The Company’s production volume on a BOE basis decreased 54% from 59,289 BOE during the second quarter of 2010 to 27,083 BOE during the second quarter of 2011. This decrease is primarily attributable to natural production declines related to existing production. The reduction in production volumes was partially offset by price increases during the quarter. Our average oil price increased to $83.39 per barrel for the second quarter of 2011, compared to $70.13 per barrel for the same period in 2010. This increase in price realization during the second quarter of 2011 was partially offset by a realized loss on hedges of approximately $164,000 compared to a realized hedge gain of approximately $273,000 for the same period in 2010. The decrease in oil production was also offset by an increase in production of natural gas. Natural gas production increased from zero during to the three months ended June 30, 2010 to 29,681 Mcf during the same period in 2011, due to production from a new gas well that commenced production in the first quarter of 2011.
For the six months ended June 30, 2011 the Company reported oil and gas revenues of $4,169,000 compared to $4,780,000 for the comparable period of 2010. Net loss for the period was $8,506,000 compared to a net loss of $6,017,000 for the same period in 2010. EBITDAX for the six months ended June 30, 2011 was $724,752. The net loss for the six month period in 2011 includes non-cash charges of depreciation, depletion, amortization and accretion of $2,141,355, stock issued for services of $251,412, stock based compensation of $4,675,332, amortization of deferred financing costs of $2,203,725, cash interest expense of $1,782,821, and an unrealized gain on commodity hedges of $222,788. Stock based compensation expenses for the period includes a one-time non-cash charge of $3,551,000 for non-cash stock based compensation related to shares issued to the Company's former chief financial officer in connection with his separation agreement. The net loss for the six month period of 2011 also includes the effect of a non-cash gain of $1.6 million related to the mark to market adjustment of a derivative liability associated with the embedded conversion feature of the Company’s convertible debentures.