Good morning, my name is Rose and I will be your conference operator today. At this time, I would like to welcome everyone to the Equitable Resources First Quarter 2008 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period. [Operator Instructions]. Thank you. It is now my pleasure to turn the floor over to your host, Mr. Pat Kane. Sir, you may begin.

Thank you, Rose. Good morning, everyone, and thank you for participating in Equitable's First Quarter 2008 Earnings Conference Call. With me today are Murry Gerber, Chairman and Chief Executive Officer; Dave Porges, President and Chief Operating Officer and Phil Conti, Senior Vice President and Chief Financial Officer. In just a moment, Phil will briefly review a few topics related to the first quarter financial results, which were released this morning, our hedging strategy and financing plans. Then Murry will provide an update on our drilling program, corridor construction and other mid-stream projects. Following Murry's remarks, we will open the phone lines for questions. But first, I would like to remind you that today's call may contain forward-looking statements related to such matters as our well drilling program, infrastructure development initiatives, reserves, tax position, financing plans, growth rate and other financial and operational matters, including the daily sales volumes. Finally, it should be noted that a variety of factors could cause the company's actual results to differ materially from the anticipated results or other expectations expressed in these forward-looking statements. These factors are listed in today's earnings release, the MD&A section of the company's 2007 Form10-K, the first quarter 2008 10-Q that will be released today as well as on our website. And now I'd like to turn the call over to Phil Conti.

Thanks, Pat and good morning everyone. This morning, Equitable announced first quarter 2008 earnings per diluted share of $0.57, which compares with earnings per share of $0.46 last year. The increase in earnings resulted from higher realized natural gas and natural gas liquids prices, as well as higher natural gas sales volumes, gathering rates, and storage related margins. In addition, during the first quarter of 2007 we incurred costs related to the royalty matter and legal issues and to the terminated LDC acquisition, the details of which we've provided in the past. And of course, those did not reoccur in the first quarter of 2008. Those expenses from '07 were partially offset in the current quarter by higher operating and incentive compensation costs which were detailed in this morning's press release. In addition to higher earnings, operating cash flow was also up in the current quarter by about 84% due to higher sales volumes and realized prices and I will go more into those in a moment. But more importantly due to lower current taxes resulting from increased deductions associated with our ramp up capital expenditure program that we mentioned on the fourth quarter call. Those are primarily intangible drilling cost on the drilled wells and accelerated depreciation on our infrastructure investments. Otherwise, I think the quarter was a pretty straightforward one and our view is that it was a very solid quarter for the company both financially and operationally. I will briefly hit a couple of important highlights for the quarter and then Murry, will give a more comprehensive operational update. Although, we did issue an 8-K on March 7, presenting our annual results in the three segments format for the past three years, this is the first quarter that we are presenting our operational results in the three…

Thanks, Joe and good morning everybody. I wanted to give, I intended to give a relatively short operating report because it's only been a month and a half since we had our Analyst Meeting, but it turns out there is quite a bit to talk about. So, this will be a little longer than I had planned. First, I just wanted to give a sort of up to date report on the horizontal, on the drilling in total in the horizontal drilling beyond what was reported in the release for the quarter. Total drilling year-to-date, Equitable's drilled 188 wells of which 99 are horizontal. And for those that are counting that would be me particularly we drilled a total of horizontal... total horizontal well so far in the Appalachian basin of 193. So, we are well along in this horizontal drilling program. As was noted in the release based on the rate at which we're drilling wells this year, horizontal wells we're raising our expectations of horizontals from the previous estimate of 250 to 300 to greater than 300. Currently, we have 17 rigs running in the Appalachian basins, we recall that Methane 2, our deep vertical. That is Marcellus/Utica, which I will get to in a minute and 12 in the horizontal play. We expect our rig count to increase to 22 rigs, we will be adding one coal-bed methane rig and four more for the horizontal program. Let's move on to the P3 reserve development portion of the presentation, the impact of horizontal drilling to that P3 reserve development. Remember that more than 72% of our P3 reserves are classified is coming from Devonian shale. And at this point, those shale reserves are entirely from low-pressure shale, predominantly the Lower Huron shale. As I said before, of which…

That concludes the comments portion of the call. Rose, can you please now open the call up for questions. Question and Answer

Gentleman, your first question comes from the line Scott Hanold of RBC Capital Market.

That was a lot of operational update. I just want to kind of hit a couple of points, just to kind of clarify some information, on the Marcellus wells what is your total high-pressure Marcellus drilling program look like this year?

We’re hoping to drill 8 to 10 horizontals and another six at least verticals this year.

And those are all high pressure.

Yes. Right.

Okay. Are you... when you kind of talk some of the West Virginia wells, are those still in the high-pressure zone or just somehow get two more of the lower pressure?

The ones I mentioned, right, we are drilling the well in Wetzel County, it’s a high-pressure Marcellus well.

Okay.

But to answer your question, the northern portion of West Virginia as best we understand all the data, a significant portion of that well. Our acreage in that northern West Virginia segment is in the high-pressure Marcellus, which is... so the answer to your question is yes, because wells are being drilled in high-pressure Marcellus.

Okay. Got it. And when you... the first horizontal well, Marcellus well, that you're going to be stimulating next month, was that the one that ends up being drilled in the Hamilton and you'll frac down in Marcellus?

Yes. We're still... right, that's the same well. We are still, again the delay there is just waiting to get on pipeline, we will be getting a pipeline there. And then, of course we took this, as I said, we call this audible to drill that second well deeper to test the Utica at the same time.

Okay. And when you talk about potentially producing both the Marcellus and Utica, you're considering the difference in depths, do you pursue there will be potential like pressure issues.

Well. There are going to be two separate wells.

Okay.

They are two separate wells.

Got it. Okay, okay. So, the second well will be another horizontal into the Marcellus.

Well no, the first, just to review... the first well is a horizontal into the Marcellus. The second well at this point is a vertical into the Utica, that's where we're headed, we’ll frac and complete both of those wells. So, one will be horizontal, one will be vertical. See how it goes and produce them. If they work, we'll produce them into the pipeline at that point. Beyond that though if the Utica doesn't work we’ll just back off inside of that current vertical well and then drill out a horizontal Marcellus well through that same exact hole, that's one of the reasons we did this year as we sort of get a relatively cheap look at the Utica with this well. But if Utica works, we will produce. If it doesn't work we'll back off and drill on horizontal Marcellus. If the Utica does work, we'll go ahead and drill on the third well here. The third well will be a horizontal Marcellus well. Hope that clears that up.

Understood and if the Utica does work, would that move up sort of the timeframe of drilling the second one. The second, Utica or would that still be.

No. We are going to drill second one anyhow. We're just getting permits and going to drill I think, yes, a number of wells need to be drilled in that place. So one well is not going to tell a story one way or the other.

Okay. Okay, fair enough. And then going to those multilateral wells, I guess you get to get 300 day type of rate without a frac, can you kind of give us a sense of what do you all think the plan on sort of the multilateral would be at this point? Whether… how do you sort of position them relative to your portfolio? Where would you still want to try to focus is? Or is that still something that’s a in testing mode at this point in time.

I think it's still I would consider it's still in testing mode. I mean the fact that the first one is profitable is a good thing. But we don't know whether that technology is going to be best applied to areas where we previously had no natural flows so that we can actually reduce the cost of accessing gas from where we would have otherwise drilled a single-leg fractured multilateral. We don't know if that's going to be the biggest benefit of multilateral or where or whether the biggest benefit will come from drilling in areas where we have had naturally flowing single leg horizontals and by drilling a multilateral we would be able to increase the flow rate substantially. So I think there is a lot of experimentation to do here and it's sort of like, kind of like the space program, mercury to Apollo, we are sort of on the mercury side of that right now.

Okay. One last question, I'll let somebody else to ask question. Obviously you maintain your year-end production target and then I guess officially move your set a long-range although you did indicate there is upside to that. Obviously, now it's drilling a little bit more than 300 wells this year. Do you anticipate sort of... some are a little bit more uplift by year-end or are you still speaking kind of that 235 number.

Well, yes. Again the 235, we're not changing the 235. So let me be clear about that first. But I think Dave and I have always said that both the 12% long-term growth rate and the 235 short-term rate are milestones and I don't want to move those goalposts until we start to see real results coming from increased production and sales that will come when we believe when the infrastructure is in place. So I'd rather not move those goalposts yet until we see a bit more. The reason I said that I felt we could go beyond 12% is because we're seeing just so much more opportunity here and we had a pretty good first quarter, the 9% is a pretty darn good growth rate. And so we are feeling a little better but I did not give you a new long-term growth rate and I'm not going to change that 235 today.

All right. Fair enough. Thank you guys.

Your next question comes from Shenark Shuni [ph] from UBS.

Good morning, guys. Just a couple of questions here. Just with respect to the Marcellus well that you've drilled. Have you been able to figure out the thickness of the pace for that well and is there plans to shooting sort of seismic and so forth?

Well, we know how thick it is and I just don't know the exact number right off the top of my head because we record [ph] the second well by the way which is right next door and I just don't have the number off the top of my head. But…

You did more than a 100 feet or…?

It's about a 100 feet I think. A little bit more. I just don't know the exact number.

Okay. And then just a follow-up on the previous caller's questions about the drilling program and so forth. Can we assume that you're going to want to maintain the type of pace that you're moving at? I mean give or take how well you drill, how fast you can drill but sort of the same rig program for next year and so forth and so I guess my question would be that I am assuming that you'd a similar capital needs or may be not as much of this but you would have similar capital needs for next year. And would you anticipate coming back to the markets for more capital just for next year's program or are you finding on expanding the program further and so forth, I was wondering if you could comment on that.

Those are two separate questions. I’ll take the first one. First, we are not satisfied with the pace of our drilling program. Yet, we think we're doing a great job ramping it up but Dave and I both want to increase it as much as we possibly can. So, if what I think we've been pretty clear about that. So, at least on the drilling development side of the capital equation, we are hopeful that we'll have enough more permits in places to drill so that we'll go up next year. Absolutely. As far as funding, I think Phil has kind of given you the party line on that and we don't really have many much more to say on financing at this point.

Okay and if I can just turn over to one just operational question. You recorded $42.5 million for this quarter. Clearly that’s to do with the outperformance of stock and so forth and the changes to your assumptions. Can you quantify how much relates specifically to this quarter and how much relates to previous years and so forth?

Yes, it was $42.5 million. This is Phil by the way. $31 million was associated with the prior quarters and so you can expect about $11.5 million per quarter assuming we don't change the assumptions again in 2008. There are currently at a multiply of 2.5 times and a stock price of $70.

So the appropriate amount for this quarter is about $11million and 30…?

$11.5 million.

Yes. $11.5 million and $31 million is for previous year.

That's right.

Okay. Thank you guys. Thank you for answering my questions.

All right.

There appear to be no questions at this time. I would now like to turn the floor back to Mr. Kane for any closing remarks.

Thank you, Rose. That concludes today's call. We would like to just remind everybody that it will be available for a seven-day replay period beginning at approximately 1:30 p.m. today. The phone number for the replay is 706-645-9291, the confirmation code for the replay is 29614313. The call will also be available on our website for replay for seven days. Thank you everyone for participating.

This concludes today's Equitable Resources conference call. You may now disconnect.