Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Dave Kistler with Simmons & Company.
Dave Kistler - Simmons & Company
Quick question with $1.8 billion of liquidity, can you walk us through the capital requirements for the next two years and what effectively your surplus will look like with that much cash and credit available under your current facility?
Winston Talbert
Yeah, the way we are looking at the business and after we did the equity offering, we think we could a current outlook and the strip, probably a little lower strip than you got right now, probably get through 2010 without really drawing down anything meaningful on the revolver. Does that help?
Dave Kistler - Simmons & Company
Yeah. So essentially absorb 500 million in cash and still have the flexibility of the revolver at the end of 2010?
Scott Winters
That's right.
Jim Flores
Yes. And Dave just a little more color on that. The equity offering gave us a great backstop to the revolver. The banks are all, have issues and various degrees of health and so forth, but we wanted to make sure that our revolver was something we would be willing to use and feel confident and our balance sheet was strong enough to borrow on the revolver.
Lot of people have liquidity on the revolvers and especially with all the write-downs that people take in this quarter and so forth are not going to be in a position to even have the courage to borrow unless they're desperate. We are not going to be in that situation. We're going to make sure that we maintain a conservative financial stance and if we need to borrow on the revolver or see something opportunistic from a standpoint and we can do that. Feel comfortable about our leverage even post drawing down on the revolver which is kind of a key part of our strategy.
Dave Kistler - Simmons & Company
Great. Following up on the opportunistic comment, compressed gas prices right now as you mentioned companies that are having liquidity problems. Are you seeing an increase traffic in terms of people who are looking for partners and either well interest formats or in just straight sales of assets these days?
Jim Flores
We are seeing more opportunities in areas that are interesting to us, some of the lower cost shale plays and also some in deepwater that that not necessarily distressed assets. I would say premium asset where people are trying to fund operations and those types of things.
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