First Quarter 2013 Operating and Financial Highlights
-- Record-setting quarterly average daily production of 6,727 boe/d, weighted 55% towards light oil and NGLs, representing a 34% increase over the first quarter 2012 level of 5,026 boe/d. In the first quarter of 2013, RMP achieved its highest quarterly production level in spite of third-party-operated outages on an oil sales pipeline which impacted production at Waskahigan and at a mid-stream operated Kaybob gas plant, which curtailed the Company's gas production in the area.-- Petroleum and natural gas revenue for the first quarter amounted to $32.6 million (including a realized gain on oil risk management commodity contracts of $335 thousand), of which 82% was derived from crude oil and NGL sales ($26.8 million). The Company's realized crude oil discount differential to the Canadian-dollar converted WTI price averaged approximately $13.50/bbl during the quarter, as compared to $15.35/bbl in the first quarter of 2012. Differentials have subsequently tightened in the forward market for the Company's Waskahigan and Ante Creek crude oil pricing, with pricing at a current average discount of approximately $9.00/bbl estimated for the balance of this year.-- In the first quarter, the Company incurred capital expenditures of $39.1 million. RMP successfully drilled and completed six (6.0 net) horizontal oil wells. Three of these wells were drilled at Waskahigan, two wells at Ante Creek and one well at Grizzly. The Company also completed the expansion of both the Waskahigan and Ante Creek oil battery facilities and increased its Grizzly-area working interest position to 100% with the acquisition of a partner's 30% working interest.-- Net debt as of March 31, 2013 was $95.7 million, representing 1.2 times net debt-to-annualized first quarter funds from operations. The Company has a recently-expanded bank line of $140 million, of which only approximately $91 million is presently drawn.-- RMP reported funds from operations of $20.1 million ($0.19 per basic share) for the three months ended March 31, 2013, a 95% increase (73% per share) from the funds from operations for the first quarter of 2012.-- Net income for the first quarter amounted to $1.7 million, as compared to $2.6 million of net earnings in the first quarter of 2012. In the comparable quarter ended March 31, 2012, a non-cash gain on a property disposition of $5.8 million was recognized, increasing the realized income for that period and thus skewing the quarterly income comparison.-- Corporate operating costs of $7.93/boe decreased by 8% on a per boe basis, when compared to operating costs for the first quarter 2012 period of $8.66/boe. In the first quarter of this year, operating costs were impacted by approximately $263 thousand ($0.43/boe) due to a thirteenth-month equalization charge at the mid-stream-operated Kaybob gas plant.
First Quarter 2013 Operations Update
At Waskahigan, RMP drilled three, 100% working interest Montney horizontal light oil wells (two infill and one step-out) in the first quarter. All three wells were brought on-stream after the Peace Pipeline crude oil system re-commenced service on March 15, 2013. For the balance of this year, the Company intends to drill an additional five to six, 100% working interest horizontal light oil wells. The Company's acreage position at Waskahigan encompasses 37 contiguous sections at 100% working interest, providing for a future light oil drilling inventory of approximately 120 locations.