Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Neal Dingmann – Dahlman Rose & Co.
Neal Dingmann – Dahlman Rose & Co.
Say Jim can you address a bit as far as, you know, now with your CapEx I bet sort of living within your cash flow means and that, in addition to sort of the I guess the lack of profit that Gary had mentioned, can you give me an idea, I guess, as far as how active you can get, you know, within the next quarter or two in that the Pearsall in that region? And then will that come a bit at the expense, will you slow down San Miguel or Glen Rose or not necessarily?
James E. Sigmon
I mean, we’re still developing it. But let me tell you the priorities are. It makes no sense to drill Pearsall wells if I can’t frac them. That being said, I’ve got a minimal number of Pearsall wells I have to drill under the farm out agreements by time frames. I don’t have those exact dates in front of me, but I would anticipate – I think it’s the middle of the year, June or July of next year; we have to drill by that period of time. I think we have to drill four wells under our EnCana project. We’re starting one of those now. So there’s a minimum number of wells we’re going to drill that are the Pearsall.
We – it depending on availability of profit and obviously the success of the wells, we can always adjust what we’re going to do with wells we’re going to drill next year, but we’ve got a minimum Pearsall that we’re going to get. San Miguel oil sands, we’ve got heat going in the grand on two of our [products] where we’re actually heating the wells, we’re actually getting some oil coming back. You know, a small response at the present time, starting. It makes no sense to shut down those operations and pull back that operation. I mean, San Miguel oil sands was just not doing what we want.
However, we don’t think any reason to increase our operations there and expand that activity there in the light of the financial markets, where we are today, oil prices where they are right now. So you’ll see us most likely not doing a lot of CapEx increases in the San Miguel oil sands; however, we will just maintain what we’re doing at the present time. And I don’t know if I got all your questions there –
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