Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Dave Kistler - Simmons & Company.
Dave Kistler - Simmons & Company
For 2010, uptick in capex, can you give us any kind of additional color on the capex, how it will be directed, and what you see as far as a rig count uptick in 2010.
Tom Ward
We should not have a rig count uptick. We have scheduled for 25 rigs in 2010, 20 of those going in Pinon. That that does have those 5 discretionary rigs outside of Pinon, does require us to basically look at a $6.00 NYMEX. We don't want to drill hyperbolic decline wells in a very low-price environment and that's why we don't have any drilling today.
So I don't think with the pipe that we already have bought and we could probably look at a capex that would be flat at 750 across the board, for 2010, 2011, and 2012, except we've already spent some of that money.
So I think that it's really not a uptick other than what we've always planned to do and why we raised the capital we did in 2009 was to get ready to fill Century Phase 1, which starts early in the first quarter of 2010. And that's drilling 20 rigs in Pinon field.
Dave Kistler - Simmons & Company
Can we tie in the service agreements that you locked down on long-term contracts for cementing, etc. Can you talk about the term of those and the thought process of locking those down at this point?
Tom Ward
Sure. I'll talk a little bit about the thought process and then turn it over to Matt.
Our thought process is that we have a rig count that is probably bottoming and as prices move up next year, might increase just a bit. I don't see it really ramping up tremendously but that we have moved down to a price of $2.2 million per well and we wanted to lock that in as long as possible, and Matt's done a great job and I'll let him address it now.
Matt Grubb
One of the very positive things that's been an outcome of this downturn is driving the service calls down. What we're going to do is lock into the various services for 12 months to 18 months, which will take us certainly to the middle of 2010 and in some cases all the way through to the end of 2010.
- To read the full transcript on Seeking Alpha, click here »
