Follow-on capital expenditures for phases 3 and 4 of the Little Bow ASP project are expected to be completed by 2017 with forecasted total combined phases 1 to 4 project peak production rates of 2,300 barrels of oil per day expected to occur in 2020. For further information regarding the Little Bow ASP project, please refer to our updated corporate presentation, which is available at www.zargon.ca.
Other Field Activities
In addition to the $5.0 million of ASP capital expenditures, Zargon executed a $14.3 million capital program in the 2013 first quarter on conventional oil exploitation assets. This capital program included the drilling of 5.1 net Williston Basin horizontal oil wells in addition to significant infrastructure upgrades at the Alberta Hamilton Lake and Bellshill Lake properties and the Saskatchewan Steelman and Weyburn properties. These infrastructure costs are now essentially completed and will provide operating expense improvements for the remainder of the related long-life oil properties. Significantly lower drilling and infrastructure capital expenditure levels are anticipated for the next two quarters.
In particular, the first quarter drilling program concentrated on Williston Basin Midale drainage type wells at Steelman, Weyburn, Ralph, Saskatchewan and Mackobee Coulee, North Dakota. These horizontal oil exploitation wells met our expectations that are characterized by moderate initial rates, but long-life, shallow declines that provide solid returns. Conversely, first quarter 2013 production results from our three well fourth quarter 2012 Hamilton Lake Viking oil exploitation program did not meet expectations due to lower well inflows than anticipated. This summer, we will re-examine our technical work and historical results to develop a plan to unlock this property's large oil exploitation potential.
For the remainder of the year, Zargon is planning on drilling an additional 10 net high-graded horizontal oil exploitation wells, roughly equally divided between our Taber South Sunburst and Williston Basin Midale drainage projects. In aggregate, Zargon has identified more than 100 horizontal locations in six conventional (non-ASP) oil exploitation projects, which will provide a high-graded drilling inventory for many years. Each of these six oil exploitation projects are (or will be) pressure supported by water injections or natural reservoir aquifers and consequently provide long-life low-decline oil volumes that will support future dividends.
Property Dispositions Update
During the 2013 first quarter, property dispositions of $3.5 million were concluded, which primarily related to the sale of undeveloped land assets in Karr, Alberta. Subsequent to quarter end, an additional $4.3 million of property dispositions were made with the sale of the 40 barrels of oil per day in the Workman, Saskatchewan property. Throughout 2013, a minimum of $20 million of property dispositions are budgeted.
To meet this disposition objective, we are using third party services to market two packages (Twining, Wayne, Provost and Grand Forks, Alberta) that, in aggregate, are producing 350 barrels of oil per day. Additional oil properties, as required, will be marketed in the second half of 2013 in order to meet the company's $20 million disposition target. With numerous disposition options available, Zargon will exercise prudence with its planned dispositions so as to maximize the potential value from the dispositions and minimize the cash flow impact. A key consideration of the sales will be to reduce our property footprint by selling (or trading) our very large non-strategic property inventory and consequently, sales in addition to the $20 million target may be considered. Over time, we anticipate that these dispositions will enable Zargon to realize a lower cost structure through a disciplined focus on our growing tertiary oil recovery business and the stable production volumes coming from the measured exploitation of core, conventional long-life low-decline oil properties.
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