Before I turn the call over to Terry, let me remind everyone that our presentation will contain forward looking statements based on our current assumptions, estimates and projections about us, our industry and the current environment in which we operate. These statements involve risks and uncertainties detailed in our SEC reports, to which we refer you along with cautionary statements contained in our press releases and our actual results could differ materially. We expect our presentation to take approximately 25 to 30 minutes and have allowed additional time for questions.Terry Swift. Thanks, Paul and thank you everyone for joining our call today. Swift Energy’s emphasis on crude oil and liquid’s rich projects during the first half of 2012 is now delivering better than expected growth. Our crude oil production for the quarter was above our previous expectations and current projections are for a sequential crude oil production increase of approximately 20% in the third quarter. We also expect a similar increase in our natural gas liquids production and remain on track to delivering and having in the fourth quarter average daily production volumes being over 50% crude oil and natural gas liquids. Total corporate production for 2012 is on track to be a new record for Swift Energy Corporation. We have spent several years putting together the assets, people and processes necessary to achieve this type of growth. As part of this long-term approach to developing our resources, we have anticipated periods of time to which our capital expenditures would outpace our current cash flows and when necessary secured additional financing to support our spending levels. As our acreage is developed and our production grows, our cash flow levels should increase. It’s important to note that we have repeatedly stated this year that we will reduce our capital expenditure levels during the second half of 2012 to achieve a better balance between spending and our growing cash flows. Even with reduced spending and activity levels that may continue through next year, we believe we will still deliver oil and gas liquids growth in 2013, consistent with our long term strategic growth targets of 7%-12% annual production growth. I want to remind folks that this is not any particular guidance for next year. It just emphasizes that we do have strategic growth plans and that for a much reduced capital spending program next year we could easily achieve those plans.
We are sensitive to the current sentiment by some market participants to look forward in the future of hydrocarbon pricing and the uncertainties that it has as well as the general macroeconomic environment. Our longstanding philosophy of maintaining low levels of leverage and high levels of liquidity is tailor-made for the type of efficient operating organization that we are managing today, even given as uncertain and external environment as we all currently face. Although we realize the greatest cost effectiveness in our operating program when we’re at higher activity levels than the expected 3 rig South Texas Program that we’ll have in place by year end, we have positioned the company to be flexible enough to operate effectively and deliver growth even in a wide range of operating scenarios.Bruce and Bob will detail our current activity levels and what type of activity we expect to have as we enter 2013 in just a few minutes. The volatility of hydrocarbon pricing has persisted and without question is the primary challenge facing our industry today. Our crude oil price realizations have been well above our budgeted expectations and crude oil sales accounted for 74% of our second quarter revenues. As we increase our percentage of production levered to crude oil pricing, we will continue to benefit from stout Gulf Coast pricing relative to the NYMEX. Of greater concern has been natural gas liquids pricing. Although natural gas front month prices how now recovered sharply from their earlier lows, our second quarter realized natural gas and liquid pricings had decreased significantly from the first quarter of the year. While we believe that liquids pricing will return to historical levels relative to crude oil over time, it’s clear that the industry’s focus on liquids rich drilling has impacted short term supplies of certain products. This type of volatility does impact the economics of certain types of drilling activity and adds complexity to spending and development plans. At Swift Energy, our strategy of diversification, both geographically as well across commodities allows us to exploit acreage that benefits from the strongest commodity prices even with reduced spending and activity levels. Read the rest of this transcript for free on seekingalpha.com