008, there was very little activity. We started ramping that activity up and so there’s actually a delay in production as you can imagine from taking it from a very low activity profile to what is now a growing and active activity profile. Everything we do through Q3 impacts production in that given year. You need to think of Q4 as actually activity which builds and helps us achieve our goals for the following year. What you’ll see different this year from perhaps the last cycle is that we will be busy in Q4 and Q1; we have the equipment, the people in place, we’ve closed and our closing the knowledge gap; and so we will be working through Q4 and Q1 which will have a significant impact on 2009.
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