You can go to 23 rigs and even ramp your production up. Why isn’t that happening?

The goal for the year in terms of EOG’s ability to supervise things is 225 wells. The company has a hundred wells drilled year-to-date and about 30 of those wells are either waiting on completion or waiting on pipeline high end. That’s where the backlog is. The fact is that the company is drilling the wells faster than it can get them completed. It decided that there is no sense in running more rigs and building up bigger backlogs until it can get staffed up internally to handle even more fracs. EOG adequately supervises the well completions and production times of the year. It is not so much how many could be drilled, but how many could be completed.

You have lowered the net reserves per well and estimates for Western and Northeastern Counties. What is that attributed to?

In the Eastern counties the reserve estimate is more represented. The company has a bigger population of wells and it is showing about 2.5 net Bcf now. In the western side the company is drilling more short laterals as it gets into issues by drilling closer to these cars and is drilling Class B and Class C locations and it is not drilling all Class A locations. What the company does in the western side, lowers the like a tenth of the Bcf.

Can you make up for the problem in Johnson County which had total net potential of 1.25 and 1.80 Tcf?

The company believes that Palo Pinto and Hill County are going to turn out to be better than average counties. But this presumption is based on the seismic the company has but nothing can be said for sure till drill works are done there

Are Palo Pinto and Hill County the counties 0.8 to 1.0 and 0.8 to 1.4 Bcf per well?

Palo Pinto and Hill may weight the average up. The company’s belief is that the Jack County, the Erath County and Hood counties are probably going to be 0.8 to 1.0 net. But it is also the belief that the Hill County and the Palo Pinto may turn out to be better than those of the Erath and the Palo Pinto and the Hill County.

Could you comment on the progress of the negotiations for Block 4(a)?

The negotiations for the new contracts for Block 4(a) are currently in progress, and the company believes that it will be able to get a gas contract to bring those volumes online, mechanically that should happen in 2009.

Would you be able to commit some gas in your exciting fields to supply the needs for the new contract before the production of 4(a) is ready?

That is the company’s intent. It’s discussing it with the government right now.

Have you spread the deliverability capacity out of the existing fields?

In the SECC block and in the U(a) block, EOG had excess deliverability.

Can you characterize how much excess deliverable you have?

In the first half of the year, the company was utilizing much of that excess deliverability to fuel domestic and LNG contracts in countries. Deliver abilities on a gross basis are in the neighborhood of 0.5 a Bcf a day.

Can you comment on a full cycle basis the factor in the land acquisition cost and what the rate of return in Barnett is?

The land cost and the seismic cost are all costs generally incurred. The land cost would have been incurred over the last 2 or 3 years as the company accumulated over a significant land position in Barnett, the seismic cost would have been incurred primarily last year as EOG shot most of that acreage. If those costs are included it would probably de-rate the rates of returns at about 5%.

Any comment on Oilbird lower results?

It is in the regional block the company acquired back in 1992, the SECC block and there was a couple of old technical wells drilled back in early 80’s. EOG actually discovered a couple of sand that turned out to be the top of the accumulation. Additional sands were found below that as well as fresh and additional coal blocks. It is a new discovery.