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Press release from CNW Group

Bellatrix Exploration Ltd. provides an update on Q2 drilling results and production, Alberta Government Royalty adjustments and credit facility extension

Tuesday, June 15, 2010

Bellatrix Exploration Ltd. provides an update on Q2 drilling results and production, Alberta Government Royalty adjustments and credit facility extension08:30 EDT Tuesday, June 15, 2010TSX: BXECALGARY, June 15 /CNW/ - Bellatrix Exploration Ltd. ("Bellatrix" or the "Company") is pleased to release the results of three new wells that were drilled in Q2 and completed and tied in during June and provide an update on Q2 production, recently announced Alberta Government Royalty adjustments and the extension of its credit facility. << Q2 Drilling Results and Plans ----------------------------- >> Bellatrix successfully drilled and completed 3 gross wells (2.67 net) to date in the second quarter of 2010; one Notikewin horizontal gas well at Ferrier and two heavy oil wells at Mantario.At Ferrier, the Company drilled their fourth successful Notikewin horizontal gas well (67% WI) to a total depth of 4,006 meters; horizontal length was 1,367 meters. The well was fracture stimulated in 17 stages and had an initial gas test rate of over 16 mmcf/d gross at 3,200 psi flowing tubing pressure following recovery of nitrogen load gas. Bellatrix tied the well in and it was placed on production in early June at an initial restricted rate of 2.5 mmcf/d with 35 to 40 bbls of liquids per mmcf.At Mantario, Bellatrix drilled and completed two 100% WI McLaren heavy oil wells, at depths of 905 and 915 meters; the first well was completed and placed on production at an initial rate of 125 bopd; the second well completion is underway. The Company has an inventory of an additional 14 drilling locations at Mantario.Bellatrix plans to drill 8 (5.57 net) additional horizontal Notikewin wells in 2010 at Brazeau, Pembina and Willesden Green.The Company's Cardium development program was resumed in June following spring break up; the Company has spud the first of 17 (8.76 net) remaining 2010 operated and non-operated Cardium horizontal wells. The Cardium development program will expand on the Company's earlier successes at West Pembina, Lodgepole and Willesden Green.At Frog Lake, Bellatrix plans to drill a up to 3 new heavy oil wells at an average 25.8% WI as follow up to four gross (0.55 net) McLaren heavy oil wells that were drilled in the first quarter 2010 that are producing at a gross average of 70 boe/d per well.The Company is on track to fulfill their drilling goals for the remainder of 2010; Bellatrix expects to drill 28 additional gross wells (15.11 net) in the remaining quarters of 2010.Bellatrix continues to develop a stronger presence in the prolific oil and liquids rich gas focus in the Cardium and Notikewin zones at Ferrier and Pembina; the Company has increased its land holdings by over 16.25 gross (8.24 net) sections in the quarter and acquired a strategic length of pipeline that opens additional production capacity for future gas development in the area. Current development plans also include the planning and installation of four to five additional sections of pipeline that will ensure that the Company can continue to develop their oil and gas assets in the area.Specifically at Ferrier, the Company acquired 10.0 gross sections (3.25 net) of land with Notikewin gas potential under farm-in for a non-converting overriding royalty; we expect to spud the first of two commitment wells in August.At Brazeau, Bellatrix recently closed a $3.2 million acquisition which included approximately 55 boe/d of net production along with an interest in an additional two sections (0.74 net) of land and the acquisition of facilities and an 8 km section of pipeline.At Lodgepole, the Company acquired 4.25 (4.25 net) sections of Cardium rights under farm-in for a non-converting overriding royalty and expects to spud the first Cardium horizontal commitment well in July/August. << Q2 Production ------------- >> Bellatrix estimates second quarter 2010 average production at approximately 7,800 boe/d which has increased from the first quarter 2010 average production of 7,248 boe/d. Second quarter 2010 production was impacted by delays in bringing new wells on production due to a shortage of stimulation equipment and fracture fluids, early onset of road bans truncating our drilling program earlier than expected, unplanned plant outages and generally wet field conditions.Bellatrix is currently building addition infrastructure at Ferrier and Willesden Green that creates increased flow capacity for the Company in these areas. Construction is expected to be completed over the next 30 days. The Company has over 1,000 boe/d of restricted oil and gas production that will be brought on stream following the completion of current projects.Commencing the week of June 14, 2010, the Company is producing 1,660 bbls/d of crude oil, 670 bbls/d of natural gas liquids and 34 mmcf/d of natural gas yielding approximately 8,000 boe/d.Bellatrix's production guidance for 2010 remains unchanged at an average daily production rate of approximately 8,500 boe/d and an exit rate of approximately 10,000 boe/d. << Alberta Government Royalty Adjustments -------------------------------------- >> On May 27, 2010, the Alberta Government released an update to the 2010 Alberta Fiscal Framework first announced March 11, 2010. New horizontal and gas incentive programs directly benefit Bellatrix's prospect inventory and drilling plans. The Company's horizontal Cardium well inventory planning at Pembina now qualifies for an expanded New Well Royalty Reduction (the maximum 5% royalty rate was extended from 12 months to between 18 to 36 months and the maximum volume limit was increased from 50 to 100 mboe). The horizontal Notikewin well drilling inventory planned at Pembina and Willesden Green now qualifies for both the extended New Well Royalty Reduction period (maximum 5% royalty rate extended from 12 to 18 months) and Natural Gas Deep Drilling Program incentive (up to $1 million in additional royalty reduction per well). Collectively, these royalty incentives significantly improve Bellatrix's project economics. Rate of return is increased, payout is reduced, and growth and reinvestment are accelerated. << Credit Facilities Update ------------------------ >> On June 8, 2010, Bellatrix executed an amending agreement with its banking syndicate that provided for the extension of the revolving period of its existing credit facility from June 29, 2010 to June 28, 2011. Amounts borrowed under the credit facility will bear interest at a floating rate based on the applicable Canadian prime rate, U.S. base rate or LIBOR rate, plus between 1.25% and 4.25%, depending on the type of borrowing and the Company's debt to cash ratio. As previously reported, on March 31, 2010, the borrowing base level was confirmed at $85 million through to the next borrowing base determination on November 30, 2010.Bellatrix Exploration Ltd. is a growth oriented exploration and production company based in Calgary, Alberta, Canada.Forward looking statements: Certain information set forth in this news release, including management's assessments of the future plans and operations including drilling and facilities plans, production rates for new wells and timing thereof and the effect of royalty and incentive changes may contain forward-looking statements, and necessarily involve risks and uncertainties, certain of which are beyond Bellatrix's control, including risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets and other economic and industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling services, incorrect assessment of value of acquisitions and failure to realize the benefits therefrom, delays resulting from or inability to obtain required regulatory approvals, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources and economic or industry condition changes. Actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that Bellatrix will derive therefrom. Additional information on these and other factors that could affect Bellatrix are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com), or at Bellatrix's website www.bellatrixexploration.com. Furthermore, the forward-looking statements contained in this news release are made as of the date of this news release, and Bellatrix does not undertake any obligation to update publicly or to revise any of the included forward looking statements, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities law.BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.For further information: BELLATRIX EXPLORATION LTD., Raymond G. Smith, P.Eng., President & CEO, (403) 750-2420; Edward J. Brown, CA, Vice President, Finance & CFO, (403) 750-2655; Troy Winsor, Investor Relations, (800) 663-8072