2017 year end reserves
Bellatrix Announces 2017 Year End Reserves Highlighted by Low Cost Reserve Additions T.BXE | 2 hours ago CALGARY, Alberta, March 01, 2018 (GLOBE NEWSWIRE) -- Bellatrix Exploration Ltd. (Bellatrix or the Company) (TSX:BXE) (NYSE:BXE) is pleased to announce its 2017 year end reserves, and an update of commodity price risk management and sales market diversification contracts. Reserves at December 31, 2017 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). Financial information presented herein is based on management prepared financial statements for the year ended December 31, 2017, which are in the process of being audited by Bellatrixs independent auditors and, accordingly, such financial information is subject to change based on the results of the audit. See "Reader Advisory - Unaudited Financial Information" below. 2017 YEAR END RESERVE HIGHLIGHTS 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. The Company achieved a 100% success rate through the drill bit, focused on the low cost Spirit River liquids rich natural gas play. Average Spirit River well performance exceeded management type curve expectations by approximately 38% over an IP180 day basis, underpinning the high quality nature of Bellatrixs core area play. Bellatrix established a December 31, 2017 2P net asset value (2P NPV10 before tax) of $1.16 billion ($23.52/share) which incorporates future net revenue adjusted for year end total net debt, seismic, and land value. This represents a reduction of only 6% compared with the 2P net asset value calculated at year end December 31, 2016 of $25.10/share. Bellatrix demonstrated strong results within its core area in 2017 highlighted by the following achievements: Total 1P and 2P reserves at year end 2017 increased by 8% and 3% respectively despite the impact from the Strachan and West Pembina non-core asset divestitures completed during the year. Strong positive technical reserve revisions and infill drilling additions achieved in 2017 more than offset the impact of net dispositions and reserves produced during the year. The 2017 year end Proved Developed Producing (PDP) NPV10 before tax value of $475.3 million remained relatively unchanged from the 2016 year end PDP NPV10 value of $498.9 million despite the impact of lower forecast natural gas prices and the non-core asset divestitures completed in 2017. Bellatrix maintained a focused capital program in 2017 adding PDP reserves at an FD&A cost of $4.81/boe excluding capital invested in the Bellatrix OChiese Nees-Ohpawganuck 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. Bellatrixs 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 of $2.39/boe and $4.05/boe respectively. The Companys calculated 1P and 2P reserve life indices remained relatively unchanged year over year at 13.5 years and 17.4 years, respectively. CONFERENCE CALL DETAILS Bellatrix plans to release its fourth quarter and year end 2017 financial and operational results on March 13, 2018 after market close. The Company plans to host a conference call to discuss both year end reserves and financial results on March 14, 2018 at 9:00 am MT / 11:00 am ET. To participate, 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 Bellatrixs website at https://www.bxe.com/investors/presentations-events.cfm and will be archived on the website for approximately 30 days following the call. Additional reserve information as required under NI 51-101 will be included in the Company's Annual Information Form which management anticipates will be filed on SEDAR on March 15, 2018. STRONG RISK MANAGEMENT PROTECTION IN 2018 & SALES MARKET DIVERSIFICATION IN PLACE THROUGH 2020 During the fourth quarter of 2017, Bellatrix added to its commodity price risk management protection for calendar 2018 to further reduce the impacts of price volatility on our business. 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 Bellatrixs exposure to AECO pricing on approximately 26% of the Companys 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). Bellatrixs 2018 through 2020 commodity price risk management contracts as at February 28, 2018 include: Product Financial Contract Period Volume Average Price (1) Natural gas Fixed price swap January 1, 2018 to December 31, 2018 66.1 MMcf/d $3.06/mcf Natural gas AECO/NYMEX basis swap April 1, 2018 to October 31, 2018 10,000 MMBtu/d -US$1.24/MMBtu Natural gas AECO/NYMEX basis swap April 1, 2019 to October 31, 2020 10,000 MMBtu/d -US$1.24/MMBtu Propane Fixed price differential January 1, 2018 to December 31, 2018 1,000 bbl/d 47% of NYMEX WTI Crude oil Fixed price swap January 1, 2018 to December 31, 2018 1,000 bbl/d $70.14/bbl (1) Prices for natural gas fixed price swap contracts assume a conversion of $/GJ to $/mcf based on an average corporate heat content rate of 40.3Mj/m3. Bellatrixs market diversification contracts as at February 28, 2018 include: Product Market Start Date End Date Volume Natural gas Chicago February 1, 2018 October 31, 2020 15,000 MMBtu/d Natural gas Chicago November 1, 2018 October 31, 2020 15,000 MMBtu/d Natural gas Dawn February 1, 2018 October 31, 2020 15,000 MMBtu/d Natural gas Dawn November 1, 2018 October 31, 2020 15,000 MMBtu/d Natural gas Malin February 1, 2018 October 31, 2020 15,000 MMBtu/d Bellatrixs hedging program is part of its overall risk management strategy focused on providing reduced commodity price volatility and greater assurance over future revenue and cash flows which help drive the capital and reinvestment decisions within our business. 2017 HIGHLIGHTS Twelve months ended December, 2017 2016 Reserves (Working Interest (1), mboe) Proved Developed Producing 65,305 60,322 Total Proved 171,198 158,400 Proved Undrilled/Total Proved 61 % 62 % Total Proved and Probable 235,330 228,540 Probable/Total Proved and Probable 27 % 31 % Net Present Value of Reserves (Before Tax, 10% Discount Rate) (2) Total Proved ($MM) $1,016 $1,030 Proved and Probable ($MM) $1,501 $1,556 Net Asset Value Proved and Probable ($MM) (3) $1,161 $1,238 Proved and Probable Net Asset Value, per basic share (4) $23.52 $25.10 FD&A Costs (Including Changes in FDC) PDP, excluding Alder Flats Plant capital ($/boe) $4.81 $5.30 1P, excluding Alder Flats Plant capital ($/boe) $4.12 $3.98 2P, excluding Alder Flats Plant capital ($/boe) $3.15 $3.83 3 year average 1P ($/boe) $4.05 $8.78 3 year average 2P ($/boe) $2.39 $7.59 Selected Key Operating Statistics Annual average sales volumes (boe/d) 36,872 35,677 Q4 average sales volumes (boe/d) 37,077 31,888 Annual operating netback ($/boe) (5) $9.02 $7.91 Total net debt ($MM) (5) $420.8 $396.2 Reserve Life Index Proved 13.5 yrs. 14.1 yrs. Proved and Probable 17.4 yrs. 18.8 yrs. Recycle Ratio PDP, excluding change in FDC and Alder Flats Plant capital 1.9 x 1.5 x 1P, excluding change in FDC and Alder Flats Plant capital 3.8 x 4.0 x 2P, excluding change in FDC and Alder Flats Plant capital 4.1 x 4.3 x Read more at https://www.stockhouse.com/news/press-releases/2018/03/01/bellatrix-announces-2017-year-end-reserves-highlighted-by-low-cost-reserve#9Jbp6R8IVCKguYOi.99