Bellatrix Announces 2018 Year End Reserves Highlighted by 13% Reserve Growth and Low Cost Reserve Additions
TSX: BXE
CALGARY, March 14, 2019 /PRNewswire/ - 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 $2.6 million directly on the Alder Flats Plant. Capital spent directly on the Alder Flats Plant has been excluded from the calculation of recycle ratio as such capital is non-recurring and no further development capital will be required to be spent on the Alder Flats Plant in future years.
As at December 31, 2018
Proved
Proved
Proved
Developed and
Producing Probable
---
Operating netback after commodity price risk management contracts ($/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 Proved plus Probable Future
Costs 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 WTI Oil Edmonton
AECO Butane Propane Condensate Exchange
Crude Oil Natural Gas ($/bbl) ($/bbl) ($/bbl) Rate (1)
Forecast Cushing Ref Price ($/MMBtu) ($US/$Cdn)
Oklahoma
($US/bbl) ($/bbl)
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.
