Lone Pine drilled six net operated wells that were brought onstream in the quarter, although five of the wells were not brought onstream until late March so the production impact was not reflected in the quarter. Total net sales volumes at Evi for the first quarter of 2013 are expected to be approximately 2,450 boe/d (2,900 boe/d working interest).
The table below highlights Lone Pine's estimated first quarter of 2013 sales volumes and capital expenditures compared to the Company's previously released guidance:
Q1/13 Estimate H1/13 Guidance ------------------------------------Working Interest Sales Volumes (MMcfe/d) 57 52 - 54% Liquids 34% 35%Net Sales Volumes (MMcfe/d) 49 45 - 47% Liquids 35% 35%Capital Expenditures ($MM) $ 33 $ 35
Current total corporate net sales volumes are estimated at 49 MMcfe/d (57 MMcfe/d working interest). With the onset of spring break-up in the Company's core operating areas, Lone Pine has now largely completed its first half of 2013 capital program and expects to return to the field in July, depending on field conditions.
Evi Waterflood Update
Lone Pine continues to monitor its operated waterflood pilot and remains pleased with the reservoir response to date. At year- end 2012, DeGolyer & MacNaughton, Lone Pine's independent qualified reserves evaluators, attributed 110,000 barrels of estimated proved and probable reserves (determined in accordance with Canadian National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities) to the Evi waterflood pilot. This represents less than 1% of the proved and probable reserves of 35 million barrels booked to the Evi field under primary recovery. Analogous Slave Point waterfloods have demonstrated that ultimate waterflooding recovery has the potential to double the recovery versus that of primary production alone.
The Company has engaged RPS Energy Canada Ltd., a leading international petroleum engineering consulting firm, to assist with waterflood simulation and geological modeling that will be used in the interpretation and design of future waterflood pilots. The 36 section simulation area is expected to be completed by the end of the second quarter and will be used by the Company in determining the location of future waterfloods. Lone Pine plans to initiate at least one horizontal waterflood pilot project in the second half of 2013.
Borrowing Base Redetermination
Lone Pine's lenders have completed the semi-annual review of Lone Pine's borrowing base available under its five-year syndicated credit facility. Effective April 15, 2013, the borrowing base has been revised from the previously available $275 million to $185 million, which includes the effect of asset dispositions completed in the first quarter of 2013 together with updated year-end engineering data and price forecasts. In addition, the credit facility has been amended such that the Company's Total Debt to EBITDA financial covenant, which previously had a permitted ratio of 4.0 to 1.0, has been increased to 4.5 to 1.0 for any quarterly period ending on or before June 30, 2013. The result of this redetermination is consistent with Lone Pine's strategy of presenting a fiscally disciplined deleveraging plan to the lending syndicate. The expanded liquidity under the credit facility's financial covenant is expected to provide Lone Pine with adequate near term liquidity to complete the Company's previously announced asset portfolio review process. As of March 31, 2013, Lone Pine's long term debt consisted of $152 million outstanding under the credit facility and US$198 million of senior notes.