TSX, NYSE: BXE
CALGARY, Sept. 19, 2016 /CNW/ - Bellatrix Exploration Ltd.
("Bellatrix" or the "Company") (TSX, NYSE: BXE) is pleased to
announce that it has entered into an agreement with InPlay Oil
Corp. ("InPlay") to sell certain non-core Cardium focused assets in
the greater Pembina area of Alberta (the "Pembina asset sale") for total
consideration of $47 million.
Total consideration is comprised of $42
million cash, and 16,666,666 shares of InPlay with a deemed
value of $5 million ($0.30 per share). InPlay is currently a
private exploration and production company, but concurrently with
the announcement of the Pembina asset sale, it has announced a
proposed reverse takeover transaction which among other things,
would provide for a public listing for its shares on the Toronto
Stock Exchange.
The Pembina asset sale consists of Cardium oil weighted
production of approximately 930 boe/d and formation rights in the
Cardium only. As part of the transaction, Bellatrix has
retained formation rights above and below the Cardium on the
Pembina acreage, including the Notikewin, Falher and Wilrich members of the Spirit River
formation. Cash proceeds from the Pembina asset sale are
expected to be used to repay existing bank indebtedness, including
repayment in full of the remaining $12.9
million balance outstanding on the Company's non-revolving
term facility, and a reduction of the amount outstanding under the
Company's syndicated revolving facility. Bellatrix estimates
that its current outstanding bank indebtedness, including the
assumed application of net proceeds from the Pembina asset sale, to
be approximately $78 million,
representing a reduction of approximately $236 million from June 30,
2016.
The Pembina asset sale details include:
Total
consideration(1)
|
$47
million
|
Estimated current
production(2)
|
930 boe/d (74% oil
and liquids)
|
Proved
reserves(3)
|
5.4 mmboe
|
Proved plus Probable
reserves(3)
|
7.9 mmboe
|
Divestiture metrics include:
Production
|
$50,538/boe/d
|
Proved
reserves
|
$8.67/boe
|
Proved plus probable
reserves
|
$5.98/boe
|
Notes
|
(1)
|
Before customary
closing adjustments.
|
(2)
|
Estimated average
production based on June 2016 field estimates.
|
(3)
|
Reserves at December
31, 2015 as estimated by Sproule Associates Limited. Reserves
refer to "Working interest" meaning Bellatrix's working interest
(operated or non-operated) share before deduction of
royalties. Also referred to as "Gross" reserves under
National Instrument 51-101 – Standards of Disclosure for Oil and
Gas Activities. The estimates of reserves for individual
properties may not reflect the same confidence level as estimates
of reserves and future net revenue for all properties, due to the
effects of aggregation.
|
Closing of the Pembina asset sale is expected to occur prior to
November 11, 2016, with an effective
date of June 1, 2016, and is subject
to a number of conditions. For further information relating to the
conditions relating to the Pembina asset sale see the advisory
relating to Forward-Looking Statements below.
UPDATED GUIDANCE
Bellatrix has updated its full year 2016 guidance forecasts to
incorporate the impact of the disposition which is anticipated to
have a minor impact on full year guidance estimates.
|
|
|
|
Updated
Guidance
September 19, 2016
|
Prior Guidance
dated
August 10, 2016
|
Average daily
production (boe/d)
|
|
|
|
Full year 2016
average (+/- 500 boe/d)
|
36,000
|
36,250
|
|
December month
average (+/- 500 boe/d)
|
35,500
|
36,500
|
Natural gas
weighting
|
73%
|
73%
|
Net capital spending
($ millions) (1)
|
$77
|
$77
|
Production
expenses(2) ($/boe)
|
$8.50
|
$8.50
|
|
(1)
|
Capital spending
includes exploration and development capital projects and corporate
assets, and excludes property acquisitions and dispositions. Second
half net capital budget of up to $40 million, with funding limited
to available cash flow.
|
(2)
|
Production expenses
before net processing revenue/fees.
|
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 and on the New York Stock
Exchange under the symbol BXE.
FORWARD LOOKING STATEMENTS
Certain information contained in this press release may
contain forward looking statements within the meaning of applicable
securities laws. The use of any of the words "forecast", "believe",
"expect", "position", "maintain", "continue", "plan", "future",
"estimate", "intend", "strategy", "anticipate", "enhance" and
similar expressions are intended to identify forward-looking
statements. More particularly and without limitation, this document
contains forward-looking statements concerning the anticipated
closing date and terms of the Pembina asset sale, anticipated use
of proceeds from the Pembina asset sale and the expectation that
the Company will apply the cash proceeds to repay in full the
remaining $12.9 million balance
outstanding on the Company's non-revolving term facility, and to
reduce the amount outstanding under the Company's syndicated
revolving facility, expectations of the Company's outstanding bank
indebtedness following completion of the Pembina asset sale,
expectations of future development opportunities in the Spirit
River liquids rich natural gas play and Cardium resource play, and
that such opportunities provide a value enhancing growth platform
for the Company, the reserves associated with the Pembina asset
sale, may constitute forward-looking statements under applicable
securities laws. To the extent that any forward-looking information
contained herein constitute a financial outlook, they were approved
by management on the date hereof and are included herein to provide
readers with an understanding of the anticipated funds available to
Bellatrix to fund its operations and readers are cautioned that the
information may not be appropriate for other purposes.
Forward-looking statements necessarily involve risks, including,
without limitation, risks associated with oil and gas exploration,
development, exploitation, production, marketing and
transportation, loss of markets, volatility of commodity prices,
currency fluctuations, imprecision of reserve estimates,
environmental risks, competition from other producers, inability to
retain drilling rigs and other services, incorrect assessment of
the value of acquisitions, failure to realize the anticipated
benefits of acquisitions, delays resulting from or inability to
obtain required regulatory approvals, actions taken by the
Company's lenders that reduce the Company's available
credit, the risk that Bellatrix is unable to complete
acquisitions or dispositions as anticipated, and any inability to
access sufficient capital from internal and external sources.
In addition, the Pembina asset sale is subject to a condition that
the purchaser completes a reverse take-over of a publicly listed
Toronto Stock Exchange company. Such reverse take-over transaction
will also be subject to satisfaction of customary conditions for a
transaction of its nature, which includes respective shareholder
approvals for the purchaser and the other party to such
transaction. Events or circumstances may cause actual results to
differ materially from those predicted, as a result of the risk
factors set out and other known and unknown risks, uncertainties,
and other factors, many of which are beyond the control of
Bellatrix. 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 and which have been used to develop such statements
and information in order to provide shareholders with a more
complete perspective on Bellatrix's future operations. Such
information may prove to be incorrect and readers are cautioned
that the information may not be appropriate for other purposes.
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 continued availability of
funds under the Credit Facilities; 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 to operate the
field in a safe, efficient and effective manner; the ability of the
Company to obtain financing on acceptable terms; 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; the ability to complete
acquisition and dispositions as currently anticipated; the ability
to obtain the necessary funds through acquisition, disposition or
financing activities in order to repay amounts outstanding under
the Bellatrix's debt obligations when due; 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 list is
not exhaustive of all factors and assumptions which have been
used. As a consequence, actual results may differ materially
from those anticipated in the forward-looking statements.
Additional information on these and other factors that could affect
Bellatrix's operations and financial results are included in
reports (including, without limitation, under the heading "Risk
Factors" in the Company's Annual Information Form for the year
ended December 31, 2015) on file with
Canadian and United States
securities regulatory authorities and may be accessed through the
SEDAR website (www.sedar.com), through the SEC website
(www.sec.gov), and at Bellatrix's website
(www.bellatrixexploration.com). Furthermore, the forward
looking statements contained herein are made as at the date hereof
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 required by applicable securities laws.
BARRELS OF OIL EQUIVALENT
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
press release 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.
SOURCE Bellatrix Exploration Ltd.