Bellatrix Exploration Ltd.

The NYSE told Bellatrix it has regained compliance with the minimum share price rule, because the average closing price exceeded US$1.00 for 30 consecutive trading days after a 5-for-1 share consolidation on July 6, 2017. This resolves the price-deficiency notice from August 2016. The consolidation means each shareholder holds one-fifth as many shares (per-share figures from before July 2017 are not comparable).

listing compliance notice

Bellatrix closed the $34.5 million Strachan asset sale. The borrowing base was reconfirmed at $120 million (unchanged), giving about $105 million of available liquidity before letters of credit, with about $15 million outstanding on the credit facilities and no other debt maturities until 2020 and 2021. The 2017 net capital budget rises $15 million to $120 million (about four more net Spirit River wells, about 13 net wells in the second half), while 2017 production guidance stays at 34,500 boe/d average and 35,500 boe/d exit. This completes the sale announced June 14 and carries out the plan to reinvest less than half the proceeds.

capital raising announcement

Bellatrix signed an agreement to sell non-core assets in the Strachan area of Alberta for $34.5 million cash, with closing expected on or before June 30, 2017. The assets produce about 1,750 boe/d (70% natural gas) based on June month-to-date estimates. The company says it plans to review its 2017 capital budget after closing, put part of the proceeds into its Spirit River gas play to hold production guidance, and use the rest to reduce debt. This continues the pattern of asset sales to cut debt seen in 2016.

asset acquisition disposition

Bellatrix closed the $80 million Harmattan sale, receiving about $65 million net cash and lending $15 million to the buyer (10% interest, secured by a first lien on the assets sold, 2-year term, at least 50% of the assets' net operating income going to repayment quarterly). Cash went to pay down bank debt. The borrowing base was set at $100 million, giving about $70 million liquidity, with an estimated $30 million drawn at December 31, 2016 and no other debt maturities until 2020 and 2021. This completes the sale announced December 5.

capital raising announcement

Bellatrix agreed to sell its southern Harmattan area assets to an unnamed TSX-listed company for $80 million: $65 million cash plus a $15 million vendor loan at 10% interest with a 2-year term. The assets produced 3,076 boe/d in Q3 2016 (58% liquids) and carry 12.1 mmboe proved reserves. Bank debt is expected to fall to about $30 million at year end, and the 2017 budget is planned for January 2017. Closing is expected before December 31, 2016.

asset acquisition disposition

Bellatrix closed the Pembina sale to InPlay, receiving $42 million cash (before adjustments) and 2,171,667 InPlay shares deemed worth $5 million, and repaid the $12.9 million term loan in full. This resolves the Nov 11 term facility deadline and the pending Pembina sale. Credit facilities were renewed at $130 million ($25 million operating plus $105 million syndicated), with maturity extended to October 1, 2017 (further extendable up to three years with lender consent). Bank debt is about $75 million, with about $55 million of available capacity, and no other debt maturities until 2020 and 2021. The share count received differs from the 16,666,666 InPlay shares in the September announcement; the filing does not explain why.

capital raising announcement

Bellatrix agreed to sell non-core Cardium assets in the greater Pembina area to InPlay Oil Corp. for $47 million: $42 million cash plus 16,666,666 InPlay shares deemed worth $5 million. The assets produce about 930 boe/d (74% oil and liquids); Bellatrix keeps rights above and below the Cardium. Cash is to repay the remaining $12.9 million term facility (the one due Nov 11, 2016) and cut the revolver, which would bring bank debt to about $78 million. Closing is expected before Nov 11, 2016 and depends on InPlay completing a reverse takeover. Full-year 2016 production guidance is trimmed to 36,000 boe/d from 36,250 boe/d.

asset acquisition disposition

On August 9, 2016 Bellatrix closed the $112.5 million cash sale of a 35% interest in the Alder Flats deep-cut gas plant to Keyera Partnership, and the $80 million debenture and subscription receipt financing closed the same day. The debentures' maturity extends to September 30, 2021, and the receipts convert into common shares on a one-for-one basis. Net financing proceeds of about $76.0 million plus the sale proceeds go to pay down credit facilities; Bellatrix expects the revolver to fall to $160 million and the term facility to about $13 million, and expects to repay the term facility before November 11, 2016. This completes the pending sale and financing from July; the receipt conversion adds shares (dilution, inference). The underwriters' over-allotment option remains open for 30 days.

asset acquisition disposition

The NYSE told Bellatrix its shares averaged below US$1.00 over 30 consecutive trading days, a continued-listing breach. It has six months to cure, and the company says it intends to do so. The shares keep trading on the NYSE with a '.BC' marker from August 11, 2016, and the TSX listing and SEC reporting are unaffected.

listing compliance notice

Bellatrix announced a bought deal for $50 million of 6.75% subordinated convertible debentures (convertible at about $1.62 per share) and 25,000,000 subscription receipts at $1.20, about $30 million, for roughly $80 million in total, up to about $92 million with the over-allotment option. Each receipt becomes one common share only if the Alder Flats plant sale to Keyera closes, otherwise the money is returned. Proceeds will first repay bank debt. New shares and potential conversion dilute existing holders (inference).

capital raising announcement

Bellatrix completed its credit review effective July 15, 2016: total commitments are $365 million, made up of a $210 million revolving facility (maturing July 1, 2017, extendable) and a $155 million non-revolving term facility due November 11, 2016. The company aims to repay the term facility in full before it matures, and notes a $112.5 million sale of a minority interest in the Alder Flats plant to Keyera Partnership, expected to close in August 2016. It says completing that sale would cut bank debt about 44% from $359 million at March 31, 2016. This resolves the redetermination flagged in June and, as that release warned, leaves a debt deadline to meet.

debt financing

Bellatrix agreed to buy Grafton Energy Co. I Ltd.'s interest in 18 gross wells in its Ferrier area (Grafton's pre-payout interest, earned under the $250 million joint venture), producing about 2,000 boe/d net to Grafton in May (79% gas), for $29.2 million paid entirely in 20,547,576 new Bellatrix shares. This is a new twist on the Grafton joint venture, and issuing shares means existing holders are diluted (inference). Separately, the lenders deferred the borrowing base review to June 30, 2016, and management expects the borrowing base to be cut, possibly below the amount currently drawn, with any excess becoming non-revolving and due before the May 30, 2017 maturity. An extension has been requested but lenders may refuse, and further acquisition and sale talks to reduce debt are under way with no assurance of a deal.

debt financing

Citing recent rapid declines in crude oil prices, Bellatrix cut its 2015 capital budget to $300 million from $400 million, which revises the December 1 figure, and lowered 2015 average production guidance to about 47,000-48,000 boe/d. Phase 2 of the deep-cut gas plant is deferred to Q4 2016 from Q2 2016 with no change in cost, and Cardium drilling will be limited to expiring leases and commitment wells. Phase 1 remains on schedule for July 2015, and the company says it achieved its 2014 exit guidance of 47,000-49,000 boe/d.

production update

Bellatrix sold minority interests in its Alder Flats deep-cut gas plant and related pipelines under construction: Keyera 35% and O'Chiese 5%, leaving Bellatrix with 60% and operatorship. The facilities are estimated at $230 million, and about $26 million of capital spent to year end is expected to be recovered immediately. Phase I is expected on stream July 1, 2015 and Phase II in Q2 2016. Bellatrix also secured firm processing capacity with Keyera at Strachan of 19 MMcf/d, rising to 30 MMcf/d on April 1, 2016, and plans one Second White Specks exploration well in the second half of 2015.

asset acquisition disposition

Bellatrix completed a roughly $118 million cash purchase of assets in its Alder Flats area (effective November 1, 2014) adding about 2,200 boe/d (80% gas, 20% liquids), and raised its 2014 exit guidance to 47,000-49,000 boe/d and 2015 average guidance to 49,000-50,000 boe/d. Separately it cut its 2015 capital spending guidance to $400 million from $450 million, citing recent commodity price changes. The release also states the borrowing base and credit facilities were increased to $725 million (announced November 26), a figure that did not include this acquisition.

production update

Bellatrix signed a new multi-year joint venture with Canadian Non-Operated Resources Corp. (CNOR, managed by Grafton Asset Management), which commits $250 million, bringing total Grafton-related commitments to $500 million. CNOR pays 50% of drilling and related capital to earn 33% of Bellatrix's working interest until payout (its capital back plus an 8% return), then converts to a 10.67% gross overriding royalty. Funds are available now, but Bellatrix expects them to be spent mainly from 2016 through 2018. This builds on the earlier Grafton Fund 1 venture.

joint venture update

Bellatrix closed a bought deal of 18,170,000 common shares at $9.50 each, raising $172.6 million gross, including the underwriters' full use of the over-allotment option. Net proceeds will temporarily pay down credit facility debt, freeing up borrowing room to be redrawn for capital spending and general purposes, and the 2014 capital budget goes from $440 million to $500 million. The new shares dilute existing holders (inference).

capital raising announcement

Bellatrix filed its required business acquisition report on the Angle deal, confirming completion on December 11, 2013 for $69.7 million cash, 30,230,998 Bellatrix shares and about $63.7 million for the Angle debentures (including accrued interest). Angle was producing 10,500 boe/d in September 2013 (58% oil and liquids), with management estimating 500 drilling locations and 228,280 net undeveloped acres. On closing Bellatrix's credit facilities rose to a $500 million borrowing base from $255 million ($50 million operating plus $450 million syndicated), revolving to June 24, 2014 subject to lender extension; pro forma figures show long-term debt of about $268 million at September 30, 2013. The filing states no plans for material changes in the business.

business combination

Bellatrix completed the Angle Energy acquisition on December 11, 2013, paying $69.7 million cash and about 30.2 million new Bellatrix shares for the Angle shares, and buying all the Angle 5.75% debentures ($60 million principal) at $1,040 per $1,000 plus accrued interest. Angle was amalgamated into Bellatrix and its shares are being delisted from the TSX; Keith Turnbull, a former Angle director, joins the Bellatrix board effective January 1, 2014. This resolves the October 15 pending acquisition; existing shareholders now hold a smaller share of a larger company (inference on dilution).

business combination

On December 10, 2013 the Angle arrangement received securityholder approval (Angle holders and debentureholders approved with over 99% of those voting), Bellatrix shareholder approval for the share issuance, and Alberta court approval. Completion was expected December 11, 2013. This clears the main remaining hurdles for the Angle deal announced in October.

business combination

Bellatrix closed the $240 million Ferrier Cardium joint venture with TCA Energy (Troika fund, Seoul) on November 11, 2013, ahead of the November 15 target. TCA contributes $120 million for an expected 63 gross wells, and Bellatrix received $16.7 million of net proceeds at closing, initially used to reduce debt. This resolves the pending Troika deal and succeeds the January Korean venture that failed.

joint venture update

Bellatrix closed its $175 million bought deal on November 5, 2013, selling 21,875,000 common shares at $8.00 each, with an over-allotment option for up to 3,281,250 more shares exercisable for 30 days. Proceeds are to fund the Angle acquisition, part of the Troika JV obligations and general corporate purposes. This resolves the financing left open in the October 15 announcement; the new shares dilute existing holders (inference).

capital raising announcement

Bellatrix filed the formal Angle Energy arrangement agreement and a material change report covering the October 15 announcements. Angle holders get $3.85 cash or 0.4734 of a Bellatrix share (cash capped at $69.7 million), and Bellatrix would issue about 30.2 million shares for it, plus the $175 million bought deal at $8.00 per share (21,875,000 shares, plus an over-allotment option of up to 3,281,250 shares). This fills in the terms that were truncated earlier: the offering proceeds first repay credit facility debt that is then redrawn for the cash part of the Angle purchase, the Angle debentures and part of the Troika JV obligations; share count after the deal is stated as 170,534,257. A mutual $17 million non-completion fee applies, and the deal still needs Bellatrix and Angle shareholder, court and exchange approvals, with a mid-December close expected.

business combination

On October 15, 2013 Bellatrix announced three things: a $240 million Ferrier Cardium joint venture with TCA Energy (a vehicle for Seoul-based Troika fund), closing expected by Nov 15, 2013; a $576 million deal to acquire Angle Energy via a plan of arrangement, with Angle holders choosing $3.85 cash or 0.4734 Bellatrix share (cash capped at $69.7 million, so prorated); and a $175 million bought deal financing (details truncated in the filing text). The Troika deal replaces the failed January Ferrier venture. The Angle purchase issues new Bellatrix shares, so existing holders would be diluted (inference), and requires a Bellatrix shareholder vote.

capital raising announcement

Grafton exercised its option to add $100 million to the June joint venture, taking it to $244 million (Grafton $200 million, 82%) and an expected 58-well program in Willesden Green and Brazeau. Bellatrix's 2013 net capital plan rises to about $240 million (excluding Grafton capital); production guidance is unchanged at 23,000-24,000 boe/d average and 30,000-31,000 boe/d exit. Grafton keeps a further $50 million option.

joint venture update

Bellatrix closed the Daewoo/Devonian asset sale ($52.5 million for 50% of its Baptiste-area working interest assets) and the roughly $200 million, 70-well joint venture in Ferrier and Willesden Green. It raised its 2013 net capital plan to about $235 million and used the net sale proceeds to reduce debt. This resolves the August 1 pending deal, and unlike the January Korean deal, it closed.

joint venture update

Bellatrix signed a definitive agreement with Daewoo International and Devonian Natural Resources Private Equity Fund to sell 50% of its working interest in Baptiste-area producing assets (about 268 boe/d) for $52.5 million, and to form a joint venture of about $200 million covering 70 gross wells in Ferrier and Willesden Green. Closing is expected on or before September 16, 2013, subject to conditions including Korean regulatory approvals. Bellatrix plans to raise its 2013 net capital plan to about $235 million and use the sale proceeds to reduce debt. This partly fills the gap left by the failed January Korean deal, with Korean-linked partners again involved.

joint venture update

Bellatrix closed a $122 million joint venture with Grafton Energy Co I Ltd. in the Willesden Green and Brazeau areas of Alberta, with Grafton contributing $100 million (82%) toward an expected 29-well program. This is a different deal from the failed Korean Ferrier venture; Bellatrix still says it is looking for partners for Ferrier and its other Cardium interests. Its 2013 net capital plan is now $210-220 million (excluding Grafton capital), with 2013 production guidance of 23,000-24,000 boe/d average and 30,000-31,000 boe/d exit. Grafton has until Sept 15, 2013 to add $100 million and a later option to add $50 million.

joint venture update

The Korean joint venture did not close: the Seoul-based partner could not meet the remaining closing conditions by May 31, 2013, and Bellatrix did not extend the deadline. Bellatrix says it will consider alternative joint venture partners for the Ferrier project and for its other Cardium interests, which ends the January 2013 deal and leaves the extra funding for the 2013 plan unresolved.

joint venture update

Bellatrix agreed a $300 million Cardium joint venture with an unnamed Seoul, Korea-based partner, which would put in $150 million for an expected 83-well program, with closing expected on or before April 30, 2013. Bellatrix would guarantee return of up to $30 million of the partner's capital if not recovered within 7 years, and its net 2013 capital plan rises from $180 million to $230-240 million. It also reported a December 14, 2012 land purchase of 11 sections and added gas price hedges.

business combination