(1) Cash flow, net debt, corporate netback, net production expense and cash G&A are not IFRS measures. These terms do not have any standardized meanings as prescribed by IFRS and, therefore, may not be comparable with the calculations of similar measures presented by other companies. See headings entitled "Cash Flow from Operations", "Net Debt", "Corporate Netback", "Net Production Expense" and "Cash G&A" in the reader advisory section for further information on such terms.
Successful oil discoveries early in 2012 from the Montney at Kaybob and the Dunvegan at Wapiti and Karr prompted the Company to expand its capital program in these areas through 2012 and into 2013. Chinook participated in the drilling of 11 (4.74 net) wells in 2012 with an additional 3 (1.5 net) wells being drilled through year end. The Company has successfully completed 2 (0.75 net) Montney horizontal wells at Kaybob and has equipped both wells for production through third party facilities with production anticipated to commence in April 2013. Initial gross production on these wells is estimated to be 500 barrels of oil per day and 1.5 million cubic feet of natural gas per day per well. There are 2 (0.75 net) additional wells planned for 2013, an additional six locations on lands with a 37.5% working interest and six to eight locations on lands with a 75% working interest. The Company drilled 6 (2.25 net) horizontal Dunvegan wells at Karr and Wapiti in its Grande Prairie core area. Average expected initial production rates for the Dunvegan wells at Karr are 250 boed (80% oil and liquids) and 200 boed at Wapiti (50% oil and liquids). Chinook has identified 45 additional Dunvegan locations on Company lands.
In December, Chinook completed the acquisition of two Dunvegan properties in its Grande Prairie core area. The key attributes of the acquisition was large oil in-place reserves with low recovery to date and over 30 horizontal locations identified on operated high-working interest lands. The Company has drilled 3 (1.5 net) horizontal Dunvegan wells on the acquired properties since closing which have been brought on production in the first quarter of 2013 at initial gross production rates of 75-100 barrels of oil per day per well. There are 3 (3.0 net) additional horizontal Dunvegan oil wells budgeted for 2013. In addition to the producing properties, the acquisition included six additional sections of undeveloped lands offsetting an existing producing pool which has seen a five-fold increase in production rates from vertical to horizontal wells from 40 barrels of oil per day in existing vertical wells to 200 barrels of oil per day in horizontals. The acquired properties are also believed to have significant waterflood potential which will be modeled in 2013 and, if warranted, implemented in 2014.
Chinook continued disposing of non-core assets in 2012 with proceeds from dispositions of $106.3 million for 1,600 barrels of oil equivalent per day of production. The disposition of non-core assets is expected to continue through 2013 with approximately $25 million of proceeds expected through April 2013. Proceeds from dispositions will continue to strengthen Chinook's balance sheet and enable the Company to accelerate and advance the opportunities referenced above as well as pursue additional strategic acquisitions in its core Grande Prairie area.
In Tunisia, the Company was successful in a significant and technically complex operation with the drilling of four horizontal wells with multi-stage fracture completions on its producing Bir Ben Tartar concession ("BBT Concession"). These wells were the first ever multi-stage fracture stimulated wells in Tunisia and the largest ever performed on the African continent. As follow up to this success, the Company plans to drill an additional six wells, at least four of which will be horizontals, on the BBT Concession in 2013 along with the construction of a centralized oil battery and associated water handling facility. This facility will support higher production volumes and lower operating costs. In addition to Chinook's continued development of the BBT Concession, the Company plans to drill an exploration well approximately 25 kilometres away at El Bell, on the Sud Remada permit, targeting the same Ordovician interval on a seismically defined prospect similar in size to that on the BBT Concession. Subject to crew availability, the Company also plans to shoot a 250 km2 3-D seismic survey on the southern portion of its Sud Remada permit which currently has limited coverage with older vintage 2-D seismic data.
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