CALGARY, June 27, 2013 /CNW/ - Bellatrix Exploration Ltd. ("Bellatrix"
or the "Company") (TSX, NYSE MKT: BXE) is pleased to announce it has closed a joint venture (the "Joint Venture") with Grafton Energy Co I Ltd.
("Grafton"), to accelerate development on a portion of Bellatrix's
extensive undeveloped land holdings. The Joint Venture is in Willesden
Green and Brazeau areas of West-Central Alberta. Under the terms of the
agreement, Grafton will contribute 82%, or $100 million, to the $122
million Joint Venture to participate in an expected 29 Notikewin/Falher
and Cardium well program. Under the agreement, Grafton will earn 54% of
Bellatrix's working interest in each well drilled in the well program
until payout (being recovery of Grafton's capital investment plus an 8%
return on investment) on the total program, reverting to 33% of
Bellatrix's working interest ("WI") after payout. At any time after
payout of the entire program, Grafton shall have the option to elect to
convert all wells from the 33% WI to a 17.5% Gross Overriding Royalty
("GORR") on Bellatrix's pre-Joint Venture working interest. Grafton
will have until September 15, 2013 to elect on an option to increase
the committed capital investment by an additional $100 million on the same terms and conditions. Grafton shall also have an additional
one-time option within 12 months of the effective date to increase its
exposure by an additional $50 million on the same terms and conditions. The effective date of the agreement
is July 1, 2013 and has a term of 2 years. If the $50 million option
is exercised, Bellatrix shall have until the end of the third
anniversary of the effective date to spend the additional capital (if
the $100 million option is exercised it will not result in an extension
of the term of the Joint Venture).
In the event Bellatrix fails to expend all of the commitment capital
within 2 years of the closing date and if the funding period has not
been otherwise terminated before such time in accordance with the terms
of the Joint Venture, Grafton will be entitled to a non-performance
payment from Bellatrix equal to 0.4 times the unspent capital. Should
Grafton fail to fund as required in accordance with the Joint Venture,
Bellatrix will have the option to terminate the funding period under
the Joint Venture and if they do so Bellatrix shall be entitled to a
non-funding payment from Grafton equal to 0.2 times of the unpaid
commitment capital.
In certain circumstances if Bellatrix is in default of its commitments
under the Joint Venture or there is a change of control of Bellatrix,
Grafton shall have the right to cause Bellatrix to acquire Grafton's
earned working interest or GORR, as applicable. Under certain
circumstances if Grafton fails to fund in accordance with the Joint
Venture, in addition to the non-funding payment, Bellatrix shall be
entitled to elect to acquire Grafton's earned working interest or GORR,
as applicable. The value paid under Grafton's put option and
Bellatrix's call option shall depend on the circumstances and be based
on formulas as set out in the Joint Venture.
As a result of the Joint Venture and based on the initial funding
commitment, Bellatrix's updated net capital expenditure plan for 2013
is expected to be $210 to $220 million, not including Grafton capital.
Based on the timing of proposed expenditures in the latter half of
2013, completion of anticipated infrastructure and normal production
declines, execution of the updated 2013 capital expenditure plan is
expected to provide average daily production of 23,000 to 24,000 boe/d
and 2013 exit rate of 30,000 to 31,000 boe/d.
Bellatrix continues to consider alternative joint venture partners for
the previously announced proposed Ferrier area Cardium Joint Venture as
well as continuing to consider other joint venture partners for the
Company's other interests in the Cardium resource play.
The Company has recently entered into three additional crude oil
commodity price risk management arrangements as follows:
Type
|
Period
|
Volume
|
Price
|
Index
|
Crude Oil Fixed
|
Jul. 1, 2013 to Dec. 31, 2013
|
1,500 bbl/d
|
$96.87 CDN/bbl
|
WTI
|
Crude Oil Fixed
|
Jan. 1, 2014 to Dec. 31, 2014
|
1,500 bbl/d
|
$94.00 CDN/bbl
|
WTI
|
Crude Oil Fixed
|
Jan. 1, 2014 to Dec. 31, 2014
|
1,500 bbl/d
|
$95.22 CDN/bbl
|
WTI
|
As at June 26, 2013, the Company has entered into commodity price risk
management arrangements as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Type
|
|
|
Period
|
|
Volume
|
|
Price Floor
|
|
Price Ceiling
|
|
Index
|
Crude oil fixed
|
|
|
Jan. 1, 2013 to Dec. 31, 2013
|
|
1,500 bbl/d
|
|
$ 94.50 CDN
|
|
$ 94.50 CDN
|
|
WTI
|
Crude oil fixed
|
|
|
Jul. 1, 2013 to Dec.31,2013
|
|
1,500 bbl/d
|
|
$ 96.87 CDN
|
|
$ 96.87 CDN
|
|
WTI
|
Crude oil fixed
|
|
|
Jan. 1, 2014 to Dec. 31, 2014
|
|
1,500 bbl/d
|
|
$ 94.00 CDN
|
|
$ 94.00 CDN
|
|
WTI
|
Crude oil fixed
|
|
|
Jan. 1, 2014 to Dec. 31, 2014
|
|
1,500 bbl/d
|
|
$ 95.22 CDN
|
|
$ 95.22 CDN
|
|
WTI
|
Crude oil call options (1)
|
|
|
Nov. 1, 2013 to Dec. 31, 2013
|
|
3,000 bbl/d
|
|
-
|
|
$ 110.00 US
|
|
WTI
|
Crude oil call options
|
|
|
Jan. 1, 2014 to Dec. 31, 2014
|
|
3,000 bbl/d
|
|
-
|
|
$ 105.00 US
|
|
WTI
|
Natural gas fixed
|
|
|
Apr. 1, 2013 to Oct. 31, 2013
|
|
20,000 GJ/d
|
|
$ 3.05 CDN
|
|
$ 3.05 CDN
|
|
AECO
|
Natural gas fixed
|
|
|
Apr. 1, 2013 to Oct. 31, 2013
|
|
10,000 GJ/d
|
|
$ 3.095 CDN
|
|
$ 3.095 CDN
|
|
AECO
|
Natural gas fixed
|
|
|
Feb. 1, 2013 to Dec. 31, 2013
|
|
10,000 GJ/d
|
|
$ 3.05 CDN
|
|
$ 3.05 CDN
|
|
AECO
|
Natural gas fixed
|
|
|
Apr. 1, 2013 to Jun. 30, 2014
|
|
15,000 GJ/d
|
|
$ 3.05 CDN
|
|
$ 3.05 CDN
|
|
AECO
|
(1) This crude oil call option for the period May 1 to October 31,
2013 was settled for $0.2 million.
Bellatrix continues to focus on growth by development of its core
Cardium and Notikewin/Falher assets utilizing its large inventory of
geological prospects. The Company has developed an inventory of 692 net
remaining Cardium locations and 401 net Notikewin/Falher locations
representing net remaining capital requirements of $4.34 billion based
on current costs. Based on the initial funding commitment, the Joint
Venture represents approximately 2.7% of the aforementioned inventory.
As at March 31, 2013, Bellatrix has approximately 205,113 net
undeveloped acres and including all opportunities has approximately
1,700 net exploitation drilling opportunities identified, with capital
requirements of $8.22 billion based on current costs representing over
40 years of drilling inventory based on current annual cash flow. The
Company continues to focus on adding Cardium and Notikewin/Falher
prospective lands.
The Company's updated corporate presentation is available at www.bellatrixexploration.com.
Bellatrix Exploration Ltd. is a Western Canadian based growth oriented
oil and gas company engaged in the exploration for, and the
acquisition, development and production of oil and natural gas reserves
in the provinces of Alberta, British Columbia and Saskatchewan. Common
shares and convertible debentures of Bellatrix trade on the Toronto
Stock Exchange ("TSX") under the symbols BXE and BXE.DB.A, respectively
and the common shares of Bellatrix trade on the NYSE MKT under the
symbol BXE.
Grafton Asset Management Inc. ("Grafton") is an energy focused,
Calgary-based investment management firm. Grafton creates bespoke
energy investment solutions on behalf of sovereign, institutional and
private clients through its proprietary access and intelligence in the
Canadian energy sector. As a financial partner, Grafton provides both
investors and energy companies with unique financing strategies to meet
requisite investment mandates and a variety of risk parameters.
For all Grafton Asset Management Inc. inquiries, please direct your
questions to Ashley Vickers, Investor Relations (ashley@graftonfunds.com, 403-991-4274 or 403-228-8247).
All amounts in this press release are in Canadian dollars unless
otherwise identified.
Forward looking statements: Certain information set forth in this news
release, including management's assessments of the future plans and
operations including anticipated 2013 average daily production and exit
rate, 2013 capital expenditure budget, drilling inventory and amount of
capital required to develop inventory and time for development may
contain forward-looking statements, and necessarily involve risks and
uncertainties, certain of which are beyond Bellatrix's control,
including risks related to satisfaction of conditions precedent to the
Joint Venture and related to closing thereof, risks associated with oil
and gas exploration, development, exploitation, production, marketing
and transportation, loss of markets and other economic and industry
conditions, volatility of commodity prices, currency fluctuations,
imprecision of reserve estimates, environmental risks, competition from
other producers, inability to retain drilling services, incorrect
assessment of value of acquisitions and failure to realize the benefits
therefrom, delays resulting from or inability to obtain required
regulatory approvals, the lack of availability of qualified personnel
or management, stock market volatility and ability to access sufficient
capital from internal and external sources and economic or industry
condition changes. Actual results, performance or achievements could
differ materially from those expressed in, or implied by, these
forward-looking statements and, accordingly, no assurance can be given
that any events anticipated by the forward-looking statements will
transpire or occur, or if any of them do so, what benefits that
Bellatrix will derive therefrom. Additional information on these and
other factors that could affect Bellatrix are included in reports on
file with Canadian securities regulatory authorities and the United
States Securities and Exchange Commission and may be accessed through
the SEDAR website (www.sedar.com), the SEC's website (www.sec.gov or at Bellatrix's website www.bellatrixexploration.com. Furthermore, the forward-looking statements contained in this news
release are made as of the date of this news release, and Bellatrix
does not undertake any obligation to update publicly or to revise any
of the included forward looking statements, whether as a result of new
information, future events or otherwise, except as may be expressly
required by applicable securities law.
Conversion: The term barrels of oil equivalent ("boe") may be
misleading, particularly if used in isolation. A boe conversion ratio
of six thousand cubic feet of natural gas to one barrel of oil
equivalent (6 mcf/bbl) is based on an energy equivalency conversion
method primarily applicable at the burner tip and does not represent a
value equivalency at the wellhead. Given that the value ratio based on
the current price of crude oil as compared to natural gas is
significantly different from the energy equivalency of 6:1, utilizing a
conversion on a 6:1 basis may be misleading as an indication of value.
All boe conversions in this report are derived from converting gas to
oil in the ratio of six thousand cubic feet of gas to one barrel of
oil.
SOURCE: Bellatrix Exploration Ltd.