Question-and-Answer Session
Operator
Thank you. (Operator instructions) We will take our first question from Stephen Maresca with Morgan Stanley.
Stephen Maresca – Morgan Stanley
Good morning everyone. My question is to do with Rockies basis and we have seen it obviously come all the way down and in some cases be a little bit of a premium to Henry Hobbs [ph] and I wanted to know if you could talk about how this impacts WPZ from a cash flow perspective?
Alan Armstrong
Sure. It comes right out of the big portion as you know of our volumes and our margins as produced in both Rockies and San Juan that is the largest portion, so that is the area that we are exposed to, what we have seen the benefit from that has offset that has been our lower NGL transportation rates which were cut in half when we moved form MAPL last year over to Overland Pass and so that has been a pretty large offset to that basis differential. But it certainly comes right out of our bottom line when we see our gas prices increase there in Wamsutter.
Stephen Maresca – Morgan Stanley
And then you have got –
Alan Armstrong
I was going to say you can see we had a pretty flat basis differential in the third quarter. So you would not expect to see much difference than that for the fourth quarter particularly if you are looking at first to month rather than spot pricing.
Stephen Maresca – Morgan Stanley
Got you. Two other things, you talked about you have not seen the big volume decline that we made, many may have expected given the low gas prices that we had for a while, can you talk to why you think that has happened?
Alan Armstrong
I think there are several reasons. First of all in the San Juan basin that is just such a big basin and most of our wells are fairly old there I think 85% of our wells there are older than five years so the decline rate on those wells is pretty low to start with. So even when we see a falloff in drilling we just do not see it move very fast one way or the other. In the Wamsutter which is probably more highlighted as an area that was expected to decline, we have got very large customers in that area, BP, Anadarko and Devon are by far the three largest customers with BP being a lion’s share of the production there and they have a very long-term perspective on gas prices and they have a fairly large position in (inaudible) which keeps them producing into that capacity long term. So we have got a lot going forward having some of those bigger players who have a little longer-term perspective on things.
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