As a result of the Company's strategic Ante Creek undeveloped land acquisition, as previously announced on May 10, 2013, RMP has now established 'critical mass' in the area for the purpose of future delineation and development drilling activities. The Company's acreage position at Ante Creek encompasses 28.75 sections (22.0 net), providing for a significant, future light oil drilling inventory.
At Grizzly, to the southeast of Waskahigan, RMP successfully drilled and completed its second, 100% working interest Montney horizontal oil well (4-5-63-22W5) in the first quarter. The well is presently pipeline-connected to an area operator's oil battery facility, however, solution gas handling issues at a gas plant downstream of this battery is preventing RMP's well from commencing production. The Company expects this well to be on production by the fourth quarter of 2013, based on indications from the gas plant operator. At Grizzly, RMP holds a 100% working interest position on 12.25 sections of acreage, providing the Company with another Montney light oil resource project to delineate and develop.
Ante Creek Pipeline Project
As a result of exceptional drilling and production results achieved at Ante Creek, the Company will proceed with the installation of a wholly-owned pipeline inter-connect between its Ante Creek and Waskahigan properties, including the expansion of the Company's Ante Creek surface field facilities. The pipeline will connect RMP's Ante Creek 4-36-66-24W5 Battery facility to its Waskahigan 12-7-64-23W5 Battery, which has direct tie-in to third-party crude oil and associated solution gas sales pipelines. The Ante Creek pipeline portion of this capital project will cover approximately 35 kilometres of right-of-way and will consist of a six inch diameter oil pipeline and an eight inch diameter associated solution gas line. Oil fluid handling capacity at RMP's Ante Creek 4-36 Battery will be expanded to 10,000 bbls/d, with solution gas handling increased to 20 MMcf/d. Barring any unforeseen delays, the pipeline inter-connect and related field equipment is scheduled to be commissioned and operational in late-February 2014.
The estimated capital cost of this strategic investment is approximately $34 million, forecasted as staged capital expenditures to be incurred over the next eight months based on scheduled progress. A total of $28 million is anticipated to be incurred by December 31, 2013, with the residual $6 million expended in the first quarter of 2014. The Company's total capital program for 2013 is now forecasted to aggregate to approximately $127 million, comprised of an unchanged $85 million exploration and development program, $13.5 million for the Ante Creek land expansion purchased for RMP common shares, and the forecasted $28 million associated with the pipeline project and field facilities.
Given RMP's significant financial strength and cash flow generating capabilities, both presently and upon commissioning of the Ante Creek pipeline, the Company intends to finance this capital project with bank debt, which presently has a debt servicing cost of only 3.5% per annum (before-tax). As previously disclosed, RMP's bank facility was recently increased to $140 million, providing for ample funding support for this key project. Net debt at December 31, 2013 is estimated to be approximately $105 million after funding most of the Ante Creek project, providing for $35 million of projected, un-utilized borrowing capacity entering 2014.
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