Bellatrix Exploration Ltd.
Bought Angle Energy, and entered into a $240 million joint venture with TCA Energy Ltd.
Bellatrix Exploration Ltd. (TSX, NYSE MKT: BXE) announced Oct. 15 that it entered into a $240 million joint venture partnership with TCA Energy Ltd.
The same day, Bellatrix said it signed an agreement to acquire Angle Energy Inc. (TSX: NGL) for $576 million.
Bellatrix said the combination of its own top-tier asset base with Angle’s high-quality, low-cost, high working interest asset base will result in one of the largest intermediate producers in the West Central Alberta fairway. The company sees itself with a dominant and highly focused position in the Cardium and Lower Mannville.
The acquisition increases Bellatrix’s drillable inventory to more than 2,000 locations and doubles its undeveloped land base to more than 400,000 net acres.
The joint venture with TCA will have the two companies drilling and developing lands in the Ferrier Cardium area of West Central Alberta, with the program to be completed by Dec. 31, 2014.
TCA is a Canadian company backed by Troika Resources Private Equity Fund in Seoul, Korea, and managed by KDB Bank, SK Energy and Samchully AMC. Certain conditions precedent to closing, including Korean governmental regulatory approvals, are expected to be satisfied or waived to enable closing to occur on or before Nov. 15.
A previous joint venture in Korea died in June after Bellatrix said its partner company was not able to meet closing conditions.
In the new agreement, TCA will contribute $120 million, representing a 50% share, toward the capital program for the drilling of an expected 63 gross wells and will receive 35% of Bellatrix’s working interest until payout.
As part of this agreement TCA will participate in 14 gross wells of the total 63-gross-well program, for wells that have been drilled since Jan. 1, 2013, resulting in estimated net proceeds of $16.7 million to be received by Bellatrix upon closing.
After closing the JV, Bellatrix plans to review its previously announced net capital expenditure plan for 2013 of $240 million. It will utilize net proceeds from the disposition to reduce the company’s indebtedness, and ultimately will direct it to the continued development of its Cardium and Mannville asset base.
Bellatrix is focused on development of its core Cardium and Notikewin/Falher assets. It has developed an inventory of 611 net remaining Cardium locations and 378 net Notikewin/Falher locations representing net remaining capital requirements of $3.94 billion based on current costs.
As of June 30, Bellatrix has approximately 201,891 net undeveloped acres of land in Alberta, British Columbia, and Saskatchewan.