As is our standard practice, we’d like to remind everyone that comments that we may make and answers we may give during this teleconference conference call. Maybe considered forward-looking statements, which involve risks and uncertainties and we’ve detailed those for you in our SEC filings.
Approximately two years ago, with the acquisition of our Eagle Ford Shale position, we began a long-term strategic transition from a company whose reserves and production were 98% natural gas and 2% liquids, to a company’s assets, production, and reserves are more balanced between crude oil and natural gas.
While this transition has not always been as seamless and as quick as we may have desired, we are very pleased with the progress we have made. Crude oil, as a percentage of production on an Mcfe basis, has risen to just over 18% of production in the second quarter, and we are projecting will increase further in the fourth quarter of this year to approximately 23% of production.
Third quarter oil volumes will continue to grow and we’ve averaged approximately 3,500 barrels a day since the end of the second quarter. Due to the timing of the completion of five gross Eagle Ford Shale wells on two separate pads in September, we are projecting another meaningful increase in production as we enter the fourth quarter of this year.Further, with a desire to both accelerate the early-stage delineation of the Tuscaloosa Marine Shale play and maintain financial discipline during this period by maintaining a $250 million CapEx budget, we expect some incremental volume impact associated with the transition of one rig from the south Texas area to the Tuscaloosa Marine Shale. However, we continue to maintain our forecasted 2012 exit rate of approximately 5,000 barrels of oil per day. With continued success in the TMS, plus the non-core asset sale we announced last night. We believe we are very well positioned to run it multiple rigs in both the Eagle Ford Shale and TMS in 2013.