Engineering work is ongoing and Pengrowth has undertaken capital investment in critical path and long lead items. Pending regulatory approval, expected in the summer, field construction is slated to kick off in the third quarter, with drilling activities to commence in the fourth quarter of 2013. Lindbergh is expected to provide Pengrowth with the potential to develop production of up to 50,000 bbl/d of bitumen over three phases of development. This is expected to be low cost, low decline, stable production, with a 25 year reserve life.
Approximately $37.8 million was spent at Lindbergh during the quarter, with Pengrowth drilling 26 delineation wells. These wells help confirm the thickness, aerial extent and geological characteristics of the reservoir and were drilled in support of the Environmental Impact Assessment (EIA) application currently being compiled for the second phase (17,500 bbl/d) commercial development, which would increase the facility's capacity to 30,000 bbl/d. Pengrowth expects to submit this application by the end of 2013.
Operations at the pilot project continued to show strong results during the quarter, with combined field production from the two well pairs averaging 1,620 bbl/d of bitumen and daily rates reaching 1,750 bbl/d just prior to a planned turnaround. The ISOR of 1.7x was constant through the first quarter, with cumulative production from the two well pairs exceeding 500,000 barrels of bitumen since commencing production in June of 2012. The two week plant turnaround at the pilot site was completed in mid-April, 2013 and production is now fully restored.
Pengrowth remains committed to ensuring its financial flexibility as it makes its transition to becoming a long term sustainable, dividend paying energy producer. The Company has taken several measures intended to safeguard its dividend, maintain its financial and balance sheet strength and provide additional flexibility to ensure that it has the financial means and discipline to develop the Lindbergh thermal bitumen project. These include:
-- Selling non-core properties-- Expanding its commodity hedging program-- Managing interest costs through term debt markets
In the first quarter of 2013, Pengrowth closed the sale of the non-operated Weyburn unit interest (2,500 boe/d net) in southeast Saskatchewan, for gross proceeds of $316 million, prior to closing adjustments. The proceeds of the sale were used to pay down Pengrowth's credit facilities, leaving the facilities undrawn at March 31, 2013, with $1.0 billion of available capacity. With the Weyburn sale complete, Pengrowth expects that it will be able to fund its planned 2013 capital spending while maintaining the current dividend, with no increase in total debt over 2012 debt levels.
On January 11, 2013, Pengrowth announced plans to make additional dispositions targeting total proceeds of up to $700 million by year end 2013. Pengrowth has made good progress on the sale of non-core assets and is currently negotiating agreements worth $100 million to $125 million. Pengrowth enjoys an extensive inventory of additional actionable funding opportunities. The proceeds from these targeted sales are earmarked to support the 2014 funding of the first commercial phase of the Lindbergh thermal project and are not required to fund any capital expenditures or the dividend in 2013. Pengrowth will exercise discipline and be prudent with its planned dispositions so as to maximize the potential value from the dispositions and minimize the cash flow impact.