We’re going to start out with a summary of the financial and operating highlights and then we will move in to a discussion of some of the drilling results from Q2 and our plans of for the future and then we’ll follow that by a Q&A session.
Randy Neely will review the financial and highlights of the quarter starting on the next slide.
Thanks Ross, good morning? First let’s note that all dollar figures that we speak of in this presentation are in US dollars. Gross revenues for the quarter were $148 million representing an increase of 30% over Q2 2011 and for the first six months of 2012, revenues were $307.5 million, a 45% increase over 2011.
Revenues were up principally due to our increased production which averaged 16,978 barrels a day for the quarter and 16,850 barrels a day for the first six months of 2012. These production levels represent a 44% and 46% over the same periods in 2011. Q2 funds-flow from operations were strong at $35.2 million with the first six months at $71.3 million. These figures represent a 15% and a 28% increase over the same periods in 2011. Growth in funds-flow were lower than revenue growth principally due to the majority of our production growth coming from the West Bakr PSC which has a lower profit sharing arrangement than our West Gharib PSC.
Q2 net earnings were $30.1 million but were again impacted materially by the accounting for the convertible debenture which on mark-to-market basis resulted in an $8.8 million gain in the quarter versus a $7.8 million loss in Q1. This occurred as a result of the market prices of the convertible debenture falling from $1.08 at the beginning of the quarter to $0.99 at the end of the quarter and while these fair value adjustments are made in accordance with IFRS, they do not represent a cash expense or an increase in the future cash outlay required to repay the convertible debentures.