Bellatrix Exploration Announces Material Reserves Increases (up 54%) Posting $6.95/boe Finding and Development Costs
TSX: BXE
CALGARY, Feb. 21, 2013 /CNW/ - Bellatrix Exploration Ltd. ("Bellatrix"
or the "Company") announces the results of an independent reserve
evaluation effective December 31, 2012. The report was completed by
Sproule Associates Limited ("Sproule"). The evaluation encompasses
100% of Bellatrix's oil and gas properties and was prepared in
accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101").
Bellatrix benefitted from the largest capital program since conversion
to a growth-oriented exploration and production company as it grew 54% to a total of 104 million boe proved and probable ("2P") reserves in 2012.
In 2012, the Company spent $164 million developing its resource play
assets and $14 million (net of dispositions) on acquiring additional
Cardium and Notikewin/Falher production and development acreage.
Resultant growth contributed to a 42% increase in the Company's net asset value to $1.07 billion, equivalent to $9.90/share using a 10%/year discount to future net revenue.
The Company replaced 702% of total production in 2012 with new proved and probable reserves at a finding, development and acquisition ("FD&A") cost of $4.28/boe, excluding future development capital ("FDC") requirements. Including FDC requirements, FD&A totaled $6.95/boe. Annual production was up 40% in 2012, to 6.11 million boe from 4.36 million boe.
The Company established a proved ("1P") Recycle Ratio of 2.35X and a 2P Recycle Ratio of 5.02X excluding FDC.
As at December 31, 2012 proved plus probable reserves were comprised of 34.6 million barrels of oil and natural gas liquids as well as 418 billion cubic feet of natural gas, with a 33% liquids weighting on a boe basis.
The Company's calculated reserve life index improved to 8.6 years for 1P
reserves, 12.4 years for 2P reserves.
KEY 2012 ACHIEVEMENTS
|
Twelve months ended December,
|
|
|
2012
|
2011
|
Change
|
Reserves (company interest, mboe)
|
|
|
|
|
Proved Developed Producing
|
24,518
|
19,336
|
+26.8 %
|
|
Total Proved
|
55,490
|
41,818
|
+32.7%
|
|
Proved Undrilled/Total Proved
|
56%
|
53%
|
|
|
Total Proved and Probable
|
104,258
|
67,550
|
+54.3%
|
|
Probable/Total Proved and Probable
|
47%
|
38%
|
|
Net Asset Value, per basic share
|
$9.90
|
$7.01
|
+41.4%
|
|
Twelve months ended December,
|
|
|
2012
|
2011
|
Change
|
FD&A costs
|
|
|
|
|
1P, including FDC ($/boe)
|
$11.77
|
$13.00
|
-9.5%
|
|
2P, including FDC ($/boe)
|
$6.95
|
$9.29
|
-25.2%
|
|
3 year average 2P, including FDC ($/boe)
|
$9.04
|
$10.59
|
-14.6%
|
Annual Average Sales Volumes (boe/d)
|
16,686
|
11,954
|
+39.6 %
|
Q4 Average Sales Volumes (boe/d)
|
18,763
|
14,209
|
+32.1 %
|
Exit Production Rate (boe/d)
|
19,500
|
16,141
|
+20.8 %
|
Funds Flow From Operations ($ millions) 1(unaudited)
|
$111.0
|
$94.2
|
+17.8 %
|
|
Per basic share (unaudited)
|
$1.03
|
$0.91
|
+ 13.2%
|
Reserve Life Index
|
|
|
|
|
Proved
|
8.6 yrs
|
8.0 yrs
|
+7.5%
|
|
Proved and Probable
|
12.4 yrs
|
10.0 yrs
|
+24.0%
|
Recycle Ratios1
|
|
|
|
|
1P, excluding FDC
|
2.35 x
|
3.01 x
|
|
|
2P, excluding FDC
|
5.02 x
|
4.16 x
|
|
1 Funds flow from operations is not a recognized term under Canadian
generally accepted accounting principles. See "Non-GAAP Measures".
2Operating netback includes impact of commodity price risk contracts
|
SELECT 2012 OPERATING RESULTS
To assist in interpretation of the Company's reserves and key
achievements, Bellatrix releases select 2012 operating results ahead of
full year-end 2012 financial results including data on capital
expenditures, cash flow from operating activities, and drilling
results.
CAPITAL EXPENDITURES
|
|
|
|
|
|
|
|
Years ended December 31,
|
($000s)
|
|
|
|
2012
(unaudited)
|
2011
|
Lease acquisitions and retention
|
|
|
8,303
|
16,367
|
Geological and geophysical
|
|
|
290
|
433
|
Drilling and completion costs
|
|
|
118,783
|
141,051
|
Facilities and equipment
|
|
|
36,811
|
18,471
|
|
|
|
164,187
|
176,322
|
Drilling Incentive Credits
|
|
|
-
|
(827)
|
Exploration and development1
|
|
|
164,187
|
175,495
|
Corporate 2
|
|
|
195
|
268
|
Property acquisitions
|
|
|
20,966
|
3,798
|
Total capital expenditures - cash
|
|
|
185,348
|
179,561
|
Property dispositions - cash
|
|
|
(6,660)
|
(4,203)
|
Total net capital expenditures - cash
|
|
|
178,688
|
175,358
|
Capital lease additions - non cash
|
|
|
10,000
|
3,700
|
Other - non-cash 3
|
|
|
(285)
|
6,875
|
Total - non - cash
|
|
|
9,715
|
10,575
|
Total capital expenditures
|
|
|
188,403
|
185,933
|
1 Excludes capitalized costs related to decommissioning liabilities
expenditures incurred during the year.
2 Corporate includes furniture, fixtures and other costs.
3 Other includes non-cash adjustments for current year's decommissioning
liabilities and share based compensation.
|
The $185.3 million capital program for the year ended December 31, 2012
was financed from funds flow from operations and bank debt.
ACQUISITIONS
Effective November 1, 2012, Bellatrix acquired additional highly
prospective Cardium and Notikewin/Falher lands and production in the
Willesden Green area of Alberta with 500 boe/d of production, 16 gross
(11.95 net) sections of Cardium and Mannville prospective lands, 25 net
Cardium development locations, 4 net Notikewin/Falher development
locations and a 25% working interest in an operated compressor station
and gathering system. The purchase price of $21 million was funded
using the Company's existing credit facilities.
On December 14, 2012, Bellatrix acquired an additional 11 gross and net
sections of highly prospective Cardium and Notikewin/Falher lands in
the Ferrier area of west central Alberta. This acquisition is
anticipated to provide an additional 37 net drilling locations in the
Cardium, 9 net locations in the Notikewin/Falher and an additional 66
net locations in the Duvernay formation.
DISPOSITIONS
During the third quarter of 2012, Bellatrix closed on the disposition of
a minor non-core property interest in the Wainwright area, Alberta for
$4.25 million after adjustments. This non-operated unit heavy oil
property had production of approximately 59 boe/d. The net proceeds
from the disposition were initially used to reduce the Company's bank
indebtedness, and ultimately were directed toward the development of
the Company's Cardium oil resource program.
During the second quarter of 2012, Bellatrix closed on the disposition
of two minor non-core property interests consisting of the sale of the
Girouxville property in Alberta for $0.6 million after adjustments and
the sale of the Cypress-Chowade property in British Columbia for $1.4
million after adjustments. There was no current production from the
Girouxville or Cypress-Chowade properties.
RECONCILIATION OF CASH FLOW FROM OPERATING ACTIVITIES AND FUNDS FLOW
FROM OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
Years ended December 31,
|
($000s)
|
|
|
|
2012
(unaudited)
|
2011
|
Cash flow from operating activities
|
|
|
109,328
|
98,192
|
Decommissioning costs incurred
|
|
|
635
|
569
|
Change in non-cash working capital
|
|
|
1,075
|
(4,524)
|
Funds flow from operations1
|
|
|
111,038
|
94,237
|
1
|
Funds flow from operations is not a recognized term under Canadian
generally accepted accounting principles. See "Non-CAAP Measures"
|
Bellatrix generated funds flow from operations of $111.0 million ($1.03
per basic share and $0.96 per diluted share) for the year ended
December 31, 2012, an increase of 18% from $94.2 million ($0.91 per
basic share and $0.84 per diluted share) for the 2011 year.
Bellatrix's cash flow from operating activities of $109.3 million
($1.02 per basic share and $0.95 per diluted share) for the year ended
December 31, 2012 increased approximately 11% from the $98.2 million
($0.95 per basic share and $0.87 per diluted share) generated in the
2011 year. The increase between the 2012 and 2011 years was
principally due to higher net realized gains on the Company's commodity
risk management contracts and higher funds from operating netbacks,
despite significantly reduced commodity prices, offset partially by
increased financing expenses and slightly higher general and
administrative expenses in 2012 compared to 2011.
Bellatrix maintains a commodity price risk management program to provide
a measure of stability to funds flow from operations. Unrealized
mark-to-market gains or losses are non-cash adjustments to the current
fair market value of the contract over its entire term and are included
in the calculation of net profit.
DRILLING RESULTS
During the 2012 year, Bellatrix posted a 100% success rate drilling
and/or participating in 34 gross (26.32 net) wells, resulting in 28
gross (21.32 net) Cardium oil wells, 2 gross (2.0 net) Cardium
condensate-rich gas wells, 1 gross (1.0 net) Duvernay gas well, and 3
gross (2.0 net) Notikewin/Falher liquids-rich gas wells.
By comparison, Bellatrix drilled or participated in 54 gross (34.84 net)
wells during the year ended December 31, 2011, including 39 gross
(29.04 net) oil wells, 14 gross (5.79 net) liquids-rich natural gas
wells, and 1 gross (0.007 net) dry hole that was drilled in a
non-operated oil unit.
During fiscal 2012 the Company operated 24 net wells of the 28 net wells
reported in the Cardium. The following average initial production
("IP") rates for the first 7 days ("IP 7"), for the first 15 days
("IP15") and the first 30 days ("IP 30") were achieved:
Time
|
# of wells
|
Boe/d
|
IP 7
|
24
|
769
|
IP 15
|
24
|
715
|
IP 30
|
24
|
656
|
2012 RESERVES
Bellatrix engaged Sproule to complete a reserve report in accordance
with NI 51-101, on 100% of Bellatrix's oil and gas properties effective December 31,
2012. Sproule's review does not include the impact of Bellatrix's
proposed Cardium Joint Venture announced subsequent to the effective
date and currently estimated to close on or before April 30, 2013.
Highlights of Bellatrix's December 31, 2012 reserves and 2012 reserve
additions include:
-
104.3 million boe total company interest proved and probable reserves, and 55.5 million boe total company interest proved reserves as at
December 31, 2012, representing 54.3% and 32.7% year over year growth in 2012, respectively.
-
$1,106.9 million net present value of future net revenue of working interest reserves before tax at 10%
discount rate up from $722.5 million posted as of December 31, 2011.
This growth contributes to a 41.9% increase in Bellatrix's net asset value, as at December 31, 2012 to $9.90 per basic share outstanding based on the Sproule evaluation of proved and probable
reserves at a 10% discount rate.
-
702% replacement of production with 2P company interest reserve additions in year ended 2012.
-
$11.77/boe FD&A for proved reserves including changes to future development capital and $9.16/boe
-
FD&A for proved reserves excluding changes to future development capital for the year ended
2012.
-
FD&A of $6.95/boe for total proved and probable reserves including changes to future development and $4.28/boe FD&A for total proved and probable reserves excluding changes to future development capital for the year ended
2012.
-
The 3 year 2P FD&A including FDC was reduced to $9.04/boe.
-
12.4 year reserve life index on a total working interest proved and probable basis at December 31,
2012 based on Sproule's 2013 forecasted average production of 22,888
boe/d.
-
161 gross (96 net) evaluated future undrilled Cardium horizontal locations.
-
56 gross (41 net) evaluated future undrilled Notikewin/Falher horizontal locations.
|
2012 Reserves
|
|
|
|
2011
Reserves
|
|
|
Oil & Liquids
|
Natural Gas
|
Total
|
|
Total
|
Variance
|
|
(mbbls)
|
(mmcf)
|
(mboe)
|
|
(mboe)
|
%
|
Proved
|
19,722
|
214,607
|
55,490
|
|
41,818
|
+32.7%
|
Probable
|
14,921
|
203,077
|
48,767
|
|
25,732
|
+89.5%
|
Proved Plus Probable
|
34,644
|
417,684
|
104,258
|
|
67,550
|
+54.3 %
|
NET ASSET VALUE - PROVED PLUS PROBABLE
The following table of net asset value, as at December, 31, 2012, is
based on the Sproule evaluation of future net revenue of the Company's
proved plus probable reserves before tax, which does not represent fair
market value and does not take into account possible reserve additions
from reinvestment of cash flow in existing properties.
($000's except acre, unit and per unit amounts)
|
|
PW 0%
|
PW 5%
|
PW 10%
|
PW 15%
|
PW 20%
|
Proved plus Probable
Reserves1
|
2,321,425
|
1,523,786
|
1,106,930
|
854,404
|
686,480
|
Undeveloped Lands2
|
131,515
|
131,515
|
131,515
|
131,515
|
131,515
|
Value of Seismic3
|
19,500
|
19,500
|
19,500
|
19,500
|
19,500
|
Net Debt4
|
(189,577)
|
(189,577)
|
(189,577)
|
(189,577)
|
(189,577)
|
Net Asset Value 6
|
2,282,863
|
1,485,224
|
1,068,368
|
815,842
|
647,918
|
|
|
|
|
|
|
Per Common Share 5
- Per Basic Share
|
$21.16
|
$13.77
|
$9.90
|
$7.56
|
$6.01
|
1 As evaluated by Sproule as at December 31, 2012 based on forecast
prices and costs before income tax
|
2 As estimated by Bellatrix as at December 31, 2012 based on 206,638 net
acres of undeveloped land at an average price of $636.45 per acre.
|
3 Based on 27.66% of $70.5 million replacement value based on seismic
costs on an average of $1,500/km for 2d and $10,000/km2 to buy data.
|
4 The Company's calculation of Net Debt as at December 31, 2012, includes
long term debt, the working capital deficiency (excess), and the
liability portion of convertible debentures ($50.687 million) and
excludes deferred liabilities, long-term commodity contract
liabilities, decommissioning liabilities, long-term finance lease
obligations and the deferred tax liability. As at December 31, 2012,
the principal amount of convertible debentures outstanding was $55.0
million.
|
5 Based on 107.869 million common shares outstanding as at December 31,
2012.
|
6Certain of the information used in the foregoing calculation, including
net debt and number of common shares outstanding, is based on unaudited
financial information.
|
NET PRESENT VALUE OF FUTURE NET REVENUE ("NPV")
The forecast prices used in Sproule's reserve report effective December
31, 2012 (the "Sproule Report") were an average of the forecast prices
published by Sproule Associates Ltd., GLJ Petroleum Consultants Ltd.
and McDaniel & Associates Consultants Ltd., as at January 1, 2013 (the
"Consultants' Average Forecast Prices"). It should not be assumed that the NPV estimated by Sproule represents
the fair market value of the reserves.
Estimated future net revenues are stated before deducting future
estimated site restoration costs but are reduced for estimated future
abandonment costs, the Saskatchewan Capital Tax and estimated capital
for future development associated with the reserves. In the Sproule
Report, the net total future capital over the life of the reserves
associated with the proved reserves is $327.4 million ($288.3 million
discounted at 10%) and $524.6 million ($452.1 million discounted at 10%) for the total
proved and probable reserves. The change in 2012 net total future
capital over the life of the reserves associated with the proved
reserves is $63.2 million ($52.7 million discounted at 10%) and $147.8 million ($115.1 million discounted at 10%) for the total
proved and probable reserves.
SUMMARY OF NPV BEFORE INCOME TAXES1, 2
|
|
|
|
|
|
|
As at December 31, 2012
|
0%
|
5%
|
10%
|
15%
|
20%
|
Proved
|
|
|
|
|
|
|
Developed producing
|
576,951
|
447,539
|
369,969
|
318,154
|
281,033
|
|
Developed non-producing
|
2,069
|
1,455
|
1,069
|
816
|
643
|
|
Undeveloped
|
567,611
|
378,161
|
265,854
|
192,681
|
141,884
|
Total proved
|
1,146,631
|
827,154
|
636,891
|
511,651
|
423,561
|
Probable
|
1,174,793
|
696,632
|
470,039
|
342,753
|
262,919
|
Proved Plus Probable
Producing
|
852,644
|
601,470
|
469,850
|
389,410
|
335,260
|
Total proved plus probable
|
2,321,425
|
1,523,786
|
1,106,930
|
854,404
|
686,480
|
1 Forecast Prices and Costs ($000s), Discounted at (%/year).
|
2 May not add due to rounding.
|
SUMMARY OF NPV AFTER INCOME TAXES1, 2, 3
|
|
|
|
|
|
|
As at December 31, 2012
|
0%
|
5%
|
10%
|
15%
|
20%
|
Proved
|
|
|
|
|
|
|
Developed producing
|
574,579
|
446,965
|
369,811
|
318,106
|
281,018
|
|
Developed non-producing
|
1,552
|
1,280
|
1,007
|
793
|
634
|
|
Undeveloped
|
425,706
|
286,032
|
201,357
|
145,075
|
105,352
|
Total proved
|
1,001,838
|
734,278
|
572,175
|
463,974
|
387,004
|
Probable
|
880,969
|
518,644
|
346,562
|
249,909
|
189,412
|
Proved Plus Probable Producing
|
781,256
|
568,456
|
452,664
|
379,749
|
329,522
|
Total proved plus probable
|
1,882,207
|
1,252,922
|
918,737
|
713,883
|
576,417
|
1 Forecast Prices and Costs ($000s), Discounted at (%/year).
|
2 May not add due to rounding.
|
3 The after-tax NPV of Bellatrix's oil and gas properties reflects the tax
burden on the properties on a stand-alone basis and utilizes corporate
tax pools. It does not consider the business-entity-level tax
situation, or tax planning. It does not provide an estimate of the
value at the level of the business entity, which may be significantly
different. Bellatrix's consolidated financial statements and
management's discussion and analysis should be consulted for
information at the business entity level.
|
PROVED PLUS PROBABLE FD&A COSTS 1, 2
|
|
|
|
|
|
|
|
2012
|
2011
|
2010
|
2010 - 2012
Average
|
Excluding FDC
|
|
|
|
|
FD&A Costs, 2P ($/boe)
|
|
|
|
|
|
Exploration and development3
|
4.29
|
5.99
|
4.68
|
4.95
|
|
Acquisitions (excluding dispositions)
|
4.21
|
12.24
|
20.96
|
5.76
|
|
Total (including acquisitions)
|
4.28
|
6.06
|
4.96
|
5.00
|
Including FDC3
|
|
|
|
|
FD&A Costs, 2P ($/boe)
|
|
|
|
|
|
Exploration and development
|
7.31
|
9.26
|
12.74
|
9.25
|
|
Acquisitions (excluding dispositions)
|
4.21
|
12.24
|
20.96
|
5.76
|
|
Total (including acquisitions)
|
6.95
|
9.29
|
12.89
|
9.04
|
1 NI 51-101 specifies how finding and development costs should be
calculated if they are reported. Essentially NI 51-101 requires that
the exploration and development costs incurred in the year along with
the change in estimated future development costs be aggregated and then
divided by the applicable reserve additions. The calculation
specifically excludes the effects of acquisitions and dispositions on
both reserves and costs.
By excluding the effects of acquisitions and dispositions Bellatrix
believes that the provisions f the NI 51-101 do not fully reflect
Bellatrix's ongoing reserve replacement costs. Since acquisitions can
have a significant impact on Bellatrix's annual reserve replacement
costs, excluding these amounts could result in an inaccurate portrayal
of Bellatrix's cost structure. Accordingly, Bellatrix also provides
FD&A costs that incorporate all acquisitions net of any dispositions
during the year. The foregoing calculation is based on working
interest reserves.
|
2 Certain of the information used in the foregoing calculation, including
exploration and development expenditures and acquisition expenditures
is based on unaudited financial information and is subject to audit and
may be subject to change as a result. 2010 numbers do not reflect any
changes to accounting rules that may have occurred and are based on
generally accepted accounting principles prior to adoption of
International Financial Reporting Standards ("IFRS") and have not been
restated.
|
3 The aggregate of the exploration and development costs incurred in the
most recent financial year and the change during that year in estimated
future development costs generally will not reflect total finding and
development costs related to reserve additions for that year.
|
PROVED FD&A COSTS 1, 2
|
|
|
|
|
|
|
2012
|
2011
|
2010
|
2010-2012
Average
|
Excluding FDC
|
|
|
|
|
FD&A Costs, 1P ($/boe)
|
|
|
|
|
|
Exploration and development3
|
8.87
|
8.28
|
8.03
|
8.43
|
|
Acquisitions (excluding dispositions)
|
12.20
|
15.71
|
27.41
|
14.52
|
|
Total (including acquisitions)
|
9.16
|
8.37
|
8.47
|
8.69
|
Including FDC3
|
|
|
|
|
FD&A Costs, 1P ($/boe)
|
|
|
|
|
|
Exploration and development
|
11.73
|
12.97
|
15.67
|
13.17
|
|
Acquisitions (excluding dispositions)
|
22.42
|
15.71
|
27.41
|
22.33
|
|
Total (including acquisitions)
|
11.77
|
13.00
|
15.94
|
13.22
|
1 NI 51-101 specifies how finding and development costs should be
calculated if they are reported. Essentially NI 51-101 requires that
the exploration and development costs incurred in the year along with
the change in estimated future development costs be aggregated and then
divided by the applicable reserve additions. The calculation
specifically excludes the effects of acquisitions and dispositions on
both reserves and costs. By excluding the effects of acquisitions and
dispositions Bellatrix believes that the provisions of the NI 51-101 do
not fully reflect Bellatrix's ongoing reserve replacement costs. Since
acquisitions can have a significant impact on Bellatrix's annual
reserve replacement costs, excluding these amounts could result in an
inaccurate portrayal of Bellatrix's cost structure. Accordingly,
Bellatrix also provides FD&A costs that incorporate all acquisitions
net of any dispositions during the year. The foregoing calculation is
based on working interest reserves.
|
2 Certain of the information used in the foregoing calculation, including
exploration and development expenditures and acquisition expenditures
is based on unaudited financial information and is subject to audit and
may be subject to change as a result. 2010 numbers do not reflect any
changes to accounting rules that may have occurred and are based on generally accepted accounting principles prior to
adoption of International Financial Reporting Standards ("IFRS") and
have not been restated.
|
3 The aggregate of the exploration and development costs incurred in the
most recent financial year and the change during that year in estimated
future development costs generally will not reflect total finding and
development costs related to reserve additions for that year.
|
RESERVE LIFE INDEX
Bellatrix's reserve life index has been determined for proved and proved
plus probable working interest reserves using forecast prices and
costs. The reserve life index for 2012 below is calculated by dividing
reserves as at the effective date of the Sproule Report, December 31,
2012, by 2013 forecasted average production of 22,888 boe/d proved plus
probable and 17,655 boe/d proved, as set forth in the Sproule Report,
representing a measure of the amount of time production could be
sustained at the production rates based on the reserves at the
applicable point in time.
|
|
|
|
|
|
|
2012
|
2011
|
2010
|
2009
|
2008
|
Proved
|
8.6
|
8.0
|
7.2
|
6.4
|
6.4
|
Proved and Probable
|
12.4
|
10.0
|
11.2
|
9.4
|
10.1
|
RECYCLE RATIO (OPERATING NETBACK1/FD&A COST)
As at December 31, 2012
|
Proved
|
Proved and
Probable
|
Operating netback before commodity price risk management contracts
($/boe) 1
(unaudited)
|
$19.66
|
$19.66
|
Recycle ratio (excluding change in FDC)
|
2.15x
|
4.59x
|
|
|
|
Operating netback after commodity price risk management contracts
($/boe) 1 (unaudited)
|
$21.51
|
$21.51
|
Recycle ratio (excluding change in FDC)
|
2.35x
|
5.02x
|
1Operating netback is calculated by deducting transportation, royalties
and operating costs from revenue.
The recycle ratio is a measure for evaluating the effectiveness of a
company's re-investment program. The ratio measures the efficiency of
capital investment. It accomplishes this by comparing the operating
netback per BOE to that year's reserve FD&A cost per BOE. Since its
conversion to a growth oriented exploration and production company,
Bellatrix has successfully achieved a recycle ratio in excess of the
2.74 times recorded in 2009 for proved and probable reserves. In 2012,
2011 and 2010 the recycle ratio for proved and probable reserves was
5.02 times, 4.16 times and 4.31 times, respectively.
RESERVES RECONCILIATION
Reserves included herein are stated on a company interest basis (working
interest plus royalty interests prior to deduction of royalty burdens)
unless noted otherwise in addition, certain reserves included herein
are stated on a gross (working interest excluding royalty interests and
burdens) and net (working interest plus royalty interest less royalty
burdens) basis as defined in NI 51-101. "Company interest" is not a
term defined by NI 51-101 and as such the estimates of company interest
reserves herein may not be comparable to estimates prepared in
accordance with NI 51-101 or to other issuers' estimates of company
interest reserves.
At December 31, 2012 the Company's proved plus probable company interest
reserves as evaluated by Sproule, using forecast prices and costs, were
104,258 mboe, an increase of 54.3% compared to 67,550 mboe at December
31, 2011. By commodity type, natural gas made up 67% and oil and
natural gas liquids 33% of total proved plus probable reserves. At
December 31, 2012, the Company's total proved company interest reserves
were 55,490 mboe, an increase of 32.7% compared to 41,818 mboe at
December 31, 2011 (calculated after taking into account 2012 production
of 6,107 mboe).
In addition to the information disclosed herein, more detailed
information on the Company's reserves will be included in the Company's
Annual Information Form.
Reserves, at December 31, 2012, as evaluated by Sproule, are summarized
below and in the following tables.
Summary of Oil and Gas Company Interest Reserves1 (Gross + Royalties Receivable)
|
Forecast Prices and Costs
|
|
|
As at Dec. 31, 2012
|
As at Dec. 31, 2011
|
|
|
Natural Gas2
|
Heavy Oil
|
Light and
|
Natural Gas
|
Total
|
Total
|
|
|
|
|
Medium Oil
|
Liquids
|
|
|
|
|
(mmcf)
|
(mbbl)
|
(mbbl)
|
(mbbl)
|
(mboe, 6:1)
|
(mboe, 6:1)
|
Proved
|
|
|
|
|
|
|
|
Developed producing
|
91,900
|
68
|
5,337
|
3,796
|
24,518
|
19,336
|
|
Developed non-producing
|
787
|
-
|
13
|
22
|
166
|
438
|
|
Undeveloped
|
121,920
|
113
|
5,129
|
5,244
|
30,807
|
22,043
|
Total proved
|
214,607
|
181
|
10,479
|
9,062
|
55,490
|
41,818
|
Probable
|
203,077
|
224
|
6,073
|
8,624
|
48,767
|
25,732
|
Proved plus probable, producing
|
128,726
|
92
|
7,527
|
5,325
|
34,398
|
27,405
|
Total proved plus probable
|
417,684
|
405
|
16,552
|
17,687
|
104,258
|
67,550
|
1 "Company Interest" means Bellatrix's working interest (operated or
non-operated) share before deduction of royalties but after including
any royalty interests of Bellatrix. May not add due to rounding.
2 Includes natural gas from coal bed methane and shale gas reserves.
|
Summary of Oil and Gas Working Interest Reserves1 (Gross)
|
Forecast Prices and Costs
|
|
|
As at Dec. 31, 2012
|
As at Dec. 31, 2011
|
|
|
Natural Gas2
|
Heavy Oil
|
Light and
|
Natural Gas
|
Total
|
Total
|
|
|
|
|
Medium Oil
|
Liquids
|
|
|
|
|
(mmcf)
|
(mbbl)
|
(mbbl)
|
(mbbl)
|
(mboe, 6:1)
|
(mboe, 6:1)
|
Proved
|
|
|
|
|
|
|
|
Developed producing
|
91,664
|
68
|
5,337
|
3,787
|
24,468
|
19,302
|
|
Developed non-producing
|
787
|
-
|
13
|
22
|
166
|
438
|
|
Undeveloped
|
120,898
|
113
|
5,119
|
5,200
|
30,581
|
22,021
|
Total proved
|
213,348
|
181
|
10,468
|
9,008
|
55,215
|
41,761
|
Probable
|
201,962
|
224
|
6,058
|
8,576
|
48,519
|
25,674
|
Proved plus probable, producing
|
128,441
|
93
|
7,526
|
5,312
|
34,396
|
27,318
|
Total proved plus probable
|
415,310
|
405
|
16,526
|
17,584
|
103,734
|
67,435
|
1 "Working Interest" means Bellatrix's working interest (operated or
non-operated) share before deduction of royalties. Also referred to as
"Gross" reserves under NI 51-101. May not add due to rounding.
2 Includes natural gas from coal bed methane and shale gas reserves.
|
|
Summary of Oil and Gas Net Reserves1 (Net)
|
Forecast Prices and Costs
|
|
|
As at Dec. 31, 2012
|
As at Dec. 31, 2011
|
|
|
Natural Gas2
|
Heavy Oil
|
Light and
|
Natural Gas
|
Total
|
Total
|
|
|
|
|
Medium Oil
|
Liquids
|
|
|
|
|
(mmcf)
|
(mbbl)
|
(mbbl)
|
(mbbl)
|
(mboe, 6:1)
|
(mboe, 6:1)
|
Proved
|
|
|
|
|
|
|
|
Developed producing
|
72,206
|
52
|
4,159
|
2,253
|
18,526
|
14,906
|
|
Developed non-producing
|
641
|
-
|
9
|
12
|
128
|
337
|
|
Undeveloped
|
93,809
|
86
|
4,287
|
3,527
|
23,536
|
16,279
|
Total proved
|
166,656
|
138
|
8,455
|
5,793
|
42,189
|
31,522
|
Probable
|
153,589
|
169
|
4,828
|
5,477
|
36,095
|
18,970
|
Proved plus probable, producing
|
100,625
|
71
|
5,800
|
3,115
|
25,806
|
20,792
|
Total proved plus probable
|
320,244
|
307
|
13,862
|
11,270
|
78,284
|
50,492
|
1 "Net" means Bellatrix's working interest (operated or non-operated)
share after deduction of royalty obligations, plus Bellatrix's royalty
interests in reserves. May not add due to rounding.
2 Includes natural gas from coal bed methane and shale gas reserves.
|
COMPANY INTEREST1 (Gross + Royalties Receivable) RESERVES RECONCILIATION
|
|
Light and
Medium
Crude Oil
(mbbl)
|
Heavy Crude
Oil (mbbl)
|
Total Crude
Oil (mbbl)
|
NGLs (mbbl)
|
Conventional
Natural Gas
(mmcf)2
|
Oil
Equivalent
(mboe)
|
PROVED PRODUCING
|
|
|
|
|
|
|
Opening Balance
|
4,380
|
651
|
5,031
|
2,414
|
71,351
|
19,336
|
|
Extensions
|
646
|
-
|
646
|
1,059
|
24,100
|
5,721
|
|
Infill Drilling
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Improved Recovery
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Technical Revisions
|
1,376
|
23
|
1,399
|
1,158
|
19,416
|
5,793
|
|
Discoveries
|
-
|
-
|
-
|
2
|
1,945
|
327
|
|
Acquisitions
|
99
|
-
|
99
|
124
|
2,806
|
691
|
|
Dispositions
|
-
|
(504)
|
(504)
|
-
|
(20)
|
(507)
|
|
Economic Factors
|
(81)
|
-
|
(81)
|
(53)
|
(3,611)
|
(736)
|
|
Production
|
(1,083)
|
(103)
|
(1,186)
|
(907)
|
(24,087)
|
(6,107)
|
Closing Balance
|
5,337
|
68
|
5,405
|
3,796
|
91,900
|
24,518
|
TOTAL PROVED
|
|
|
|
|
|
|
Opening Balance
|
8,840
|
861
|
9,701
|
5,718
|
158,398
|
41,818
|
|
Extensions
|
1,198
|
-
|
1,198
|
2,338
|
54,592
|
12,634
|
|
Infill Drilling
|
674
|
-
|
674
|
200
|
4,442
|
1,614
|
|
Improved Recovery
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Technical Revisions
|
672
|
(73)
|
599
|
1,363
|
17,241
|
4,835
|
|
Discoveries
|
-
|
-
|
-
|
2
|
1,945
|
327
|
|
Acquisitions
|
283
|
-
|
283
|
426
|
6,799
|
1,842
|
|
Dispositions
|
-
|
(504)
|
(504)
|
-
|
(501)
|
(587)
|
|
Economic Factors
|
(105)
|
-
|
(105)
|
(77)
|
(4,222)
|
(886)
|
|
Production
|
(1,083)
|
(103)
|
(1,186)
|
(907)
|
(24,087)
|
(6,107)
|
Closing Balance
|
10,479
|
181
|
10,660
|
9,062
|
214,607
|
55,490
|
PROBABLE
|
|
|
|
|
|
|
Opening Balance
|
5,703
|
382
|
6,085
|
3,677
|
95,820
|
25,734
|
|
Extensions
|
1,055
|
-
|
1,055
|
3,779
|
87,004
|
19,335
|
|
Infill Drilling
|
713
|
-
|
713
|
148
|
3,079
|
1,374
|
|
Improved Recovery
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Technical Revisions
|
(1,729)
|
60
|
(1,669)
|
551
|
3,980
|
(455)
|
|
Discoveries
|
-
|
-
|
-
|
-
|
421
|
71
|
|
Acquisitions
|
283
|
-
|
283
|
503
|
14,107
|
3,137
|
|
Dispositions
|
-
|
(218)
|
(218)
|
-
|
(155)
|
(244)
|
|
Economic Factors
|
47
|
-
|
47
|
(33)
|
(1,179)
|
(183)
|
|
Production
|
-
|
-
|
-
|
-
|
-
|
-
|
Closing Balance
|
6,073
|
224
|
6,297
|
8,624
|
203,077
|
48,767
|
PROVED PLUS PROBABLE
|
|
|
|
|
|
Opening Balance
|
14,543
|
1,242
|
15,785
|
9,395
|
254,218
|
67,550
|
|
Extensions
|
2,253
|
-
|
2,253
|
6,117
|
141,596
|
31,969
|
|
Infill Drilling
|
1,388
|
-
|
1,388
|
348
|
7,521
|
2,989
|
|
Improved Recovery
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Technical Revisions
|
(1,057)
|
(13)
|
(1,070)
|
1,914
|
21,222
|
4,380
|
|
Discoveries
|
-
|
-
|
-
|
3
|
2,366
|
397
|
|
Acquisitions
|
566
|
-
|
566
|
929
|
20,906
|
4,979
|
|
Dispositions
|
-
|
(722)
|
(722)
|
-
|
(656)
|
(831)
|
|
Economic Factors
|
(58)
|
-
|
(58)
|
(111)
|
(5,401)
|
(1,069)
|
|
Production
|
(1,083)
|
(103)
|
(1,184)
|
(907)
|
(24,087)
|
(6,107)
|
Closing Balance
|
16,552
|
405
|
16,957
|
17,687
|
417,684
|
104,258
|
1 "Company Interest" means Bellatrix working interest (operated or
non-operated) share before deduction of royalties but
i ncluding any royalty interests of Bellatrix. Based on forecast prices
and costs. May not add due to rounding.
|
2 Company coal bed methane and shale gas reserves have been included in
Natural Gas. Coal bed methane reserves had
been reconciled separately in previous reserve press releases; however,
coal bed methane and shale gas reserves represent
an immaterial portion of the Company's Natural Gas reserves.
|
WORKING INTEREST1 (Gross) RESERVES RECONCILIATION
|
|
Light and
Medium
Crude Oil
(mbbl)
|
Heavy Crude
Oil (mbbl)
|
Total Crude
Oil (mbbl)
|
NGLs (mbbl)
|
Conventional
Natural Gas
(mmcf)2
|
Oil
Equivalent
(mboe)
|
PROVED PRODUCING
|
|
|
|
|
|
|
Opening Balance
|
4,380
|
646
|
5,026
|
2,409
|
71,208
|
19,302
|
|
Extensions
|
646
|
-
|
646
|
1,059
|
24,100
|
5,721
|
|
Infill Drilling
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Improved Recovery
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Technical Revisions
|
1,374
|
23
|
1,396
|
1,152
|
19,300
|
5,765
|
|
Discoveries
|
-
|
-
|
-
|
2
|
1,945
|
327
|
|
Acquisitions
|
99
|
-
|
99
|
124
|
2,806
|
691
|
|
Dispositions
|
-
|
(499)
|
(499)
|
-
|
(19)
|
(502)
|
|
Economic Factors
|
(81)
|
-
|
(81)
|
(54)
|
(3,623)
|
(738)
|
|
Production
|
(1,082)
|
(103)
|
(1,185)
|
(905)
|
(24,052)
|
(6,098)
|
Closing Balance
|
5,337
|
68
|
5,405
|
3,787
|
91,664
|
24,469
|
TOTAL PROVED
|
|
|
|
|
|
|
Opening Balance
|
8,840
|
856
|
9,696
|
5,709
|
158,144
|
41,761
|
|
Extensions
|
1,198
|
-
|
1,198
|
2,323
|
54,226
|
12,558
|
|
Infill Drilling
|
663
|
-
|
663
|
199
|
4,433
|
1,601
|
|
Improved Recovery
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Technical Revisions
|
670
|
(73)
|
597
|
1,457
|
16,574
|
4,906
|
|
Discoveries
|
-
|
-
|
-
|
2
|
1,945
|
327
|
|
Acquisitions
|
283
|
-
|
283
|
302
|
6,799
|
1,718
|
|
Dispositions
|
-
|
(499)
|
(499)
|
-
|
(499)
|
(582)
|
|
Economic Factors
|
(105)
|
-
|
(105)
|
(77)
|
(4,222)
|
(886)
|
|
Production
|
(1,082)
|
(103)
|
(1,185)
|
(905)
|
(24,052)
|
(6,098)
|
Closing Balance
|
10,468
|
181
|
10,649
|
9,008
|
213,348
|
55,215
|
PROBABLE
|
|
|
|
|
|
|
Opening Balance
|
5,703
|
375
|
6,079
|
3,668
|
95,561
|
25,674
|
|
Extensions
|
1,055
|
-
|
1,055
|
3,753
|
86,398
|
19,207
|
|
Infill Drilling
|
699
|
-
|
699
|
147
|
3,069
|
1,357
|
|
Improved Recovery
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Technical Revisions
|
(1,729)
|
61
|
(1,669)
|
415
|
3,739
|
(631)
|
|
Discoveries
|
-
|
-
|
-
|
-
|
421
|
71
|
|
Acquisitions
|
283
|
-
|
283
|
627
|
14,107
|
3,261
|
|
Dispositions
|
-
|
(212)
|
(212)
|
-
|
(154)
|
(238)
|
|
Economic Factors
|
47
|
-
|
47
|
(33)
|
(1179)
|
(183)
|
|
Production
|
-
|
-
|
-
|
-
|
-
|
-
|
Closing Balance
|
6,058
|
224
|
6,282
|
8,576
|
201,962
|
48,519
|
PROVED PLUS PROBABLE
|
|
|
|
|
|
Opening Balance
|
14,543
|
1,231
|
15,774
|
9,377
|
253,705
|
67,435
|
|
Extensions
|
2,253
|
-
|
2,253
|
6,075
|
140,624
|
31,765
|
|
Infill Drilling
|
1,362
|
-
|
1,362
|
346
|
7,502
|
2,959
|
|
Improved Recovery
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Technical Revisions
|
(1,059)
|
(13)
|
(1,073)
|
1,871
|
20,315
|
4,185
|
|
Discoveries
|
-
|
-
|
-
|
3
|
2,366
|
397
|
|
Acquisitions
|
566
|
-
|
566
|
929
|
20,906
|
4,979
|
|
Dispositions
|
-
|
(710)
|
(710)
|
-
|
(653)
|
(819)
|
|
Economic Factors
|
(57)
|
-
|
(57)
|
(111)
|
(5,401)
|
(1,068)
|
|
Production
|
(1,082)
|
(103)
|
(1,185)
|
(905)
|
(24,052)
|
(6,098)
|
Closing Balance
|
16,526
|
405
|
16,931
|
17,584
|
415,310
|
103,734
|
1 "Working Interest" means Bellatrix working interest (operated or
non-operated) share before deduction of royalties and without including
any royalty interest of Bellatrix. Also referred to as "Gross" reserves
under NI 51-101. May not add due to rounding.
|
2 Company coal bed methane and shale gas reserves have been included in
Natural Gas. Coal bed methane reserves had been reconciled
separately in previous reserve press releases; however, coal bed methane
and shale gas reserves represent an immaterial portion of the
Company's Natural Gas reserves.
|
TAX POOLS
At December 31, 2012, the Company had approximately $584 million in tax
pools available for deduction against future income as follows:
|
|
|
|
|
($000s)
|
|
Rate %
|
2012
(unaudited)
|
2011
|
Canadian exploration expenses
|
100
|
45,900
|
47,600
|
Canadian development expenses
|
30
|
369,300
|
326,900
|
Canadian oil and gas property expenses
|
10
|
40,400
|
25,100
|
Foreign resource expenses
|
10
|
800
|
800
|
Attributed Canadian Royalty Income
|
(Alberta) 100
|
16,100
|
16,100
|
Undepreciated capital cost(1)
|
6-55
|
98,000
|
83,100
|
Non capital losses (expire through 2027)
|
100
|
10,000
|
10,000
|
Financing costs
|
20 S.L
|
3,300
|
4,700
|
Total Tax Pools
|
|
583,800
|
513,300
|
(1) Approximately $91 million of undepreciated capital cost pools are class
41, which is claimed at a 25% rate.
|
FUTURE DEVELOPMENT COSTS USING FORECAST PRICES AND COSTS
At year-end, 2012, Sproule had evaluated certain future development
opportunities on Company lands including 161 gross (112.7 net) future
undrilled Cardium horizontal locations and 56 gross (23.3 net)
evaluated future undrilled Notikewin/Falher horizontal locations. Of
the 161 Cardium locations, 104 were assigned proved and probable
reserves, with 57 assigned probable reserves only. Of the 56
Notikewin/Falher locations, 41 were assigned proved and probable
reserves, with the remaining 15 assigned probable reserves only.
For purposes of assigning net present value of future revenue, future
development locations were committed as detailed in the following
table. On the basis of current cash flow projections, the schedule,
and resulting NPV, can be considered conservative, as the future
development inventory represents only approximately two years of
reinvested cash flow.
($000's)
|
Proved
Future
Development
Costs
|
Proved plus
Probable Future
Development
Costs
|
2013
2014
2015
2016 and subsequent
|
109,439
126,292
74,032
17,642
|
157,773
172,707
141,060
53,097
|
Undiscounted total
|
327,407
|
524,638
|
Discounted @ 10%/yr
|
288,291
|
452,101
|
RESERVE REPORT COMMODITY PRICING
The following is a summary of the Consultants' Average Forecast Prices
as at January 1, 2013:
|
OIL
|
|
|
|
|
Year
Forecast
|
WTI
Cushing
Oklahoma
($US/Bbl)
|
Edmonton
Par Price
40° API
($Cdn/Bbl)
|
Western
Canada
Select 20.5
API
($Cdn/Bbl)
|
NATURAL
GAS AECO
Price ($Cdn/
MMBTU)
|
NATURAL
GAS
LIQUIDS
at
Edmonton3
($Cdn/Bbl)
|
INFLATION
RATES1
%/Year
|
EXCHANGE
RATE2
($US/$Cdn)
|
2013
|
90.71
|
85.68
|
69.73
|
3.35
|
94.89
|
1.83
|
1.0003
|
2014
|
91.64
|
90.61
|
75.36
|
3.80
|
96.57
|
1.83
|
1.0003
|
2015
|
92.30
|
91.60
|
75.71
|
4.18
|
95.97
|
1.83
|
1.0003
|
2016
|
96.17
|
95.48
|
80.23
|
4.71
|
100.08
|
1.83
|
1.0003
|
2017
|
97.29
|
96.59
|
80.83
|
5.12
|
101.22
|
1.83
|
1.0003
|
2018
|
98.44
|
97.71
|
81.44
|
5.36
|
102.41
|
1.83
|
1.0003
|
2019
|
99.94
|
99.21
|
82.49
|
5.45
|
104.00
|
1.83
|
1.0003
|
2020
|
101.76
|
101.03
|
83.94
|
5.57
|
105.88
|
1.83
|
1.0003
|
2021
|
103.61
|
102.88
|
85.41
|
5.67
|
107.82
|
1.83
|
1.0003
|
2022
|
105.54
|
104.81
|
86.91
|
5.77
|
109.85
|
1.83
|
1.0003
|
2023
|
107.46
|
106.69
|
88.43
|
5.87
|
111.82
|
1.83
|
1.0003
|
2024
|
109.43
|
108.65
|
89.97
|
5.99
|
113.85
|
1.83
|
1.0003
|
2025
|
111.43
|
110.64
|
91.54
|
6.09
|
115.94
|
1.83
|
1.0003
|
2026
|
113.48
|
112.69
|
93.15
|
6.19
|
118.09
|
1.83
|
1.0003
|
2027
|
115.59
|
114.76
|
94.78
|
6.31
|
120.26
|
1.83
|
1.0003
|
Thereafter
|
+ 1.8%/yr
|
+ 1.8%/yr
|
+ 1.8%/yr
|
+ 1.8%/yr
|
+ 1.8%/yr
|
|
|
1 Inflation rates for forecasting prices and costs
2 Exchange rates used to generate the benchmark reference prices in this
table
3 Natural Gas Liquids is represented by the pentanes plus price
|
Weighted average historical prices realized by Bellatrix (before
commodity price risk management contracts) for the year ended December
31, 2012, were $2.62/mcf for natural gas, $86.47/bbl for light, medium
gravity crude oil and condensate, $68.51/bbl for heavy oil and
$38.88/bbl for natural gas liquids (excluding condensate).
RESERVES COMMITTEE
Bellatrix has a reserves committee, comprised of independent board
members, that reviews the qualifications and appointment of the
independent reserve evaluators. The committee also reviews the
procedures for providing information to the evaluators. All booked
reserves are based upon annual evaluations by the independent qualified
reserve evaluators conducted in accordance with the COGE (Canadian Oil
and Gas Evaluation) Handbook and NI 51-101. The evaluations are
conducted using all available geological and engineering data. The
reserves committee has reviewed the reserves information and approved
the reserve report.
LAND
As at December 31, 2012, Bellatrix had over 206,638 net undeveloped
acres in Alberta, British Columbia and Saskatchewan.
Land Statistics
|
|
|
|
2012
|
2011
|
Average working interest
|
|
|
|
Developed
|
57%
|
57%
|
|
Undeveloped
|
66%
|
63%
|
Total
|
61%
|
60%
|
|
|
|
Land Holdings1
|
|
|
|
2012
|
2011
|
|
Gross
|
Net
|
Gross
|
Net
|
Developed
|
|
|
|
British Columbia
|
9,752
|
2,692
|
19,850
|
7,315
|
|
Alberta
|
373,705
|
211,967
|
370,653
|
209,786
|
|
Saskatchewan
|
13,327
|
12,720
|
13,327
|
12,720
|
|
Total
|
396,784
|
227,380
|
403,830
|
229,821
|
Undeveloped
|
|
|
|
British Columbia
|
107,700
|
47,521
|
143,968
|
60,590
|
|
Alberta
|
194,158
|
148,815
|
198,777
|
152,363
|
|
Saskatchewan
|
10,302
|
10,302
|
11,606
|
11,606
|
|
Total
|
312,160
|
206,638
|
354,351
|
224,559
|
Developed and Undeveloped
|
|
|
|
British Columbia
|
117,452
|
50,213
|
163,818
|
67,905
|
|
Alberta
|
567,864
|
360,782
|
569,429
|
362,149
|
|
Saskatchewan
|
23,628
|
23,022
|
24,934
|
24,326
|
Total
|
708,944
|
434,017
|
758,181
|
454,380
|
1 May not add due to rounding
|
|
|
|
|
OPERATIONS OUTLOOK
Bellatrix continues to focus on growth by development of its large
inventory of Cardium and Notikewin/Falher assets geological prospects.
The Company also continues to focus on adding Cardium and Notikewin
prospective lands.
-
Bellatrix has entered into a joint venture agreement with a Seoul, Korea
based company ("JV Partner"), effective January 2013, to accelerate
development of Bellatrix's extensive undeveloped Cardium land holdings
in west-central Alberta. As a result of the Joint Venture, Bellatrix's
net capital expenditure plan for 2013 is expected to increase from the
previously announced $180 million level to between $230 and $240
million, not including JV Partner capital. Based on the timing of
proposed expenditures, downtime from anticipated plant turnarounds,
completion of anticipated infrastructure and normal production
declines, execution of the increased 2013 capital expenditure plan is anticipated to provide
average daily production of 24,000 to 25,000 boe/d. The Company is
anticipating a 2013 exit rate of 30,000 to 31,000 boe/d.
-
The Company has budgeted a capital program between $230 and $240 million funded from the Company's cash flows and to the extent necessary, bank
indebtedness, based on the current economic conditions and Bellatrix's
operating forecast for 2013 and assuming the closing of the joint
venture transaction with the JV Partner. A total capital program of $365 million is expected including the capital expected to be invested by the JV Partner. The
capital budget is expected to be directed primarily towards horizontal
drilling and completions activities in the Cardium and Notikewin/Falher
areas.
-
The Company has developed an inventory of 692 net remaining Cardium locations and 401 net Notikewin/Falher locations representing a net capital development opportunity of $4.34 billion based on current costs.
-
The Company has identified $8.22 billion in potential development including all identified prospects and based on current costs
representing over 40 years of drilling inventory based on current
annual cash flow.
-
As at December 31, 2012, Bellatrix has approximately 206,638 net undeveloped acres and, including all opportunities, has in excess of 1,700 net
exploitation drilling opportunities identified.
-
As at December 31, 2012, approximately $87 million or 40% was undrawn under the existing $220 million credit
facilities and is available to fund Bellatrix's ongoing capital spending and
operational requirements.
COMMODITY RISK MANAGEMENT CONTRACTS
Bellatrix has the following crude oil and natural gas commodity price
risk management contracts in place for 2013. The conversion of $/GJ to
$/mcf is based on an average corporate heat content rate of 40.8Mj/m3.
Product
|
Term
|
Volume
|
Average Price
|
Crude Oil1
|
Jan. 1, 2013 to Dec. 31, 2013
|
1,500 bbls/d
|
$94.50 CDN/bbl
|
Natural Gas
|
Feb. 1, 2013 to Mar. 31, 2013
|
8.7 mmcf/d
|
$3.51 CDN/mcf
|
Natural Gas
|
Apr. 1, 2013 to Oct. 31, 2013
|
47.8 mmcf/d
|
$3.52 CDN/mcf
|
Natural Gas
|
Nov. 1, 2013 to Dec. 31, 2013
|
21.7 mmcf/d
|
$3.51 CDN/mcf
|
Natural Gas
|
Jan. 1, 2014 to Jun. 30, 2014
|
13.0 mmcf/d
|
$3.51 CDN/mcf
|
1 A call has been placed on 3,000 bbls/d at $110 US/bbl for the year 2013
and at $105US/bbl for the calendar year 2014.
|
Based on exit rate of December 2012 production volumes of approximately
19,500 boe/d annualized for 2013, Bellatrix has put in price protection
on approximately 53% of 2013 production volumes, 27% for first and
second quarter and 15% for third and fourth quarter 2014 production
volumes.
An updated corporate presentation is available on www.bellatrixexploration.com.
Bellatrix Exploration Ltd. is a growth oriented exploration and
production company based in Calgary, Alberta, Canada.
READER ADVISORIES: (to be updated)
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. 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. 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.
UNAUDITED 2012 FINANCIAL INFORMATION: As Bellatrix plans to announce
its audited 2012 financial results on or about March 7, 2013, certain
financial information for the year ended December 31, 2012 disclosed
herein, or used in various calculations herein, is based on unaudited
information and has been utilized by Bellatrix in this release to
facilitate the discussion with respect to the performance of our
capital program. Readers are advised that these financial estimates are
subject to audit and may be subject to change as a result, and such
changes could be material.
NON-GAAP MEASURES: The press release section contains the term "funds flow from operations"
which should not be considered an alternative to, or more meaningful
than cash flow from operating activities as determined in accordance
with Canadian generally accepted accounting principles ("GAAP") as an
indicator of the Company's performance. Therefore reference to diluted
funds flow from operations or funds flow from operations per share may
not be comparable with the calculation of similar measures for other
entities. Management uses funds flow from operations to analyze
operating performance and leverage and considers funds flow from
operations to be a key measure as it demonstrates the Company's ability
to generate the cash necessary to fund future capital investments and
to repay debt. The reconciliation between cash flow from operating
activities and funds flow from operations can be found in the
document. Funds flow from operations per share is calculated using the
weighted average number of common shares for the period.
Management believes that this measure is a useful supplemental measure
of cash flow from operations. Readers are cautioned, however, that
these measures should not be construed as an alternative to cash flow
from operations determined in accordance with GAAP as a measure of
performance. Bellatrix's method of calculating these measures may
differ from other entities, and accordingly, may not be comparable to
measures used by other trusts or companies.
INITIAL PRODUCTION RATES: Any references in this press release to
initial production rates and/or 7, 15 and 30 day production rates are
useful in confirming the presence of hydrocarbons, however, such rates
are not determinative of the rates at which such wells will continue
production and decline thereafter. Additionally, such rates may also
include recovered "load oil" fluids used in well completion
stimulation. While encouraging, readers are cautioned not to place
reliance on such rates in calculating the aggregate production for
Bellatrix.
FORWARD LOOKING STATEMENTS: Statements in this document may contain
forward-looking information including management's assessment of future
plans and operations, expected 2013 average production and exit
production, reserve estimates, anticipated additional drilling
locations, the total future capital associated with development of
drilling locations and reserves, 2013 capital expenditures and expected
amount of total program including capital to be invested by the JV
Partner, expected closing of joint venture transaction, timing of
completion and testing of wells and timing of release of 2012 financial
results. The reader is cautioned that assumptions used in the
preparation of such information may prove to be incorrect. Events or
circumstances may cause actual results to differ materially from those
predicted, a result of numerous known and unknown risks, uncertainties,
and other factors, many of which are beyond the control of the Company.
These risks include, but are not limited to: the risks associated with
the oil and gas industry; commodity prices; risks that the joint
venture transaction will close when expected or at all, and exchange
rate changes. Industry related risks could include, but are not limited
to: operational risks in exploration; development and production;
delays or changes in plans; risks associated to the uncertainty of
reserve estimates; health and safety risks, and; the uncertainty of
estimates and projections of production, costs and expenses. The
recovery and reserve estimates of Bellatrix's reserves provided herein
are estimates only and there is no guarantee that the estimated
reserves will be recovered. In addition, forward-looking statements or
information are based on a number of factors and assumptions which have
been used to develop such statements and information but which may
prove to be incorrect. Although the Company believes that the
expectations reflected in such forward-looking statements or
information are reasonable, undue reliance should not be placed on
forward-looking statements because the Company can give no assurance
that such expectations will prove to be correct. In addition to other
factors and assumptions which may be identified herein, assumptions
have been made regarding, among other things: the impact of increasing
competition; the general stability of the economic and political
environment in which the Company operates; the timely receipt of any
required regulatory approvals; the ability of the Company to obtain
qualified staff, equipment and services in a timely and cost efficient
manner; drilling results; the ability of the operator of the projects
which the Company has an interest in operating the field in a safe,
efficient and effective manner; the ability of the Company to obtain
financing on acceptable terms; that the joint venture transaction will
close when expected and on the terms expected; field production rates
and decline rates; the ability to replace and expand oil and natural
gas reserves through acquisition, development of exploration; the
timing and costs of pipeline, storage and facility construction and
expansion and the ability of the Company to secure adequate product
transportation; future commodity prices; currency, exchange and
interest rates; the regulatory framework regarding royalties, taxes and
environmental matters in the jurisdictions in which the Company
operates; and the ability of the Company to successfully market its
oil and natural gas products. Readers are cautioned that the foregoing
lists of factors and assumptions are not exhaustive. Additional
information on these and other factors that could affect the Company's
operations and financial results are included in reports on file with
Canadian securities regulatory authorities and may be accessed through
the SEDAR website (www.sedar.com), at the Company's website (www.bellatrixexploration.com.). Furthermore, the forward-looking statements contained in this news
release are made as at the date of this news release and the Company
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 required by
applicable securities laws.
SOURCE: Bellatrix Exploration Ltd.
BELLATRIX EXPLORATION LTD. Raymond G. Smith, P.Eng. President & CEO (403) 750-2420 Edward J. Brown, CA Vice President, Finance & CFO (403) 750-2655 Brent A. Eshleman P.Eng. Executive Vice President (403) 750-5566 Troy Winsor Investor Relations (800) 663-8072
Source: Canada Newswire
(February 21, 2013 - 2:05 AM EST)
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|