Bellamont Exploration Ltd. announces third quarter 2009 results
/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE
FINANCIAL AND OPERATIONAL HIGHLIGHTS
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Three Months Ended September 30
2009 2008 % Change
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FINANCIAL ($)
Petroleum and natural gas sales 2,238,856 3,463,349 (35.4)
Funds generated from operations(1) 745,196 1,013,686 (26.5)
Per share basic and diluted 0.01 0.02 (50.0)
Net loss (969,209) (508,150) (90.7)
Per share basic and diluted (0.02) (0.01) (100.0)
Capital expenditures 3,012,392 3,246,137 (7.2)
Working capital surplus 5,132,055 9,104,148 (43.6)
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OPERATING
Production
Crude Oil (Bbls per day) 168 159 5.7
Natural gas (Mcf per day) 3,768 2,267 66.2
Natural gas liquids (Bbls per day) 26 11 136.4
Total (Boe per day) 822 548 50
Average realized prices
Crude Oil ($ per Bbl) 68.04 115.08 (40.9)
Natural gas ($ per Mcf) 3.02 7.92 (61.9)
Natural gas liquids ($ per Bbl) 60.16 120.93 (50.3)
Average realized price ($ per Boe) 29.62 68.66 (56.9)
Netbacks(1) ($ per Boe)
Petroleum and natural gas sales 29.62 68.66 (56.9)
Royalties (4.39) (15.21) (71.1)
Operating expenses (10.15) (17.76) (42.8)
Transportation expenses (1.06) (1.99) (46.7)
Operating netback 14.02 33.70 (58.4)
Undeveloped land holdings
Gross acres 64,842 59,526 8.9
Net acres 40,357 35,826 12.6
Average working interest 62% 61% 1.6
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COMMON SHARES
Shares outstanding, end of period
Class A shares 56,280,781 44,649,115 26.1
Class B shares 1,012,000 1,012,000 -
Weighted average shares
Basic and diluted(2) 56,488,354 52,742,199 7.1
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Nine Months Ended September 30
2009 2008 % Change
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FINANCIAL ($)
Petroleum and natural gas sales 6,855,143 8,212,318 (16.5)
Funds generated from operations(1) 1,498,604 3,042,624 (50.7)
Per share basic and diluted 0.03 0.06 (50.0)
Net loss (3,898,546) (673,913) (478.5)
Per share basic and diluted (0.07) (0.01) (600)
Capital expenditures 7,505,162 14,753,085 (49.1)
Working capital surplus 5,132,055 9,104,148 (43.6)
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OPERATING
Production
Crude Oil (Bbls per day) 181 126 43.7
Natural gas (Mcf per day) 3,624 1,714 111.4
Natural gas liquids (Bbls per day) 18 10 80.0
Total (Boe per day) 802 421 90.5
Average realized prices
Crude Oil ($ per Bbl) 57.62 110.78 (48.0)
Natural gas ($ per Mcf) 3.78 8.74 (56.8)
Natural gas liquids ($ per Bbl) 56.64 109.99 (48.5)
Average realized price ($ per Boe) 31.30 71.18 (56.0)
Netbacks(1) ($ per Boe)
Petroleum and natural gas sales 31.30 71.18 (56.0)
Royalties (3.98) (12.77) (68.8)
Operating expenses (11.82) (16.93) (30.2)
Transportation expenses (1.29) (2.25) (42.7)
Operating netback 14.21 39.23 (63.8)
Undeveloped land holdings
Gross acres 64,842 59,526 8.9
Net acres 40,357 35,826 12.6
Average working interest 62% 61% 1.6
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COMMON SHARES
Shares outstanding, end of period
Class A shares 56,280,781 44,649,115 26.1
Class B shares 1,012,000 1,012,000 -
Weighted average shares
Basic and diluted(2) 55,348,492 46,846,533 18.1
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(1) Funds generated from operations and Netbacks as presented do not have
any standardized meaning prescribed by Canadian GAAP and therefore
may not be comparable with the calculation of similar measures for
other entities. Please refer to the Non-GAAP Measures section of the
MD&A for more details.
(2) For the period ended September 30, 2009 the Class B shares are
converted at the minimum Class A share price of $1.00 and added to
the Class A shares. Thus each Class B share converted to 10 Class A
shares for the basic and diluted share calculation.
THIRD QUARTER HIGHLIGHTS
- Daily production averaged 822 Boe/d, an increase of 50% from 548
boe/d from the same period last year;
- Generated funds from operations of $745,000;
- Reduced operating expenses to $10.15 per Boe, a reduction of 16.0%
from Q2 2009;
- Incurred capital expenditures of $3.0 million;
- Successfully extended the Corporation's Montney oil discovery in the
Grimshaw area by drilling a horizontal well (100% BPO; 70% APO) which
production tested at 400 bbl/d;
- Entered into multiple farmin agreements giving the Corporation access
to earn up to 18 sections (9.2 net) located in the Corporation's
core Valhalla area;
- Added Mr. Greg Bay, President and CEO of Cypress Capital Management
Ltd. to the Corporation's board of directors;
- Closed a $7.1 million bought deal dollar financing; and
- Prudently managed its balance sheet by exiting the quarter with a
$5.1 million working capital surplus.
Subsequent to the third quarter, the Corporation achieved the following:
- Announced an acquisition of assets located in the its core Peace
River Arch area with production of approximately 210 boe/d; comprised
of 164 bbl/d of high quality light gravity (40 degree API) oil and
279 mcf/d of natural gas, 80% of which is operated.
- Closed a bought deal financing and a private placement financing
raising total gross proceeds of $13,331,500, a portion of which
($9,269,000) was in the form of Subscription Receipts that will be
exchanged for Bellamont Class A common shares upon closing of the
Acquisition.
CORE AREA ACQUISITION
On
OPERATIONAL UPDATE
In the Grimshaw Area, the Corporation's first horizontal multi-stage fraced Montney oil well has been tied into a newly constructed oil battery. The startup of the well and battery is underway and initial production is expected to be 150 bbl/d. In addition, Bellamont has drilled and cased two (1.4 net) new horizontal wells from the same surface location as the battery and first well. The new wells will be completed via multi-staged fracs and if successful, tied into the new oil battery with initial production expected by year end.
At Valhalla, Bellamont has spud its first horizontal Falher natural gas development well (100% working interest), the results of which will be known by year end. If successful, the Corporation expects to have the new well tied in for mid January. In addition, Bellamont is in the process of constructing a pipeline immediately offsetting the new horizontal well for a successful re-entry well (100% working interest) that tested gas in excess of 1.1 mmcf/d. The re-entry well should also be tied in and on production by mid January.
At Rycroft, the Company has begun operations to shoot a 100% owned 27 square mile 3D seismic program The Corporation's land base holds multi zonal potential for oil in the Montney and
OUTLOOK
Bellamont has a strong, technically focused management team that internally generates and develops high quality, large resource based prospects. Specific to the Peace River Arch area, the Corporation has compiled an undeveloped land inventory of 46,245 gross acres (31,574 net). Bellamont has successfully built significant land positions around discoveries in three areas in the Peace River Arch - Grimshaw (Montney oil), Rycroft (Montney oil) and Valhalla (Falher natural gas). In addition, with the closing of the Acquisition, the Corporation has built a solid foundation of long reserve life Doe Creek Formation light oil production in the Sinclair, Saddle Hills and Gold Creek Areas.
Including the production from the Acquisition, the Corporation expects to exit 2009 at approximately 1,125 boe/d of production. Based on risked success of the remaining capital program for 2009, Bellamont expects to average 1,350 boe/d (approximately 40% light oil) in the first quarter of 2010.
The Corporation's balance sheet remains strong with an estimated
Bellamont balance sheet also gives it significant flexibility to continue to pursue acquisitions. The Corporation intends to maintain its discipline and concentrate on strategic acquisition opportunities that are accretive on cash flow, production and reserves on a per share basis, while maintaining a strong balance sheet.
Readers are encouraged to visit the Corporation's web page at www.bellamont.com to view the current corporate presentation.
Bellamont is an emerging oil and gas company focused on the acquisition, exploration, development and production of oil and natural gas in western
FORWARD LOOKING STATEMENTS
This press release may contain forward-looking statements including expectations of future production, cash flow and earnings. More particularly, this press release contains statements concerning Bellamont's future production estimates, expansion of oil and gas property interests, exploration and development drilling, capital expenditures and number and drilling locations to be drilled in 2009. The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Bellamont, including expectations with respect to the anticipated closing date of the proposed financing and assumptions concerning the success of future drilling and development activities, the performance of existing wells, the performance of new wells and prevailing commodity prices. Although Bellamont believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward looking statements because Bellamont can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties, which could cause actual results to differ from those anticipated. These risks include, but are not limited to: the risks associated with the oil and gas industry (e.g. operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price, price and exchange rate fluctuation, uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures, and failure to obtain necessary approvals for or otherwise satisfy conditions to completion of the proposed financing. Additional information on these and other factors that could affect Bellamont's operations or financial results are included in Bellamont's reports on file with Canadian securities regulatory authorities.
The forward-looking statements or information contained in this news release are made as of the date hereof and Bellamont undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws
Oil and Gas Advisory
This press release contains disclosure expressed as "Boe/d". All oil and natural gas equivalency volumes have been derived using the ratio of six thousand cubic feet of natural gas to one barrel of oil. Equivalency measures may be misleading, particularly if used in isolation. A conversion ratio of six thousand cubic feet of natural gas to one barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the well head.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Not for distribution to U.S. newswire services or for dissemination in the
%SEDAR: 00024373E
For further information: Steve Moran, President and Chief Executive Officer, (403) 802-1355, 200, 1324-17th Avenue S.W., Calgary, Alberta, T2T 5S8, Email: [email protected], www.bellamont.com
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