Bellatrix Exploration (BXE) Sells Non-Core Asset for $47M
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Bellatrix Exploration Ltd. (NYSE: BXE) is pleased to announce that it has entered into an agreement with InPlay Oil Corp. ("InPlay") to sell certain non-core Cardium focused assets in the greater Pembina area of Alberta (the "Pembina asset sale") for total consideration of $47 million. Total consideration is comprised of $42 million cash, and 16,666,666 shares of InPlay with a deemed value of $5 million ($0.30 per share). InPlay is currently a private exploration and production company, but concurrently with the announcement of the Pembina asset sale, it has announced a proposed reverse takeover transaction which among other things, would provide for a public listing for its shares on the Toronto Stock Exchange.
The Pembina asset sale consists of Cardium oil weighted production of approximately 930 boe/d and formation rights in the Cardium only. As part of the transaction, Bellatrix has retained formation rights above and below the Cardium on the Pembina acreage, including the Notikewin, Falher and Wilrich members of the Spirit River formation. Cash proceeds from the Pembina asset sale are expected to be used to repay existing bank indebtedness, including repayment in full of the remaining $12.9 million balance outstanding on the Company's non-revolving term facility, and a reduction of the amount outstanding under the Company's syndicated revolving facility. Bellatrix estimates that its current outstanding bank indebtedness, including the assumed application of net proceeds from the Pembina asset sale, to be approximately $78 million, representing a reduction of approximately $236 million from June 30, 2016.
The Pembina asset sale details include:
Estimated current production(2)
930 boe/d (74% oil and liquids)
Proved plus Probable reserves(3)
Divestiture metrics include:
Proved plus probable reserves
Before customary closing adjustments.
Estimated average production based on June 2016 field estimates.
Reserves at December 31, 2015 as estimated by Sproule Associates Limited. Reserves refer to "Working interest" meaning Bellatrix's working interest (operated or non-operated) share before deduction of royalties. Also referred to as "Gross" reserves under National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities. The estimates of reserves for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation.
Closing of the Pembina asset sale is expected to occur prior to November 11, 2016, with an effective date of June 1, 2016, and is subject to a number of conditions. For further information relating to the conditions relating to the Pembina asset sale see the advisory relating to Forward-Looking Statements below.
Bellatrix has updated its full year 2016 guidance forecasts to incorporate the impact of the disposition which is anticipated to have a minor impact on full year guidance estimates.
Updated Guidance September 19, 2016
Prior Guidance dated August 10, 2016
Average daily production (boe/d)
Full year 2016 average (+/- 500 boe/d)
December month average (+/- 500 boe/d)
Natural gas weighting
Net capital spending ($ millions) (1)
Production expenses(2) ($/boe)
Capital spending includes exploration and development capital projects and corporate assets, and excludes property acquisitions and dispositions. Second half net capital budget of up to $40 million, with funding limited to available cash flow.
Production expenses before net processing revenue/fees.
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