A replay of this call will be available today later on through a link on our homepage. As usual, our call will contain some forward-looking estimates. And we will be refining some of those in our call today, but we are not planning to issue a new 8-K. We will, however, post those changes to the guidance page of our website. To find that, just click on the Guidance link found in the Investor Relations portion of the Devon website.Please note that all references today to our plans, forecast, expectations and estimates are forward-looking statements under U.S. securities law. And while we always strive to give you the very best information possible, there are many factors that could cause our actual results to differ from those estimates. We urge you to review the discussion of risk factors and uncertainties that we provide in our SEC Form 10-K filing, provided that is. Also in today's call, we will reference certain non-GAAP performance measures. When we use these measures, we're required to provide related disclosures. Those are also available on the Devon website. The First Call mean estimate for Devon's earnings for the first quarter was $1.43 per share. However, at the midpoint of the guidance we provided, you would've expected our first quarter earnings to come in at $1.35 a share or $0.08 below The Street estimates. However, our actual first quarter non-GAAP results came in at $1.05 per share or $0.30 below our guidance. This was most almost entirely due to unusually wide differentials on Canadian oil and U.S. NGLs. Jeff will cover both of these, as well as our expected future price differentials in detail later in the call. With those items out of the way, I'll turn the call over to John. John Richels Thank you, Vince, and good morning, everyone. Although, as Vince mentioned, wide differentials had a significant negative impact on earnings, we delivered another very solid quarter from an operational perspective.
Our North American onshore production reached an all-time record, averaging 694,000 equivalent barrels per day in the first quarter. This represents a 10% increase over the year-ago quarter and that was led by 26% growth in oil production. On a sequential quarter basis, a 7% increase in oil and NGLs production more than offset a 1% decrease in natural gas production.We continue to bolster our future oil potential by assembling significant acreage positions in additional new oil plays, and we continue to do a very good job of controlling costs. Pretax costs -- or pretax cash costs per unit of production increased only 1% from the last quarter of 2011. And even in an environment of weak commodity prices, we delivered net earnings of $393 million in cash flow of $1.4 billion. Devon's financial position remains rock solid. We ended the quarter with the $7.1 billion of cash on hand, and we continue to have one of the lowest debt-to-cap ratios in the industry. This financial strength is especially important given current natural gas prices. The economics of drilling dry gas wells are unattractive, and reduced cash flow from lower pricing makes sustaining investment and higher-margin oil- and liquids-rich gas more difficult for many. Our financial strength allows us to continue to fund a robust E&P capital program directed entirely towards oil- and liquids-rich opportunities. The economics of these projects are enhanced by low royalties, reasonable operating costs and by our midstream operations. In aggregate, our 2012 drilling activity will deliver oil production growth in excess of 20% and double-digit growth in NGLs. And more importantly, the projects driving this growth are delivering very attractive rates of return. Read the rest of this transcript for free on seekingalpha.com