We view what was a very quiet second quarter as very positive on a number of fronts. From an operations perspective, the production performance from our Q1 drilling program has been very positive. In the press release, we've outlined the 60 and 90-day production performance of a number of our projects we did in the first quarter and are very pleased with those results and that performance.Especially with regards to the horizontal wells drilled in the Cardium, which are outperforming a great number of the Cardium wells that have been drilled and have that kind of production history, as well as our Doe Creek light oil plant at Hythe is performing very, very well as is our Falher horizontal gas well and our Bluesky at Hythe. The Q1 drilling success at Wapiti in the Nikanassin and Bluesky did prompt us to construct in the second quarter here a 15-kilometer $3 million pipeline, 100% owned by Delphi, that connects us more directly to the Deep Cut facility of Devon's, which we also have a working interest in. Now, this pipeline will increase our total infrastructure takeaway capacity from the area to over 20 million a day with an average NGL content of about 18 barrels per million or in total about 5,000 BOEs a day, setting us up for a continued unimpeded growth like we've been delivering at Bigstone and Hythe. So we're very, very excited about the results that we've had in Wapiti. And this positive performance gives us the confidence to continue to develop and move forward everything that was successful in the winter program, and that's reflected in the second half drilling program we've outlined. And we have a much greater confidence level in advancing a number of these scalable growth-oriented project types on the horizontal drilling front.
From a financial perspective, Brian will get into much more detail, but I'm very pleased with the strong cash flows, especially on a per unit base, despite AECO being $4 in the quarter. And part of that was certainly due in part to increasing oil and NGL component, but also our strong production.Our operating cost reductions continue to play an important role in being efficient and economic in this environment. We saw our royalty rates increase slightly, but that's really due to our increased oil and NGL production. And Brian will talk more on that. We continue to benefit from the strong hedge position, and we'll beat AECO again this time by 36%. So that continues to play a strong role in our financial strategies as well continuing to pursue greater components of oil and NGL in our mix. So we remain very optimistic and confident in our ability to execute in what continues to be a challenging environment from a gas pricing perspective, but things are going very, very well. So with that, I'll turn it over to Brian and he will provide some comments around the financials, and then I'll come back and talk about the second half capital program. Brian Kohlhammer Thanks, Dave, and good morning, everyone. From a financial perspective, we're focused on two primary objectives. One is maintaining our strong financial position, our balance sheet, with the strong position we've got there, and also having a recycle ratio of at least 2-to-1. As we've talked about before, we're focused on generating an operating netback recycle ratio of approximately 2.4-to-1 and a cash netback recycle ratio of about 2-to-1. Generating recycle ratio of greater than 2-to-1 will provide us with the cash reserves to pursue our planned capital program to grow production and reserves and add considerable value to the company for our shareholders. At a minimum, we strive to achieve a cash netback of at least $20 per boe and planning and development cost of $10 or less for two key reserve additions. Read the rest of this transcript for free on seekingalpha.com