Good afternoon, and welcome to the Penn Virginia First Quarter 2021 Earnings Conference Call. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to the company for the prepared remarks. Please go ahead.
PVAC Penn Virginia
Thank you, and good afternoon, everyone. We appreciate your participation in today's call. I'm Clay Jeansonne, Director of Investor Relations, and I'm joined this afternoon by Darrin Henke, Penn Virginia's President and CEO; Rusty Kelley, our Senior Vice President and CFO; Julia Gwaltney, our Senior Vice President, Development. Prior to getting started, I'd like to remind you we will discuss non-GAAP measures on this call. Definitions and reconciliations of these measures to the most comparable GAAP measure are provided in our first quarter earnings press release issued this afternoon, which can be found on our website at www.pennvirginia.com. I would also point you to the language in the forward-looking statement section of the press release.
Our comments today will contain forward-looking statements within the meaning of the federal securities law. These statements, which include, but are not limited to, comments on our operational guidance, are subject to a number of risks and uncertainties that could cause actual results to be materially different from those forward-looking statements, including those identified in the Risk Factors in our most recent annual report on Form 10-K and our quarterly reports on Form 10-Q.
Finally, after our prepared remarks, we'll be happy to take your questions. With that, I'll turn the call over to Darrin.
Thanks, Clay. We very much appreciate everyone joining us for today's call. Once again, our team delivered solid performance in the quarter, delivering on our commitment to driving down capital costs, increasing operational efficiencies and generating free cash flow.
On the production front, we beat on oil by selling 16,324 barrels per day, which exceeded the high end of our guidance of 16,200 barrels of oil per day.
Our strong sales volume for the quarter were largely due to the outperformance of wells brought online during the period, which benefited from our advanced completion designs, coupled with drilling improvements. Volumes for the quarter were also less impacted by the February winter storm that we previously anticipated, largely due to the outstanding efforts of the Penn Virginia operational team.
We have seen significant improvements in results from our drilling program. The wells we spud in 2020 are outperforming their D&M projections by 13%. The wells that have been turned in line in 2021 are performing even better. Their combined IP-30 results are outperforming D&M projections by over 20%. On Page 8 of the presentation, we provide highlights of some of the great wells we have drilled and their results.
Our strong well performance to date provided us the confidence to raise our full year 2021 production guidance by more than 6%, while still maintaining our previous target on capital expenditures.
Looking at expenses for the first quarter, we posted adjusted direct operating expenses of $13.55 per BOE. This low operating expense typifies our lean cost structure and culture of cost containment. Put simply, we will continue to leave no stone unturned to find ways to improve the operating performance of our business.
For the remainder of the year, we expect our direct operating expenses per BOE to trend lower. The same holds true for capital spending where we continue to do more with less. CapEx for the first quarter was $54 million, which was below the low end of our guidance range. The combination of increased operational efficiencies, reduced capital spending and generating strong margins supports one of Penn Virginia's key priorities, generating free cash flow for the long-term benefit of our shareholders. I am pleased to report that we generated free cash flow of $6 million during the first quarter, which was used to pay down debt. This represents the sixth consecutive quarter in which we generated free cash flow and we expect to be free cash flow positive for 2021.
Over the last several quarters, we have taken multiple strategic steps that we believe have positioned the company to deliver free cash flow in the future through our commitment to a returns-driven strategy.
We expect to use the free cash flow we generate this year to continue reducing debt. Consistent with our disciplined approach, we expect any further improvement in cash flow from higher commodity prices will accelerate debt reduction. We remain steadfast in our commitment to free cash flow generation, capital discipline and maximizing cash-on-cash returns.
So with that, we will open up the call to questions. Operator?
[Operator Instructions]. And our first question will come from Neal Dingmann of Truist.
Nice quarter. Darrin, my first question, I like that Slide 8 you all have, it really shows the deep inventory, so my question is around that deep inventory. I know kind of the next 80 or so wells you have planned certainly seems like there's high confidence there. Could you talk -- again, without obviously going into too much detail, but it talks about here that even of your 500 locations, you all have the confidence that 2/3 of these are estimated to have sort of that 55%-plus IRR at $55.
And so I'm just wondering, is that all -- looking at that slide, is that all kind of in that general area? I'm just wondering how far out, if I would draw the circle, I mean is the confidence continuing? And is this all just -- I guess my second part of that is really just this year, next year, would you consider most of this now just sort of pure development activity.
Yes. The -- We do have a great inventory, and I appreciate you acknowledging that. The -- when you think about where these wells will be drilled, they're really all across our acreage. The longer laterals generate better returns.
And so we can have longer laterals. Where they show up on our acreage, generally, they rise to the top.
So there isn't really one particular area or areas that generate the best returns. It's really all across the acreage and plays to function -- well spacing and lateral length play a role in those economics.
Okay. And then just lastly, just looking at cost, maybe for you or Rusty, it looks like to -- for us that the costs had gone down a little bit. I'm just wondering, based on sort of assumptions, not only OFS, but just again, just ops cost in general. I'm wondering if you could talk a little bit about that, kind of what expectations are for at least the remainder of the year for that.
So relative to well costs, we're working to drill our wells from existing pads to utilize existing facilities where we can to put as many wells onto 1 pad as we can and to drill the longest laterals that we can.
So those are all things that we're tweaking to improve and lower the cost of the total wells relative to the lateral lengths that we complete.
So from an inflationary standpoint, we didn't really see any direct inflationary pressure in the first quarter. And by and large, in the second quarter, we're overcoming what little inflationary pressures we see out there with efficiencies in our drilling and completion program.
[Operator Instructions]. This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Henke for any closing remarks.
We thank everyone for participating in the call today. We're a company that's focused on cash-on-cash returns. We've got a great balance sheet, and we intend to maintain the strength of that balance sheet. We absolutely are interested in looking at M&A opportunities this year. And we will be looking for accretive opportunities to grow the company, and stay tuned.
So thanks again for participating in the call.
The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.