Just having a read of the HK earnings call - they have their...

Just having a read of the HK earnings call - they have their Bakken acreage in the FBIR - and it the Q&A the CEO appears to be getting a little antsy with the analyst (from Wells Fargo) regarding the Borrowing Base (which has lead banks of JPM and Wells). So HK is good thru their next redetermination in the fall and what go them through was the strength of their hedging (in 2015 about 90% at $90 oil). NPV10 price deck used by banks varied but started in high $40s and worked up to long term in $70-$75 range.

That seems pretty consistent to the survey also.


James A. Spicer - Wells Fargo Securities LLC
Yeah. Hi, good morning everybody. I've got a couple of quick questions on the balance sheet, probably for Mark. First of all, can you talk a little bit about how you view the appropriate level of leverage and/or absolute debt in the price environment that could be lower for an extended period of time? And as a follow-up to that, you mentioned that you're looking at some possible ways of strengthening the balance sheet. I'm wondering if you could elaborate on that a little bit?
Mark J. Mize - Chief Financial Officer, Treasurer & Executive VP
Yeah. As we've indicated leverage is higher than we want it to be, of course. And it's something that we're focused on and there are some thoughts here in the company that we've been working on, on ways to bring that down. Obviously, we can't get into specifics on what may or may not happen in the future, but we're obviously very focused on it. And that's also reflected in what we've done with our 2015 capital spend to try to stay as close to within cash flow as possible so that that number doesn't continue to creep up too much on us.
Floyd C. Wilson - Chairman & Chief Executive Officer
So look, appropriate level of leverage would be at least a third less than we have, but we don't have that right now. So we've backed off the spend. We've done a lot of hedging. We've made other reductions around the company so that we can get through this, and we will. Of course, it'd be lovely to have less leverage than we have right now.
If you'd of called me a year ago and said that we're going to have this oil price, we would have less leverage than we have right now. But you didn't call me.
James A. Spicer - Wells Fargo Securities LLC
Okay. So it sounds like there's nothing that you can provide at this point in terms of additional detail on specifics about what you are looking at?
Floyd C. Wilson - Chairman & Chief Executive Officer
No, not at this time, no. Thanks, though.
James A. Spicer - Wells Fargo Securities LLC
Okay. And the just one more question on the borrowing base redetermination. I thought that was great news that that was reaffirmed. Can you just clarify that you're in the clear now for the next six months as far as the borrowing base redetermination goes? And maybe a little bit about what drove the banks to ultimately reaffirm you guys at the current level?
Floyd C. Wilson - Chairman & Chief Executive Officer
Look, Michael, that's sort of a Mark question. But let me just say, we have a long history with all of our banks. We have a long history of strong production reserve growth, which we delivered last year as well. And this weighs heavily into their thoughts. Our big hedge book also is a big factor for this because they're driven by their own price decks. So Mark got 100% of the banks in, and we're good until the next time of redetermination. And we'll see what goes on then, but I'd point out that we have a very strong hedge book at that moment too in the fall for this year and for 2016. So it's a combination of experience the banks have with us and Mark's foresight in making sure that we hedge.
James A. Spicer - Wells Fargo Securities LLC
All right. Thanks a lot, guys.


followed by this


Gary W. Stromberg - Barclays Capital, Inc.
Hi. Good morning. Just a follow-up, Mark, on the borrowing base question, when will the next borrowing base redetermination be? And do you have any expectations on where that could wind up?
Mark J. Mize - Chief Financial Officer, Treasurer & Executive VP
Yeah, Gary, the next redetermination will be in the fall. We typically do that kind of in the October, maybe into early November timeframe. Where it's going to go clearly will be dependent of what commodity prices do. But again, with the hedges that we have in place, we'll have some protection there. And we're also going have the impact of drilling between now and then that will, of course, be beneficial to the redetermination.
Gary W. Stromberg - Barclays Capital, Inc.
And what...
Floyd C. Wilson - Chairman & Chief Executive Officer
With our hedge book, I'd be surprised if it changes. But I could be wrong.
Gary W. Stromberg - Barclays Capital, Inc.
Okay. And do you know what price deck the banks use for the $1.05 billion borrowing base?
Floyd C. Wilson - Chairman & Chief Executive Officer
It's varied.
Mark J. Mize - Chief Financial Officer, Treasurer & Executive VP
Every bank, as you would expect, is a little different. The JPMorgan deck, I believe, starts in the – it was in the high $40s, and I think worked up to a long-term price in the $70 to $75, somewhere in that ballpark.