Bellatrix Exploration, the mid-sized, shrewd growth-focused oil and gas E&P with its primary positions in Alberta and Saskatchewan (as well as some assets in the Peace River Arch region of British Columbia), reported entry today into an agreement valued at $21M, whereby the company can expand their core footprint in the Willesden Green area of Alberta (Ferrier/Willesden Green Cardium light oil resource play) via acquisition of certain highly-prospective adjacent acreage with current output capacity of some 500 boe/d.
This deal would add substantially to BXE performance in the long run and be immediately accretive to shareholder value. Bellatrix can expand their core territory in the exciting Cardium fairway in a manner which is extremely cost effective with this deal, adding to an already impressive operating cost refinement arc pursued by the company over the last several years, with implementation of similar methods on the new assets.
BXE posted a 100% success rate drilling/participating in 24 gross (20.15 net) wells during the first nine months of this year while simultaneously making compelling reductions in lease, general, and administrative costs. Q3 sales vectors look solid with 15.5k boe/d (34% liquids, 66% gas) and exit targets of 18.3k boed/d to 19k boe/d for October. Looking at the $5.2M taken ($0.05/share) taken in Q3 profits ($48.1M in revenues with $26.6M in cash flow from operations) despite some ugly, anomalous weather all across West Central Alberta hampering production, as well as the company's drilling program, combined with slumping natural gas prices, we see some very encouraging metrics for 2013 and beyond.
Some really choice assets getting picked up here with 16 gross (11.95 net) sections in the Cardium/Mannville acreage, 25 really nice looking sites that bump BXE's inventory of ready-to-drill targets to an impressive 669 net locations, as well as another four in the Notikewin/Falher that brings the ready-to-drill tally there up to 359 net locations. The deal also happens to come with 25% working interest in a crucial gathering and compressor station (operated).
Given that the purchase price will be readily handled through the existing credit facility and consent from the lenders is unanimous to maintain the $200M ceiling all the way through to May 31 of next year, anticipation is high at BXE that they will be turning these complementary lands into shareholder returns in no time. The deal is set to close Thursday, and investors can expect to hear again from the company very soon regarding the deal and subsequent activities.
For more information, visit www.BellatrixExploration.com
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