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We continue to be in a strong financial position, thanks to our virtually 100% oil drilling success in Californian, with target returns of 50% to 100%. As a result of the 2011 and first quarter 2012 drilling program, Warren exited the first quarter at a rate of 3,698 gross barrels of oil per day at our two Wilmington field units, compared to 3,392 barrels for the fourth quarter of 2011. With an inventory of over 200 new producing wells targeted in the Wilmington field, we expect to see continuing oil production and oil reserve improvements throughout 2012 and beyond.Recent production gains resulted from new horizontal wells in the Tar, Ranger and Upper Terminal oil reservoirs and later it’s oil production from our units in the Wilmington field in Californian. Our oil production increased 19% to 249,000 barrels of oil in the first quarter of 2012 compared to 210,000 barrels of oil produced in the first quarter of 2011. Our cash flow from operating activates increased to $12.9 million in the first quarter of 2012 compared to $7.7 million in the first quarter of 2011. 2012 cash flow from our operations is expected to cover 2012 capital expenditures. Although we had water injection permitting challenges in 2011, during the first quarter of 2012 we received seven new water injection permits in California. To protect 2012 cash flows, we have in place $90 Brent Crude oil puts, covering approximately 500,000 barrels of oil and $70 NYMEX Puts covering another 275,000 barrels for the remainder of 2012. And finally I continue to believe believe that our long-term outlook has never been brighter. With that overview, I will turn the call over to Tim Larkin, our CFO. Tim. Tim Larkin Thanks Norman. Before I discuss the company’s financial results released earlier today, I would like to remind everyone that all statements made during our conference call that are not statements of historical fact constitute forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Actual results could vary materially from those contained in the forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements are described in our Forms 10-K and 10-Q, other periodic filings with the SEC and our press releases.As Norman mentioned, we are excited about 2012 and certain challenging issues of the past seem to be behind us. Our cash flow from operations continues to be solid and we are in a strong liquidity position. As of March 31, 2012 we had $30.5 million available under our senior credit facility. Today we reported net income of $3.8 million for the quarter or $0.05 per diluted share and adjusted net income of $4.7 million, excluding losses from hedging activities of $900,000. Additionally, during the quarter we generated $12.9 million of cash flow from operation. Also our oil and gas production was 454,000 barrels of oil equivalent for the quarter or approximately 5,000 barrels of oil equivalent per day. Production from our two oil fields in California totaled 249,000 net barrels during the first quarter, a 19% increase from the 210,000 net barrels produced during the same period in 2011. Additionally, natural gas production, primarily from our Atlantic Rim Project in Wyoming was strong and overall natural gas production increased 5% to 1.23 billion cubic feet during the first quarter compared to 1.18 billion cubic feet during 2011. The average realized oil price for the first quarter 2012 was $100 per barrel, compared to $87 per barrel during the first quarter of 2011, an increase of 14%. On average, realized gas price for the first quarter was $2.85 per Mcf, compared to $4.15 per Mcf in the first quarter of 2011. Read the rest of this transcript for free on seekingalpha.com