In 2011, net production averaged 370,000 barrels of oil equivalent per day, down from 418,000 barrels of oil equivalent per day in 2010. This decrease primarily resulted from short-term setbacks, including severe weather in North Dakota, the temporary shut-in of the Llano No. 3 well in the Gulf of Mexico because of mechanical issues, a two month shut-in of the non-operated Valhall Field in Norway due to a fire and civil unrest in Libya. We continue to make progress restoring lost volumes at these assets.

Net production from the Bakken doubled to 30,000 barrels of oil equivalent per day from 15,000 barrels of oil equivalent per day the previous year, despite harsh winter weather and severe flooding in the spring. We generated strong growth throughout the second half of the year and exited 2011 at a net peak rate of approximately 50,000 barrels of oil equivalent per day. We also continued to invest in infrastructure projects, including our crude oil rail loading facility and the Tioga gas plant expansion.

In May, we commenced initial production in the Eagle Ford Shale in Texas, where we have more than 100,000 net acres. By year end, we had drilled 28 new wells in the Eagle Ford and completed 22. We plan to continue to delineate our acreage position, operating a three rig program and drilling approximately 25 to 30 wells in 2012.

In the deepwater Gulf of Mexico, net production from the Shenzi Field in which Hess has a 28 percent interest averaged 29,000 barrels of oil equivalent per day. In March, the United States government granted approval to continue drilling the previously suspended Shenzi production well. A second Shenzi production well and a water injection well were also drilled and completed. Additional wells are planned in 2012 and 2013.

Equatorial Guinea Block G, in which Hess holds an 85 percent interest and is the operator, produced at a net rate of 54,000 barrels of oil equivalent per day. A 4D seismic survey of the block has identified additional drilling opportunities to extend the life of the fields. In Russia, a subsidiary in which Hess holds a 90 percent interest drilled 28 wells with production reaching a net rate of 50,000 barrels of oil equivalent per day at year end.

We achieved a significant milestone in the third quarter of 2011 with the sanctioning of the Tubular Bells project in the deepwater Gulf of Mexico, in which Hess has a 57 percent interest and is the operator. Hull and topsides fabrication commenced and first production is targeted for 2014.

Several projects in Europe hit important milestones. In the Norwegian North Sea, redevelopment of the Valhall Field (Hess 64%) progressed with the completion of the new living quarters in March and startup of gas lift at the Valhall Flank South wellhead platform in June. In the United Kingdom, the Schiehallion Field (Hess 16%) Floating Production, Storage and Offloading Vessel (FPSO) replacement project was sanctioned. In Denmark, fabrication of the platform jacket and deck commenced for Phase 3 development of the South Arne Field (Hess 62%, operator).

In Australia, appraisal of Block WA-390-P (Hess 100%, operator) is expected to be completed in 2012 and we are pursuing commercial options with potential liquefaction partners.

Development of the Malaysia Thailand Joint Development Area (JDA) (Hess 50%) progressed with the installation of wellhead platform No. 7, fabrication of platform No. 8 and sanctioning of platforms No. 9 and No. 10. In Indonesia, Ujung Pangkah's (Hess 75%, operator) central processing and accommodation and utility platforms were completed and gas production commenced in June.

In Ghana, the Paradise-1 well was completed on the Deepwater Tano Cape Three Points Block and a Notice of Discovery was filed with the Minister of Energy of Ghana. The well encountered an estimated 490 net feet of oil and gas condensate pay over three separate intervals. Hess is the operator and has a 90 percent interest in the license. Additional exploration drilling is planned in 2012.

On the Semai V Block in Indonesia, the Andalan No.1 and No. 2 wells were completed without encountering commercial quantities of hydrocarbons. Hess is the operator and has a 100 percent interest in the license. Data from both wells are being processed and interpreted. On Block CA-1 in Brunei, the Julong Center well was completed but did not encounter commercial quantities of hydrocarbons. Hess has a 14 percent interest in the license and additional wells are planned during 2012.

In Peru, on Block 64 in the Marañón Basin, the Situche Norte 4X well spud in November and will be completed in 2012. This well follows the previous Situche Central light oil discoveries. Hess has a 50 percent working interest with Talisman as operator.

In August, our company acquired Marquette Exploration for approximately $750 million, which included 85,000 net acres in the emerging Utica Shale play in Ohio. This transaction was followed by the formation of a joint venture with CONSOL Energy that added an additional 100,000 net acres in Ohio, bringing our position in the Utica to nearly 200,000 net acres. In 2012, we plan to acquire more than 400 square miles of seismic and drill approximately 29 appraisal wells.

In Australia's Beetaloo Basin, Hess announced a partnership with Falcon Oil and Gas on the EP76, 117 and 98 licenses. These licenses cover more than 6.2 million acres in a large under-explored basin in northern Australia with conventional and unconventional potential. Hess has an option to earn a 63 percent interest in the area. A 2D seismic program commenced in 2011 and will continue in 2012.

In Kurdistan, Hess and partner Petroceltic International signed production sharing contracts (PSE) with the Kurdistan Regional Government of Iraq for the Shakrok and Dinarta blocks. Hess is the operator and has an 80 percent paying interest in these licenses. The blocks are located northeast of Erbil and cover a combined area of approximately 670 square miles. Each PSC has an initial three-year exploration period in which the joint venture plans to acquire 2D seismic and drill at least one exploration well in each block.