The shift in our production mix is no accident. It reflects the choices we make for capital investment. So even though we may not always deliver as robust overall growth rates as some would like to see, we continue to make good profits and are able to do so without levering up our balance sheet or issuing equity.

We had good growth in our proved reserves during 2011 and have an equally active capital program plan for 2012. With quality cash flow at a very strong balance sheet, we have a lot of flexibility for how we fund our 2012 program.

With that, I'd like to turn the call over to Tom.

Thomas E. Jorden

Thank you, Paul. I'm going to be working off the presentation as posted on our website. So if any of you have it up, I'll be starting with Slide 7. If you don't have it up, it's not really that important, but there are some figures in there that might help as I talk.

In 2011, we invested here under $1.6 billion in exploration and development. We drilled 174 net wells, and as Paul said that's on our release, we had extremely solid returns in our Permian and Cana programs. We grew our proved reserves to 2.05 Tcf equivalent, which is a record for us. Our Permian Mid-Continent reserves proved increased 26%, an all-time high of 2 Tcf equivalent. We added 587 Bcf equivalent from extensions and discoveries, and 45% of those adds were liquids, 55% gas. All in all, we replaced 272% of production. But the real story, and we'll get onto that as we give you a little detail, is our record 2011 Permian Basin and Mid-Continent production of 487 million cubic feet equivalent per day. Those 2 regions in aggregate showed a 16% production growth over 2010. Those are our engines of growth.

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