We'll also discuss certain non-GAAP financial measures that we believe are useful in evaluating our performance. Reconciliation of those measures to the most directly comparable GAAP measures and other information about these non-GAAP metrics are described in our earnings press release from yesterday.Additionally, we may use the terms probable, possible and 3P reserves and estimated ultimate recovery, or EUR, on this call. You should read the Cautionary Language page in our slide presentation for an important discussion of these terms and the special risks and other considerations associated with these non-proved reserve metrics. The company officials on the call this morning are Tony Best, President and Chief Executive Officer; Jay Ottoson, Executive Vice President and Chief Operating Officer; Wade Pursell, Executive Vice President and Chief Financial Officer; Brent Collins, Senior Director of Planning and Investor Relations; and myself, David Copeland, the company's Senior Vice President and General Counsel. With that, I'll turn the call over to Tony. Anthony J. Best Good morning, everyone, and thank you for joining us today for our first quarter 2012 earnings call. I'll briefly cover a few highlights and then turn the call over to Wade and Jay for their respective financial and operational reviews. We'll be referring to slides this morning from the presentation that was posted to our website last evening, and my comments will begin with Slide 3. As I reflect on this quarter, the theme that comes to mind is confident growth. We are hitting the mark with continued strong performance across the board in executing our 2012 business plan. SM Energy had another strong quarter to start the year. We came within guidance -- came in within guidance on production and met or beat all of our cost guidance. Our development programs remain focused on high-return projects. In fact, approximately 95% of our drilling and completion capital is dedicated to oily and NGL-rich projects, with the bulk of that being deployed in our Eagle Ford and Bakken/Three Forks programs.
Our financial position remains strong and our liquidity position was recently enhanced with the increase in our borrowing base by our bank group, which Wade will talk about shortly. This increase is being driven by the growth in our higher value oil and NGL assets. Finally, we are on track to post-significant production growth in 2012, which will exceed 30% year-over-year, again, driven by our high-return liquid rich projects.With that, I'll turn the call over to Wade for his financial review. A. Wade Pursell Thank you, Tony, and good morning, everyone. I'll be pretty brief this morning. The first quarter was solid, and frankly, very clean. I'll begin with a brief recap of how we performed versus our guidance on Slide 5. Production for the quarter came in at 50.7 Bcf equivalent or 8.4 million barrels of oil equivalent, which is right in the middle of our range that we provided for the quarter. Jay is going to discuss production in more detail during his operations review. Cost for the quarter in essentially all areas were better than our guidance and there were no transactions or unusual items during the quarter. GAAP net income came in at $26.3 million or $0.39 per diluted share. Adjusted net income for the quarter was $32.8 million or $0.48 per share. EBITDAX for the quarter was $259 million. For those of you who follow us regularly, you'll note that we changed from operating cash flow to EBITDAX this quarter. We made this change because we use EBITDAX internally as a performance metric and it is more commonly used in the investment community. Read the rest of this transcript for free on seekingalpha.com