Good morning, my name is Julie and I will be your conference operator today. At this time I would like to welcome everyone to the Advantage Energy 2023 Year-End Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks there will be a question and answer session. If you'd like to ask a question during this time simply press star then the number one on your telephone keypad. If you'd like to withdraw your question please press star two. Thank you. Mr. Bagnell, you may begin your conference.
Thank you, Julie, and welcome everybody to Advantage's conference call to discuss our 2023 year-end results and reserves. My name is Brian Bagnell and I'm the Director of Commodities and Capital Markets at Advantage. Before we get started here, I refer you to the advisories on forward-looking statements contained in the news release as well as the advisories contained in Advantage's annual information form and MD&A which are available on SEDAR+ and on our website. I also draw your attention to the material factors and assumptions in those advisories. I'm here with Mike Belenkie, President and CEO of Advantage, Craig Blackwood, our Chief Financial Officer, as well as the rest of our executive team. We'll start by speaking to some of our financial and operational highlights from 2023. Once Mike is finished speaking we'll pass it back to the operator for questions.
While we're happy to answer your questions, we'd ask that if you have any detailed modeling questions that you follow up with us individually after the call. Mike, please go ahead.
Thank you, Brian, and thanks to everyone for joining us this morning to go over our 2023 year-end results. Advantage enjoyed an exceptional year in 2023. Our business is in order. Our balance sheet is strong. We have a low-cost structure and we have decades of top-tier inventory. This allows us to maintain a laser-like focus on cash flow per share optimization. We do that with disciplined capital allocation with very few distractions. Our results indeed were exceptional in 2023 including record production, record well results, and continued significant share buybacks. We ended the year well below our net debt target. I think everyone will have noticed by now that we've reduced our capital program coming into 2024 by CAD 40 million.
We're able to do this thanks to the exceptional well performance and disciplined cost control and capital allocation that the team's been able to achieve through the year and continuing into 2024. As we walk through the financials I'll refer to Advantage numbers only since Entropy financials are not particularly relevant as Entropy is funded separately by Brookfield and CGF. Entropy really being a core basically controlled by Advantage but not actually relevant to Advantage valuation currently with the exception of the common equity ownership. As we think about the financials it was punctuated by our second-best AFF per share in the history of the company, CAD 320 million. That's second-best both in total AFF and in AFF per share. The best ever having been in 2022 where realized prices were CAD 6.82 per MCF versus realized pricing this year in this past year of CAD 2.92.
So for us to achieve this second-best of all time at less than half the pricing realized was an exceptional accomplishment for the team. Free cash flow was CAD 54 million. And cash used in investing activities or net capital expenditure is a better way to put it, CAD 266 million was right smack in the middle of our guidance including a CAD 10 million unbudgeted acquisition. So again to achieve our capital program right in the middle after an incredible amount of inflation, many operational challenges that the entire industry experienced, and an acquisition the team was very pleased with that outcome. And while we went through the year we were able to purchase about 8% of our outstanding shares based on coming into the year numbers. That's 13.1 million shares repurchased.
Now we entered the year of 2023 with our debt target well below, sorry, with our debt well below our debt target, having basically thrown off too much cash flow to be able to redeploy through the buyback head pace. So what we did through 2023 was we re-levered by about CAD 79 million, which allowed us to deploy CAD 117 million on the buyback combined with our free cash flow. Since the buyback started less than two years ago, we have bought back 20% of our stock. Rolling into our operational accomplishments, excuse me, we achieved record annual production of over 60,000 BOE per day. Our liquids production went with that, an increase of 13% versus 2022. Our liquids continue to be much more valuable than many would understand, representing about 40% of our total revenue.
This is because our liquids are typically very high-value liquids with minimal of the very light low-value NGLs. Again, part of the overperformance of our capital program and our production is based on our well performance just simply right down to where the value is generated right at the well. 13 of the top 16 gas producers drilled in the Montney, Alberta were Advantage's based on IP90 rates. Each of our assets is outperforming including Glacier, Valhalla, Wembley. And on top of that our emissions continue to fall reducing exposure to carbon pricing via Entropy's post-combustion carbon capture projects. Now again I mentioned Entropy at the start. Entropy is indeed a separate company with a separate management team with only a few shared roles.
Financials of course are not necessarily relevant having been an early-stage company but there is embedded value of the Entropy shares and the embedded value is growing. Advantage owns 27 million shares in Entropy. The deal that we announced in December with the Canada Growth Fund would imply a value of CAD 1,275 per share. Rolling into reserves highlights. Reserves were again exceptional for Advantage in 2023 with an increase of to our PDP reserves of 8%. F&D sitting at CAD 767 per BOE which is as typical amongst the best in our peer group and continuing to grow. 2P reserves increased by 4% with an F&D of CAD 8.17. It's important to note that within our reserves we include the capital for gas plants and we do not shelter these costs or hide these costs using midstream assumptions. NPV of the 2P reserves were CAD 4.2 billion or CAD 26 a share.
We were able to replace 151% of production based on PDP reserve additions. Also worth noting our recycle ratios continue to be strong at over two times for PDP, 1P, and 2P. Our ROI for PDP is six years and for 2P is 24 years. Important to note again in Canada there are limits on how many locations can be booked. We are capped on the number of wells we're able to book. Our inventory is well in excess of the 10-year rule for 2P. We'll talk a little bit about that if people have questions on how we allocate our bookings area by area. Some additional notes on our 2024 capital reductions. We've been able to cut CAD 40 million out of our capital program via three bins or buckets of spending. We started with two fewer wells, at least two fewer wells.
That number may actually increase. We may be able to drop additional wells pending continued high performance of our program. We're also deferring a debottlenecking project that was approximately CAD 10 million, perhaps a little over CAD 10 million worth of spending. That was not necessarily a production adder but a reliability improver for the company. So it reduces the risk of constrictions or outages. So that's not reducing production but it certainly narrows our landing strip in certain circumstances. And a previously unbudgeted capital recovery which relates to the federal government's Investment Tax Credit for carbon capture which is spending that we did during 2022 prior to Entropy being spun. There remains significant discretionary capital in the budget for the second half of 2024. Each individual well that we drill is evaluated on a regular basis at strip pricing.
In the event that North American supply growth continues to overwhelm demand and if strip were to be suppressed further, and in particular forward strip were to be suppressed additionally, we have the constant process of reviewing each investment and the ability to cut those individual investments at the appropriate time. The capital revision that we've announced yesterday is not necessarily the lowest number that we'd get to if futures pricing were to be reduced further. It's important to note that on a two-year average our spending will be 75% of forecast at AFF. We are remaining at a fairly low level in spite of the fact that we are a growth company, i.e. cash flow per share growth. This is a nice balance where we're essentially sticking to our three-year plan of about 10% growth while throwing off free cash flow per share buybacks.
That focus is of course cash flow per share driven as always. Looking forward we will remain focused on cash flow per share growth. We do believe that our value is driven by that primary metric. Our debt target is unlikely to change, CAD 200 million-CAD 250 million. We will remain within that range or we're going to be back in that range here this year and stay within that range. All excess cash will be returned to shareholders via the share buybacks. And every on a regular basis as the world changes we will change with it quickly and make sure that that is optimized on a simple cash per share basis, not on some dogmatic approach to achieving the 10% number or on the flip side of cashing up with some other reason to be too conservative.
We're looking for that balance and that balance will be optimized on a regular basis. With that, that concludes my prepared remarks. I'll throw it back to Brian and we'll be happy to answer questions.
Thank you, Mike. Julie, we'll take some Q&A from the lines. Thank you.
Thank you, ladies and gentlemen. Should you have a question please press the star followed by the one on your touch-tone phone. If you'd like to withdraw your question please press star two. If you're using a speakerphone please leave the handset before pressing any keys. One moment please for your first question. Your first question comes from Jamie Kubik from CIBC. Please go ahead.
Yeah. Good morning, guys. Thanks for taking my question. Mike, you alluded to this in your remarks and your press release indicates that significant discretionary capital remains in the budget for the second half of 2024 including the Progress gas plant project. If gas pricing remains weak for the balance of 2024, I guess how much discretionary capital could be reduced and when would you have to make that decision for the second half? Thanks.
Thanks, Jamie. Yeah. We do have a huge amount of discretionary capital in the second half. The ability to cut wells is constant for us. We obviously don't want to do that in a way that reduces our 2025 cash flow per share targets. So we think about optimizing either well count or about sliding the Progress gas plant backwards and there's about CAD 50 million of spending in the Progress gas plant in the second half. Now the nuance here with capital spending in 2024 is that yes, gas prices are very low today and they're low for a very good reason because of North American oversupply. But there's also a pretty good reason why the forward strip is in contango which is obvious structural demand growth.
So there's an analogy here that we use frequently which is we don't want to close the barn door just before the horse goes back into the barn. And you can see that obviously prices are low today. We expect prices to be less low in the future. I wouldn't say that we're unbridled bulls about how high prices will go next year. That is not the case. But we do know that the economics of our investments that we're making today are investment these are actually significantly these are basically very economic at strip pricing which of course is driven heavily by some recovery into 2025.
Best example is if we were to slide our Progress gas plant by 1 quarter, 3 months, we would reduce capital by CAD 25 million this year. But we would also reduce cash flow next year by about CAD 58 million on strip pricing. So we're balancing that carefully. We're not at a spot now where we think there's any reason to cut our program further. If 2025 pricing were to be suppressed and these investments no longer resulted in a higher cash flow per share next year, we would make those adjustments at that time.
Okay. Got it. So. Yep. Yep. Just to be clear, so I mean dependent on 2024 pricing for the back half of this year but also how 2025 is shaping up.
Yeah. The best way to think of it is investments being made in the second half deliver cash flow in 2025. So we're making those investments forward-looking rather than sort of being mired in what's happening today.
Okay. Thanks. Maybe one more question from me here is just on the drought conditions in Western Canada. I've heard from a number of different operators some of the water management techniques and recycling initiatives underway to try and combat potential restrictions from forthcoming drought. Can you just talk about how Advantage is set up to be defensible in that scenario? Thanks.
Hi, Jamie. It's Neil Bokenfohr here. We've been thinking about drought conditions and water supply for a long time. So we have some water recycling initiatives going on and we've also I feel like we're in a position that we have enough water supply to get us through at least three quarters of 2024. And then the expectation is that Q4 would be a little bit better in the province for water supply. So we're comfortable with our position right now for 2024.
Okay. That's all from me. Thanks.
Ladies and gentlemen, as a reminder, should you have a question please press star one. There are no further questions over the phone at this time. I will turn the call back over to Brian. Thank you.
Okay. Thank you, Julie, and thank you, everybody, for joining our call. Just a reminder, if you have any follow-up questions, we're available should you need us. Thank you very much.
Ladies and gentlemen, this concludes your conference call for today. We thank you for joining and you may now disconnect your lines. Thank you.