Before we begin, I want to remind everyone that our conference call will contain forward-looking statements, including our expectation of future results. The actual results might differ materially from those projected in these forward-looking statements. Additional information concerning factors that could cause the results to differ materially from those forward-looking statements are contained in our press release dated August 8, 2012, announcing our earnings, as well as disclosures in our public reports on Forms 10-K, 10-Q and 8-K filed with the SEC and available on the SEC website.During the conference call, we’ll also make references to adjusted net income, discretionary cash flow, which are non-GAAP financial measures. Reconciliations of these non-GAAP measures to the applicable GAAP measures can be found in our earnings release. Now I’d like to introduce our President, Mr. Michael Rohleder, for some opening remarks. Michael Rohleder Thanks, Alan, and thanks all of you for being on the call this morning. Oil continues to be the driving economic force of the energy sector. Natural gas reserves and natural gas storage are at all-time highs, and natural gas prices were at 10-year lows during Q2 of 2012. Our transition to oil is made even more urgent by these factors. The company must direct its capital to the most economic projects, which coincidentally are those that deliver the highest shareholder value. This is why we’ve been focused on the transition from being mostly a natural gas producer to being a more balanced producer of oil and natural gas. In order to make that transition a reality, we embarked on a number of different interdependent plans, finding and acquiring acreage, finding investors willing to support the plan, building an operational footprint in an area where none existed, reallocation of our CapEx from natural gas to oil only and accelerating all of this in a challenging market environment.
The successful transition to oil is a vital building block of GMX Resources’ shareholder value. Dealing with the facts today, the solution to our challenges is to continue to focus on the steps necessary to achieve the goal. Our oil production has grown 107%. We’re on budget with our 2012 CapEx forecast. We’re on budget with our 2012 G&A reduction goal and expect to reduce G&A by another 20% in the year 2013, and we’re on budget for our 2012 LOE forecast. So we’re moving the company in the direction that we set course for 18 months ago.It’s not even been a year since our first Bakken well came online and we have produced more oil in the first six months of 2012 than we did in the entire year of 2011. More specifically, looking forward to 2013, as the company’s liquidity position improves through drilling results, cost reductions and asset optimizations, we’ll be able to accelerate our business plan. I’ll now turn to the presentation that, as Alan has said, is posted on the website and begin on page three, which describes the major advancement in near-term liquidity. One of the near-term challenges the company faces is the maturity of the company’s convertible notes due in February 2013. The remaining balance of $52 million is the focus of an exchange offer we launched this morning just prior to this call. Assuming we are successful in this offer, we would address the current liquidity issues for the 2013 notes along with a limited portion of our 2015 (inaudible) through the issuance of up to $60 million of new notes maturing in 2018. If the exchange offer is fully subscribed by holders of our 2013 convertible notes, we would also issue approximately 15 million shares of common stock to those noteholders, representing slightly less than 20% of our outstanding shares of common stock. I know all of you will have lots of questions regarding this and I’m going to have to refer you to the tender offer documents that we filed with the SEC for any questions regarding the terms of this offer. Read the rest of this transcript for free on seekingalpha.com