Bellatrix Closes $122 Million Notikewin/Falher, Cardium JV

Bellatrix Exploration Ltd. (NYSE: BXE) has closed a joint venture with Grafton Energy Co I Ltd. to accelerate development on a portion of Bellatrix's extensive undeveloped land holdings. The JV is in Willesden Green and Brazeau areas of West-Central Alberta. Under the terms of the agreement, Grafton will contribute 82%, or $100 million, to the $122 million JV to participate in an expected 29 Notikewin/Falher and Cardium well program. Under the agreement, Grafton will earn 54% of Bellatrix's working interest in each well drilled in the well program until payout (being recovery of Grafton's capital investment plus an 8% return on investment) 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 WI. Grafton will have until September 15, 2013 to elect on an option to increase the committed capital investment by an additional $100 million on the same terms and conditions. Grafton shall also have an additional one-time option within 12 months of the effective date to increase its exposure by an additional $50 million on the same terms and conditions. The effective date of the agreement is July 1, 2013 and has a term of 2 years. If the $50 million option is exercised, Bellatrix shall have until the end of the third anniversary of the effective date to spend the additional capital (if the $100 million option is exercised it will not result in an extension of the term of the JV).

As a result of the JV and based on the initial funding commitment, Bellatrix's updated net capital expenditure plan for 2013 is expected to be $210 to $220 million, not including Grafton capital. Based on the timing of proposed expenditures in the latter half of 2013, completion of anticipated infrastructure and normal production declines, execution of the updated 2013 capital expenditure plan is expected to provide average daily production of 23,000 to 24,000 barrels of oil per day (boe/d) and 2013 exit rate of 30,000 to 31,000 boe/d.

Bellatrix continues to consider alternative joint venture partners for the previously announced proposed Ferrier area Cardium JV as well as continuing to consider other JV partners for the company's other interests in the Cardium resource play.

The company has recently entered into three additional crude oil commodity price risk management arrangements as follows:

As at June 26, 2013, the Company has entered into commodity price risk management arrangements as follows:

(1) This crude oil call option for the period May 1 to October 31, 2013 was settled for $0.2 million.

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 692 net remaining Cardium locations and 401 net Notikewin/Falher locations representing net remaining capital requirements of $4.34 billion based on current costs. Based on the initial funding commitment, the JV represents approximately 2.7% of the aforementioned inventory. As at March 31, 2013, Bellatrix has approximately 205,113 net undeveloped acres and including all opportunities has approximately 1,700 net exploitation drilling opportunities identified, with capital requirements of $8.22 billion based on current costs representing over 40 years of drilling inventory based on current annual cash flow. The company continues to focus on adding Cardium and Notikewin/Falher prospective lands.