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These low-decline assets are free cash flow positive and adjacent to our current operations, and that provides us the opportunity to recognize increased scale, rationalized operations and capture cost efficiencies to further grow cash flow. The total discounted P&A liabilities associated with these properties is very low at $26 million, and the abandonment costs don't occur until well into the future due to the long-live nature of these assets. We have the opportunity for future growth in reserves from potential field life extensions with little or no capital as well, and also through drilling a facility, upgrade opportunities. The transaction will expand W&T's presence to become the largest operator in the area.

Closing is expected at the end of August, and the transaction continues to move forward as planned. Based on that closing date, we expect to benefit from the added production revenue and adjusted EBITDA beginning in September. We believe this acquisition perfectly complements our ongoing strategy and enhances our ability to generate value for our shareholders. So turning to our second-quarter results.

We're very pleased with our performance, in particular with the increases in production and adjusted EBITDA that we generated, compared to the first quarter of 2019. We grew adjusted EBITDA by 32% to $75 million while investing $31.6 million in capital expenditures, excluding acquisitions, and maintain an active drilling program in the Gulf of Mexico where four rigs run. This is very important as we continue to create significant value by generating over $40 million more of adjusted EBITDA versus our capex. One of the pillars of our success is our ability to generate positive cash flow.

So in the second quarter of 2019, our production increased 5% to 35,045 BOE per day or 3.2 million barrels of oil equivalent compared to the first quarter of 2019. We continue to have strong liquids production with 61% of our second-quarter production coming from oil and NGLs. Even though production for this -- for the first and second quarters of 2019 were over the end-production guidance, we experienced above-normal, non-operated and third-party downtime issues, as well as facility dial-back. Production downtime in the first half of 2019, including -- included several large, nonrecurring operational events at major fields, including Mahogany, Big Bend and Dantzler.

As you saw in yesterday's release, we have increased full-year 2019 production guidance to a range of 38,900 to 42,200 barrels of oil equivalent per day. This includes our initial estimate of production from the Mobile Bay acquisition beginning in September and incorporated all of the year-to-date production deferrals created by operational and Hurricane Barry downtime and our estimated downtime for the balance of 2019. For the third-quarter 2019, W&T's production guidance is expected to be between 38,600 and 42,500 barrels of oil equivalent per day. For the second quarter of 2019, the average realized crude oil sales price was strong at $64.86 per barrel, and realized NGL sales prices -- and excuse me, realized NGL sales price was $17.59 per barrel.

Crude differentials in the second quarter averaged about $5 per barrel higher than the average WTI Cushing spot prices. This reflects increased demand for GOM oil production proposal refineries. Revenues in the second quarter increased 16% to $134.7 million. The higher revenue was driven by an increase in realized commodity sales price and higher sales volumes.

So our second-quarter LOE came in at $40.3 million, which was 7% lower than the prior quarter and below our guidance range, primarily due to lower workover costs, resulting from delays in the timing of planned projects. We adjusted our third quarter and full-year guidance on LOE to account for the additional costs associated with the GOM Mobile Bay acquisition in the second half of 2019, as well as additional workover facility projects. We also adjusted our gathering and transportation costs going forward to account the acquisition, as well as rate increases we've experienced from third-party pipelines. I would like to point out that our full-year 2019 G&A cost estimate is essentially unchanged despite adding significant new production volumes from the acquisition.

This was a key positive factor in taking on these additional properties. We reported net income in the second quarter of 2019 of $36.4 million or $0.25 per share, which significantly outpaced the consensus estimates of $0.10 per share. Our adjusted net income was essentially the same at $36.5 million or $0.25 per share. I am pleased to report that we received word from the IRS that our refund claims have finally been approved, and we expect payment of about $54 million in the third quarter which will greatly enhance our cash position.

At June 30, we had $65.7 million in cash and cash equivalents and $221.8 million of availability under our revolving bank facility. This has netted the $10 million deposit we made on the Mobile Bay acquisition. As of today's date, we've now reduced our revolver and are undrawn on that RBL facility, so the full $250 million is available. As discussed in our earnings release, we recently received our midyear 2019 reserve report prepared by Netherland, Sewell, our independent reserve engineering consultants.

SEC proved reserves as of June 30, 2019, were 84 million barrels of oil equivalent. And our PV-10, it was -- reserves was $1.4 billion, both essentially unchanged from year-end 2018. The midyear 2019 reserves, which were 72% proved developed and proved developed non-producing, were 58% liquids. Good news here is that the combination of positive revisions of previous estimates and new reserves in the first six months of 2019 replace year-to-date production and revisions due to lower pricing.

Keep in mind, these midyear reserves do not include interim reserves related to the pending Mobile Bay GOM property acquisition. The midyear SEC PV-10 was based on average crude oil price of $61.45 per barrel, compared with $65.56 at year-end 2018 and an average natural gas price of $3.02 per Mcf, compared with $3.10 at year-end 2018. So turning now to operations at our Mahogany field, we brought the A-19 well online in late November last year. As a reminder, the A-19 well already exceptionally high-quality, T-Sand bay, up a bit from the P-sand first discovery of the A-14 well.

In February, the well reached a rate of over 5,000 barrels of oil equivalent per day of production, and in April, produced a rate of over 6,000 barrels of oil equivalent per day. We are continuing to perform -- or to perform a staged ramp-up in production on the well. And in early July, the well was producing at a rate of over 7,000 barrels of oil equivalent per day. This well is our third producer in the T-Sand and has, thus far, shown significantly higher rates of early production than T-Sand well drilled to date in the field where the productivity index is more than double the best prior to completion in the field.

So we're getting better at completing and drilling these wells. Following the recent successful workover on the A-8 well to restore safety valve functionality and enhanced productivity of this P-sand producer was able to skid over the A-6 well to confect the sidetrack in order to accelerate production from another pay zone log in the A-19 P-sand producing well. Following sidetrack and completion of the A-6 well, rig we'll then move to the A-12 sidetrack well targeting further development of P sand. As a reminder, we have a 100% working interest in all of the Mahogany field wells with the exception of the A-5 sidetrack, which is part of the Joint Venture Drilling Program.

At new Ewing Bank 910 deepwater fields last year, we completed the South Tim 320 A-2 well that logged approximately 163 feet of net pay, which exceeded predrill estimates. We brought that well online in December. And in late June, the well was producing at a rate of approximately 7,100 barrels of oil equivalent per day. The South Tim 320 A-3 well was successfully drilled in the first quarter of 2019 and discovered two high porosity and high permeability of sand zones.

This well is currently on flowback. Both of these wells are in the Monza with your drilling program. At Viosca Knoll 823 deepwater Virgo field, we drilled the A-13 well, utilizing the Virgo front-owned rigs that TD in the fourth quarter and accounted 77 feet of net vertical pay in the 2.4-second and 3.4-second sand intervals. The well was brought online in the first quarter of 2019.

It is currently producing over 3,000 Mcfe per day out of the 2.4-second sand zone. We plan to complete the 3.4-second zone in the future. On June 5, we announced an oil discovery at our first exploration well in the -- in 2019 at Gladden Deep. W&T operated the well, which is one of the 14 wells planned in the drilling program under the Monza JV.

The company owns a 17.25% interest in discovery. We are currently completing the well, and it's expected to be brought online through the existing Gladden pipeline to the Medusa Spar fourth-quarter 2019 via a subsea tieback. We continue to be pleased with our Monza JV and have drilled a total of nine wells in that program since inception. So W&T was recently awarded all 15 of the blocks on which we will have better than March of 2019, Gulf of Mexico Lease Sale 252.

This included eight deep water and seven shallow water blocks. These include deepwater blocks in Garden Banks between Canyon and Mississippi Canyon 244 and shallow water blocks in Eugene and Main Pass and South Marsha Island. These 15 blocks added approximately 73,500 gross and net acres to W&T's inventory. We paid approximately $3.5 million for all the awarded leases combined, which reflects a 100% working interest in the acreage.

All of the blocks have a five-year lease term with the exception of one of the deepwater blocks, which has a seven-year lease term. Royalty rate for the eight shelf block is 12.5%, and the remaining seven deepwater leases are at a rate of 18.75%. Of the 30 companies participating in the lease sale, W&T ranked fourth in the number of the parent high bids. We see some exciting opportunities on the acreage we've acquired.

They're going to be available for future drilling. So looking ahead to the rest of 2019, our capital program, excluding acquisitions, will continue to be focused on low-risk, high-return development projects with some exploration wells. We're adding an exploration well in the growing schedule in the second half of the year, which, assuming success, would enhance 2020 production, as well as taking into account a different mix of planned projects, which results in an estimated budget of $125 million to $155 million for 2019. Our focus remains on generating significant free cash flow, which means that we will take a measured approach to drilling while continuing to fund our capital expenditures, excluding acquisitions, with available cash and cash generated from operations.

So we're clearly focusing on cash-flow-positive projects, whether that's with the drill bit or making acquisitions. That's very important to us and has probably been our biggest consistent accomplishment. Our Mobile Bay acquisition is expected to generate strong free cash flow for us. We have the formulas worth over three decades driven by cash flow and capital discipline.

We still see a good market for TON acquisitions, and we'll continue to review new opportunities that meet our criteria and allow us to further grow cash flow and shareholder value. We're very optimistic about the future of W&T. We have a premier portfolio of both shallow water and deepwater properties with significant upsides that will be further enhanced by the pending acquisition in recent GOM lease sale. We remain focused on executing our long-term strategy while maintaining our strong balance sheet, continuing to develop and deliver near-term results by operating efficiently and mitigating risk to maximize shareholder value.

We're well-positioned to continue to focus on growth, and we believe that the Gulf of Mexico is an excellent basis in which to achieve that growth and additional cash flow. So with that, operator, we can now open the line for questions.

Questions & Answers:

Operator

[Operator instructions] Your first question comes from Mike Scialla of Stifel.

Mike Scialla -- Stifel Financial Corp. -- Analyst

So could you talk at all about the acquisition? Just wondering in terms of the timing of potentially consolidating the gas plants, how quickly could you do that and what the savings there might be? And any plans to drill on the new properties at all?

Tracy Krohn -- Chairman and Chief Executive Officer

I'll address the first part of that question. I actually went to Mobile Bay last week and toward both of those plants and talked to some of the -- talked to our own folks and some back [Inaudible] folks. Actually, we have plans to think about consolidating. But I temper that with the idea that we will be drilling in the future.

I hope that it supports, fully utilizing the Exxon GOM plant, assuming success. And I would hope that potentially making additional acquisitions in the area will fill up our Yellowhammer plant. So my ideal situation is we use both plants so -- and because we're generating a lot of production. So in the event that we're not able to accomplish that within a reasonable amount of time, we would consolidate the plants.

OK. So on -- and that answers part of your question. Your second part of your question about drilling, we do have prospects that we've looked at that we want to drill, and we're working toward that goal now. I can't give you the exact date on that yet.

We're actually meeting with the Alabama Oil and Gas board today to see that firming up some of that and what we need to do. It's just been a long time since any wells have been drilled in this field. I actually worked for Mobile many years ago when we made the discovery here. I like to tell people I've been working on this transaction for about 40 years, so the wells were deep and high pressured, and they had some unique challenges in these northward producers.

So we'll make sure that when we commit, we'll do it right and move forward with that program.

Mike Scialla -- Stifel Financial Corp. -- Analyst

That sounds good. You mentioned you're still reviewing acquisitions. I want to see if I could kind of gauge your appetite for doing another one potentially this year. Or do you need to take a breather and focus on fully integrating the Mobile Bay deal? And it sounds like you see additional opportunity in that area specifically.

Is that something that you could get done this year? Or is that further down the road?

Tracy Krohn -- Chairman and Chief Executive Officer

I absolutely intend to do more acquisitions before the end of the year. We're wide open. We believe that our balance sheet is in good shape, and then we have the financial wherewithal to do it.

Mike Scialla -- Stifel Financial Corp. -- Analyst

Very good. One last one for me. I -- can you talk at all about the timing of getting Gladden Deep completed? You mentioned you should have it online in the fourth quarter with the tieback. But just wondering if -- you announced the discovery a couple of months ago.

Wondering if there were any issues there in getting it completed? Or are we doing any sort of extensive testing? Or is that just sort of the normal time frame to get a well like that completed?

Tracy Krohn -- Chairman and Chief Executive Officer

Well, I'm going to put my VP drilling completions and facilities on the hot spot right now since he's right out here looking at me. So, David, you want to answer that?

David Bump -- Executive Vice President of Drilling, Completions, and Facilities

Yes. Sure enough. This is David Bump. We're in the middle of -- we're doing a completion right now.

It's -- it began from a plan of singles-owned completion to a two-zoned completion. So that's adding some time, as well as the -- a delay from the Hurricane Barry, as well caused some delays. However, we're on track to have the well completed by the middle of -- the end of August. And it's a 60-foot tieback and already has existing infrastructure, and we already have that prepared for early to mid-September to meet our early fourth-quarter target.

Operator

And your next question is from Mike Kelly at Seaport Global.

Mike Kelly -- Seaport Global Securities -- Analyst

Great quarter. And I was hoping maybe you could give us a little bit of a preview for what you're going to tap for 2020. If -- just in kind of broad brush terms which is vacant in terms of the capex program, what we could expect potentially for organic growth. I know you've got kind of a number of balls in the air, some moving parts, but let me just frame it as it stands right now.

Tracy Krohn -- Chairman and Chief Executive Officer

Yes. That's a great question. We're actually right in the middle of that budget process as we speak here today, I have better answers on that for you, Mike. First part of the year, I will tell you that, clearly, production's going up.

I will tell you that, clearly, I would think that our budget goes up. I can't forecast how much at this point in time, but we see more acquisitions on the horizon, and we're trying to figure out what is an appropriate way to budget for those. We don't normally budget for acquisitions, but I think that there's a good enough market going forward that we need to be thinking about that.

Mike Kelly -- Seaport Global Securities -- Analyst

Got it. Appreciate that. Maybe you could shift gears a little bit and talk about exploration. You mentioned that you'll have an exploration rig in the second half of '19.

And maybe, if you could, just give us a sense of what you're really targeting on the exploration front. And then just remind us, in the success case scenario, how quickly exploration can turn into development to online production.

Tracy Krohn -- Chairman and Chief Executive Officer

Yes. The well we're referencing is a deepwater well. I'm expecting that online within a couple of years, max, I would say. My drilling guys are saying, well, maybe even a little sooner than that.

But I'm going to be a little bit more conservative and call it a couple of years. We're assuming if we find reserves there, it will be reasonably substantial.

Operator

And your next question is from Zach Pancratz with DRZ.

Zach Pancratz -- DRZ -- Analyst

Congrats on a great quarter. I understand the appetite for acquisitions given how accretive the acquisitions you have made year to date, especially on the Exxon position here recently. But with your stock at -- in the low $4 range, at what point does it make sense to start buying back your own stock with the free cash flow you're currently generating? Just kind of your opinions on that given I imagine you're not happy with where the stocks trade at.

Tracy Krohn -- Chairman and Chief Executive Officer

No. Well, no. It's in our job to never be happy where it's trading at, but I will tell you that buying back stock is an option for us. I don't dismiss it nor do I dismiss paying dividends.

I have to look at this as opportunity. I mean, I don't have an unending budget that we need to consider as a never-ending cash flow source, but I will tell you that we're pretty creative. We've been able to buy back stock in the past. I would look at all of this as a function of our acquisition ability.

I think the reserves are relatively readily available, and we're putting a lot of attention on that. So I don't quite know how to answer your question. I'm not sure exactly how it will proceed in the next several months but feel really good about the acquisition side of it, and I feel really good that we'll continue to be cash flow positive. So as a shareholder, as the largest shareholder, I'm certainly going to be in the camp of trying to increase that value.

Operator

Your next question comes from John Evans of S&P Capital.

John Evans -- S&P Global Market Intelligence -- Analyst

I'm just curious from the standpoint of the Exxon infrastructure. So one of the things that's hampered you guys over the last couple of years is you've been able to produce more than you've basically been able to sell because of the issues with the infrastructure in the Gulf that you put some of your stuff through? And can you move some of that to the Exxon acquisition and be able to really maximize your throughput and sell? I mean, is this one of the big benefits, too?

Tracy Krohn -- Chairman and Chief Executive Officer

There is a possibility of thinking about this field -- pre-own this treating facility as excess capacity. So, yes, we'll be looking at that. I think it's important to think about it as a possibility. I don't know quite how to answer your question at this point in time because we haven't really assimilated this -- the -- these properties yet.

Right now, what we want to do is make sure that we have a smooth transition. And that we understand requirements of exactly what day-to-day operations are. But yes, I don't -- I'm really hoping that we'll fill up both plants and have a capacity problem for both of them.

John Evans -- S&P Global Market Intelligence -- Analyst

OK. And then the Exxon acquisition was more gassy than the rest of your portfolio. Is that just a switch at all? And what you think is -- has the most value in the acquisition market? Or is it just this is too good of a deal? So can you just kind of give us your thoughts of like potentially going forward?

Tracy Krohn -- Chairman and Chief Executive Officer

Sure. I mean, it's very normal to look at oil as being the dominant class of asset that you want to try to acquire a drill for. We're pretty agnostic. We don't care whether it's oil and gas.

We don't care whether it's deepwater, shallow water or even onshore for that matter. What we do care about is value. We believe we have very good value here. We believe it's accretive in every way.

It meets all of our criteria. The first criteria is, is it a good, solid crude base; second, is there something that we can do to enhance the value with the drill bit; and last, is there something we can do in the way of workovers, recompletions and facilities upgrades to make the properties more valuable near term. The answers to all those questions with the Exxon acquisition are yes. So given that vein in our processes of over three decades, this meets all the -- this -- we check every box on this acquisition for that mantra.

So I'm very pleased that we're making this gas acquisition. I know that people look at gas as not being as valuable as liquids on a volume basis than they aren't, but it doesn't make any difference to us. This is cash flow positive, and that's what we really think about and value as well of course.

John Evans -- S&P Global Market Intelligence -- Analyst

OK. And then the last question is once you close the deal and you're getting the $54 million back of cash from the IRS, do you expect your revolver to increase in size? And do you have any thought process of when potentially that might happen?

Tracy Krohn -- Chairman and Chief Executive Officer

Well, the short answer to that is damn right. I expect it to increase. I'm not sure that I necessarily want it to increase because if there's not an immediate requirement for the funds, then you're just paying for the privilege of having your credit line not getting any real value for it, but I'm not particularly concerned either way. When good deals come around, we've been able to figure out ways to resolve all the financing questions for three -- over three decades now.

We've done a whole lot with practically nothing. So now we feel like we can do practically anything with nothing at all.

Operator

[Operator instructions]

Tracy Krohn -- Chairman and Chief Executive Officer

OK, operator, looks like we're done now, so we appreciate it, and we'll talk to everyone soon. Thank you.

Operator

[Operator signoff]

Duration: 31 minutes

Call participants:

Al Petrie -- Investor Relations Coordinator

Tracy Krohn -- Chairman and Chief Executive Officer

Mike Scialla -- Stifel Financial Corp. -- Analyst

David Bump -- Executive Vice President of Drilling, Completions, and Facilities

Mike Kelly -- Seaport Global Securities -- Analyst

Zach Pancratz -- DRZ -- Analyst

John Evans -- S&P Global Market Intelligence -- Analyst

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