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We would like to remind you that today's teleconference will contain forward-looking statements. While National Fuel's expectations, beliefs and projections are made in good faith and are believed to have a reasonable basis, actual results may differ materially. These statements speak only as of the date on which they are made, and you may refer to last evening's earnings release for a listing of certain specific risk factors.With that, we will begin with Dave Smith. Dave Smith Thank you, Tim, and good morning to everyone. National Fuel has had a number of very good quarters in a row, and the first quarter of fiscal 2012 was no exception. Indeed, given the headwinds created by the extremely warm winter and significantly lower gas prices, the quarter was exceptional and clearly demonstrates the value of owning diverse assets. Overall, earnings were up 4% or $0.03 per share quarter-over-quarter. The increase was largely due to a $15 per barrel increase in realized crude oil price and a 17% increase in Seneca’s production, an increase that I should note was achieved despite the sale of our offshore Gulf of Mexico properties in fiscal 2011. Excluding the impact to that sale, Seneca’s production was up 40%. Earnings in the regulated businesses which are not particularly commodity price sensitive remain steady and were consistent with our expectations. In the utility, particularly in Pennsylvania and our Pennsylvania division, earnings were off because of warmer weather. But that was offset by growth in our pipeline and storage segment whereas expected, our recent expansion projects contributed to a $0.03 per share growth in earnings. As we placed additional expansion projects and service, pipeline and storage segments earnings will continue to grow. So, generally and overall, we’re pleased with our consolidated earnings for the quarter. Despite the significant headwinds that I mentioned earlier, earnings of $0.73 per share were virtually spot on our own internal forecast.
While we can’t control the weather and gas prices, we can and do control our operations. And in that front, we had an excellent quarter.In the Marcellus, Seneca’s production continues to grow at a rapid pace, nearly doubling quarter-over-quarter. And Seneca was also active in continuing to delineate our acreage with respect to the Utica Shale. Assessing the prospectivity of our Utica acreage is one of our top priorities. Over the remainder of the fiscal year, we plan to drill at least three additional horizontal wells in the Utica. In California, crude oil production was up slightly from the prior year, due in large part to increased steaming at our Midway-Sunset Field. As we said in the past, our California properties are terrific assets and they generate considerable cash flow. For the quarter, EBITDA from our West division alone was nearly $60 million. In the pipeline and storage segment, construction of the Line N expansion and Tioga County Extension projects were completed this past quarter, and both projects are currently in service. Our operational folks did a great job despite a very difficult construction season, which was extremely wet. Both projects were completed essentially on time, and, I should also add, on budget. These projects will have a very meaningful impact on our results in this business segment, adding almost $24 million in revenue in fiscal 2012. Looking to the future, the research sharp decline in natural gas prices and the resulting effect on cash flows have caused us to revisit the aggressive growth plans we laid out at our analyst day last September. In particular, we’ve taken a hard look at the amount of capital we plan to allocate to Seneca’s Marcellus program. Simply put, at these gas prices, we’re not planning to grow at the pace we had contemplated. Fortunately, as you know, we’re under no obligation to drill our acreage. Most of our natural gas rates are held in fee and most of our lease acreage is either held by production or has a number of years remaining on its lease term. Read the rest of this transcript for free on seekingalpha.com