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September 2016 Analyst Update – Bellatrix Exploration Ltd.

Bellatrix Exploration Ltd. · Sep 28, 2016 · 95 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 1
    TSX: BXE NYSE: BXE Full Cycle Profitable Growth ANALYST UPDATE PRESENTATION SEPTEMBER 14, 2016
  2. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 2
    Agenda TOPIC Introduction Corporate Strategy & Key Themes Deleveraging Review Strength & Depth of Asset Portfolio Repositioned for Growth Financial Strategy Risk Management Capital Structure Asset Overview Intro Geology Deep…
  3. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 3
    Analyst Update Presentation Themes TRANSFORMATIONAL DELEVERAGING ACHIEVED IN 2016 TOP TIER ASSETS PROVIDE OPTIONALITY FOR BOTH OIL & NATURAL GAS INVESTMENT MEANINGFUL EQUITY VALUE PROPOSITION REPOSITIONED FOR GROWTH 4…
  4. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 4
    Experienced & Committed Management Team Ray Smith Ed Brown Brent Eshleman Tim Blair Chris Curry Leanne Gress-Blue President & CEO Executive VP Finance Executive VP & COO VP Land VP Controller VP Finance & CFO Charles Kraus…
  5. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 5
    Corporate Profile MARKET SUMMARY Ticker Symbol TSX / NYSE: BXE Average Daily Volume1 Canada: 2.2 million / U.S.: 0.7 million Shares Outstanding 2 237.5 million basic / 249.0 million diluted Market Capitalization3 278 million Bank…
  6. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 6
    Bellatrix Differentiated Strategic Value TOP TIER ACREAGE POSITION AND RESULTS IN THE SPIRIT RIVER One of North Americas lowest supply cost natural gas plays Leading well results deliver superior economic returns and industry leading…
  7. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 7
    Material Reduction in Debt 800 700 Sold US250MM Senior notes 600 Debt (MM) Sold 75MM 500 facilities 400 Sold 35% of Plant for 112.5MM & 300 80MM Financings 200 100 0 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Aug…
  8. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 8
    Material Torque to Improving Commodity Prices Annualized Funds Flow Annualized Funds Flow Sensitivity Analysis From Operations From Operations Based on Q2/16 Financial Results ( millions) ( per share) Change of 0.10/Mcf 6.4 0.03…
  9. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 9
    2016 Second Half Capital Plan SECOND HALF 2016 GUIDANCE BALANCES FINANCIAL FLEXIBILITY & MAXIMIZED RETURNS H2 2016 BUDGET UP TO 40MM CAPITAL ALLOCATION MAXIMIZE RETURNS Capital by Area 3.00 H2 2016 cash flow capital budget of up to…
  10. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 10
    Financial Summary
  11. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 11
    Financial Strategy PROACTIVELY MAINTAIN AMPLE LIQUIDITY SIMPLE CAPITAL STRUCTURE WITH DIVERSIFIED DEBT MATURITIES OPPORTUNISTIC STRATEGIC ACQUISITIONS AND CONTINUAL REVIEW AND RATIONALIZATION OF NON-CORE PROPERTIES PRUDENT…
  12. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 12
    Balance Sheet & Financial Flexibility Effective capital resource management, balancing liquidity and flexibility BANK DEBT 122 MILLION CREDIT FACILITY CONTAINS LIMITED NEAR TERM DEBT AS AT AUG 9, 20161 ONE FINANCIAL COVENANT2…
  13. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 13
    Bank Debt Summary Current bank debt comprised of two parts: 1. 160 million revolving syndicated credit facility 2. 13 million non-revolving facility CREDIT FACILITY DETAILS Syndicated reserve based credit facility Renewed and reviewed…
  14. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 14
    Senior Unsecured Notes Summary US250 million of 8.50% senior unsecured notes maturing May 15, 2020 US notes translated to Cdn quarterly. Q2/16 US notes were C313.3 million SENIOR NOTE DETAILS Closed the private offering of US250…
  15. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 15
    Convertible Debenture Summary 50 million of 6.75% extendible unsecured subordinated convertible debentures Subordinated to bank credit facilities and any other senior indebtedness CONVERTIBLE DEBENTURE DETAILS Issued by way of…
  16. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 16
    Shareholders TOTAL SHAREHOLDER OWNERSHIP INSTITUTIONAL OWNERSHIP BY GEOGRAPHY Identified Institutions Other Canada institutions / family offices U.S. Europe Management & Board Other Retail / other Sources: IPREO include…
  17. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 17
    Strong Institutional Ownership 350 Identified Institutional Shareholders () 300 Historic/current yield E&Ps Institutional Owners () 250 Non-yield E&Ps 200 150 100 50 0 Peer Peer Peer Peer Peer Peer Peer…
  18. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 18
    Risk Management & Marketing Strategy FINANCIAL RISK MANAGEMENT STRATEGY A pillar of Bellatrix's strategic planning is a board approved active risk management policy providing reduced commodity price volatility and greater…
  19. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 19
    Corporate Production Overview 50 45 40 Production (mboe/d) 35 30 25 Natural Gas 20 15 10 NGLs 5 Crude Oil & Condensate 0 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 100% 65% 65% 69% 69% 72% 72% 70%…
  20. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 20
    Corporate Liquids Volume Overview 14 12 Production (mboe/d) 10 NGLs 8 6 4 Condensate 2 Crude Oil 0 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q2/16 CRUDE OIL & CONDENSATE Q2/16 NGLs Pentane Ethane…
  21. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 21
    Bellatrix Premium Realized Natural Gas Price BELLATRIXS NATURAL GAS SOLD HAS A HIGHER HEAT CONTENT THAN THE INDUSTRY AVERAGE, RESULTING IN A PREMIUM PRICE RECEIVED 0.45 14% 0.40 12% Price Premium (C/Mcf) 0.35 10% Price…
  22. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 22
    Bellatrix Oil and Condensate Realized Pricing BELLATRIXS OIL IS PRINCIPALLY LIGHT SWEET CRUDE ALONG WITH CONDENSATE VOLUMES RESULT IN NARROW DIFFERENTIALS TO INDUSTRY LIGHT OIL PRICES 120 100 80 C/bbl 60 40 20 0 Q1/14…
  23. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 23
    Commodity Price Risk Management NATURAL GAS HEDGES OIL HEDGES 70% 70% 2.91 % of oil & condi volumes hedged 3.02 3.34 3.34 3.34 3.34 60% 60% % of total forecast gas volumes 50% 50% 40% 40% 30% 30% 20% 20% 10% 10%…
  24. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 24
    Ensuring Firm Capacity Within Core Areas TOTAL BELLATRIX GROSS PROCESSING CAPACITY GREATER FERRIER 600 BXE Phase 2 deep cut incremental Total 120 MMcf/d processing Total Gross Raw Gas Processing Capacity (MMcf/d) BXE Phase 1…
  25. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 25
    Asset Overview
  26. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 26
    Concentrated Land Base GREATER FERRIER / WEST CENTRAL ALBERTA STRACHAN WILLESDEN GREEN Production1 (% of total): 6% Production1 (% of total): 80% Land2 (net acres): 42,110 Land2 (net acres): 111,866 P+P net locations: 27 P+P net…
  27. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 27
    Strategic Land Position in a Tightly Held Competitive Area of West Central AB GREATER FERRIER/BRAZEAU/WILLESDEN GREEN AREAS OF WEST CENTRAL ALBERTA Pembina Brazeau Ferrier Willesden Green Bellatrix 28 Source: Accumap,…
  28. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 28
    Geology Overview
  29. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 29
    Geology Overview FOCUSED ASSET BASE IN AN ESTABLISHED AREA OF THE WESTERN CANADIAN SEDIMENTARY BASIN ACREAGE CONTAINS FAVORABLE GEOLOGIC CHARACTERISTICS RIGOROUS & SYSTEMATIC APPROACH TO INVENTORY EVALUATION MULTI-ZONE…
  30. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 30
    Geology Liquids rich gas along Alberta deep basin corridor Horizontal drilling into existing marine and fluvial conventional but tighter sand reservoirs Excellent vertical well control of 16,000 - 19,000 wells Pressure and…
  31. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 31
    Spirit River Geology Summary SPIRIT RIVER STACKED SANDS Broad, thick, extensive sand rich valleys in Notikewin, Falher and Wilrich members Tight sandstone: long life reserves with long term hyperbolic decline profile Average…
  32. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 32
    Spirit River Liquids Rich Gas FERRIER CORE SPIRIT RIVER PLAY BXE Land Sections 262 Gross1 153 Net1 BXE Net Drilling Inventory2 62 proved 28 probable 294 unbooked 384 total Formation depth 2,400 meters Currently drilling 1 mile…
  33. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 33
    Ferrier - Development Example of Multiple Spirit River Zones / Section SECTION 31 DEVELOPMENT OF NOTIKEWIN & FALHER B ZONES Six wells with combined IP30 daily gas rate of over 65 MMcf/d IP30 rates on average of 10 to 13 MMcf/d Six…
  34. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 34
    Evolution of Alder Falher Development Beginning in 2009 REPRESENTATIVE EXAMPLE OF BELLATRIX INVENTORY IDENTIFICATION & EXPANSION 2009 4-25-44-9 W5M Vertical Gas Well Sand filled valley system defined by subsurface control, geology…
  35. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 35
    Evolution of Alder Falher Development 2010 - 2016 REPRESENTATIVE EXAMPLE OF BELLATRIX INVENTORY IDENTIFICATION & EXPANSION Jan 2012 Sept 2016 BXE drilled initial step out wells proximal to vertical Mannville gas wells Virgin…
  36. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 36
    Operations Overview
  37. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 37
    Operations Overview CAPITAL COST SAVINGS INITIATIVES & ACHIEVEMENTS COST SAVINGS SUSTAINABILITY EFFICIENCY GAINS PLANNING AND OPTIMIZATION 38 Long term shareholder value creation
  38. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 38
    Spirit River Well Costs & Capital Efficiencies FOCUSED CAPITAL COST REDUCTIONS 6.0 Long reach Long reach 5.0 4.0 Costs (millions) Equip & Tie-in 3.0 Complete 2.0 Drill 1.0 0.0 2015 - 24 wells H1/16 - 10 wells…
  39. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 39
    Efficiency Gains AVERAGE SPIRIT RIVER DRILLING CURVES SPUD TO RIG RELEASE BY YEAR 0 20 Days (Spud to Rig Release) 2014 Spirit River Average 500 2015 Spirit River Average 15 1,000 2016 Spirit River Average 10 2016 Spirit…
  40. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 40
    Spirit River Relative Play Cost Reductions YEAR OVER YEAR ALL-IN WELL COST REDUCTIONS ACROSS TOP WCSB PLAYS Spirit River Ranks highest in year over year cost reductions providing enhanced play profitability 14.0 (35%) -31% 12.0…
  41. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 41
    Capital Cost Reductions COST REDUCTIONS AND MAINTENANCE OF A LOW COST PROFILE IS ALL ABOUT REVIEWING & OPTIMIZING Review and optimize how surface hole is drilled Review and optimize bottom hole assembly Review and optimize well…
  42. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 42
    Improvement & Optimization Efforts TANGIBLE BENEFITS ACHIEVED ACROSS MULTIPLE AREAS Re-engineered the use of high performance motors Reamer run while drilling The use of the same equipment and people for improved consistency of…
  43. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 43
    Spirit River Development Comparison COMPARATIVE 2015 & H1/16 SPIRIT RIVER COST & EFFICIENCY METRICS Frac stages Number of completion days Avg proppant placed per stage (t) 20 30 70 25 60 Proppant per stage (tonnes) 15…
  44. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 44
    Engineering Overview
  45. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 45
    Engineering Overview SPIRIT RIVER PLAY PROFITABILITY PLAY PERFORMANCE DEPTH OF INVENTORY ENGINEERING VALUE 46 Long term shareholder value creation
  46. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 46
    Spirit River is the Growth Engine SPIRIT RIVER PRODUCTION GROWTH 22,000 2010 20,000 Spirit 18,000 Average monthly production (boe/d) River 16,000 Other 14,000 12,000 10,000 June 2016 8,000 6,000 Other Spirit 4,000…
  47. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 47
    Spirit River Productivity Results Consistently Rank Best in Class 2015 HIGHEST DELIVERABILITY WELLS IN ALBERTA 20.0 18.0 16.0 First month calendar day rate (Mmcfe/d) 14.0 12.0 10.0 8.0 6.0 4.0 Spirit River Spirit…
  48. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 48
    North American Supply Cost Comparison 4.00 3.50 3.00 Henry Hub (US/MMbtu) 2.50 2.00 1.50 1.00 0.50 0.00 Economics assume 15% Before tax IRR, assumes US0.83 = CDN1.00, US0.75/MMbtu AECO basis, and a 20:1…
  49. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 49
    Bellatrix Spirit River Competitiveness BXE SPIRIT RIVER COMPETITIVE WITH TOP TIER MARCELLUS OPERATOR F&D COSTS AND EFFICIENCIES BXE Marcellus Type Curves1 Blended SW PA Spirit River SW PA SW PA SW PA 50% Wet Type Curve Super rich…
  50. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 50
    Spirit River Performance Delivering Results AVERAGE TYPE CURVE REPEATABILITY DEMONSTRATED WITH 2015 & 2016 WELLS 2,500 2,000 Cumulative natural gas (MMcf) 1,500 1,000 500 0 15 30 45 60 75 90 0 105…
  51. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 51
    Spirit River All-In Profitability Full Cycle F&D costs C2.50/GJ C3.00/GJ Drill 1.7MM Complete 1.6MM Full cycle F&D costs /Mcfe (0.85) (0.85) Equip & tie in 0.7MM Half cycle costs 4.0MM Land/seismic/facilities 1.1MM Full cycle…
  52. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 52
    Representative Spirit River Inventory Required to Maintain Production Volumes Approximately 15 net Spirit River wells1 per year to maintain 35 mboe/d through 2020 Represents scenario of drilling of only 17% of current net Spirit River…
  53. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 53
    Corporate Decline Rate BELLATRIX CORPORATE DECLINE RATE 40% 2015: 35% 35% Leading 12 Month Decline Rate 2016: 30% 30% 2017: mid 20% to 30% range 25% 20% 15% 10% 2015 2016 2017 Base production decline profile…
  54. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 54
    Production Facilities & Optimization Overview
  55. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 55
    Production Overview STRATEGIC FACILITIES OVERVIEW FACILITIES INVESTMENT AND IMBEDDED VALUE OPTIMIZATION EFFORTS & ACHIEVEMENTS BENEFITS OF IN-HOUSE REVIEW & ANALYSIS 56 Long term shareholder value creation
  56. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 56
    Greater Ferrier Area Infrastructure Overview GREATER FERRIER EXISTING GREATER FERRIER AREA STRATEGIC INFRASTRUCTURE INFRASTRUCTURE ACCESS: Infrastructure gives Bellatrix control of production and growth Working interest or…
  57. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 57
    Significant Investment in Strategic Infrastructure OVER 330 MILLION INVESTED SINCE 2013 IN STRATEGIC INFRASTRUCTURE ASSETS Monetized approximately 187.5 million in facilities and plant working interest in 2016 representing…
  58. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 58
    Bellatrix Alder Flats Deep Cut Plant 59
  59. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 59
    Bellatrix Alder Flats Deep Cut Plant Phase I - 110 MMcf/d design inlet capacity, - 130 MMcf/d off design max inlet capacity - First Sales: May 22, 2015 Recoveries: Ethane C2 = 18.5% Propane C3 = 99.5% Butane C4 = 100% Pentane…
  60. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 60
    Phase 2 Progressing BELLATRIX IS COMMITTED TO CONSTRUCTING PHASE 2 OF THE ALDER FLATS PLANT Investment continues into Phase 2 at 30 the Bellatrix Alder Flats Plant Phase 2 Net Bellatrix Spending (MM) 25 Bellatrixs net capital…
  61. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 61
    BXE Alder Flats Superior Operational Performance in Core West Central AB Area SUPERIOR & CONSISTENT PLANT PERFORMANCE FUEL/DISPOSITION EFFICIENCY 120% Highest utilization Bellatrix Alder Flats Most efficient 100% 3rd Party Plant…
  62. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 62
    Ferrier 13-05 Compressor Station Design Capacity: 160 MMcf/d Compression = 28,000 Break Horsepower (BHP) Plant Delivery Capacities: BXE Alder Flats 130 MMcf/d Third Party Plant 1 110 MMcf/d Third Party Plant 2 90 MMcf/d Third Party…
  63. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 63
    Ferrier 09-03 Compressor Station Design Capacity: 80 MMcf/d Compression = 13,440 Break Horsepower (BHP) Plant Delivery Capacities: BXE Alder Flats 130 MMcf/d Third Party Plant 1 90 MMcf/d Third Party Plant 2 40 MMcf/d Third Party Plant…
  64. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 64
    Baptiste 06-21 Battery/Compressor Station Design Capacity: 40 MMcf/d Compression = 6,720 Break Horsepower (BHP) 2,200 bbl/d Plant Delivery Capacities: BXE Alder Flats 130 MMcf/d Third Party Plant 1 90 MMcf/d Third Party Plant 2 20…
  65. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 65
    Brazeau 02-10 Battery/Compressor Station Design Capacity: 40 MMcf/d Compression = 4,560 Break Horsepower (BHP) 2,200 bbl/d Plant Delivery Capacities: Third Party Plant 1 90 MMcf/d Third Party Plant 2 40 MMcf/d Third Party Plant 3 20…
  66. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 66
    Asset Optimization 83 PLUNGER LIFT INSTALLATIONS PERFORMED YTD IN 2016 Combined 83 well production volumes (boe/d) Early installation of plunger lifts has moderated decline rates and reduced downtime 67
  67. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 67
    POC Installations and Optimization Pump-off-controller POC installations have optimized chemical usage, reduced down-hole failure and reduced production downtime 96 POCs installed and remotely monitored ASSET OPTIMIZATION 68
  68. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 68
    Pipeline Pressure Optimization and Analysis PIPELINE FLOW CHANGE REVIEW Pressure analysis using in-house software to BEFORE AFTER evaluate flow changes before implementing Evaluate impact to existing production when new wells…
  69. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 69
    Historical Performance & Outlook
  70. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 70
    Analyst Update Presentation Themes TRANSFORMATIONAL DELEVERAGING ACHIEVED IN 2016 TOP TIER ASSETS PROVIDE OPTIONALITY FOR BOTH OIL & NATURAL GAS INVESTMENT MEANINGFUL EQUITY VALUE PROPOSITION REPOSITIONED FOR GROWTH 71…
  71. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 71
    Track Record of Production and Reserves Growth HISTORICAL PRODUCTION HISTORICAL RESERVES Natural Gas Oil and Liquids Production per share (right side) Natural Gas Oil and Liquids Reserves per share (right side) 45,000 90 260 1.4…
  72. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 72
    Focus on Continued Cost Reductions OPERATING COSTS NET G&A COSTS 13 3.50 12 3.00 11 Net G&A expense (/boe) 2.50 Operating cost (/boe) 10 2.00 9 1.50 8 1.00 7 6 0.50 5 0.00 2010 2011 2012 2013 2014 2015 H1/16…
  73. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 73
    2016 Second Half Capital Plan SECOND HALF 2016 GUIDANCE BALANCES FINANCIAL FLEXIBILITY & MAXIMIZED RETURNS H2 2016 BUDGET UP TO 40MM CAPITAL ALLOCATION MAXIMIZE RETURNS Capital by Area 3.00 H2 2016 cash flow capital budget of up to…
  74. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 74
    Capital Allocation & Balanced Opportunity Set CAPITAL ALLOCATED TO HIGHEST EXPECTED RETURN PROJECTS COMMODITY AGNOSTIC RETURNS DRIVE INVESTMENT NOT PRODUCT (OIL OR GAS) Gas weighted Balanced Oil weighted Spirit River Cardium…
  75. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 75
    Long Term Value Enhancing Opportunities Long term value focus Medium term - Second White Specks value focus - Belly River - Liquids rich - Viking Cardium - Duvernay Near term - Cardium Oil value focus - Lower Mannville -…
  76. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 76
    Corporate Responsibility Bellatrix is dedicated to achieving industry leading economic results in an environmentally responsible, compliant, and safe manner Our core Company values are rooted in Safety, Teamwork, Accountability, and…
  77. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 77
    Responsibility & Oversight INTERNAL CORPORATE RESPONSIBILITY OVERSIGHT Corporate Governance Committee Board of Directors Reserve, Safety & Environment Committee Chief Executive Officer Director, Environment, VP, General…
  78. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 78
    Stakeholder Engagement Bellatrix believes that stakeholder engagement is essential in achieving success and sustainability. There are many different stakeholder groups, identified as those individuals and parties who have either…
  79. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 79
    Strong Liability Management Bellatrixs Liability Management Rating is 9.8, more than double the industry average of 4.4, and significantly above the 1.0 threshold demonstrating a strong LMR position. Alberta uses a comparison of…
  80. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 80
    Compelling Equity Value Proposition 14.0x 12.0x RELATIVE VALUATION COMPARISON: 2017E EV/DACF 10.0x 2017E EV/DACF 8.0x 6.0x 4.0x 2.0x 0.0x Peer Peer BXE Peer Peer Peer Peer Peer Peer Peer Peer Peer Peer Peer Peer Peer…
  81. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 81
    Compelling Equity Value Proposition 400% RELATIVE VALUATION COMPARISON: P/NAV (2P) 350% 300% 250% P/NAV (2P) 200% 150% 100% 50% 0% Peer BXE Peer Peer Peer Peer Peer Peer Peer Peer Peer Peer Peer Peer Peer Peer Peer Peer…
  82. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 82
    Compelling Investment Opportunity Experienced Unfettered growth Leadership management potential with firm Excellent Organic with a history of creating value processing capacity Growth Potential Large inventory World Class of…
  83. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 83
    Supplemental Information
  84. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 84
    Peer Group Comparison OPERATING & TRANSPORTATION COSTS/ BOE1 16 14 12 Costs (/boe) 10 8 6 4 2 0 BXE NET G&A & STOCK BASED COMPENSATION EXPENSE/ BOE1 7 6 5 Expense (/boe) 4 3 2 1 0 BELLATRIX IS A LOW…
  85. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 85
    Peer Group DD&A Expense Comparison DEPLETION, DEPRECIATION & AMORTIZATION EXPENSE/ BOE1 25 20 15 DD&A (/boe) 10 5 0 BXE DD&A EXPENSE TREND 30 25 20 DD&A (/boe) 15 10 5 0 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15…
  86. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 86
    Joint Ventures JOINT VENTURES Bellatrixs differentiated JV strategy Grafton JV (GJV) CNOR JV - 500 MM provides significant benefits 305 MM (Grafton managed co.) Accelerates development potential of our multi-billion dollar Effective…
  87. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 87
    Tax Pools BELLATRIX HOLDS APPROXIMATELY 1.65 BILLION IN TAX POOLS NO CASH TAXES FORECAST OVER THE NEAR TERM TAX POOLS (000s) Rate (%) June 30 2016 Intangible resource pools: Canadian exploration expenses 100 119,100 Canadian…
  88. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 88
    Additional Long Term Opportunities
  89. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 89
    Cardium Light Oil Resource Play Greater Pembina BXE Cardium Sections 379 Gross 271 Net BXE Net Drilling Inventory1 141 proved 42 probable 231 unbooked Ferrier 414 total Willesden Green Average Lease Operate Expense 9.00/boe…
  90. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 90
    Balanced Cardium Inventory Provides Long Term Optionality on Oil Prices Cardium Gas Cardium High GOR Cardium Oil 96 net drilling locations 140 net drilling locations 178 net drilling locations 76% gas / 24% oil & liquids 64% gas /…
  91. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 91
    Cardium Proven Innovative Development Leading Cardium driller in 2013/2014 APPLYING CUTTING EDGE EXPLOITATION TECHNIQUES Horizontal well placement and applying cutting edge exploitation techniques results in top-tier well results…
  92. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 92
    Lower Mannville: Liquids-rich Gas Play Drill locations identified across three GR Porosity play types 31 horizontal Ellerslie wells drilled by Angle/BXE at Harmattan to date Net Drilling Inventory: 16 proved 18 probable 89 unbooked…
  93. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 93
    Second White Specks: Tight Oil Resource Laterally continuous fairway: 6,000 sq miles Thick: 75-225m Over-pressured: 9-14KPA/m Thermally mature for oil: Tmax 435-455C High Organic Content (TOC): 1.5-4wt% Existing vertical production 15…
  94. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 94
    Corporate Information BOARD OF DIRECTORS OFFICERS BANKERS W.C. (Mickey) Dunn Raymond G. Smith, P.Eng. National Bank of Canada Chairman President & CEO Alberta Treasury Branches HSBC Bank Canada Doug N. Baker, FCA Edward J. Brown, C.A.…
  95. September 2016 Analyst Update – Bellatrix Exploration Ltd. – slide 95
    1920, 800 5th Avenue SW Calgary, Alberta Canada T2P 3T6 Tel: (403) 266-8670 Fax: (403) 264-8163 www.bellatrixexploration.com

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