Brian Singer (Goldman Sachs): What were your major contributors to the better than expected performance in the Barnett over the last year?
Mark G Papa: The single largest contributor to our improved Barnett performance over time has been improvement in well completion efficiency and this is something we practice significantly in the Johnson County. The dramatic improvement in well completion efficiency is the major strength that differentiates our company from other industry players. There is third party data on our website, which shows that we are consistently making better wells than our competition.
Leo Mariani (RBC Capital Markets): What has been the position in East Texas in the past few quarters and what are your plans for 2008?
Mark G Papa: We have a division office in Tyler, Texas which runs all of our operations in Texas, North Louisiana and Mississippi. Our last year production for the division rose about 12% year-over-year and we expect it to gain another 8% to 10% in 2008.
Leo Mariani (RBC Capital Markets): Has there been any recent increase in horizontal exploitation in that area?
Mark G Papa: All the production that has been generated from the Tyler area is vertical drilling though we are beginning to experiment in a couple of resource plays with horizontal drilling. We expect good results from that in 2008 but for now it is all vertically sourced production growth.
Leo Mariani (RBC Capital Markets): You mentioned about 21 million barrels at year end 2007 for Bakken. What percentage of that is PUDs and PDP and what is the relevant number of wells?
Mark G Papa: We have about 56% wells there and an estimated 50-50 proportion being 10 million barrels on the PDP and another 10 million barrels on the PUD.
Kenneth Carroll (Johnson Rice & Company): Looking at natural gas, you had about 127 negative revision in North America. Any detail as to whether that was from any particular areas or it was spread across the company?
Mark G Papa: It was one area, Canada, where we had shallow gas fields, especially one in Alberta where the drilling and production results were not according to our expectations for that particular area. We ended up with about 57 Bcfe from shallow gas activities in Canada. There is another area as far as the U.S. gas negative reserve revisions that were completely offset by positive reserve revision in natural gas liquid. This is particularly in western areas of Barnett and the gas will be shown on the accounting statement as natural gas liquids and less as Mcfe.
Ben Dell (Sanford Bernstein): Looking at your asset geographical distribution, it appears Canada is diluting your overall performance. Any thoughts about disposing those assets and applying the proceeds into the U.S. market where your returns are better?
Mark G Papa: The Canada gas supply picture is not materially different from the group. We have been forecasting flat production in Canada for the years 2006 to 2008 but we believe there are several areas there which are amenable to horizontal drilling. We believe Canada is a very big deal and we are therefore looking at several areas there to apply horizontal drilling. Our expectation is that we will realize significant gross from Canada towards 2010 and beyond largely through resources that are accessible only by horizontal drilling.
Ben Dell (Sanford Bernstein): There has been growing industry interest in inshore high gas in Europe. Have you considered areas like Eastern Europe and Ukraine?
Mark G Papa: Yes we have. The implementation of horizontal drilling to resource plays can be a very tight sandstone that doesn’t have to be shale but the application of horizontal drilling to large hydrocarbon accumulations that don’t work well with vertical wells. We believe there is going to be worldwide onshore phenomena and so we are looking at areas like Europe where there are available areas with huge assets of hydrocarbons that are yet to be tested whether horizontal drilling applies.
Joseph Allman (J P Morgan): What is your current net acreage at Bakken?
Mark G Papa: It is greater than 175,000 acres.
Joseph Allman (J P Morgan): What is your comment on the acreage west of the Nesson Anticline and do you think that improved technology can make that area commercial?
Mark G Papa: It is possible but we are more focused on crude oil in the Uinta Basin.
Joseph Allman (J P Morgan): Will you be spending fewer dollars in Canada in 2008 to get that by-production?
Mark G Papa: Out of the $4.1 billion E&P budget, Barnett will get $1.4 billion, the Denver division, including the Green River Basin Wyoming area, will get $1 billion and Canada’s allocation will be about $400 million, which is more or less the same as last year.
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