Question-and-Answer Session
Operator
Thank you sir. Ladies and gentleman at this time we will begin the question and answer session. (Operator instructions) The first question comes from the line of Chris Cook [ph] with Zasoff [ph]. Please go ahead.
Chris Cook –
Yes. Just a couple quick questions. What are your expectations for capital spending for the year and how much of your production hedged as far as prices?
Nigel J. B. Lovett
The first question related to capital expenditures, our budget is $27.5 million for the year which is exclusively associated with Phase 2 development in the Black Sea. I did not get the second part of your question.
Chris Cook – Zasoff
Yes. How much of your annual production in ’08 and even beyond have you guys hedged as far as prices?
Nigel J. B. Lovett
Okay. We have hedged through September what is approximately 50% of our estimated French oil production. That is actually 16,000 barrels a month and the hedge price on that is around 100.
Chris Cook – Zasoff
And so why wouldn’t you do more than that at these prices. I realize prices have continued to go up.
Nigel J. B. Lovett
Yes. I think, well first of all you do not want to get into a situation where you cannot deliver the amount of oil that you have hedged. And we felt it was a reasonable balance to come up with a hedge on 50% of what we thought we would produce and float free in the market with the other 50%.
Chris Cook – Zasoff
All right, fair enough.
Operator
Thank you. Our next question comes from the line of Myron Pawn [ph] with UBS. Please go ahead.
Myron Pawn – UBS
Good morning Nigel.
Nigel J. B. Lovett
Good morning sir.
Myron Pawn – UBS
On the [inaudible] of the Turkey’s offshore SASB properties can you tell us what percentage of that is sold and what the structure of the deal is?
Nigel J. B. Lovett
Well, I think first the deal is not done and it may not be done. I want to be very cautious about that. We are in negotiations but nothing is signed, set, sealed, delivered, approved or anything else. So I think at this point it will be premature for me to give you any specifics. It is still in the process of discussion, negotiation and due diligences.
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