TSX, NYSE MKT: BXE
CALGARY, July 3, 2014 /PRNewswire/ - Bellatrix Exploration Ltd. ("Bellatrix" or
the "Company") (TSX, NYSE MKT: BXE) is pleased to announce that the
Ferrier Area Gas Plants, that had been shut in for scheduled and
unscheduled plant turnarounds in the first half of 2014 resulting in
significant production restrictions, have returned to full capacity as
of June 30, 2014. Bellatrix's daily production is estimated to have
averaged 36,600 boe/d in the second quarter 2014 due to these
restrictions. With removal of these restrictions production is currently estimated to be 40,000 boe/d (65% gas). In addition the Company has 4,000 boe/d behind pipe that is expected to come on-stream in July. Based on the timing of
proposed expenditures, normal production declines, and execution of the
revised $500 million 2014 capital budget the Company reaffirms its unchanged 2014 average daily production guidance of approximately to +/-
41,000 boe/d and an exit rate guidance of approximately +/- 48,000
boe/d.
Unscheduled Temporary Downtime in West Central Alberta
As outlined in its previous press release and during its conference call
on June 10, 2014, Bellatrix has experienced significant outages and
delays due to unscheduled temporary plant turnarounds at some of the third party operated gas processing plants during the
months of May and June. The following is an updated summary of plant
turnaround outages and delays:
-
The Sand Creek Plant, sour plant was down prior to the main turnaround
with the entire sweet plant being down for maintenance for the period
from May 4, 2014 through to May 15, 2014.
-
The Strachan Plant experienced an extended downtime on all sour trains
with volumes being shut in starting on May 8, 2014. The deep cut
facility was taken offline on May 15, 2014 to enable the system to be
depressurized. The entire plant was expected to be down until June 7,
2014. The Strachan facility was however down an additional 12 days
longer than expected which took offline approximately 4,500 boe/d of
the Company's production during this entire period.
-
The Minnehik Buck Lake ("MBL") Gas Plant was shut in on May 12, 2014
through to May 14, 2014 to replace cold boxes on the deep cut
facilities.
-
The Harmattan Plant commenced turnaround on April 28, 2014 with one of
the medium pressure inlet compressors being shut down for a compressor
overhaul. This unit was offline for 10 to 12 days and resumed operation
on May 9, 2014. This outage caused an increased inlet pressure and
affected all medium pressure inlets. Throughput was maximized through
the facility as much as possible but there was some reduction in flow
rates during this time.
-
Bellatrix was delivering up to 82 mmcf/d at its peak to the Blaze Plant
during the first week of June. Blaze curtailed delivery into the plant
to upgrade the second sour train reducing deliveries to 65 mmcf/d
during the last 3 weeks of June. The Blaze Plant returned to full
delivery on June 30, 2014.
Bellatrix took advantage of the unanticipated turnarounds and used the
opportunity to perform pressure surveys and/or build up analysis during
these turnarounds, as well as, performing any necessary maintenance and
inspections of the related facilities.
As a result of the combined effect of these temporary third party
restrictions and outages during the months of May and June, and based
on month of June field production estimates, Bellatrix's second
quarter 2014 production volumes are expected to average +/-36,600
boe/d. This represents a 4% increase over first quarter 2014 production
volumes of 35,049 boe/d and a 65% increase over second quarter 2013 volumes of 22,102 boe/d.
Although the weather during the month of June in Central Alberta has
been quite wet, Bellatrix has maintained five drilling rigs operating
in the field. With improving weather conditions the Company will ramp
up to 14 rigs post-break up. There are ten wells waiting on completion,
including a two-mile Falher horizontal well (JV well with Grafton, BXE
has 46% WI) which is due for its completion the first week of July.
2014 cash flow forecasts, for the year remain unchanged as higher commodity prices are expected to offset the aforementioned
restricted production. 2014 funds flow from operations are expected to remain unchanged at $370
million or $2.02 per basic share.
Based on an assumed 2014 average Edmonton Light oil price of $95.85/bbl
and AECO $4.50/GJ, average 2014 royalty rates of 17.5% and estimated
2014 operating costs of $116.5 million or $7.75 boe/d, the Company
expects to exit 2014 with total net debt of approximately $355 million
or less than 1.0 times total net debt to annualized estimated fourth
quarter 2014 funds flow from operations.
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 of Bellatrix trade on the Toronto Stock Exchange ("TSX") and 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, the expectation that behind pipe production will come
on-stream in July, the expected second quarter average 2014 production
volumes, the expectations about 2014 average daily production and 2014
exit rate production, the expectations that the Company will ramp up to
14 rigs post-break up, the expectation that 2014 cash flow forecasts
will remain unchanged as expected higher commodity prices are expected
to offset the restricted production discussed above, the forecast of
2014 funds flow from operations, the forecast 2014 exit total net debt,
and the forecast 2014 total net debt to annualized estimated fourth
quarter 2014 funds flow from operations ratio, 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. To the
extent such estimates constitute a financial outlook, they were
approved by management on date hereof and are included herein to
provide readers with an understanding of management's expectations and
assumptions about future activities and results and readers are
cautioned that the information may not be appropriate for other
purposes. 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. The forward looking statements contained in this press release are
made as of the date hereof and Bellatrix undertakes no obligations to
update publicly or revise any forward looking statements or
information, whether as a result of new information, future events or
otherwise, unless so required by applicable securities laws.
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 six to one,
utilizing a conversion on a six to one 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.
Non-GAAP Measures: This press release 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 generally accepted accounting principles
("GAAP") as an indicator of the Company's performance. Therefore
reference to 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. Funds flow from operations per share is
calculated using the weighted average number of shares for the period.
This press release also contains the term total net debt. Total net debt
is calculated as long-term debt plus the net working capital deficiency
(excess) before short-term commodity contract assets and liabilities
and current finance lease obligations. Management believes this measure
is an useful supplementary measure of the total amount of current and
long-term debt.
SOURCE Bellatrix Exploration Ltd.