The cash contribution from Harvest's Upstream operations was $122.9 million for the first quarter of 2013, a decrease of $24.4 million or 17% as compared to the same period in the prior year, mainly due to a combination of lower realized prices and reduced sales volumes.
Downward movement of realized prices was consistent with movement in benchmark prices resulting in a 9% decrease in the average realized price after hedging for the quarter compared to the first quarter of 2012. Upstream production volumes in the first quarter of 2013 averaged 55,571 boe/d, 8% lower than the first quarter of 2012 due to natural declines in production, a smaller capital program from previous years and dispositions of certain non-core assets.
Lower realized prices also contributed to the decrease in the operating netback after hedging of $28.00/boe compared to the same period in 2012 of $29.97/boe, a decrease of 7%. Harvest's average realized price after hedging was $53.52/boe for the first quarter compared to $58.83/boe in the same quarter of 2012. Royalty reductions from an average of 16.5% in the first quarter of 2012 to 12.2% in the first quarter of 2013 offset the impact of lower realized prices on the operating netback.
During the first quarter of 2013 Harvest spent $122.9 million of its $300 million Upstream capital budget. Of the $122.9 million, 64% was spent on drilling and completion activities. During the quarter Harvest drilled 47 gross (44.9 net) wells with a 96% success rate. In Hay River, Harvest drilled 26 gross (26.0 net) wells pursuing heavy gravity oil in the Bluesky formation, including 16 producing, 9 injection and 1 Muskwa shale gas test wells. Harvest also drilled, or participated in, 4 gross (2.6 net) deep, multi-stage fractured, liquids-rich gas wells in the Falher and Montney formations in the Deep Basin area. At Red Earth, Harvest drilled 3 gross (3.0 net) oil wells into the Slave Point and Gilwood light oil formations. The Company's remaining drilling program included oil and gas wells in the western Alberta area as well as oil wells in Suffield and southeast Saskatchewan.
During the first quarter of 2013, Harvest disposed of certain non-core producing properties in Alberta and British Columbia for proceeds of $9.5 million. The transactions resulted in a gain of $6.6 million. Subsequent to the end of the first quarter, on April 29, 2013, Harvest entered into an agreement to sell certain oil and gas assets to a third party with approximately 900 barrels of oil equivalent per day of production in west central Saskatchewan, for total proceeds of approximately $110 million. The sale is anticipated to close later this month.
During the first quarter of 2013 Harvest invested $61.0 million of the $315 million 2013 capital budget on the continued development of the BlackGold project. Through the first quarter most of the spending was allocated to the engineering, procurement and construction ("EPC") of the central processing facility ("CPF"). As at March 31, 2013, the engineering and procurement portion of the contract relating to the central processing facility is approximately 92% complete and the facility construction portion of the contract is approximately 50% complete.
2013 activities for the BlackGold project will focus on facility construction and module assembly. As at March 31, 2013, Harvest has spent $210.6 million on the EPC contract and has also invested $347.4 million in the project since acquiring the BlackGold assets in 2010.
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