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In summary, it says that statements in last night’s press release and on this conference call, that state the company’s or management’s expectations or predictions of the future are forward-looking statements intended to be covered by the Safe Harbor provisions under the Federal Securities Law. There are many factors that could cause actual results to differ materially from our expectations, including those we’ve described in the press release, our 10-K and other filings with the SEC. In addition, we will reference certain non-GAAP measures, so be sure to see the reconciliations in our earnings release.On today’s call, I’m joined by Tim Leach, our Chairman and CEO; Joe Wright, our Chief Operating Officer; and Steve Pruett, Senior Vice President of Corporate Development, who will discuss our second quarter results. We are also joined by other members of our management team, who’ll be available to answer your questions later in the call. With that, I would now like to turn the call over to Tim. Timothy A. Leach Good morning, everyone. Thanks for joining our second quarter conference call. I’m joined in Midland today by our officer team, who look forward to taking your questions later in the call. Before I turn things over to Joe and Steve, I’d like to spend a few minutes talking about our performance and accomplishments during the quarter, as well as our expectations going in the second half of the year. As you most likely read in our earnings release last night, during the second quarter production was curtailed by about 3,000 Boe’s per day, due to gas plant turnarounds. And our oil realizations were negatively impacted by the widening of the Midland Tucushion basis differential. So, this created a tough quarter for Concho. The good news is that both of these challenges appear to be behind us and our fundamentals remain intact.
In addition, we are still on track to achieve the targets we set for 2012 production growth and capital spending. The Permian Basin remains the place to be in terms of profitability and oil growth. Although, price realizations were negatively impacted due to takeaway disruptions during the quarter, we still delivered a 74% cash margin, which remains one of the best in the industry.Activity in the Permian reached unprecedented levels during the second quarter with rig count surpassing the 500 mark previously set in the early 80s. As the second largest oil producer in the Permian Basin, with over a million gross acres, we’re exposed to some of the highest rate of return plays in the country. And against a backdrop of an increasingly unpredictable economy, it’s encouraging to know that Concho has the ability to organically grow profitably in a broad range of commodity price environments. One of our most significant accomplishments during the second quarter was the acquisition of the Permian assets from Three Rivers Operating Company. The Three Rivers acquisition represents our largest and most strategic acquisition since Marbob in 2010. And just like the Marbob, Henry and Chase acquisitions, this slightest deal was privately negotiated and provides an opportunity to deploy our big drilling and operating machine to accelerate and optimize the activity on these assets. We expect that the acreage we acquired from Three Rivers in the Northern Delaware Basin and the Southern Midland Basin, will provide us an additional source of growth over the next five or six years. As you know, we elected to finance the acquisition with a combination of bank debt in a planned asset divestiture. As we continue to evaluate the non-core divestiture candidates, we’re confident that expected proceeds will not only enable us to reduce borrowings and bring our leverage more inline with our optimal target, but also will provide an opportunity to redeploy capital into higher growth areas in the form of additional acreage in our more strategic areas and accelerated drilling in our horizontal plays. Read the rest of this transcript for free on seekingalpha.com