I will now turn the call over to Mr. Larry Pinkston, President and CEO. Mr. Pinkston, you may begin.Larry Pinkston Thank you, John. Good morning, everyone. We want to thank you for joining us this morning. With me today, as we’ve done in the past, are, David Merrill, who is our CFO; Brad Guidry, who is – who runs our Exploration segment; John Cromling, our Executive Vice President of Contract Drilling Operations; and Bob Parks, who is President of our Mid-Stream segment. Each of these gentlemen will be providing you with updates concerning their segments in a few minutes, and then we will take questions after their comments. We released our third quarter results to public this morning. We reported net income of $53.4 million and earnings per share of $1.11. This represents a net income increase of 55% over the third quarter of 2010 and a 7% increase over the second quarter of 2011. Our net income through the first nine months of 2011 is 40% higher than the same period for 2010. Our Contract Drilling segment continued to show strong results. Our number of rigs utilized during the third quarter increased by 8% and with the second quarter, averaging 79 rigs operating. Average day rates continue to increase, up $448 during the third quarter. We currently have two remaining rigs to complete, should be operating late in the fourth quarter, that’s out of the seven total that we constructed this year. Midway through the third quarter, we experienced a slowdown in new inquiries for both existing rigs and new builds; however, inquiries started picking back up late in the quarter and has continued into the fourth quarter. Based on the level of inquiries, we feel the rig cap should remain strong through the remainder of the year and into the first part of 2012.
Our Mid-stream segment achieved significant operating growth during the third quarter as compared to the second quarter. Gas sold volumes were up 40%, gas processed volumes were up 45%. Natural gas liquids sold volumes were up 28%. The increase is a result of our installing of new plants and upgrades to our existing plants that we’ve completed over the last six to nine months.We increased our capacity in our Granite Wash processing plant in the Texas Panhandle from 50 million a day to 120 million a day. The plant is currently operating near full capacity. We are again in the process of increasing the capacity of this plant which should be completed in the second quarter of 2012. We are continuing to see a growing number of opportunities in this segment as the oil and gas industry continues to drill for oil and rich natural gas. Margins for this segment were down slightly for the third quarter compared to the second quarter of 2011 as a result of the downward pressure on commodity prices during the third quarter. Our exploration and production segment continued to achieve exciting growth. All natural gas liquids and natural gas production continued its growth trajectory. Our equivalent production during the third quarter increased 5% over the second quarter. Our year-to-date equivalent production for 2011 is up 23% over the same period of 2010. We’ve achieved good results toward our goal of increasing liquids production. Liquids production for the nine months of 2011 is up 58% over the same period of 2010. Total liquids production for the first nine months of 2011 is 38% of our total production as compared to 30% during the same period of 2010. Read the rest of this transcript for free on seekingalpha.com