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Bellatrix announces growth to 250 million boe in proved plus probable reserves establishing a 2P net asset value of $9.01 per share


View All News Releases March 9, 2015

TSX, NYSE: BXE

CALGARY, March 9, 2015 /CNW/ - Bellatrix Exploration Ltd. ("Bellatrix" or the "Company") (TSX, NYSE: BXE) is pleased to announce its 2014 year-end reserves information.  Reserves at December 31, 2014 were independently evaluated by Sproule Associates Limited ("Sproule").  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").

2014 marked another successful and profitable growth year for Bellatrix.  The Company delivered a 100% success rate through the drill bit, anchoring another strong year of reserves growth as punctuated by the following achievements:

  • Bellatrix benefitted from its largest capital program in the Company's history which provided 18% growth in Proved plus Probable ("2P") reserves to a total of 250 million boe with a 10% NPVBT of $2.1 billion at December 31, 2014.  The NPVBT value was relatively unchanged from year end 2013 despite a material contraction in average near term (2 year) natural gas and oil price forecasts used by independent reserve evaluators.
  • Proved ("1P") reserves grew 30% year over year to 161 million boe.
  • Proved Developed Producing ("PDP") reserves grew 37% to 74 million boe with a 10% NPVBT value of $932 million, equivalent to $4.85 per basic share. 
  • As at December 31, 2014 2P reserves were comprised of 80 million barrels of oil and natural gas liquids as well as 1.0 trillion cubic feet of natural gas, with a 32% liquids weighting on a boe basis.
  • 2P reserves added at a finding, development and acquisition ("FD&A") cost of $12.13/boe, excluding the change in future development capital ("FDC") requirements.  Including the change in FDC requirements, FD&A totaled $13.22/boe.  Excluding approximately $36 million invested in the Bellatrix deep-cut plant during 2014, 2P FD&A costs averaged $11.48/boe and $12.58/boe excluding and including the change in FDC respectively.
  • Excluding the change in FDC, Bellatrix delivered a 2P Recycle Ratio of 1.82x on total 2014 capital, and 1.92x excluding $36 million spent directly on its deep-cut gas plant project.
  • Bellatrix's December 31, 2014 net asset value of $1.7 billion, equivalent to $9.01/share using a 10% per year discount to future net revenue adjusted for year-end net debt, seismic, and land value.
  • The Company replaced 369% of total production in 2014.
  • The Company's calculated 1P reserve life index improved by 16% to 10.6 years and is 13.3 years based on 2P reserves.
  • Annual production increased by 74% in 2014 to 13.9 million boe from 8.0 million boe in 2013.

 

A conference call to discuss Bellatrix's annual financial and reserves results will be held on March 12, 2015 at 9:00 am MDT/11:00 am EDT. To participate, please call toll-free 1-888-231-8191 or 647-427-7450. The conference call will also be recorded and available by calling 1-855-859-2056 or 403-451-9481 and entering passcode 94534280#.

2014 ACHIEVEMENTS

 

       
 

Twelve months ended December,

   
 

2014

2013

 

% Change

Reserves (Company Interest (1), mboe)

       
 

Proved Developed Producing

74,181

54,078

 

+37%

 

Total Proved

161,448

124,154

 

+30%

   

Proved Undrilled/Total Proved

54%

56%

   
 

Total Proved and Probable

250,098

211,536

 

+18%

   

Probable/Total Proved and Probable

35%

41%

   
         

Net Present Value of Reserves (Before Tax, 10% Discount Rate)

       
 

Proved Developed Producing ($MM)

$932

$879

 

+6%

 

Total Proved ($MM)

$1,412

$1,433

 

-1%

 

Proved and Probable ($MM)

$2,116

$2,090

 

+1%

         

Net Asset Value

       
 

Proved and Probable ($MM) (2)

$1,729

$1,949

   
 

Proved and Probable Net Asset Value, per basic share

$9.01

$11.40

   
         

FD&A costs

       
 

1P, including FDC ($/boe)

$13.80

$13.76

   
 

2P, including FDC ($/boe)

$13.22

$9.67

   
 

1P, including FDC ($/boe) excluding deep-cut gas plant capital

$13.14

     
 

2P, including FDC ($/boe) excluding deep-cut gas plant capital

$12.58

     
 

3 year average 2P, including FDC ($/boe)

$10.05

$9.01

   
         

Selected Key Operating Statistics

       
 

Annual Average Sales Volumes (boe/d)

38,065

21,829

 

+74%

 

Q4 Average Sales Volumes (boe/d)

42,945

23,968

 

+79%

 

Operating netback ($/boe) (3)

$22.04

$20.99

 

+5%

 

Funds Flow From Operations ($ millions) (4) (unaudited)

$270.8

$143.5

 

+89%

 

Funds Flow per basic share (unaudited)

$1.48

$1.27

 

+17%

         

Reserve Life Index

       
 

Proved

  10.6 yrs.

  9.1 yrs.

 

+16%

 

Proved and Probable

  13.3 yrs.

13.7 yrs.

 

-3%

Recycle Ratios (3)

       
 

1P, excluding FDC

  1.76 x

  1.88 x

   
 

2P, excluding FDC

  1.82 x

2.90 x

   
 

1P, excluding FDC and deep-cut gas plant capital

  1.86 x

     
 

2P, excluding FDC and deep-cut gas plant capital

  1.92 x

     
         

Evaluated Future Horizontal Drilling Locations

       
 

Gross Cardium

281

     
 

Net Cardium

206.6

     
 

Gross Mannville

185

     
 

Net Mannville

95.2

     

(1)

"Company Interest" means Bellatrix's working interest (operated or non-operated) share before deduction of royalties but after
including any royalty interests of Bellatrix.  May not add due to rounding.

(2) 

Proved plus Probable net asset value incorporates 2P NPV10 (Before tax) value and adjusts for year-end net debt, seismic, and
land value.

(3)

Operating netback is not a recognized term under Canadian generally accepted accounting principals ("GAAP") and is calculated
by deducting transportation, royalties and operating costs from revenue. Operating netback includes impact of commodity price
risk contracts.  See "Non-GAAP Measures".

(4) 

Funds flow from operations is not a recognized term under Canadian generally accepted accounting principles. See "Non-GAAP
Measures".

 

SELECT 2014 OPERATING RESULTS

To assist in interpretation of the Company's reserves and key achievements, Bellatrix releases select 2014 unaudited operating results ahead of full year-end 2014 financial results including data on capital expenditures, cash flow from operating activities, and drilling results.

CAPITAL EXPENDITURES

       
     

Years ended December 31,

($000s)

   

2014

(unaudited)

   

2013

Lease acquisitions and retention

   

16,701

   

11,190

Geological and geophysical

   

1,601

   

140

Drilling and completion costs

   

298,313

   

211,912

Facilities and equipment

   

220,773

   

57,767

Property transfers – cash

   

(32,921)

   

-

Capital – exploration and development (1)  

   

504,467

   

281,009

Capital – corporate assets (2)

   

11,163

   

9,270

Property acquisitions

   

176,428

   

13,386

 

Total capital expenditures – cash

   

692,058

   

303,665

Property dispositions – cash

   

(9,809)

   

(70,942)

 

Total net capital expenditures – cash

   

682,249

   

232,723

Corporate acquisition  – non cash

   

-

   

595,891

Property acquisitions – non cash

   

68,616

   

-

Other – non cash (3)

   

20,000

   

12,187

 

Total - non – cash

   

88,616

   

608,078

Total capital expenditures – net

   

770,865

   

840,801

             

(1)

Excludes capitalized costs related to decommissioning liabilities expenditures incurred during the period.

(2)

Capital – corporate assets includes office leasehold improvements, furniture, fixtures and equipment
before recoveries realized from landlord lease inducements.

(3)

Other includes non-cash adjustments for the current period's decommissioning liabilities and share based
compensation.

 

The $771 million capital program for the year ended December 31, 2014 was financed from funds flow from operations, a common share offering, and bank debt.

RECONCILIATION OF CASH FLOW FROM OPERATING ACTIVITIES AND FUNDS FLOW FROM OPERATIONS

       
     

Years ended December 31,

($000s)

   

2014

(unaudited)

   

2013

Cash flow from operating activities

   

294,828

   

128,458

Decommissioning costs incurred

   

1,743

   

1,057

Transaction costs

   

-

   

5,344

Change in non-cash working capital

   

(25,818)

   

8,600

Funds flow from operations (1)

   

270,753

   

143,459

(1) 

Funds flow from operations is not a recognized term under Canadian generally accepted accounting principles.
See "Non-GAAP Measures".

 

Bellatrix generated funds flow from operations of $270.8 million ($1.48 per basic share and $1.46 per diluted share) for the year ended December 31, 2014, an increase of 89% from $143.5 million ($1.27 per basic share and $1.24 per diluted share) generated in 2013.  Bellatrix's cash flow from operating activities of $294.8 million ($1.61 per basic share and $1.59 per diluted share) for the year ended December 31, 2014 increased by 130% from the $128.5 million ($1.14 per basic share and $1.11 per diluted share) generated in 2013.  The increase in funds flow from operations between 2013 and 2014 was principally due to an increase of 74% in production volumes and higher realized natural gas prices, partially offset by reduced NGL prices, a net realized loss on commodity contracts in 2014 compared to a net realized gain on commodity contracts in 2013, and increased general and administrative, production, transportation, royalty, and finance expenses related to the increased operational activity.

2014 RESERVES

Bellatrix engaged Sproule to complete a reserve report in accordance with NI 51-101, on 100% of Bellatrix's oil and gas properties effective December 31, 2014. 

Highlights of Bellatrix's December 31, 2014 reserves report include:

  • 250 million boe total company interest Proved and Probable reserves, and 161 million boe total company interest Proved reserves as at December 31, 2014, representing 18% and 30% year over year growth respectively.
  • $2.1 billion net present value of future net revenue of Proved plus Probable reserves before tax at 10% discount rate up 1% from year end December 31, 2013 despite an average 10% to 20% contraction in near term (2 year) forecast natural gas prices by reserve evaluators.
  • Net asset value, as at December 31, 2014 is $9.01 per basic share outstanding based on the Sproule evaluation of Proved and Probable reserves at a 10% discount rate.
  • 369% replacement of production with 2P company interest reserve additions in year ended 2014. 
  • $13.80/boe FD&A for proved reserves including changes to future development capital and $12.53/boe FD&A for 1P reserves excluding changes to FDC for the year ended 2014.
  • $13.22/boe FD&A for total proved and probable reserves including changes to future development capital and FD&A of $12.13/boe for total 2P reserves excluding changes to FDC for the year ended 2014.
  • $10.05/boe 3-year 2P FD&A including FDC.
  • 13.3 year reserve life index on a total working interest Proved plus Probable basis at December 31, 2014 and increased the Company's Proved reserve life index to 10.6 years, up 16% from 9.1 years at December 31, 2013.
  • 281 gross (206.6 net) Cardium evaluated future undrilled horizontal locations.
  • 185 gross (95.2 net) Mannville evaluated future undrilled horizontal locations.

 

             
   

 

2014 Reserves

 

2013
Reserves

   
   

Oil & Liquids

 

Natural Gas

 

Total

 

Total

 

Variance

   

(mbbl)

 

(mmcf)

 

(mboe)

 

(mboe)

 

%

Proved

 

51,637

 

658,863

 

161,448

 

124,154

 

+30%

Probable

 

28,750

 

359,404

 

88,650

 

87,382

 

+1%

Proved Plus Probable  

 

80,387

 

1,018,267

 

250,098

 

211,536

 

+18%

 

NET ASSET VALUE – PROVED PLUS PROBABLE

The following table of net asset value, as at December 31, 2014, is based on the Sproule evaluation of future net revenue of the Company's proved plus probable reserves before tax, which does not represent fair market value and does not take into account possible reserve additions from reinvestment of cash flow in existing properties.

 

 

 ($000's except acre, unit and per unit amounts)

   

PW 0%

 

PW 5%

 

PW 10%

 

PW 15%

 

PW 20%

Proved plus Probable Reserves (1)

 

4,753,295

 

3,020,462

 

2,115,605

 

1,574,039

 

1,219,481

Undeveloped Lands (2)

 

225,276

 

225,276

 

225,276

 

225,276

 

225,276

Value of Seismic (3)

 

26,068

 

26,068

 

26,068

 

26,068

 

26,068

Net Debt (4)

 

(637,726)

 

(637,726)

 

(637,726)

 

(637,726)

 

(637,726)

Net Asset Value (5)

 

4,366,913

 

2,634,080

 

1,729,223

 

1,187,657

 

833,099

                     

Per Basic Common Share (5)(6)

 

$22.75

 

$13.72

 

$9.01

 

$6.19

 

$4.34

(1)

As evaluated by Sproule as at December 31, 2014 based on forecast prices and costs before income tax.

(2)

As estimated by Bellatrix as at December 31, 2014 based on 385,397 net acres of undeveloped land at an average price of
$584.53 per acre

(3)

Based on 26.1% of $99.8 million replacement value based on seismic costs to buy data at an average of $1,500/km for 2d
and $14,500/km2 for 3D.

(4)

The Company's calculation of Net Debt as at December 31, 2014, includes long-term debt and the net working capital
deficiency (excess). The net working capital deficiency (excess) excludes the current portions of: finance lease obligation,
deferred lease inducements and commodity contract liability and asset. See "Additional GAAP Measures".

(5)

Certain of the information used in the foregoing calculation, including net debt and number of common shares outstanding,
is based on unaudited financial information.

(6)

Based on 191.95 million common shares outstanding as at December 31, 2014

           

NET PRESENT VALUE OF FUTURE NET REVENUE ("NPV")

The forecast prices used in Sproule's reserve report effective December 31, 2014 (the "Sproule Report") were an average of the forecast prices published by Sproule, GLJ Petroleum Consultants Ltd. and McDaniel & Associates Consultants Ltd., as at January 1, 2015 (the "Consultants' Average Forecast Prices")It should not be assumed that the NPV estimated by Sproule represents the fair market value of the reserves.

Estimated future net revenues are stated before deducting future estimated site restoration costs but are reduced for estimated future abandonment costs, estimated royalties payable, estimated operating costs, the Saskatchewan Capital Tax and estimated capital for future development associated with the reserves.  In the Sproule Report, the net total future capital over the life of the reserves associated with the proved reserves is $863 million ($742 million discounted at 10%) and $1,336 million ($1,152 million discounted at 10%) for the total proved and probable reserves. The change in 2014 net total future capital over the life of the reserves associated with the proved reserves is $76 million ($67 million discounted at 10%) and $51 million ($55 million discounted at 10%) for the total proved and probable reserves.  Calculated changes in net future capital exclude future capital from acquired properties.

SUMMARY OF NPV BEFORE INCOME TAXES (1), (2)

                     

As at December 31, 2014

 

0%

 

5%

 

10%

 

15%

 

20%

Proved

                   
 

Developed producing

 

1,562,159

 

1,162,721

 

932,046

 

782,872

 

678,792

 

Developed non-producing

 

27,463

 

21,785

 

17,872

 

15,064

 

12,976

 

Undeveloped

 

1,346,355

 

768,248

 

461,602

 

279,377

 

162,344

Total proved

 

2,935,976

 

1,952,754

 

1,411,520

 

1,077,313

 

854,112

Probable

 

1,817,319

 

1,067,708

 

704,085

 

496,725

 

365,370

Total proved plus probable

 

4,753,295

 

3,020,462

 

2,115,605

 

1,574,039

 

1,219,481

(1)

Forecast Prices and Costs ($000s). Discounted at (%/year).

(2)

May not add due to rounding.

 

SUMMARY OF NPV AFTER INCOME TAXES (1), (2), (3)

 

                     

As at  December 31, 2014

 

0%

 

5%

 

10%

 

15%

 

20%

Proved

                   
 

Developed producing

 

1,562,159

 

1,162,721

 

932,046

 

782,872

 

678,792

 

Developed non-producing

 

27,463

 

21,785

 

17,872

 

15,064

 

12,976

 

Undeveloped

 

1,018,812

 

594,238

 

360,220

 

216,319

 

121,175

Total proved

 

2,608,434

 

1,778,744

 

1,310,138

 

1,014,255

 

812,943

Probable

 

1,362,632

 

796,728

 

521,876

 

365,112

 

265,818

Total proved plus probable

 

3,971,066

 

2,575,472

 

1,832,014

 

1,379,367

 

1,078,761

(1)

Forecast Prices and Costs ($000s), Discounted at (%/year).

(2)

May not add due to rounding.

(3)

The after-tax NPV of Bellatrix's oil and gas properties reflects the tax burden on the properties on a stand-alone basis and
utilizes corporate tax pools. It does not consider the business-entity–level tax situation, or tax planning. It does not provide
an estimate of the value at the level of the business entity, which may be significantly different. Bellatrix's consolidated
financial statements and management's discussion and analysis should be consulted for information at the business entity
level.

 

FD&A COSTS (1), (2)

 

                         
     

2014

   

2013

   

2012

   

2012 – 2014 Avg.

PROVED PLUS PROBABLE FD&A COSTS

                       

Excluding FDC

                       

FD&A Costs, 2P ($/boe)

                       
 

Exploration and development (3)

   

21.21

   

4.73

   

4.29

   

7.82

 

Acquisitions (excluding dispositions) (4)

   

5.45

   

9.70

   

4.21

   

8.02

 

Total (including acquisitions)

   

12.13

   

7.24

   

4.28

   

7.91

 

Total excluding plant capital

   

11.48

                 

Including FDC (3)

                       

FD&A Costs, 2P ($/boe)

                       
 

Exploration and development

   

23.80

   

9.65

   

7.31

   

11.69

 

Acquisitions (excluding dispositions) (4)

   

5.45

   

9.70

   

4.21

   

8.02

 

Total (including acquisitions)

   

13.22

   

9.67

   

6.95

   

10.05

 

Total excluding plant capital

   

12.58

                 
                         

PROVED FD&A COSTS

                       

Excluding FDC

                       

FD&A Costs, 1P ($/boe)

                       
 

Exploration and development (3)

   

16.32

   

6.21

   

8.87

   

10.03

 

Acquisitions (excluding dispositions) (4)

   

7.53

   

18.04

   

12.20

   

13.61

 

Total (including acquisitions)

   

12.53

   

11.17

   

9.16

   

11.39

 

Total excluding plant capital

   

11.86

                 

Including FDC (3)

                       

FD&A Costs, 1P ($/boe)

                       
 

Exploration and development

   

18.56

   

10.67

   

11.73

   

13.45

 

Acquisitions (excluding dispositions) (4)

   

7.53

   

18.04

   

22.20

   

13.61

 

Total (including acquisitions)

   

13.80

   

13.76

   

11.77

   

13.51

 

Total excluding plant capital

   

13.14

                 
                         

PROVED DEVELOPED PRODUCING FD&A COSTS

                       

FD&A Costs, PDP ($/boe)

                       
 

Exploration and development (3)

   

17.06

                 
 

Acquisitions (excluding dispositions) (4)

   

23.81

                 
 

Total (including acquisitions)

   

18.42

                 
 

Total excluding plant capital

   

17.43

                 

(1)

NI 51-101 specifies how finding and development costs should be calculated if they are reported. Essentially NI 51-101 requires that the exploration and development costs incurred in the year along with the change in estimated future development costs be aggregated and then divided by the applicable reserve additions. The calculation specifically excludes the effects of acquisitions and dispositions on both reserves and costs. By excluding the effects of acquisitions and dispositions Bellatrix believes that the provisions of the NI 51-101 do not fully reflect Bellatrix's ongoing reserve replacement costs. Since acquisitions can have a significant impact on Bellatrix's annual reserve replacement costs, excluding these amounts could result in an inaccurate portrayal of Bellatrix's cost structure. Accordingly, Bellatrix also provides FD&A costs that incorporate all acquisitions net of any dispositions during the year. The foregoing calculation is based on working interest reserves.

(2)

Certain of the information used in the foregoing calculation, including exploration and development expenditures and acquisition expenditures is based on unaudited financial information and is subject to audit and may be subject to change as a result.

(3)

The aggregate of exploration and development costs incurred in the most recent year and the change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserve additions for that year.

(4)

FD&A is calculated using the announced purchase price for corporate acquisitions rather than the actual amount allocated to property, plant and equipment for accounting purposes.

 

RESERVE LIFE INDEX

Bellatrix's reserve life index has been determined for proved and proved plus probable working interest reserves using forecast prices and costs.  The reserve life index for 2014 is calculated by dividing reserves as at the effective date of the Sproule Report, December 31, 2014, by 2015 forecasted average production of 51,193 boe/d proved plus probable and 41,553 boe/d proved, as set forth in the Sproule Report, representing a measure of the amount of time production could be sustained at the production rates based on the reserves at the applicable point in time.

                               
     

2014

   

2013

   

2012

   

2011

   

2010

Proved

   

10.6

   

9.1

   

8.6

   

8.0

   

7.2

Proved and Probable

   

13.3

   

13.7

   

12.4

   

10.0

   

11.2

 

RECYCLE RATIO (OPERATING NETBACK (1)/FD&A COST)

 

             

As at December 31, 2014

   

Proved

   

Proved and
Probable

Operating netback before commodity price risk management contracts ($/boe) (1) 
(unaudited)  

   

$24.34

   

$24.34

Recycle ratio (excluding change in FDC)

   

1.94 x

   

2.01 x

Recycle ratio (excluding change in FDC and deep-cut gas plant capital)

   

2.05 x

   

2.12 x

             

Operating netback after commodity price risk management contracts ($/boe) (1) 
(unaudited)  

   

$22.04

   

$22.04

Recycle ratio (excluding change in FDC)

   

1.76 x

   

1.82 x

Recycle ratio (excluding change in FDC and deep-cut gas plant capital)

   

1.86 x

   

1.92 x

(1)

Operating netback is calculated by deducting transportation, royalties and operating costs from revenue. (See Non-GAAP Measures)

 

The recycle ratio is a measure for evaluating the effectiveness of a company's re-investment program. The ratio measures the efficiency of capital investment. It accomplishes this by comparing the operating netback per boe to that year's reserve FD&A cost per boe. In 2014, the Company made significant investment in infrastructure of $221 million including $36 million directly on the Bellatrix O'Chiese Nees-Ohpawganu'ck deep-cut gas plant.  For this reason, recycle ratio information is included for both the total capital program and the exploration and development program excluding capital spent directly on the plant.

RESERVES RECONCILIATION

Reserves included herein are stated either on a company interest basis (working interest plus royalty interests prior to deduction of royalty burdens), a gross (working interest excluding royalty interests and burdens) or a net (working interest plus royalty interest less royalty burdens) basis as defined in NI 51-101.  "Company interest" is not a term defined by NI 51-101 and as such the estimates of company interest reserves herein may not be comparable to estimates prepared in accordance with NI 51-101 or to other issuers' estimates of company interest reserves.

At December 31, 2014 the Company's proved plus probable company interest reserves as evaluated by Sproule, using forecast prices and costs, were 250,098 mboe, an increase of 18% compared to 211,536 mboe at December 31, 2013; total proved company interest reserves were 161,448 mboe, an increase of 30% compared to 124,154 mboe at December 31, 2013.  By commodity type, natural gas made up 68% and oil and natural gas liquids 32% of total proved plus probable reserves.  In addition to the information disclosed herein, more detailed information on the Company's reserves will be included in the Company's Annual Information Form.

Reserves, at December 31, 2014, as evaluated by Sproule, are summarized below and in the following tables.

 

Summary of Oil and Gas Company Interest Reserves (1) (Gross + Royalties Receivable)

Forecast Prices and Costs

   

As at Dec. 31, 2014

 

As at Dec. 31,
2013

   

Natural Gas (2)

 

Heavy Oil

Light and

 

Natural Gas

 

Total

 

Total

         

Medium Oil

 

Liquids

       
   

(mmcf)

 

(mbbl)

(mbbl)

 

(mbbl)

 

(mboe, 6:1)

 

(mboe, 6:1)

Proved

                     
 

Developed producing

 

292,542

 

24

9,009

 

16,391

 

74,181

 

54,078

 

Developed non-producing

 

6,406

 

77

205

 

306

 

1,656

 

781

 

Undeveloped

 

359,915

 

109

7,867

 

17,649

 

85,611

 

69,295

Total proved

 

658,863

 

210

17,081

 

34,346

 

161,448

 

124,154

Probable

 

359,404

 

214

7,721

 

20,815

 

88,650

 

87,382

Total proved plus probable

 

1,018,267

 

424

24,802

 

55,162

 

250,098

 

211,536

(1)

"Company Interest" means Bellatrix's working interest (operated or non-operated) share before deduction of royalties but after including
any royalty interests of Bellatrix. May not add due to rounding.

(2)

Includes natural gas from coal bed methane and shale gas reserves. Coal bed methane and shale gas reserves represent an immaterial
portion of the Company's natural gas reserves.

 

 

                         

Summary of Oil and Gas Working Interest Reserves (1) (Gross)

Forecast Prices and Costs

   

As at Dec. 31, 2014

 

As at Dec. 31,
2013

   

Natural Gas (2)

 

Heavy Oil

 

Light and

 

Natural Gas

 

Total

 

Total

           

Medium Oil

 

Liquids

       
   

(mmcf)

 

(mbbl)

 

(mbbl)

 

(mbbl)

 

(mboe, 6:1)

 

(mboe, 6:1)

Proved

                       
 

Developed producing

 

291,764

 

24

 

9,009

 

16,356

 

74,016

 

54,037

 

Developed non-producing

 

6,373

 

77

 

204

 

304

 

1,647

 

780

 

Undeveloped

 

356,650

 

109

 

7,867

 

17,508

 

84,926

 

69,295

Total proved

 

654,787

 

210

 

17,079

 

34,168

 

160,589

 

124,111

Probable

 

357,626

 

214

 

7,721

 

20,738

 

88,277

 

87,372

Total proved plus probable

 

1,012,413

 

424

 

24,800

 

54,907

 

248,866

 

211,483

(1)

"Working Interest" means Bellatrix's working interest (operated or non-operated) share before deduction of royalties. Also referred to as
"Gross" reserves under NI 51-101. May not add due to rounding.

(2)

Includes natural gas from coal bed methane and shale gas reserves. Coal bed methane and shale gas reserves represent an immaterial
portion of the Company's natural gas reserves.

 

 

 

Summary of Oil and Gas Net Reserves (1) (Net)

Forecast Prices and Costs

   

As at Dec. 31, 2014

 

As at Dec. 31,
2013

   

Natural Gas (2)

 

Heavy Oil

 

Light and

 

Natural Gas

 

Total

 

Total

           

Medium Oil

 

Liquids

       
   

(mmcf)

 

(mbbl)

 

(mbbl)

 

(mbbl)

 

(mboe, 6:1)

 

(mboe, 6:1)

Proved

                       
 

Developed producing

 

237,063

 

21

 

7,305

 

10,959

 

57,796

 

41,012

 

Developed non-producing

 

5,419

 

59

 

175

 

205

 

1,343

 

638

 

Undeveloped

 

296,978

 

81

 

6,525

 

12,850

 

68,953

 

55,436

Total proved

 

539,460

 

162

 

14,006

 

24,014

 

128,091

 

97,086

Probable

 

288,774

 

155

 

6,129

 

14,744

 

69,158

 

68,050

Total proved plus probable

 

828,234

 

317

 

20,135

 

38,758

 

197,249

 

165,136

(1)

"Net" means Bellatrix's working interest (operated or non-operated) share after deduction of royalty obligations, plus Bellatrix's
royalty interests in reserves. May not add due to rounding.

(2)

Includes natural gas from coal bed methane and shale gas reserves. Coal bed methane and shale gas reserves represent an
immaterial portion of the Company's natural gas reserves.

 

 

 

COMPANY INTEREST (1) (Gross + Royalties Receivable) RESERVES RECONCILIATION

                         
   

Light and
Medium
Crude Oil
(mbbl)

 

Heavy
Crude Oil
(mbbl)

 

Total Crude
Oil (mbbl)

 

NGLs
(mbbl)

 

Conventional
Natural Gas
(mmcf) (2)

 

Oil
Equivalent
(mboe)

PROVED PRODUCING

                       

Opening Balance (3)

 

9,396

 

104

 

9,500

 

11,932

 

195,873

 

54,078

 

Extensions

 

90

 

-

 

90

 

613

 

13,492

 

2,952

 

Infill Drilling

 

235

 

-

 

235

 

1,739

 

40,166

 

8,669

 

Improved Recovery

 

-

 

-

 

-

 

-

 

-

 

-

 

Technical Revisions

 

1,059

 

(54)

 

1,005

 

4,240

 

81,627

 

18,850

 

Discoveries

 

57

 

-

 

57

 

43

 

1,042

 

273

 

Acquisitions

 

57

 

-

 

58

 

1,539

 

35,677

 

7,544

 

Dispositions

 

(203)

 

-

 

(203)

 

(794)

 

(17,844)

 

(3,971)

 

Economic Factors

 

11

 

(1)

 

11

 

(90)

 

(1,438)

 

(320)

 

Production

 

(1,694)

 

(26)

 

(1,720)

 

(2,832)

 

(56,053)

 

(13,894)

Closing Balance (3)

 

9,009

 

24

 

9,033

 

16,391

 

292,542

 

74,181

TOTAL PROVED

                       

Opening Balance

 

18,993

 

217

 

19,210

 

25,850

 

474,560

 

124,154

 

Extensions

 

483

 

-

 

483

 

1,300

 

28,437

 

6,523

 

Infill Drilling

 

750

 

-

 

750

 

2,680

 

60,824

 

13,567

 

Improved Recovery

 

-

 

-

 

-

 

-

 

-

 

-

 

Technical Revisions

 

(1,713)

 

19

 

(1,694)

 

4,544

 

67,272

 

14,062

 

Discoveries

 

57

 

-

 

57

 

43

 

1,042

 

273

 

Acquisitions

 

421

 

-

 

421

 

4,897

 

113,504

 

24,235

 

Dispositions

 

(203)

 

-

 

(203)

 

(794)

 

(17,844)

 

(3,970)

 

Economic Factors

 

(12)

 

(1)

 

(13)

 

(1,343)

 

(12,880)

 

(3,502)

 

Production

 

(1,694)

 

(26)

 

(1,720)

 

(2,832)

 

(56,053)

 

(13,894)

Closing Balance

 

17,081

 

210

 

17,291

 

34,346

 

658,863

 

161,448

PROBABLE

                       

Opening Balance

 

11,568

 

265

 

11,833

 

21,197

 

326,113

 

87,382

 

Extensions

 

602

 

-

 

602

 

1,140

 

24,422

 

5,812

 

Infill Drilling

 

794

 

-

 

794

 

1,857

 

40,896

 

9,468

 

Improved Recovery

 

-

 

-

 

-

 

-

 

-

 

-

 

Technical Revisions

 

(5,120)

 

(51)

 

(5,171)

 

(3,634)

 

(66,727)

 

(19,926)

 

Discoveries

 

11

 

-

 

11

 

9

 

216

 

55

 

Acquisitions

 

173

 

-

 

173

 

1,845

 

42,773

 

9,148

 

Dispositions

 

(38)

 

-

 

(38)

 

(183)

 

(4,125)

 

(908)

 

Economic Factors

 

(269)

 

-

 

(269)

 

(1,417)

 

(4,164)

 

(2,379)

 

Production

 

-

 

-

 

-

 

-

 

-

 

-

Closing Balance

 

7,721

 

214

 

7,935

 

20,815

 

359,404

 

88,650

PROVED PLUS PROBABLE

                       

Opening Balance

 

30,561

 

482

 

31,043

 

47,047

 

800,673

 

211,536

 

Extensions

 

1,085

 

-

 

1,084

 

2,440

 

52,860

 

12,335

 

Infill Drilling

 

1,544

 

-

 

1,544

 

4,537

 

101,720

 

23,034

 

Improved Recovery

 

-

 

-

 

-

 

-

 

-

 

-

 

Technical Revisions

 

(6,833)

 

(32)

 

(6,865)

 

910

 

543

 

(5,864)

 

Discoveries

 

68

 

-

 

68

 

51

 

1,258

 

329

 

Acquisitions

 

594

 

-

 

594

 

6,743

 

156,277

 

33,383

 

Dispositions

 

(241)

 

-

 

(241)

 

(976)

 

(21,968)

 

(4,879)

 

Economic Factors

 

(281)

 

(1)

 

(282)

 

(2,760)

 

(17,044)

 

(5,882)

 

Production

 

(1,694)

 

(26)

 

(1,720)

 

(2,832)

 

(56,053)

 

(13,894)

Closing Balance

 

24,802

 

424

 

25,226

 

55,162

 

1,018,267

 

250,098

(1)

"Company Interest" means Bellatrix working interest (operated or non-operated) share before deduction of royalties but
including any royalty interests of Bellatrix. Based on forecast prices and costs. May not add due to rounding.

(2)

Company coal bed methane and shale gas reserves have been included in natural gas. Coal bed methane and shale gas
reserves represent an immaterial portion of the Company's natural gas reserves.

(3)

Opening Balance is as at December 31, 2013 and Closing Balance is as at December 31, 2014.

 

 

WORKING INTEREST (1) (Gross) RESERVES RECONCILIATION

                         
   

Light and
Medium
Crude Oil
(mbbl)

 

Heavy
Crude Oil
(mbbl)

 

Total Crude
Oil (mbbl)

 

NGLs
(mbbl)

 

Conventional
Natural Gas
(mmcf) (2)

 

Oil
Equivalent
(mboe)

PROVED PRODUCING

                       

Opening Balance (3)

 

9,396

 

104

 

9,500

 

11,924

 

195,675

 

54,037

 

Extensions

 

90

 

-

 

90

 

609

 

13,405

 

2,933

 

Infill Drilling

 

235

 

-

 

235

 

1,739

 

40,166

 

8,669

 

Improved Recovery

 

-

 

-

 

-

 

-

 

-

 

-

 

Technical Revisions

 

1,058

 

(54)

 

1,004

 

4,242

 

81,692

 

18,862

 

Discoveries

 

57

 

-

 

57

 

43

 

1,042

 

273

 

Acquisitions

 

58

 

-

 

58

 

1,512

 

35,036

 

7,409

 

Dispositions

 

(203)

 

-

 

(203)

 

(794)

 

(17,844)

 

(3,970)

 

Economic Factors

 

11

 

(1)

 

10

 

(90)

 

(1,435)

 

(319)

 

Production

 

(1,693)

 

(26)

 

(1,719)

 

(2,829)

 

(55,972)

 

(13,877)

Closing Balance (3)

 

9,009

 

24

 

9,033

 

16,356

 

291,765

 

74,016

TOTAL PROVED

                       

Opening Balance

 

18,993

 

217

 

19,210

 

25,842

 

474,353

 

124,111

 

Extensions

 

483

 

-

 

483

 

1,295

 

28,324

 

6,498

 

Infill Drilling

 

750

 

-

 

750

 

2,678

 

60,793

 

13,560

 

Improved Recovery

 

-

 

-

 

-

 

-

 

-

 

-

 

Technical Revisions

 

(1,716)

 

20

 

(1,696)

 

4,545

 

67,307

 

14,067

 

Discoveries

 

57

 

-

 

57

 

43

 

1,042

 

273

 

Acquisitions

 

421

 

-

 

421

 

4,732

 

109,660

 

23,429

 

Dispositions

 

(203)

 

-

 

(203)

 

(794)

 

(17,844)

 

(3,971)

 

Economic Factors

 

(12)

 

(1)

 

(13)

 

(1,343)

 

(12,876)

 

(3,502)

 

Production

 

(1,693)

 

(26)

 

(1,719)

 

(2,829)

 

(55,972)

 

(13,877)

Closing Balance

 

17,079

 

210

 

17,289

 

34,168

 

654,787

 

160,589

PROBABLE

                       

Opening Balance

 

11,568

 

265

 

11,833

 

21,195

 

326,065

 

87,372

 

Extensions

 

602

 

-

 

602

 

1,139

 

24,394

 

5,806

 

Infill Drilling

 

794

 

-

 

794

 

1,826

 

40,173

 

9,316

 

Improved Recovery

 

-

 

-

 

-

 

-

 

-

 

-

 

Technical Revisions

 

(5,121)

 

(51)

 

(5,172)

 

(3,633)

 

(66,715)

 

(19,924)

 

Discoveries

 

11

 

-

 

11

 

9

 

216

 

55

 

Acquisitions

 

173

 

-

 

173

 

1,803

 

41,797

 

8,943

 

Dispositions

 

(38)

 

-

 

(38)

 

(183)

 

(4,125)

 

(908)

 

Economic Factors

 

(269)

 

-

 

(269)

 

(1,418)

 

(4,180)

 

(2,383)

 

Production

 

-

 

-

 

-

 

-

 

-

 

-

Closing Balance

 

7,721

 

214

 

7,934

 

20,738

 

357,626

 

88,277

PROVED PLUS PROBABLE

                       

Opening Balance

 

30,561

 

482

 

31,043

 

47,037

 

800,418

 

211,483

 

Extensions

 

1,085

 

-

 

1,085

 

2,433

 

52,718

 

12,304

 

Infill Drilling

 

1,544

 

-

 

1,544

 

4,504

 

100,966

 

22,876

 

Improved Recovery

 

-

 

-

 

-

 

-

 

-

 

-

 

Technical Revisions

 

(6,836)

 

(32)

 

(6,868)

 

912

 

592

 

(5,857)

 

Discoveries

 

68

 

-

 

68

 

51

 

1,258

 

329

 

Acquisitions

 

594

 

-

 

594

 

6,535

 

151,457

 

32,372

 

Dispositions

 

(241)

 

-

 

(241)

 

(976)

 

(21,968)

 

(4,879)

 

Economic Factors

 

(281)

 

(1)

 

(282)

 

(2,760)

 

(17,055)

 

(5,884)

 

Production

 

(1,693)

 

(26)

 

(1,719)

 

(2,829)

 

(55,972)

 

(13,877)

Closing Balance

 

24,800

 

424

 

25,224

 

54,907

 

1,012,413

 

248,866

(1)

"Working Interest" means Bellatrix working interest (operated or non-operated) share before deduction of royalties and without including any royalty interest of Bellatrix. Also referred to as "Gross" reserves under NI 51-101. May not add due to rounding.

(2)

Company coal bed methane and shale gas reserves have been included in natural gas. Coal bed methane and shale gas reserves represent an immaterial portion of the Company's natural gas reserves.

(3)

Opening Balance is at December 31, 2013 and Closing Balance is as at December 31, 2014.

 

TAX POOLS

At December 31, 2014, the Company had approximately $1.64 billion in tax pools available for deduction against future income as follows:

                   

($000s)

   

Rate %

   

2014

(unaudited)

   

2013

Intangible resource pools:

                 
 

Canadian exploration expenses

   

100

   

116,700

   

99,000

 

Canadian development expenses

   

30

   

758,700

   

691,500

 

Canadian oil and gas property expenses

   

10

   

207,900

   

80,200

 

Foreign resource expenses

   

10

   

800

   

900

Alberta Non Capital losses greater than Federal non-capital losses

   

(Alberta) 100

   

16,100

   

16,100

Undepreciated capital cost (1)

   

6 – 55

   

367,600

   

224,900

Non capital losses (expire through 2030)

   

100

   

162,300

   

94,500

Financing  costs

   

20 S.L

   

14,100

   

15,600

Total Tax Pools

         

1,644,200

   

1,222,700

(1)

Approximately $355 million of undepreciated capital cost pools are class 41, which is claimed at a 25% rate.

 

FUTURE DEVELOPMENT COSTS USING FORECAST PRICES AND COSTS

At year-end, 2014, Sproule had evaluated certain future development opportunities on Company lands including 281 gross (207 net) future undrilled Cardium horizontal locations and 185 gross (95 net) evaluated future undrilled Mannville horizontal locations.  Of the 281 Cardium locations, 208 were assigned proved and probable reserves, with 73 assigned probable reserves only.  Of the 185 Mannville locations, 130 were assigned proved and probable reserves, with the remaining 55 assigned probable reserves only.

For purposes of assigning net present value of future revenue, future development locations were committed as detailed in the following table.

                 

($000's)

     

Proved Future
Development Costs

     

Proved plus Probable
Future Development
Costs

2015

     

234,209

     

369,262

2016

     

339,453

     

532,991

2017

     

203,473

     

309,953

2018 and subsequent

     

86,114

     

123,784

Undiscounted total

     

863,249

     

1,335,990

Discounted @ 10%/yr.

     

742,206

     

1,151,804

 

RESERVE REPORT COMMODITY PRICING

The following is a summary of the Consultants' Average Forecast Prices as at January 1, 2015:

 

   

OIL

               

Year

Forecast

 

WTI

Cushing
Oklahoma

($US/bbl)

 

Edmonton
Par Price

40° API
($Cdn/bbl)

 

Hardisty
Heavy 12°
API API
($Cdn/bbl)

 

NATURAL
GAS AECO
($Cdn/

MMBtu)

 

NATURAL
GAS LIQUIDS
at Edmonton (3)
($Cdn/bbl)

 

INFLATION
RATES (1)
%/Year

 

EXCHANGE
RATE (2)
($US/$Cdn)

                             

2015

 

64.17

 

67.89

 

51.86

 

3.38

 

73.48

 

1.833

 

0.853

2016

 

76.67

 

83.52

 

63.90

 

3.83

 

90.17

 

1.833

 

0.868

2017

 

83.33

 

90.96

 

69.64

 

4.06

 

98.20

 

1.833

 

0.868

2018

 

87.08

 

95.26

 

72.93

 

4.41

 

102.69

 

1.833

 

0.868

2019

 

90.67

 

99.33

 

76.03

 

4.76

 

106.99

 

1.833

 

0.868

2020

 

94.30

 

103.80

 

79.45

 

4.97

 

111.73

 

1.833

 

0.868

2021

 

96.59

 

106.16

 

81.25

 

5.18

 

114.26

 

1.833

 

0.868

2022

 

98.36

 

108.10

 

82.74

 

5.36

 

116.34

 

1.833

 

0.868

2023

 

100.18

 

110.09

 

84.25

 

5.54

 

118.47

 

1.833

 

0.868

2024

 

102.02

 

112.13

 

85.85

 

5.70

 

120.67

 

1.833

 

0.868

2025

 

103.88

 

114.17

 

87.39

 

5.80

 

122.85

 

1.833

 

0.868

2026

 

105.80

 

116.26

 

88.98

 

5.90

 

125.10

 

1.833

 

0.868

2027

 

107.74

 

118.41

 

90.63

 

6.02

 

127.40

 

1.833

 

0.868

2028

 

109.74

 

120.58

 

92.29

 

6.12

 

129.73

 

1.833

 

0.868

2029

 

111.75

 

122.81

 

93.97

 

6.24

 

132.12

 

1.833

 

0.868

Thereafter

 

+1.83%/yr.

 

+1.83%/yr.

 

+1.83%/yr.

 

+1.83%/yr.

 

+1.83%/yr.

       

(1)

Inflation rates for forecasting prices and costs

(2)

Exchange rates used to generate the benchmark reference prices in this table

(3)

Natural Gas Liquids is represented by the pentanes plus price

 

Weighted average historical prices realized by Bellatrix (before commodity price risk management contracts) for the year ended December 31, 2014, were $4.77/mcf for natural gas, $91.41/bbl for crude oil and condensate, and $42.74/bbl for natural gas liquids (excluding condensate).

RESERVES COMMITTEE

Bellatrix has a reserves committee, comprised of independent board members, that reviews the qualifications and appointment of the independent reserve evaluators. The committee also reviews the procedures for providing information to the evaluators.  All booked reserves are based upon annual evaluations by the independent qualified reserve evaluators conducted in accordance with the Canadian Oil and Gas Evaluation Handbook and NI 51-101. The evaluations are conducted using all available geological and engineering data. The reserves committee has reviewed the reserves information and approved the reserve report.

 

LAND

As at December 31, 2014, Bellatrix had over 385,685 net undeveloped acres in Alberta, British Columbia and Saskatchewan.

 

Land Statistics

                       
           

2014

         

2013

Average working interest

                       
 

Developed

         

61%

         

62%

 

Undeveloped

         

74%

         

75%

Total

         

68%

         

69%

Land Holdings (1)

                       
     

2014

   

2013

     

Gross

   

Net

   

Gross

   

Net

Developed

                       
 

British Columbia

   

9,285

   

2,765

   

9,752

   

2,692

 

Alberta

   

462,741

   

282,478

   

443,780

   

272,114

 

Saskatchewan

   

13,327

   

12,720

   

13,327

   

12,720

 

Total

   

485,353

   

297,962

   

466,859

   

287,526

Undeveloped

                       
 

British Columbia

   

106,180

   

47,208

   

107,700

   

47,521

 

Alberta

   

405,991

   

330,835

   

436,436

   

360,821

 

Saskatchewan

   

7,641

   

7,641

   

8,289

   

8,289

 

Total

   

519,812

   

385,685

   

552,425

   

416,631

Developed and Undeveloped

                       
 

British Columbia

   

115,465

   

49,973

   

117,452

   

50,213

 

Alberta

   

868,732

   

613,313

   

880,216

   

632,935

 

Saskatchewan

   

20,968

   

20,361

   

21,616

   

21,009

Total

   

1,005,165

   

683,647

   

1,019,284

   

704,157

(1) 

May not add due to rounding

 

OPERATIONS OUTLOOK

2015 represents a transformational year for the Company given the strategic infrastructure investment made over the past several years.  The decision to build, maintain, and control operatorship of key strategic infrastructure remains critical to our long term sustainability and growth objectives.  Bellatrix anticipates significant benefits from our infrastructure investment including an improvement in operational reliability, increased revenue from enhanced liquids extraction, and reduced operating costs.  Highlights of Bellatrix's 2015 expected operations include:

  • Construction continues on the Bellatrix O'Chiese Nees-Ohpawganu'ck deep-cut gas plant; all major components included shop welded pipe is on-site with 55% of on-site welding complete.  Critical path items remain on schedule including the express pipeline crossing the North Saskatchewan River, the gas plant condensate line, and finalized integration of mechanical and electrical schedules.  The project remains on budget and on schedule for a start-up by July 1, 2015.
  • Bellatrix's differentiated joint venture strategy provides access to additional third party capital on terms that enhance economic returns, allowing the Company to continue profiting from the further development of its properties even during the current commodity price weakness. Bellatrix expects to access up to $85 million of joint venture capital in 2015, resulting in gross capital spending for the year of up to $285 million. Pursuant to its existing joint venture arrangements, Bellatrix may access up to $250 million of additional joint venture capital in 2016 and beyond. 
  • The 2015 net capital budget of $200 million is comprised of approximately $120 million drilling and completion costs, $70 million facility and infrastructure costs and $10 million land, geological and other related costs.  Bellatrix will revisit its capital budget on a continuous basis, will pursue accretive monetization opportunities, and will further curtail capital spending, if necessary, in order to preserve its balance sheet until commodity prices firmly recover.
  • Despite commodity price headwinds in 2015, the Company remains acutely focused on profitability for our shareholders. Bellatrix maintains a deep inventory of highly profitable drilling opportunities at today's commodity prices, and has an active risk management program to support 2015 objectives. 

 

COMMODITY RISK MANAGEMENT CONTRACTS

Bellatrix has the following crude oil and natural gas commodity price risk management contracts in place for 2015. 

 

     

Q1 2015

   

Q2 2015

   

Q3 2015

   

Q4 2015

Natural gas volumes (mmcf/d)

   

47.2

   

156.7

   

156.7

   

85.9

Average price ($/mcf) (1)

   

$3.13

   

$2.93

   

$2.93

   

$2.94

                         

Oil volumes (bbl/d)

   

1,967

   

3,000

   

3,000

   

3,000

Average fixed price ($/bbl) (2)

   

$70.34

   

$70.34

   

$70.34

   

$70.34

(1)

The conversion of $/GJ to $/mcf is based on an average corporate heat content rate of 40.8Mj/m3.

(2)

Oil hedges are Canadian dollar WTI equivalent.

 

Bellatrix recently added to its 2015 risk management program with the addition of 87 mmcf/d of natural gas fixed price swaps for March 1 through March 31, 2015 at C$3.24/mcf.  Including our previously announced hedging contracts, the Company has protected approximately 90% of forecast natural gas volumes through the spring and summer season (March through October) compared with the mid-point of our current annual average production guidance range.

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. 

All amounts in this press release are in Canadian dollars unless otherwise identified.

READER ADVISORIES:

CONVERSION: The term barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent (6 mcf/bbl) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions in this press release are derived from converting gas to oil in the ratio of six thousand cubic feet of gas to one barrel of oil. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

UNAUDITED 2014 FINANCIAL INFORMATION: As Bellatrix plans to announce its audited 2014 financial results on or about March 12, 2015, certain financial information for the year ended December 31, 2014 disclosed herein, or used in various calculations herein, is based on unaudited information and has been utilized by Bellatrix in this release to facilitate the discussion with respect to the performance of our capital program. Readers are advised that these financial estimates are subject to audit and may be subject to change as a result, and such changes could be material.

NON-GAAP MEASURES: This press release contains the term "funds flow from operations" which should not be considered an alternative to, or more meaningful than "cash flow from operating activities" as determined in accordance with GAAP as an indicator of the Company's performance. Therefore reference to funds flow from operations or funds flow from operations per share may not be comparable with the calculation of similar measures for other entities. Management uses funds flow from operations to analyze operating performance and leverage and considers funds flow from operations to be a key measure as it demonstrates the Company's ability to generate the cash necessary to fund future capital investments and to repay debt. The reconciliation between cash flow from operating activities and funds flow from operations can be found in this press release. Funds flow from operations per share is calculated using the weighted average number of shares for the period. This press release also contains the term of operating netbacks, which is not a recognized measure under GAAP. Operating netbacks are calculated by subtracting royalties, transportation, and operating expenses from revenues before other income. Management believes this measure is a useful supplemental measure of the amount of revenues received after transportation, royalties and operating expenses. Readers are cautioned, however, that this measure should not be construed as an alternative to net profit or loss determined in accordance with GAAP as a measure of performance. Bellatrix's method of calculating this measure may differ from other entities, and accordingly, may not be comparable to measures used by other companies.

ADDITIONAL GAAP MEASURES:  This press release also contains the term net debt. The reference to the additional GAAP measure of net debt may not be comparable with the calculation of similar measures for other entities. The Company's calculation of net debt includes long-term debt and the net working capital deficiency (excess). The net working capital deficiency (excess) excludes short-term commodity contract assets and liabilities, current finance lease obligation, and current deferred lease inducements.

FORWARD LOOKING STATEMENTS:  Statements in this document may contain forward-looking information including management's assessment of future plans and operations, production forecasts used to calculate reserve life, reserve life calculations, reserves estimates, anticipated additional drilling locations, the total future capital associated with development of drilling locations and reserves, 2015 capital expenditures and expected amount of total program including capital to be invested by various joint venture partners, method of funding thereof and nature of expenditures, infrastructure and facilities plans and timing and status thereof, anticipated benefits from our infrastructure investment including an expected improvement in operational reliability, expected increased revenue from enhanced liquids extraction, and expected reduced operating costs, the expectation that Bellatrix's joint venture strategy will provide access to additional third party capital on terms that enhance economic returns that is expected to allow the Company to continue profiting from the further development of its properties even during the current commodity price weakness, the intention of Bellatrix to revisit its capital budget on a continuous basis, to pursue accretive monetization opportunities, and to further curtail capital spending, if necessary, in order to preserve its balance sheet until commodity prices firmly recover, the expectations that Bellatrix has a deep inventory of highly profitable drilling opportunities at today's commodity prices, the expectation that Bellatrix's risk management program will support 2015 objectives, the expectation of the percentage of 2015 production guidance that is protected by natural gas commodity risk management contracts, Bellatrix's strategy and future objectives, and timing of release of 2014 financial results. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company. These risks include, but are not limited to: the risks associated with the oil and gas industry; commodity prices; and exchange rate changes. Industry related risks could include, but are not limited to: operational risks in exploration; development and production; delays or changes in plans; risks associated to the uncertainty of reserve estimates; health and safety risks, and; the uncertainty of estimates and projections of production, costs and expenses. The recovery and reserve estimates of Bellatrix's reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. In addition, forward-looking statements or information are based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although the Company believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because the Company can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding, among other things: the impact of increasing competition; the general stability of the economic and political environment in which the Company operates; the timely receipt of any required regulatory approvals; the ability of the Company  to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects which the Company has an interest in operating the field in a safe, efficient and effective manner; the ability of the Company to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development and exploration; the timing and costs of pipeline, storage and facility construction and expansion and the ability of the Company to secure adequate product transportation and processing; future commodity prices; currency, exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which the Company operates; and the ability of the Company to successfully market its oil and natural gas products. Readers are cautioned that the foregoing lists of factors and assumptions are not exhaustive. Additional information on these and other factors that could affect the Company's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com), at the Company's website (www.bellatrixexploration.com.). Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

SOURCE Bellatrix Exploration Ltd.

Bellatrix Exploration Ltd.
1920, 800 5th Avenue SW
Calgary, Alberta T2P 3T6
Main: 403-266-8670
Fax: 403-264-8163
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Bellatrix Exploration
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