Bellatrix Exploration Ltd. Announces Second Quarter 2015 Financial Results

Press Releases `

CALGARY, Aug. 5, 2015 – Bellatrix Exploration Ltd. (“Bellatrix” or the “Company”) (TSX, NYSE: BXE) announces its financial and operating results for the three and six months ended June 30, 2015. This press release contains forward-looking statements. Please refer to our cautionary language on forward-looking statements and the other matters set forth at the end of this press release and the beginning of the Management’s Discussion and Analysis (the “MD&A”) for the three and six months ended June 30, 2015 and 2014. Bellatrix’s unaudited condensed consolidated financial statements and notes, and the MD&A are available on Bellatrix’s website at www.bellatrixexploration.com, and are filed on SEDAR at www.sedar.com.

SECOND QUARTER 2015 HIGHLIGHTS
			Three months ended June 30,		Six months ended June 30,
			2015	2014	2015	2014
SELECTED FINANCIAL RESULTS
(CDN$000s except share and per share amounts)
Total revenue (2)			88,941	152,311	179,127	315,896
Funds flow from operations (2)			28,378	71,014	53,235	148,656
	Per basic share (3)		$0.15	$0.40	$0.28	$0.85
	Per diluted share (3)		$0.15	$0.39	$0.28	$0.84
Cash flow from operating activities			16,475	60,063	39,027	144,363
	Per basic share (3)		$0.09	$0.34	$0.20	$0.83
	Per diluted share (3)		$0.09	$0.33	$0.20	$0.81
Adjusted net profit (loss) (2)			(18,134)	27,005	(32,086)	69,929
	Per basic share (3)		($0.09)	$0.15	($0.17)	$0.40
	Per diluted share (3)		($0.09)	$0.15	($0.17)	$0.39
Net profit (loss)			(24,427)	38,252	(37,116)	63,419
	Per basic share (3)		($0.13)	$0.22	($0.19)	$0.36
	Per diluted share (3)		($0.13)	$0.21	($0.19)	$0.36
Capital – exploration and development			37,454	131,362	118,799	284,049
Capital – corporate assets			1,957	3,206	3,111	3,161
Property acquisitions			48	–	749	3,000
Capital expenditures – cash			39,459	134,568	122,659	290,210
Property dispositions – cash			(1,790)	(8,613)	(1,811)	(8,392)
Total net capital expenditures – cash			37,669	125,955	120,848	281,818
Other non-cash items			(3,921)	3,602	3,554	8,592
Total capital expenditures – net (2)			33,748	129,557	124,402	290,410
Bank debt			387,132	323,007	387,132	323,007
Senior notes			298,125	–	298,125	–
Adjusted working capital deficiency (2)			30,276	40,426	30,276	40,426
Total net debt (2)			715,533	363,433	715,533	363,433
Total assets			2,233,516	1,837,242	2,233,516	1,837,242
Total shareholders’ equity			1,214,627	1,141,830	1,214,627	1,141,830

SELECTED OPERATING RESULTS							Three months ended June 30,		Six months ended June 30,
							2015	2014	2015	2014
Average daily sales volumes
	Crude oil, condensate and NGLs			(bbl/d)			11,477	12,640	12,058	12,524
	Natural gas			(mcf/d)			173,693	142,214	182,085	139,051
	Total oil equivalent			(boe/d) (4)			40,426	36,342	42,406	35,699
Average realized prices
	Crude oil and condensate		($/bbl)				66.95	103.25	57.69	100.72
	Crude oil and condensate (including risk management (1))						66.73	88.98	58.28	89.00
	NGLs (excluding condensate)		($/bbl)				15.15	42.70	16.69	49.72
	Crude oil, condensate and NGLs		($/bbl)				37.77	74.73	35.14	77.53
	Natural gas		($/mcf)				2.91	5.04	2.95	5.45
	Natural gas (including risk management (1))		($/mcf)				2.94	4.40	2.99	4.64
	Total oil equivalent		($/boe) (4)				23.23	45.72	22.66	48.43
	Total oil equivalent (including risk management (1))		($/boe) (4)				23.30	40.78	22.98	43.01
Net wells drilled							2.8	9.0	6.0	34.6
Selected Key Operating Statistics
	Operating netback (2)				($/boe) (4)		11.92	29.26	10.42	31.31
	Operating netback (2) (including risk management (1))				($/boe) (4)		11.99	24.31	10.74	25.89
	Transportation				($/boe) (4)		1.26	0.82	1.24	1.20
	Production expenses				($/boe) (4)		8.58	7.80	8.57	7.96
	General & administrative				($/boe) (4)		1.81	1.37	1.82	1.56
	Royalties as a % of sales (after transportation)						11%	18%	15%	17%
COMMON SHARES
Common shares outstanding							191,963,910	191,091,741	191,963,910	191,091,741
Share options outstanding							13,847,836	11,576,839	13,847,836	11,576,839
Fully diluted common shares outstanding							205,811,746	202,668,580	205,811,746	202,668,580
Weighted average shares (3)							191,960,174	180,975,410	191,956,654	177,408,647
SHARE TRADING STATISTICS
TSX and Other (5)
(CDN$, except volumes) based on intra-day trading
High							4.05	11.65	4.46	11.65
Low							2.87	8.88	2.38	7.64
Close							2.91	9.26	2.91	9.26
Average daily volume							1,852,296	3,266,310	2,382,730	2,563,117
NYSE
(US$, except volumes) based on intra-day trading
High							3.38	10.70	3.81	10.70
Low							2.31	8.15	1.86	6.93
Close							2.33	8.71	2.33	8.71
Average daily volume							733,698	371,163	809,725	265,351

(1)	The Company has entered into various commodity price risk management contracts which are considered to be economic hedges.  Per unit metrics after risk management include only the realized portion of gains or losses on commodity contracts.  The Company does not apply hedge accounting to these contracts.  As such, these contracts are revalued to fair value at the end of each reporting date.  This results in recognition of unrealized gains or losses over the term of these contracts which is reflected each reporting period until these contracts are settled, at which time realized gains or losses are recorded.  These unrealized gains or losses on commodity contracts are not included for purposes of per unit metrics calculations disclosed.
(2)	The terms “funds flow from operations”, “funds flow from operations per share”, “adjusted net profit (loss)”, “total net debt”, “operating netbacks”, “total capital expenditures – net”, “adjusted working capital deficiency (excess)”, and “total revenue” do not have a standard meaning under generally accepted accounting principles (“GAAP”). Refer to “Non-GAAP and other measures” disclosed at the end of this Press Release.
(3)	Basic weighted average shares for the three and six months ended June 30, 2015 were 191,960,174 (2014: 177,847,190), and 191,956,654 (2014: 174,754,132), respectively.
	In computing weighted average diluted profit (loss) per share, weighted average diluted cash flow from operating activities per share, and weighted average diluted funds flow from operations per share for the three and six  months ended June 30, 2015, a total of nil (2014: 3,128,220), and nil (2014: 2,654,515) common shares were added to the denominator as a consequence of applying the treasury stock method to the Company’s outstanding share options, resulting in diluted weighted average common shares of 191,960,174 (2014: 180,975,410), and 191,956,654 (2014: 177,408,647), respectively.
(4)	In accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (“NI 51-101”), a boe conversion ratio of 6 mcf: 1 bbl has been used, which is based on an energy equivalency conversion method primarily applicable at the burner tip. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different than the energy equivalency of the conversion ratio, utilizing the 6:1 conversion ratio may be misleading as an indication of value.
(5)	TSX and Other includes the trading statistics for the Toronto Stock Exchange (“TSX”) and other Canadian trading markets.

PRESIDENT’S MESSAGE

Bellatrix maintains a large inventory of future drilling locations in the highly prolific Spirit River formation and oil and liquids weighted opportunities in the Cardium. The Company continues to focus on profitable growth for our shareholders, preserving these opportunities when necessary, to maximize production growth when commodity prices and rates of return are supportive. Our balanced portfolio of opportunities provides flexibility in terms of capital allocation decisions and enables Bellatrix to dedicate capital to its highest rate of return projects. This is clearly reflected in our 2015 capital plan which remains focused on development of our Spirit River play.

The Spirit River continues to be one of the most active plays in Canada given its superior rate of return expectations and Bellatrix has proven itself one of the premier operators in the play over the past several years. Spirit River well performance continues to drive improved capital efficiencies and reduced capital spending in 2015 and beyond. On a half cycle basis Bellatrix’s P50 type curve (5.2 Bcf) delivers extremely competitive capital efficiencies of less than $8,000/boe/d on an IP365 basis. The principal focus for Bellatrix in the second half of the year will be development drilling in the high impact Spirit River play. With the aforesaid capital efficiency and focus on the Spirit River play in 2016, Bellatrix anticipates drill bit focused capital of approximately $100 million will be sufficient to offset forecast production declines.

UPDATED CORPORATE GUIDANCE

In light of the current protracted weak commodity prices, Bellatrix is honing its 2015 net capital budget from up to $200 million to a maximum of $160 million. With the majority of facilities and infrastructure spending now complete in 2015, our revised budget contemplates a focus in the second half of the year drilling 20 gross (9.5 net) wells. Net capital spending of up to $40 million in the last six months of 2015 is expected to represent approximately 80% of forecast cash flow during the balance of the year. The revised capital budget incorporates plans to access up to $65 million of partner capital under joint venture (“JV”) arrangements, thereby providing an uplift in net Bellatrix production volumes and cash flow relative to its net proportion of capital spend on drilling and completion activity.

Strong well performance and shallowing production decline rates have partially mitigated the impact of a reduced capital spending budget. Bellatrix anticipates full year annual average production of approximately 40,500 to 41,500 boe/d, down 2,500 boe/d relative to the Company’s previous guidance range, reflecting the reduced capital budget. As previously announced on May 21, 2015, Bellatrix successfully completed an offering of US$250 million of 8.50% senior notes due 2020 (the “Senior Notes”), and used the net proceeds from the offering to partially repay indebtedness outstanding on its bank credit facilities, thereby creating additional liquidity of approximately $235 million. Following this successful Senior Note offering, Bellatrix has recently finalized amendments to the agreement governing its bank credit facilities to permanently remove two of the three existing financial covenants, as detailed below. All of these developments provide enhanced financial flexibility to the Company.

Read More: http://investors.bellatrixexploration.com/2015-08-05-Bellatrix-Exploration-Ltd-Announces-Second-Quarter-2015-Financial-Results

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