Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Leon G. Cooperman - Omega Advisors, Inc.
Leon G. Cooperman - Omega Advisors, Inc.
Two questions. One, could you review the significance if any of President Obama’s tax plan as it regards intangible drilling costs and the significance to the attractiveness of ATN’s offering to the public? And then secondly and equally importantly, your capital management plans – I went back and I looked at the record and I guess all of us to some degree were drinking Kool-Aid, but in 2006 you spent $29.9 million on repurchase; in 2007 you spent $80.4 million on repurchase; in 2008 for the first nine months you spent $34.9 million. And early on in that period probably the Marcellus Shale was at best a glint in your eye, probably not even a consideration. I think the average price paid was somewhere between $35 and $36.
We’re sitting on a debt free balance sheet with about $2.50 a share in cash, significant cash flow generation, significant asset value and the stock is down about 70% or thereabouts from what you previously had bought it back at. So I’d like to kind of understand – I understand the environment is a bit different, to put it mildly, than you envisioned a year, a year-and-a-half ago. But kind of what the plans are. So those two questions.
Edward E. Cohen
Thanks very much, Lee. First of all with regard to the deficit reduction press release and text that was put out toward the end of last week and disseminated over the weekend, it actually contains six elliptical words, ?2011 eliminate expensing of intangible drilling costs.? Our expectation is that if that did lead to legislation it’s unlikely that the government would be able to express the legislation in the eight words that they put onto their release. So the legislation is likely to have the usual complexity and conditions and targeting of particular targets if it ever were to be enacted.
Our sources suggest that as the president had indicated in his campaigning that it’s majors like Exxon and others who are the target of this aspect because the independent drilling companies like ourselves who are responsible for most of U.S. production of natural gas, it’s hard to imagine that an effort would actually be pressed into legislation to discourage at this time U.S. production of the clean fuel, natural gas.
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