Okay. Very good morning to everybody, and welcome to IPC's year-end results and operations update presentation. My name is Mike Nicholson. I'm the CEO of IPC. Also joining me in presenting this morning is Christophe Nerguararian, the CFO, and we also have Rebecca Gordon, who's our VP of Investor Relations. I'll begin in the usual fashion, with the operations update, and then I'll pass across to Christophe, and he'll run through the financial numbers. It's going to be a much shorter presentation this morning than our usual quarterly presentations because we do, of course, have our Capital Markets Day presentation this afternoon at 2:00 P.M., which will go through all of the forward-looking, guidance for 2022, our longer term business plan update and an overview of all of the assets in the financial forecast.
We will have a Q&A session at the end of this call, but if I can ask it to be just constrained to any questions around the year-end or the Q4 results because we'll have a much more detailed Q&A session this afternoon. To get started, IPC generated its best ever financial performance. If we look at the cash flow numbers, record in terms of our operating cash flow at just under $340 million and a free cash flow of in excess of our latest high-end guidance, $263 million, which represents a very, very strong 26% free cash flow yield. Most of that free cash flow has gone to strengthen the balance sheet and reducing our debt levels.
The net debt at the end of last year was down to just $94 million, and in terms of our leverage, it's down at 0.3x net debt to EBITDA. Notwithstanding the fact we had a limited capital budget in 2021, we still had a very impressive performance in terms of our reserves replacement. Above 90% reserves replacement, which means our 2P reserves at the end of 2021 stand at still 270 million barrels of oil equivalent, and a huge uplift in our contingent resources. We'll cover that more in the presentation this afternoon. An addition of 300 million barrels of 2C resources which lifts now our total 2C resources to above 1.4 billion barrels of oil equivalent.
A good continued focus on sustainability, we're well on track with our emissions reductions and carbon offset initiatives to meet our five-year target, and we're pleased to report that we didn't have any material incidents through the full year 2021. If we turn now and look into a bit more detail at production, Q4 production was 46,800 barrels of oil equivalent per day. That was above the high end of the guidance that we gave for the Q4, and really rounds out 2021 with a very impressive four quarters in succession above the high-end guidance.
That fed into our full year 2021 numbers with production at 45,500 barrels of oil equivalent per day, and we've now got production lifted back up in excess of pre-COVID levels back in 2019. If you look at the pie chart on the top right-hand side of this slide, you can see IPC has a nice balance of 48% Canadian oil, about a third Canadian gas, and the rest international light Brent oil. Obviously, with the significant strength we've seen across the entire energy complex has meant that we've been able to generate extremely strong financial performance. Turning to the cost side, Q4 operating costs per BOE was just above $15 per barrel.
That rounds out 2021 with a full year OpEx per barrel of $15 per BOE. Our latest guidance was $15.50. We also have a beat on that latest guidance. CapEx, the latest guidance that we gave to the market for the full year was $50 million. We're $2 million below that, and that's largely a result of the rephasing of some expenditure into 2022. Turning to the operating cash flow. Q4 operating cash flow was a record for the company. Average Brent prices in Q4 were $80 per barrel, and we generated $111 million in OCF. That means that for the full year, we generated $337 million of operating cash flow, with Brent prices averaging over the full year $71 per barrel.
That's a material beat to the high-end guidance that we gave at the beginning of the year, which was $220 million, assuming a $65 per barrel Brent price. The reason for that performance is, of course, the higher oil price and the production above the top end of our guidance. We've seen also tighter Canadian WCS differentials. We've seen much stronger gas prices and also the lower OpEx than forecast. So, you know, really strong performance across the board. When you set that against the relatively limited capital expenditure budget, and we look at the free cash flow generation, again, it represents a highest ever free cash flow performance for the company.
Q4 free cash flow was $87 million, and our full-year free cash flow was $263 million, representing a 26% free cash flow yield. That's significantly in excess of the $155 million high-end guidance that we gave in our original Capital Markets Day presentation. If we turn now into the update on share repurchase program, and the bond issue. IPC announced in December our third share repurchase program. That gives us the ability to repurchase up to just over 11 million shares through December 2022. Up to early February 2022, the company has purchased 2.6 million shares for a total cost of $16 million. That represents an average purchase price of around SEK 55 a share.
If we look back at the aggregates of share repurchases since IPC's inception, we've bought back now close to 37 million shares at around SEK 35 per share. A lot of value created from that share repurchase program. We're also pleased to announce in early January that we successfully issued a new $300 million bond. It's got a five-year term, and we secured a 7.25% coupon. We can see the balance sheet is in great shape, is exceptionally strong, but we felt you know, market conditions were favorable, and we felt it was prudent to diversify our capital structure and funding sources.
I think it puts us on the front foot when we talk to the majors as they seek to rationalize their portfolios in the energy transition from a position of strength, and we hope to be able to conclude further value-creative acquisitions. In terms of sustainability and ESG strategy on the health and safety side, very pleased to announce that we did not have any material safety incidents during 2021. We did have to continue to operate with our COVID-19 protocols, and I think it's a huge credit to all of our operating teams on the ground that we haven't had any interruptions on any of our assets as a result of the COVID restrictions that we've had to endure. You know, big effort and a great delivery by the teams.
In terms of our climate strategy and our sustainability report, we've got the commitment to reduce our net emissions intensity by 50% through the end of 2025. You can see from the chart on the bottom of this slide that in 2022 we'd reduced that to 33 kilograms per BOE. We're well on track to meet that target of 20 kilograms per BOE by the end of 2025. We did publish alongside our Q2 results, our second annual sustainability report. The reporting standards were uplifted. It was fully compliant with the Global Reporting Initiative standards, and I would encourage everyone to take a read to show all the excellent work that's been done by all of our teams in Geneva, in Canada, in Malaysia, and in France.
That rounds out my part of the presentation. I'll pass the call now to Christophe, who will walk through the financial numbers. Christophe, over to you.
Yeah. Thank you very much, Mike. Moving on to the financial highlights, and actually, I will start the financial highlights by talking about the operations which have been, as Mike mentioned, absolutely stellar. Performance-wise, the uptime was very high across all of our assets. It is not just the high oil and gas prices which translate into the best financial results ever for IPC. It was the basis was the strong performance of all the teams and all the assets. Production for the Q4 and the full year respectively, at 46,800 BOE per day and 45,500 barrels of oil equivalent per day. That is very close to our best performance ever in 2019.
Certainly with strong oil and gas prices, the average of the dated Brent in the Q4 was just shy of $80, and that certainly translated into our best financial performance ever with an operating cash flow of $111 million for the Q4, and just a third of the overall operating cash flow for the year 2021 at $337 million. Operating costs at $15 for the year and $15.1 per BOE for the Q4 is below the guidance and demonstrates that our costs of operations are really under control.
With limited CapEx that translated into very high free cash flow of $263 million, which were mainly used to reduce the debt down to $94 million at the end of last year. We now have a very strong balance sheet with a net debt to EBITDA leverage, which went from 3x at the end of 2020 down to 0.3x at the end of 2021. Moving on to the next slide about realized prices. Brent on average was $71 in 2021, and the WTI was $3 below that at $68. I think what matters because we're producing the most of our oil production from Canada. It's important to focus on the WTI-WCS differential.
If you look back, it's been volatile, but on average very stable at -$13 per barrel since 2019. If you look at the realized price in 2021, very happy to report that we sold on average our Malaysian crude at a $4 premium over Brent, while our French Brent linked oil production was selling on parity with Brent under the long-term contract with Total. In Canada, we continue to sell our Suffield oil roughly at a $1 discount to the WCS and $2.3 discount for our Onion Lake thermal oil production.
Now, this being said, in going into 2022, we will be blending virtually 100% starting from a few weeks from now, so not in Q1, but certainly in Q2 2022, we'll be blending 100% of our Onion Lake thermal production. You can expect that we will be selling our Onion Lake production on par with the WCS going forward. Looking at the realized gas prices, I mean, we all know that gas prices have been very, very strong through almost any continent, and North America was no exception. In the Q4, our realized price was just shy of CAD 5 per Mcf and CAD 3.7 per Mcf for the full year 2021.
We're very constructive moving into 2022 with gas prices remaining above CAD 4 per Mcf. Looking at the next slide and on operating cash flows and EBITDA, obviously a very nice comparison indeed. When you look back and compare 2021 to 2020, you can see the very strong financial performance. As a reminder, the operating cash flows are our revenues minus OpEx minus cash taxes when EBITDA is revenues minus OpEx minus G&A. Roughly our G&A are $12 million a year, and our cash taxes, we only pay cash taxes in France, is $6 million.
That explains why there's that six million difference, and you can see the operating cash flow at $337 million, EBITDA at $331 million for the full year, virtually 3x higher, exactly 3x higher for the EBITDA and almost 3x higher when you compare 2021 to 2020 for the operating cash flow. Operating costs are well under control, and they are below our previously guided level of $15.5. It's $15 per BOE on average for the full year. We did beat our own guidance, thanks to a very strong production performance in the Q4 and marginally in the second half of 2021. The costs are under control.
Now, if you look back at 2021 compared to the previous period of 2018 to 2020, those OpEx per barrel are around $2.50 above what they used to be. That was mainly driven by increased energy costs, by increased gas prices, which net-net is a positive for IPC because we're producing more gas than we're consuming. Slightly higher OpEx actually translate into a higher netback overall for the business given our roughly 16,000 BOE per day of gas production in Canada. Looking at the netback, I think this slide is really important, and it's worth looking at the operating cash flow and the EBITDA netback for the Q4.
We're talking about $25-$26 per BOE of netback, and that happened in the context of an average Brent price of $80. As we all know, today, the Brent price is $90-$112 higher. If you compare that netback to the full year 2021, it was $20 for the operating cash flow and EBITDA. If you look back further at 2020, on average, the netback then was $7-$8 per barrel. You can see that our business is very torquey to oil prices and to the upside. We will be talking about netback this afternoon when we talk about our projection and our forecast for 2022.
You can certainly expect that in the current oil prices, our netback would be even higher than $25 per barrel. Looking at the cash flows, I mean, I love this slide because it just gives you the scale of our operating cash flow when you compare it to what we have to cover and pay for with our operating cash flow, which was CapEx. $337 million of operating cash flow to cover $46 million of CapEx, $11 million of G&A, and $15 million of financial costs. That puts in perspective why we were able to reduce the debt so much. We generated $263 million of free cash flow. $227 million was used to reduce the debt, and the rest is the funding of an increased working capital need.
Again, it's a positive. This working capital need just means that by the end of 2021, compared to the end of 2020, we are producing more oil and gas in a higher oil price environment. That's a positive. It just means that when that working capital unfolds in the Q1 in 2022, we will cash in more revenues than back in the Q1, 2021. Looking at the G&A and financial items. G&A are flat at around $12.5 million per year. It's flat compared to the prior year of 2020. It's flat at around $0.7 per BOE.
On the financial cost, you can see that the Q4 is way less than 25% of the full year 2021. It just shows that our debt was reducing fairly quickly, and so our interest cost burden was getting smaller every quarter as you would expect. Looking at the graphic presentation of our financial results, you can see that we generated a cash margin of $340 million, a gross profit of $210 million, and the highest net profit for the business ever in 2021 at $146 million. Our balance sheet is in great shape. The total size of our balance sheet has reduced by $60 million. This is the natural depreciation and depletion of our oil and gas assets and our FPSO.
The two points worth noting on the balance sheet is the steep reduction in financial liabilities, obviously in our debt outstanding, as well as the increase in current assets. This is just what I was talking about. It's the result of increasing receivables, just a reflection of our higher production at the end of 2021 in a higher oil price environment compared to the end of 2020. Looking at the hedging, I will actually start by the last point. We don't have any hedge covenants anymore because we changed our capital structure. I'll come back to that on the next slide. We have no oil hedges in place for Brent-linked production in Canada, in Malaysia, nor France.
We just have some hedges for Canadian gas and our Canadian oil production. For the oil hedging, even though the differential has been fairly stable, on average, it's been volatile. We decided to hedge 60% of the WTI-WCS differential in Canada at -$13 to avoid facing the volatility that we've seen in the markets over the last three years. You can see on the graph that the level of $13, which actually was the average in each of the years 2019, 2020, and 2021, provides a solid basis for the business going forward.
On the back of very strong gas prices, the best realized since IPC decided to go to Canada, we've actually hedged roughly 25% of our production in Q1 at AECO was $4.40, but our realized price, 'cause we're sitting at a slight premium to AECO. 25% of our Canadian gas is actually hedged at CAD 4.6 per Mcf and 35% of the Q2 and Q3 of our Canadian gas sales hedged at around CAD 4 per Mcf at our selling points. On the capital structure, Mike touched upon it. We have issued unsecured bonds worth $300 million at a coupon of 7.25%.
That was issued a few days ago, and we used the bond proceeds to repay our two revolving bank facilities, which are no longer outstanding. We repaid and canceled those two. The bonds are five-year, they are unsecured, provide us with a lot of flexibility in the way we want to run our business. On top of that, we have a fully unutilized revolving credit facility of $75 million. We have a very strong balance sheet, low-levered. We are sitting on roughly $200 million of cash, and that positions our business very well to be able to seize any M&A opportunities should we like what we can find these days on the market.
That's the new capital long-term structure for the business, and I hand over back to Mike. Thank you.
Okay, thank you very much, Christophe. Just to come back again and recap on the 2021 highlights. We talk a lot about excellence and operational excellence within IPC and I think it's been a huge credit to all of our teams in Canada, in Malaysia, and in France for delivering such an exceptional performance through 2021. They've managed to deliver production above 45,000 barrels a day, which was in excess of the original high-end guidance that we gave at the beginning of the year. Costs were below guidance at $15 per barrel, and we're able to deliver the capital program at just under $50 million.
Of course, in a rising commodity price environment, that put the company in a position to really capture the benefits of the rising commodity price environment that we've seen and has put the company on track to generate record financial performance and cash flow generation. If we look at our operating cash flow, we generated just under $340 million, $263 million of free cash flow, which represents a 26% free cash flow yield based upon our current market capitalization. As Christophe has shown in his presentation, the company is in great shape in terms of balance sheet strength. A very low net debt of $94 million. The leverage is 0.3x net debt to EBITDA.
Of course, we start 2022 on the front foot with a lot of firepower to continue to grow our business. The teams also did a phenomenal job in terms of reserve and resource replacement and additions in a year where the capital budget was relatively limited. 91% reserve replacement ratio, keeping our 2P reserves at 270 million barrels of oil equivalent, and a 300 million barrel addition to our contingent resources. Lifting our undeveloped contingent resources now to in excess of 1.4 billion barrels, which gives us a huge amount of fuel for future reserve replacement and additions. We're still well on track with our sustainability strategy to reduce our net emissions intensity by 50% through the end of 2025, through a combination of operational emissions reductions and carbon offsetting.
Everyone was kept safe. We didn't have any material incidents to 2021, which again is a huge credit to all of our teams on the ground. That rounds out the highlights for the Q4 and the full year 2021. We've obviously got our Capital Markets Day presentation this afternoon at 2 P.M., where we'll go into a lot more detail on the strategic update and the short and long-term plans for the companies. We'll turn the call now back to the operator and take any questions, if there are any, on the Q4 results. Thank you.
Thank you. If you wish to ask a question, please dial zero one on your telephone keypads now to enter the queue. Once your name has been announced, you can ask your question. If you find it's answered before it's your turn to speak, you can dial zero two to cancel. Our first question comes from the line of Teodor Nilsen of SpareBank 1 Markets. Please go ahead. Your line is open.
Thank you. Good morning, Mike and Christophe. A few questions from me, if I may. First on, specifically on operating cost per barrel for Q4 and maybe 2021 as a whole. How was that impacted by higher and increasing energy prices through the year? Second question is on your share repurchase. I just wonder what will trigger that you will pay cash dividends in addition or maybe swap repurchase program with cash dividends. My third question, and maybe that's related to like Capital Markets Day, but I'll still give it a try. That is on slide eight, you show your ambition of reducing CO2 emissions. I just wonder, will that have any tax impacts? Do you pay any CO2 taxes in Canada? That's all. Thanks.
Okay. Thank you, Teodor. I'll take the first one. Yeah, no, indeed, it's no secret that energy, i.e., electricity costs have increased, and we're obviously using quite a bit of electricity. We have many wells, many pumps in Canada. We're also buying gas to inject some steam in the ground at Onion Lake Thermal. That has played an important part in increasing our OpEx from 2020 to 2021, roughly by $2-$3. Although 2020 was a very low point in the cycle for obvious reasons. A good part of that increase was coming from energy costs, electricity and gas prices. They have increased over the year, last year.
Now, as I was saying, net-net it is a positive funding offer for the business, because we are producing roughly 100 million scf a day of gas in Canada, and we're producing much more than we're using. Overall, it's a net increase to IPC netback.
Yeah. Thanks, Christophe. On the dividend question, Teodor, I mean, I think for the time being, we've obviously set out the capital allocation framework. We'll get into more details on that in the CMD presentation this afternoon. What we've committed to is distributing 40% in excess of $55 per barrel Brent. We have, of course, got the share buyback scheme in place at this point in time. That's the initial return mechanism. Of course, if we see continued sustained high commodity prices, it does give us the flexibility as we move through 2022 to look at other return forms such as dividends.
In terms of your question on CO2 taxes, we do pay carbon tax in Canada, and the CO2 tax currently is CAD 50 per ton, and that's forecast to rise to CAD 170 per ton by 2035. The carbon tax is baked into all of our numbers, all of our financial forecasts. When we talk about our NAV and our NAV per share calculations, all of those Canadian carbon taxes are baked into all of the valuations that we disclose. Hope that answers your third question.
Yes, absolutely. Thank you.
Okay. Thank you very much, Teodor.
Thank you. Currently we have one further question on the phone. Just as a reminder to participants, if you do wish to ask a question, please dial zero one now. The next question comes from the line of Mark Wilson at Jefferies. Please go ahead, your line is open.
Yes, good morning, and excellent results once again, guys. Congratulations on that. Thank you for the clarity on the tax question. It is actually taxes I'd like to ask you about. Christophe confirmed on the call that you don't pay any cash taxes in Canada. So could you remind us why that is the case? Should we view or how should we view any potential change to that situation going forward, either from your current tax structure or through any legislation that could be expected in Canada? Thanks.
Yeah. No, thanks indeed. In 2021, we paid taxes in France and that's it. We're in the lucky position where, on the back of the acquisitions we concluded in Canada, through assets and corporate acquisitions, we've inherited very significant tax losses from previous from the predecessor's company's investment. As a result, we are not paying taxes in Canada. It's not based on any change in legislation or anything other than you can see that corporate taxes in France and Canada have reduced by 2%-3%, which is obviously positive to the business. Now, looking forward, it's a factor of where oil prices will be.
We don't expect to pay too much taxes next year either, on the back of the tax losses. Now, the sooner we pay, the better because that means oil prices would remain where they are. Very small cash tax take for the business in 2022 expected as well.
Mark, just a follow-up to that. In all the long-term cash flow guidance that we've put out there this morning for the five-year business plan, all of the detailed Canadian tax loss positions are built into those five-year forecasts. Those are net of all of those tax losses and allowances that we have across all the business units.
The new presentation, which includes all of those balances, will be uploaded today just before Capital Markets Day. You'll be able to see where the allowances are as well, Mark.
All right. Okay. Would I be able to ask just, for a non-accountant, what is the tax loss position in Canada and within your current range, 65-95?
Yeah, Mark, there'll be a full detailed presentation published this afternoon on the website that will give you all of the information.
I'll mention it in Capital Markets Day as well, Mark, but let's put that one off for this afternoon, so everyone's got the opportunity to hear it.
Great. Okay. Thank you.
Thank you. Currently there are no further questions on the phone, so I'll hand back to our speakers for any questions from the web.
Okay. Well, thank you very much, everyone. I think it's been a tremendous 2021 for IPC. I think 2022 has gotten off to an even better start, and we look forward to presenting our plans for 2022 and the five-year business plan this afternoon at 2:00 P.M. Thank you very much for your attention.
Thank you.
Thank you, everyone.
Goodbye.