So we have the ability to pay off all that debt, but we believe that liquidity would be extremely important strategically, hence the issuance. We have a low average -- a low leverage profile of 1.2 times net debt to trailing 12 months adjusted EBITDA, coupled with the significant cash we have on hand, that provides us with financial flexibility to act quickly should we see additional acquisition opportunities arise. So in September 2023, we used about $27 million of cash on hand to purchase working interest in eight shallow Gulf of Mexico fields. In January 2024, we used about $72 million of cash on hand to purchase 100% working interest in six shallow Gulf of Mexico fields from Cox at all, adding 18.7 million barrels of oil of proved reserves.

So while we were very busy from a financial acquisition standpoint, we also executed operationally. So for the first, well, for the full year 2023, we generated $15.6 million in net income, $183.2 million in adjusted EBITDA and $63.3 million in free cash flow. We delivered strong production of 34,900 barrels of oil equivalent per day. And we continue to pay down debt with net debt falling to $217.3 million. We adopted a quarterly cash dividend policy paying an initial dividend in December 2023 and announced the first quarter 2024 payment will occur later this month. So we continue to execute at a high level generating strong adjusted EBITDA and free cash flow despite decreases in pricing because it's such an integral part of our strategy, I'd like to reiterate one more time.

The fourth quarter of 2023 marked the 24th consecutive quarter we have generated free cash flow. So coupled with our ability to pay down debt and improve our balance sheet, we're in a strong financial position in 2024 and we remain focused on operational execution to build on these solid results. So over the years, we've created significant value by integrating producing properties acquisitions, but it's not as easy or straightforward as you might think. After we close on any acquisition, we take time to assess and inspect the newly acquired fields, which potentially require shutting in some of the fields in the process. We have a large footprint across the Gulf of Mexico. So we look for ways to optimize operations, increase production, utilize that large footprint where we can and reduce costs to maximize value.

As we look to implement this culture of operational excellence, this can result in production deferrals and increase near-term investment to both bring fields up to our standards and increase production. So with over 40 years of experience integrating acquisitions into our asset base, we have proven that the near-term costs are well worth it to realize the long-term potential of the newly acquired assets to generate cash flow for us for many years to come. So in September 2023, we completed yet another accretive acquisition of properties in the Central Eastern Gulf of Mexico. These fields have a solid base of proved reserves with upside potential and the ability to add production and cash flow. We funded the acquisition of cash on hand and six months later, these assets are exceeding their forecasted production levels.

We're in the early stages of the same type of integration process with the recent Cox acquisition. These assets were in bankruptcy, and we're spending the first part of 2024 and expecting and assessing these fields. They're located in close proximity to existing assets, and we are identifying workovers, recompletion opportunities and facility upgrades that need to be performed to increase production. We have the experience and expertise to execute a tried and true acquisition and integration strategy that will allow us to drive value from these latest property additions for our shareholders. We paid around $100 million in cash for these two acquisitions over the past six months, and we still have the flexibility and dry powder to make additional acquisitions.

We will continue to generate free cash flow while paying down debt. And because we have no long-term rate commitments or near-term drilling obligations, we have the flexibility to ramp up or defer capital opportunities based on market conditions. Now turning to year-end reserve results. I would like to point out that we continue to see positive well performance and technical revisions, which demonstrates the strength of our world-class conventional Gulf of Mexico assets. This also directly points to our ability to enhance production and our reserve base through operational excellence. For the year ended 2023, we reported SEC proved reserves of 123 million barrels of oil equivalent, which did not include the 18.7 million barrels of oil of proved reserves we acquired in early 2024.

The 2023 reserves did include 4 million barrels of equivalent, positive performance revisions and an increase of 2.6 million barrels of oil equivalent due to the acquisition made in September. While we had strong performance from the factories we can control, we did see a decrease of 36.2 million barrels of oil equivalent due to pricing revisions as we saw natural gas pricing decreased by 58% in 2022 and oil pricing declined by 17% from 2022. Additionally, we had a production of 12.7 million barrels of oil equivalent in 2023. Despite only spending $41 million on CapEx and $27 million in acquisitions in 2023, we were able to replace about 52% of our production with reserve additions. In our year-end press release issued yesterday, we showed that the reserves associated with the Cox acquisition would have added 18.7 million barrels of oil equivalent and $250 million in PV-10 on a pro forma basis to our year-end 2023 reserves.

Pretty impressive numbers for the $72 million purchase we paid and I predict these reserve numbers will continue to increase absent further price decreases. The PV-10 value of our SEC proved reserves at year-end 2023 was $1.1 billion, approximately 41% of year-end 2022 SEC proved reserves were liquids were 30% crude oil and 11% NGLs and we had 59% natural gas. The reserves were classified as 67% proved developed producing, 17% proved developed nonproducing and 16% proved undeveloped. W&T's reserve life ratio at year-end 2023 based on year-end 2023 proved reserves and 2023 production was 9.7 years. So entering 2023, we strengthened our balance sheet by issuing new, I'm sorry, that's 2024, by issuing new 2026, I'm sorry, 2023. We strengthened our balance sheet by issuing new 2026 senior second lien notes at par, totaling $275 million in a private offering and used the proceeds along with our considerable cash position to retire all of our 2023 senior second lien notes.

This significantly reduced our interest payments, preserved financial flexibility and further improved our balance sheet. At year-end '22, the company had total debt of $693.4 million. And at year-end 2023, W&T's total debt was down 44% to $390.6 million. The total debt includes a $111.1 million balance of the nonrecourse Mobile Bay term loan. We also have nothing drawn on our $50 million secured revolving credit facility. So, yesterday, we provided our detailed guidance for 2024. In the first quarter of 2024, we had several facility and pipeline maintenance projects as well as prolonged downtime at several fields that have temporarily reduced our production volumes. We are predicting the midpoint of Q1 2024 production to be slightly better than Q4 2023.

We're also predicting production to increase through time and despite only projecting to spend about $35 million to $45 million in capital expenditures in 2024, we believe the recent acquisitions will help us to offset natural decline and grow production this year. So for the full year 2024, we expect to average 36,900 barrels of oil equivalent per day at the midpoint, which is about a 6% increase year-over-year. So we focus more on acquisitions over the last few years rather than on drilling many new wells. Our ability to maintain strong production numbers is a testament to our culture of operational excellence. So on the cost side, our guidance for LOE and gathering transportation and production taxes includes inflationary pressures that we've seen in 2023 and expect to continue into 2024.

In addition, we believe that we will have to spend additional costs to bring the former Cox assets up to our standards. With that said, we do believe that there are opportunities to reduce our operating costs, find synergies to drive lower cost long-term, and we're working hard to reduce costs without impacting safety or deferring asset integrity work. Our first quarter lease operating expense is expected to be between $77.5 million and $86 million, which reflects some of the expected inspection and upgrading work at the former Cox facilities as well as some maintenance and repair costs included with that. First quarter G&A costs are expected to be between $15 million and $17 million. I would like to sincerely thank our team at W&T as we are well positioned to add value in 2024 and everybody has worked pretty darn hard and the results are starting to show.

So even after the recent Cox acquisition, we have a solid cash position and additional liquidity that enables us to continue to evaluate growth opportunities, both organically and inorganically. We have a long track record of successfully integrating assets into our portfolio, and we continue to believe the GOM is and will continue to be a world-class basin. We do remain focused on operational excellence and maximizing the cash flow potential of our asset base. So as the company's largest shareholder, I believe W&T is very well positioned to succeed in 2024 and beyond. Our entire management team's interests are highly aligned with those of our shareholders, given our 34% stake in W&T's equity, which is one of the largest of any public E&P company.

Operator, we can now open the lines for questions.

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