RMP Energy Inc. has set a 2012 capital budget of $75 million for exploration and development investments, as compared to an estimated $109 million of E&D capital expenditures in 2011. The focus of RMP's 2012 Capital Budget will be the continued delineation and development of the 100%-owned, Montney light oil resource play at Waskahigan in West Central Alberta. Budgeted drilling and completion activity in 2012 also includes additional development drilling at Pine Creek in West Central Alberta, associated with the non-operated development of the Wilrich tight gas play, wherein five wells were successfully drilled in 2011.

Since restructuring Orleans Energy in May, 2011, RMP has successfully utilized horizontal drilling and multi-stage fracturing techniques to exploit and delineate the Waskahigan Montney light oil pool. The Company presently holds a significant land position of 39 sections.

With regards to the Company's other assets within its portfolio of opportunities, RMP continues to monitor industry activity in both its Deep Basin areas of Resthaven/Bilbo and Ricinus wherein the Company holds 43.25 sections and 53 sections of land, respectively. At Resthaven, there are multi-zone targets throughout the stratigraphic section. Competitor activity at Resthaven has demonstrated noteworthy drilling success in both the Nikanassin and Montney formations. At Ricinus, the area is prospective for multi-zone targets including the Glauconite, Ellerslie and Basal Quartz/Cadomin. Recent results by industry, targeting the Cretaceous Ellerslie channel systems that are present throughout the area, have been very encouraging and bodes well for future RMP drilling operations.

Forecasted Production

For 2012, RMP is targeting average daily production to range between 5,000 to 5,500 boe/d, weighted 40% towards light oil and natural gas liquids on a volume basis and 75% weighted on a revenue basis. This forecast includes the impact of a four-week production curtailment at Kaybob in May 2012, as a result of a scheduled plant turnaround by the mid-stream operator. Based on the mid-point of the production guidance range, the 2012 Capital Budget reflects an internally-generated, "drill-bit" growth rate of 54% over 2011 production of approximately 3,400 boe/d. RMP's production base has grown through the Company's drilling success at Waskahigan, with current corporate production of about 5,000 boe/d.

Forecasted Net Debt and Cash Flow

Projected cash flow from operations for 2012, utilizing current commodity strip price assumptions of an AECO gas price of C$3.00 per gigajoule, a West Texas Intermediate oil price of US$94.00 per bbl, and an exchange rate of 1C$ = 0.96US$, is estimated between $60 million to $66 million. This represents approximately 200% growth in cash flow, as a result of the crude oil focus. For 2012, the Company presently has a total of 700 bbls/d of crude oil hedged with a fixed weighted average price of C$99.19 per barrel. As a result of the marked shift towards an oilier production platform and anticipated operating cost savings resulting from the RMP-owned and operated Waskahigan oil battery, forecasted cash flow operating netbacks will increase significantly.

Tags: RMP Energy Inc.