Our transition will continue, and we are confident further progress will be made over the coming quarters, as we will direct virtually all of our drilling and development capital expenditures to oil-directed drilling in both the Eagle Ford Shale and the Tuscaloosa Marine Shale. In the TMS, we significantly expanded our footprint and acreage position in the thick, high-resistivity portion of the play during the second quarter.

We exited the first quarter with approximately 102,000 net acres. We updated that position on May 23 to reflect the addition of 18,000 net acres, and we subsequently added another 12,000 net acres, during the second quarter, to bring our total net position to 132,000 net acres.

The agreements we have in place and the wells we have participated in, to date, provide us excellent insight into the development of the play, and we are pleased and encouraged by the early-stage well performance in the TMS.

As a result, we are increasing our capital allocation to the TMS during the second quarter of this year, with plans for further acceleration in 2013. At the core of our natural-gas-to-oil strategy is the rapid expansion of revenues, cash margins, and cash flow.

Our growing crude oil volumes, coupled with our excellent hedge position, are achieving the projected results. While production, measured on an Mcfe basis, declined by approximately 6% sequentially. Discretionary cash flow, led by sequential oil volume growth, grew by 16% over the first quarter of this year.

Both EBITDAX and cash flow grew to record levels as realized pricing, after giving effect to our realized crude oil and natural gas hedges, increased by 34% over the year-ago period to $7.58 per Mcfe.

Going forward, we have an outstanding hedge position to protect against price volatility during the second half of this year. We have recently added to our crude oil positions and, coupled with our natural gas hedges; provide us price protection on approximately 90% of our anticipated production in the second half of this year, at a blended average price of approximately $8.60 per Mcfe or $52 per BOE.

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