Before I start as usual, the boilerplate standard language that we have is forward-looking statements included in the press release do apply to my comments today. Excuse me. At this time, we have many things to cover, and I'm going to expand on the press releases that were issued last night. I'll briefly cover the financials in the second quarter. We'll update the '12 guidance, including a capital discussion, as well as a preliminary review of our 2013 plan, and the recent successes that we had with drill bit, and I'll follow that with a discussion of our operations.Before I go into the details on these topics, I'd like to start with just a brief list of the highlights that we've seen in this last quarter. Cabot grew production 40% over the comparable quarter of last year, including 37% growth in natural gas and a 96% growth in liquids. Second quarter production was up 5% quarter-over-quarter, and this is even after the impact of unscheduled maintenance and the delays we've talked about as attached to our Marcellus gathering lines. We have brought online a 2-well pad that together the wells have produced 2 Bcf in 39 days, and they are still producing right at 59, 60 million cubic foot a day. The initial down space test in our Buckhorn area in the Eagle Ford and the zipper fracs, which were the first we'd tried out there that have proven to be successful. Along with our down space initiatives in the Marcellus. Also, the cash proceeds and the increase in capital, the cash proceeds from our JV fully fund drilling in 2 new plays, the Purcell and the Utica. And we have only very minimal production forecast due to the nature of these 2 areas. We've also had acreage acquisition in several new areas. All of this is going to enhance the 2013 production growth expectations.
Now let me roll into the financial results. The company reported clean earnings of approximately $10 million or $0.05 per share. That was driven by significant production increases that more than offset weaker natural gas prices. Cash flow from operations and discretionary cash flow for the second quarter were $159 million and $142 million, respectively. The Marcellus continues to be the driving force behind our production growth, while the Eagle Ford and Marmaton continue to add significant liquids production to our profile as illustrated by our 96% increase. When you adjust for the 2.8 Bcf of production from the second quarter of 2011 that was associated with last year's Rocky Mountain sale, our equivalent production growth for the quarter was 49% greater than last year's second quarter. Guidance, we continue to reaffirm our equivalent production growth for 2012, 35% to 50%, and liquids production growth of 55% to 65%. We updated the full year cost guidance by decreasing DD&A and taxes other than income on a per share per unit basis to reflect our updated views for the remainder of the year. We also provided third quarter guidance for absolute G&A and exploration expenses. In the second quarter, G&A increased primarily due to a higher pension expense as a result of the termination of our qualified pension plan that was completed in the second quarter of 2012, additionally, which was not normalized and included in the second quarter G&A figure are an assessment from the Office of Natural Resources Revenue for certain matters in the Rocky Mountains, which we are currently disputing, and was also increased in legal fees associated with preparation for the Fiorentino lawsuit in PA. However, in regard to that case, Cabot has reached verbal settlement agreement with 32 out of 36 households. Negotiations will continue with the remaining households. The aggregate value of the settlements are not a material item with respect to Cabot's financial statements. Resolution of this litigation will have a very positive impact on G&A going forward due to the reduction in cost of defense. The combination of these items had a $0.03 per share impact to the quarter. Exploration expenses also increased during the quarter due to the expensing of our initial Brown Dense exploratory well in Arkansas.Read the rest of this transcript for free on seekingalpha.com