Frank HopkinsThanks, Matt. Good day, everyone, and thank you for joining us. Let me briefly review the agenda for today’s call. Scott will be the first speaker. He will review the financial and operating highlights for the first quarter and update you on PSE’s drilling program in the Spraberry field. Rich will then cover the first quarter financials in more detail and provide earnings guidance for the second quarter. And after that we will open up the call for your questions. So with that intro, I will turn the call over to Scott. Scott Sheffield Good morning. Thanks, Frank. We are on slide three on highlights. For the first quarter, PSE had adjusted income of $24 million or $0.75 per unit. That does exclude mark-to-market derivative losses of $37 million due to the run up of commodities or $1.13 per unit. First quarter production averaged close to our midpoint of 66.48 barrels of oil equivalent per day, up 4% from first quarter due to the extremely cold weather affecting the Permian Basin. We have some down time. We have 11 wells placed on production during the first quarter from a two-rig drilling program. We have got 13 wells in our fracback awaiting completion at March 31st. We’re continuing to see excellent results from our drilling deeper at the lower Wolfcamp formation and also opening up the organic rich shale/silt intervals. Cash flow from operations were $27 million, and we did announce a distribution increase to $0.51 per outstanding unit for the first quarter payable on May 12 to unit holders as a record of May 2nd; equates to $2.04 per common unit on an annualized basis. Slide number four on our drilling program, our CapEx $67 million is broken out between $62 million for drilling, $5 million for facilities and expect to drill about 40 to 45 wells with that program. Well costs are still staying much cheaper than our peer group – other companies, at 1.4 million continuing to drill deeper, as I mentioned earlier in the Wolfcamp.
Organic rich shale zones, seeing obviously great results there, starting to test deeper Strawn formation in certain areas of the field. Earlier this morning PXD reported a tremendous success from the Strawn interval, adding 20,000 to 40,000 barrels equivalent for a cost of about roughly $60,000.We’re forecasting our production growth of 5% in ‘11 compared to ’10, and just remind everybody we do have a significant number of 20 acre locations, 1,200. And earlier this morning PXD Pioneer, the general partner, reported tremendous success in its recent 20-acre drilling. We’re exceeding our 40 acre type curve in those wells, so again, that gives plenty of upside for PSE to significantly grow by just drilling for the next several years. Let many turn it over to Rich to go over our financials. Rich Dealy Thanks. I will start on slide five. As Scott mentioned net loss of $13 million or $0.38 per unit did include unrealized mark-to-market derivative losses attributable to the run up in commodity strip prices of $37 million or $1.13 per unit adjusting for that $24 million or $0.75 unit on a normalized basis. In the text box below, you can see where first quarter guidance where we forecast we come in versus first quarter results as you can see from all of those were in the middle part of the guidance where we would have expect it to be. And as Scott mentioned on production, given the weather impacts we had about 50 barrels a day that we lost from our results as a result of weather downtime. Turning to slide six, and looking at second quarter guidance, as a result of our continued successful two-rig drilling program we are continuing to increase our guidance quarter-over-quarter. So it’s 6,600 to 7,100 BOEs per day for the second quarter and then each of the other line items here for guidance are equivalent to what they have been for a number of quarters now and expect results to be right in that range. Read the rest of this transcript for free on seekingalpha.com