Question-and-Answer Session
Operator
Thank you. (Operator’s Instructions). Your first question comes from the line of Michael Jacobs, Tudor Pickering & Holt.
Michael Jacobs – Tudor Pickering & Holt
Morning everyone. Glen, your hedge position through 2010 speaks for itself, I wanted some help in thinking ahead through the end of the decade, and if we think about 50 to 75 million a day of unhedged production through 2010, how do you think about your rig count and completion schedule at $4.00 gas?
Glenn Darden
Are you referring to 2009 or 2010 or beyond that?
Michael Jacobs – Tudor Pickering & Holt
Kind of the logical progression as you move into 2010 and kind of where you’re comfortable from a percent of production hedged and how would you think about that unhedged production and associated development schedule.
Glenn Darden
You bet. Well, we will have a backlog of uncompleted wells, so we’ll drill in case this year if we spend our full budget, which that’s debatable with current prices. But if we spend our full budget, we’ll drill 180 Barnett wells, and we’ll complete about 100. So, we’ll add 80 wells to an inventory of roughly 90 wells or so. So, moving into 2010, we have probably five rigs contracted at that point, and that slows down in 2010, so those contracts play out, so those aren’t really factors. So we can slow our drilling down significantly, cut it in half or three-quarters, and just complete wells and still keep production flat should we want to, I mean depending on what the gas price is. So I would – based on today’s prices, I would expect to significantly slow down drilling, slow down completions as well, but keep a reasonable – certainly our hedge production volumes for ’09 and 2010 fulfilled.
But we’re significant savings on the frac side and those savings appear to be accelerating. I’ll give you an example of our budget and this is beyond your question here Mike, but I’d like to bring it out now. Our budget for 2009 is $600 million; $150 million of that is mid-stream and of that $150, a little less than a third is covered by Quicksilver Gas Services. So you take that $450 million, all of those costs that $600 million budget was based on 2008 costs, we’re not seeing 2008 costs, we’re seeing easily 20% and probably more than that, maybe closer to 30% savings across the board.
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