First Quarter Financial and Operating Highlights
-- Increased average production to 3,603 boe/d, up 43% from the first quarter of 2012 and 8% from the fourth quarter of 2012.-- Improved crude oil and liquids volumes 54% to a record level of 1,491 bbls/d, of which 76% was oil and condensate, representing 41% of total production.-- Increased funds flow from operations 104% to $6.9 million and 63% on a per share basis to $0.13 per share.-- Improved operating netbacks 28% to $25.00/boe.-- Reduced operating costs 15% to $9.53/boe.-- Drilled 7 (3.6 net) wells (100% success rate), including 4 (2.4 net) wells at Inga, British Columbia and 3 (1.2 net) wells at Leduc Woodbend, Alberta.-- Invested $20.7 million in capital expenditures, including $1.4 million on undeveloped land acquisitions in our core operating areas and $1.0 million on expansion of the Company's Inga natural gas facility.-- Closed a bought deal equity financing where Artek issued 8.7 million common shares at a price of $3.45 per share and 2.15 million flow- through shares at a price of $4.20 per share for aggregate gross proceeds of $39.0 million.-- Exited the period with a working capital deficiency of $25.8 million, down 35% from year-end, resulting in a healthy net debt to annualized first quarter funds flow ratio of 0.9.-- Increased operating bank line from $65.0 million to $75.0 million.
Artek's average production for the three-month period ending March 31, 2013 was 3,603 boe/d (41% liquids), up 43% from the previous year and up 8% from the 2012 fourth quarter, despite shut-ins related to pad drilling at Inga. Liquids production increased to a record level of 1,491 boe/d in the quarter. First quarter funds flow increased 104% to $6.9 million and 63% on a per share basis to $0.13 per share from the same period of 2012. Operating costs per boe dropped 15% to $9.53/boe primarily as a result of increasing production volumes from the Inga property, which had operating costs of approximately $7.70/boe. The Company's operating netback was $25.00/boe in the first quarter, up 28% from the 2012 first quarter, while general and administrative costs and interest expenses fell approximately 22% on a boe basis to $3.67/boe from the previous year.
On March 28, 2013, Artek closed a bought deal equity financing where Artek issued 8.7 million common shares at a price of $3.45 per share and 2.15 million flow-through shares at a price of $4.20 per share for aggregate gross proceeds of $39.0 million. Consequently, the Company's working capital deficiency of $25.8 million at March 31, 2013 was down 35% from year-end.
Artek has entered into several commodity hedges to protect its cash flow for the remainder of the year. The Company has put a floor price of $3.00/GJ on 6,000 mmbtu/d of natural gas production for the period April to October 2013. As part of the same transaction for the same period, Artek gave up a call on 600 bbls/d of crude oil production at an average price of CDN$101.37 WTI. The Company has also entered into natural gas production swaps on 2,000 mmbtu/d from April to December 2013 at a fixed price of $3.27/GJ and 1,000 mmbtu/d at a fixed price of $3.41/GJ from April to October 2013. Lastly, 200 bbls/d of crude oil production has been fixed at CDN$96.00 WTI for the period June to December 2013.
Following the Company's semi-annual credit review, Artek's lender has increased our $65.0 million operating line to $75.0 million. The next scheduled review of the credit facilities is September 2013.