Hello, I'm Tony Marino, CEO of Tenaz Energy. Thank you for joining us for our Q1 2024 update. Please note on slide 2 our advisory on forward-looking statements. So turning to slide 4, our operating and financial highlights, production volumes were approximately 2,900 BOED in the Q1. That's down modestly from Q4 2023, the decline driven by natural declines in production in our Canadian older wells and the newer wells that we drilled in the second half of last year in Canada, coming off their initial higher rates.
Netherlands production was also down modestly. That's driven by a combination of planned and unplanned downtime. We registered FFO, funds flow from operations, of CAD 7 million in the Q1. After deducting CAPEX of CAD 3.8 million, we had CAD 3.2 million of free cash flow. That FFO number, again, down from what we recorded in Q4 2023 with the aforementioned lower production level.
We had a little bit lower benchmark prices. That was significantly offset by the hedging that we had done for TTF gas in the Netherlands. And the net of those factors, again, lower FFO. We ended Q1 2024 with positive adjusted working capital, or negative net debt, of approximately CAD 49 million. That's about the same level that we had at the end of the year. And that includes the impact of our buyback program. The NCIB retired another 200,000 shares, approximately, at an average cost of CAD 0.67 per share in Q1 2024. We feel that that's been a very successful program, having acquired a total now of 2,000,000 shares and an average cost of CAD 2.77 since we began the NCIB program.
As I'll cover more in detail in just a minute, we executed a definitive agreement to acquire a gas processing plant and the surrounding oil and gas leasehold from a private company. The net cost to us, CAD 2.8 million, based on an effective date of January 1, 2024. Turning to the gas plant acquisition at Leduc-Woodbend, covered on slide 6 of the PowerPoint, first I'll talk about the deal terms. Again, after assigning 1/8 of the purchase to our non-operating partner in the Leduc-Woodbend field, we acquired 7/8, 87.5% of the surrounding leasehold, and for Tenaz, 100% of the gas plant, known as the Watelet Gas Plant. Net cost estimated at closing of CAD 2.8 million to us for these assets based on the effective date of January 1, 2024.
If you look on the map on the right side of the slide, you can see our Leduc-Woodbend field with our Rex Member leasehold shaded in gray. We have our Rex horizontal wells shown in blue, and then the acquired assets in the orange color. With the gas plant just to the southwest of our field, roughly two and a half miles away from our southernmost wells, a variety of pipelines that go with this to connect the leasehold wells to the plant and our existing Leduc-Woodbend Rex wells to the plant, and then a couple of other smaller batteries, which we label here as active batteries, in the leasehold position. The transaction is subject to approval by the Alberta Energy Regulator. We expect to get that approval in Q2 2024. The purpose of the acquisition is to control our processing destiny at Leduc-Woodbend.
All of our produced gas from Leduc-Woodbend, solution gas that we're making while we ramp up oil production in that field, goes through this plant. We do pay a fee stream on the plant that we will now be paying to ourselves, and so there's a profit stream associated with it already. We will have the opportunity now, the control of the plant, to cut costs there, to increase the uptime, which we have a strong incentive to maintain it at the highest uptime possible because when the gas plant is down, so is our oil production. There's a whole host of advantages just in our proprietary gas production that go with this plant. In addition, the plant does take in some third-party volumes, and I'll run through that in just a second when we talk about the capacity in the plant.
That's a part of the business that we believe can be quite profitable as well, and we would seek to expand over time. There are a variety of producers in the area with gas production that we think would like to send it through the plant. Some of them with shut-in wells because they don't have adequate processing capacity. In the bottom half of the slide, I want to focus in a little bit more on the capabilities and the characteristics and the metrics of this set of assets. The plant currently has a capacity of about 7.5 million cubic feet a day. About three-quarters of that gas plant capacity, today's capacity, is currently being used with the flows through the plant. And of that three-quarters of 7.5 million, about 75% of what is flowing through is our proprietary gas from Leduc-Woodbend.
The plant does have, we think, good capability to be expanded, and you can think of this in a couple of different ways. First of all, there is equipment at the plant, idle compression, probably require a few other modifications to the process flow there. But with that idle equipment, we think we can, if we put it back in service at fairly minimal cost, we can get the capacity of the plant up to about 12 million cubic feet a day. Now, today we don't need that capacity, but we would be using more of it as we expand the oil production at Leduc-Woodbend with its associated solution gas.
Furthermore, we do have the concept of bringing in additional third-party volumes, some of which are already shut in the area, some of which would allow more development by third-party operators if they had a place to send the gas and sending that additional gas through Leduc-Woodbend for a profitable fee. Ultimately, the licensing of the plant, which is pretty important, allows it to have a capacity of 20 million cubic feet a day. It is licensed for sour service, we think, which is quite an advantage considering that the plant is in the area of Leduc Reef and there's a lot of sour production in the area.
Our production from the Rex formation is all sweet production, no H2S in it, but a number of the other third-party producers in the area do have sour gas, and it's certainly an advantage in this area to be able to process that. As the plant stands today without expansion, a third-party report by McDaniel using our reserve report showing the growth and the future growth in our Leduc-Woodbend Rex production shows a value for the plant and the associated leasehold of about CAD 9 million discounted to 10% on an A-tax basis. So that includes the quite minimal production from the associated lands which exist today and the plant with our current forecast under the reserve report of Leduc-Woodbend associated gas coming with the oil product that we're developing there.
That number does not include any additional third-party volumes, and it doesn't include the value in the upstream in the leasehold acquired of any further development, any further drilling on those new yellow lands that are shown on the map. We do think that there are some interesting possibilities in the leasehold. There are several different ideas. We have Rex potentially Glauconite and Glauconitic on a small pool, but particularly regarding the Ellerslie formation. Now, this is part of the Mannville Group that includes the Rex, Glauconite, Lloydminster, the other horizons that we are producing from and are prospective for us in the area. Ellerslie is a good producer in the Mannville and a variety of places in Alberta. There's actually a pretty big original oil-in-place Ellerslie pool that is included in the acquired lands. It's at a fairly low recovery factor today, all on primary development.
We do think that there is a target for horizontal drilling. It's a permeable zone. It would use multilateral wells without hydrofracturing. That is not included in the value that we see today, but it is a possibility for us to add to our development slate. I don't really want to commit to a certain timing on that, and it's going to require additional study before we do any drilling in the Ellerslie on these new lands. However, I guess in the fastest scenario, it could even involve drilling an Ellerslie well in this year's program. So we'll keep you posted on that. But we think we got a great plant asset that is valuable in and of itself. It's got some upsides to it, certainly, in this area. And we think that we've got some potential value in the leasehold that comes along with the gas plant.
Next, let's just briefly take a look at slide 8 and put Q1 2024 in the context of the Tenaz record dating back to our recapitalization about two and a half years ago. So comparing Tenaz today for 2024 to the time of the recap in Q4 2021, we find that production is up about 3X. FFO actually is, as at 2023, up about 8X from the time of the recapitalization. And even while that production and cash flow has been going up, we've had a substantial improvement in the balance sheet, in our positive adjusted working capital balance, what we also refer to as negative net debt, standing at about roughly CAD 49 million at Q1 2024, again, up substantially from the time of the recap.
At the same time that production and cash flow have been going up, along with our adjusted working capital position, we have reduced the share count by 7% through the NCIB. Let's take a look at our activity that we have planned for 2024 and just review our guidance. During 2024, we're going to continue development at Leduc-Woodbend. That development could also include some activity on the new leasehold as we evaluate the various opportunities that we have, look at capital efficiencies, and decide which new concepts we might want to bring in to allow even more inventory for future development. We will be planning to drill in Canada in the second half of the year. This budget plan that we have is designed to maintain investment flexibility and continue to deliver free cash flow while we grow.
We could go up or down in the size of the program depending on commodity prices and a variety of other factors, including our alternative investment opportunities, but that's what we have planned presently for activity. Netherlands capital investment on the existing E&P hydrocarbon properties will continue in our non-operated position that we have in offshore Netherlands gas. We will also continue with evaluation of the Netherlands CCS project, where the operator of that project plans about $3 million of capital investment that would be net to our account as they advance through the front-end engineering design phase en route to a FID decision, probably in the first half of 2025. The production volumes that we will be producing are hedged to a meaningful degree for the gas product.
We have one-fifth of our production hedged for TTF for Q2 and Q3 of this year, an equivalent Canadian fixed price of CAD 14.57 per MCF. In the winter, 2024-2025, that would be Q4 2024 and Q1 2025, we have hedged 40% of our TTF exposure at quite strong prices, a swap price on a portion of it at about CAD 14 Canadian per MCF, and a collar between a floor of CAD 13.74 Canadian with a ceiling of CAD 17.49 Canadian, all of these reflecting the very strong market that we have for natural gas in Europe. We have hedged also about a quarter of our winter AECO exposure, so that would be approximately Q4 2024 and Q1 2025 at a price of CAD 3.28 per MCF.
A good price, we feel, by Canadian standards, that hedge is a little bit in the black right now, but you can see the big disparity between the prices for natural gas that we get in Canada for our associated gas from Leduc-Woodbend as compared to the gas production that we have offshore Netherlands. And of course, something I'll touch on in closing, we're continuing our M&A efforts in our targeted regions of focus, primarily Europe, but also Latin America and potentially MENA. On the lower left, we show our production mix for 2024, about 43% Canadian oil and liquids, about 38% high-value TTF gas in the Netherlands, and the remaining 19%, the lower-priced AECO gas production. 2024 guidance remains unchanged, production of 2,700-2,900 BOED. We produced just below the upper end of that guidance in Q1 2024. That was before any drilling in Canada in 2024.
We maintain our current D&D CapEx or drilling and development CapEx guidance of CAD 23 million-CAD 25 million. Finally, on slide 11, I just want to reiterate our international strategy. We have made this what we think is a quite valuable but small acquisition of infrastructure and leasehold in Canada. I want to be very clear that even though we try to add to the value of the Canadian asset, well, we can. We've got a great asset here in Canada, and we'll make small deals around that existing field to further increase its value. The main focus of the company remains making acquisitions in the international market in the regions I mentioned, Europe, Latin America, MENA. We go there because there is, for these larger assets that we're talking about in the international arena, there's a lot less competition, we feel, than in Canada.
They come off at higher rates of return. That can be expressed as lower multiples on the initial acquisition, and we find a greater opportunity in those assets for operational improvements. And you'd find, I think, on similarly sized assets in North America and the combination of those two things, better value at entry and a greater opportunity for operational improvement in the international assets gives you a higher rate of return on invested capital in this international M&A market compared to North America. And as always, we'll be emphasizing our leadership and ESG practices, and I encourage you to look at our sustainability reports that are on our website. So with that, I will close and thank all of our listeners for your interest in Tenaz. We will look forward to speaking to you again when we release our Q2 results this summer. Thank you.