Hello, I'm Tony Marino, President and CEO of Tenaz Energy. Thank you for joining us for this brief discussion of our first quarter results. Before we get started, please note our advisory on forward-looking statements. Let's start with a review of our Q1 2023 operating and financial results. Turning to slide four. Production averaged 2,337 BOED in the first quarter. That was an increase of 54% from Q4 2022 and 132% from Q1 2022. Production was up in Canada by 10% from the previous quarter and by 55% from a year ago, driven by our successful well results and good uptime in our field. Netherlands produced 777 BOED in Q1, reflecting its first four full quarter of contribution after closing that deal in the final days of December 2022.
Operating netback was over $55 per BOE, a 31% increase from Q4 2022. benefited both from good results in Canada and also the very high margin contributions from the Netherlands gas. When we combine the operating netback with the increase in production volumes, we generated CAD 7.3 million of FFO or funds flow from operations in Q1 2023, a substantial increase, 125% higher than the previous quarter. The next step in our free cash flow sequence is to deduct off capital spending, we find that we generated free cash of CAD 6.6 million in Q1, a strong level, reflecting both the higher FFO and a relatively low set of level of capital activity during Q1.
Net income was CAD 2.9 million, nearly a tripling over Q4 2022 and down a little bit from the year earlier period. Really there just driven by having a big impairment reversal which benefited Q1 2022. We continued with our share buyback program or NCIB, retiring another roughly 400,000 shares as of the end of April, for the first four months of the year at an average cost of CAD 2.27 per share. Our share count is now down 3% over where it was at the time of our recapitalization in late 2021. Our net working capital surplus continues to increase.
We have no debt, and we showed approximately $19 million of adjusted working capital as of the end of Q1. That reflects the free cash that we generated during the first quarter. On Slide five, let's take a look at our liquidity position and our market cap. What we find at the top of this Slide is a progression of our, we would think of this as our available liquidity, over the history of Tenaz. We're creating a plot here with four points in time. Year-end 2020, which was actually Altura before the recap. Year-end 2021 after the Tenaz recapitalization. Year-end 2022, following the Netherlands acquisition, and then Q1 2023 that we just released.
The way this chart is set up on the top of slide five is that we start with a gray bar on the left of each of these points in time, showing our adjusted working capital. A blue bar that reflects available bank debt capacity. We combine those two in the with that third lighter gray bar to show the net liquidity available to the company. If you look at December 2020 before the recap, a little bit of negative net working capital, some bank line available and a pretty low liquidity position before the recapitalization. After the recapitalization, we had significant cash on hand and positive net working capital, small bank line at that point, and combined liquidity that was in excess of $ 20 million.
After the acquisition at the end of 2022, and with the continued drilling activities that have driven up our production in Leduc-Woodbend in Canada, we had a combined liquidity position just under $20 million at the end of 2022. Now at Q1 2023, we have higher positive net working capital. We have our full bank line available, having repaid the bank, the balance on the bank line that we used to effect the acquisition. In combination, we have now nearly CAD 30 million of liquidity available for our acquisition strategy, and that would be available to us even before we would seek additional equity or debt in the market.
The point here being that we think we're internally generating some good firepower for acquisitions, and we would expect to augment that with additional issuance that, you know, we believe would be available in the market to get those deals done. The table at the bottom of slide five is just a brief tally of our market cap. At our current share price, we have about a $60 million equity market cap. When you deduct off that nearly $19 million of net working capital, we have an enterprise value of just $ 40 million.
We have a note there at the bottom that denotes that we do have significant Tenaz insider ownership, about 9% of the basic shares and 22% on a fully diluted basis. We definitely want our management aligned with the interest of shareholders. We are owners in the company, having made investments at the time of the recapitalization. We've had additional investments by our directors since the recap. A number of them have bought stock over recent periods. Certainly, our philosophy is to have the D&O in this company participating in the same way that the shareholders do in what we intend to be the continued success of Tenaz. One more point I would make before I leave this slide.
We show this combined total liquidity at the highest level in the company's history. We have done that while production has been increased by 2.3x since we effected the recapitalization. If you take an annualized funds flow from this quarter and compare it back to the pre recap levels, FFO was up on the order of 8x from what we had at that time. We're maintaining our firepower in the bank, building up cash balances and still growing the company. Next, let's briefly review our outlook for 2023. During the summer, we'll conduct our four well drilling program at Leduc Woodbend, 3.35 net wells. We've had inflation forces in the industry abate to some degree from last year.
With prices where they are today, we should have very high rates of return from those wells, and we'll be getting the production impacts from them in the second half of the year. We'll be making some minor facility enhancements at Leduc Woodbend. We're well set up there with our infrastructure for future growth, but these will allow a little bit more efficient production operation and really enhance that magnitude of growth that we can handle over the long term with this small level of facility investment that we're going to make this year. We've had a small level of capital investment in the Netherlands asset to date. That'll be a little bit higher for the rest of the year.
We'll maintain at present our capital guidance for both parts of the company, resulting in a capital guidance range of $ 20 million-$ 24 million. With respect to production, we were above the top end of our guidance range for Q1. We'll probably have a minor reduction in production from those levels in the middle part of the year. Once the drilling and work overactivity that I discussed kicks in, we should be substantially up in Q4 and we are at present also not changing our production guidance range. The main effort in the company is to continue the M&A activities that we have currently ongoing. e‑evaluation, offers, negotiation of new deals. I think our pipeline is very strong.
I think that the market is better situated for us now that we're past the big run-up in prices in 2022. We've got still quite strong price levels, but I think greater realism on the part of sellers. While we can't guarantee any specific deal out of the pipeline that we have, we're optimistic that we'll be able to continue the acquisition growth that we started with the Netherlands asset that we bought at the end of last year. That, that guidance, summarized on the lower right. We'll point out the production mix in the company. I think nicely diversified and quite high netback. Significant contribution from Canadian oil, and NGLs, and a small contribution from AECO.
Most of that is fixed in price for this year, with about a third of our mix now coming in from that high-margin Netherlands gas. In summary, our progress at Tenaz continues. Remind you that we are TNZ on the TSX. Our primary business strategy is to acquire and exploit assets in the international market. Our primary area of geographic focus is Europe and MENA, with a secondary opportunity for acquisitions in the Americas. We have an existing very strong return Canadian oil growth project in our portfolio. It's now paired with a very strong free cash flow producing European natural gas asset.
I'll point out that the forward prices for European natural gas are supportive of very strong free cash levels for this asset at the prices indicated in the market for the remainder of 2023 and for 2024. Our company is debt-free. As I discussed earlier in the financial section, record levels of liquidity available for our company to implement that acquisition strategy. We continue to generate free cash out of the existing assets. We have historically been able to access capital markets, equity markets, and debt markets as necessary to effect bigger deals. We do feel that our management has a strong record of value creation in this model of M&A with follow-up operational improvement.
I'd point out that what we've been able to do with the Canadian asset in terms of driving up production levels with free cash and with improved capital efficiencies is an example of what we intend to do in the international market as we make deals and operate them and subsequently improve the performance. This is all wrapped within a growth in income capital markets model that we've had success with for shareholders in the past. Very much appreciate the support of our shareholders. We're looking forward to our AGM on June 1, which we invite you to attend, and our next discussion about our Q2 results. Thank you again, and I would ask you finally to note the disclaimer on slide nine . Goodbye.