We drilled and completed 9 gross (8.8 net) wells in our Sugg Ranch area during the third quarter 2012 with 89% drilling success. We are currently running one operated rig and plan to drill and complete 36 gross (35.2 net) wells in 2012. Economics for this drilling activity typically have rates-of-return in excess of 50%. In the third quarter, our production averaged approximately 4,100 barrels per day of net oil equivalents which was essentially flat with the third quarter 2011. This average production rate consisted of 1,500 net barrels of oil, 6,900 net Mmcf of natural gas, and 1,400 net barrels of natural gas liquids per day.
Based on industry results surrounding our Permian acreage position, we are continuing to evaluate our shale potential. We have tested both the Wolfcamp and Cline shale formations vertically in several wells and continue to collect and analyze core samples.
TGGTOur jointly held midstream company, TGGT, had total throughput averaging approximately 1.5 Bcf per day for the third quarter 2012. TGGT’s adjusted EBITDA of $42 million for the third quarter 2012 was a 48% increase over TGGT’s adjusted EBITDA for the third quarter 2011. The improvement in EBITDA in the third quarter 2012 is primarily attributable to reduced operating expenses as well as increased throughput from third party producers in the Holly area. TGGT's major focus in the fourth quarter 2012 will be continued reduction of operating expenses through the release of rental units and discontinuation of equipment leases where appropriate. In order to release rental units, TGGT is finalizing the installation and start up of owned treating facilities in the Holly area. In our Shelby area, TGGT's major infrastructure development and capital projects in the Shelby area are concluded for 2012. In the legacy East Texas area, TGGT anticipates increased throughput from customers drilling horizontal Cotton Valley wells.