Western Canadian Producer Sells Acreage to Focus on Spirit River
Bellatrix Exploration (ticker: BXE) has announced that it will sell certain non-core assets in the greater Harmattan area of Alberta for $80 million. The deal will close at year-end.
The deal will be funded by $65 million in cash and $15 million in a vendor take-back loan with interest of 10% per year and secured by a first lien charge against the assets for sale.
Source: Bellatrix Investor Presentation
The asset sale is expected to further simplify the company’s asset portfolio and to reduce the company’s outstanding bank debt to approximately $30 million at December 31, 2016.
Bellatrix Looking to Spirit River Upside
The company intends to replace the production, cash flow, and reserves associated with the Harmattan asset sale with continued development of its low cost, high productivity Spirit River play. Spirit River is competitive with top tier Marcellus operators in terms of F&D costs, efficiencies, and rates of returns.
Source: Bellatrix Investor Presentation
The play will comprise 60% of total corporate production following completion of the sale and is currently supported by strategic infrastructure ownership and operatorship.
Bellatrix said it intends to release its initial 2017 capital budget and guidance in January 2017 following its completion of the Harmattan asset sale.
