CALGARY, Dec. 5, 2016 /PRNewswire/ - Bellatrix Exploration Ltd. ("Bellatrix" or the "Company") (TSX, NYSE: BXE) is pleased to announce that it has entered into an agreement with a TSX-listed issuer to sell certain non-core assets in the greater Harmattan area of Alberta for $80 million (before customary closing adjustments). The transaction is expected to close prior to December 31, 2016, with an effective date of December 1, 2016.
The $80 million purchase price will be payable $65 million in cash and $15 million in a vendor take back loan ("VTB Loan") bearing interest at 10% per annum and secured by a first lien charge against the assets being sold. The terms of the VTB Loan will also provide that a minimum of 50% of the net operating income from the assets sold will be earmarked for principal repayment on a quarterly basis, together with accrued interest. The VTB Loan will have a 2 year maturity date, and no prepayment penalties.
The Harmattan asset sale will further simplify the Company's asset portfolio and is expected to allow the Company to reduce outstanding bank debt to approximately $30 million at December 31, 2016 (excluding letters of credit). Bellatrix is well positioned to replace the production, cash flow, and reserves associated with the Harmattan asset sale from continued development of its low cost Spirit River play, which is supported by strategic infrastructure ownership and operatorship.
The Spirit River play delivers superior rates of return and competes as one of the lowest cost natural gas plays in North America. Bellatrix maintains industry leading efficiencies, spud to on-stream times, and capital costs within the Spirit River formation, which will comprise approximately 60% of total corporate production following the completion of the Harmattan asset sale. With a dominant acreage position in the greater Ferrier, Willesden Green, Pembina, and Strachan areas of Alberta containing 393 net drilling locations in the Spirit River play, Bellatrix maintains more than 12 years of accelerated and profitable growth potential from this formation. Additionally, Bellatrix retains decades of incremental multi-zone potential in both oil and liquids rich natural gas weighted hydrocarbon charged zones including, but not limited to, the Cardium, Viking, Belly River, Lower Mannville, Rock Creek, Second White Specks and Duvernay formations. The multi-zone nature of the Deep Basin provides the ability to proactively adjust capital investment to either oil or natural gas weighted projects focused on delivering the highest return and value for shareholders.
Bellatrix plans on releasing its initial 2017 capital budget and guidance in January 2017 following completion of the Harmattan asset sale, with a continued emphasis on profitable and sustainable per share growth, and proactive capital resource management.
Bellatrix Exploration Ltd. is a 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 in the provinces of Alberta, British Columbia and Saskatchewan. Common shares of Bellatrix trade on the Toronto Stock Exchange and on the New York Stock Exchange under the symbol BXE.