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We have significant undeveloped acreage and future drilling locations. Drilling horizontal wells, generally consisting of 7,500 to 12,000-foot lateral lengths, in the Midland Basin is capital intensive. At December 31, 2018, we had approximately $0.4 million in cash and approximately $196.2 million in unused borrowing capacity under the EEH Credit Agreement (discussed below) for a total of approximately $196.5 million in funds available for operational and capital funding. We currently estimate 2019 capital expenditures will be approximately $190 million, which assumes a 16-well program running one rig for our operated acreage in the Midland Basin and a seven-well program for our operated Eagle Ford acreage as well as estimated expenditures for our non-operated Midland Basin properties and land and infrastructure activities. We likely will continue to outspend our cash flows provided by operating activities over at least the next 12 months from the date of this report based on current assumptions. However, we believe we will have sufficient liquidity with cash flows from operations and borrowings under the EEH Credit Agreement for the next 12 months in order to meet our cash requirements. We may consider various financial arrangements or other techniques or transactions, including but not limited to promoted drilling arrangements. 

Working Capital, defined as Total current assets less Total current liabilities as set forth in our Consolidated Balance Sheets, was a deficit of $18.3 million as of December 31, 2018 compared to a deficit of $21.8 million as of December 31, 2017. We used $150.0 million to fund our capital program, in addition to $32.6 million to acquire additional oil and natural gas properties, offset by $6.0 in cash proceeds from the disposition of certain non-core oil and natural gas properties in the Eagle Ford Trend, that was facilitated by $102.4 million of net cash provided by our operating activities resulting from increased oil prices as well as increased production resulting from our 2018 drilling and development program, net borrowings of $53.8 million under the EEH Credit Agreement and a reduction of our cash on hand by $22.6 million. Due to the costs incurred related to our drilling program, we may incur additional working capital deficits in the future. We expect that our pace of development, production volumes, commodity prices and differentials to NYMEX prices for our oil and natural gas production will continue to be the largest variables affecting our working capital. 

We expect to finance future acquisition and development activities through available working capital, cash flows from operating activities, borrowings under the EEH Credit Agreement and, various means of corporate and project financing, assuming we can effectively access debt and equity markets. In addition, as indicated above, we may continue to partially finance our drilling activities through the sale of participating rights to financial institutions or industry participants, and we could structure such arrangements on a promoted basis, whereby we may earn working interests in reserves and production greater than our proportionate share of capital costs. 

## Capital Expenditures 

We have set our 2019 capital budget, which assumes a one-rig operated program and non-operated activities as currently proposed by operators, for our acreage in the Midland Basin as well as a seven-well program on our operated Eagle Ford acreage. Our anticipated capital expenditures for 2019 are currently estimated at $190 million. 

Our accrual basis capital expenditures for the years ended December 31, 2018 and 2017 were as follows: 

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In addition to the capital expenditures described above, on October 5, 2018, we closed the Exchange. Under the terms of the Exchange, we acquired 3,899 net operated acres in Reagan County with virtually a 100% working interest, including producing assets representing a net production increase of approximately 350 Boe/d, in exchange for 1,222 net non-operated acres in Glasscock County with an average working interest of 39% and $27.8 million in cash, plus customary closing adjustments. 

For further discussion, see Note 3. Acquisitions and Divestitures  to the Notes to Consolidated Financial Statements included in this report. 

## Credit Agreement 

On November 6, 2018, in connection with a regularly scheduled borrowing base redetermination, the borrowing base under the EEH Credit Agreement was increased from $225.0 million to $275.0 million. As of December 31, 2018, we had $78.8 million of borrowings outstanding, bearing annual interest of 4.479%, resulting in a remaining $196.2 million of borrowing base available under the EEH Credit Agreement. 

## Impairments to Oil and Natural Gas Properties 

