Could you give an estimate for the EOR?

It is a couple of hundred of Bcfe, but the Oilbird reserves are already reflected in the reserve books. They are shown there as PUD reserves, so all that will happen this year is those PUD reserves are going to be shifted to PDP reserves.

How much is the development capital for that?

The total is going to be around $150 million. This year it will be probably about $50 million and $60 million of the total CapEx budget is going to show up as money spend to develop the transfer of those reserves.

Could you give us an update on the West Texas Barnett Shale?

The company slowed that well the previous quarter for about 90 days waiting on the pipeline. It acted net slow characteristic similar to the Western Johnson County well. For the last 90 days it’s been waiting on a pipeline connection. The company hoped that it would get a pipeline connection in July, but it was postponed for November. EOG is currently drilling a second horizontal well which will be completed in late November.

Are you experiencing any shortage of rigs and upward pressure on the rig rates?

The company has a sufficient number of rigs so there will be no rigs other than the ones made at this point. The rig rate has continued to increase reaching about 8.5% to 10%.

Since you would be almost doubling the drilling program to 450 wells in 2007, won’t you face any kind of shortage of rigs in the 2007?

The company had contracted for new drilled rigs and they are just starting to be delivered. There will be 15 wells through the balance of this year and also into 2007.

Are you expecting strong gross profits for 2007 because of drilling gas reserves in the US or rising demand from that?

The company is expecting robust gas prices mainly because it hasn’t seen a supplier response from the high level of drilling activity in the US and Canada. The company believes that on November 1st it will have about 3.45 Tcf of gas storage. EOG expects that gas will average in the range of about $9 for the calendar year of 2007.

Are the tax rates benefits in Canada and Alberta going to be a recurring process?

It is not going to be recurring. The change in the tax rate caused deferred taxes to be recomputed, and that reflected in the second quarter. There will be a benefit of the now lower tax rate in Canada going forward, but they will not be substantially lower the overall tax rate.

You have got an excess of $700 million in your balance sheet, why do you keep such light balance sheet?

The company is trying to assess, what is the proper number of wells that it needs to be drilling over the next 4 or 5 years in the Fort Worth Barnett. The company is waiting to see whether the other 6 incremental Barnett clones are going to work or not. If those clones work, they are all going to need some funding in 2007 and probably 2008 before becoming self-funding. That is why EOG is keeping a very light balance sheet.

Are you still expecting to see any involuntary shut in productions of gas over the next couple of months?

There is such possibility only in October but the likelihood of that happening is beginning to drop significantly. The probability of having a serious production shut is considerably lower than during the first quarter.

What are the key challenges to bring a shale area to commerciality?

Commerciality of those shale areas around the country is really case-by-case. It depends on how deeply it has its held, how hard are the rock deposits, well costs, completion costs. Rig primary driver is in most cases, its reserves per well that are going to determine its economics. That is why costs are quite variable.