Good morning. My name is Carmen and I will be your conference operator today. At this time I would like to welcome everyone to the Petrohawk Energy Corporation 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 session. [Operator Instructions]. I will now turn the conference over to Ms. Dunlap. Please go ahead.

Good morning. This conference call contains forward-looking statements intended to be covered by the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. For a detailed description of our disclaimer see our press release issued yesterday and posted to our website as well as our other public filings. In addition to our first quarter earnings release, our company issued two additional press releases yesterday relating to an equity offering and a debt offering that we are currently conducting. Due to SEC regulations involved, we are not at liberty to discuss the subject matter of either of those releases. I'll now turn it over to Floyd Wilson.

Good morning everyone and thanks for joining. Today we'll discuss our strong first quarter and an increased capital budget which includes a significant component for the Haynesville Shale play in North Louisiana and East Texas. We've also begun large scale development of an oil resource play in Oklahoma and of our James Lime and Travis Peak position in East Texas. These activities all contribute to our continuing program of building a concentrated high quality low risk and low cost resource inventory which today includes some 13,000 drilling locations equating to a bit over 10 Tcfe of risk non-proved potential. It's impressive to me that just six months ago that number stood at less than half of that. In the Haynesville Shale, Petrohawk has ceased a rare opportunity. Over the past year we have accumulated a large amount of data on the Haynesville Shale, and we believe the attributes for success in the shale play are all present. And now we have commenced a very aggressive drilling program. We have acquired or have commitments for over 150,000 net acres in this play. Petrohawk comes into the Haynesville... came into the Haynesville Shale play with approximately 40,000 net acres already in hand in Elm Grove, Longwood and Joaquin. Leasing in this area is highly competitive. The tough competition is a natural outgrowth of the potential of this play. We're in an awesome position here. We have several early mover advantages. We're leveraging our experience in the Fayetteville Shale to evaluate and plan a significant ramp-up activity in the Haynesville Shale. We have proven our ability to successfully drill and complete technically challenging horizontal shale wells. And we've shown that we can get a large scale development up and running quickly. We have analyzed approximately 50 Haynesville specific data points and with our…

Thanks Floyd. As Floyd mentioned the first quarter of 2008 was another strong quarter of organic growth for the company. The drilling programs in all of our core areas continue to achieve excellent results as well as a few other areas where Petrohawk positioned itself to accelerate growth. In the Fayetteville Shale trend we drilled a total of 62 wells, 26 of which were operated, of the 26 operated that were drilled we've conducted state tests on 18 of them. Our comparison of the productivity and cost of these wells with wells tested during the fourth quarter of 2007 provides excellent support for the improvement we have seen in the play, as Floyd previously mentioned. The average state test volumes have increased 20% quarter-over-quarter while completed well costs have decreased 12%. During the quarter, we've operated 5 horizontal rigs and one spudder rig. We will be adding our 6th horizontal rig later this month and add a 7th horizontal rig by mid year. We'll continue to expand our drilling program to extend across the full breadth of our acreage position in order to fully test the block and accelerate those areas provide... that provide the best economic returns. All in all, I would state that we have achieved very quickly a highly productive program with a relatively low number of what I would call research and development wells. In the Elm Grove field, we've continued our core drilling of vertical wells in the Cotton Valley by utilizing three vertical rigs but also employed three horizontal rigs and completed three horizontal wells during the quarter. We completed one well in the Cotton Valley Davis section at initial rate of 4.5 million a day. More impressively, we completed two Lower Cotton Valley Taylor wells for 13 million and 6 million a day.…

Thank you, Dick. As evidenced this morning by the comments from Dick and Floyd, and which should be further supported by our financial review we are off to a great start in '08, and we believe we've really set the stage for what's going to be a tremendous year for the company and shareholders. Before we jump into the results of operations, couple of items that I'll touch on. In the fourth quarter of last year we closed the divesture of the Gulf Coast Division and in conjunction with that we collected cash of $700 million as well as note receivable. I am pleased to say that note has been collected in full to the tune of $100 million. And we did apply the majority of that cash collection to reduce our revolving credit facility. Another note, earlier this week we actually made the decision to go ahead and pull the Form S-1 registration statement for the anticipated MLP that was going to house a portion of our Western region assets. In the second quarter we'll have a charge somewhere in the neighborhood of about $3.5 million which represents monies that were substantially spent in 2007 related to the formation of the MLP and the filing of the S-1. Turning our attention to the results of operations, I am really going to focus my comments on the highlights of the current quarter, touch a little bit on '08 guidance but stay away from any quarter-over-quarter discussions just because of the transformation the company has really gone through in recent months. We did generate revenues this quarter of about $215 million, about 90% being driven by natural gas and as has already been discussed on the call, we did exceed the high end of our production rate coming at 261 million…

Thanks Mark. We are having a great year in every respect, and we really look forward to what's ahead at Petrohawk and in all of our core area of operations. We're happy to take questions now if there are any. Question And Answer

[Operator Instructions]. Our first question comes from David Heikkinen of Tudor Pickering Holt.

Question, thinking about your production in the Haynesville, with this ramp in rig count, can you talk about your gathering and processing capacity and where you'd expect to exit 2008?

We don't have a firm projection on where we expect to exit, if you're talking about production wise, we have a fairly smooth increase of rigs starting with two this month going up to 5 or 6 rigs by the fourth quarter. Each well is going to re-project take about 60 days or so to drill, maybe a little less as the program progress, maybe another 15 to 30 days to get each well hooked up. We'll have a lot more data over the next... the course of this quarter. In terms of infrastructure, our early drilling has been done in areas that are very close to our existing gathering and compression and facilities. So, we have no issues whatsoever probably for what we're doing this year.

As you think about the increase in your capital budget, but no increase in production target, what it sounds like is as you get some definition full year actual production as you drill well you would have an upward bias to your production estimate?

We fully expect to revisit that David through the course of the year. We certainly wouldn't expect to spend that much more money without having an upward bias towards production. I'd just like to let results... concrete results dictate the scale of that, and I remind that we already have a fairly aggressive production target in hand for the year of actually nearly 30% year-over-year. So yes I think you hit the nail on the head.

And as you think about the number of wells that you'll drill with that ramp in rig count can you step us through that?

Dick, do you have a number for that? It strikes me, it was about 15 or so is that right?

I think it's right around 10, Floyd that we'd actually have drilled and maybe not completed but drilled.

Okay.

And with 5 or 6 being in progress that you would have about total of 15 or so data points.

Okay. I will step off and let other people ask question. Thanks.

Your next question is from Joe Magner with Tristone Capital.

Good morning. I guess stepping over the Fayetteville Shale, looks like production was up 4 to 5% over the last couple of months, and like at the analyst meeting it was in the low 70s, net production was I guess probably slightly up as well. Can you walk us through sort of how that's going to ramp up throughout the year whether midstream, and gathering facilities and takeaway capacity here in place or what... how that's going to kind of play out throughout the year?

Yes. Dick jump in here if I don't cover everything but we've got a program of I think 6 rigs to be drilling here within this quarter and perhaps add a rig or two in the second half of the year. We're getting as we pointed out results as expected on a per well basis. We've had a few delays here and there with laying a little pipe or doing a little extra diagnostic work on the few wells. We have a little bit of gas shut in, in the field but it's not a significant amount, just waiting on right of ways or some gathering line. So we don't expect any big delays in. On the other end of that we've got sufficient takeaway capacity certainly for our expectations for our drilling program for 2008, and we have plans underway to increase that takeaway capacity on the transmission lines to provide for growth during 2009.

The only thing I'd add to that is we're experiencing some curtailed production in our Wizen Hunt [ph] lease area, Hurricane area due to the need for additional compression that our gathering company is taking that gas does not quite put in place yet. So we're a little bit behind because of that otherwise we're right on target.

Okay, thanks.

Your next question is from Tom Nowack with Merrill Lynch.

Hi good morning. Just to clarify that, the $1.3 billion I presume it includes the acquisitions made in the first quarter, the 231 in the Fayetteville and 169 in the Elm Grove?

No, actually it doesn't include those early in the year. We only budgeted drilling and completions in a normal amount of... a nominal amount of seismic and land. So this increase is strictly relating to increased drilling, a bit of infrastructure and leasing in the Haynesville. So those early acquisitions are not included in the $1.3 billion

Okay and they were largely funded with the restricted cash balances, right?

Yes.

Okay thanks.

Your next question comes from Ron Mills with Johnson Rice.

Just to follow up a little bit on the Fayetteville, how are you progressing on the 100 miles worth of gathering/pipeline takeaway installations and when do you expect to have those, that program completed?

It's well under way, I believe I don't know if, I don't think Rich B. Michelle [ph] is on the call but I think we are projecting to finish it by year end. I think we are close to a third being done... accomplished already. We are building it in stages so that we can take advantage of existing takeaway capacity along the line, and we'll hook it all together by year end as one piece of business.

Okay and then at WEHLU as I recalled that was the major property that data had, when you did the recap. What's... can you explain... or go into to a little bit more detail on the horizontal oil development that you have going on there and what's driven you all to pick that ball back up?

Yes, I'll get Dick to add a little color to this but we are drilling both horizontal and vertical wells there, and we are very happy with the results that well Dick mentioned mainly being an oil well has actually produced that came in at about 450 barrels equivalent per day. I think we have Dick about 8 wells scheduled for this year, about half vertical, half horizontal, is that right?

It's actually eight of each, about eight horizontal and seven or eight vertical.

Okay.

I would add that that one of the reasons as you mentioned to pick that ball back up is we really took a technical break to evaluate the technical aspects of the play. This field's got 650 data points in it and we really wanted to kind of study what we thought was driving the success of the horizontal activity in the area that we had joint venture would Avalon and then Chesapeake as they acquired it. We really I think come up with some pretty good answers that have allowed us to put a real methodical approach to the development program that we have in place.

And if you look at your 33,000 acres in the play, any more color on what kind of spacing these horizontal wells can be drilled, what the resource potential of the WEHLU can be under this new development program?

I think the early stages of this we have some specific areas in mind that we think will be perhaps more impressive than certain other areas. The 30,000 acres I believe is the amount of land that field covers. I don't believe that's our net acreage position there, Ron but Dick what would you add to that?

Not a lot, again the study that we've have undertaken, southern portion of the field both due to a combination of lower bottom hole pressure and cultural issues with the city, coming much more in the play in the southern part of the field. We have not allocated a lot of resource potential to that part. We are not ignoring it but we think most of the resource potential is in the northern area of the field and therefore you can't just do a math equation on 30,000 acres and come up with the numbers, but again without giving specific detail to the number we see there it's significant. And we think we can really exploit it over the next couple of years.

And finally on the James Lime have you all drilled any James Lime wells yourself or is this just a way to leverage that acreage? And now EOG who's been active in that play already is going to kind of help, speed you along as you focus on Haynesville and Fayetteville?

I will let Dick answer about the wells as we certainly drilled a few. I will say that we haven't given this play the attention and... nor are we nearly as far along the learning curve as our joint venture partner is. And we are really looking forward to this JV as a way to get the... this good property developed. Dick we drilled how many?

Three horizontal wells, last one was the best one we drilled so we were making progress in the play but I would say Floyd answered it perfectly. We hadn't paid enough attention for whatever reason we are very excited about the technical abilities that the EOG brings, and we think it will be a great partnership.

Great. Thank you guys.

your next question is from Steve Berman with Pritchard Capital Partners.

Good morning everyone. Couple I guess balance sheet related questions. Can you tell me what the cash was at the end of quarter, just have current assets on this balance sheet and the press release?

Mark did we have any cash around at the end of the quarter?

Yes at the end of the first quarter we did have a cash balance. Obviously it wasn't anything of any significance though.

All right and so the $100 million came in after the close of the quarter, can you talk a little bit about what your current availability is on the revolver and if you intend given this increase in the size of the company here with the recent and proposed acreage acquisitions etcetera, your propose to increase the borrowing base and the credit facility anything to talk about there?

I don't know about the availability, Mark I think you said we had 500 and some odd drawn on a billion dollar borrowing base at the end of the quarter. We did collect $100 million on the Gulf Coast sale right at the end of April, anything to add to that Mark,

No that's correct, we are 535 drawn about 600 today and we did collect $100 million and we used the majority of it to pay down against the revolver.

Thanks but as we speak today in May they is still availability on the line.

Well there may be some but Steve we've been extremely active in acquiring property and acreage in north Louisiana here, in the last... this year.

And is your intent with the Haynesville to try and stay within Louisiana or do you see anything moving into some companies in East Texas are involved in the play, are you staying in where you are now pretty much?

Well as you know we've got a significant amount of property in East Texas anyway, and the play looks pretty perspective over there, we are working that side of the border. However our early success in acquiring additional leases has been mainly in the Louisiana side. We do think there are some very perspective areas over there though in Texas.

And last question do you think some of the planned wells balance of this year, do you think... is that going to be spread out testing maybe both sides both Louisiana and Texas?

I don't believe we have any wells planned on the Texas side for 2008. In fact, most of our wells for the first half are going to be situated on or around our acreage that we hold there at Elm Grove in a general sense. And in the second half we will be stepping out to a few other areas in the play that are not exactly within the confines of Elm Grove.

Great, thank you.

Your next question comes from Leo Mariani with RBC.

I didn't hear that question, if there was one, operator?

Hold just for a moment.

Hello.

Good morning. Operator, if you're on we're not hearing any question on this end.

Okay sir, I do apologize. We're experiencing technical difficulties. Hold for just for a moment. Excuse me Mr. Mariani?

Yes, can you hear me?

Yes sir, your line is now open.

Okay yes, just a question on the WEHLU play here, just trying to get a sense of what the costs are on those horizontal wells and if you guys have any indication on what the EURs are out there?

Dick?

They are in around 2.8 million on the horizontal, about 1 million on the vertical. EURs are... we're kind of looking at around the 200,000 barrel equivalent, right?

Okay. So, for the horizontal wells?

Correct. And we are hopeful that I mean our studies indicate that we have a chance of coming up with nearly the same type of that reserve. Therefore, obviously much better economics on vertical well and that's why we're going to test that program and really just to see what the results dictate us to whether the horizontal or vertical becomes the most efficient use of capital. So, by the year end, I would say with this test of 7 or 8 of each, we should have a good handle on which direction we'll be going forward and some of that will be driven by culture as well, vertical wells versus horizontal wells.

Okay. You guys mentioned the three wells that have kind of been down there in the James Lime play, and you said your last result was the best. Can you give us some indication of what kind of rates you are seeing on those wells?

About 3 million a day initially. Not as well as some our competitors, we think we can exceed that dramatically with more work with our partner. They've obviously got a lot of work in the Louisiana side of this play and we didn't enter into this relationship without a lot of sharing of ideas and thoughts and technology so, we're confident we can beat them.

Okay, what kind of well costs you guys are expecting out there?

Those horizontal James wells are not too terribly dissimilar than WEHLUs kind of mid twos.

Okay. Thank a lot for your time.

Your next question comes from Monroe Helm [ph] with CM Energy Partners.

Answered earlier but what kind of well costs and the EURs you are looking for in the Haynesville play at this point in time?

We don't have a firm number to publish however for planning purposes we are using between... somewhere between $6 million and $7 million for the drilling costs and 5 Bcfe on a per well basis and then of course internally we are risking those numbers down a bit.

Thank you.

[Operator Instructions]. Your next question comes from Ron Mills with Johnson Rice.

$0.3 billion budget just to be sure is that related or similar to the $150 million that you spent on drilling and completion in the first quarter or is it that... it sounds like that does include leasing. So how would you... how should we look at your spending levels over the remainder of the year from a quarterly standpoint?

Yes that will of course be ramping and the spending in both the Haynesville and the Fayetteville, the 150 spend in the first quarter does relate to the original $800 million budget on a go forward basis to $1.3 billion budget includes a Haynesville component of about $400 million or little less than that that is a lot of that's for a land position there.

Okay. But would you expect even to get to your $1.3 billion that to be... continue to be fairly lumpy depending on when you actually get leases signed up or is it going to be more heavy in the second and third quarters or even more constant throughout the year, just trying to match it with all's [ph] quarterly cash flows.

Sure it will be certainly heavier in each succeeding quarter. I wouldn't call that lumpy and we are certainly not waiting on leases. We have a huge position there already. We are leasing but we are just working the technology and staging the rigs in, and taking a workman like approach to the exploitation of this shale much as we've done in the Fayetteville Shale.

All right great thanks.

Your next question comes from Andrew Coleman of UBS

Can you on... mentioned you looked about 50 data points on the Haynesville, have any trends kind of stood out that you can highlight there?

There hadn't been enough drilling in production to highlight trends, our belief is that this play will be much like most other plays a bit statistical in nature though. There will be some areas that are better than average and some that are worse than average. As of now there are no real averages to cite. We do feel that there is some point in the northern area that it gets a bit thin, over in Texas as you farther west it's a bit thin, down to the south it's deeper and a little bit thinner. So there are some an overall kind of a macro picture of where we believe the players perspective. I got to say tough that covers a several thousand square miles over a couple of million acres. So there is a lot sort to be determined about this play Ron or Andrew?

Okay, so sort of think about the development and kind of mirroring what you guys did in the Fayetteville last year with the focus [ph] on the selective kind of sweeter spots and kind of stepping out to test more on the acreage after you got a few wells down?

Yes, I think a very similar pattern and we actually feel really good about being able to use our experience in the other shale play to perhaps accelerate the learning curve in this play.

It also mentioned in the release you've got 4000 foot lateral, currently drilling, is that going to use a pretty standard like a Fayetteville completion in terms of frac stages or do you guys kind of look at optimizing or changing the recipe if you will at this point?

We'll certainly look to optimize and change as results dictate but for now I think our model plan is to drill a 4000 foot lateral. We'll use a liner and we will do about 8 stages of frac in that 4000 foot length.

Okay. And my last question is with the pulling the S-1 for the MLP, you guys currently I think have one rig on the Permian, do you foresee that changing going forward?

Well, actually we've got a fairly active program out there and several other fields in the Permian. We've pulled the S-1, we just didn't want to keep it... have to keep updating it that MLP market in perfectly situated for what our designs are at this time. So we have a pretty active program out for the balance of this year. We are drilling at Sawyer, we are drilling at Waddell Ranch, we are drilling at Jalmat. We are drilling at TXL. So there is quite big going on out there, it's just the each operation is relatively shallow and doesn't require a whole lot of capital.

Okay, thank you.

Your next question comes from Tom Kaplan [ph] with Cadence Investment.

Hi thanks for the opportunity to ask you questions. I just want to make sure I didn't miss your response with earlier question from Monroe Helm about some of the EURs and the well costs in the Haynesville, might you just repeat what you said?

Sure, on a planning basis, we are using about five Bcfe per well, we expect the gas to be dry, pretty good Btu content from what we've analyzed so far. We think that costs are going to be between $6 million and $7 million per well with the earlier wells costing a little bit more as we do more diagnostic work than we might be doing later on. And then internally we risk that, the piece of asset [ph], we are using 65%. So that's what we are using in and we'll certainly be refining that as our own results start coming in as we ramp up the drilling in the play.

Okay thank you so much. Appreciate you taking the question.

At this time there are no further questions, do you have any closing remarks?

Operatorthank you and thanks every one for dialing in. We've had a very interesting quarter and interesting time and if you think there's something we didn't cover on this call just feel free to give us a call. Thank you.

This concludes today's conference. You may now disconnect.