So in the second quarter we now are over 50% crude oil production, which, as you know, with current crude oil prices around $93 to $95 a barrel have significantly better margins than what we’re experiencing on natural gas at around $3 an Mcf. So that is something that not many companies can do is direct their capital so quickly and change their production mix so quickly, which has allowed us to report these substantial results. That will continue throughout 2012.
Our capital of $325 million for upstream is geared to these two oil projects being the Williston and the Eagle Ford. We did announce earlier this week that we have moved into another region of the South Texas area called the Pearsall and we’ve actually spud our first well. That will be a test well to that formation. We will end up completing that well in the Eagle Ford.
We believe that there is some unique opportunities to pick up additional acreage and to expand our footprint in the Eagle Ford and we are looking at those opportunities with great interest. We also continued to expand our leasehold position up in Canada in Saskatchewan, where in the Tableland field we continue to have significant success with the way we are completing and fracking the new wells up there and getting much higher oil production and much less water production and therefore getting much better EURs.
Now, let’s – don’t leave Appalachia out because we are very high on our Appalachian division. We’ve intentionally delayed capital spending there this year predominantly because we do not have a gas processing plant up and running yet that can strip the very rich liquids that we have in that gas stream. Our plant is supposed to go live in November. It was supposed to go live in June and it is four months behind schedule. But we believe that it will happen before the end of the year and that’s a huge uplift for this company.Read the rest of this transcript for free on seekingalpha.com
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