Bellatrix Exploration Ltd. (“
Bellatrix” or the
“
Company”) (TSX: BXE) announced today that, in
connection with its previously announced recapitalization
transaction (the “
Recapitalization Transaction”)
to be implemented pursuant to Bellatrix’s court approved plan of
arrangement under the Canada Business Corporations Act (the
“
Plan of Arrangement”), the Company has
substantially finalized the following documents, each of which is
to be finalized and executed on the implementation of the
Recapitalization Transaction:
- the indenture (the “New Second Lien
Notes Indenture”) to be entered into by Bellatrix, as
issuer, and U.S. Bank National Association, as trustee and
collateral agent, pursuant to which the Company’s Existing Second
Lien Notes issued pursuant to the Existing Second Lien Note
Purchase Agreement (each as defined below) and the new second lien
notes issued pursuant to the Plan of Arrangement will be governed;
and
- the indenture (the “New Third Lien Notes
Indenture”) to be entered into by Bellatrix, as issuer,
and U.S. Bank National Association, as trustee and collateral
agent, pursuant to which the Company’s new third lien notes to be
issued pursuant to the Plan of Arrangement (the “New Third
Lien Notes”) will be governed.
As set out in the Company’s management
information circular dated April 18, 2019 (the “Information
Circular”), the terms of the New Second Lien Notes
Indenture are substantially the same as the terms of the note
purchase agreement dated July 25, 2018, as amended (the
“Existing Second Lien Note Purchase Agreement”)
governing the Company’s existing 8.5% second lien notes due 2023
(the “Existing Second Lien Notes”), subject to
certain amendments and modifications that have been agreed to by
the Company, the holders of the Existing Second Lien Notes (the
“Existing Second Lien Noteholders”) and the
holders of the Company’s 8.5% senior unsecured notes due 2020 (the
“Senior Unsecured Notes”) that entered into the
support agreement with the Company as of March 28, 2019 (the
“Initial Consenting Noteholders”), including,
among others, certain conforming changes related to the conversion
of the Existing Second Lien Note Purchase Agreement into a note
indenture and to address certain informational and monitoring
rights by way of an Investor Side Letter (as defined in the New
Second Lien Notes Indenture and attached as an exhibit thereto)
with the Existing Second Lien Noteholders rather than forming part
of the New Second Lien Notes Indenture.
The terms of the New Third Lien Notes Indenture
are substantially similar to the terms of the indenture governing
the Senior Unsecured Notes, with certain amendments and
modifications that have been agreed to by Bellatrix and the Initial
Consenting Noteholders, including, among others, the inclusion of a
number of additional covenants also contained in the New Second
Lien Notes Indenture, as well as modifications to reflect the
maturity date of the New Third Lien Notes, the applicable interest
rate and payment mechanics, the security to be granted in respect
of the New Third Lien Notes and the ability to prepay the New Third
Lien Notes from time to time (in full or in part, without any
premium or penalty).
The foregoing descriptions of the New Second
Lien Notes Indenture and New Third Lien Notes Indenture are
qualified in their entirety by reference to the forms of the New
Second Lien Notes Indenture and New Third Lien Notes Indenture,
substantially final versions of which will be posted for review on
the Company’s website at www.bxe.com and under the Company’s
profile on SEDAR at www.sedar.com. Securityholders are
encouraged to refer to the full text of the New Second Lien Notes
Indenture and New Third Lien Notes Indenture for the full set of
terms and conditions of such documents. The final versions of
these documents will also be posted following implementation of the
Recapitalization Transaction under the Company’s profile on SEDAR
at the address set forth above.
The securities to be issued pursuant to the
Recapitalization Transaction have not been and will not be
registered under the U.S. Securities Act of 1933 (the “1933
Act”), or the securities laws of any state of the United
States, and may not be offered or sold within the United States
except pursuant to an exemption from the registration requirements
of the 1933 Act. The securities to be issued pursuant to the
Recapitalization Transaction will be issued and distributed in
reliance on the exemption from registration set forth in Section
3(a)(10) of the 1933 Act (and similar exemptions under applicable
state securities laws).
It is expected that the Recapitalization
Transaction will be completed on or about June 4, 2019, subject to
the satisfaction or waiver of the conditions to the Plan of
Arrangement. Additional information with respect to the
Recapitalization Transaction is set out in the Company’s
Information Circular. Any questions or requests for further
information may be directed to Kingsdale Advisors, the Company’s
proxy and information agent, at 1-866-229-8874 or 416-867-2272, or
by email at contactus@kingsdaleadvisors.com.
About Bellatrix
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.
For further information, please
contact:
Steve Toth, CFA, Vice President, Investor Relations &
Corporate Development (403) 750-1270
Bellatrix Exploration Ltd. 1920,
800 – 5th Avenue SW Calgary, Alberta, Canada T2P 3T6 Phone: (403)
266-8670 Fax: (403) 264-8163 www.bxe.com
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 “continue”, “plan”, “propose”, “would”,
“will”, “believe”, “expect”, “position”, “anticipate”, “improve”,
“enhance” and similar expressions are intended to identify
forward-looking statements. More particularly and without
limitation, this document contains forward-looking statements
concerning the expected process for and timing of implementing the
Recapitalization Transaction.
Forward-looking statements necessarily involve
risks, including, without limitation, risks associated with the
ability of the Company to implement the Recapitalization
Transaction on the terms and on the timeline described in this
press release and the other press releases issued in respect of the
Recapitalization Transaction; the ability of the Company to receive
all remaining necessary third party approvals in order to complete
the Recapitalization Transaction; the ability of the Company to
achieve its financial goals including with respect to the nature of
any agreement with its debtholders; the ability of the Company to
operate in the ordinary course, including with respect to
satisfying obligations to service providers, suppliers, contractors
and employees; the ability of the Company to continue as a going
concern; the ability of the Company to continue to realize its
assets and discharge its liabilities and commitments; the ability
of the Company to comply with its contractual obligations,
including, without limitation, its obligations under debt
arrangements; the general regulatory environment in which the
Company operates; the tax treatment of the Company and the
materiality of any legal and regulatory proceedings; the general
economic, financial, market and political conditions impacting the
industry and markets in which the Company operates; the ability of
the Company to generate sufficient cash flow from operations; the
impact of competition; the ability of the Company to obtain and
retain qualified staff, equipment and services in a timely and
efficient manner (particularly in light of the Company’s efforts to
restructure its debt obligations); and the ability of the Company
to retain members of the senior management team, including but not
limited to, the officers of the Company.
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 stakeholders 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 general stability of the
economic and political environment in which Bellatrix operates; the
timely receipt of any required regulatory approvals; future
commodity prices; currency, exchange and interest rates; the
regulatory framework regarding royalties, taxes and environmental
matters in the jurisdictions in which Bellatrix operates; and the
ability of Bellatrix 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 under the heading “Risk Factors” in the
Company’s annual information form for the year ended December 31,
2018, on file with Canadian and United States securities regulatory
authorities and may be accessed through the SEDAR website
(www.sedar.com), and at Bellatrix’s website (www.bxe.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.