Bellatrix Exploration Ltd. (NYSE: BXE) has announced that Grafton Energy Co. I Ltd. has elected to exercise their option to increase their committed capital investment by an additional $50 million, for a total commitment of $250 million, on the same terms and conditions as the previously announced joint venture. Grafton's increased capital investment will continue to support the accelerated development of a portion of Bellatrix's extensive undeveloped land holdings.
The Grafton JV is located in the Willesden Green and Brazeau areas of West-Central Alberta. Under the terms of the amended agreement prior to the exercise of this option, Grafton was committed to contributing 82%, or $200 million, to the $244 million JV to participate in an expected 58 net Notikewin/Falher and Cardium well program. Under the agreement, Grafton will earn 54% of Bellatrix's working interest in each well drilled in the development program until payout (being recovery of Grafton's capital investment plus an 8% return) on the total program, reverting to 33% of Bellatrix's working interest (WI) after payout. At any time after payout of the entire program, Grafton shall have the option to elect to convert all wells from the 33% WI to a 17.5% Gross Overriding Royalty on Bellatrix's pre-JV working interest. The effective date of the initial agreement for the JV is July 1, 2013 and had an initial term of two years. With the exercise of the $50 million option, Bellatrix shall have until the end of the third anniversary of the effective date to spend the additional capital.
Calgary-based Bellatrix continues to focus on growth by development of its core Cardium and Notikewin/Falher assets utilizing its large inventory of geological prospects. The company has developed an inventory of 742 net remaining Cardium locations, 381 net Notikewin/Falher and 128 Mannville locations representing a net remaining investment of $4.97 billion (based on current costs). Bellatrix has approximately 416,631 net undeveloped acres and including all opportunities of approximately 2,000 net exploitation drilling opportunities identified, with capital requirements of $10.1 billion representing over 30 years of drilling inventory based on current annual cash flow and costs.
Recommended Reading
Defeating the ‘Four Horseman’ of Flow Assurance
2024-04-18 - Service companies combine processes and techniques to mitigate the impact of paraffin, asphaltenes, hydrates and scale on production — and keep the cash flowing.
Tech Trends: AI Increasing Data Center Demand for Energy
2024-04-16 - In this month’s Tech Trends, new technologies equipped with artificial intelligence take the forefront, as they assist with safety and seismic fault detection. Also, independent contractor Stena Drilling begins upgrades for their Evolution drillship.
AVEVA: Immersive Tech, Augmented Reality and What’s New in the Cloud
2024-04-15 - Rob McGreevy, AVEVA’s chief product officer, talks about technology advancements that give employees on the job training without any of the risks.
Lift-off: How AI is Boosting Field and Employee Productivity
2024-04-12 - From data extraction to well optimization, the oil and gas industry embraces AI.
AI Poised to Break Out of its Oilfield Niche
2024-04-11 - At the AI in Oil & Gas Conference in Houston, experts talked up the benefits artificial intelligence can provide to the downstream, midstream and upstream sectors, while assuring the audience humans will still run the show.