Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Matt Doherty with Advisory Research.
Matt Doherty – Advisory Research
Just had a question regarding the planned development schedule for the Marcellus acreage. You’re running a vertical rig and a horizontal rig right now?
Nicholas J. DeIuliis
Yes.
Matt Doherty – Advisory Research
Do you anticipate keeping it at that pace or perhaps going up and increasing the rig count in ’09 or what are the thoughts there?
Nicholas J. DeIuliis
The thought with the Marcellus is going to be right now it’s somewhere between an exploration and a development program and with those rigs that we’ve deployed in the exploration capital we put to work there, the first tack is to get a feel for what a vertical versus what a horizontal application might look like and we’ve seen preliminary, and I’ll emphasize preliminary, success with both, but our lean right now is that we’re probably going to want to drill much more horizontals than verticals. Yes, there is upside with regard to that program. Again, if we see the results that we’re expecting relative to the first number of the test wells. The other side of that of course on timing is going to come down to how quickly we can tie in and get into the sales meter to the production from these wells. That’s an inherent advantage that we have relative to our asset portfolio because of the coalbed methane play. We’re operating right above the Marcellus and on the midstream infrastructure that we’ve capitalized and put in place to take advantage of that, so let’s see how those vertical and horizontal test wells come in.
As I said, preliminarily, they look very favorable, and then once we’ve got a feel for what the economics are, then we start to pick specific locations within our 180,000 plus acres of Marcellus which will allow us to not only drill those wells and get great economic production rates but more importantly get them tied into the sales meter so we can start generating some revenue.
Matt Doherty – Advisory Research
With the Chattanooga shale, can you talk a little bit about what you think is driving kind of the wide range of results you’re seeing down there and along the same lines, what kind of rates you would need to clear that project economic or go into full scale development and then kind of where you are right now in terms of where you think you need to be.
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