Okay. Very good morning to everybody, and welcome to IPC's year-end results and financial update presentation. My name is Mike Nicholson. I'm the CEO. Also joining me this morning is Christophe Nerguararian, the CFO, and Rebecca Gordon, who's our VP of Investor Relations and Corporate Planning. I'll begin with the highlights from the full year 2023. It will be a much shorter presentation from me this morning than usual. I'll just be focused really on the 2023 results in terms of the operations update and all of our forward-looking business plan that we announced this morning. That will all be covered in much more detail in our Capital Markets Day presentation, which is due to start this afternoon at 2:00 P.M.
To get started with the highlights from 2023, it was really truly an exceptional year for IPC. A record performance across all of the business. If we start by looking at the investment year, we originally guided full-year capital investment of $170 million. We ended up spending slightly less than that, $163 million, and we did have some carryover. We expect the balance of that capital expenditure to be concluded as part of our 2023 work program. In terms of production, it was a record high for IPC. In the third quarter, you'll recall that we touched 50,000 BOE per day. Our original guidance was on the high side, was 48,000.
To come in at 48,600 bbl of oil equivalent per day in excess of that high-end guidance. Good delivery on the cost front. Our operating costs were $16.60 per BOE. That combination of record production and very, very strong commodity prices meant that the company was able to generate its highest ever cash flow. Operating cash flow for the full year was $623 million. After the investment program, the free cash flow that the company generated $430 million. That represents a just shy of 30% free cash flow yield, extremely attractive compared with the rest of our peer group. Turning to the balance sheet. With such a strong operational and financial performance, the balance sheet has really transformed in the last 12 months.
We started the year with a net debt position just below $100 million. Notwithstanding the significant share buyback program and investment program that we delivered through 2023, we're still able to finish the year in a net cash position with $175 million. Taking into account the bond cash that we raised, the gross cash resources that the company has just under half a billion dollars. Company's never been in as good financial shape as we are today. We'll talk a lot more on this this afternoon. An absolutely huge increase in our 2P reserves, 80% increase in our 2P reserves. It means that we've replaced 13x or 1,300% reserves replacement, largely driven by Blackrod and supplemented by the acquisition of Cor4, which we announced yesterday.
We'll be giving a lot more details on that in our Capital Markets Day presentation. Finally, on the sustainability side, been a very good performance. We're still on track with our carbon net emissions intensity reduction to get down by 50% through 2025 and was very pleased that we didn't have any material incidents to report through 2022. Just to go into a little bit more detail on the production side and put the record production into context. If you go back to 2017 when IPC started, we were producing then 10,000 bbl of oil equivalent per day. Then through a series of acquisitions, you can see that we built production to 46,000 BOE per day in 2019.
We took the decision to scale back some production in 2020 as a result of the pandemic, and to shut in some higher marginal cost barrels. I think what's been impressive is the fast recovery from COVID. We pushed back up to pre-COVID heights, 46,000 bbl a day in 2021. In 2022, we've been able to reach new heights, so above the 48,000 bbl a day high-end guidance, delivering full-year production numbers just below 49,000 bbl of oil equivalent per day. That's a huge credit to all of the IPC teams in Canada, in France, and in Malaysia for their continued excellence in operational delivery. Turning now to the, to the cost side. Again, very good discipline on both the OpEx and capital expenditure side. Fourth quarter operating cost was just below $17 per bbl.
That was in line with expectation and guidance. Our full year guidance that we gave to the market was we expected our operating costs to come in the range of between $16-$17 per BOE. You can see we're pretty much spot on the midpoint at $16.60 per BOE for the full year. As I mentioned on the highlights, it was a very active investment year through 2022. We're investing in all of our assets in France and in Malaysia and in Canada. Our latest guidance on our budget was we expected to invest around $170 million. We have had some carryover of that investment program into this year, into 2023. $7 million slips into this year's budget.
The full year capital expenditure was $163 million. If we go back and cast our mind back to 12 months ago when we were standing here, and we were looking at the guidance for the operating cash flow that our assets would generate, we had quite a wide bandwidth in terms of oil prices on the low side. We were looking at $55 per bbl Brent. On the high side, we were looking at up to $100 per bbl Brent. Obviously, oil prices were pretty close to $100 per bbl for the full year. The cash flow guidance that we gave to the market 12 months ago at that price was $600 million-$635 million.
When you look at the $623 million of operating cash flow, that the company delivered, that was net of a windfall tax of around $11 million. Really, we would have been right at the top end of that guidance, with the exception of the windfall tax in France, which wasn't baked into our numbers a year ago. When we look at the post capital investment program, it was by far the largest free cash flow generation that IPC has ever delivered. The top-end guidance that we gave, again, 12 months ago was between $460 million-$480 million U.S. dollars. What we did during the year is, obviously, we increased our capital expenditure budget by $33 million, and we paid the windfall tax of $11 million.
Again, really delivering cash flow right at the top end of that guidance and a 29% free cash flow yield based upon our market cap at the end of January, an extremely favorable metric when you compare that with our peers, in the industry. One of the things that we've been able to do, which again I think has differentiated IPC, is return a huge amount of that cash flow generation back to our shareholders last year. We came out at the Capital Markets Day, with our capital allocation framework that said, provided, the balance sheet is in good shape and our leverage metrics are below 1 x, we're gonna distribute, 40% of all incremental free cash flow above $55 per bbl.
Based upon the estimates that you can see at $100, we said that should be around $146 million returned to shareholders. We've gone far in excess of that commitment. The first was through our normal course issuer bid, which we started just over 12 months ago. We purchased 10.3 million shares under that program from December 2021 through December 2022. We followed that up with a summer in July with the first time to do what's called a substantial issuer bid. Essentially, it was a Dutch auction, where we returned $100 million back to shareholders, and we bought back 8.3 million shares. Really, 2020 was a year for IPC of delivery on that capital allocation framework.
We bought back in total and canceled 12% of the company's shares. That amounted to $187 million of share buybacks. Well in excess of the $146 million that we originally committed to return. Finally, my last slide on the sustainability side, and we're well into to our ESG journey now. Very pleased again that we had another good year on the health and safety side with no material incidents to report. In terms of our climate strategy, you can see from the chart on this slide that we're well on our way to achieving that target, which was a net reduction on our emissions intensity by 50% through 2025.
You can see in our 2021 report, we're already down to 28 kg per BOE, and I feel very confident that we're gonna be able not only to achieve that, but as you'll hear this afternoon, to go beyond that commitment that we have currently. We have published alongside our second quarter results, our third annual sustainability report, fully GRI and compliant, aligned with the TCFD climate-related initiatives, so continuing to improve on our non-financial disclosures. All in all, a very good year. I'll pass across to Christophe now to walk you through some pretty nice financial numbers. Christophe, over to you.
Thank you very much, Mike. Yeah, indeed, it's very pleasing to be here this morning in front of you to discuss our year-end 2022 financial highlights because this year has been for sure exceptional for IPC. In terms of production, another very strong quarter. This fourth quarter 2022 was a production in excess of 49,000 bbl of oil equivalent per day, capping a very strong performance for the whole year, where we posted an average production of 48.6 thousand BOE per day. Just above the high end of the range, which is a true demonstration of what our teams on the ground across all countries have been able to deliver.
The average dated Brent was a bit lower, just below $90 for the quarter, but still average in excess of $100 per bbl for the full year. With our operating costs within the range we guided for the full year at $16.6 per bbl of oil equivalent. We posted very, very strong operating cash flow again this quarter at $115 million and more than $620 million for the full year. $125 million of EBITDA just for this fourth quarter and $640 million for the full year. For the CapEx, we spent $44 million this quarter and $163 million for the full year.
Just shy of our guided $170 million. That is mostly due to some carryover of some work into Q1 2023. I think if you only needed to remember two numbers, that would be the free cash flow for the overall year at $430 million for 2022. Our cash position, which at year-end was $487 million gross and $175 million of net cash at year-end. The oil prices were lower in this Q4. The WTI, WCS differential widened to $26 per bbl. Fortunately, we had over 60% of our Canadian oil production hedged.
That, we posted a $20 million hedging gain in the fourth quarter because we hedged that differential at $13 per bbl for the fourth quarter. Good hedging management. I'll talk about our hedging position later on for 2023. At, if you look at the full year, as I said, Brent was in excess of $100. We sold on average our Malaysian barrels at $11 above Brent. The French barrels slightly below Brent, and the Suffield and Onion Lake, so our Canadian oil barrels we sold in line with the WCS. In terms of gas price, that's been very, very volatile as we all recognized.
It's been sky high during the third and some extent the fourth quarter, where we realized almost CAD 6 per Mcf during the fourth quarter. On average for the year, we realized in excess of CAD 6 per Mcf, so almost twice as much as what we had in our original budget due to the war in Ukraine, obviously, the supply disruption from Russian gas to Europe needing to fill up its storage and pushing gas prices up across the globe, including in North America and in Canada. The situation today is that the storage levels are pretty high in Europe. The winter is mild, and so there's less tension on the market.
In Canada as well, the gas prices have come off a bit and are closer to CAD 3 per Mcf. I wouldn't be surprised if that spiked again in the future. This slide speaks for itself. I mean, very, very significant operating cash flow and EBITDA in 2022, in excess of $620 million and almost $640 million respectively, almost twice as much as what we posted in the prior year. In terms of operating costs, on average, we delivered right within the range of what we guided for the full year between $16-$17 per BOE.
You can see that the evolution quarter to quarter reflects the lower production in the first quarter when we had to shut in production while we were drilling one of our wells offshore Malaysia. With production increasing in Q2, Q3, lower operating cost per barrel. In Q4, gas prices being quite high, that increased some of our input costs for the Onion Lake thermal operations, and we had a bit more activity as well. Resulting in a slightly higher OpEx per barrel in the fourth quarter, but still within the range, as I said, for the full year. In terms of netback, I think it's very important.
Between $25 and $28 per BOE netback for the operating cash flow and the EBITDA respectively, and a very strong, actually the best ever for the full year for business at $35 and $36 per BOE netback for operating cash flow and EBITDA for the full year. That's as usual, one of my favorite slide, and that's the consequence really of our capital allocation strategy. You can see how we've been using and deploying our capital. We generated $620 million of operating cash flow, and we spent $160 million on CapEx and really drove production up from 46,000 in 2021 to in excess of 48,000 this year.
Very limited amounts on on G&A and cash financial item, less than $30 million, and then even more on a share buyback in excess of $180 million more than what we spent on on CapEx in 2022. Despite or thanks to this capital allocation from CapEx to share buyback, we also ended the year in a very, very strong balance sheet position with by moving the balance sheet from a position of being in a net debt position of $94 million at the beginning of 2022 and closing with a net cash position of $175 million. I'll. Well, I can mention it here.
If you look at our financial items, you can see that in the fourth quarter, our net interest expense is almost zero, which is a bit counterintuitive when you think that we're paying seven and a quarter coupon on $300 million of bonds. Given the market dynamics, we're sitting on close to $500 million of cash and we are depositing that cash with our banks, and we're yielding 4.5% on those deposits. Receiving 4.5% on our cash deposits for $480 million is the exact equivalent of spending 7.25% Coupon on our $300 million bond. Effectively, the cost of carry for our bonds as we speak is zero.
The G&A remain under control and in line with the previous quarters at below $1 per barrel, actually $0.8 per BOE. When you summarize the year with in excess of $1.1 billion of revenues and production cost in line with the guidance at $16.6 per BOE, we generated a cash margin in excess of $650 million, gross margin of in excess of $500 million, and the highest net profit ever for the company at just shy of $340 million. The balance sheet is in a very, very strong position, as you can see here, showing a cash of $487 million.
You can see our bonds on the liability side, at $300 million and the equity increasing as a result of our net profit. The capital structure of the company has not changed over the last quarter. The bulk of it is the $300 million bonds at 7.25% Coupon, with interest payable twice a year and maturing in February 2027. We have this small French loan, which we are amortizing every quarter. In Canada, we have a liquidity, a revolving facility which we are not using at all for CAD 75 million.
As I just mentioned, our current cash deposit receives 4.5% interest resulting in a zero cost of carry for current bonds, putting the balance sheet in a very strong position, allowing us, as Mike mentioned, for instance, to be very quick in seizing market opportunities, M&A opportunities like the Cor4 Oil Corp. acquisition we released yesterday, and we'll give you more information this afternoon. To conclude this presentation on the hedging side, we mentioned that we've hedged roughly 60% or 12,000 barrels a day of our Canadian oil production. We've hedged the transportation effectively costs. From Hardisty in Canada to the U.S. Gulf Coast, that WTI-WCS to ARV, we've hedged that $10. The-
It's not speculative. It's really just to protect us against any issues or problems on pipeline transportation. For instance, in December, there was an issue on one of the pipeline transporting Canadian oil to the U.S. The result was a widening of that transportation costs in January. So we were because we were protected with that hedges, that paid out quite significantly in the first months of this year. On the gas side, we were prudent in hedging some of our gas production, so in excess of 30 million scf a day of gas for Q1 in excess of CAD 6 per Mcf.
In, for the winter part, so for Q1 and for the so-called summer strip from April to October this year, we've hedged as well the in excess of 33 million scf a day at just above CAD 4 per Mcf. That compares very well to the current forward curve. Obviously, those hedges position are well in the money as we speak. We have no specific covenants from our bank facilities or any of our financial arrangements, we have no hedges in place for WTI or WCS or Brent, other than what I just mentioned for that transportation part. We did put when the U.S. dollar was extremely strong towards the end of last year.
We bought forward some EUR to cover some of our OpEx in France and some CAD to cover some of our OpEx and CapEx in Canada. Those trades are well within the money as well because the dollar, although those currency reappreciated a bit against the dollar, that was quite timely as well in terms of hedges. You can find all of those details in our financials, which have been released and are available on our website. Thank you very much.
Okay. Thank you very much, Christophe. amazing set of numbers I think you can all agree. Really just the final slide to conclude again and to remind everyone of the highlights for 2022. A record exceptional year for IPC and a huge congratulations to all of our teams for delivering such an amazing performance. Investment, $163 million that targeted growth in all of our producing assets in France, in Malaysia and in Canada. Record levels of production above the high end of guidance at 48,600 bbl of oil equivalent per day. Inline operating costs right in the middle of guidance at $16.60 per BOE.
That combination of record production and the strong commodity price environment that Christophe talked about, delivered $623 million of operating cash flow, $430 million of free cash flow, or close to 30% of the entire market value of the company in just one year. Obviously, that financial performance meant that we have the strongest ever balance sheet. Christophe showed you that we're sitting on a net cash of $170 million. More importantly, with the financial arrangements that we have in place, we've got close to half a billion dollar war chest to continue to fund the growth in our business and create value for our shareholders. The reserve increase is quite unheard of in our industry.
80% increase in one year, 1,300% reserve replacement, up to 487 million bbl of oil equivalent. We'll be talking a lot more about that in our Capital Markets Day presentation this afternoon. Again, a very good performance on the ESG side, where we continue to meet our climate and net emissions intensity reduction objectives. That rounds out a phenomenal year. As I said at the beginning of the presentation, we can of course take questions, we'll ask those please just to relate to last year's results. We've got a lot of material to get through at the Capital Markets Day, we'll be giving a full business update and operations update and long-term business plan update at 2:00 P.M. this afternoon at our Capital Markets Day.
I hope you can tune in to that presentation. For now we'll pass across and see if there are any questions. You can ask questions via the website, or we can also take questions from the telephone line.
Start with the operators.
Yeah.
Thank you. To ask a question over the telephone, please signal by pressing star one on your telephone keypad. That is star one for questions over the telephone. Our first one comes from Teodor Sveen-Nilsen of SB1 Markets. Please go ahead.
Good morning, Mike, and good morning, Christophe. Congrats on yet another strong quarter. I'll try to limit my questions to the fourth quarter results. Just for first question, could you just remind us of the OpEx impact of gas prices? I would actually expect OpEx to decline slightly in fourth quarter compared to third quarter given the gas prices. That's the first one. Second question is on the cash balance. You now reported a very strong cash balance. Almost 30% of the balance sheet is now cash. Should we expect it to be that way going forward? Just, second question, cash balance. Christophe, you mentioned 4.5% interest rate. Where can I get that risk-free? I'm curious. Thanks.
That's all. That's all.
Thank you. Yeah, in the fourth quarter, our realized gas price is slightly lower than in the third quarter, actually because we use AECO. AECO was higher, it's all about we're selling at a premium to AECO, and that premium goes up and down. If you look, AECO was actually higher in the fourth quarter. That drove OpEx per barrel slightly higher in the fourth quarter. That's the reason. In terms of cash, I don't think we have a policy to keep half a billion dollars of cash on the balance sheet. The flip side is we're trying to remain very disciplined in the way we deploy capital between organic, inorganic growth or share buyback.
A part of this answer, I guess, will be answered this afternoon when we look at our capital allocation going forward and how the CapEx spend and Blackrod will impact our cash position in 2023 at different oil prices. As for the deposit, frankly, we were very pleasantly surprised. I hope not all our Canadian banks and international banks are listening, but effectively with no risk, with like one week deposit risk-free rates, both in Canadian and U.S. dollar actually, just in excess of 4.5%. Everything being equal, we would expect that to actually even go further higher if you see further rates hike from central banks.
Okay. Thank you.
Thank you. Once again, that is star one for questions over the telephone. We currently have no further telephone questions.
Okay. We just have one question via the web. Christophe, perhaps another one for you here. What was the reason for the widening Empress-AECO differential in August and October? That's from Ruben from Jefferies.
Yep. Thanks, Ruben. So the way it works, as you know, Suffield is in the southeast part of Alberta. We're selling our gas literally on that Alberta-Saskatchewan border.
What that means is at times where you have storage issues or logistic challenges within the province of Alberta, having ourselves access to that selling point on the border, which is downstream to the logistical challenges in the province and closer to the end market, which are Toronto, New York, Chicago, gives us a premium which can be significant, where you have typically the last summer you had some injection issues where the system as a whole faced compression challenges, couldn't inject as much gas as wanted, weighing down on the AECO price whereas the Empress was trading significantly higher.
Okay.
Maybe just a follow-up, Christophe. We obviously benefit from because we purchase the AECO gas for our Onion Lake thermal property, but essentially we're selling our Suffield gas at the Empress price, so we get the benefit of that arbitrage.
Correct.
We do have one more question. It's on the moving parts of the increase in the Blackrod CapEx. We do have a specific slide that we will present you this afternoon on how that's changed and what parts are contingency and cost inflation versus the plateau production coming forward. We will present that this afternoon, Mark. Hang on. We'll speak to that at 2:00 P.M. is our Capital Markets Day. That's all the web questions, yeah?
Okay. Very good. Thank you very much for everyone for tuning in and it has been an incredible year for the company. I hope you can all tune in to the Capital Markets Day presentation at 2:00 this afternoon. You're gonna see an incredible future also for IPC. Thank you very much for everybody for tuning in.
Thank you.
Thanks, everyone.