We’re completing the sixth well of the six well program. All those wells have been very, very successful and at the same time, we continue to block and tackle and add some adjacent acreage to where we already have. Our strategy has resulted in a significant increase in EBITDAX and cash operating margins. But we are focused on improving liquidity. I think we've been put in the [penalty] box as a company for any gas company or size we've had to stay focused on liquidity.We recently saw our Appalachia assets which excludes the Marcellus Shale for $100 million and we're also cut our $10 million per year dividend. Our current borrowing base is $230 million with a $125 million of current availability. We have reduced our CapEx program in 2012 which is 30% less than what we had in 2011 and important to us as we have some significant hedges in place. On the oil side we're 67% hedged for the second half of this year with an average price of $101 per barrel. So what are the catalysts. The catalyst for this company is staying focus on Eagle Ford and strong results in the Eagle Ford. And more importantly continue to expand our success in Lavaca County. We've had some very impressive results today. We think we are in the right fairway and I'll show you here a map here which shows where our acreage position is. Continued increase in our oil production and oil reserves, our operating margins and cash flows and it is important to us is not only Eagle Ford, that we do think we need to diversify to some extent, we have a new ventures team in place, they will continue to look for new exploratory oil play types. At the same time, we do have an attractive natural gas asset base that is primarily held by our production even after the Appalachia sale, but with our challenges. This is a very capital intensive industry. We have suffered as far as income associated with natural gas because we of not only the decline of our natural gas assets, because of lack of drilling, but more importantly of course is because of the decline in natural gas prices.
We continue to build financial liquidity, we have got to continue to fund our Eagle Ford Shale and the opportunities we have there and other oily exploratory drilling that we will become involved with. And more importantly as we have got to continue to expand our drilling inventory, I think we somewhat again get criticized for not having enough to do. I don’t necessarily agree with that, we have four to five years of things to do in Eagle Ford.We can continue to add 4000 to 5000 acres a year in and around where we already are and are essentially replaced our 40 well program on an annual basis. So I think that we can perpetuate by drilling inventory by adding 4000 to 5,000 acres a year. Our strategy is gas to oil transition. We have built our Eagle Ford from initially 6800 acres a few years ago up to about 25000 net acres. We have added a few thousand acres as I said early since beginning of the year. We have up to approximately 250 total well locations and this includes acreages and locations of our AMI in Lavaca County. We have been able to grow oil and natural gas liquid production considerably. We have grown from approximately 2500 barrels in the second quarter of 2010 to almost 8800 barrels in the second quarter of 2012 or 257% increase. This is up 70% from the 5200 barrels in the second quarter for 2011. Today our oil and natural gas production is 45% of our total production whereas just a few short years ago, it was about 10% to 15% and its 86% of our product revenues today. So it is material. Read the rest of this transcript for free on seekingalpha.com