Question-and-Answer Session
Operator
(Operator Instructions) Your first call comes from Clayton Moran – Stanford Group.
Clayton Moran – Stanford Group
Your SEC filings indicate that the IRS has moved on to 2005 through 2007. Can you give us a sense if there's a dispute there or if we might see another potential tax liability as a result of this new audit?
James Courter
Since we have been a public company we have been audited every year, every year we've been a public company so the fact audits continue is just a fact of life of being a large business even though we're not as large as we used to be, but we are a large business in New Jersey. That said, we have characterized the disputes with the IRS, in our filings we have never made any significant changes in our tax liabilities in the way we accrued things from day one.
Even though we did have a negotiation with the IRS to finalize the shortage, it was a very immaterial change in the total liability. The only major difference was when we were discussing what was long term and what was short term.
The company has always felt that the tax liability is deducted and there's nothing in any thing that we have knowledge of any orders or any entity that we're aware that would require any additional disclosure or accrue any additional liability.
Operator
Your next question is from [Michael Traynor – Milwaukee Private Wealth Management].
[Michael Traynor – Milwaukee Private Wealth Management]
With regard to the shale oil, what level do you assume you need to have crude trade at in order to be competitive with your end product?
Claude Pupkin
It's fairly early in our R&D work to be able to give you a thorough answer to that question. The preliminary numbers that we've run which happen to be consistent with some of the majors who are involved in the business show a cost of production roughly $40 to $45 a barrel range. We are several years, quite a few years from getting in a position to be in commercial production and we strongly believe what Jim referred to earlier which is the long term prices are going back up.
So we feel fairly confident that there will be significant margin between our operating costs and our external market price of oil. However, as I said it's still early in the game.
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