TSX, NYSE: BXE
CALGARY, Jan. 29, 2015 /CNW/ – Bellatrix Exploration Ltd. (“Bellatrix” or the “Company”) (TSX, NYSE: BXE) announces an updated 2015 net capital budget and operational outlook, and provides an update on its recent commodity price risk management activities.
2015 Revised Capital Expenditure Plans and Operational Guidance
In response to continued volatility of oil and gas prices, Bellatrix announces an updated 2015 net capital budget of up to $200 million, reduced from the previously announced $300 million. The revised capital budget is designed to preserve Bellatrix’s favorable financial position in the current commodity price environment.
Despite the reduced net capital spending plans, Bellatrix’s differentiated joint venture strategy provides access to additional third party capital on terms that enhance economic returns, allowing the Company to continue profiting from the further development of its properties even during the current commodity price weakness. Bellatrix expects to access up to $85 million of joint venture capital in 2015, resulting in gross capital spending for the year of up to $285 million. Pursuant to its existing joint venture arrangements, Bellatrix may access up to $250 million of additional joint venture capital in 2016 and beyond.
The Company’s capital spending focus in 2015 remains unchanged and twofold: execution of Phase 1 of the Bellatrix O’Chiese Nees-Ohpawganu’ck deep-cut gas plant at Alder Flats, and to drill highly economic Spirit River (Notikewin/Falher) liquids rich natural gas wells to be processed through the plant. Phase 1 of the aforementioned deep-cut gas plant is on budget and is anticipated to be on-stream on or before July 1, 2015.
The $100 million reduction in spending relative to previous guidance reflects a reduced drilling budget and an acute focus on wells that deliver superior rates of return at current commodity prices. Bellatrix will revisit its capital budget on a continuous basis, will pursue accretive monetization opportunities, and will further curtail capital spending, if necessary, in order to preserve its balance sheet until commodity prices firmly recover.
As a result of the reduced capital spending plans, 2015 full year average annual production guidance is being reduced by 8% to approximately 43,000 to 44,000 boe/d (from 47,000 to 48,000 boe/d), 67% natural gas weighted. The updated 2015 production guidance reflects annual growth of approximately 14% relative to estimated 2014 average daily production of 38,100 boe/d.
2015 Price Risk Management Contracts
Bellatrix has recently entered into a series of natural gas fixed price swap contracts that provide downside commodity protection through the summer natural gas season. Bellatrix has hedged an additional 106.6 mmcf/d of natural gas volumes at an average price of $2.92/mcf for the period between April 1, 2015 and October 31, 2015. The risk management program for the April 1, 2015 through October 31, 2015 period represents approximately 60% of forecast natural gas volumes (before royalties) over the duration of the contract period, compared with the midpoint of full year 2015 average production guidance range.
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. All dollar amounts are expressed in Canadian dollars unless otherwise indicated.
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.
SOURCE Bellatrix Exploration Ltd.
For further information: Steve Toth, CFA, Vice President, Investor Relations (403) 750-1270; or Troy Winsor, Investor Relations (800) 663-8072; Bellatrix Exploration Ltd., 1920, 800 – 5th Avenue SW, Calgary, Alberta, Canada, T2P 3T6, Phone: (403) 266-8670, Fax: (403) 264-8163, www.bellatrixexploration.com