Bellatrix Exploration Ltd. (NYSE: BXE) is selling noncore assets to infuse capital into its Spirit River Play in Western Canada's Deep Basin, the Calgary, Alberta-based company said June 14.
An undisclosed company agreed to buy Bellatrix's noncore assets located in the Strachan area of Alberta for C$34.5 million (US$26 million) in cash. The sale is consistent with Bellatrix's strategy to maintain a focused and concentrated asset base, while strengthening the balance sheet, according to a company press release.
Based on field estimates in June, Bellatrix's Strachan asset has average production volumes of about 1,750 barrels of oil equivalent per day (boe/d), of which 70% is natural gas weighted. As a result, the company said it pegs the flowing barrel metric at $19,700 per boe/d.
Bellatrix said it plans on reviewing its full year 2017 capex upon closing the transaction with the intention to reinvest a portion of the proceeds from the sale into its Spirit River liquids-rich natural gas play to maintain current production volume guidance.
In first-quarter 2017, Bellatrix drilled and/or participated in nine gross (7.8 net) Spirit River wells. The first two Spirit River wells completed in Bellatrix's 2017 program ranked as the best wells in Alberta during February, the company said May 10.
Any remaining proceeds from the sale will be used to reduce outstanding debt, which at March 31 totaled C$41.5 million, the release said.
Bellatrix said it expects to close the Strachan asset sale by June 30, subject to customary closing conditions. (US$1 = C$1.33)