With that, we will begin with Dave Smith.Dave Smith Thank you Tim and good morning. As you read in last night's release, National Fuel's earnings for second quarter were $0.81 per share. Excluding the $0.08 per share charge related to the new Marcellus impact fee on Pennsylvania most of which relates to Marcellus wells drilled in prior quarters, operating results for the quarter were $0.89 per share, which is $0.11 less than last year's second quarter. This drop was largely due to three factors. First; the winter of 2011 and 2012 was unseasonably warm. In fact it was the warmest on record on our service territories. The mild weather impact the earnings by $0.05 per share in the Pennsylvania service territory of our utility and was the significant contributor to the $0.03 per share drop in earnings at National Fuel Resources, our non-regulated energy market subsidiary. Second; and as you all know, natural gas prices continue to decline throughout the second quarter. While our hedging program did help, our actually realized natural gas price still decreased by $0.68 per Mcf quarter over quarter. That decrease in the sale of our offshore Gulf of Mexico properties last April which is the third factor was the largest contributor to the $0.05 per share drop in operating results at Seneca. Of the three, only the sale of the Gulf, which incidentally we believe was the right decision, was within our control. Since we can't control gas prices much less the weather, we focused on managing our businesses and put particular emphasis on controlling our budgets. We also continue to execute on our plans to grow our Midstream assets all with a view to maintaining our strong balance sheet in creating long-term shareholder value. In the Pipeline and Storage segment, our ongoing expansion efforts are progressing according to plan. Construction has actually commenced on the Northern Access and Line N 2012 projects with both projects still scheduled to be in service by November 1, 2012. When these projects ramp up to their fully contracted volumes, they will add just about $20 million in annual revenues. At our National Fuel Midstream subsidiary, construction of our Trout Run project was completed last week and will go into service when Seneca's Tract 100 wells are connected which should be in the next few weeks and Matt will address that in his remarks.
In the E&P segment, excluding the impact of last year's sale of our offshore Gulf of Mexico properties, Seneca's consolidated production grew by 18%. In the East, Seneca's natural gas production increased by 2.4 BCF or 22%. So that's an impressive rate of increase, it actually understates what could have been produced.As we announced at the end of March, low spot natural gas prices from the Tennessee 300 line led us to curtail an average at 15 million a day of production into the Covington Gathering System for most of the month. That impacts the production for the quarter by more than 4/10ths of the BCF. Looking forward to the third quarter, we expect the significant jump in production, when we bring on our first four wells at Tract 100. That production will be delivered by our Trout Run System into the Transco System to the south where pricing in stronger. In addition should gas prices rise, we have the ability to immediately resume full production in the Tennessee 300 line. In California, crude oil production was up 11.5% from their prior year, largely due to our drilling programs at South Midway-Sunset, which as you know we acquired from Ivanhoe in 2009 and [SSP]. Our California folks continue to do a great job and at these oil prices we'll look to be as aggressive as we can with our development program in Pennsylvania and California. Read the rest of this transcript for free on seekingalpha.com