Question-and-Answer Session
Operator
Certainly. Ladies and gentlemen if you would like to ask a question today please press the * then 1 on your touchtone phone. You’ll hear a tone indicating you have been placed in the queue. If your question gets answered and you wish to remove yourself from the queue please press the # key. Once again if you have a question please press * then 1.
Our first questions are from the line of Ray Deacon with BMO Capital Markets. Please go ahead.
Ray Deacon - BMO Capital Markets
Hey Nick it sounds like your balance sheet is in great shape and I’m just wondering if you are successful in the three upcoming Marsalis and the Chattanooga would you be able to ramp up activity this year and also if there is upcoming carbon legislation I guess in what way could you potentially benefit from that?
Nicholas Deluliis
Ray the issue with regard to some of the shale plays we are exploring right now it really does come down to for us is NAV. Let’s say we are lucky enough to get strong results from the Marsalis that look to be accretive and have a good rate of return. What we do then is develop an expanded exploratory program and step out program and that program and timing is set with regard to what can be done in the most efficient manner again from an NAV or rate of return standpoint.
So the good news is with regard to something like balance sheet or access to capital that is not a rate limiting factor in any way shape or form within the foreseeable future and the expansion beyond what we have currently committed to with regard to shales would be set by simply the efficient deployment of capital. So it is a pure NAV type of assessment. We don’t want to move too quick where we start destroying value but we are going to move as quickly as we can and capital constraints because of our balance sheet won’t be a problem.
On the carbon side of the equation the devil is always going to be in the details with regard to the specific plans that basically the Congress or presidential candidates propose, come up with and approve regarding climate change mitigation efforts. It is those details that will ultimately determine timing and availability and eligibility of carbon offsets or carbon credits and we do know that no matter which foreseeable plan comes into play we are in a pretty good position with regard to seeing some value creation for our shareholders on that front. As to how much and when we would start realizing that and what our strategy would be to try and monetize it we would want to wait and see how the specific rules and policies and elections, frankly, pan out.
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