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I will now turn the call over to Mr. Larry Pinkston, President and CEO. Mr. Pinkston, you may begin.Larry D. Pinkston Thank you, John. Good morning, everyone. I want to thank you for joining us this morning. With me today are David Merrill, Brad Guidry, John Cromling, and Bob Parks. Each of these gentlemen will be providing you with updates concerning their segments. We will take questions after their comments. We released second quarter results this morning. We reported a net loss of $19.3 million, as a result of a $115 million pre-tax full cost flow ceiling right down on our oil and gas property book values. The write down does not impact cash flow; the write down was recorded as a result of the decline in natural and natural gas liquid prices. Excluding the write down, second quarter net income would have been $52.8 million or $1.10 per share, basically flat with the first quarter of 2012. The substantial growth in oil, natural gas and natural gas liquid prices had a significant impact in all three of our segments during the second quarter. The unhedged commodity prices we received in the second quarter, which should be somewhat indicative for the industry, were down 11% for oil, 22% for natural gas, and 17% for natural gas liquids in the second quarter as compared to the first quarter. Our hedges for oil and gas segment, somewhat mitigated to full reduction to our oil and gas revenue base, however, we did not have a 100% of our production hedge. The lower commodity prices started to have more impact to our drilling division in the second quarter with less demand for our drilling rigs, including three rigs that were operating under long-term contracts that were canceled. The contracts had cancellation penalties which we are trying to have acknowledged. In our Midstream segment had we received the same commodity pricing in the second quarter that we realized in the first quarter, our margins would have been about $7 million higher. As commodity prices rebound, the impact should reverse for all three of our segments. We released very exciting news from our oil and gas – from our oil and natural gas division over the last couple of weeks.
Our pending acquisition with the Noble properties will have very significant results for us over the next several years. It is an acquisition that we will realize significant benefits to all three segments of Unit. It provides 600 plus drilling locations that our EMP division will be able to develop for many years. For Midstream division, it will provide immediately one gas gathering operation and at the end of 2014, it will provide an opportunity to gather and process the Granite Wash production for the properties. As we ramp-up the development drilling in 2013, we will be using 7 plus drilling rigs from our contract drilling division.We will fund the acquisition through a combination of terms received from our $400 million bond offering, and we closed approximately two weeks ago bank debt and property divestitures. We are optimistic at the possibility of selling $200 million to $300 million of oil and gas properties that do not fit with our long-term growth plans. As you can tell, we are very excited about the benefits from this acquisition and look forward to the closing of the acquisition in mid-September. Read the rest of this transcript for free on seekingalpha.com