Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Salil Sharma – Highbridge Capital Management.
Salil Sharma – Highbridge Capital Management
I’m just wondering in your 10K you have some properties in the Granite Wash and I’m just wondering if you have acreage perspective for that play?
Thomas E. Jorden
We’re looking at that the last couple of days. We believe we do not but we’re doing reconnaissance.
Salil Sharma – Highbridge Capital Management
Just real quickly the second one, you mentioned $14 million charge, should analyst be treating that as a onetime charge?
Paul Korus
I will leave that up to the analysts.
Operator
Your next question comes from Gregg Brody – J.P. Morgan.
Gregg Brody – J.P. Morgan
I was just wondering if I could get your thoughts just on the acquisition opportunities out there and how that dovetails with your new credit facility expansion?
F. H. Merelli
Well, I think the easiest way to put that is we have our nose in the wind. It has to be an exceptional opportunity that would cause us to take on more debt and buy something that is of any significant size. We’re keeping an eye on it. We have dry powder and as we move in to the fall we’ll be watching it. But, you know, we really have a lot of drilling opportunity that we’re contemplating so it’s just going to be best opportunities for either our cash flow or increasing our debt.
Paul Korus
I’ll add to that Gregg, as you know especially the high yield market for issuers such as ourselves has been quite active recently. We think we’re obviously well positioned to access it when and if we choose. The dilemma of course is trading 3% money for 10% money and if we were to term out say $300 million the simple math is that’s about $21 million of additional annualized interest expense plus up front underwriting fees so that’s the economic decision.
Until we see indications that that market will not remain open for the foreseeable future to issuers like us we can afford to wait. If we find a good acquisition opportunity later this year or early next year then we could access the market at that time is our view.
Gregg Brody – J.P. Morgan
Just a question for Mick, the hedges obviously protect your cash flow and you’ve added them there so that you can keep your plan going, I’m just curious what to expect going forward in terms of a hedging program? Should we view this as a one-time sort of action or do you think that you’ll actually maintain a hedging program going forward?
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