Question-and-Answer Session
Operator
(Operator instructions) Our first question comes from the line of Ellen Hannan of Weeden & Co. Ellen, you may proceed.
Ellen Hannan – Weeden & Company
Thank you, good morning. A general outlook comment Rob, the last time we met you talked about trying to work with some of your service providers in terms of kind of sharing the wealth or adversely sharing the pain in terms of upping your re-contract in terms of new day rates, etc, can you kind of update us as to where you stand with that?
Rob Turnham
Sure Ellen. We have two rigs that we have entered into a color with that is tied to the NYMEX gas strip, we’ll mark to market the NYMEX strip at the end of each quarter and the rig rate will fluctuate with a floor and a ceiling and basically the floor is $16,000 a day plus top drive of $3000 a day, so we are looking at a kind of a minimum price there of $19,000 a day and that is for anything less than $7 gas price and these are large rigs by the way. They are the equivalent of 2000 horsepower rigs which we feel like will allow us to shake days off of our drill time. We are hopeful of saving the work from three to four days due to the added horsepower. We are also seeing as you know we bid out all of our goods and services. We do it on a calendar year basis and we didn’t look at it quarterly as well as semi-annually and we have just gone through that bid process and we are seeing 15% to 20% projected cost reductions across the board when you look at drilling and completion expenses. Some of that is fluid, you look at pipe prices, we clearly would expect additional pressure and relief on pipe prices, pressure pumping is under pressure, the profit is not, it is in high demand but we would hope to continue to see across the board some relief on prices.
Ellen Hannan – Weeden & Company
Thanks. Now, just one other question maybe now for Gil, in terms of your Cotton Valley Taylor sand well, could you put that in context of what you are looking more in terms of EURs and well costs and how that compares to what your thoughts are on the averages for the Haynesville Shale wells?
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