Bellatrix Exploration Ltd. Announces Fourth Quarter 2017 and Year End Financial and Operating Results

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CALGARY, Alberta, March 13, 2018 (GLOBE NEWSWIRE) --

Strong fourth quarter 2017 results concluded a solid operational year for Bellatrix, demonstrated by consistent improvement in corporate operating guidance throughout the year and full year results that met or exceeded expectations.

Fourth quarter 2017 performance included the following operational and financial achievements:

In 2017, Bellatrix drilled and/or participated in 26 gross (19.3 net) Spirit River liquids rich natural gas wells, 3 gross (3.0 net) Cardium wells and 4 gross (1.6 net) Ellerslie wells. Bellatrix's operated drilling activity in 2017 included, a total of 101,040 meters drilled, 35,297 meters of which was horizontal length.  All-in (drill, complete, equip and tie-in) well costs in 2017 for our operated Spirit River program averaged $3.8 million, meaningfully below the $4.0 million budgeted cost level during the year.

Efficiency improvements continued in 2017, which provide the foundation for continued cost suppression.  In 2017, Bellatrix averaged 13.5 days from spud to rig release, an 8% improvement year over year.  These operational efficiencies achieved through 2017 are enduring and Bellatrix continues to improve on its already industry leading well cost and performance metrics year to date in 2018.

Bellatrix delivered strong operational performance in 2017 relative to guidance expectations as summarized below:

Bellatrix delivered low cost reserve additions in 2017 with growth in both Proved (“1P”), and Proved plus Probable (“2P”) reserve categories notwithstanding the sale of non-core assets during the year. Bellatrix maintained a focused capital program in 2017 adding Proved Developed Producing ("PDP") reserves at a finding, development and acquisition ("FD&A") cost of $4.81/boe excluding capital invested in the Bellatrix O’Chiese Nees-Ohpawganu’ck deep-cut gas plant at Alder Flats (the “Alder Flats Plant”), and $5.27/boe including the Alder Flats Plant.  The PDP recycle ratio excluding Alder Flats Plant capital was 1.9 times.  Bellatrix’s 2P and 1P FD&A costs including changes in future development capital (“FDC”) in 2017 averaged $3.36/boe and $4.34/boe, respectively.  On a three year average basis (2015 to 2017), Bellatrix delivered strong 2P and 1P FD&A costs including changes in future development capital of $2.39/boe and $4.05/boe, respectively. Strong FD&A costs were once again achieved in 2017 highlighting the low cost structure Bellatrix has built in finding and developing its resource base in West Central Alberta.  With an inventory of 354 net well locations in the Spirit River liquids rich natural gas play and 213 net well locations in the higher liquids Cardium play, Bellatrix maintains decades of low cost development drilling opportunities. The Company’s calculated 1P and 2P reserve life indices remained relatively unchanged year over year at 13.5 years and 17.4 years, respectively.

A series of incremental improvements and operational measures have delivered a step change reduction for all-in average Spirit River well costs (drill, complete, equip and tie-in) to under $3.5 million in the first quarter of 2018 (from $3.8 million in 2017).  An enhanced focus on pad drilling to reduce surface disturbance (reduced need for pipeline infrastructure and improved efficiency for operating wells), increased monobore style drilling, other proprietary drilling techniques, and reduced nitrogen use are examples of cost reduction efforts achieved.  In addition, drilling efficiency gains have continued in 2018, averaging approximately 10 days from spud to rig release for the Spirit River program down from a full program average of 13.5 days in 2017.

In addition to the cost savings, Bellatrix delivered productivity improvements with average well performance from the Company's 2017 Spirit River well program outperforming expected results by approximately 38% on an IP180 basis.  The combination of lower capital costs and improved well performance provide enhanced corporate competitiveness against weak natural gas prices.

During the fourth quarter of 2017, Bellatrix completed the semi-annual borrowing base redetermination under the Company’s syndicated revolving credit facilities (“Credit Facilities”), and the borrowing base was reconfirmed at $120 million, comprised of a $25 million operating facility and a $95 million syndicated facility.  The next semi-annual redetermination, scheduled for May 2018, will incorporate the results of Bellatrix’s recently completed 2017 year-end independent reserves evaluation.  Other than $52 million outstanding under the Credit Facilities as at December 31, 2017, the Company has no debt maturities until 2020, providing the Company with approximately $55 million of available liquidity, after deducting letters of credit.

During the fourth quarter of 2017, Bellatrix added to its commodity price risk management protection for calendar 2018. Bellatrix has 66.1 MMcf/d of 2018 natural gas volumes hedged at an average fixed price of approximately $3.06/mcf, representing approximately 40% of forecast 2018 natural gas volumes.

Bellatrix has also diversified its natural gas price exposure through physical sales contracts that give the Company access to the Dawn, Chicago, and Malin natural gas pricing hubs. This long-term diversification strategy reduces Bellatrix’s exposure to AECO pricing on approximately 26% of the Company’s forecast 2018 natural gas volumes.

In combination, the market diversification sales and fixed price hedges cover approximately 2/3 of natural gas volumes in 2018 and just under 50% in 2019 (based on the mid-point of 2018 average production guidance).  Bellatrix’s hedging program is part of the Company's overall risk management strategy providing reduced commodity price volatility and greater assurance over future revenue and operating funds flow which help drive the capital and reinvestment decisions within our business. Bellatrix’s 2018 through 2020 commodity price risk management contracts as at March 13, 2018 include:

Bellatrix’s market diversification contracts as at March 13, 2018 include:

Utilization remained strong at the Alder Flats Plant (Phase 1) with an average utilization rate of 99% in 2017, providing strategic benefits to Bellatrix including reduced operating costs, improved deep cut liquids extraction and reliability of processing.

The Phase 2 expansion project of the Alder Flats Plant remains on schedule and approximately 5% under budget.  The project represents the last stage of our multi-year infrastructure build out and upon completion will more than double gross throughput capacity at the Alder Flats Plant to 230 MMcf/d (from 110 MMcf/d currently).  Major equipment installation progressed throughout the fall and was completed on plan in November.  Major mechanical construction was completed in December and electrical and instrumentation installation activity began in August 2017 and was completed in early 2018.  Pre-commissioning activity has commenced with full commissioning of the Phase 2 expansion expected in March, with operations on-stream early in the second quarter of 2018.

Completion of Phase 2 of the Alder Flats Plant, will add an incremental 30 MMcf/d ownership capacity net to Bellatrix's 25% working interest, and forecasted 2018 production volume additions are expected to deliver continued reductions in production expenditures in 2018 to a range of $7.50/boe to $7.90/boe.  Completion of Phase 2 is anticipated to drive improved revenue generation through additional higher margin natural gas liquids (“NGL”) extraction, resulting in an improvement in our average corporate liquid weighting to approximately 26% in 2018, which we expect to, in turn, drive enhanced corporate profit margins and cash flow.

Capital costs remaining for the Phase 2 expansion, net to Bellatrix`s 25% working interest, are estimated at approximately $3 million in calendar 2018 (excluding received partner prepayment).  Upon completion, Bellatrix expects the majority of capital investment to be utilized directly in drilling, completion and production addition activities with minimal capital required for facilities and infrastructure projects over the near term.  Management expects that completion of Phase 2 of the Alder Flats Plant will provide the facilities and processing capacity to grow net production volumes beyond 60,000 boe/d, with minimal future facility related capital.

On December 14, 2017 Bellatrix’s Board of Directors approved the 2018 capital budget of between $65 to $80 million, designed to achieve average production volumes of between 35,000 to 37,000 boe/d. The 2018 capital budget will remain flexible throughout the year, and given continued weakness in the forward strip natural gas prices, Bellatrix intends on managing our capital investment program near the lower end of the capital guidance range.

Development activity in 2018 focuses on achievement of the following strategic objectives:

Bellatrix’s 2018 guidance estimates are outlined in the following table.

A conference call to discuss Bellatrix's fourth quarter and year end results and reserves will be held on March 14, 2018 at 9:00 am MT / 11:00 am ET. To participate, please call toll-free 1-800-319-4610 or 403-351-0324 or 416-915-3239. The call can also be heard live through an internet webcast accessible via the investors section of Bellatrix's website at  and will be archived on the website for approximately 30 days following the call.

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.

Common shares of Bellatrix trade on the Toronto Stock Exchange and on the New York Stock Exchange under the symbol "BXE".

Steve Toth, CFA, Vice President, Investor Relations & Corporate Development (403) 750-1270

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Globe Newswire: 21:00 GMT Tuesday 13th March 2018

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