MESSAGE FROM THE CEO
The first quarter of 2019 was active as we invested $44.6 million for drilling, completions, pads, facilities and artificial lift in our South Berthold and Antelope areas that included drilling six (5.4 net) wells and fracing two (1.5) net wells. PetroShale also successfully acquired land and working interests within our core South Berthold area for approximately $2.0 million, further strengthening our existing portfolio of high-quality assets in the heart of the North Dakota Bakken / Three Forks play.
Our average quarterly production was 52% higher in the first quarter of 2019 compared to the same period in 2018 as a result of new wells that were brought on-line during 2018. Average production in the first quarter of 2019 was 16% lower relative to the fourth quarter of 2018 due to downtime at certain wells to install artificial lift and/or shut-ins for offset fracing. Currently these wells are back on-line and will contribute to higher production volumes in the second quarter of 2019.
During the first quarter, the Company's realized oil prices decreased to an average of $64.10 per Bbl compared to $74.02 per Bbl in the same period of 2018 and $64.89 per bbl in the fourth quarter of 2018 as a result of lower WTI benchmark prices. Bakken crude oil price differentials narrowed significantly in the first quarter of 2019 to US$6.35 per Bbl from US$9.61 per Bbl in the fourth quarter of 2018 following a return of refinery capacity and a reduction of Canadian oil supply as a result of Alberta production cuts.
Adjusted EBITDA for the first quarter totaled $9.6 million, 12% lower than the first quarter 2018 and 18% lower than the fourth quarter 2018, reflecting softer prices, lower netbacks and reduced production levels during the period. Operating netbacks for the first quarter of 2019 averaged $23.86 per Boe, compared to $25.57 per Boe in the fourth quarter of 2018 and $42.09 per Boe (prior to hedging) in the first quarter of 2018, reflecting the commodity price environment coupled with higher operating costs associated with workover activity on both operated and non-operated wells.
Operations Update and Outlook
Our current production has increased to approximately 6,200 Boe/d, which is in line with previously provided guidance of 5,000-6,000 Boe/d on average during the first half of 2019.
Our operated drilling rig continues to do well and will finish drilling four (2.3 net) wells this week and then commence the drilling of three (1.5 net) wells next month. Also, this week we finished fracing three (2.85 net) wells and will commence fracing two (2 net) wells in June and another 4 (2.2 net) wells in August. These wells and two wells at Primus East are forecasted to be on-line and producing at various times during the second half of the year. All of this activity will lead to higher production that is expected to average between 10,000 and 11,000 Boe/d over the second half of the year with an expectation to exit 2019 at approximately 11,000 Boe/d.
PetroShale continues to stay active as we carry out our development plans with a focus on strong operational execution and value creation in the heart of the Bakken play.
As always, we wish to thank PetroShale's employees, directors and shareholders for your continued support and look forward to updating you on our progress and achievements in the future.
President & CEO