The company also recently increased its natural gas hedging position. For the full-year 2013, Devon now has approximately 1.3 billion cubic feet per day protected at a weighted average floor price of $3.87. This position covers approximately 60 percent of the company’s expected natural gas production in 2013.Operating Costs Reflect Increased Oil Activity In aggregate, the company’s pre-tax, cash costs totaled $14.36 per Boe in 2012, a 7 percent increase compared to 2011. Devon’s cost management efforts and efficient operations partially offset the full impact of industry inflation and a shift toward oil projects. In general, oil projects are more expensive to develop and have higher operating costs than gas projects. In the fourth quarter of 2012, expenses in most categories were generally in line with expectations. However, general and administrative expenses of $198 million or $3.17 per Boe exceeded estimates. This was primarily due to $21 million of costs associated with the early settlement of pension obligations during the fourth quarter. Depreciation, depletion, and amortization expense (DD&A) increased to $11.73 per Boe in the fourth quarter. The DD&A rate was attributable to the impact of price-related reserve revisions and an upward adjustment in future development cost assumptions. Joint Ventures Strengthen Balance Sheet and Liquidity In 2012, Devon successfully entered into two exploration-based joint ventures, delivering almost $4.0 billion in value to the company. The transactions included $1.3 billion in cash payments along with $2.6 billion of drilling carries that fund roughly 70 percent of the company’s capital requirements in the joint ventures. During the year, Devon generated cash flow from operations of $5.0 billion. When combined with cash payments from the closing of two joint venture agreements and other minor asset sales, Devon’s cash inflows totaled $6.5 billion in 2012. The company exited 2012 with a very strong balance sheet. At December 31, 2012, the company’s cash and short-term investments totaled $7.0 billion, and Devon’s net debt to adjusted capitalization was 18 percent.