The Company's estimated ranges of average daily production for the remainder of 2007 are: Q3 Q4 Natural Gas (Mmcf) 1,490 - 1,500 1,600 - 1,610 NGL (Mbbl) 15 15 Oil (Mbbl) 47 48 Total Gas Equivalent (Mmcfe) 1,862 - 1,872 1,978 - 1,988
Price Realizations and Differentials
The Company's realized natural gas and oil prices are expected to average below the NYMEX prices due to regional differentials. The following are estimated pricing differentials, or percentage reductions to NYMEX prices, before consideration of any hedging activity:
Q3 - Q4 Differential (Percentage of NYMEX) Natural Gas 9 - 11% Oil 8 - 10%
Realized pricing for natural gas liquids (NGL) is expected to be about 55% to 65% of the average NYMEX oil price.
The following table presents the Company's expected expenses per Mcfe assuming a $7.00 per Mcf NYMEX gas price and a $70.00 per Bbl NYMEX oil price:
Expense ($/Mcfe) Q3 - Q4 Production 0.90 - 0.95 Taxes, transportation and other 0.65 - 0.75 Exploration 0.05 - 0.10 Depreciation, depletion and amortization 1.80 - 1.90 Accretion of asset retirement obligation 0.02 - 0.04 General and administrative: cash 0.25 - 0.30 General and administration: non-cash, stock-based 0.08 - 0.12 Interest 0.34 - 0.40 Hedging The Company's current NYMEX hedging positions for natural gas and oil are: Mcf or Bbls NYMEX Price per Day per Mcf or Bbl PRODUCTION: Natural Gas July-Dec 2007 900,000 $ 9.19 Jan-Dec 2008 400,000 $ 8.80 Oil July-Dec 2007 37,500 $ 74.40 Jan-Dec 2008 22,500 $ 74.26
For the remainder of the year, the Company projects a 37% effective tax rate, with up to 45% of that amount expected to be currently payable.
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