Oil pricing continued to be volatile and continues today to be volatile, especially with respect to the discounts being charged in Canadian oil production in the first quarter, including synthetic crude oil. The discount climbed dramatically in the first quarter from the last quarter in 2011, as planned and unplanned maintenance issues caused a number of refinery shut-ins during the first quarter and into the early part of the second quarter. As expected, as these refineries are placed back online, the discount is tightening up again. Additional pipeline capacity, some of which is under construction and close to being completed, should also help to alleviate these discounts and the disconnect between Brent pricing and WTI pricing.
We are at a very strong financial position, with our operation providing cash flow to carry out our capital programs; take advantage of any opportunistic acquisitions that may arise; pay dividends, an increase of 17% over last year; and buy back shares if appropriate. Our teams are strong, and we are looking forward to carrying out our objectives over the remainder of 2012.
Now I'd like to turn the call over to Steve for a more detailed analysis on the properties. Steve?
Steve W. LautThanks, John, and good morning, everyone. In the first quarter, Canadian Natural continued to execute our proven strategy, based on effective and efficient operations and optimizing capital allocation to ensure we maximize the return on capital, generate free cash flow, maintain our strong balance sheet through the price cycles, transition our asset base to a more sustainable long-term asset base and provide the ability to increase dividends on a consistent basis. Canadian Natural was one of the few companies in our peer group that has a strong, well-balanced and diverse asset base with significant upside in each component of our business. We have, on a consistent basis, been able to effectively allocate capital and maximize return on capital over the long run and throughout commodity price cycles. Today, with oil prices and low -- strong oil prices and low gas prices, Canadian Natural continues to allocate capital disproportionately to oil projects. Read the rest of this transcript for free on seekingalpha.com