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June 2019 Corporate Presentation – Bellatrix Exploration Ltd.

Bellatrix Exploration Ltd. · Jun 10, 2019 · 45 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. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 1
    Corporate Presentation JUNE 2019 1
  2. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 2
    Bellatrix Investment Highlights Dominant core acreage position in Top tier capital efficiencies and cost west central Alberta profile deliver full cycle profitability Spirit River represents one of North Asset portfolio provides…
  3. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 3
    Corporate Profile MARKET SUMMARY Ticker Symbol TSX : BXE Average Daily Volume1 75,000 Shares Outstanding2 40.9 million basic / 41.2 million diluted Market Capitalization3 81 million Bank Debt4 47 million Second Lien Notes due 20235…
  4. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 4
    Strategic Objectives & Outlook Improving financial strength and value preservation in low commodity price environment 2017 2018 2019 New management team Manage capital Advance debt refinancing established investment levels within…
  5. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 5
    2019 Guidance & First Quarter Results STRONG OPERATIONAL PEFORMANCE IN THE FIRST QUARTER RELATIVE TO ANNNUAL GUIDANCE EXPECTATIONS1 2019 ANNUAL ACTUAL RESULTS FIRST THREE MONTH GUIDANCE VERSUS MIDPOINT 2019 RESULTS (JAN 15, 2019)…
  6. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 6
    Macro Conditions Macro Current Situation Potential Improvements Conditions AECO basis Reflects changes initiated in July 2017 to Capacity expansions add over 2.1 the operating methodology used by the Bcf/d of incremental export capacity…
  7. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 7
    AECO Basis Differential AECO Basis Differential (US/MMBtu) 1.00 0.50 Historical Forecast 0.00 (0.50) (1.00) (1.50) Historical average (Jan 2003 to May 2018) (2.00) US0.80/MMBtu (2.50) (3.00) The AECO market was…
  8. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 8
    AECO Natural Gas Expansion Projects Underway ADDITIONAL EXPORT CAPACITY BEING DEVELOPED OUT OF THE CANADIAN BASIN Effective Capacity (MMcf/d) 2017A 2018 2019E 2020E 2021E 2022E 2023E 2024E In Service Alliance 1,800 1,800 1,800 1,800…
  9. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 9
    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…
  10. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 10
    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…
  11. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 11
    Commodity Price Risk Management & Diversification NATURAL GAS MARKET DIVERSIFICATION & FIXED PRICE HEDGING COVERAGE 70% % of total forecast 2019 gas volumes 60% 50% 40% 30% 20% 10% 0% Q2/19 Q3/19 Q4/19 Q1/20 Q2/20…
  12. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 12
    Growing High Value Liquids Growing NGL Volumes & High Value Condensate 55.00 100% Corporate NGL yield (bbl/MMcf) 90% Light oil Product % of total crude oil & condensate volumes (bbl/d) 50.00 80% 70% 45.00 60% 50% 40.00…
  13. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 13
    Recapitalization Transaction COMPLETED JUNE 4, 2019 Total outstanding debt reduced by approximately 110 million (approximately 23%) Term debt maturities extended until 2023 Annual cash interests payments reduced by approximately 12…
  14. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 14
    Debt Maturity Profile MATURITY PROFILE - MARCH 31, 2019 1 Credit Facilities Second Lien Notes 350 Second Lien Note Matures in May 2020 if Senior Notes Principal Amount (Cmm) 300 134.8 Senior Unsecured balance is not below US…
  15. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 15
    Diversified Balance Sheet & Financial Flexibility Actively exploring refinancing opportunities and additional sources of liquidity BANK DEBT 47MM CREDIT FACILITY LONG TERM DEBT AT MARCH 31, 2019 FINANCIAL COVENANTS MATURITIES 5.0 300…
  16. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 16
    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…
  17. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 17
    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 oil-to-gas…
  18. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 18
    Pre-eminent Capital Efficient Operator in the WCSB BXE BEST IN CLASS ON 2018 ALL-IN CAPITAL EFFICIENCY 45,000 All-in capital efficiencies, excl. A&D (/boe/d) 40,000 35,000 30,000 25,000 20,000 15,000 10,000…
  19. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 19
    Bellatrixs Spirit River Play BXE Land Sections1 GREATER FERRIER AREA CORE SPIRIT RIVER PLAY 198 Gross 118 Net BXE Net Drilling Inventory2 105 proved 27 probable 250 unbooked 382 total True vertical formation depth 2,250 meters…
  20. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 20
    Spirit River Geology Summary Broad, thick, extensive sand rich valleys SPIRIT RIVER STACKED SANDS in Notikewin, Falher and Wilrich members One square Tight sandstone: long life reserves with mile section long term hyperbolic decline…
  21. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 21
    Comparing Premier Resource Plays Spirit River Montney Duvernay Tight Conventional Siltstone Shale Sandstone BXE Typical Reservoir Porosity 6 to 18%; Porosity 0.6 to 8%; Porosity 2 to 8%; Permeability 1 to 3 mD Permeability…
  22. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 22
    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 10…
  23. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 23
    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…
  24. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 24
    Spirit River Type Curves SPIRIT RIVER 5.2 & 6.0 BCF TYPE CURVES Bellatrix Spirit River Economics 9 Economic Assumptions 5.2 Bcf 6.0 Bcf Liquids (bbl/MMcf) Gross CAPEX (DCE&T, MM) 3.4 3.4 8 Gross Natural Gas IP30 (MMcf/d) 6.6 6.3…
  25. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 25
    Spirit River All-In Profitability 5.2 Bcf Type Curve C1.50/GJ C2.50/GJ Full Cycle F&D costs Drill 1.5MM Full cycle F&D costs /Mcfe (0.71) (0.71) Complete 1.4MM Equip & tie in 0.5MM Half cycle costs 3.4MM Land/seismic/facilities…
  26. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 26
    Delivering on our Objectives RESULTS OUTPERFORMING EXPECTATIONS 14 12 10 Producing Day Volumes (MMCF/d) 8 6 4 2 0 0 30 60 90 120 150 180 210 240 270 300 330 360 390 420 450 480 510 540 570 600 630 660 690 720…
  27. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 27
    Enduring Efficiency Gains on Drill Times AVERAGE SPIRIT RIVER DRILLING CURVES DAYS SPUD TO RIG RELEASE BY YEAR 0 20 Days (Spud to Rig Release) 2014 Spirit River Average 500 15 2015 Spirit River Average 1,000 10 2016 Spirit…
  28. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 28
    Spirit River Well Costs & Capital Efficiencies FOCUSED CAPITAL COST REDUCTIONS 6.0 Long Reach Long Reach 5.0 Long Reach 4.0 Long Reach Costs (millions) Equip & Tie-in 3.0 Complete 2.0 Drill 1.0 0.0 2016…
  29. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 29
    Bellatrix Focused Spirit River Growth SPIRIT RIVER PRODUCTION GROWTH 80% 2010 32,000 70% 28,000 Spirit River % of Total Company Volumes Spirit Average Monthly Production (boe/d) 60% River 2018 New 24,000 2014 Drill…
  30. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 30
    Cost Reductions Achieved 45% 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 Q3/18 Q4/18 Q1/19 37% REDUCTION IN…
  31. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 31
    Low Cost FD&A Performance 6.00 FD&A costs (/boe) 5.00 4.00 3.00 2.00 1.00 0.00 2018 2017 3 Year Avg 2018 2017 3 Year Avg ('16-'18) ('16-'18) FD&A Costs Including Plant Capital FD&A Costs Excluding Plant Capital PDP FD&A…
  32. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 32
    Representative Spirit River Inventory Required to Maintain Production Volumes Approximately 12-15 net (5.2 Bcf type curve) Spirit River wells1 per year maintains production in the high 30 mboe/d range through 2023 Alternatively,…
  33. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 33
    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)…
  34. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 34
    Greater Ferrier Area Infrastructure Overview GREATER FERRIER AREA STRATEGIC INFRASTRUCTURE GREATER FERRIER EXISTING INFRASTRUCTURE ACCESS: Infrastructure gives Bellatrix control of production and growth Working interest or operatorship…
  35. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 35
    Material Facilities & Infrastructure Value MAJOR FACILITIES & INFRASTRUCTURE VALUE 190MM NET TO BXE 200 11MM 180 9MM 29MM 160 Estimated Value (MM) 140 87MM 120 100 80 60 40 55MM 20 0 BXE Alder Flats Plant Major…
  36. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 36
    Drill Bit Focused PLANT PHASE 2 CONSTRUCTION COMPLETE MARCH 2018 Major compressor stations, pipelines and Bellatrix Alder Flats Plant capital investment completed Proportion of incremental capital to drilling & completion expected to…
  37. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 37
    Ample Takeaway Capacity & Market Egress ALBERTA NATURAL GAS MARKET EGRESS AMPLE FIRM TRANSPORTATION IN PLACE FOR CURRENT & GROWTH ALBERTA VOLUMES Firm Transportation (FT) agreements in place for gross operated volumes at multiple…
  38. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 38
    Supplemental Information 39
  39. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 39
    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 Sweet, light gravity crude oil 6,200 ft TVD Cardium Multi-zone hydrocarbon…
  40. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 40
    Cardium Light Oil Resource Play BXE Land Sections1 176 Gross 117 Net BELLATRIX Activity Since Jan 2017 5 Wells Drilled BXE Net Drilling Inventory2 105 proved 22 probable 124 unbooked 251 total Cardium Resource Play Summary…
  41. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 41
    Strategic Land Position GREATER FERRIER/BRAZEAU/WILLESDEN GREEN AREAS OF WEST CENTRAL ALBERTA Pembina Brazeau Ferrier Willesden Green Source: Accumap, company presentations and various public sources 42
  42. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 42
    AER Calculated LMR 0 4 8 12 16 20 24 28 LMR as at April 6, 2019 Advantage Oil and Gas Ltd. Birchcliff Energy Ltd. Pengrowth Bellatrix Exploration Ltd. Torc Oil and Gas Ltd. NuVista Energy Ltd. Kelt…
  43. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 43
    Bellatrix Environmental Metrics DIRECT GHG EMISSIONS FLARED & VENTED GAS 0.55 8,000 e3m3/year 6,000 0.50 4,000 Tonnes CO2e (millions) 2,000 0 0.45 2015 2016 2017 2018 Flared Gas Vented Gas 0.40 REPORTABLE RELEASES…
  44. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 44
    Operational Execution Scorecard Production expense reductions 45% reduction in production expenditures to a record low reported level of 5.83/boe in Q1/19 from 10.57/boe in Q4/16 Capital cost reductions 20% reduction in all-in well…
  45. June 2019 Corporate Presentation – Bellatrix Exploration Ltd. – slide 45
    Corporate Information BOARD OF DIRECTORS SENIOR OFFICERS BANKERS Cody Church Brent A. Eshleman, P.Eng. National Bank of Canada President & CEO Alberta Treasury Branches Todd Dillabough, B.Sc. Canadian Western Bank Max Lof, CFA Brent A.…

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