Key Themes & Takeaways SCORECARD OF PAST 18 MONTHS AND STRATEGIC OBJECTIVES ACHIEVED COST AND PERFORMANCE LEADER IN THE SPIRIT RIVER UNLOCKING THE MATERIAL UPSIDE VALUE OF THE CARDIUM IMPROVED FINANCIAL STRENGTH AND RUNWAY…
Bellatrix Investment Highlights Dominant core acreage position in west central Alberta Top tier capital efficiencies and cost Spirit River represents one of North profile deliver full cycle profitability Americas lowest supply cost…
Corporate Profile MARKET SUMMARY Ticker Symbol TSX / NYSE: BXE Average Daily Volume1 Canada: 550,000/ U.S.: 100,000 Shares Outstanding2 61.8 million basic / 63.4 million diluted Market Capitalization3 78 million Bank Debt4 71…
Leadership Brent Eshleman Max Lof Garrett Ulmer Charles Kraus President & CEO Executive VP & CFO COO Executive VP, General Counsel & Corporate Secretary 7
Last 18 Months in Review Debt reduction and maturity extension Over 1/3 of 2020 note maturities extended to 2023 Capital cost reductions 20% reduction in all-in well costs to under 3.4 million (drill, complete, equip and tie-in) from…
Debt Reductions & Maturity Extension DEBT MATURITY PROFILE SEPTEMBER 11, 2018 300 250 200 Over 1/3 of 2020 notes exchanged with maturity extended to 2023 through Debt maturities (C) 150 Phase 1 of debt refinancing…
Cost Reductions Achieved 29% REDUCTION IN PRODUCTION EXPENSES (/BOE) 11.00 Production expense 10.00 9.00 (/boe) 8.00 7.00 6.00 5.00 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 17% REDUCTION IN PRODUCTION EXPENSES…
Low FD&A Costs 8.00 FD&A costs (/boe) 6.00 4.00 2.00 0.00 2017 2016 3 Year Avg 2017 2016 3 Year Avg ('15-'17) ('15-'17) FD&A Costs Including Plant Capital FD&A Costs Excluding Plant Capital PDP FD&A 1P FD&A 2P FD&A FD&A…
Pre-eminent Capital Efficient Operator in the WCSB NATURAL GAS WEIGHTED & BALANCED PRODUCERS 2019 ESTIMATED CAPITAL EFFICIENCY 25,000 20,000 2019E Capital Efficiency 15,000 10,000 5,000 0 BXE ARX SRX PEY…
Risk Management Gains OVER 45 MILLION IN REALIZED RISK MANAGEMENT GAINS GENERATED IN LAST 18 MONTHS 50 45 40 Realized Gains (MM) 35 30 25 20 15 10 5 0 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Quarterly Realized…
Tight Project Control PHASE 2 BROUGHT ON-STREAM SAFELY, AHEAD OF SCHEDULE AND 5% BELOW BUDGET Enhanced control Improved value through additional natural gas liquids extraction Lower production expenses Lower transportation…
Growing High Value Liquids Growing NGL Volumes & High Value Condensate 70 100% Product % of Total Crude Oil & 65 Condensate Volumes (bbl/d) Light oil 80% Corporate NGL yield 60 (bbl/MMcf) 55 60% 50 45 40% 40…
Strategic Objectives & Outlook Improving financial strength and value preservation in low commodity price environment 2017 2018 2019 New management team Manage capital Sustain operational levels established investment levels within…
Capital Allocation CAPITAL ALLOCATED TO HIGHEST EXPECTED RETURN PROJECTS COMMODITY AGNOSTIC RETURNS DRIVE INVESTMENT NOT PRODUCT (OIL OR GAS) Spirit River 60 bbls/mmcf Liquids Cardium Ellerslie Belly River Rock Creek 40 bbls/mmcf…
2018 Outlook & Guidance 2018 CAPITAL GUIDANCE REDUCED BY 5MM NO CHANGE IN VOLUME GUIDANCE GIVEN STRONG RESULTS TO DATE CURRENT PREVIOUSLY SET 2018 BUDGET 2018 ANNUAL 2018 ANNUAL STRATEGIC OBJECTIVES GUIDANCE GUIDANCE (AUGUST 2,…
Risk Management and Marketing Overview 20
Commodity Price Risk Management NATURAL GAS FIXED PRICE SWAPS OIL FIXED PRICE SWAPS 60% 50% 2.89 % of total forecast 2018 oil & condi volumes 2.98 70.14 70.14 % of total forecast 2018 gas volumes 50% 40% 40% 30% 30%…
Hedging & Market Diversification Market Diversification Contracts Market Start Date End Date Volume Chicago 01-Feb-18 31-Oct-20 15,000 MMBtu/d Chicago 01-Nov-18 31-Oct-20 15,000 MMBtu/d Dawn 01-Feb-18 31-Oct-20 15,000 MMBtu/d Dawn…
Ample Takeaway Capacity & Market Egress AMPLE FIRM TRANSPORTATION IN PLACE FOR ALBERTA NATURAL GAS MARKET EGRESS CURRENT & GROWTH VOLUMES Firm Transportation (FT) agreements in place for gross ALBERTA operated volumes at multiple…
AECO Natural Gas Demand Growth Drivers INTRA-ALBERTA DEMAND GROWTH External forecasts see intra-Alberta demand growth of: 500 MMcf/d YoY in 2018 to 5.3 Bcf/d 245 MMcf/d YoY in 2019 to 5.5 Bcf/d 190 MMcf/d YoY in 2020 to 5.7…
AECO Natural Gas Expansion Projects Underway ADDITIONAL EXPORT CAPACITY BEING DEVELOPED OUT OF THE CANADIAN BASIN Winter Effective Capacity (MMcf/d) 2017A 2018E 2019E 2020E 2021E 2022E In Service Alliance 1,800 1,800 1,800 1,800…
Cost and Performance Leader in the Spirit River Formation 26
Highly Concentrated Land Base DOMINANT ACREAGE POSITION WEST CENTRAL ALBERTA CORE AREA Highly focused land base in the prolific Deep Basin of FERRIER Alberta WILLESDEN GREEN 99% of total corporate GREATER PEMBINA production and…
Concentrated Multi-Zone Acreage DEEP BASIN MULTI-ZONE ACREAGE Deep Basin is highly coveted for: Sweet, liquids rich natural gas 4,600 ft TVD Belly River 6,200 ft TVD Sweet, light gravity crude oil Cardium Multi-zone hydrocarbon…
The Spirit River Deep Basin Gas Play Fluvial valleys 10-35 km wide 100 to 150 km in length Valley systems up to 50m in thickness Stacked valley complexes 29
Spirit River Contribution to WCSB Volume Growth 18 20% of all AB & BC natural gas production comes from the Spirit River 16 14 Production by zone (Bcf/d) 12 10 8 6 4 2 0 Apr-10 Apr-11 Apr-12…
Bellatrix Focused Spirit River Growth SPIRIT RIVER PRODUCTION GROWTH 2010 2018 New Drill 80% Techniques Spirit 32,000 River 70% 28,000 Other Spirit River % of Total Company Volumes 60% Average Monthly Production…
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…
Bellatrixs Spirit River Play BXE Land Sections1 GREATER FERRIER AREA CORE SPIRIT RIVER PLAY 180 Gross 104 Net BXE Net Drilling Inventory2 102 proved 27 probable 225 unbooked 354 total True vertical formation depth 2,250 meters…
Spirit River Geology Summary Broad, thick, extensive sand rich valleys in SPIRIT RIVER STACKED SANDS Notikewin, Falher and Wilrich members One square Tight sandstone: long life reserves with mile section long term hyperbolic decline…
Greater Ferrier Spirit River Play Advantages Lateral reservoir continuity and predictability Repeatable results Moderate reservoir porosity and permeability Historical vertical production Low to moderate drilling risk Moderate drilling…
Comparing Premier Resource Plays Spirit River Montney Duvernay Tight Conventional Siltstone Shale Sandstone Porosity 6 to 18%; Porosity 0.6 to 8%; Porosity 2 to 8%; Permeability 1 to 3 mD Permeability 0.0001 to Permeability…
Low Cost Competitive Advantage BXE Spirit River Versus Canadian Plays STAGE COUNT PROPPANT PLACED 40 8,000 35 7,000 Average proppant (tonnes) Average stage count 30 6,000 25 5,000 20 4,000 15 3,000 TOTAL WELL COST…
Play Profitability Comparisons BXE Spirit River Montney Duvernay All-in Well Costs 3.4 6.4 9.4 (DCE&T, MM) Average IP365 1,070 608 459 (boe/d) IP365 Capital Efficiency 3,180 10,500 20,560 (/boe/d) Average Implied EUR 7.1…
Bellatrix Spirit River Drilling Inventory TOTAL INVENTORY OF 354 NET SPIRIT RIVER LOCATIONS FORMATIONAL BREAKOUT RESERVE BREAKOUT 40 98 129 Booked Unbooked locations = 10 Booked years low risk 122 drilling at current pace of…
Spirit River Type Curves Bellatrix Spirit River Economics SPIRIT RIVER 5.2 & 6.0 BCF TYPE CURVES 9 Economic Assumptions 5.2 Bcf 6.0 Bcf Gross CAPEX (DCE&T, MM) 3.4 3.4 Liquids (bbl/MMcf) Gross Natural Gas IP30 (MMcf/d) 6.6 6.3 8…
Representative Spirit River Inventory Required to Maintain Production Volumes Approximately 15 net (5.2 Bcf type curve) Spirit River wells1 per year maintains production in the high 30 mboe/d range through 2022 Alternatively, 12 net…
Spirit River All-In Profitability 5.2 Bcf Type Curve Full Cycle F&D costs C1.50/GJ C2.50/GJ Drill 1.5MM Complete 1.4MM Full cycle F&D costs /Mcfe (0.71) (0.71) Equip & tie in 0.5MM Half cycle costs 3.4MM Land/seismic/facilities…
Spirit River Drilling Evolution Historic/Vertical Early HZ Current HZ Development Development Development Multi-well pad sites Intermediate casing w/liners Smaller casing strings, Falher B Type Log Monobore casing…
Drilling Performance Improvements Mud motors on Multi well surface pad sites Larger Big capacity diameter pumps drill pipe Single well pad sites Top drive rigs Kelly bar rigs Proprietary new techniques Raise…
Completion Performance Improvements 160 m3 Eliminate per stage N2 40T/stage 200 m3 60T/stage for per stage Falher A Fluid Dynamics 50T/stage Less water Slickwater per stage, fracing quicker 20T/stage Hybrid clean up Fluids…
Enduring Efficiency Gains on Drill Times AVERAGE SPIRIT RIVER DRILLING CURVES DAYS SPUD TO RIG RELEASE BY YEAR 20 0 Days (Spud to Rig Release) 2014 Spirit River Average 500 15 2015 Spirit River Average 1,000 10 2016 Spirit…
Capital Cost Reductions BELLATRIX HAS MATERIALLY IMPROVED BOTH DRILLING TIMES AND METERS/DAY REDUCING BOTH TIME AND COSTS 35 450 30 400 350 Days (spud to rig release) 25 Meters/day 300 20 250 15 200 150 10…
Spirit River Well Costs & Capital Efficiencies FOCUSED CAPITAL COST REDUCTIONS 6.0 Long Reach Long Reach 5.0 4.0 Long Reach Costs (millions) Equip & Tie-in 3.0 Complete 2.0 Drill 1.0 0.0 2015 - 24 wells…
Unlocking the Value of the Cardium 50
Paleo Setting Cardium Modern Analogue Baja Mexico Stacked shoreface system 100 km wide 800 km in length 30-60m in thickness Multiple facies 51
Bellatrixs Cardium Value Strategy Bellatrixs Cardium Acreage is Top Tier Recent Cardium Activity Among the highest total liquids, EURs and IP rates Wells drilled since Jan 2017 Edson Peak 30 Peak 30 4 wells day Oil day Gas Oil EUR…
Cardium Light Oil Resource Play BXE Land Sections1 144 Gross BELLATRIX Activity Since Jan 2017 84 Net 3 Wells Drilled BXE Net Drilling Inventory2 97 proved 21 probable 95 unbooked 213 total Cardium Resource Play Summary…
Bellatrix Cardium Drilling History BELLATRIX HAS DRILLED 200 WELLS IN THE CARDIUM SINCE 2010 90 120 Most active Cardium 80 driller in the Basin 100 70 60 80 Wells drilled WTI (US/bbl) 50 60 40 30 40 20 20 10 0…
Industry Cardium Activity 51 wells drilled in the Greater Ferrier area since January 2017 (all utilize new technology) Number of stages has been increasing over time (up to 80 stages/ mile) Longer lateral being drilled; 32 of the 51…
Cardium Drilling Evolution 1,400 1,200 Current HZ Early HZ Average of Cemented Liner1 Development Development 1,000 Sales (boed) Monobore Intermediate 800 Casing Casing Spud to RR: 8 Spud to RR: 19 600 days days 400…
Bellatrixs Cardium Value Strategy 1,400 Ferrier Cardium Cardium task force established 1,200 Old Technology New Technology New Technology (1-mile) (1-mile) (2-mile) Goal is to reduce Total EUR 1,000 (mboe) 490 790 1,500 Cardium…
Efficiency Improvements Achieved BELLATRIX CARDIUM PERFORMANCE IS COMPETITIVE WITH INDUSTRY RESULTS 100,000 90,000 80,000 70,000 60,000 Cum (boes) 50,000 40,000 30,000 20,000 10,000 0 0 1 2 3 4 5 6 Normalized…
Efficiency Improvements Achieved BELLATRIX HAS USED ITS LEARNINGS AND EFFICIENCY GAINS DRILLING IN THE SPIRIT RIVER AND HAVE SUCCESSFULLY APPLIED TO THE CARDIUM 20 500 18 450 16 400 14 350 Days (spud to rig release) 12…
Strategic Infrastructure Value & Competitive Advantage 61
Bellatrix Alder Flats Phase 2 PHASE 2 ON-STREAM MARCH 2018 Phase 2 brought on-stream safely, ahead of schedule, and approximately 5% under budget More than doubles throughput capacity at the plant to 230 MMcf/d (from 110 MMcf/d)…
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 operatorship…
Meaningful Lease/Pad Buildout Complete PAD DESIGNS ALLOW MAXIMUM FLEXIBILITY AND REDUCED COSTS 1MM savings on 4 well pad drilled sequentially vs 4 single well pads Utilizes less space than allowable by the AER, minimizing ongoing…
Material Facilities & Infrastructure Value MAJOR FACILITIES & INFRASTRUCTURE VALUE 190MM NET TO BXE 200 11MM 180 9MM 29MM 160 140 87MM 120 Estimated Value (MM) 100 80 60 40 55MM 20 0 BXE Alder Flats Plant Major…
Drill Bit Focused PLANT INVESTMENT PLANT PHASE & CONSTRUCTION 2 CONSTRUCTION COMPLETE COMPLETE MARCH 2018 Q2/18 Major compressor stations, pipelines and Bellatrix Alder Flats Plant capital investment nearing completion Proportion…
Improved Financial Strength 67
Diversified Balance Sheet & Financial Flexibility Actively exploring refinancing opportunities and additional sources of liquidity BANK DEBT 71MM CREDIT FACILITY LONG TERM DEBT AT JUNE 30, 20181 FINANCIAL COVENANT1 MATURITIES1 3.5…
Debt Refinancing Transaction Closed STRENGTHENS LIQUIDITY AND INCREASES FINANCIAL FLEXIBILITY EXCHANGE NEW MONEY ADDITIONAL 2ND COMMITMENT LIEN CAPACITY Exchanged US80 million of Existing New money commitment of Senior Unsecured…
Debt Reduction PROFORMA CAPITALIZATION AND LIQUIDITY IMPROVEMENT Actual Proforma 30-Jun-18 30-Jun-18 Bank Debt 71.4 51.7 Letters of Credit 11.6 11.6 Total Facility Utilized 83.0 63.3 Total Loan Facility 100.0 95.0 % Utilized…
Extending Term Debt Maturities LONG TERM DEBT MATURITY PROFILE JUNE 30, 2018 300 250 Debt maturities (C) 200 150 100 50 0 2018 2019 2020 2021 2022 2023 LONG TERM DEBT MATURITY PROFILE SEPTEMBER 11, 2018 300 250 Debt…
Value Proposition 72
Bellatrix Investment Highlights Dominant core acreage position in west central Alberta Top tier capital efficiencies and cost Spirit River represents one of North profile deliver full cycle profitability Americas lowest supply cost…
Strategic Land Position GREATER FERRIER/BRAZEAU/WILLESDEN GREEN AREAS OF WEST CENTRAL ALBERTA Pembina Brazeau Ferrier Willesden Green Bellatrix Peyto TAQA Cenovus Tourmaline Westbrick Source: Accumap, company…
Torque to Both Oil & Natural Gas Prices H1/18 Production (boe/d) Sensitivity Analysis Adjusted Funds Oil, Based on Q2/18 Financial Flow condensate Oil & liquids Results (Annualized) & NGL account for 27% 27% of Change of US1/bbl…
Strategic Objectives & Outlook Improving financial strength and value preservation in low commodity price environment 2017 2018 2019 New management team Manage capital Sustain operational levels established investment levels within…
Supplemental Information 77
Second Lien Notes Summary US87 million of 8.50% Second Lien Notes currently outstanding US notes translated to Cdn quarterly. SECOND LIEN NOTE DETAILS Closed the original private offering of US87 million of Second Lien Notes…
Senior Unsecured Notes Summary US154 million of 8.50% senior unsecured notes currently outstanding US notes translated to Cdn quarterly. SENIOR NOTE DETAILS Closed the original private offering of US250 million of senior unsecured…
Convertible Debenture Summary 50 million of 6.75% extendible unsecured subordinated convertible debentures Subordinated to bank credit facilities, senior notes and any other senior indebtedness CONVERTIBLE DEBENTURE DETAILS Issued…
Realized Natural Gas Price Premium BELLATRIXS NATURAL GAS SOLD HAS A HIGHER HEAT CONTENT THAN THE INDUSTRY AVERAGE, RESULTING IN A PREMIUM PRICE RECEIVED 0.25 12% 0.20 10% Price Premium (C/Mcf) Price Premium (%) 8% 0.15…
Strong Liability Management Bellatrixs Liability Management Rating is 10.7, more than double the industry average of 4.8, and with a top decile LMR ratio ranking within industry. Alberta uses a comparison of the licensees deemed…
Tax Pools BELLATRIX HOLDS APPROXIMATELY 1.36 BILLION IN TAX POOLS NO CASH TAXES FORECAST OVER THE NEAR TO MEDIUM TERM TAX POOLS (000s) Rate (%) June 30 2018 Intangible resource pools: Canadian exploration expenses 100 78,800…
Historical Deleveraging Activities SUCCESSFULLY RAISED OVER 450 MILLION IN THE PAST 18 MONTHS OVER MULTIPLE TRANSACTIONS WITH MINIMAL PRODUCTION DIVESTED Announcement Gross Proceeds Production sold Transaction Date MM boe/d 1…
Corporate Information BOARD OF DIRECTORS SENIOR OFFICERS BANKERS W.C. (Mickey) Dunn Brent A. Eshleman, P.Eng. National Bank of Canada Chairman President & CEO Alberta Treasury Branches The Bank of Nova Scotia Murray L. Cobbe Max Lof,…
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