In the fourth quarter of 2021, we had net income on a GAAP basis of $292 million or $7.34 per diluted share as compared to $198 million or $5 per share in the previous quarter.
Adjusting for certain items, but primarily the mark-to-market of our hedging transactions, we had adjusted net income of $168 million or $4.23 per diluted share in the fourth quarter as compared to $142 million or $3.57 per share for the previous quarter.
Adjusted EBITDAX was $226 million compared to $201 million in the previous quarter.
Our production on a barrels of oil equivalent basis remain relatively flat quarter-over-quarter, averaging 92,800 BOE per day compared to a third quarter production of 92,100 BOE per day.
Oil production for the fourth quarter averaged 52,900 barrels of oil per day, which is up slightly from 51,800 barrels of oil in the third quarter.
And NGL prices continued to be strong in the fourth quarter at an average percentage of WTI oil of around 37%.
Just for context, this compares to less than 20% that we were experiencing in the same quarter last year.
The company invested capex of about $66 million during the fourth quarter to bring 16 gross, 12 net wells on to production and we drilled 17 gross, 10.4 net operated wells.
We ended the quarter with 34 gross, 20.2 net drilled and uncompleted wells.
Lease operating expense was $62 million for -- or $7.31 per BOE for the fourth quarter of '21.
Our cash G&A expenses were $12 million for the fourth quarter and for the year totaled about $39 million, averaging right around $1.16 per BOE for 2021.
We did see a dramatic increase year-over-year with the estimated total proved reserves totaling 326 million BOEs with a pre-tax PV10 value of $4.4 billion at year-end compared to 260 million BOE and $1.2 billion at the year-end 2020.
Pricing under SEC rules increased by approximately $27 per barrel to $66.56 per barrel at December 31, 2021, compared to December 31, 2020.
Gas increased to $3.60 per MMBtu compared to $1.99 for the same two periods.
Obviously, these price changes were the biggest factor in the year-over-year changes, but we also added 20.3 million BOE through the drill bit and 16 million BOE with acquisitions, which more than offset the decrease from selling our Colorado assets.
Lastly, I'll point out that our proved developed properties accounted for roughly 80% of our total proved reserves with approximately $3.6 billion in value.
It's worth noting that this value is at SEC pricing of around $67 per barrel of oil as compared to spot prices today.
As such, the board approved a quarterly dividend of $0.25 per share that will be paid beginning in March, which was only the first step of our capital return program.
When we look out over the next four years and consider a $70 price environment for WTI crude, we see our company generating free cash flow in an amount approximately the same as our current market cap.
With our current hedges in place and using the $70 price for WTI and $4 for gas, we model over $900 million in EBITDA, resulting in over $500 million of adjusted free cash flow, which demonstrates that we can continue to grow our return to capital program while also continuing to pursue acquisition opportunities that will compete with our current profile.

Summary:
In the fourth quarter of 2021, we had net income on a GAAP basis of $292 million or $7.34 per diluted share as compared to $198 million or $5 per share in the previous quarter.
Adjusting for certain items, but primarily the mark-to-market of our hedging transactions, we had adjusted net income of $168 million or $4.23 per diluted share in the fourth quarter as compared to $142 million or $3.57 per share for the previous quarter.