Oil and natural gas sales. For the three months ended June 30, 2012, oil and natural gas sales revenue increased $303,097 to $342,522, compared to $39,425 for the same period during 2011. Oil sales increased $300,128 and natural gas sales increased $2,969. The increases were the result of higher production, which occurred primarily as a result of additional acquisitions between the periods, partially offset by lower oil prices between periods. For the three months ended June 30, 2012, oil sales volume increased 3,667 barrels to 4,004 barrels, compared to 337 barrels for the same period in 2011. The average realized per barrel oil price decreased 28% from $117.033 for the three months ended June 30, 2011 to $84.81 for the three months ended June 30, 2012. For the three months ended June 30, 2012, gas sales volume increased 612 thousand cubic feet (MCF) to 612 MCF, compared to 0 MCF for the same period in 2011. The average realized natural gas price per MCF was $4.86 for the three months ended June 30, 2012 with no volumes being sold during the same period in 2011.
Oil and gas production costs. Our lease operating expenses (LOE) increased from $20,438 or $60.67 per barrel of oil equivalent (BOE) for the three months ended June 30, 2011 to $218,074 or $53.11 per BOE for the three months ended June 30, 2012. The increases in total LOE was the result of additional acquisitions made between periods and work to get properties into proper working condition. The decrease in the per BOE amount was the result of higher production volumes between periods.
Production taxes. Production taxes as a percentage of oil and natural gas sales were 5% during the three months ended June 30, 2011 and remained steady at 5% for the three months ended June 30, 2012. These rates are expected to stay relatively steady unless we make acquisitions in other states with differing production tax rates or the state of Texas changes its production tax rate.
Depreciation, depletion and amortization. Our depreciation, depletion and amortization expense increased by $92,356 to $94,707 for the three months ended June 30, 2012, compared to $2,351 during the same period in 2011. The increase was the result of higher production volume partially offset by a decrease in the average depletion rate from $21.24 per BOE during the three months ended June 30, 2011 to $19.87 per BOE during the three months ended June 30, 2012. The decreased depletion rate was the result of additional acquisitions between periods.
General and administrative expenses. General and administrative expenses increased by $472,834 to $497,190 for the three months ended June 30, 2012, compared to $24,356 during the same period in 2011. The increase was primarily the result of an increase in stock-based compensation expense from $0 for the three months ended June 30, 2011 to $290,886 for the three months ended June 30, 2012 and contract staff compensation.
Interest expense. Interest expense was increased by $85,257 to $94,011 for the three months ended June 30, 2012, compared to the same period in 2011. The increase was primarily due to additional acquisitions and equity transactions financed through our credit facility between periods.
Net loss. Net loss increased from $14,545 for the three months ended June 30, 2011 to $541,377 for the same period in 2012. The primary reason for this increase is compensation expense.
