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#I think the most activity in our area has been from BHP and also from EOG and the well results just seem to get better and better.
So we still don't have a good handle on cost because we haven't drilled or fracked a well yet.
We are still working on a farm out.
We're closing to getting it than we were two weeks ago.
But looking at the BHP wells, the Horseshoe Springs wells are the best thing to compare to.
I think at Analyst Day, we're predicting the generation-three rigs to go from about 1.8 wells per rig per month to about 2.1 wells per rig per month.
We seem to be on schedule for that.
So that is what I would use in your model.
This is <UNK> <UNK>, I will address the inning for the efficiency.
I think probably the bottom of the eighth.
I think there is smaller gains to be made but they are going to be more slug-it-out type stuff.
Our average Eagle Ford well is running 10 days to 12 days on a 6,700 foot lateral.
And we see incremental gains but they are small.
We talked about it at Analyst Day.
It is kind of slugging it out from here.
We do get a little bigger jumps when we bring on these new generation rigs and new generation tools.
I think the eighth inning is where we are at.
On the EUR side, this is <UNK> <UNK>, I think we're probably six to seventh inning.
One thing that we have to remember here is the most mature Eagle Ford well has probably been online for five years or less.
And I think if we have been able to prove anything in this industry and in particular with respect to resource plays, shale plays, is that we have figured out ways to get more out of this rock.
We have started out with pretty low recovery efficiencies and we've consistently been able to up that.
<UNK> earlier talked about a couple of different things we are trying on the completion front.
And there may be some things down the road that we don't even know of yet, but these are 30 year to 40 year life type wells.
And I think we will see continued improvement in the EUR.
Good morning, <UNK>, this is <UNK> <UNK>.
With respect to the Brown and Wagler and Rector wells, it is important to understand their relative structural positions and location north to south in the play.
The Rector and Wagler wells are at about the same structural depth.
Some 20 miles apart.
And when we tested the Wagler wells, we primarily tested those for a short timeframe because since they are on strike with the Rector, we expected them to be very good wells.
And indeed, they were.
And we were more interested in getting fluid samples to kind of refine our understanding of the facilities that we would need and stabilization around those wells.
The Wagler wells were very Rector-like.
The Brown well is some 6 miles up depth of the Wagler wells.
So if you go up depth, it's about 6 miles away and about 400 foot to 500 foot shallower from a structural standpoint.
And we are very pleased with the Brown well relative to other wells in that structural position.
We have averaged over 400 barrels a day.
For the Brown and we are on day 100 of the flow test for the Brown, so the well is doing well.
It is some 30% less almost than our type well in length.
Our type well is 8,000 foot and it is on order of 6,200 foot in length.
So it continues to flow.
The last test a day or so ago was 340 barrels a day plus and over 1 million cubic feet a day plus.
With respect to be exact pressure differences, between the Rector, Wagler and the Brown, we view that as somewhat competitive and prefer not to get into that.
Hey <UNK>, this is <UNK> <UNK>.
I think getting back to my comment earlier about whether that ash bed seals.
If it does not, our anticipation is that the Upper Eagle Ford is going to look very much like a Lower Eagle Ford well.
If it does seal and it is an independent reservoir, it will be more chalk like.
We're not sure at this point what the EURs are going to look like in that scenario.
It would be hard to comment at this point.
As far as the Permian comparing it to the Eagle Ford.
There are a lot of moving pieces there in terms of well costs, differentials, the amount of gas.
We think the better performing Permian wells look very Eagle Ford-like in terms of economics.
And so for us, we think where we are going to be drilling we're in, our initial wells will be in that area.
We believe it will be competitive with our Eagle Ford.
I guess I support your plan as somebody who wants to make acquisitions.
But I read way too many reports where people think it is going to be a U-shaped recovery.
And it just depends on where the right leg on the U is, whether it's a year from now or five years now.
But, the contango dropping like it did should help us eventually to bid-ask should start shrinking and people will start getting a little market therapy and be willing to sell something.
I think it all depends on oil price.
Not only because it gives us more cash flow to invest but the affect of the big differentials has less bearing.
The Eagle Ford right now has a low differential like $2 below WTI, whereas the Niobrara is still higher than that, $6 to $10.
The Permian is higher than ---+ or is around $10.
Utica seems to be around $8 to $10.
So, as long as those differentials stay there, then Eagle Ford is going to always command the dollars.
But if prices go up enough, then that shrinks ---+ or the impact of that differential doesn't have the same bearing, and we'd probably think more about drilling in some of these other areas.
Yes, that would be safe through 2016.
And 2017 we'd probably start thinking about holding acreage in the Utica.
We don't really have to spend much money until 2017 on Utica acreage holds.
We really don't have to spend much money anywhere else on that.
<UNK>, this is <UNK> <UNK>.
So far, we are a bit ahead of what we projected.
Right now, we are running on the oil ---+ or on the Eagle Ford side.
We are at about 10% on the drilling and about 23.5% almost 24% on the completion side.
If we kind of hold that constant for the rest of the year, assuming we maintain that, we're going to basically come out just a little bit of ahead of what we predicted in our models.
Going forward, on the drill-and-completion side, I think there is a little bit of room there.
Once again, I think it will be kind of slugging it out from here forward if we see commodity prices start to come up and we see activity pick up, the discounts are directly tied to activity levels.
So if activity levels come up, the discounts are going to stay stable and at some point they are going to start to erode.
At the price level we are at right now, it is hard to fathom that they are going to erode a lot more but I just don't see them coming up a lot on the drill-and-complete side.
If there are no further questions, we will wrap it up.
Just to sum up, I think we are one of the healthiest small-cap Company's at these oil prices.
We have been able to improve the balance sheet in the first quarter both with the equity offering and the restructuring of our bonds.
We had ---+ we beat the high end of our oil production guidance and now we should have sequential growth all through this year.
We are poised to be able to ramp up if we see a significant increase in oil prices.
And maybe the market for acquisitions is going to get a little better as some people start saying that they need the money as we get closer to the next re-determinations.
With that, I would like to thank the staff and the Management for doing such a good job of dealing with these low oil prices.
And we'll talk again in 90 days.
