Information recorded on this call is valid only as of today, September 13, 2010, and therefore, time-sensitive information may no longer be accurate as of the date of any replay.Today, management is going to discuss certain topics that may contain forward-looking information, which are based on management’s belief as well as assumptions made by management and information currently available to management. Forward-looking information includes statements regarding expected future drilling results production and expenses. Although management believes that expectations reflected in such forward-looking statements are reasonable, they can give no assurance that such expectations will prove to be correct. Such statements are subject to certain risks and uncertainties and assumptions which are listed and described in the company’s filings with the Securities and Exchange Commission. If one or more of these risks materialize or should underlying assumptions prove incorrect, actual results may differ materially from those expected. Also, today’s call may include discussions of probable and possible reserve through use of terms like volume, reserve potential or recoverable reserves. Please note these estimates of non-proved reserves or resources are by their very nature more speculative than estimates of proved resources, and accordingly are subject to substantially greater risk. Now with that, I’d like to turn the call over to Bob Herlin, Evolution’s Chief Executive officer. Bob? Bob Herlin Thanks, Lisa, and good morning to everyone. Thank you for joining us today. Sterling McDonald, our CFO is here to provide details on the financial results, and help me answer your questions later. As Lisa mentioned, this morning we released our fourth quarter and year-end results, reported our estimate reserves as of year-end 2010 and provided an update on our operations and plans for the upcoming year. Hopefully, you’ve had a chance to view that release. Sterling’s going to cover the financial highlights in his remarks, and I’m going to do an initial overview and then focus on reserves, and finish up our prepared remarks with discussion of our plan for 2011. We’ll be certainly glad to take any questions you might have later.
As an overview, we’re very pleased with the results for the year given the limited $3 million capital budget that was focused really more on project testing than production development.We essentially hit our net production target of about 126,000 barrels of oil equivalent, and generated about $5 million in revenues. Our loss of $2.4 million, which is improvement over last year, included over $2 million of non-cash stock compensation. So we really generated positive cash flows to cover much of our CapEx. More importantly, we achieved several milestones in 2010. First and foremost, our EOR project at Delhi moved into the proved producing category with the first CO2 injection last November, first production response last March, and now first proved reserves on June 30. Second, we entered into a joint venture for the first five development drilling locations at Giddings, first well of which is now drilling in the horizontal section in Burleson. Third, we have made considerable progress in advancing the commercialization of our artificial lift technology through discussions with the industry. Fourth, we’ve progressed in the testing of our Woodford Shale potential in Oklahoma and our infill oil potential in South Texas. Last, we accomplished these milestones, without diluting shareholders and taking on debt. As far as reserves go, our proved reserves as of June 30, 2010 are now at 12.4 million barrels of oil equivalent, which is over 300% increase from the prior year. This increase is primarily due to the upgrade at Delhi based in large part on first production from Phase I of the project. Denbury, the operator, is currently installing and funding Phase II and III in the field. We also realized our first reserves in Oklahoma, although the amount is really very limited, as just the lease is around one test well. Read the rest of this transcript for free on seekingalpha.com