Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from the line of Neal Dingmann with Dahlman Rose. Please go ahead
Neal Dingmann - Dahlman Rose
Good morning.
Tracy Krohn
Good morning, Neal.
Neal Dingmann - Dahlman Rose
Hi, Tracy, just wondering with the great liquidity position that you all have and nice cash that you have, what do you look as far as opportunities go, number one, paying debt down, are you comfortable there versus looking at additional leases versus looking at acquisition, just wondering how you balance all that?
Tracy Krohn
The last list would be paying debt down right now. I think we have got a very comfortable level of debt. It is long- term, for the most part, and we feel like there are opportunities in acquisitions and drilling, it does not necessarily mean that we just do acquisitions. It could also mean M&A. It could also mean that we find a bunch of other wells that we think that our prospects that we think deserve being drilled. We expect to see some deflationary pressure on rig rates and bulk rates and whatnot that will drive the cost of goods and services, at lease operating expenses down in the future.
Neal Dingmann - Dahlman Rose
Okay. Then the change here in the near-term, you can say politically, does that give you any concern as far as the changes potentially as far as holding leases and just what is going on in the gulf?
Tracy Krohn
No, I do not think so. Whatever the political landscape is going to be, we will deal with it accordingly as we always have.
Neal Dingmann - Dahlman Rose
Okay. Thanks.
Operator
We will take our next question from the line of Phil McPherson with Global Hunter Securities. Please go ahead.
Phil McPherson - Global Hunter Securities
Hi, good morning. Congrats on a great quarter, considering the difficult situation out in the Gulf. Hey, Tracy, if I do back-of-the-envelope math, are we looking at exiting the year at pretty close to 700 Bs, and I get to that by taking your unrisked pre-drill estimates on the deep shelf of 115 Bs, and you went 2 for 3, so is about 75 Bs. Is that the way to think of it?
Tracy Krohn
I do not know how to think of looking at our reserves at this point in time. I am not going to respond to that. We still got some wells to drill before the end of the year.
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