NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
CALGARY, March 28 /CNW/ - Bellamont Exploration Ltd. (the "Corporation" or "Bellamont") (TSXV:BMX.A) (TSXV:BMX.B) is pleased to provide a summary of its financial and operating results for the three months and year ended December 31, 2010.
FINANCIAL AND OPERATING HIGHLIGHTS
During the year ended December 31, 2010, Bellamont achieved the following:
- A record production level averaging? 2,343 Boe/d for the year,? an increase of 186% from 2009;
- Exited the year with 2,840 Boe/d of production;
- Increased funds generated from operations for the year by 491% over 2009 to $15.8 million (175% increase on a per share basis);
- Increased oil and liquids production 313% year over year from 221 bbl/d to 913 bbl/d;
- Increased oil and liquids weighting to 39.0% of corporate total production from 27.0% in 2009
- Decreased G&A per Boe 29% year over year;
- Increased operating netback to $22.94/Boe for the year, a 45% improvement over 2009, reflective of the increased oil and liquids weighting;
- An operating netback in the fourth quarter of $24.36/ Boe based on a 41% weighting of oil and liquids;
- Successfully closed the acquisition of Standard Energy Inc. for? $54 million;
- Increased its revolving? demand credit facility from $12 million at the beginning of the year to $50 million currently;
- Achieved a 90% success rate on an oil weighted exploration and development capital program of $32.8 million, drilling 10 (9.2 net) wells, resulting in 9 (8.2 net) oil wells.
FINANCIAL AND OPERATING HIGHLIGHTS
The Corporation will file its audited financial statements and related management's discussion and analysis ("MD&A") for the year ended December 31, 2010, with Canadian securities regulatory authorities on SEDAR.? Copies of these documents may be accessed electronically on SEDAR at www.sedar.com or at www.bellamont.com.?? Certain selected financial and operational information for the three months and year ended December 31, 2010 and December 31, 2009 are set out below and should be read in conjunction with Bellamont's financial statements and MD&A.
| ? | Three Months Ended December 31, | Year Ended December 31, |
(
00s, except per share amounts) | 2010 | 2009 | % Change | 2010 | 2009 | % Change |
| FINANCIAL | ? | ? | ? | ? | ? | ? |
| Petroleum and natural gas sales | 10,225 | 3,390 | 202 % | 36,936 | 10,246 | 260 % |
| Funds generated from operations(1) | 4,511 | 1,176 | 284 % | 15,799 | 2,674 | 491 % |
| ? | Per share basic and diluted | 0.03 | 0.02 | 50 % | 0.11 | 0.04 | 175 % |
| Net loss | (1,852) | (670) | 176 % | (6,526) | (4,569) | ???????????? 43 % |
| ? | Per share basic and diluted | (0.01) | (0.01) | - | (0.05) | (0.08) | (38 %) |
| Net capital expenditures (2) | 10,817 | 25,380 | (57 %) | 93,436 | 32,709 | 186 % |
| Net Debt | ? | ? | ? | 32,787 | 3,490 | 839 % |
| OPERATING | ? | ? | ? | ? | ? | ? |
| Production | ? | ? | ? | ? | ? | ? |
| ? | Crude Oil (Bbls per day) | 865 | 271 | 219 % | 774 | 203 | 281 % |
| ? | Natural gas (Mcf per day) | 8,921 | 3,501 | 155 % | 8,576 | 3,593 | 139 % |
| ? | Natural gas liquids (Bbls per day) | 169 | 21 | 705 % | 139 | 18 | 672 % |
| ? | Total (Boe per day) | 2,522 | 875 | 188 % | 2,343 | 820 | 186 % |
| Average realized prices | ? | ? | ? | ? | ? | ? |
| ? | Crude Oil ($ per Bbl) | 77.51 | 71.44 | 8 % | 74.10 | 62.26 | 19 % |
| ? | Natural gas ($ per Mcf) | 3.90 | 4.65 | (16 %) | 4.17 | 4.00 | 4 % |
| ? | Natural gas liquids ($ per Bbl) | 54.64 | 60.23 | (9 %) | 58.19 | 57.66 | 1 % |
| ? | Average realized price ($ per Boe) | 44.08 | 42.13 | 5 % | 43.19 | 34.21 | 26 % |
| Netbacks(1) ($ per Boe) | ? | ? | ? | ? | ? | ? |
| ? | Petroleum and natural gas sales | 44.08 | 42.13 | 5 % | 43.19 | 34.21 | 26 % |
| ? | Royalties | (5.09) | (7.50) | (32 %) | (5.92) | (4.93) | 20 % |
| ? | Operating expenses | (13.93) | (13.46) | 3 % | (13.47) | (12.26) | 10 % |
| ? | Transportation expenses | (0.70) | (1.12) | (38 %) | (0.86) | (1.25) | (31 %) |
| ? | Operating netback | 24.36 | 20.05 | 22 % | 22.94 | 15.77 | 45 % |
| Undeveloped land holdings | ? | ? | ? | ? | ? | ? |
| ? | Gross acres | ? | ? | ? | 75,846 | 64,531 | 72 % |
| ? | Net acres | ? | ? | ? | 54,059 | 41,573 | 30 % |
| ? | Average working interest | ? | ? | ? | 71% | 64% | ? |
| COMMON SHARES | ? | ? | ? | ? | ? | ? |
| Shares outstanding, end of year | ? | ? | ? | ? | ? | ? |
| ? | Class A shares | ? | ? | ? | 140,787,699 | 81,861,426 | 72 % |
| ? | Class B shares | ? | ? | ? | 1,012,000 | 1,012,000 | - |
| Weighted average shares | ? | ? | ? | ? | ? | ? |
| ? | Basic and diluted(3) | 150,907,699 | 76,594,715 | 97 % | 144,127,136 | 60,703,704 | 137 % |
| (1)? | Funds generated from operations, Net debt and Netbacks as presented do not have any standardized meaning prescribed by Canadian GAAP and therefore may not be comparable with the calculation of similar measures for other entities.? Please refer to the Non-GAAP Measures section of the MD&A for more details. |
| (2)? | Total net capital expenditures, including acquisitions. |
| (3) | The Class B shares are converted at the minimum Class A share price of $1.00 and added to the Class A shares.? Thus each Class B share converted to 10 Class A shares for the basic and diluted share calculation. |
OPERATIONS UPDATE
Grimshaw Montney Oil Pool
In the first quarter of 2011, Bellamont has successfully drilled and completed 2 (1.75 net) additional horizontal wells at its Grimshaw Triassic C Montney oil pool.? Bellamont successfully placed seventeen fracture?stimulations in the 13-28-83-23W5M well (the "13-28") and twelve fracture stimulations in the 16-29-83-23W5M well (the "16-29").?? The 13-28 well swab tested at 600 bbl/d of total fluid with 47% oil cut (the remainder being frac fluids) prior to being shut in to run the bottom hole pump.? During the test, only 261 out of 325 cubic meters of the frac fluid had been recovered. The 16-29 well tested at an average of 264 bbl/d of clean oil during its 22 hour test. These test rates compare very favorably to test rates from the existing wells in the pool, which were fraced between 5 to 11 stages per well.
The average 30 day production rate of the successful horizontal wells in this pool has been approximately 110 bbl/d. After one year, the average production rate is 60 bbl/d.? The best well in the pool, completed with 9 fracs, produced at an initial 30 day rate in excess of 175 bbl/d and is still producing at 75 bbl/d after 14 months.?? Due to the increased number of fracture stimulations in the two new wells, Bellamont expects these wells to produce at rates equivalent or better than the average producing wells drilled by Bellamont to date.? ? Work has already begun to equip these new wells, which should be placed on production in the next 30 days.
Success at these two wells, in particular the 13-28, has extended the proven boundary of the pool by one-half mile to the east.? This result further reinforces Management's interpretation, based on well control and three dimensional seismic, that this pool contains approximately 50 million bbls of Discovered Petroleum Initially-In-Place (DPIIP). ? At the end of 2010, Bellamont had only booked 943 thousand barrels (net), or 1.9%, of the internally estimated DPIIP.? Bellamont believes a 15% recovery factor from this pool is attainable under primary recovery, with 20% possible via waterflood.? Bellamont obtained a core sample from a recent well drilled in the pool and expects to complete a study evaluating potential for water flood in the second quarter of 2011. If the results of the study are positive, Bellamont could initiate a waterflood pilot project in the second half of 2011.
During the first quarter of 2011, Bellamont successfully acquired a partner's interest in three key sections of land in the centre of this pool for $2.35 million.? Bellamont now has a 100% working interest in seven of the horizontal wells drilled to date and 75% in the eighth.? Based on a drill density of eight wells per section, Bellamont has a total of 38 (~34 net) additional horizontal locations identified in this pool. ? Only three of these locations were booked in the Corporation's reserve report at the end of 2010, two of which were the 13-28 and 16-29.?? Bellamont is planning on drilling three additional horizontal wells in the pool immediately following spring breakup and hopes to continue accelerating development with more positive results.
The economics of Grimshaw are excellent.? The relatively shallow (~900 metres) vertical depth results in all-in cost per horizontal well of approximately $2.0 million and on stream costs of less than $20,000 per bbl/d. ? These wells qualify for a 5.0% royalty for the first 50,000 Boe or 18 months of production. Based on an oil price of $95 WTI (USD), the new wells are expected to achieve a netback in excess of $60.00/boe.
Bellamont completed construction of a 100% owned centralized production battery late in the fourth quarter. ? Management expects the battery will result in reduced operating costs across the field and shorten the on-stream time lines for future drills.
Grande Prairie Area
In the Grande Prairie area, Bellamont has acquired 2240 net acres of land in a new Montney oil prospect the Corporation considers analogous to the Corporation's Grande Prairie Montney I Oil Pool (the "Montney I Pool").? Bellamont is currently producing a total of 1200 boe/d from six horizontal wells in the Montney I Oil Pool, comprised of 330bbl/d of light oil and natural gas liquids and 5.2 mmcf/d of natural gas.? Bellamont's interpretation, based on three dimensional seismic, is that the new prospect is similar in size and scope as the Montney I Pool. Bellamont's third party engineer estimates the Montney I Pool contains both oil and gas, with an estimated DPIIP of 4.8 MM bbls of oil and 55 Bcf of natural gas.?? Bellamont plans to drill a well to evaluate this new prospect in the summer of 2011.
ANNUAL MEETING
Bellamont's annual shareholder meeting will be held at 3:00 p.m.? on June 2, 2011 in the Livingston Place Conference Centre, Livingstone Place, South Tower, 2nd Floor, 222 3rd Avenue S.W., Calgary Alberta.
OUTLOOK
2010 was a year of significant achievement for Bellamont.? The Corporation has seen significant per share growth of production, reserves and cash flow.? The Corporation has a $250 million inventory of capital projects consisting of 125 (110 net) drilling locations, only 19 (gross) of which are booked in the 2010 year end reserve report.? The majority of the Bellamont's unbooked locations are oil targets, lower risk and developmental in nature.? This drilling inventory will provide Bellamont with a solid platform for growth over the next several years.? Bellamont has expanded its technical team over the past six months and expects to accelerate its identification of new projects to add to its large existing inventory.
Bellamont's current oil and natural gas liquids weighting of daily production is approximately 46.0%.? Based on $89.50 average WTI (USD) oil price in January and February of 2011, Bellamont has enjoyed an excellent field operating netback of approximately $28.00/boe. With a 2011 capital program heavily weighted to drilling oil targets, a conservatively managed balance sheet and solid cash flow base, Bellamont is well positioned to take advantage of the recent surge in oil prices.
Investors are encouraged to view an updated version of Bellamont's corporate presentation on its web page at www.bellamont.com.
Bellamont's strategy is to build a low risk reserve, production and cash flow base through acquiring, developing and exploring primarily in the Peace River Arch area of Alberta.? Bellamont has a strong technically focused management team that internally generates and develops high quality large resource based prospects.? In addition, the Corporation has compiled an undeveloped land inventory of 83,339 gross acres (61,123 net), of which 63,601 gross acres (48,742 net) is located in the Peace River Arch area of Alberta.
Bellamont is an oil and gas company focused on the acquisition, exploration, development and production of oil and natural gas in western Canada and trades on the TSX Venture Exchange under the symbols "BMX.A" and "BMX.B". The Corporation has 140,787,699 Class A shares and 1,012,000 Class B shares outstanding.
FORWARD LOOKING STATEMENTS
This press release may contain forward-looking statements including expectations of future production, cash flow and earnings. More particularly, this press release contains statements concerning Bellamont's future production estimates, expansion of oil and gas property interests, exploration and development drilling and capital expenditures. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ from those anticipated.? These risks include, but are not limited to: the risks associated with the oil and gas industry (e.g. operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price, price and exchange rate fluctuation and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures.? Additional information on these and other factors that could affect Bellamont's operations or financial results are included in Bellamont's reports on file with Canadian securities regulatory authorities.
The forward-looking statements or information contained in this news release are made as of the date hereof and Bellamont undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws
Oil and Gas Advisory
This press release contains disclosure expressed as "Boe/d". All oil and natural gas equivalency volumes have been derived using the ratio of six thousand cubic feet of natural gas to one barrel of oil. Equivalency measures may be misleading, particularly if used in isolation. A conversion ratio of six thousand cubic feet of natural gas to one barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the well head.
Discovered Petroleum Initially-In-Place (DPIIP) is equivalent to Original Oil In Place (OOIP).? DPIIP, also known as a "discovered resource", is defined as that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production. The recoverable portion of discovered petroleum initially-in-place includes production, reserves and contingent resources; the remainder is unrecoverable.? A recovery project cannot be defined for this volume of discovered petroleum initially-in-place at this time. There is no certainty that it will be commercially viable to produce any portion of the resources.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. Not for distribution to U.S. newswire services or for dissemination in the United States.? Any failure to comply with this restriction may constitute a violation of U.S. securities law.