Bellatrix takes fresh route

It took less than a month for Bellatrix Exploration, a mid-size company with a multiyear drilling inventory in Western Canada, to bounce back from its failed C$300 million joint venture with a South Korean company.

By late June it has closed a joint venture with private investment company Grafton Asset Management to accelerate development on a portion of its undeveloped land holdings, concentrating on the Willesden Green and Brazeau areas of west-central Alberta.

Grafton will contribute 82 percent of the costs to participate in drilling an expected 29 Notikewin/Falher and Cardium wells by contributing C$100 million towards a C$122 million capital program.

In return, Grafton will earn 54 percent of Bellatrix’s working interest in each well drilled until payout (capital plus an 8 percent return) when it will revert to 33 percent.

Grafton has an option to increase its committed capital by C$100 million by September and another C$50 million within 12 months.

In search of other partners

Grafton works on behalf of sovereign, institutional and private clients through its proprietary access and intelligence in the Canadian energy sector.

Bellatrix is currently hedging 1,500 barrels per day at C$96.87 per barrel for the second half of 20134; 1,500 bpd at C$94 for 2014 and 1,500 bpd at C$95.22 for 2014.

The company said it has developed an inventory of 692 net remaining Cardium locations and 401 Notikewin/Falher locations representing net remaining capital requirements of C$4.34 billion based on current costs.

As of March 31, Bellatrix had about 205,113 net developed acres and including all opportunities had about 1,700 net exploration drilling opportunities with capital requirements of C$8.22 billion representing 40 years of drilling inventory based on current annual cash flow.

—GARY PARK