Additionally, during the course of today’s discussion, management will refer to adjusted EBITDA, distributable cash flow and the distribution coverage ratio as important metrics for evaluating QR Energy’s performance. Please note these are non-GAAP financial measures. They are reconciled to their most directly comparable GAAP measures in this morning’s press release.Now, I will turn the call over to our Chief Executive Officer, Alan Smith. Alan Smith Well, thanks, Taylor, and good morning, everyone. We appreciate you taking the time to join our call and look forward to updating you with our second quarter results. Overall we really deliver strong operational and financial results in the second quarter. Even with the volatility that has been present in the marketplace with lower commodity prices and the third-party downturn, we really deliver a solid distribution coverage ratio of 1.3 times for the quarter. We continue to remain focused on our core strategy of top-notch execution on our existing asset base while strategically sourcing and closing accretive acquisitions that provide growth for QRE. Over the past nine months we have nearly tripled the size of the company which is also led to an 18% increase in our quarterly cash distributions. Our robust commodity hedge portfolio continues to give us confidence in the stability of our cash flows even in periods of commodity punctuation as we saw this quarter. On the acquisition front, we closed the $225 million Prize Petroleum acquisition on April 20, as planned. The Prize assets added approximately 1,200 BOEs per day or 9% to our daily production and we welcome our new team members who are busy implementing new artificial lift projects and upgrading facilities to further increase our production. As a result to this acquisition, we increased our quarterly cash distribution by 3% this quarter, therefore, tomorrow’s distribution will be $48.75 per unit. Last month we significantly increased our available liquidity by completing a $300 million bond offering, which we utilized to pay down our bank rollover. This gives us approximately $330 million of available liquidity with risk to peruse accretive acquisitions. Our operations team continues to execute well on the field. We produced 14,505 BOEs per day in the second quarter which included only a partial quarter of the assets acquired from Prize. Production was within our guidance range and was a 7% increase from the first quarter even though we experienced some third-party down time from force majeure events during the quarter which impacted production by approximately 175 BOEs per day.
John will review the production details with you here in a moment.Our lease operating expenses for the quarter were also within our guidance range and a bit higher than the first quarter due to a 20% increase in oil production. We spent approximately $26.2 million of CapEx in the second quarter and our capital was a bit higher than our guidance due to project timing as we have some additional projects with strong returns planned for this year. So, we have increased our annual guidance to $75 million to $85 million. Adjusted EBITDA came in at $50 million and distributable cash flow was $27.7 million for the quarter. As I mentioned at the beginning, these results gave us additional coverage ratio 1.3 times. Let’s take a look at our hedging program. Our oil and gas production was 88% hedged in the quarter and commodity hedges secured more than $68 million of revenue. In addition to the six years of oil hedges that we added this quarter in conjunction with the Prize acquisition, we also added natural gas hedges in 2016 and 2017 which resulted majority of our oil and gas production now hedged through 2017. Cedric will give you more details on our hedge portfolio and financial position here in a moment. Read the rest of this transcript for free on seekingalpha.com