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
North American LNG Exports Surge: Texas Fuels Mexico’s Growth
2024-11-05 - Mexico is finally getting its feet off the ground with LNG exports, joining the U.S. to make North America an LNG exporting powerhouse.
Diversified Inks NatGas Supply Contract with Gulf Coast LNG Facility
2024-10-24 - Diversified Energy will supply 40 Bcf to an unnamed Gulf Coast LNG facility over a three-year period.
Shell and Argentina’s YPF Agree on $50B LNG Development
2024-12-19 - Shell and YPF say they will partner to build the first LNG export project in Argentina.
Suez Canal Economic Zone Set for Rapid Expansion: Chairman
2024-11-05 - Egypt's Suez Canal Economic Zone is a collection of six ports and four industrial areas alongside, or near the waterway.
LNG Tanker Docks at Venture Global’s Plaquemines LNG Terminal
2024-11-18 - The FERC recently gave Venture Global’s Plaquemines LNG facility permission to use natural gas.