Hello. Welcome to the annual meeting of shareholders of Pieridae Energy Limited. Please note that today's meeting is being recorded. If you participate in today's meeting and disclose personal information, you will be deemed to consent to the recording, transfer, and use of same. If you disclose personal information of another person in today's meeting, you will be deemed to represent and warrant to Odyssey and the corporation that you first obtained all required consents for the disclosure, recording, transfer, and use of such personal information from all appropriate persons before your disclosure. During the meeting, we'll have a question and answer session. Participants on the phone can initiate a question by dialing star one one on the telephone.
For those participants on the webcast, you can submit questions or comments at any time by clicking on Ask a Question button on the top of the right corner of the webcast. It is now my pleasure to turn today's meeting over to Patricia MacLeod, Chair of the Board of Directors. Patricia, the floor is yours.
Thank you very much. Good afternoon, ladies and gentlemen, and welcome to this live and audio webcast of our annual meeting of the shareholders of Pieridae Energy Limited . My name is Patricia MacLeod, and I'm honored to be the Chair of the Board of Directors of the corporation, and I will act as chair for this meeting. It is wonderful to be hosting an in-person meeting again and to see those of you who are here in person today. This meeting is also being streamed via live audio webcast, and those on the webcast have the ability to raise their hand and ask questions. However, I remind you that voting can only be done in person at the meeting or via proxy, all of which was specified in the management information circular.
Before we proceed with the formal business of the annual meeting, I'd like to take a moment to introduce the other Directors and senior officers of Pieridae corporation, who are participating in this meeting. They include Charles Boulanger, Director and Nominee, Richard Couillard, Director and Nominee, Doug Dreisinger, Director and Nominee, Gail Harding, Director and Nominee, Andrew Judson, Director and Nominee, Kiren Singh, Director and Nominee, Alfred Sorensen, Chief Executive Officer, Director and Nominee, Darcy Reding, President and Chief Operating Officer, Adam Gray, Chief Financial Officer, Thomas Dawson, Senior Vice President, Business Development, Yvonne McLeod, Vice President, Health, Safety, Environment, and Regulatory Drilling and Completions, winner of longest title, Dallas McConnell, Vice President, Corporate Finance. I'd like to now invite Alfred Sorensen to present some opening remarks. Sorry.
Good afternoon. Thank you, Madam Chair. Good afternoon, ladies and gentlemen. On behalf of the management employees of Pieridae Energy Limited , I would like to welcome you to the 2023 annual meeting of shareholders. Once the formal part of the meeting is over, myself, Darcy Reding, and Adam Gray will make a brief presentation to highlight our future operations of Pieridae, along with the recently released results of our 2023 first quarter. With that, I will turn things back to our board chair.
Thank you, Mr. Sorensen. Okay, at this time, I'd like to introduce Dallas McConnell, Vice President, Corporate Finance, who's kindly agreed to act as the moderator for this meeting.
Thank you, Madam Chair. I would like to take this opportunity to introduce the participants in the meeting to the basic functionality of the live audio webcast platform, which is hosting the meeting. We encourage shareholders to ask questions, but ask that those questions unrelated to the matters to be voted on today be held until after the formal portion of the meeting. If anyone has questions during the meeting, for those on the phone, please dial star one one. For those on the webcast, please click the Ask a Question button in the top right corner of the webcast screen. If you wish to vote or ask a question during the formal business of the meeting, you must be a registered shareholder of record as of March 27, 2023, or a duly appointed proxyholder and be here in person at this meeting.
All those attending via webcast will be able to listen to the formal business of the meeting and ask questions. However, they will not be able to vote on items of business.
Thank you, Mr. McConnell. We will now proceed with the formal part of the meeting. The meeting of the shareholders of the corporation will now come to order, and with your approval, I will ask Thomas Valentine, Corporate Secretary, to act as secretary of the meeting.
Thank you.
Thank you. I will also ask that Paul Bedard of Odyssey Trust Company be appointed to act as scrutineer for the meeting to report on the shareholders participating in person and the number of shares represented in person or by proxy at the meeting, and to compute votes on any poll taken at the meeting or any adjournment thereof, and to report thereon to the Chair. The notice calling this annual meeting of shareholders was sent on April 11, 2023, to all shareholders of record as of March 27, 2023, which is designated as the record date, and to intermediaries as required by securities legislation. A declaration as to such distribution is available for inspection by any shareholder. The Secretary will append the declaration as scheduled to the minutes of the meeting.
The notice calling this meeting was also sent to the directors and to Ernst & Young LLP as auditors of the corporation in accordance with the Canada Business Corporations Act. I've been advised by the scrutineer that we have achieved forum. I direct that the scrutineer's report be kept with the minutes of the meeting. Please stand by. We're having technical difficulties. Again, please stand by.
Hello, can you hear us?
Yes, please proceed.
Okay, we're looking to you.
Okay. Apologize for the technical problem. I'll go to the start of where I was, I believe, cut off. I've been advised by the scrutineer that we have achieved quorum, and I direct that the scrutineer's report be kept to the minutes of the meeting. As such, I declare this meeting properly constituted for the transaction of business. Notice having been served. I just wanna make sure. Notice having been served in accordance with the bylaws of the corporation and a quorum being present, I now declare that the annual meeting of the shareholders of the corporation has been duly called and is properly constituted for the transaction of business. Should a shareholder wish to address the chair or if there is any discussion, the monitor will read the statement or question aloud.
The form of proxy delivered to registered shareholders in connection with today's meeting, provided registered shareholders with the option of appointing Alfred Sorensen or alternatively Darcy Reding as such shareholder's proxy. As a result, they will be voting on their own behalf and on behalf of all registered shareholders who appointed them, either of them as their proxy.
The purpose of this meeting is to allow shareholders to receive the audited, consolidated financial statements of the corporation for the year ended December 31st, 2022, together with the report of the auditor thereon and the management discussion and analysis, to fix the number of directors of the corporation to be elected as eight, elect the directors of the corporation for the ensuing year, appoint Ernst & Young LLP as the auditors for the corporation for the ensuing year, and authorize the board of directors of the corporation to fix the remuneration of the auditors, to accept the corporation's approach to executive compensation, and to transact any other business which may properly be brought before the meeting.
All as more particularly outlined in the management information circular of the corporation dated March 27th, 2023, which was available via the notice and access regime to all of the shareholders of the corporation with the notice calling this meeting. I'm advised by the scrutineer that the total number of votes represented at the meeting by proxy that are required to be voted against any of these resolutions is less than 3% of the votes attached to the common shares entitled to vote and represented at the meeting. The last annual and special meeting of the shareholders of the corporation was held on May 26th, 2022. The secretary has tabled the minutes from that meeting. They are available for inspection by any shareholder at the registered office of the corporation.
Unless any shareholder wishes the minutes to be read, I do not propose to read them at this meeting. As the first matter of formal business, I place before the shareholders at this meeting the audited, consolidated financial statements of the corporation for the year ended December 31st, 2022. Copies of such financial statements, the auditor's report thereon, and the management discussion and analysis have been made available to all shareholders. As is customary, we do not intend to conduct a vote on the financial statements. I declare that the audited financial statements of the corporation for the year ended December 31st, 2022, together with the report of the auditors thereon and management discussion and analysis, have been received. As previously indicated, Mr. Sorensen will make a brief presentation on the corporation following the formal portion of the meeting.
We will now conduct the votes on the matters before us by a poll. On a poll, every registered shareholder of the corporation, as at the record date, is entitled to vote on the matter and has one vote in respect of each common share that is entitled to be voted on the matter and is held by that shareholder. It is now in order to proceed with the election of directors of the corporation. I will entertain a motion to fix the number of directors to be elected at this meeting at eight and invite any such motion to be seconded.
Madam, my name is Adam Gray. I am a proxy holder, and I so move.
Madam Chair, my name is Thomas Dawson. I am a proxy holder, and I second the motion.
Is there any discussion?
No discussion.
Thank you. As there is no further discussion, I will now call for a vote on the motion before the meeting. I am informed that a majority of votes submitted were in favor of the motion, and I therefore declare the motion carried. I now declare the meeting open for the election of directors. The articles of the corporation allow for a minimum of three and a maximum of 11 directors. As well, the corporation has also adopted bylaw number three, which establishes the nomination procedures. Bylaw number three requires, among other things, that any notice of nomination is given by or at the direction of the board must be included in the notice of meeting.
That given by any nominating shareholder in the case of an annual meeting, must be delivered to the corporate secretary of the corporation no later than the end of the tenth day following April 11, 2023. I'm informed by the corporate secretary that no such notice has been delivered by any nominating shareholder. The corporation has given notice of the nomination for election to the board of directors of eight individuals whose names and biographic information are included in the management information circular. I will now entertain a motion placing the names of those nominees before the meeting for election as directors of the corporation and invite any such motion to be set.
Madam Chair. My name is Adam Gray. I am a proxy holder, and I nominate each of Charles Boulanger, Richard Couillard, Doug Dreisinger, Gail Harding, Andrew Judson, Patricia MacLeod, Kiren Singh, and Alfred Sorensen for election as a director of Cavvy Energy Ltd. to hold office until the next annual meeting of shareholders or until their successors are duly elected or appointed.
Madam Chair. My name is Yvonne McLeod. I am proxy holder, and I second the motion.
Thank you. As timely notice has not been received of the nomination of any other individual for election as a director of the corporation and as the number of individuals nominated pursuant to this motion is equal to the number of vacancies on the board of directors, I now declare the nomination closed. I will now read the names and call for a vote with respect to each proposed director and ask that all voting shareholders raise their hands with respect to each director for election as a director of the corporation to hold office until the next annual meeting of shareholders or until their successors are duly elected or appointed, unless their office is vacated earlier pursuant to the articles of the corporation or the Canada Business Corporations Act. Charles Boulanger. Richard Couillard. Doug Dreisinger. Gail Harding. Andrew Judson. Patricia MacLeod. Kiren Singh. Alfred Sorensen.
The moderator has cast a ballot for each individual nominated, and the ballots have been counted. I'm informed that a majority of the votes submitted were in favor of each motion. I declare the motion carried. I declare that Charles Boulanger, Richard Couillard, Doug Dreisinger, Gail Harding, Andrew Judson, Patricia MacLeod, Kiren Singh, and Alfred Sorensen are each duly elected as a director of the corporation to hold office until the next annual meeting of shareholders or until their successors are duly elected or appointed. I'd like to congratulate the board of directors and thank them for their service. The next item of business is the appointment of the auditors of the corporation. The corporation proposes the appointment of Ernst & Young LLP as its auditors to hold office until the next annual meeting of shareholders.
At such remuneration as may be fixed by the corporation's board of directors. May I have a motion, please, and a seconder of that motion?
Madam Chair, my name is Adam Gray. I move that Ernst & Young LLP be appointed as auditors of Pieridae Energy Limited to hold office until the next annual meeting of shareholders at such remuneration as may be fixed by the board of directors of Pieridae Energy Limited.
Madam Chair, My name is Thomas Dawson. I am a proxy holder, and I second that motion.
Thank you. Is there any discussion?
There are no questions, Madam Chair.
As there is no further discussion, I will now call for a vote on the motion before the meeting. I am informed that a majority of the votes submitted were in favor of the motion, and therefore I declare the motion carried. The next item of business is the non-binding advisory vote on executive compensation, also known as a say on pay. May I have a motion, please, and a seconder of that motion.
Madam Chair. My name is Yvonne McLeod. I am a proxy holder, and I move that on an advisory basis and not to diminish the role and responsibilities of the board of directors, that the shareholders accept the approach to executive compensation disclosed in the management information circular.
Madam Chair, my name is Adam Gray. I'm a proxy holder, and I second the motion.
Thank you. Is there any discussion?
Madam Chair, there's no discussion.
If there's no discussion, I will now call for a vote on the motion before the meeting. I'm informed that a majority of the votes submitted were in favor of the motion. Therefore, I declare the motion carried. I believe the polls are now closed. I now ask if there's any other business to be brought before the meeting. Being and hearing that no other business is being brought before this meeting, I now declare the formal part of the meeting is terminated, and I thank you for attending.
After doing all that, good meeting there. We'll just wait for the presentations to come in, so I will primarily will be dividing this up between the three of us. Myself, I will take the lead on our future, and then Adam and Darcy are gonna do our regulatory disclosure call update for results for this quarter. What I'd like to start with is talking a little bit about where is Cavvy Energy going to from here. For the last two years, our company was built around the idea of building this LNG project on the east coast of Canada. As many of you may be aware, over the last year, the situation's changed in Europe regarding the situation in Ukraine. There was a renewed interest on the project.
Unfortunately, due to many issues regarding transportation primarily through gas across the country, that we have decided that it makes more sense to concentrate our business on Western Canada. Earlier this year, we began looking at a new strategy for the company, and we spent some time trying to figure out where does this business go from here. We've come up with a new strategy that's gonna focus mostly on our Western Canadian assets. Before you see a very fancy-looking pyramid, and as of yesterday, our board approved our new strategy to move forward with our corporation. Over the next year, we're gonna focus on rebranding the company's identity less of an LNG business and more as a Western Canadian producer.
By taking advantage of our existing asset position, move Pieridae more towards a more conventional oil and gas producer. We're gonna take advantage of our existing asset position, focus on eight key strategies around these assets. Primarily what we can do on a midstream basis, what we can do to move our markets outside of Alberta, and thirdly, how to take advantage of the marketplace as it changes with regard to decarbonization. Our strategy for the next year, is gonna focus on around several key things. When we look to build our asset position, we are a largest producer in the Foothills, extending from northeastern British Columbia to the border, US-Canadian border.
We are the leader in the Foothills, we're going to continue to grow that position in the Foothills, starting with our new drilling program that we began early in late 2022 and completed in the first quarter of 2023. We'll let Darcy Reding speak more into that. As we look at other places that we can build on our current success from those additional wells. One of the big advantages of the Foothills is these wells are high risk but also high impact. We believe that we can take advantage of that situation as the Western Canadian market begins to change, particularly when LNG Canada comes on late 2025, early 2026. This will represent the single largest change in market demand in North America really since about 1990, we want to be prepared to participate in that change.
Yes, we do have old assets, but we're bringing new skills to those assets and new perspectives on how we can take advantage of assets that have a long life and have the ability to bring existing value and perhaps create new value when we look at the fact that we are the largest conventional producer of sulfur and have sulfur involvement to play a greater role in food security around the world. We recognize that our company still has some gaps and barriers that we need to work on, primarily to refinance our current debt position. We believe that we're in a good position to get that done prior to the end of the quarter.
I'd like to talk a little bit about, well, where we sit today with pricing and what's different between 2021 and 2023. Many of you have been shareholders for a while. 2021 was a very difficult year for us. As you see kind of before you on the page, if we look at where we sat in 2021 versus where we are today, we're a significantly different company, much more able to withstand the lower natural gas prices that we are experiencing today. Probably the single biggest difference between 21 and 23 is certainly the stronger the oil prices. We do produce, roughly about 8,000 barrels of condensate and natural gas liquids. We have that ability to somewhat withstand the falling price of natural gas.
We remain committed to repaying our debts, that will be our primary focus for 2023 is to continue to pay that debt down. As you can see, since 2021, we have reduced that by a little over CAD 100 million over that period of time. We continue to use hedging as a tool to protect the downside. As we have seen in our first quarter results, that hedging can and remains an important part of our strategy. What are the primary risks to a successful 2023? Our business is very challenged at a commodity price below CAD 2.50 per MCF Canadian. As a result of that, we need to find ways to mitigate the decline in the pricing.
One of the ways we will be doing that is looking at a longer-term hedge program that will allow us to, for lack of a better term, to average those pricing over the next 2- 3 years. We are very well aware of our cost structure and also find that the important part of our business is managing that cost structure and bringing it more in line with industry standard. If we don't produce, we don't earn revenue. Unplanned outages are enemy, you know, worked very hard to make sure that we have fewer of them than we have in the past. I already mentioned, we have seen scenarios where things happen. For example, what's going on right now with the wildfires in Alberta. We've mentioned that our assets are over.
They need to go out of intended care, but managing those unplanned outages is a key part of how we think we've been successful this year. I believe for our company to continue to grow, we need to continue to be in the field in order for us to grow. We need to look for new financing. This is a big part of who we are, who we need to become, and we need to be able to react to market changes when it comes to other types of wells that we'll drill. There is no doubt that a big part of our new strategy is to become a constant driller of reproduction, to grow and use the assets we have to the best of their ability.
Perhaps the biggest risk to the company, one that, is not going to be a surprise to anyone, is in October of 2023, we must refinance our debt by that point in time. We continue to work very hard on that, and our people have done a great, an outstanding job in managing that position. Expect to have a result of that in the near future. Speaking of how that refinance is affecting our share price, I'd like to conclude my piece of the presentation this afternoon. I was talking a little bit about how our stock operates over time. We are, we're actually very, correlated to natural gas prices. As you can see on the chart, the darker color or the gray color, I should say, being the price of natural gas.
The green is our stock price, that we are very highly correlated to the movement in natural gas prices. When we reached our peak of roughly about CAD 2, also very close to where the peak natural gas price was last year. Our stock price will continue to be very volatile, mainly as a result of natural gas being one of the most volatile commodities on the planet, but also because the debt is an overhanging albatross. If you look at the two circles on our graph, starting to speak with A first and then B. In those two cases are the two places where you see a disconnect between natural gas price and our stock price. How did that happen?
In both of those cases, we were experiencing a situation where we were close to either having to have a refinance occur or some type of other event occur. A was September of 2021. B represents where we are today. You can sort of see our gas, our stock prices sort of flattened out, while natural gas prices have continued to decline. The principal reason behind that being that the market was principally waiting for us. We believe by influencing a hedge program that will upright the impact of volatility on our gas prices, that that will be the path leading to a refinance business. We don't anticipate that we will be returning capital to shareholders anytime soon.
The debt repayment is our primary concern at this time, and that will be until we are well below kind of industry standard for debt service. With that, I will now pass it to Darcy to begin this piece of our first quarter discussion.
All right. Thank you very much, Alfred. As we begin our review of the first quarter results, I'd like to first take a moment to send our thoughts to those affected and displaced from their homes by the Alberta wildfires, and to thank the first responders and many others in our communities for doing such admirable work to protect people, property, forests and resources. With recent rains, we sincerely hope the situation has improved and will soon be fully controlled. To date, the wildfires have primarily impacted non-operated facilities that we produce into in both our central and northern Alberta areas, resulting in temporary shut-in of operated and non-operated wells. However, the more significant shut-ins have been largely short duration, with most production already back online.
We still have approximately 1,800 BOEs per day of shut-in due to the continued wildfire impact on two non-operated gas plants, but we expect these facilities will begin accepting our production within the next week or so. We expect the wildfire impact on our second quarter average production will be in the range of 500 BOEs per day. We are pleased to report a successful first quarter on several fronts. First, robust physical natural gas hedges boosted our realized gas sales price by more than CAD 1.80 per MCF, allowing the company to realize over CAD 5 per Mcf on gas sales, generating CAD 50 million of net operating income and contributing to our strong cash flow for the quarter.
We advanced our Foothills winter drilling program, rig releasing, completing, and flow testing the Brown Creek 6-35 well in the quarter, along with drilling the second well of the program at Brown Creek 6-29, which was also rig released in the quarter. Adam will provide a few more details on our third quarter highlight on this slide in a few moments. I'd like to point out that the photo on the accompanying slide is of the Savannah 686 drilling rig on location at our 6-29 well site in March of this year on one of those stereotypically sunny early spring days in Alberta. It's a very beautiful photo. Moving on to the next slide.
Strong first quarter production of approximately 36,500 BOEs per day was impacted by the unplanned outage at our Caroline gas plant. This outage to repair a sulfur recovery heat exchanger was taken to maintain normal, reliable operations during the cold weather months and actually commenced late in the fourth quarter of 2022 and extended into the first half of January. This outage impacted production by 1,300 BOEs per day in the first quarter. Of note, our production mix remains gas-weighted at 85% natural gas, with the remaining 15% entirely comprised of associated natural gas liquids, with approximately half of these liquids being condensate, which fetches prices similar to or at a slight premium to light sweet crude oil.
It is obviously not included in our reported production numbers, it is also worth mentioning that first quarter sulfur production was more than 1,400 metric tons per day, which represents a significant revenue stream. Our position as one of the largest producers of sulfur in Western Canada will continue to be a competitive advantage for the company, given our Foothills sour gas production and midstream asset ownership. First quarter operating expense of CAD 66.5 million, combined with the previously mentioned Caroline gas plant outage, drove per barrel operating costs to CAD 20.25 per BOE. The Caroline plant outage not only impacted production for the quarter, as mentioned, but also contributed additional operating expense.
These expenses included vessel repair costs, fuel gas purchase costs due to the outage being partially within a period of very cold winter conditions, and increased emissions intensity costs under the Alberta TIER Carbon Emissions Program due to lower average facility throughput in the quarter. Of particular note, our reported operating costs do not include revenue from sales from sulfur sales or from third-party processing income, both of which are possible because of our ownership in the gas processing infrastructure. These two revenue streams, in essence, serve to offset the costs of running our processing facilities. In combination, these two items generated over CAD 9 million in offsetting income in the quarter, resulting in our adjusted operating expense, which was CAD 57 million or CAD 17.39 per BOE for the first quarter.
The chart in the top right-hand side of the accompanying slide shows the relationship between the per barrel operating costs depicted by the green diamonds and the per barrel adjusted operating costs, which are depicted by the red dots. Capital expenditures for the quarter totaled just over CAD 20 million, with three-quarters of that invested into our previously mentioned winter drilling program in the Brown Creek area. In regard to our winter drilling program, our first well at Brown Creek, 6-35, was tied in and placed on production on April 14th.
As of May fourth, immediately prior to being temporarily shut in as a result of the area wildfires, the well was producing nearly six million cubic feet a day of sale gas and is highly restricted with a down-hole choke as the production capability of the well far exceeds the company's working interest capacity in the gas gathering system at the tie-in point. The second well at Brown Creek, 6-29, was drilled and rig released in the quarter. The onset of spring breakup conditions truncated further operations, and the remaining completion and tie-in work is now deferred, awaiting improvement in AECO natural gas pricing.
A third well was scheduled for our winter drilling program, but with some of the company's robust first quarter gas hedges rolling off and lower AECO gas prices projected for the second and third quarters, the third well of the program was deferred to more effectively manage available free cash flow. Similarly, we continue to evaluate originally scheduled non-critical summer maintenance activity and the scope of our deferment of the Waterton gas plant turnaround originally scheduled for the third quarter as we continue to investigate opportunities to reduce discretionary spending in 2023 to better manage lower cash flows expected as a result of the aforementioned weak summer natural gas prices. At this time, I'd like to turn the call over to Pieridae's Chief Financial Officer, Adam Gray, for a review of quarterly financial results and a brief look ahead.
Thank you, Darcy. To follow up on Darcy's comments, during the quarter, we took a balanced approach to allocating our record cash flow from operations. We repaid CAD 28 million of debt principal and invested CAD 20 million into our capital development program. This allocation reflects that both repairing our leverage ratios and investing in Foothills development are essential elements of our strategic direction during periods of strong netback. On an absolute basis, our debt remains higher than we are comfortable with. Its reduction will remain a priority going forward. However, when cash flows are supportive of doing so, we are also committed to investing in growth. Over the past four quarters, we've reduced our debt principal from CAD 266 million to CAD 189 million, a reduction of nearly 30%.
The impact on our debt service cost is evident as we paid CAD 5.9 million in total interest during the quarter versus CAD 7.9 million in the first quarter of 2022. As it relates to our term debt, we continue to advance our refinancing initiative. I understand there is some impatience around progress here, but want to assure our investors that this initiative is our number one priority, and we will provide more information to the market as soon as possible. Briefly turning to a few other elements of our financial results. Our royalties and transportation costs came in at CAD 4.48 per BOE and CAD 1.60 per BOE, respectively, both lower than the prior quarter as a result of lower benchmark commodity prices.
While we are disappointed in our operating expense results, I believe Darcy provided a fulsome overview of the abnormally impactful Caroline outage, and I believe with ongoing laser focus on cost reduction, we will see operating expense normalize through the remainder of the year. In spite of our operating cost results, Pieridae generated strong cash flow from operations during the quarter and net income of CAD 0.08 per share on a fully diluted basis. Next slide. Okay, turning to our next and final slide. Our hedge program continued to add revenue stability during the quarter. On a volumetric basis, we sold 64% of natural gas and 45% of condensate under fixed price forward sales contracts during the quarter, which in aggregate added CAD 9.40 per BOE to its netback.
We also benefited from the very small quantum of financial hedge contracts, which we were successful layering in in late Q4 and early Q1. Those are evident in our financial statements as they are marked to market with an unrealized net gain of approximately CAD 1 million. As I have previously mentioned, it is a primary goal of our current refinance initiative to provide senior secured collateral to future hedge partners, which will enable us to implement a much more effective and sophisticated hedge program. For the time being, we have done what is possible on an unsecured basis. Going forward, the majority of our winter gas contracts, which were laid on in late Q3 last year, have rolled off.
However, we remain approximately 25% hedged on gas and 45% on condensate for the next two quarters at prices highly in excess of the current market prices. We recognize that natural gas pricing is under pressure during the next few months and have taken very prudent and careful steps to reduce or defer our capital and operating expenditure plans to the extent possible. We are also managing G&A costs, as evidenced by the decreasing G&A per BOE expense over the last couple of quarters. In conclusion, I'm very proud to the extent to which our balance sheet has improved over the past year and our team remains focused on deleveraging and delivering resilient operating results. We are really pleased that our first onstream well has been a success and look forward to our second well and returning to the field as soon as possible.
At this time, I'll turn the presentation back over to Dallas McConnell to wrap us up and take any questions that folks might have.
Thank you, Adam. We will now take questions submitted via the audio webcast and the phone line. We'll just give folks a couple minutes to to put their questions in if they have any. Operator, are there any questions on the phone conference?
There are no questions on the phone.
Okay. I do not have any on the webcast either. Seeing no further questions, I would like to thank everyone for their participation in our annual shareholder meeting this afternoon and for your interest in Pieridae. Stay safe and healthy, everyone, and have a good day.
This concludes the meeting. You may now disconnect.