TSX: BXE
CALGARY, March 14, 2019 /CNW/ - Bellatrix Exploration Ltd.
("Bellatrix" or the "Company") (TSX: BXE) announces 2018 year
end reserves, highlighted by 13% reserve growth and low cost
reserve additions.
Reserves at December 31, 2018 were
independently evaluated by InSite Petroleum Consultants Ltd.
("InSite"). 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") and the Canadian Oil and Gas
Evaluation Handbook ("COGE Handbook").
2018 YEAR END RESERVE HIGHLIGHTS
Bellatrix delivered low cost reserve additions in 2018 with 13%
growth in each of Proved Developed Producing ("PDP"), Proved
("1P"), and Proved plus Probable ("2P") reserve categories.
The Company achieved a 100% success rate through the drill bit,
focused on the low cost Spirit
River liquids rich natural gas play.
In 2018, Bellatrix drilled and/or participated in 14 gross (9.2
net) total wells including 10 gross (7.7 net) operated Spirit River liquids rich natural gas wells, 1
gross (1.0 net) operated Cardium well and 3 gross (0.5 net)
non-operated wells (two Spirit
River and one Cardium). Bellatrix's operated drilling
activity in 2018 included, a total of 49,027 meters drilled, 18,026
meters of which was horizontal length.
Bellatrix demonstrated strong results within its core area in
2018 highlighted by the following achievements:
- Total 1P and 2P reserves at year end 2018 increased to 193
mmboe and 265 mmboe, respectively, representing 13% growth within
each category, driven by strong positive technical reserve
revisions and infill drilling additions which more than offset the
impact of reserves produced during the year.
- Achieved reserves replacement of 330% in 2018 including the
effect of total net acquisitions, and 166% reserve replacement
excluding the effect of total net acquisitions in 2018.
- Bellatrix established a December 31,
2018 2P net asset value (2P net present value discounted at
10% ("NPV10") before tax) of $1.12
billion ($13.84/share) which
incorporates future net revenue adjusted for year end total net
debt, seismic, and land value.
- The 2018 year end PDP NPV10 before tax value of $472.5 million remained relatively unchanged from
the 2017 year end PDP NPV10 value of $475.3
million as the 13% growth in reserve volumes mitigated the
impact of lower forecast natural gas and natural gas liquids prices
year over year.
- Bellatrix maintained a focused capital program in 2018 adding
PDP reserves at a finding, development and acquisition ("FD&A")
cost of $3.12/boe excluding capital
invested in the Bellatrix O'Chiese Nees-Ohpawganu'ck deep-cut gas
plant at Alder Flats (the "Alder
Flats Plant"), and $3.22/boe
including the Alder Flats Plant. The PDP recycle ratio excluding
Alder Flats Plant capital was 2.7 times.
- Bellatrix's 2P and 1P FD&A costs including changes in
future development capital ("FDC") in 2018 averaged $1.99/boe and $2.28/boe, respectively. On a three year average
basis (2016 to 2018), Bellatrix delivered strong 2P and 1P FD&A
costs of $3.22/boe and $3.76/boe, respectively.
- The Company's calculated 1P and 2P reserve life indices
improved year over year to 14.7 years and 19.2 years (compared with
13.5 and 17.4 years in 2017), respectively.
- Bellatrix's corporate decline rate forecast by InSite for PDP
reserves in 2019 is 26% (relatively unchanged compared with an
estimated first year PDP decline rate at December 31, 2017 of 25%).
2018 HIGHLIGHTS
|
|
|
Twelve months ended
December,
|
|
2018
|
2017
|
Reserves (Working
Interest (1), mboe)
|
|
|
|
Proved Developed
Producing
|
77,327
|
65,305
|
|
Total
Proved
|
192,979
|
171,198
|
|
Proved
Undrilled/Total Proved
|
59%
|
61%
|
|
Total Proved and
Probable
|
265,222
|
235,330
|
|
Probable/Total Proved
and Probable
|
27%
|
27%
|
|
|
|
Net Present Value
of Reserves (Before Tax, 10% Discount Rate)
(2)
|
|
|
|
Total Proved
($MM)
|
$1,049
|
$1,016
|
|
Proved and Probable
($MM) (3)
|
$1,500
|
$1,501
|
|
|
|
Net Asset
Value
|
|
|
|
Proved and Probable
($MM) (4)
|
$1,120
|
$1,161
|
|
Proved and Probable
Net Asset Value, per basic share (5)
|
$13.84
|
$23.52
|
|
|
|
FD&A Costs
(Including Changes in FDC)
|
|
|
|
PDP, excluding Alder
Flats Plant capital ($/boe)
|
$3.12
|
$4.81
|
|
1P, excluding Alder
Flats Plant capital ($/boe)
|
$2.28
|
$4.12
|
|
2P, excluding Alder
Flats Plant capital ($/boe)
|
$1.99
|
$3.15
|
|
3 year average 1P
($/boe)
|
$3.76
|
$4.05
|
|
3 year average 2P
($/boe)
|
$3.22
|
$2.39
|
|
|
|
Selected Key
Operating Statistics
|
|
|
|
Annual average sales
volumes (boe/d)
|
35,635
|
36,872
|
|
Q4 average sales
volumes (boe/d)
|
35,001
|
37,077
|
|
Annual operating
netback ($/boe) (6)
|
$8.51
|
$9.02
|
|
Total net debt ($MM)
(6)
|
$443.3
|
$420.8
|
|
|
|
Reserve Life Index
(Years)
|
|
|
|
Proved
|
14.7
|
13.5
|
|
Proved and
Probable
|
19.2
|
17.4
|
Recycle
Ratio
|
|
|
|
PDP, excluding change
in FDC and Alder Flats Plant capital
|
2.7 x
|
1.9 x
|
|
1P, excluding change
in FDC and Alder Flats Plant capital
|
3.8 x
|
3.8 x
|
|
2P, excluding change
in FDC and Alder Flats Plant capital
|
4.7 x
|
4.1 x
|
|
|
|
Evaluated Future
Horizontal Drilling Locations (7)
|
|
|
|
Gross Spirit
River
|
174
|
177
|
|
Net Spirit
River
|
132
|
129
|
|
Gross
Cardium
|
150
|
147
|
|
Net
Cardium
|
127
|
117
|
|
(1) "Working Interest" means
Bellatrix's working interest (operated or non-operated) share
excluding any royalty interest and before deduction of royalties
and is also referred to as "Gross" reserves under NI 51-101. May
not add due to rounding.
|
(2) It should not be
assumed that the present worth of estimated future net revenue
presented in the tables above or elsewhere in this press release
represents the fair market value of the reserves. There is no
assurance that the forecast prices and costs assumptions will be
attained and variances could be material. The recovery and reserves
estimates of Bellatrix's crude oil and natural gas reserves
provided herein are estimates only and there is no guarantee that
the estimated reserves will be recovered. Actual crude oil, natural
gas and natural gas liquids reserves may be greater than or less
than the estimates provided herein.
|
(3)
Bellatrix reserves information includes the impact of IFRS 16,
which changes the accounting treatment of certain operating leases
so that the future lease payments associated with such leases are
recognized as a financial liability on the Company's balance sheet.
As a result, for the purposes of preparing the reserves data
presented herein, the lease payments associated with such leases
are recognized as financing costs rather than as operating costs
and have not been deducted in calculating the value of the
Company's reserves. If such lease payments were recognized as
operating costs in calculating the value of the Company's reserves,
it would result in a reduction to the Company's 2P NPV10 future net
revenue by $88 million from approximately $1.5 billion to $1.412
billion.
|
(4)
Proved plus Probable net asset value incorporates 2P NPV10
(before tax) value and adjusts for year end total net debt,
seismic, and land value.
|
(5) Based on 80.9
million common shares outstanding as at December 31, 2018
(excluding common shares issuable pursuant to securities that are
convertible, exercisable or exchangeable into common
shares).
|
(6)
The terms "operating netback" and "total net debt" do not have
standard meanings under Canadian generally accepted accounting
principles ("GAAP"). Operating netback is calculated by
deducting transportation, royalties and operating costs from
revenue. Operating netback includes the impact of commodity price
risk management contracts. The Company's calculation of total
net debt excludes other deferred liabilities, deferred capital
obligations, long-term risk management contract liabilities,
decommissioning liabilities, and deferred tax liabilities. Total
net debt includes the adjusted working capital deficiency, long
term loans receivable, 8.5% senior unsecured notes due 2020 (the
"Senior Notes"), 8.5% second lien notes due 2023 (the "Second Lien
Notes"), 6.75% convertible unsecured subordinated debentures due
2021 (the "Convertible Debentures") (liability component), and
current and long term amounts outstanding under our syndicated
revolving credit facilities (the "Credit Facilities"). The adjusted
working capital deficiency is calculated as net working capital
deficiency excluding current risk management contract assets and
liabilities, current portion of other deferred liabilities, current
portion of deferred capital obligation and the current Credit
Facilities. See "Non-GAAP measures" in the Reader Advisories at the
end of this Press Release.
|
(7) Represents
proved plus probable undeveloped locations included in the InSite
Report as defined below.
|
2018 RESERVES
Bellatrix engaged InSite to complete a reserve report in
accordance with NI 51-101, on 100% of Bellatrix's oil and
gas properties effective December 31,
2018 (the "InSite Report"). Highlights include:
- 265.2 million boe total working interest 2P reserves and 193.0
million boe 1P reserves.
- $1.5 billion net present value of
future net revenue of 2P reserves before tax at a 10% discount
rate.
- A net asset value of $13.84 per
basic share outstanding based on the InSite evaluation of 2P
reserves at a 10% discount rate.
- Bellatrix's corporate decline rate forecast by InSite for PDP
reserves in 2019 is 26% (relatively unchanged compared with an
estimated first year PDP decline rate at December 31, 2017 of 25%).
|
|
|
|
|
Working
interest
|
2018
Reserves
|
|
2017
Reserves
|
|
|
Oil &
Liquids
|
Natural
Gas
|
Total
|
|
Total
|
Variance
|
|
(mbbl)
|
(mmcf)
|
(mboe)
|
|
(mboe)
|
%
|
Proved
|
62,308
|
784,024
|
192,979
|
|
171,198
|
13%
|
Probable
|
23,421
|
292,934
|
72,243
|
|
64,132
|
13%
|
Proved Plus Probable
(1)
|
85,729
|
1,076,957
|
265,222
|
|
235,330
|
13%
|
(1) Totals may not add
due to rounding.
|
NET ASSET VALUE – PROVED PLUS PROBABLE
The following table of net asset value, as at December 31, 2018, is based on the InSite
evaluation of future net revenue of the Company's 2P reserves
before tax, which does not represent fair market value.
|
($000s except
acre, unit and per unit amounts)
|
|
PV 0%
|
PV 5%
|
PV 8%
|
PV 10%
|
PV 15%
|
Proved plus Probable
Reserves (1)
|
3,793,797
|
2,246,652
|
1,743,453
|
1,500,254
|
1,083,970
|
Undeveloped Lands
(2)
|
35,952
|
35,952
|
35,952
|
35,952
|
35,952
|
Value of Seismic
(3)
|
26,872
|
26,872
|
26,872
|
26,872
|
26,872
|
Total Net Debt
(4)
|
(443,332)
|
(443,332)
|
(443,332)
|
(443,332)
|
(443,332)
|
Net Asset
Value
|
3,413,289
|
1,866,144
|
1,362,945
|
1,119,746
|
703,462
|
|
|
|
|
|
|
Per Basic Common
Share (5)
|
$42.19
|
$23.06
|
$16.85
|
$13.84
|
$8.69
|
(1) As evaluated by InSite
as at December 31, 2018 based on forecast prices and costs before
income tax.
|
(2) As estimated by
Bellatrix as at December 31, 2018 based on 133,815 net acres of
undeveloped land at an average price of $268.67
per
acre.
|
(3)Based on 25% of $105.7
million replacement value based on seismic costs to buy data at an
average of approximately $1,600/km for 2D and $16,000/km2 for
3D.
|
(4) The Company's
calculation of total net debt excludes other deferred liabilities,
deferred capital obligations, long-term risk management contract
liabilities, decommissioning liabilities, and deferred tax
liabilities. Total net debt includes the adjusted working capital
deficiency, long term loans receivable, Second Lien Notes, Senior
Notes, Convertible Debentures (liability component), current Credit
Facilities and long term Credit Facilities. The adjusted working
capital deficiency is calculated as net working capital deficiency
excluding current risk management contract assets and liabilities,
current portion of other deferred liabilities, current portion of
deferred capital obligation and the current Credit
Facilities.
|
(5)
Based on 80.9 million common shares outstanding as at December
31, 2018 (excluding common shares issuable pursuant to securities
that are convertible, exercisable or exchangeable into common
shares).
|
NET PRESENT VALUE ("NPV") OF FUTURE NET REVENUE
The forecast prices used in the InSite Report incorporate
InSite's commodity price forecasts as at December 31, 2018 ("InSite Forecast Prices")
which are noted below under the heading "Reserve Report Commodity
Pricing". It should not be assumed that the NPV
estimated by InSite represents the fair market value of Bellatrix's
reserves. Estimated future net revenues are reduced for
estimated future abandonment and reclamation costs (for wells (both
current and future wells) that have been attributed reserves),
estimated royalties payable, estimated operating costs, and
estimated capital for future development associated with the
reserves.
In the InSite Report, the net total future capital over the life
of the reserves associated with 1P reserves is $679 million ($512
million discounted at 10%) and
$863 million ($639 million discounted at 10%) for 2P reserves.
The change in 2018 net total FDC over the life of the reserves
associated with 1P reserves is $15
million ($1 million discounted
at 10%) and $31
million ($7 million discounted
at 10%) for 2P reserves. Calculated changes in net FDC
exclude future capital from acquired properties.
SUMMARY OF NPV BEFORE INCOME TAXES (1),
(2)
|
|
|
|
|
|
As at December 31,
2018
|
0%
|
5%
|
8%
|
10%
|
15%
|
Proved
|
|
|
|
|
|
|
Developed
producing
|
887,468
|
619,667
|
522,192
|
472,545
|
382,630
|
|
Developed
non-producing
|
18,791
|
13,685
|
11,690
|
10,637
|
8,654
|
|
Undeveloped
|
1,506,640
|
885,604
|
671,650
|
566,101
|
382,763
|
Total
proved
|
2,412,899
|
1,518,956
|
1,205,532
|
1,049,283
|
774,047
|
Probable
|
1,380,898
|
727,696
|
537,921
|
450,971
|
309,923
|
Total proved plus
probable
|
3,793,797
|
2,246,652
|
1,743,453
|
1,500,254
|
1,083,970
|
|
(1
)Forecast Prices and Costs ($000s). Discounted at
(%/year).
|
(2)
May not add due to rounding.
|
SUMMARY OF NPV AFTER INCOME
TAXES (1), (2), (3)
|
|
|
|
|
|
As at December 31,
2018
|
0%
|
5%
|
8%
|
10%
|
15%
|
Proved
|
|
|
|
|
|
|
Developed
producing
|
887,468
|
619,667
|
522,192
|
472,545
|
382,630
|
|
Developed
non-producing
|
18,791
|
13,685
|
11,690
|
10,637
|
8,654
|
|
Undeveloped
|
1,245,226
|
763,538
|
590,955
|
503,942
|
348,934
|
Total
proved
|
2,151,485
|
1,396,890
|
1,124,837
|
987,124
|
740,218
|
Probable
|
1,022,509
|
545,391
|
407,431
|
344,313
|
241,878
|
Total proved plus
probable
|
3,173,994
|
1,942,281
|
1,532,268
|
1,331,437
|
982,096
|
|
(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.
|
FD&A COSTS (1)
The Company achieved another strong year of capital investment
in 2018 with average drill, complete, equip and tie-in costs for
its Spirit River program in 2018
averaging approximately $3.4 million
per well (down from $3.8 million in
2017).
Total exploration and development capital expenditures in 2018
(before acquisition and divestiture activities) were $50.3 million. Total net capital
expenditures after acquisition and divestiture activities were
$75.6 million in 2018.
|
|
|
|
|
|
2018
|
2017
|
2016
|
2016 –
2018 Avg.
|
PROVED PLUS
PROBABLE FD&A COSTS
|
|
|
|
|
Excluding changes
in FDC
|
|
|
|
|
FD&A Costs, 2P
($/boe)
|
|
|
|
|
Exploration and
development (2)
|
2.32
|
3.39
|
1.77
|
2.46
|
Acquisitions
(excluding dispositions) (3)
|
1.43
|
0.04
|
3.26
|
1.35
|
Total (including
acquisitions)
|
1.88
|
2.43
|
2.02
|
2.12
|
Total excluding Alder
Flats Plant capital (4)
|
1.82
|
2.22
|
1.82
|
1.96
|
Including changes
in FDC (2)
|
|
|
|
|
FD&A Costs, 2P
($/boe)
|
|
|
|
|
Exploration and
development
|
1.44
|
3.58
|
3.68
|
3.16
|
Acquisitions
(excluding dispositions) (3)
|
2.66
|
2.83
|
5.80
|
3.35
|
Total (including
acquisitions)
|
2.05
|
3.36
|
4.03
|
3.22
|
Total excluding Alder
Flats Plant capital (4)
|
1.99
|
3.15
|
3.83
|
3.05
|
|
|
|
|
|
PROVED FD&A
COSTS
|
|
|
|
|
Excluding changes
in FDC
|
|
|
|
|
FD&A Costs, 1P
($/boe)
|
|
|
|
|
Exploration and
development (2)
|
2.62
|
3.42
|
1.88
|
2.59
|
Acquisitions
(excluding dispositions) (3)
|
1.94
|
0.05
|
4.34
|
1.79
|
Total (including
acquisitions)
|
2.31
|
2.61
|
2.22
|
2.38
|
Total excluding Alder
Flats Plant capital (4)
|
2.24
|
2.38
|
1.99
|
2.20
|
Including changes
in FDC (2)
|
|
|
|
|
FD&A Costs, 1P
($/boe)
|
|
|
|
|
Exploration and
development
|
1.41
|
4.67
|
3.75
|
3.62
|
Acquisitions
(excluding dispositions) (3)
|
3.51
|
3.33
|
6.99
|
4.14
|
Total (including
acquisitions)
|
2.36
|
4.34
|
4.20
|
3.76
|
Total excluding Alder
Flats Plant capital (4)
|
2.28
|
4.12
|
3.98
|
3.57
|
|
|
|
|
|
PROVED DEVELOPED
PRODUCING FD&A COSTS
|
|
|
|
|
FD&A Costs, PDP
($/boe)
|
|
|
|
|
Exploration and
development (2)
|
3.51
|
5.56
|
5.02
|
4.83
|
Acquisitions
(excluding dispositions) (3)
|
2.84
|
0.47
|
11.14
|
4.11
|
Total (including
acquisitions)
|
3.22
|
5.27
|
5.90
|
4.67
|
Total excluding Alder
Flats Plant capital (4)
|
3.12
|
4.81
|
5.30
|
4.31
|
|
(1)
FD&A costs are used as a measure of capital efficiency.
FD&A presented above has been calculated based on exploration
and development capital and/or acquisition capital spent in the
applicable period (both including and excluding changes in future
development capital for that period) divided by the change in
reserves for that period including revisions for that same period.
Bellatrix provides FD&A costs that incorporate all acquisitions
and exclude the reserve, capital, and FDC impact of dispositions
during the year. The foregoing calculation is based on
working interest reserves.
|
(2)
The aggregate of exploration and development costs incurred in
the most recent 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.
|
(3)
FD&A is calculated using the announced purchase price for
corporate acquisitions rather than the actual amount allocated to
property, plant and equipment for accounting
purposes.
|
(4) In
2018, the Company completed facilities and equipment investments
totalling $50.3 million including approximately $2.6 million
directly on the Alder Flats Plantas such capital is non-recurring
and no further development capital will be required to be spent on
the Alder Flats Plant in future years, total FD&A costs are
shown excluding capital spent directly on the Alder Flats
Plant.
|
RESERVE LIFE INDEX
Bellatrix's reserve life index has been determined for 1P and 2P
working interest reserves using forecast prices and costs.
The reserve life index for 2018 is calculated by dividing reserves
as at December 31, 2018 by 2019
forecasted average production of 37,853 boe/d for 2P reserves and
35,824 boe/d for 1P reserves, as set forth in the InSite 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.
|
2018
|
2017
|
2016
|
2015
|
2014
|
Proved
|
14.7
|
13.5
|
14.1
|
10.1
|
10.6
|
Proved and
Probable
|
19.2
|
17.4
|
18.8
|
14.3
|
13.3
|
RECYCLE RATIO (OPERATING
NETBACK (1)/FD&A
COST)
Recycle ratio is a measure for evaluating the effectiveness of a
company's reinvestment program and 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. In 2018, the
Company completed facilities and equipment investments totalling
$50.3 million including approximately
$2.6 million directly on the Alder
Flats Plant. Capital spent directly on the Alder Flats Plant
has been excluded from the calculation of recycle ratio as such
capital is non-recurring and no further development capital will be
required to be spent on the Alder Flats Plant in future years.
As at December 31,
2018
|
Proved
Developed
Producing
|
Proved
|
Proved
and
Probable
|
Operating netback
after commodity price risk management contracts ($/boe)
(1)
|
$8.51
|
$8.51
|
$8.51
|
Recycle ratio
(excluding change in FDC)
|
2.64
|
3.68
|
4.53
|
Recycle ratio
(excluding change in FDC and Alder Flats Plant capital)
|
2.73
|
3.80
|
4.68
|
|
(1)
Operating netback is calculated by deducting transportation,
royalties and operating costs from revenue and includes the impact
of commodity price risk management contracts. (See Non-GAAP
Measures)
|
FUTURE DEVELOPMENT COSTS USING FORECAST PRICES AND
COSTS
At year end, 2018, InSite had evaluated certain future
development opportunities on Company lands including 174 gross (132
net) future undrilled Spirit River
horizontal locations and 150 gross (127 net) future undrilled
Cardium horizontal locations representing proved plus probable
undeveloped locations.
For purposes of assigning net present value of future revenue,
future development costs were committed as detailed in the
following table.
($000s)
|
Proved Future
Development
Costs
|
Proved plus
Probable Future
Development Costs
|
2019
|
54,270
|
57,720
|
2020
|
116,465
|
121,269
|
2021
|
135,577
|
160,503
|
2022 and
subsequent
|
372,284
|
523,511
|
Undiscounted
total
|
678,596
|
863,002
|
Discounted @
10%/yr.
|
511,629
|
639,408
|
RESERVES SUMMARY
The InSite Report is based on forecast prices and costs, and
applies InSite's forecast escalated commodity price deck, foreign
exchange rate, and inflation rate assumptions as at December 31, 2018 as outlined in the table below
entitled "Reserve Report Commodity Pricing". At December 31, 2018 the Company's 2P gross reserves
as evaluated by InSite, using forecast prices and costs, were
265,222 mboe, an increase of 13% compared to 235,330 mboe at
December 31, 2017; total 1P gross
reserves were 192,979 mboe, an increase of 13% compared to 171,198
mboe at December 31, 2017. By
commodity type, natural gas made up 68% and crude oil and natural
gas liquids 32% of total 2P reserves. 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 which management anticipates will be filed on or
about March 21, 2019.
Reserves, at December 31, 2018, as
evaluated by InSite, are summarized below and in the following
tables.
Summary of Oil and
Gas Working Interest Reserves (1) (Gross)
|
Forecast Prices
and Costs
|
|
|
As at Dec. 31,
2018
|
As at Dec. 31,
2017
|
|
|
Natural Gas
(2)
|
Heavy Oil
|
Light and
|
Natural
Gas
|
Total
|
Total
|
|
|
|
|
Medium Oil
|
Liquids
|
|
|
|
|
(mmcf)
|
(mbbl)
|
(mbbl)
|
(mbbl)
|
(mboe, 6:1)
|
(mboe,
6:1)
|
Proved
|
|
|
|
|
|
|
|
Developed
producing
|
319,094
|
6
|
953
|
23,186
|
77,327
|
65,305
|
|
Developed
non-producing
|
5,919
|
0
|
46
|
337
|
1,369
|
837
|
|
Undeveloped
|
459,011
|
114
|
1,925
|
35,742
|
114,283
|
105,057
|
Total
proved
|
784,024
|
120
|
2,924
|
59,264
|
192,979
|
171,198
|
Probable
|
292,934
|
198
|
1,367
|
21,856
|
72,243
|
64,132
|
Total proved plus
probable
|
1,076,957
|
318
|
4,291
|
81,120
|
265,222
|
235,330
|
|
(1) "Working Interest"
means Bellatrix's working interest (operated or non-operated) share
excluding any royalty interest and 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. Coal bed methane and
shale gas reserves represent an immaterial portion of the Company's
natural gas reserves.
|
Summary of Oil and
Gas Net Reserves (1) (Net)
|
Forecast Prices
and Costs
|
|
|
As at Dec. 31,
2018
|
As at Dec. 31,
2017
|
|
|
Natural Gas
(2)
|
Heavy Oil
|
Light and
|
Natural
Gas
|
Total
|
Total
|
|
|
|
|
Medium Oil
|
Liquids
|
|
|
|
|
(mmcf)
|
(mbbl)
|
(mbbl)
|
(mbbl)
|
(mboe, 6:1)
|
(mboe,
6:1)
|
Proved
|
|
|
|
|
|
|
|
Developed
producing
|
288,710
|
6
|
866
|
18,626
|
67,617
|
56,640
|
|
Developed
non-producing
|
4,961
|
0
|
42
|
236
|
1,104
|
688
|
|
Undeveloped
|
412,635
|
99
|
1,579
|
30,447
|
100,897
|
92,277
|
Total
proved
|
706,306
|
105
|
2,487
|
49,309
|
169,618
|
149,604
|
Probable
|
262,378
|
166
|
1,095
|
17,829
|
62,819
|
55,090
|
Total proved plus
probable
|
968,684
|
271
|
3,581
|
67,138
|
232,438
|
204,694
|
|
(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. Coal bed methane and
shale gas reserves represent an immaterial portion of the Company's
natural gas reserves.
|
RESERVE REPORT COMMODITY PRICING
The following is a summary of InSite's forecast commodity prices
as at December 31, 2018:
Year
Forecast
|
WTI
Oil
Cushing
Oklahoma
($US/bbl)
|
Edmonton
Crude Oil
Ref Price
($/bbl)
|
AECO
Natural Gas
($/MMBtu)
|
Butane
($/bbl)
|
Propane
($/bbl)
|
Condensate
($/bbl)
|
Exchange
Rate (1)
($US/$Cdn)
|
|
2019
|
57.00
|
63.50
|
1.90
|
20.96
|
28.58
|
67.95
|
0.76
|
2020
|
64.00
|
75.55
|
2.29
|
37.02
|
33.24
|
78.95
|
0.78
|
2021
|
68.00
|
80.50
|
2.71
|
45.89
|
37.03
|
83.72
|
0.80
|
2022
|
71.00
|
83.25
|
3.03
|
54.95
|
38.30
|
86.58
|
0.80
|
2023
|
72.80
|
85.60
|
3.21
|
58.21
|
41.52
|
88.60
|
0.80
|
2024
|
74.50
|
87.62
|
3.33
|
61.33
|
42.93
|
90.68
|
0.80
|
2025
|
76.50
|
90.01
|
3.44
|
62.10
|
44.10
|
93.16
|
0.80
|
2026
|
77.50
|
92.68
|
3.50
|
63.95
|
45.41
|
95.92
|
0.80
|
2027
|
79.05
|
94.53
|
3.57
|
65.22
|
46.32
|
97.84
|
0.80
|
2028
|
80.63
|
96.42
|
3.65
|
66.53
|
47.25
|
99.79
|
0.80
|
Thereafter
|
+2.0%/yr.
|
+2.0%/yr.
|
+2.0%/yr.
|
+2.0%/yr.
|
+2.0%/yr.
|
+2.0%/yr.
|
|
|
(1)
Exchange rates used to generate the benchmark reference prices
in this table
|
Weighted average historical prices realized by Bellatrix (before
commodity price risk management contracts) for the year ended
December 31, 2018, were $1.78/mcf for natural gas, $73.63/bbl for crude oil and condensate, and
$24.46/bbl for natural gas liquids
(excluding condensate).
LAND
As at December 31, 2018, Bellatrix
had approximately 133,815 net undeveloped acres in Alberta, British
Columbia, and Saskatchewan.
Land
Holdings (1)
|
|
|
|
2018
|
2017
|
|
Gross
|
Net
|
Gross
|
Net
|
Developed
|
|
|
British
Columbia
|
7,602
|
1,910
|
8,132
|
2,108
|
Alberta
|
366,664
|
230,940
|
371,715
|
227,180
|
Saskatchewan
|
13,327
|
12,720
|
13,327
|
12,720
|
Total
|
387,593
|
245,570
|
393,174
|
242,008
|
Undeveloped
|
|
|
British
Columbia
|
62,637
|
20,318
|
79,987
|
28,859
|
Alberta
|
142,313
|
105,764
|
153,035
|
112,213
|
Saskatchewan
|
8,005
|
7,732
|
8,005
|
7,732
|
Total
|
212,956
|
133,815
|
241,028
|
148,804
|
Developed and
Undeveloped
|
|
|
British
Columbia
|
70,240
|
22,228
|
88,120
|
30,967
|
Alberta
|
508,977
|
336,705
|
524,751
|
339,393
|
Saskatchewan
|
21,332
|
20,452
|
21,332
|
20,452
|
Total
|
600,549
|
379,385
|
634,202
|
390,812
|
(1) May not add due to
rounding
|
|
|
|
|
Bellatrix Exploration Ltd. is a publicly traded 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, with highly concentrated operations
in west central Alberta,
principally focused on profitable development of the Spirit River
liquids rich natural gas play.
All amounts in this press release are in Canadian dollars unless
otherwise identified.
READER ADVISORIES:
Forward-Looking Statements. Certain statements contained in
this news release may constitute forward-looking statements or
forward-looking information. These statements relate to future
events or the Bellatrix's future performance. All statements other
than statements of historical fact may be forward-looking
statements. Forward-looking statements or information are often,
but not always, identified by the use of words such as
"anticipate", "plan", pro"estimate", "expect", "may",
"will", "project", "predict", "could", "should", "believe" and
similar expressions. Statements relating to "reserves" are also
deemed to be forward-looking statements, as they involve the
implied assessment, based on certain estimates and assumptions,
that the reserves described exist in the quantities predicted or
estimated and that the reserves can be profitably produced in the
future. These statements involve known and unknown risks,
uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in such
forward-looking statements. Bellatrix believes that the
expectations reflected in those forward-looking statements are
reasonable, but no assurance can be given that these expectations
will prove to be correct and such forward-looking statements
included in this news release should not be unduly relied upon by
investors. These statements speak only as of the date of this news
release and are expressly qualified, in their entirety, by this
cautionary statement.
In particular, this news release contains forward-looking
statements, pertaining to the following: projections of market
prices and costs, the quantity of reserves, oil and natural gas
production levels, estimated future drilling locations,
future development costs and timing of filing of
Bellatrix's annual information form an annual financial
results for the year ended December 31,
2018.
With respect to forward-looking statements contained in this
news release, Bellatrix has made assumptions regarding, among other
things: prevailing commodity prices, exchange rates, interest
rates, applicable royalty rates and tax laws; the legislative and
regulatory environments of the jurisdictions where Bellatrix
carries on business or has operations; future production rates and
estimates of operating costs; performance of existing and future
wells; reserve and resource volumes; anticipated timing and results
of capital expenditures; the success obtained in drilling new
wells; the sufficiency of budgeted capital expenditures in carrying
out planned activities; the timing, location and extent of future
drilling operations; the state of the economy and the exploration
and production business; results of operations; performance;
business prospects and opportunities; the availability and cost of
financing, labour and services; the impact of increasing
competition; ability to market oil and natural gas successfully and
Bellatrix's ability to obtain additional financing on satisfactory
terms.
Although Bellatrix believes that the assumptions on which
such forward-looking information is based are reasonable, undue
reliance should not be placed on the forward-looking information
because no assurance can be given that they will prove to be
correct. Bellatrix's actual results could differ materially from
those anticipated in these forward-looking statements as a result
of risk factors that may include, but are not limited to:
volatility in the market prices for oil and natural gas;
uncertainties associated with estimating reserves; uncertainties
associated with Bellatrix's ability to obtain additional financing
on satisfactory terms; geological, technical, drilling and
processing problems; liabilities and risks, including environmental
liabilities and risks, inherent in oil and natural gas operations;
incorrect assessments of the value of acquisitions; competition
for, among other things, capital, acquisitions of reserves,
undeveloped lands and skilled personnel. Readers are cautioned that
the foregoing list of factors is not exhaustive. Management has
included the above summary of assumptions and risks related to
forward-looking information provided in this news release in order
to provide security holders with a more complete perspective on
Bellatrix's future operations and such information may not be
appropriate for other purposes. Additional information on these and
other factors that could affect Bellatrix'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).
This forward-looking information represents Bellatrix's views
as of the date of this document and such information should not be
relied upon as representing its views as of any date subsequent to
the date of this document. Bellatrix has attempted to identify
important factors that could cause actual results, performance or
achievements to vary from those current expectations or estimates
expressed or implied by the forward-looking information. However,
there may be other factors that cause results, performance or
achievements not to be as expected or estimated and that could
cause actual results, performance or achievements to differ
materially from current expectations. There can be no assurance
that forward-looking information will prove to be accurate, as
results and future events could differ materially from those
expected or estimated in such statements. Accordingly, readers
should not place undue reliance on forward-looking information.
Except as required by law, the Company undertakes no obligation to
publicly update or revise any forward-looking statements.
Information Regarding Disclosure on Oil and Gas Reserves: The
reserves data set forth above is based upon the InSite
Report which is an independent reserves assessment and
evaluation prepared by InSite with an effective date of
December 31, 2018.
The press release summarizes the Company's crude
oil, natural gas liquids and natural gas reserves and the net
present values before income tax of future net revenue for the
Company's reserves using forecast prices and costs based on the
InSite Report. All reserve references in this news release are
"Working interest reserves" unless otherwise indicated. Working
interest reserves are Bellatrix's working interest (operated and
non-operated) share before deduction of royalties, and is also
referred to as "Gross" reserves under NI 51-101. The InSite
Report has been prepared in accordance with the standards contained
in the COGE handbook and the reserve definitions contained in NI
51-101. All evaluations and reviews of future net cash flows are
stated prior to any provisions for interest costs or general and
administrative costs and after the deduction of estimated future
capital expenditures for wells to which reserves have been
assigned. It should not be assumed that the estimates of future net
revenues presented in the tables above represent the fair market
value of the reserves. There is no assurance that the forecast
prices and cost assumptions will be attained and variances could be
material. The recovery and reserve estimates of the Company's crude
oil, natural gas liquids and natural gas reserves provided herein
are estimates only and there is no guarantee that the estimated
reserves will be recovered. Actual crude oil, natural gas and
natural gas liquids reserves may be greater than or less than the
estimates provided herein. All future net revenues are estimated
using forecast prices, arising from the anticipated development and
production of the Company's reserves, net of the associated
royalties, operating costs, development costs, and abandonment and
reclamation costs (for wells (both current and future) that
have attributed reserves) and are stated prior to provision
for interest and general and administrative expenses. Future net
revenues have been presented on a before tax basis. Estimated
values of future net revenue disclosed herein do not represent fair
market value. The reserve data provided in this news release only
represents a summary of the disclosure required under NI 51-101.
Additional disclosure will be provided in the Company's Annual
Information Form which management anticipates will be
filed on www.sedar.com on or about March
21, 2019.
Non-GAAP Measures: The terms "operating netback" and "total
net debt" do not have standard meanings under Canadian general
accepted accounting principles ("GAAP"). Therefore reference to the
non-GAAP measures of net debt may not be comparable with the
calculation of similar measures for other entities. Operating
netback is calculated by deducting transportation, royalties and
operating costs from revenue. Operating netback includes the impact
of commodity price risk management contracts. The Company's
calculation of total net debt excludes other deferred liabilities,
deferred capital obligations, long-term risk management contract
liabilities, decommissioning liabilities, and deferred tax
liabilities. Total net debt includes the adjusted working capital
deficiency, long term loans receivable, Senior Notes, Second Lien
Notes, Convertible Debentures (liability component), current Credit
Facilities and long term Credit Facilities. The adjusted working
capital deficiency is calculated as net working capital deficiency
excluding current risk management contract assets and liabilities,
current portion of other deferred liabilities, current portion of
deferred capital obligation and the current Credit Facilities.
Management believes these measures are useful supplementary
measures of the total amount of current and long-term debt. A
reconciliation between total liabilities under GAAP and total net
debt as calculated by the Company is available in the Company's
Management Discussion and Analysis for the year ended December 31, 2018 and 2017.
Oil and Gas Metrics: This news release contains metrics
commonly used in the oil and natural gas industry, such as "recycle
ratio", "operating netback", "finding, development and acquisition
("FD&A") costs", and "reserve life index ("RLI")". These terms
do not have a standardized meaning and may not be comparable to
similar measures presented by other companies, and therefore should
not be used to make such comparisons. Details of how these measures
have been calculated are included in the body of this press
release. Reserve replacement is calculated by dividing
total 2P reserve additions before production, by total production
during the year, inclusive and exclusive of the net impact of net
acquisition reserve additions during the year.
BOE Presentation: References herein to "boe" mean barrels of
oil equivalent derived by converting gas to oil in the ratio of six
thousand cubic feet (Mcf) of gas to one barrel (bbl) of oil. Boe
may be misleading, particularly if used in isolation. A boe
conversion ratio of 6 Mcf: 1 bbl is based on an energy conversion
method primarily applicable at the burner tip and does not
represent a value equivalency at the wellhead. In addition, 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.
Drilling Locations: This press release discloses future
drilling locations, which can be categorized as follows: (i) proved
locations; and (ii) probable locations.
Proved locations and probable locations are sometimes collectively
referred to as "booked locations", are derived from Bellatrix's
most recent independent reserves evaluation and account for
drilling locations that have associated proved plus probable
reserves or probable-only reserves, as applicable.
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SOURCE Bellatrix Exploration Ltd.