Greetings and welcome to the Ring Energy Inc, 2015 Second Quarter Financial and Operating Results Call. At this time all participants are in a listen only mode, a brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder this conference is being recorded. I would now like to turn the conference over to your host today Mr. Tim Rochford, Chairman of the Board of Directors. Thank you sir, you may begin.

Thank you Latonya and I'd like to welcome all listeners to the 2015 second quarter and six month financial and operational conference call for Ring Energy. Again my name is Tim Rochford, I'm Chairman of the Board. Along with me this morning on the call is our CEO Kelly Hoffman, our President David Fowler, our CFO Randy Broaddrick and also our Executive VP Danny Wilson. Today we're going to cover the financials and operations for the three and six month period ended June 30, 2015. We'll review and give some input and results as it relates to our current status as well as our future operations for the remainder of the year and at the conclusion of the call we'll turn it over to the operator and she'll open up for any Q&As you may have. Now at this time I'm going to turn it over to Randy Broaddrick our CFO and ask Randy to review the financials for us. Randy please.

Thank you, Tim. Before we begin I would like to make reference that any forward looking statements which may be made during this call are within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. For a complete explanation I would refer you to our release issued Monday August 10th. If you do not have a copy of the release, one will be posted on the company Web site at www.ringenergy.com. For the three months ended June 30th, 2015 the company had oil and gas revenues of approximately $9 million and net income of $534,000, as compared to revenues of approximately 11.2 million and net income of 2.8 million in the second quarter of 2014. For the six months ended June 30th, 2015 the company had revenues of just over 15 million and a net loss of 441,000 as compared to revenues of approximately 17.2 million and net income of just under $4 million in 2014. The primary factor in the change of our net income or loss is commodity prices. We saw lower revenue totals for both the three and six months periods as compared to the same periods in 2014 despite significant increases in production volumes. For the three months ended June 30, 2015 our oil price received was $52.52 per barrel a decrease of 44% from 2014 and our gas price received was $2.87 per mcf a 42% decrease from 2014. On a per boe basis the second quarter 2015 price received was $49.46 a decrease of 47% from the 2014 price. For the six months ended June 30, 2015 our oil price received was $48.55 per barrel a decrease of 48% from 2014, and our gas price received was $2.78 per mcf, a 44% decrease from 2014. On a…

That’s okay Randy this is Kelly Hoffman. Let me just picked up here where we are I want to welcome everyone on the call of course. In the second quarter our sales as a result production were 181,512 barrels of oil equivalent. This was a 52% increase over the same period in 2014 and our average net daily production was approximately 1,995 barrel of oil equivalent per day. The average sales price per BOE we received in the second quarter was approximately $49.46 as compared to $93.58 in 2014 and that’s 47% decrease. Now regarding the recent Delaware Basin acquisition want to touch on some points there and after the closing we took over operations physically as of July 1st. We immediately began our clean up in evaluation of property. Currently we are putting wells back on executing and executing our capital improvement plans which will allow us take advantage of some of the previously identified you've heard many of us say many times low hanging fruit. Danny Wilson, is with us today our Vice President of Operations and of course Danny will be able to shed a little more color on that during our question-and-answer period in a moment. As Tim previously mentioned, I want to touch on that again that we have implemented an internal mid-year reserve review and with the discrepancy in the current commodity market we thought that might be helpful. So moving on to our current operating status, companywide for the second half of 2015. We'll be limiting our drilling and with more of a focus on remedial work as well as continued pushed for meaningful acquisitions. We intend to exit this year with a very active growth rate. I want to take a quick moment to talk a little bit about service costs we'll touch on that. We are still working vendors to lower cost across the board. As you know we haven't kicked off a drilling program we're still some price adjustments in many-many areas and expect that to continue throughout rest of this year. At this time I'm going ask David Fowler, Head of Business Development present the company to update you on current growth in acquisition opportunities. David?

Thank you Kelly. Our acquisition team remains full active on making offers to both for bolt-on acquisitions to our platform core assets and we're also preparing to make offers on our newly acquired Delaware assets in Culberson and Reeves Counties. The land department is also working diligently to increase our net lease hold position on a platform and it's pursuing additionally in our two core areas. Secondly, we're seeing an increase in M&A opportunities that are being brought to via various investor banking group and investors plus deals from our multiple relationships here in the Permian as we experienced a second pull back in oil prices along with upcoming bank with determinations and what we understand are tighter bankers relation, we believe our M&A opportunities will continue to increase throughout the end of the year. With our strong balance sheet we remain ray and able to move quickly to consummated transaction as we did on our recent acquisition, should such an opportunity arise. Our patience paid off well towards first quarter and we believe we'll service well in future. And at this point I'll turn it back to Tim Rochford for closing statements.

Hey Tim it sounds like you're having some phone trouble there, pardon my interruption. In light of the fact that Tim's cell is probably giving him some troubled content assuming here little bit we like open it up at this time for our questions-and-answers and see what we can do to cover what other those questions might to come across.

This is operator. I can open for questions now? Thank you at this time we will conduct a question-and-answer session.

I'm sorry this is Tim Rochford, I was cut off the call and I assume that David just concluded.

That is correct Tim.

Okay. I'm sorry about that, I apologize to listeners, I had a little technical problem from this end. Any case I just want to thank David and telling of course Danny and Randy for being on the call and providing all the information this morning. I also wanted to say that you can see from what the guys have said that we're excited about the not only the near-term but the long-term opportunities that lie ahead of us and not only from the operational standpoint but for the future acquisition opportunities that exist out there. I know that you are all aware but just once again I want to touch on the fact our credit facility as you know was increased from a 150 million to 500 million. Our borrowing base was increased from 40 million to 100 million. We now have roughly in round number $60 million of dry powder of liquidity for ongoing opportunities. I think what you are going to probably learn here through the Q&A period as that as we go forward through the remainder of this year the second half of this year that our operations are going to allow us not only develop and optimize what we have on the Delaware acquisition side but also the platform side and lots of remedial work lots of low hanging fruit that we've talked about in the past and some limited amount of drilling and we are going be able to that to show growth in production. We're going do that within cash flow. So with that -- it's okay operator I'm going to turn it back to you. This will conclude the official part of this call and we'll turn it open for the questions that the listeners may have.

Thank you. At this time we will conduct a question-and-answer session. [Operator Instructions] Our first question comes from Neal.Dingman with SunTrust. Please proceed with your question.

Kelly maybe for you and then maybe Tim can chime in as well more from a strategic perspective obviously just looking again at the market this morning looks like you made the right call to sort of just stay on the sidelines. I guess my question is, given what you're seeing in M&A environment and given what you're seeing in cost, Kelly how do you all think about, is there is a certain price that you'll would come back I mean again it's a tough question just to ask you just with oil price, because to me it seems like kind of two moving targets. You have the M&A prices that are moving as you do well cost. So again any color you could maybe provide on thoughts that you and Tim and David have about when coming back and adding the rigs.

Sure Neill, thank you. You know when oil was hovering around that $60 plus range we were getting pretty serious I have to admit. However with it pulling back like it is it just doesn’t make sense to do that at this time and when it was at that number we were also seeing a several companies were still looking at their numbers and determining whether or not they thought it would be smart going forward at lower prices and there was a lot of hovering going on I would say from the service and vendor company business. But since then with this little blip if you will that's in the market that's going on right now that could be continued for all we know but we're seeing some more breaking rank as we refer to it and we’re starting to get some better pricing on stuff where we thought we might be close to the bottom on some of that pricing we’re seeing some improvement there. So, no I don't have a way of looking at anything that will give me a price target if you will but I can tell you with prices continuing to go down as we stated on the last call we look at those items, one in left hand, one in the right hand, we're looking at price in the right and cost on the left and if cost continues to go down, the price comes up a little bit, it'll help us to remove those together and we'll get back to work.

Neill, I think I might add with that is that we were as Kelly mentioned, we were very close to moving a rig in fact had we not seen the turnaround in the commodities we would have been, we've had a rig running by now and possible even added a second one between now and year in, but as Kelly mentioned we're price sensitive just like a lot of our peer groups are but, I think it's important to point out is that even though at a current price that we're seeing right now in the mid 40s plus or minus, we can deliver an internal rate of return. But what's important to us that we also bring a big bang for the dollar and that means return on investment. So those two lines really have to meet, we want to hit on all cylinders. So, we're anxious to move and we can move very quickly and I think that's important point with the type of drilling that we're doing on the platform with the vertical work as well as in the Delaware we can mobilize very-very quickly and we're standing ready to do that when those two line again come closer together.

Okay and them obviously it was pretty interesting to listen to Devin and Kelly, Tim obviously, they highlighted quite significantly talking about the lower [brush] canyon and talked about nine wells and I think they talked about exceeded their type curve by more than 90%. Two questions around this, one obviously to look at something like this you know it sort of changes your philosophy rather than just drill shallow vertical wells, you'd obviously have to look at doing some of these, a bit deep but not real deep horizontals. Number one, is that something you'd consider given that the potential now that Devin is suggesting was the lower Brushing Canyon intervals and then secondly or maybe you want to talk about this first Kel, what inter-goals you all own. I know I think in your last, when you bought that Delaware basin and you mentioned what you have, I assume you have the lower brush so if you could just maybe talk to that first and then if you would target something like this which certainly change the format versus just being a shallow vertical.

We do own a sizeable amount of footage vertically across a spans of 15,000 acres, no question of that. And we own for the most part Dell Canyon, Sherry Canyon and all of the brushing, including the lower brushing, across the vast majority of everything we have and up north of us there is a lot of action going on as you stated in Brushy and it's moving south I guess you would say in some cases, lot of experimentation that's going on around there. It could equal something no doubt about it, we're very interested in that and we're looking at it closely and we're going to continue to, you're looking from the top of the bell all the way down through the Brushy being some 3000 feet I mean it's a tremendous size zone multizone there and lot's of serendipity and lots of opportunity and you might go so far as to say that within side of those zones if you will you could I guess call those benches inside of some of those, the way some folks are referring to them nowadays but I think that there's no question that there's those opportunities available to us and we're going to continue evaluating, look at them across the board.

I think Neill, to add to that as it relates to the obvious, the acquisition for a vertical play there but the Brushy Canyon and you're right, what Devin just reported recently and from what we've seen some others do in the immediate area that Brushy Canyon could be a very impactive bonus for us and in fact we had some early, very preliminary discussion as it relates to whether or not we have an interest in doing something with someone else and of course we're always going to be listening and be available to explore anything or be open to anything that can bring value, but that's something we kind of see that's on the shelf and we think at some point in time it’s going to become very valuable and we'll address it more specifically at that time.

Our next question comes from Jeff Grampp with Northland Capital Markets. Please proceed with your question.

Appreciate the reserve update here this morning. So I'm wondering across the 3P reserve categories that you guys have laid out kind of wondering what's baked into that so far in terms of drilling locations just thinking about 2,400 or so platform locations in the 400 so. New Delaware locations are all those kind of baked into the 3P or you guys maybe been a little bit more conservative with some of those out of the gate. I guess just trying to get a feel for upside to that 3P number going forward.

Danny I think maybe you could address that.

The total number that you were just talking about the 21 or the 2,500 in the 400 not all of those are included in the 3P. We're only looking at the ones that are near existing production would be third step out from those probables and possible. So now we still have a substantial amount of value in the potential category.

And then I know you guys are kind of looking at acquisition versus drilling and oil price and that’s hard to tend down. But kind of looking between the two new areas I know Kel you mentioned that maybe the platform might our first priority given it set of more how you guys like to do things. But once you kind get the Delaware maybe more upfront more efficiently how do you guys kind of look attack those two areas going forward.

When you and I talk about that in past just for clarification curves we sure to be on the call understand it. We are going to move in if when we move the rate and we would likely move into Andrews County first because that is a very easy for us do and from a more of a mature project as it relates to us. And so as it relates to what's going on up in Culberson and Reeves Count the Delaware piece we're excited about there is as I mentioned earlier this locating through there is an enormous amount of opportunity for us, lot of work to be done there that we can take advantage of that increase production will be consider will be very considerable and impact in without having to put a bit in the ground. So that’s the reason that we would move into Andrews County first essentially we have all this low hanging fruit and business and work we've doing out in the Delaware before we move the rig in it's not that we won't move rig in is just that we have all those opportunities in front of us that we want to take advantage of first before we do start drilling.

And then last one from just wondering on the LOE front you guys continue to keep a pretty low cost structure and kind of imagining maybe there is a quarter so of noise that you guys integrate kind of we see higher cost assets with all the old operators. So just kind of wondering internally are you guys are thinking operating cost trend over the next couple quarters if you guys may be have an internal number your thinking you can maintain that you guys bring these new assets and get those into shape.

I think LOE is going to continue to be without drilling it will be moderate I guess is any kind of in line with the way we have exhibited our style controlling LOE in the past most cost. If price stays down here we may see some benefits associated with that is got on the LOE side obviously we get back to drilling and I think we'll see some those numbers start to write it down again.

Our next question comes from John White with Roth Capital. Please proceed with your question.

It really does seem to be an environment it's playing to your strength. So congratulations on the acquisition I'm really excited to hear about you talked previously about changing out some infrastructure and reworking some wells and get a lot of work to do on the acquired properties. Really before you even sort of rig they work can you give us some more of the guts of that kind of the operations you got plan there.

Sure Kelly or Danny maybe you guys could shed a little color on that.

This is Danny. Now what we're really looking at their when we first took a look at that piece of property out there. First thing we noticed was at the previous operator had basically put in the place of program where if wells went off and there was other wells with HTT acreage they did not sales track on. We identified higher fluid levels in nearly every single well out there. So what we're going to the process now is we've already got in most of the capital expenditures program where we're going to increase the efficiency of the water handling facilities out there which will allow us to ramp up our fluid handling capacity. And once we get that in place and actually while we're putting that in place we're actually going through the process of upgrading pumping equipment on wells that will allow as soon as water facilities in place. We can just start cranking those up, we also are going through the property methodically and hanging wells back on that had been let go. That’s just a small example of some of the as Kelly calls this a low hanging fruit we've got in front us they're matching therefore to keep us busy probably for several months.

I appreciate that and I conclude a lot of this involve changing out rod pump for ESPs am I correct with that go in that direction.

Probably not going to go with ESP we're probably going to go with the cavity pump which are handled nearly the same amount of fluid that it will much lower cost.

And changing of the rods for the TCP.

Our next question comes from Joel Musante from Euro Pacific Capital. Please proceed with your question.

I've got a couple of questions. On a 400 locations what kind of well cost are you looking at -- are they eventually all the same time of vertical wells or and is there are an average well cost for that?

Yes. -- The 400 locations that we are talking about, yes they are vertical locations at this time. Well cost where we think we can drill those wells in the 800,000 range, somewhere in that vicinity which is substantially lower than the previous operator was drilling so none of the potential that we were talking about will drill in Brushy would be included in that.

And just on the well decline curve, production decline curve for those wells, is it pretty similar to what you have on the platform or is it some different about it.

It is the bulk of [indiscernible] decline, a little less aggressive on the decline in the Delaware where the tenanted property on the simple based platform they decline pretty rapidly in the beginning. We don’t see that same rapid decline in Reeves Counties Culberson.

And on the differential area just trying to model out the differential going forward, it's a little bit of 8-K it look like differential for the oil made available, wider than -- I don’t know the oil is different quality or in Delaware or not but...

The different there Joel is obviously the Delaware assets are little more oscillated with a little higher tuck-in cost there and the other part of that actually that occurred in the base and right now is bringing a premium to the suite and all of our vendors and simple basin platform properties on [earth] now. We are actually seeing the premium in that area.

Okay. Is it that you had -- you had about a month production area, isn't look like you have much of a discount that was -- that you normally see, I guess?

Right.

And then the LOE was -- I think the LOE and for the historical data, it looked a little bit higher than the other properties. Should we expect that to go down or I know Jeff was asking about…

I do think Joel over time we'll see that come down. We've already identified new vendors, the previous operator had a set of vendors that they liked -- what we founded they were not [verbally] competitive for whatever reason and so we have identified new vendors in that area with much more competitive.

And with all these for review work they are doing, do you think you see production kind of staying flat or you may be growing or even declining little bit or I don’t know you really don't give guidance on that but….

I don’t think that -- yeah actually we definitely -- we won't be seeing the decline, I think you will actually see some growth.

Joel I'll add just of couple of things, this is Tim. Want to go back to your earliest question on the cost, the F&D cost, particularly as compared to our platforms so as Danny pointed about we're about twice -- up twice the cost at the Delaware over 800,000 versus 400,000 may be little less than 400,000 on the platform. I think it's also important to point out that our EURs at the Delaware probably at least three times plus this much as a platform. So your dollar is certainly there. And then secondly as related to one of your question pertaining our LOEs there and the past with prior operator, the operator have partners add ons and we had disposal system and SWD system that was set up so that those barrels were charged in a cost that we're really not but we feel competitive so just that alone has dropped the cost significantly, as you complain and so -- and I guess probably lastly is that between now and year end both including the Delaware and as well as the platform with the CapEx expenditure that we've kind of set aside the budget we put together, with again within the cash flow that the company is providing now, we will see growth. There is no question about that production side.

Thank you our next question comes from Noel Parks with Ladenburg Thalmann. Please proceed with your question.

I have a couple of question here. You know as we look ahead to at some point you're adding [back] I was just wondering the part with your rigs that you would add back. Do you think it would be comparable to what you are using before or do you think you can start to see a step up in quality for same or better price.

This is Danny. There's no doubt that the, there is a lot of good equipment available right now. We had good equipment out there already. What we do know is that the, one of the main drilling companies that we worked with is now while they're heading this downturn they're in the refurbing these rigs. And so I think even if we get the same rigs back out there they'll be in much better condition than they were before.

Great, and do you have any sense of what sort of a recruitment you see, would that be you think in days to drill, something that you see or just sort of left downtime, repair.

Well, we're already drilling the wells in about four days a piece so it's hard to get much better than that but I think the big difference will be in the amount of downtime which we'd already fairly well minimized.

Great and I'm just thinking about the land situation out there. If you look at your sort of when you see 2013 time frame that was apparent from information of the company got rolling operationally. With competitors who may be, were leasing in the vicinity at that time. Do you have any sense for those guys as looking ahead to the '16 and maybe some lease exploration, do you have a sense now whether folks are still looking to do HT, HTC drilling or as you're seeing the trends of people sort of sitting right on the wall and just trying to renew or extend leases at this point.

No, you kind of have, this is Kelly. You kind of have an all of the above going on out there right now where it was sort of a general direction that everyone was heading down when prices were higher, that's all been sort of thrown out and now you're gaining each deal sort of dealt with almost an individualized basis so you get people that come at you saying, I know that we used to do it like this but we'd be willing to get concessions here, we'd be willing to do this if you'll drill a well or if we would have pushed back and say we don't want to drill the well right now, doesn't make sense to do that and you wouldn't want us to produce your reserves at such a low rate. A lot of those folks might come back and say we'll do, there's a kind of bonus. We'll extend leases so I say sort of it's all of the above on a lease by lease basis right now, it's negotiable.

And I assume is that extending to the royalty from this people are expecting.

You know for the most part the royalty terms are about the same, you know especially in the Andrews County area where I always refer to the landowners there suffering from landowner fatigue. A lot of these guys can negotiate leases and their experience levels about the same as ours. And in some cases where the landowners are. Plus you've got a lot of majors, they've bought land over the years and actual minerals are owned by Chevron or Exxon, so you're not dealing with an individual in that nature, so, or you're dealing with university land which is not the anyway, so highly sophisticated. So I think the royalty for the most parts are about the same.

And I guess the only other thing I had was, for LOE had a few questions on it already but right now if you're sort of looking to a PD 10 or a NAV on the locations you have there. Just ball park or even a range, what do you think the right unit LOE is to you sort of the right well at this point.

Including the tax?

Yes.

I think and please comment otherwise but I think that $14 to $15 range is very conservative, would you agree.

Yes sir.

And that would include the tax.

Our next question comes from Jason Wangler with Wunderlich Securities. Please proceed with your question.

You know Noel said that the LOE side I think has been kind of back. I was wondering maybe you talked a lot about what you’re going to be doing in the Delaware as far of kind of revamping it, just from a CapEx perspective as we're not using any drilling rigs right now just how you see that trending until you do decide to pick up rates.

Yes, as a matter of fact, we have a, we don't have an official CapEx that we've published but in house we have earmarked a roughly or both the platform and the Delaware in that neighborhood of 10 to 12 million, Jason.

Is that for the year, I'm sorry?

That's pretty much balanced, that's limited drilling, that's drilling a couple of wells, two or three wells on the platform, little bit of remedial work and some refracs on platform and a lot of remedial work and infrastructure work at the Delaware site.

I'm sorry, and is that for the rest of this year or kind of the time frame around that.

Yes, between now and a year.

Our next question comes from Patrick Rigamer with Seaport Global Securities. Please proceed with your question.

As you kind of think about it potentially getting back to work on the platform. Are you thinking about doing anything differently in terms of completion design or phasing or sticking to the same recipe?

We are doing a little bit of work. We have adjusted our completion technique a little up in that area and we are seeing some very positive results from that, that we think will carry forward and those come through the very and basically no increase in cost. I think we're in good shape on that.

So just hire crop and fluid levels or different space.

Some of that had really read an offset right now. But we are seeing some very positive results let me just we're probably seen a 30% to 50% increase in lot IT rates in the step on the platform with the changes that was made.

And then with this balance of kind of weighing development and cost an commodity prices as we figure with oil under 45. I guess can you rely me on what your drilling commitments are on the platform and then also on the Delaware Basin as far as kind HP in the acreage.

At this time we don’t have any drilling commitments in the Delaware Basin. On the platform I believe we have about three or so wells that we have to drill between now and year end.

And on them M&A front as we continue to be opportunistic. How do you think about the overall portfolio now that you have kind of two core operating areas? Are you looking to potentially add a third or are you more focused on opportunities that are bolt on or coring up your existing operating cut.

Patrick this is David Fowler, I think that you use the word opportunistic and I think that’s what will remain. We weren't necessarily looking at Culberson and Reeves when the asset came to us and we began to look we rely it was a great fit for us. Keep in mind that all along we've always said that if you put your point on Midland and drove out about two hours and through circle that’s our playground and you were in the Permian. So we're still going to be very active looking at all the opportunities that come our way, if we would rather see everything and then take a decision on whether or not it's fit for us. So we're going to continue to be open minded on opportunities that may come our way. But at the same time we're going to be like I said before we're going to be patient we're going to look for deals that truly are good fit for us.

Our next question comes from Richard Tullis with Capital One. Please proceed with your question.

Tim I don’t think is been touched on yet or Kelly. What's near term plan for the acreage in Kansas given the current commodity environment any plans to move forward with anything there.

Richard I'm glad somebody asked that question because we talk a lot in the enthusiasm and the passion seems to surround what we've just been reviewing this morning Delaware and platform. But Kansas we hold 17000 plus or minus acreage up there. We do have a joint venture arrangement that’s still in place over the last six, eight months or so we've conducted a seismic shoot that’s been reviewed. I'll let Danny to address that here in a moment but although it's treated like a step child we don’t have any plans, we don’t have any formal plans for spending any money between now and year end. But when commodity prices start to sweeten up a little bit at the end will be sitting with our joint venture partners and talking about an ongoing development plan of some sort and that's primarily a result of this interpretation from the seismic. But we are pleased and we are encouraged what we've seen thus far. But Danny if you don’t mid just takes a couple of moments and maybe give Richard a little more color on that please.

Sure on the seismic program sales we have one block of acreage here that covers probably half of our holdings in that area that we shot for seismic over. And we did see some things that were very interesting in there. Both in the [indiscernible] which was the main target in that result so indentified some other targets that appear to be great interest into it. At what point we'll go back to work in that area I'm not really sure but it does have some opportunities and did open our eyes with some things.

Just lastly from me I know you're not really looking to give production guidance for the second half of the year. Just trying to figure out where things were say at quarter end given the addition of acquisition production. Could you say where you were say June 30 or with the current production is for the Delaware Basin properties?

Yes I think we can address that and Danny why don't we just kind of maybe look at the last 10 day average between the two of the key assets.

Sure with gas production that’s and Culberson areas we are up about 200 barrels a day from where we took it over. We are averaging probably in the 1000 to 1,100 barrels a day range growth and about 3 million a day on gas or properties that in the [simple] basin platform or running between 1,800 to 2,000 barrels a day growth and have probably as a little less in the million a day in gas.

Our next question comes from Jeff Grampp with Northland Capital. Please proceed with your question.

Hey I just had a quick follow-up on the balance sheet side obviously you guys have a lot of flexibility here but I'm wondering there -- I want to get the sense for how you guys are looking at the upcoming borrowing base redetermination to fall, do you kind of have a sense to that 100 million of borrowing capacity, is that risk or do you have any line of sight there?

You know Jeff that’s an excellent question and keep in mind that of course that was just reviewed recently through the acquisition process of Delaware that was the banks started beginning with SunTrust and rest of the group that came in and joined sequentially to these numbers, so we have a very fresh start, there if you will but at same time with that said of this fall there could be an adjustment we'll just have to see if there is, would expect much more in the small one.

Our next question comes from Nick Copeman with GLG. Please proceed with your question.

I missed the third part of call, I mean I missed the comments on this but I was wondering if you can give some color around the breakdown of [valley] slides, and what about the acreage and which rise a bit across?

I missed the first part of your question can you say this one more time Nick?

I was wondering can you give a breakdown on certain present value you identified in back on the slides and which geographically is which risen is geologic figure and when you looking the 3P valley over 2P?

When you looking at the 3P number it's roughly it's almost value us on the PV basis. It's almost 50-50 between the two areas. As far as the horizons go obviously in the central basin in platform, it's almost exclusively San Andreas -- on the Delaware side the bulk value right now is trembling out in [interval]. Some small value at that came.

And how quickly do you think you get drilling to bring that into probable.

Well I think it's quickly we are ready to quite frankly that’s not meant to sounds that’s anything. Just we are looking at the cost and rising of the cost come down along to help out of that price and when that happens as you may has missed this earlier on the call but we will move rigs into the Andreas County area first because there so much opportunity to increase production without a drill a bit out in -- in the Delaware.

And the numbers you talked that you've risked any horizons or have you thought about quite a things?

You know in the numbers that are presented right there is -- we haven't really risk those too much there is a little bit in the probable and possible we have risked those to some extent. The 3P area where 1P part of that now there is no risk in that.

Our last question comes from John White with Roth Capital. Please proceed with your question.

Yes while we were discussing differentials earlier, can you give us the API values and sulfur content for the Delaware you acquired properties fuel?

Sulfur content, I know is very low, which classifieds -- I couldn't tell you the exact percentage API gravity I believe is about 38.

Solid, it is meaningful solids content?

No.

And how about the two ring, is this going be a mess to being pulling operation is it?

No, we're not saying about that area, there is not nearly corrosion issues that we have and sour environment unless it is forming a platform.

There are no further questions in queue. I'd like to turn the call back over to Mr. Tim Rochford, Chairman of the Board.

Thank you, operator and we want to thank all of our listeners today. We know it's been a busy time with a lot of companies reporting. I think the couple of key points of what we wanted to just be sure and take away is that we're very excited about what's on the plate ahead of us, even the absence of drilling we can add production, we can add value and we can do with cash flow constraints that’s are in house. So with that we appreciate your time. If you have follow up questions, please feel free to reach out to us. Thanks again. Have a good day.

Thank you. This does concludes today's teleconference. You may disconnect your lines at this time and have a great day.