Increased 2012 Guidance - April through December 2012 Quarter to date Raging River's production (based on field estimates) has averaged greater than 1,600 boe/d (97% oil). With continued strong performance of our first quarter drilling program the Company is increasing its average production guidance for 2012.
Average daily production for the period of April through December 2012 is now expected to be 1,800 boepd (97% oil) a further 6% increase from our prior guidance of 1,700 boepd. Raging River continues to anticipate 2012 exit production of approximately 2,200 boepd (97% oil) which reflects a 120% increase from our starting point in January 2012 of 1,000 boepd.
Operations Review
Second quarter drilling operations commenced on May 11th and, quarter to date, we have drilled and cased 2 (0.9 net) wells. Pending continual favorable weather conditions, the Company expects to drill up to an additional 21 (12.3 net) wells throughout the quarter.
Early in the first quarter, Raging River completed an extensive review of the historical drilling and completion techniques in the Dodsland area resulting in some modifications to our techniques. Although results are preliminary, the 13 wells completed in the first quarter using the revised methods resulted in average 60 day production rates of 50 bbls/d oil which is a 25% increase from the existing type curve for the area of 40 bbls/d of oil.
Outlook
Even though WTI oil prices have deteriorated from US$106/bbl in March 2012 to their current levels of approximately US$92/bbl, the Company remains well positioned to continue to execute its business plan. Edmonton Par crude prices have remained relatively flat during this period resulting in Raging River's net price currently received, being approximately equal to that which was received in March.
The price differential between WTI and Edmonton par were at historical high levels in March and April, but have since narrowed significantly. Raging River expects this price differential volatility to continue until additional export pipeline capacity is added to throughout the basin. To continue to manage this effectively, the Company will continue to utilize hedging strategies and rail delivery options to maximize the value received for the Company's crude oil production.
The Company anticipates spending $80 million for the last three quarters of the 2012 including $30 million of acquisition capital, $43 million of drilling capital in addition to $7 million of land, seismic and facility expenditures. With the expected expenditures, the Company's balance sheet will remain very strong with projected net debt at year end 2012 staying at less than 1.0 times annualized cashflow.
Raging River's experienced management team remains committed to operational and execution excellence to continually deliver per share growth to our shareholders. The current asset base with extensive development drilling inventory is expected to deliver consistent growth for 2012 and beyond
Here's part of RRX's news today, which has some ties to VCA. The two wells completed are VCA's wells. they have increased there intial 60 day average to 50 bopd on the 13 wells drilled last quater of which 5 of them were VCA wells. They are railing oil to get best value, VCA is also railing there oil. They have another 30 million for aquisitions. This will turn out to be a great partner for the company.