Distribution had second quarter 2012 operating income of $6.4 million, compared to $8.9 million for the same period in 2011. Total net operating revenues for the second quarter 2012 were 5% lower at $31.2 million primarily due to warmer weather during the first part of the second quarter of 2012. Operating expenses were $0.9 million higher year-over-year.
2012 Capital Expenditures ForecastThe Company reiterates its intent to drill 132 Marcellus wells in 2012; however, as a result of year-to-date investments, and refinements to the second half forecast, EQT Production is decreasing its 2012 CAPEX forecast to $900 million, a reduction of $65 million. The Company's overall CAPEX forecast is now $1,300 million. Hedging Since the end of the first quarter 2012, the Company added to its hedge position for the remainder of 2012 through 2014. As of July 25, 2012, EQT has hedged approximately 56% of its expected sales of produced natural gas for the second half of 2012, excluding liquids. The Company does not hedge produced NGLs. The Company’s total natural gas hedge positions for 2012 through 2014 production are:
|Total Volume (Bcf)||66||84||45|
|Average Price per Mcf (NYMEX)*||$||4.67||$||4.91||$||4.75|
|Total Volume (Bcf)||11||25||24|
|Average Floor Price per Mcf (NYMEX)*||$||6.51||$||4.95||$||5.05|
|Average Cap Price per Mcf (NYMEX)*||$||11.83||$||9.09||$||8.85|