TSX, NYSE MKT: BXE
CALGARY, Dec. 12, 2013 /CNW/ - Bellatrix Exploration Ltd. ("Bellatrix"
or the "Company") (TSX, NYSE MKT: BXE) is pleased to confirm its 2014
guidance and announce that it has completed its mid-year review of its
2013 credit facilities and provides an update of its recent commodity
price risk management activities.
2013 has been an extraordinary year earmarked by significant production
growth, announcing three separate joint ventures designed to accelerate
our program on a promoted basis, an equity financing, redemption of its
convertible debentures and closing on December 11, 2013 of an impactful
corporate acquisition. These strategic transactions strengthen the
Company by accelerating our ability to provide shareholder value
accretion.
2014 Guidance
Bellatrix expects its 2013 calendar year average daily production will
be +/- 22,250 boe/d and that its exit rate guidance will be +/- 40,000
boe/d with total crude oil, condensate and NGLs at exit at
approximately 37%.
Since November 2013 and for all of 2014, Bellatrix plans to continue to
be active in drilling with 10 rigs operating in its two core resource
plays, the Cardium oil and Mannville condensate rich gas, utilizing
horizontal drilling multi-fracturing technology. With the closing of
the acquisition of Angle Energy Inc. ("Angle") in December 2013, an
initial gross budget of $610 million (including JV partner capital) for
a net capital budget of $370 million has been set for fiscal 2014.
Based on the timing of proposed expenditures, downtime for anticipated
plant turnarounds and normal production declines, execution of the 2014
budget is anticipated to provide 2014 average daily production of
approximately +/- 44,000 boe/d and an exit rate of approximately +/-
47,000 boe/d.
The net capital budget of $370 million is comprised of drilling and
completion costs of $250 million; facility and infrastructure costs of
$100 million and land, geological and other related costs of $20
million. The Company plans to drill/participate in 146 gross (76.27
net) wells in 2014 resulting in 115 gross (65.71 net) Cardium oil wells
and 31 gross (10.56 net) Mannville condensate rich gas wells.
Increased Credit Facilities
A syndicate of lenders led by National Bank of Canada recently completed
its semi-annual borrowing base review for November 30, 2013. Based on
Bellatrix's 2013 mid-year review, effective December 11, 2013, the
Company's borrowing base was increased by $245 million to $500 million.
This 96% increase from the previous borrowing base of $255 million is a
direct result of Bellatrix's closing of its acquisition of Angle, as
well as, the strong 2013 drilling results which delivered significant
reserves and production growth in the first half of 2013.
Effective December 11, 2013, the Company's credit facilities were
increased to $500 million (subject to the semi-annual borrowing base
test on May 31 and November 30 each year), available on an extendible
revolving term basis. The credit facilities are available on a fully
revolving basis until June 24, 2014 (subject to annual extension at the
option of the lenders), and if not extended, will be due in full 366
days thereafter. The expanded credit facilities consist of a $50
million operating facility provided by a Canadian bank and a $450
million syndicated facility provided by nine financial institutions.
The increased credit facilities will be available to finance
Bellatrix's ongoing capital expenditures, working capital requirements
and for general corporate purposes. Amounts borrowed under the credit
facilities will bear interest at a floating rate based on the
applicable Canadian prime rate, U.S. base rate, CDOR rate or LIBOR
margin rate, plus between 1.00% and 3.50%, depending on the type of
borrowing and the Company's debt to cash ratio. A standby fee is
charged of between 0.50% and 0.875% on the undrawn portion of the
credit facilities, depending on the Company's debt to cash flow ratio.
The credit facilities are secured by a $1 billion debenture containing a
first ranking charge and security interest. Bellatrix has provided a
negative pledge and undertaking to provide fixed charges over its
properties in certain circumstances.
Additional 2014 Price Risk Management Contracts
In summary, Bellatrix has the following crude oil and natural gas
commodity price risk management contracts in place for 2014. The
conversion of $/GJ to $/mcf is based on an average corporate heat
content of 40.8 Mj/m3. The conversion to CDN$ from US$ is based on an exchange rate of $0.94
CDN/US.
Product
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Term
|
Volume
|
Average Price
|
Crude Oil
|
Jan 1, 2014 to Dec. 31, 2014
|
6,000 bbl/d
|
$97.07 CDN/bbl
|
Natural gas
|
Jan. 1, 2014 to Jun. 30, 2014
|
47.8 mmcf/d
|
$3.84 CDN/mcf
|
Natural gas
|
Jul. 1, 2014 to Dec 31,, 2014
|
34.8 mmcf/d
|
$3.97 CDN/mcf
|
Bellatrix recently entered into two commodity price risk management
contracts consisting of two natural gas fixed price swaps for 20,000
GJ/d and 20,000 GJ/d respectively for the period January 1, 2014 to
December 31, 2014 at a prices of CDN$3.30/GJ (CDN$3.78/mcf) and
CDN$3.60/GJ (CDN$4.13/mcf). In addition, Bellatrix assumed crude oil
hedges as part of the acquisition of Angle, which includes three crude
oil fixed price contracts for 500 bbl/d each, for the period January 1,
2014 to December 31, 2014, at prices of US $93.30/bbl, US $95.00/bbl
and CDN $98.30/bbl respectively. Bellatrix also recently bought back
1,500 bbl/d of 2014 call options of US $105.00 at no cost and entered
into two crude oil fixed price contracts for a total volume of 1,500
bbl/d, for the period January 1, 2014 to December 31, 2014. The first
contact was for 1,000 bbl/d at a price of CDN $99.50/bbl and the second
contract was for 500 bbl/d at CDN $99.60/bbl.
As at December 11, 2013, Bellatrix has entered into commodity price risk
management arrangements for 2014 as follows:
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Type
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Period
|
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Volume
|
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Price Floor
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Price Ceiling
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Index
|
Crude oil fixed
|
|
Jan. 1, 2014 to Dec. 31, 2014
|
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500 bbl/d
|
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$
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93.30 US
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$
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93.30 US
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WTI
|
Crude oil fixed
|
|
Jan. 1, 2014 to Dec. 31, 2014
|
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1,500 bbl/d
|
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$
|
94.00 CDN
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$
|
94.00 CDN
|
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WTI
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Crude oil fixed
|
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Jan. 1, 2014 to Dec. 31, 2014
|
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500 bbl/d
|
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$
|
95.00 US
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$
|
95.00 US
|
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WTI
|
Crude oil fixed
|
|
Jan. 1, 2014 to Dec. 31, 2014
|
|
1,500 bbl/d
|
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$
|
95.22 CDN
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$
|
95.22 CDN
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WTI
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Crude oil fixed
|
|
Jan. 1, 2014 to Dec. 31, 2014
|
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500 bbl/d
|
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$
|
98.30 CDN
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$
|
98.30 CDN
|
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WTI
|
Crude oil fixed
|
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Jan. 1, 2014 to Dec. 31, 2014
|
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1,000 bbl/d
|
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$
|
99.50 CDN
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$
|
99.50 CDN
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WTI
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Crude oil fixed
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Jan. 1, 2014 to Dec. 31, 2014
|
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500 bbl/d
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$
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99.60 CDN
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$
|
99.60 CDN
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WTI
|
Crude oil call options
|
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Jan. 1, 2014 to Dec. 31, 2014
|
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1,500 bbl/d
|
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-
|
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$
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105.00 US
|
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WTI
|
Natural gas fixed
|
|
Apr. 1, 2013 to Jun. 30, 2014
|
|
15,000 GJ/d
|
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$
|
3.05 CDN
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$
|
3.05 CDN
|
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AECO
|
Natural gas fixed
|
|
Jan. 1, 2014 to Dec. 31, 2014
|
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20,000 GJ/d
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$
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3.30 CDN
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$
|
3.30 CDN
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AECO
|
Natural gas fixed
|
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Jan. 1, 2014 to Dec. 31, 2014
|
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20,000 GJ/d
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$
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3.60 CDN
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$
|
3.60 CDN
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AECO
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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 742 net
remaining Cardium locations, 381 net Notikewin/Falher and 128 Mannville
locations representing a net remaining investment of $4.97 billion
(based on current costs). Bellatrix has approximately 424,452 net
undeveloped acres and including all opportunities of approximately
2,000 net exploitation drilling opportunities identified, with capital
requirements of $10.1 billion representing over 30 years of drilling
inventory based on current annual cash flow and costs. The Company
continues to focus on adding Cardium and Notikewin prospective lands.
The Company's current 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.
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, anticipated 2014 average daily production and exit rate, 2014
capital expenditure budget and nature of expenditures and drilling
inventory and costs and time to develop may contain forward-looking
statements, and necessarily involve risks and uncertainties, certain of
which are beyond Bellatrix's control, including 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 herein 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.
Raymond G. Smith, P.Eng., President and CEO (403) 750-2420
or
Edward J. Brown, CA, Executive Vice President, Finance and CFO (403) 750-2655
or
Brent A. Eshleman, P.Eng., Executive Vice President (403) 750-5566
or
Troy Winsor, Investor Relations (800) 663-8072