change in functional currency and reporting currency effective october 1 , 2011 , lone pine changed its functional currency and reporting currency from the u.s. dollar to the canadian dollar . the change in functional currency did not have a significant impact on our consolidated financial statements for either the fourth quarter of 2011 or the year ended december 31 , 2011 as lone pine 's operations are primarily carried out by its operating subsidiary , lpr canada . the functional currency of lpr canada has not changed and continues to be the canadian dollar . prior to the distribution , lone pine used the same reporting currency as forest , which was the u.s. dollar , in its consolidated financial statements . however , after the distribution , our management determined that our financial statements should be presented using the canadian dollar , in order to 54 present lone pine 's financial statements in the same currency as its functional currency , and to minimize the impact of changes in foreign currency exchange rates on our financial statements . the determination to change lone pine 's reporting currency was based on a number of factors , which included the following : ( 1 ) lone pine has no assets or operations in the united states , ( 2 ) substantially all of lone pine 's operations are conducted in a single functional currency , the canadian dollar , and ( 3 ) the reporting currency selected , the canadian dollar , is the same as the functional currency . prior to the change in reporting currency , our consolidated statements of operations were translated from canadian dollars using the weighted average exchange rate for the period . the resulting foreign currency translation adjustment was reported as a component of other comprehensive income and accumulated other comprehensive income . as a result of our change in reporting currency , all comparative financial information has been recast from u.s. dollars to canadian dollars to reflect our consolidated financial statements as if they had been historically reported in canadian dollars , consistent with asc 830 , foreign currency matters . the consolidated u.s. dollar balance sheet at december 31 , 2010 was translated into canadian dollars by translating assets and liabilities at the end-of-period exchange rate and translating equity balances at historical exchange rates . as a result of our change in functional currency and reporting currency , there is no difference between the reporting currency and the functional currency of lone pine resources inc. and any of its operating subsidiaries . following the changes in functional currency and reporting currency , we will be subject to foreign currency exchange rate risk relating to the senior notes , certain of our derivative instruments and our delivery commitment of approximately 21,000 mmbtu/d of natural gas under a long-term sales contract expiring in 2014. see `` critical accounting policies , estimates , judgments and assumptions change in reporting and functional currency `` for more information about our change in reporting currency , including the reasons for the change , the manner in which the change has been applied to recast prior period financial statements and the major financial statement categories that are denominated in u.s. dollars , and for certain u.s. dollar financial information as of and for the year ended december 31 , 2011. see also note 2 to our consolidated financial statements . financial and operating performance our financial and operating performance for 2011 included the following highlights : on june 1 , 2011 , we completed our ipo of 15 million shares of our common stock . in connection with our ipo and pursuant to our separation and distribution agreement with forest , forest contributed to us its ownership interest in lpr canada in exchange for 69,999,999 shares of our common stock and a cash distribution of $ 28.7 million . we received net proceeds from our ipo of approximately $ 173.1 million and used these net proceeds to pay $ 28.7 million to forest as partial consideration for forest 's contribution to us of forest 's direct and indirect interests in its canadian operations . we used the remaining net proceeds and borrowings under our bank credit facility to repay outstanding indebtedness owed to forest , including intercompany advances and accrued interest . our average daily net sales volumes for the fourth quarter of 2011 and for the year ended december 31 , 2011 were 99 mmcfe/d and 94 mmcfe/d respectively , and our average daily oil and ngls net sales volumes for the fourth quarter of 2011 increased 27 % to 4,499 bbls/d , compared to 3,544 bbls/d in the third quarter of 2011 as our average net liquids percentage increased from 22 % to 27 % . we drilled a total of 47 gross ( 47 net ) horizontal light oil wells at evi and 6 gross ( 5.5 net ) natural gas wells in the deep basin with a 100 % success rate . we generated adjusted ebitda of $ 128.2 million , a 27 % increase over 2010 and adjusted discretionary cash flow of $ 118.4 million , a 26 % increase over 2010 . 55 during february 2012 , lpr canada completed the senior notes offering . the net proceeds of approximately $ 192 million were used to partially repay borrowings outstanding under our bank credit facility . the senior notes are guaranteed by lone pine and all of lone pine 's wholly-owned subsidiaries ( other than lpr canada ) . recent trends and outlook for 2012 beginning in the second half of 2008 and continuing throughout 2011 , canada , the united states and other industrialized countries experienced a significant economic slowdown . during the same time period , north american natural gas supply increased as a result of increased domestic unconventional natural gas development and associated natural gas from oil development . story_separator_special_tag adjusted ebitda increased $ 27.0 million for the year ended december 31 , 2011 compared to the year ended december 31 , 2010 , due to an increase in oil and gas revenues that was partially offset by higher operating costs incurred during 2011 because of an increase in production volumes , workovers , maintenance costs , water hauling , higher utility and chemical costs and higher general and administrative costs related to our ipo and the distribution . net earnings ( loss ) for the years ended december 31 , 2010 and 2009 were primarily impacted by changes in oil and gas sales driven by oil , natural gas and ngl price fluctuations ; however , net earnings ( loss ) did not change proportionately to the changes in oil and gas sales due to ( 1 ) non-cash foreign currency gains and losses in each period presented and ( 2 ) a $ 251.0 million non-cash ceiling test write-down recorded in the first quarter of 2009 caused by a significant decline in natural gas prices as of march 31 , 2009 ( see `` critical accounting policies , estimates , judgments and assumptions full cost method of accounting `` for information on ceiling test write-downs ) . adjusted ebitda , which excludes the impact of these two non-cash items , was highly correlated with the changes in oil and gas sales for the year ended december 31 , 2010 and 2009. a discussion of the components of the changes in our results of operations follows . 61 oil and natural gas volumes and revenues oil , natural gas and ngl sales volumes and revenues ( which are reported net of royalties ) and average sales prices by product for the years ended december 31 , 2011 , 2010 and 2009 are set forth in the table below . replace_table_token_15_th ( 1 ) `` net sales volumes `` represents our working interest sales volumes less the amount of volumes attributable to royalties . net sales volumes for the year ended december 31 , 2011 increased 22 % to 94 mmcfe/d from 77 mmcfe/d for the year ended december 31 , 2010. excluding the volumes relating to properties sold in 2009 and 2010 , the increase would be 24 % for the year ended december 31 , 2011. the increases were primarily due to new drilling activity in our evi and narraway/ojay fields , as well as the acquisition of additional narraway/ojay producing properties in april 2011 , partially offset by natural declines in other areas . net sales volumes for the year ended december 31 , 2010 were 77 mmcfe/d compared to 78 mmcfe/d in 2009. the 1 mmcfe/d decrease was due to the divestiture of non-core oil and gas properties primarily in december 2009 and april 2010 that , at the time the divestitures occurred , had a combined net production rate of 16 mmcfe/d . the impact from the oil and gas property divestitures on our 2010 net sales volumes was nearly offset by production increases attributable to new wells drilled in 2010. oil and natural gas revenues were $ 191 million for the year ended december 31 , 2011 , a 26 % increase as compared to $ 151 million for the year ended december 31 , 2010. the increase in revenues was due to an increase in sales volumes of 22 % , as well as higher realized oil prices in each period . in addition , oil differentials widened in the second and third quarters of 2011 as a result of the shutdown of the pipeline used to transport oil from evi to market . this necessitated trucking the oil to market . the pipeline was back in operation in the fourth quarter of 2011. oil and natural gas revenues were $ 151 million and $ 127 million for the years ended december 31 , 2010 and 2009 , respectively . the 19 % increase in revenues was primarily due to a 19 % increase in the average sales price per unit . see `` how we evaluate our operations realized commodity prices `` 62 above for a comparison of our realized commodity prices compared to commonly used benchmark prices . oil and gas production expense the table below sets forth the detail of production expense for the periods indicated . replace_table_token_16_th lease operating expenses lease operating expenses in the year ended december 31 , 2011 were $ 38.8 million , or $ 1.13 per mcfe , compared to $ 26.5 million , or $ 0.94 per mcfe , in the year ended december 31 , 2010. the $ 12.2 million increase in lease operating expenses was primarily due to an increase in production volumes , workovers , maintenance costs , water hauling and utility and chemical costs . additional workover activity as noted above accounted for $ 3.2 million of the increase . maintenance costs increased $ 3.7 million due primarily to start-up costs associated with bringing a large number of wells on-line in late 2010 , which were previously shut-in due to infrastructure constraints . in conjunction with these wells coming on-line , a new remotely-located compressor facility was also placed in service . for several months after the initial start-up of the new wells and the new compressor facility , we incurred significant mechanical and electrical costs tied to the start-up , including troubleshooting costs related to the new facilities and the prolonged shut-in of the wells . maintenance costs at evi also increased due to the heightened activity in the area combined with some harsh operating conditions . costs of trucking and disposing of water increased by $ 1.3 million . utility costs increased $ 0.6 million primarily due to higher utility rates as well as an increase in usage . chemical costs , which primarily include methanol and glycol used to prevent the freezing of gas lines , increased $ 0.6 million for the year . other increases were

liquidity and capital resources our exploration , development and acquisition activities require us to make significant operating and capital expenditures . historically , we have used cash flow from operating activities , our bank credit facility and borrowings from forest as our primary sources of liquidity . additionally , as market conditions have permitted , we have engaged in non-core asset divestitures . following the completion of our ipo and the distribution , we are no longer able to borrow from forest . changes in the market prices for oil , natural gas and ngls directly impact our level of cash flow from operating activities . natural gas has historically comprised approximately 80 % of our production ; as a result , our operations and cash flows have been more sensitive to fluctuations in the market price for natural gas than to fluctuations in the market price for oil . in 2011 , we entered into commodity swap derivative instruments to manage our exposure to commodity price risk caused by fluctuations in commodity prices , which protect and provide certainty on a portion of our cash flows . as of march 20 , 2012 , we had entered into commodity swaps to hedge approximately 16 bcfe of our projected 2012 production . this level of hedging will provide a measure of certainty of the cash flow that we will receive for a portion of our production in 2012. in the future , we may determine to increase or decrease our hedging positions . see part ii , `` item 7a . quantitative and qualitative disclosures about market risk commodity price risk `` for more information on our derivative contracts . as noted above , a primary source of liquidity is our bank credit facility , which has been used to fund daily operations as needed . our bank credit facility , which matures in march 2016 , is secured by a portion of our assets . our bank credit facility had a borrowing base of $ 425 million at december 31 , 2011 , which was subsequently reduced to $ 375 million in february 2012 upon the completion of our offering of the senior notes .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```liquidity and capital resources our exploration , development and acquisition activities require us to make significant operating and capital expenditures . historically , we have used cash flow from operating activities , our bank credit facility and borrowings from forest as our primary sources of liquidity . additionally , as market conditions have permitted , we have engaged in non-core asset divestitures . following the completion of our ipo and the distribution , we are no longer able to borrow from forest . changes in the market prices for oil , natural gas and ngls directly impact our level of cash flow from operating activities . natural gas has historically comprised approximately 80 % of our production ; as a result , our operations and cash flows have been more sensitive to fluctuations in the market price for natural gas than to fluctuations in the market price for oil . in 2011 , we entered into commodity swap derivative instruments to manage our exposure to commodity price risk caused by fluctuations in commodity prices , which protect and provide certainty on a portion of our cash flows . as of march 20 , 2012 , we had entered into commodity swaps to hedge approximately 16 bcfe of our projected 2012 production . this level of hedging will provide a measure of certainty of the cash flow that we will receive for a portion of our production in 2012. in the future , we may determine to increase or decrease our hedging positions . see part ii , `` item 7a . quantitative and qualitative disclosures about market risk commodity price risk `` for more information on our derivative contracts . as noted above , a primary source of liquidity is our bank credit facility , which has been used to fund daily operations as needed . our bank credit facility , which matures in march 2016 , is secured by a portion of our assets . our bank credit facility had a borrowing base of $ 425 million at december 31 , 2011 , which was subsequently reduced to $ 375 million in february 2012 upon the completion of our offering of the senior notes .
```    
 Suspicious Activity Report : change in functional currency and reporting currency effective october 1 , 2011 , lone pine changed its functional currency and reporting currency from the u.s. dollar to the canadian dollar . the change in functional currency did not have a significant impact on our consolidated financial statements for either the fourth quarter of 2011 or the year ended december 31 , 2011 as lone pine 's operations are primarily carried out by its operating subsidiary , lpr canada . the functional currency of lpr canada has not changed and continues to be the canadian dollar . prior to the distribution , lone pine used the same reporting currency as forest , which was the u.s. dollar , in its consolidated financial statements . however , after the distribution , our management determined that our financial statements should be presented using the canadian dollar , in order to 54 present lone pine 's financial statements in the same currency as its functional currency , and to minimize the impact of changes in foreign currency exchange rates on our financial statements . the determination to change lone pine 's reporting currency was based on a number of factors , which included the following : ( 1 ) lone pine has no assets or operations in the united states , ( 2 ) substantially all of lone pine 's operations are conducted in a single functional currency , the canadian dollar , and ( 3 ) the reporting currency selected , the canadian dollar , is the same as the functional currency . prior to the change in reporting currency , our consolidated statements of operations were translated from canadian dollars using the weighted average exchange rate for the period . the resulting foreign currency translation adjustment was reported as a component of other comprehensive income and accumulated other comprehensive income . as a result of our change in reporting currency , all comparative financial information has been recast from u.s. dollars to canadian dollars to reflect our consolidated financial statements as if they had been historically reported in canadian dollars , consistent with asc 830 , foreign currency matters . the consolidated u.s. dollar balance sheet at december 31 , 2010 was translated into canadian dollars by translating assets and liabilities at the end-of-period exchange rate and translating equity balances at historical exchange rates . as a result of our change in functional currency and reporting currency , there is no difference between the reporting currency and the functional currency of lone pine resources inc. and any of its operating subsidiaries . following the changes in functional currency and reporting currency , we will be subject to foreign currency exchange rate risk relating to the senior notes , certain of our derivative instruments and our delivery commitment of approximately 21,000 mmbtu/d of natural gas under a long-term sales contract expiring in 2014. see `` critical accounting policies , estimates , judgments and assumptions change in reporting and functional currency `` for more information about our change in reporting currency , including the reasons for the change , the manner in which the change has been applied to recast prior period financial statements and the major financial statement categories that are denominated in u.s. dollars , and for certain u.s. dollar financial information as of and for the year ended december 31 , 2011. see also note 2 to our consolidated financial statements . financial and operating performance our financial and operating performance for 2011 included the following highlights : on june 1 , 2011 , we completed our ipo of 15 million shares of our common stock . in connection with our ipo and pursuant to our separation and distribution agreement with forest , forest contributed to us its ownership interest in lpr canada in exchange for 69,999,999 shares of our common stock and a cash distribution of $ 28.7 million . we received net proceeds from our ipo of approximately $ 173.1 million and used these net proceeds to pay $ 28.7 million to forest as partial consideration for forest 's contribution to us of forest 's direct and indirect interests in its canadian operations . we used the remaining net proceeds and borrowings under our bank credit facility to repay outstanding indebtedness owed to forest , including intercompany advances and accrued interest . our average daily net sales volumes for the fourth quarter of 2011 and for the year ended december 31 , 2011 were 99 mmcfe/d and 94 mmcfe/d respectively , and our average daily oil and ngls net sales volumes for the fourth quarter of 2011 increased 27 % to 4,499 bbls/d , compared to 3,544 bbls/d in the third quarter of 2011 as our average net liquids percentage increased from 22 % to 27 % . we drilled a total of 47 gross ( 47 net ) horizontal light oil wells at evi and 6 gross ( 5.5 net ) natural gas wells in the deep basin with a 100 % success rate . we generated adjusted ebitda of $ 128.2 million , a 27 % increase over 2010 and adjusted discretionary cash flow of $ 118.4 million , a 26 % increase over 2010 . 55 during february 2012 , lpr canada completed the senior notes offering . the net proceeds of approximately $ 192 million were used to partially repay borrowings outstanding under our bank credit facility . the senior notes are guaranteed by lone pine and all of lone pine 's wholly-owned subsidiaries ( other than lpr canada ) . recent trends and outlook for 2012 beginning in the second half of 2008 and continuing throughout 2011 , canada , the united states and other industrialized countries experienced a significant economic slowdown . during the same time period , north american natural gas supply increased as a result of increased domestic unconventional natural gas development and associated natural gas from oil development . story_separator_special_tag adjusted ebitda increased $ 27.0 million for the year ended december 31 , 2011 compared to the year ended december 31 , 2010 , due to an increase in oil and gas revenues that was partially offset by higher operating costs incurred during 2011 because of an increase in production volumes , workovers , maintenance costs , water hauling , higher utility and chemical costs and higher general and administrative costs related to our ipo and the distribution . net earnings ( loss ) for the years ended december 31 , 2010 and 2009 were primarily impacted by changes in oil and gas sales driven by oil , natural gas and ngl price fluctuations ; however , net earnings ( loss ) did not change proportionately to the changes in oil and gas sales due to ( 1 ) non-cash foreign currency gains and losses in each period presented and ( 2 ) a $ 251.0 million non-cash ceiling test write-down recorded in the first quarter of 2009 caused by a significant decline in natural gas prices as of march 31 , 2009 ( see `` critical accounting policies , estimates , judgments and assumptions full cost method of accounting `` for information on ceiling test write-downs ) . adjusted ebitda , which excludes the impact of these two non-cash items , was highly correlated with the changes in oil and gas sales for the year ended december 31 , 2010 and 2009. a discussion of the components of the changes in our results of operations follows . 61 oil and natural gas volumes and revenues oil , natural gas and ngl sales volumes and revenues ( which are reported net of royalties ) and average sales prices by product for the years ended december 31 , 2011 , 2010 and 2009 are set forth in the table below . replace_table_token_15_th ( 1 ) `` net sales volumes `` represents our working interest sales volumes less the amount of volumes attributable to royalties . net sales volumes for the year ended december 31 , 2011 increased 22 % to 94 mmcfe/d from 77 mmcfe/d for the year ended december 31 , 2010. excluding the volumes relating to properties sold in 2009 and 2010 , the increase would be 24 % for the year ended december 31 , 2011. the increases were primarily due to new drilling activity in our evi and narraway/ojay fields , as well as the acquisition of additional narraway/ojay producing properties in april 2011 , partially offset by natural declines in other areas . net sales volumes for the year ended december 31 , 2010 were 77 mmcfe/d compared to 78 mmcfe/d in 2009. the 1 mmcfe/d decrease was due to the divestiture of non-core oil and gas properties primarily in december 2009 and april 2010 that , at the time the divestitures occurred , had a combined net production rate of 16 mmcfe/d . the impact from the oil and gas property divestitures on our 2010 net sales volumes was nearly offset by production increases attributable to new wells drilled in 2010. oil and natural gas revenues were $ 191 million for the year ended december 31 , 2011 , a 26 % increase as compared to $ 151 million for the year ended december 31 , 2010. the increase in revenues was due to an increase in sales volumes of 22 % , as well as higher realized oil prices in each period . in addition , oil differentials widened in the second and third quarters of 2011 as a result of the shutdown of the pipeline used to transport oil from evi to market . this necessitated trucking the oil to market . the pipeline was back in operation in the fourth quarter of 2011. oil and natural gas revenues were $ 151 million and $ 127 million for the years ended december 31 , 2010 and 2009 , respectively . the 19 % increase in revenues was primarily due to a 19 % increase in the average sales price per unit . see `` how we evaluate our operations realized commodity prices `` 62 above for a comparison of our realized commodity prices compared to commonly used benchmark prices . oil and gas production expense the table below sets forth the detail of production expense for the periods indicated . replace_table_token_16_th lease operating expenses lease operating expenses in the year ended december 31 , 2011 were $ 38.8 million , or $ 1.13 per mcfe , compared to $ 26.5 million , or $ 0.94 per mcfe , in the year ended december 31 , 2010. the $ 12.2 million increase in lease operating expenses was primarily due to an increase in production volumes , workovers , maintenance costs , water hauling and utility and chemical costs . additional workover activity as noted above accounted for $ 3.2 million of the increase . maintenance costs increased $ 3.7 million due primarily to start-up costs associated with bringing a large number of wells on-line in late 2010 , which were previously shut-in due to infrastructure constraints . in conjunction with these wells coming on-line , a new remotely-located compressor facility was also placed in service . for several months after the initial start-up of the new wells and the new compressor facility , we incurred significant mechanical and electrical costs tied to the start-up , including troubleshooting costs related to the new facilities and the prolonged shut-in of the wells . maintenance costs at evi also increased due to the heightened activity in the area combined with some harsh operating conditions . costs of trucking and disposing of water increased by $ 1.3 million . utility costs increased $ 0.6 million primarily due to higher utility rates as well as an increase in usage . chemical costs , which primarily include methanol and glycol used to prevent the freezing of gas lines , increased $ 0.6 million for the year . other increases were

