Executives
Randy L. Limbacher – President and Chief Executive Officer
Michael J. Rosinski – Executive Vice President, Chief Financial Officer
John Clayton – Vice President of Asset Management
Jim Craddock – Vice President of Drilling and Production Operations
Analysts
Joe Magner – Tristone Capital Inc.
Mark Lear – Sidoti & Company
[Max Vasser – Winchell Capital]
Jason Wangler – Dahlman Rose & Co.
Rosetta Resources (ROSE) Q1 2008 Earnings Call May 9, 2008 8:30 AM ET
Operator
Good morning everyone and welcome to Rosetta Resources first quarter 2008 conference call. Today’s conference is being recorded and all lines have been place on mute to prevent any background noise. If you are not able to participate in the conference call an audio replay will be available from 10:30 a.m. Central on May 9 through 12:00 a.m. on May 16 by dialing 1-888-203-1112 or for international 719-457-0820 and entering the conference code 7417665. A replay of the call will remain online at www.rosettaresources.com for 60 days after the initial call. To access the replay click on the Investor Relations section of our website and select Presentations and Events.
Our speakers this morning are Randy Limbacher, Rosetta’s President and Chief Executive Officer and Mike Rosinski, Chief Financial Officer and Executive Vice President. At this time I would like to turn the call over to our host, Randy Limbacher. Mr. Limbacher, you may begin your conference.
Randy L. Limbacher
Thanks Dave. Good morning and thank you for joining us at this early hour for our first quarter 2008 conference call. Before we proceed I want to take care of a few administrative details. First I would like to introduce two additional members of Rosetta’s executive team that are here with us today. John Clayton, Rosetta’s VP of Asset Management and Jim Craddock, VP of Drilling and Production Operations are sitting in on the call today. The do not have prepared remarks but they are available for Q&A afterwards. John and Jim joined the company since our last call in March and I know you are going to be hearing more from them in the future. And we are very glad to have them both on board.
The next piece of business is to ask Mike Rosinki to read Rosetta’s safe harbor statement. Mike.
Michael J. Rosinski
Thank you Randy. All statements, other than statements of historical fact, included in this presentation are forward-looking statements within the meaning of the private Securities Litigation Reform Act of 1995. These statements are based on current expectations and are subject to a number of risks, uncertainties and assumptions which are more fully described. In Rosetta Resources annual report on Form 10-K and quarterly reports on Form-Q filed with the Securities and Exchange Commission. These risks, uncertainties and assumptions could cause actual results to differ materially from those described in the forward-looking statements. Rosetta Resources assumes no obligation and expressly disclaims any duty to update the information contained herein except as required by law. By the way, please note that Rosetta filed its first quarter 2008 10-Q last evening, Thursday, May 8.
Randy L. Limbacher
Thanks Mike. Our call agenda for today will include a review of the first quarter of 2008 and update of our guidance for the year, including a reminder about our current hedge positions. This material will be covered by Mike, and then I will provide an operational update of the quarter followed by some comments about our ongoing priorities and goals for the coming year. And then after our prepared remarks we will go to a question and answer session. So Mike please go ahead with your review.
Michael J. Rosinski
Thank you Randy. And again, welcome to our first quarter 2008 earnings call. I want to remind you that much of the information we will cover today is contained in our recent 10-Q filing. Please note that Rosetta’s revenues and production for the quarter do not include consideration of the non-consent properties as defined in its transaction with Calpine that closed on
July 7, 2005. Thanks to strong prices and volume performance, Rosetta extended its streak of consecutive record net income and production growth for the 11 quarters that we have been an independent company. Net income for this quarter was $27.5 million, up 96% compared to net income of $14 million for the first quarter of 2007, and up 58% compared to the $17.4 million for the fourth quarter of 2007.
This quarters diluted earnings per share were $0.54 up 93% compared to a year ago. Production in the quarter averaged almost $152 million a day, up 42% from the $108 million a day recorded for the comparable period of 2007 and up 1% sequentially. Volume performance was slightly ahead of our internal targets primarily due to stronger than expected performance in the Gulf of Mexico and State Waters and due to natural gas processing elections that resulted in increased liquid volumes net to Rosetta. By the way, these higher liquid yields are roughly P&L neutral. The averaged realized gas price for the quarter was $8.74 per Mcfe including the affects of hedging and the realized oil prices averaged about $100 per barrel. Revenues for Rosetta totalled $128.3 million including a modest hedge loss of about $700,000. Total revenues were up 69% from the prior year’s first quarter and up 16% sequentially. Total lease operating expense which includes direct LOE, workovers, ad-valorem and tax and insurance was $13.4 million or $0.97 per Mcfe, up about 8% compared to the first quarter of 2007. Direct LOE was $8.8 million or $0.64 per Mcfe, which was about $0.06 higher than last year’s first quarter. The majority of this variance is attributable to higher LOE in the Rockies region where we are ramping up the program and performing some catchup on maintenance and optimization. Workover costs in this quarter were $1.2 million or $0.09 per Mcfe for the period ad-valorem taxes were $2.8 million or $0.20 per Mcfe and insurance was $0.6 million which is $0.04 per Mcfe.
Production taxes were $3.4 million or $0.25 per Mcfe and treating, transportation, and marketing charges were $2.1 million or $0.14 per Mcfe. Depreciation, depletion and amortization were $51.4 million based on a DD&A rate of 3.72 per Mcfe. This was an increase versus the same period for 2007 but on guidance with the projections we provided in our last quarterly call.
General and administrative costs, including option expenses, were $12.1 million for the first quarter compared to $8.1 million in the first quarter of 2007. This quarter’s G&A included $4.3 million in costs associated with the Calpine lawsuit compared to $0.9 million for the same period last year. Adjusting out the Calpine costs in both periods G&A was $0.55 per Mcfe in ’08 compared to $0.60 per Mcfe in ’07.
Net cash provided by operating activities was $97.6 million for the quarter and capital expenditures were $46.5 million. This resulted in operating free cash flow of over $47 million. Taking that all the way to the balance sheet, Rosetta ended the first quarter with over $45 million of cash on hand which positions us very well financially for the months in year ahead.
So it was a very strong quarter for Rosetta both financially and operationally. This year is on track with our earlier expectations and we are focused on delivering continued strong results. With that, let me reiterate our projections for the year and provide an update on our hedge positions and our pending lawsuit with Calpine.
As we stated in our press release, we are maintaining our guidance on volumes for the year at $140 to $150 million a day. We slightly exceeded the top end of the range in the first quarter but a portion of the favorable performance was due to stronger volumes from higher decline rate areas such as the Gulf of Mexico and Sabine Lake. With several months to go in the year these properties still have volume risk, so we are going to hold firm on our volume range at this point. We expect our capital program to remain at $290 million which is unchanged from our prior guidance. We are a bit light in our core area spending in the first quarter but we expect to catch up over the next several quarters. For the remainder of the year unit cash costs are expected to be in line with the first quarter actual results. This reflects our focus on production optimization, unit depletion, depreciation and amortization costs are expected to average 3.55 to 3.75 per Mcfe.
The company’s hedge position is unchanged. The company has fixed priced hedges as follows: $68 million a day is hedged for the balance of 2008 at an average price of 7.75 for MMBtu. For 2009, 52 a day are hedged at an average price of 7.65 for MMBtu along with $10 million a day for 2010 at an average price of 8.30 per MMBtu. Additionally, the company has entered into costless collar transactions for 5,000 per MMBtu for 2008 and 2009 with an average floor price of $8.00 and an average ceiling price $10.27. We will continue to monitor the market for additional hedging opportunities, however we believe that we have a full compliment of hedges at this time.
Considering Calpine, here is where we currently stand. We have now received and reviewed the Calpine reports of experts with respect to solvency and valuation. And based on our review we continue to believe that their lawsuit is without merit. We have begun the process of preparing for and taking depositions of their experts and will also be taking depositions of key fact witnesses. At one time we believed the deposition schedule would allow for a trial to begin in May or June. However that timing has slipped in large part due to scheduling difficulties for witnesses and is not a reflection on our view of the merits of the case.
The bottom line is that we see nothing to change our outlook on the Calpine matter and we will continue to defend our positions against their claims against Rosetta, which we believe are baseless and without merit. Now it is my pleasure to turn the call back to Randy.
Randy L. Limbacher
Thanks Mike. I want to take just a moment to update you on our operations activities for the recent quarter and then review our priorities for the year. Rosetta’s organic capital budget for the year is unchanged at $290 million. Now recall that about three-quarters of the budget is earmarked for low risk development and step out programs in our existing core areas of the Sacramento Basin, DJ Basin and Lobo and Perdido. And about a quarter of this year’s budget is targeted for exploration activities including land acquisition in current or perspective areas of interest. This budget excludes potential acquisitions and targets continued organic growth from Rosetta’s core programs.
During the quarter we drilled 36 gross and 32 net wells with an 83% success factor. This puts us a little bit behind our pace for about 190 wells in 2008 but we expect our drilling pace to increase as we enter the summer months. About 20% of our 2008 capital budget is planned for the Sacramento Basin. We plan to drill 29 wells there including several low pressure Emigh and Hamilton wells for base optimization. We plan a couple of exploratory wells and then several unit wells in the Rio Vista unit where we would drill infill and extension wells at the southern end of the field.
We are currently undertaking some field studies across the Basin which are focused on possible downspacing opportunities and some additional targets and we think there are resources remaining in this Basin and we are allocating technical people to study and identify future potential there. In the first quarter we drilled six wells with five successes including three extension wells in the southern part of the Rio Vista field. Production averaged over $48 million a day for the first quarter. Excluding the impact of the OPEX acquisition production was up 3% compared to the same period last year. And volumes were down slightly on a sequential basis reflecting the slower program pace.
About 15% of our 2008 capital is earmarked for the Rockies, notably the DJ Basin representing about a 50% increase in capital spending versus 2007. During 2008 we plan to drill about 60 wells in and around our existing productive acreage in the DJ. Additional infrastructure will be built to accommodate the incremental production. We also plan to shoot about 30 square miles of 3D seismic data over existing acreage that has never been shot and we have an active leasing program underway there. We drilled 13 wells in the Niobrara Play during the first quarter, 11 of which were successful, and we averaged $7 million a day in the DJ Basin compared to less than $3 million a day a year ago. Also in the Rockies this year we plan to drill 14 Fruitland Coal wells on our existing asset base in the San Juan Basin.
The largest share of our 2008 capital approximately 35% is planned for the Lobo. This represents roughly a 20% increase versus ’07. Through the first quarter of 2008 we drilled 12 wells. 10 of those were successful as we continue to focus on areas covered by 320 miles of 3D seismic data. Our production averaged $38 million a day which is up 6% from a year ago. We plan to drill a total of 48 Lobo wells with our two rig program during the year and we are actively identifying inventory to extend this program for several years. This program is highly economic, even at reserve levels significantly below our current per well estimates of reserves.
We expect to spend out 10% of our 2008 capital in the Perdido. We moved a rig into the field in late March as expected and we are currently drilling. We averaged $11 million a day during the first quarter, up 26% from the prior period. We expect to drill 10 horizontal wells in 2008 plus acquire additional 3D and possible additional acreage to extend our field life.
About 20% of Rosetta’s production comes from assets that are currently being evaluated for their role in our portfolio going forward. We have scaled back capital in these areas pending detailed studies. In Sabine Lake we averaged $13 million a day for the quarter and we are evaluating additional drilling opportunities there for 2008. Likewise, in the Gulf of Mexico, we are currently assessing position. During the first quarter in the Gulf we produced almost $17 million a day, up versus last year and up versus expectations for the quarter.
Then finally, our 2007 deep Sligo well in the Clayton field, the Martin Gas unit #1 came online this week making $5 million equivalents a day. Rosetta has a 40% working interest in this well.
That is a quick review of our first quarter 2008 operational programs and plans. And as I mentioned previously, we expect to produce between $140 and $150 million a day full year average, representing 11 to 19% growth versus 2007. We are very pleased with the growth we expect to achieve this year but it is important to understand that our level of growth is a reflection of the fundamental shifts we made coming into the year. We are shifting our focus from an emphasis on top line growth to an approach that is balanced between growth and value creation. In the short term our value creation goals will focus on F&D improvement, that is to say capital efficiency.
Our planned 2008 growth is very much in line with our comparably sized DMP peers but at a level that will allow us to devote some capacity to generating inventory and opportunities so Rosetta’s growth will be more sustainable.
That is a good segue to review our priorities for 2008. While we do not necessarily control the timing of this goal, our #1 priority this year is to get the Calpine matter behind us and there is not much to say beyond Mike’s earlier comments except to reiterate our position that this is a completely frivolous lawsuit. The next priority is to continue building our organization by attracting, retaining and recruiting the right people for Rosetta. We made some great progress in the last couple of months as evidenced by the fact that John Clayton and Jim Craddock are sitting here today. We have an organizational assessment underway in which we are identifying key skill gaps that need to be filled, and we are also actively designing the organization to fit our model for both inventory generation and operations excellence by establishing multi-disciplinary teams with accountability for each asset area. We are actively hiring additional staff to supplement or fill key roles in the organization. This priority is getting a lot of our time and we hope to be able to report progress as we go throughout the year.
Now the next focus area for Rosetta is resource or inventory. Inventory is absolutely critical in this business because it allows you to ration capital to the highest quality projects. As we have stated throughout the past several months, Rosetta is putting a renewed emphasis on resource identification and capture. In fact, we are doing so in lieu of going strictly for growth. This is key to creating long term value in North America in my view. We believe Rosetta is well positioned to be successful in our goal to identify and capture additional resources. We start with a good set of core properties in the Sacramento Basin, DJ Basin, San Juan Basin in south Texas, either prolific hydrocarbon basins with lots of stack pay. We have high working interest in operatorship in many of these areas.
Furthermore, Rosetta is of a size where one or two of these ideas per year can be very leveraging. My goal is to have a pipeline of these opportunities at all times. John Clayton in his new role at Rosetta will have direct accountability for generating ideas in and around core areas and in new basins of interest. John and his multi-disciplinary teams are beginning resource assessments in existing Rosetta positions where we believe there might be inventory. And we are looking beyond our current positions in new clays or trends of interest. We will look at both organic and inorganic opportunities. We have a couple of ideas in the late stages in negotiation and I look forward to updating you on those in the near future.
Finally, we are going to continue to work on execution in all facets of our business including field operations, back office, business development, reserve engineering and analysis. This is an area where companies can always improve. Several projects are getting underway to address this priority, especially in reserves engineering, strategic planning, procurement and operations analysis. Several of these responsibilities will be under management by Jim Craddock in his new role at Rosetta.
We have a lot going on in Rosetta. It is an exciting time for our company. We are successfully implementing our planned 2008 capital program while identifying opportunities for future investments. Prices are providing a strong boost to our financial performance but we are not resting. It is going to be a busy year for Rosetta. All of us are very optimistic about the path we are on and we look forward to updating you throughout the year.
With that, I will turn the call back to our moderator and we will now take your questions.
Question-and-Answer Session
Operator
Thank you. (Operator Instructions) Our first question comes from Jason Wangler with Dahlman Rose.
Jason Wangler – Dahlman Rose & Co.
Morning guys. Nice quarter. Just kind of on that Rio Vista field with the extensions you guys keep drilling south. Is there more room to run down there as far as that field or have you guys pretty much seen the end of it?
Randy L. Limbacher
I think there is some more running room but let me let John Clayton kind of give you a brief overview of some of things we are doing in the Sac Basin and how we are looking at that.
John D. Clayton
That is a great question because that is actually the type of opportunities we are looking going forward. As you are aware we have extended the Rio Vista field by taking a harder look at the Capay in the past and the Martinez more recently. We are not drilling direct well offsets to extend that field. We are going out to where we feel it is commercially extending the field and then that does set up for additional inventory in between. Now this is not exactly bringing 100 wells into inventory as much as it is being two or three wells of inventory per well we extend.
Just to update, we have drilled 12 wells to date in the extension programs, 11 of which have been successful. So it is extremely successful for us but probably more importantly it sets us up for additional inventory as you mentioned.
Jason Wangler – Dahlman Rose & Co.
Great. And then if I could stay in California, is there any kind of update on when the D tests are going to start up. Is that going to be second half or is there a better kind of timeframe on that?
John D. Clayton
Another good question. In the past we have actually gone, as you know there is about 16 productive horizons out in California. Specifically, you are talking about Winters Play which is one of the lower productive horizons in the basin. To date we have drilled five wells, three have been successful. We are currently looking at four wells that we have got mapped on seismic in our inventory. And at the right time we will choose to drill those. One could be this year but we are going to make sure we pick the optimum location of the four we have got identified currently in seismic.
Jason Wangler – Dahlman Rose & Co.
Thanks, I'm going to jump back in.
John D. Clayton
Thanks.
Operator
And our next question comes from Mark Lear with Sidoti & Company.
Mark Lear – Sidoti & Company
Good morning gentleman. In terms of the rest of the quarter the CapEx that is designated to increasing inventory. Can you give me an idea on some of the details and how that capital is being allocated. I understand you are probably not going to be able to talk about these acquisition opportunities but maybe in terms of core area bolt on opportunities and maybe prioritize where you think that capital would be better spent in those areas.
Randy L. Limbacher
Yes, I am going to again ask John Clayton to address that but just to put it in context the total budget for the year capital is about $290 million. About $210 million is allocated to kind of the core development and step out programs and then $80 million is targeted toward the exploratory and dollars that would be used more toward sustainability. I will let John talk a little bit about how we think about that $80 million.
John D. Clayton
I will tell you a little bit. I will answer your question but a little bit about change in scope. If you go back and look at our 2007 actual capital spending excluding acquisitions we spent roughly about $295 million. 29% of that was spent in the State Waters and in the Gulf of Mexico or onshore other. In other words outside of what we are calling core areas at the present.
If you move forward to 2008 the $290 million that Randy mentioned, instead of 29% of the capital being spent on those areas we are looking at about 8% of our capital being spent on those areas for 2008. Now if we take that and break it down a little bit further to answer your question on where’s the $80 million of exploration being spent, the majority of that right now we have allocated towards our Rockies programs and the Lobo program.
What we are trying to do with exploration dollars, whether you call it big E or little E is we are not trying to take as much geologic risk with those dollars going forward as we are to try and unlock commercial risk. So I think you will see more of those dollars being applied to large acreage positions and both on acquisitions that offer us repeatable inventory. So look for it in the Rockies, look for it in the Lobo and then we are not going to pass up any opportunities that are in our inventory today. We will get those drilled. But going forward look for more of our exploration dollars to be spent organically and then taking new leases or both on acquisitions.
Randy L. Limbacher
And just a little bit of a follow onto that. Of that $80 million some of it has been allocated specifically to land and seismic into Lobo and a little bit to seismic in the DJ Basin. So again, portion of it to the core areas and then we are trying to develop two or three ideas outside of those core areas that would be new organic play entries. And we have got a couple things in kind of late stages in negotiation that are going to be resource, you are going to recognize them resource plays within the United States as we go forward. So it is kind of too early, it is not ready for prime time to talk about them yet but that kind of gives you a flavor for where those dollars are going.
Mark Lear – Sidoti & Company
That is great insight. Thanks a lot guys. Great quarter.
Randy L. Limbacher
Thank you.
Operator
Our next question comes from Max Vasser with Windshell Capital [ph].
[Max Vasser – Windshell Capital]
Nice to see the progress guys. So he answered some of my questions but I have noticed that some other companies that have been rationalizing assets the way you guys seem to be thinking about it have done some tax free swaps of properties in State and Gulf Waters for properties that were more desirable or contiguous to where they are working now, the kinds of things you were describing in terms of step outs and contiguous properties. Have you guys been exploring anything like that at all?
Randy L. Limbacher
Good question Max. What I would tell you is that we are looking at obviously we got the areas that we feel good about that are core that we have discussed and look at the offshore and some of the State Waters gulf coast properties is not necessarily core. We are studying them and we think there is a lot of opportunities left in those areas but it really doesn’t offer the kind of repeatable sustainable programs we are looking for.
We would certainly in the priority of how we rationalize those some day prefer to entertain trades around that as opposed to an outright sale. But for various reasons it is probably not the best time to be doing that. But that certainly is something we would entertain going forward.
[Max Vasser – Windshell Capital]
Next question if I can add one more. You mentioned Randy a number of positions that you think you need to fill out your staff, and I just wonder if you have a target dollar increase or target percentage. However, you want to measure an increase in the overall SG&A which sounds like it has to go up certainly the, G&A part.
Randy L. Limbacher
I am going to ask Jim Craddock to give you some feedback on that. Jim has been taking a hard look at the organization and some of the gaps that we have out there. So Jim do you want to address that with Max?
James E. Craddock
Sure. What we are focused on is probably 8 to 10 key people. So that kind of gives you a sense. But let’s start with in one of the announcements we mentioned adding a chief engineer role to Rosetta. That will help us focus on some of the reservoir engineering reserves management components and that person will also lead our inventory management processes that we have talked about. Look for us to augment our technical teams so that as we do resource assessments and grow inventory we are focused in those key areas. And then also look for us to add some talent in the drilling engineering, completion engineering components as well.
Randy L. Limbacher
If you are looking for an exact number, these 8 to 10 people, you know it is probably too early to tell. But a couple of million dollars a year associated with that. But hopefully when you look at over time on a unit cost basis it should decrease over time as we continue to be successful. What we are saying is there is going to be a little blip going forward as we hire and get the right people and supplement the key skill sets we have in our core areas. The people working our core areas are doing I think a very good job of that. But there is just not enough of them to go and do some of these resource assessments that John and Jim are talking about.
[Max Vasser – Windshell Capital]
Well understood and thank you very much. I was just trying to get my hands around the dimensions and I think you have given us enough information to satisfy what I was after. And I look forward to meeting you guys. I think you have joined a great team and Mike and Randy keep up the good work.
Operator
And we will now hear from Joe Magner with Tristone Capital.
Joe Magner – Tristone Capital, Inc.
Good morning. You lined out sort of the priorities for the existing CapEx budget both development and exploration. Can you talk about, it looks like you are going to have at least based on our model and the current production outlooks and free cash flow and Mike identified how much cash you had the books at the end of the first quarter. Can you sort of go into priorities for how you might spend that free cash flow?
John D. Clayton
Yes, by just about anybody’s model we are going to have significantly more cash flow than the $290 million capital that is going to be spent in the base budget. I feel very comfortable with the $80 million dollars or so that we allocated toward the exploration side of it for organic plays and extending core areas and new organic entries. We do not feel compelled to spend this money. But if the right acquisition opportunity came along being in the form of a bolt on to an existing area or new area entry then we would certainly consider that. But again we do not feel compelled to spend beyond the 290 but we are looking for good opportunities for smaller bolt on type of acquisitions or new play entries to utilize it.
Joe Magner – Tristone Capital, Inc.
Okay. Then I wonder if you could provide just a little bit more color on the production outlook. The first quarter was above the top end of the range. I understand there is some volume risk in some of the high rate wells in State Waters but is the attempt to try to offset those looming declines or should we model in sort of a quarter to quarter decrease and then look for some of these other programs to kick in later in the year. Just any additional insight.
Randy L. Limbacher
We won’t give specific guidance on the quarter but I will ask Jim Craddock again to give you a little more color on the various areas and how we see the year playing out.
James E. Craddock
Yes Joe, I think you are thinking about it right. We had a very good first quarter. We had a lot of momentum coming into the quarter and we have volume risk in probably two key areas, offshore and that can be expressed both in terms of the reservoir mechanism there. You have some water dry reservoirs. Just a handful of wells make up that volume there. Also the State Waters Sabine Lake area has a similar situation. You could also have some storm risk, hurricane risk going into the summer months. So I think you are right in saying there is some potential for us to see a quarter that might be a bit down from the first quarter.
But also to offset that a bit is we are seeing our activity level begin to ramp back up and so we have sort of a back end loaded program so look for us to see that capital volume component begin to increase as we go through the year. Overall that is our rationale for maintaining our overall guidance numbers
Randy L. Limbacher
Yes, and we look out further I think the good news in all of this is that the core areas are performing well. Quarter to quarter they are fairly flat but they are just now, I mean we only spent $40 million in the quarter so we are just now ramping up the activity level. Seeing some good wells in the Lobo. So again I feel for the reasons Jim sited I feel very comfortable about the full year guidance but I think you are right that there is some risk of a little bit of a dip in the summer and then we ramp up through the end of the year.
Joe Magner – Tristone Capital, Inc.
Okay thanks. I know you cannot say much about it but Mike I was wondering if you give us, you put out some timelines and those have slipped but any expectation on when that trial could start now?
Michael J. Rosinski
I think the one thing we have internally concluded as a management team is that we are not good at predicting timelines. You may recall that there was a time when we thought this trial might take place in December of last year. Our experience has been that this process is taking longer than we thought. And again as we get into depositions and try to schedule the various witnesses that we have if you will on the docket, we find difficulty with respect to their availability.
So it is going to be a couple of months for sure before we complete the deposition process. And to make a prediction at this time is just something that would probably have to be revised again so I think we are just better off saying we are going to pursue this on as quick a timetable as we can. We are not going to jeopardize or put any shareholder value at risk but the fact of the matter is predicting the timetable would probably in the end work against us.
Joe Magner – Tristone Capital, Inc.
Okay. That is all I have. Thank you.
Operator
And we have no further questions at this time.
Randy L. Limbacher
Okay. Again we appreciate your interest in the company. We do believe we had a great quarter and we look forward to communicating with you with some more details on some of these things as they evolve throughout the year. But we appreciate your interest in the company and I will give it back to the moderator for the replay information. Again, have a good day.
Operator
Thank you and once again the replay will be available from 10:30 a.m. Central Time May 9 through 12:00 a.m. on May 16 by dialing 1-888-203-1112 or for international that would be 719-457-0820 and entering the conference code of 7417665. A replay of the call will remain online at www.rosettaresources.com for 60 days after the initial call. To acces the replay click on the Investor Relation section of our website and select Presentations and Events. That does conclude our conference today. Thank you for your participation and have a great day.
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