TSX, NYSE: BXE
CALGARY, June 16, 2016 /CNW/ – Bellatrix Exploration Ltd. (“Bellatrix” or the “Company”) (TSX, NYSE: BXE) is pleased to announce the acquisition of highly complementary producing assets in its west central Alberta core Ferrier area, and provide an update on its ongoing credit facility redetermination process.
Asset Acquisition from Grafton Energy Co. I Ltd.
Bellatrix has entered into an agreement with Grafton Energy Co. I Ltd. (“Grafton”) to acquire complementary producing assets within Bellatrix’s core Ferrier area, with the consideration payable in common shares of Bellatrix. The acquired assets were originally earned by Grafton under the $250 million joint venture between Bellatrix and Grafton, and consist of Grafton’s interest in 18 gross wells (representing Grafton’s pre-payout interest in such wells) and related lands, rights and interests currently operated by Bellatrix. The acquired assets produced an average of approximately 2,000 boe/d net to Grafton in the month of May (79% natural gas weighted).
The transaction is consistent with Bellatrix’s strategy to consolidate operated production and acreage within the Company’s core area at attractive metrics. In addition, the transaction allows Bellatrix to add production and reserves while minimizing capital expenditures in the current commodity price environment. The acquired volumes are expected to be processed through Bellatrix owned infrastructure and facilities and are expected to have no incremental impact on general and administrative costs. The total consideration for the asset acquisition is $29.2 million (implying a $14,600 per flowing boe metric) and will be satisfied on a cash-free basis through the issuance of 20,547,576 Bellatrix common shares, which was determined based on the historical 10-day volume weighted average price of Bellatrix common shares on the Toronto Stock Exchange. The common shares are expected to be qualified for issuance pursuant to a prospectus supplement to be filed by Bellatrix under the Company’s existing base shelf prospectus. The Toronto Stock Exchange (the “TSX”) has conditionally approved the listing of the common shares to be issued to Grafton on the TSX. In addition, application has been made to list the common shares to be issued to Grafton on the New York Stock Exchange (the “NYSE”). Listing will be subject to the Company fulfilling all of the listing requirements of the TSX and the NYSE, as applicable.
Credit Facilities Update
As announced on June 1, 2016, Bellatrix and its syndicate of lenders have mutually agreed to defer the semi-annual borrowing base redetermination under the Company’s revolving credit facilities (the “Credit Facilities”) from May 31, 2016 to June 30, 2016. The Grafton acquisition is expected to have a positive effect on the borrowing base redetermination. Bellatrix is also actively engaged in negotiations on several other acquisition and disposition initiatives that, if completed, are expected to materially reduce indebtedness and improve the Company’s liquidity, but also impact the borrowing base redetermination. In light of currently depressed commodity prices and their impact on the estimated value of the Company’s oil and gas properties, management anticipates the borrowing base will be reduced at the next redetermination, and that such reduction may result in the borrowing base being lower than the amount currently outstanding under the Credit Facilities. In such instance, it is anticipated that any amount outstanding in excess of the new borrowing base will become non-revolving and will have a maturity date prior to the current revolving facility maturity date of May 30, 2017. Bellatrix has formerly applied for an extension to the maturity date of the revolving Credit Facilities; however, the lenders under the Credit Facilities may not grant such extension.
While the Company continues its negotiations, there can be no assurance that any agreement or transaction will occur, or if a transaction is undertaken, as to its terms or timing. Given the nature of the negotiations and the need for confidentiality during this process among all parties, the Company does not intend to provide detailed updates until such time as the Company has entered into a definitive agreement, or unless otherwise required by law or regulation or disclosure of which is deemed appropriate.
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.