AB/BC Business Unit
Production in our Alberta/BC business unit averaged 3,362 boepd in the quarter, with the growth driven by our new Swan Hills resource play, where we drilled 5 wells and brought 2 wells on production in the quarter. Consistent with this light oil-focused activity, the liquids weighting in this business unit has increased from 40% in the fourth quarter of 2012 to 47% in the first quarter of 2013. We have compiled an inventory of over 294 net sections of land prospective for light oil resource potential in one or more of the Nordegg, Montney, Duvernay and Swan Hills zones. We continue to pursue other opportunities in this business unit to increase the depth and prospectivity of our inventory.
Saskatchewan Conventional Business Unit
Our southeast Saskatchewan Conventional business unit continues to provide a low decline, light oil production base. We drilled 7 wells in the business unit in the first quarter and generated average production of 6,073 boepd.
Our production of 49,078 boepd and operating netback of $49.79/boe resulted in funds flow from operations of $177 million ($0.92 per basic share) for the first quarter, a 5% increase over the preceding quarter. As compared to the first quarter of 2012, our growth in production did not offset lower light oil benchmark prices and higher differentials experienced in the first quarter of 2013, resulting in a 5 percent decrease in funds flow from operations. Our adjusted net income for the first quarter was $1.6 million ($0.01 per basic share). This represents a material change from first quarter 2012 adjusted net income of approximately $103 million, which included gains on dispositions of $129 million. Capital expenditures before acquisitions and dispositions in the first quarter were $302 million, representing an 18% decrease from the fourth quarter of 2012 and a 46% increase from the first quarter of 2012. This reflects our plan to execute a more balanced program between the first and second half of 2013, which requires the highest capital spending levels in the first quarter as expenditures typically decrease in the second quarter with reduced activity during spring break-up. Conversely, in 2012 our capital program was more heavily weighted to the back half of the year as we actively reinvested a portion of our proceeds from asset dispositions following the completion of spring break-up.
Our monthly dividend of $0.08 per share has remained constant since the Company's inception. During the first quarter, total dividends of $47 million were declared, representing 27% of funds flow from operations. However, with approximately 30% of shareholders participating in our dividend reinvestment and share dividend plans, cash dividends were $33 million, or 19% of quarterly funds flow from operations.
As at March 31, 2013, PetroBakken had $1.1 billion of debt drawn on our $1.4 billion credit facility. Effective April 2013, the credit facility was amended to extend the maturity by an additional year to June 2016. All other terms of the facility remain the same, including the tiered covenants and the $100 million accordion feature potentially allowing us to increase the facility size to $1.5 billion.
CURRENT OPERATIONS UPDATE
Average production in April was approximately 48,000 boepd, based on field estimates. In the Cardium business unit, the 600 boe/d of production previously restricted at Lochend is being restored with the recent start-up of a third-party facility expansion. We continue to have about 1,000 boepd of production in the Brazeau region restricted due to high line pressures at third-party gas processing facilities, which is anticipated to be restored in the third quarter with the completion of planned infrastructure improvements. Consistent with previous years, second quarter production is expected to decrease from current levels as we experience restricted activity due to spring break-up conditions. However, we expect the impact of spring break-up to be reduced from previous years due to our maturing production base and a greater number of wells being tied-in to infrastructure.
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