Please keep in mind that some of the comments made during this call will be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. As such, no assurances can be given that these events will occur or that the projections will be attained. A variety of factors exist that may cause actual results to differ. For a further discussion of risk factors, see Murphy's 2011 annual report on Form 10-K filed with the SEC. Murphy takes no duty to publicly update or revise any forward-looking statements. I will now turn the call over to Kevin for his comments.
Kevin G. Fitzgerald
Thanks, Barry. Net income in the first quarter of 2012 was $290.1 million or $1.49 per diluted share. This compares to net income in the first quarter of 2011 of $268.9 million or $1.38 per diluted share. There were no unusual items significant to the 2012 quarter, but 2011 did include $30.5 million of $0.16 per diluted share of income from discontinued operations related to the 2 U.S. refineries and associated marketing assets that were sold at the end of the third quarter 2011.
Taking a look at net income by segment. E&P segment for the first quarter of 2012 a net income of $321.6 million compared to net income in the first quarter of last year of $260.4 million. Higher E&P earnings for 2012 were primarily attributable to higher average crude oil sales prices and lower exploration expenses. Unfavorable variances in the 2012 quarter included lower crude oil sales volumes and significantly lower North American natural gas sales prices. Crude oil, condensate and gas liquids production for the quarter averaged approximately 107,500 barrels per day in 2012 compared to approximately 113,300 barrels per day in 2011. This decrease was mostly attributable to lower gross volumes in Kikeh, Malaysia and Azurite, offshore Republic of the Congo. Natural gas items, however, were a quarterly company record of 525 million cubic feet per day in the first quarter of 2012 compared to 413 million cubic feet per day in the 2011 quarter, an increase of over 27%. This increase was primarily due to a full quarter of production at the Tupper West in British Columbia, which was on production for only a portion of the 2011 first quarter after coming online in February of last year.
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