Bellamont Exploration Ltd. Announces December 31, 2011 Year End Reserves

/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

CALGARY, Feb. 14, 2012 /CNW/ - Bellamont Exploration Ltd. (the "Corporation" or "Bellamont") (TSXV: BMX.A) (TSXV: BMX.B) is pleased to provide a summary of its 2011 year end reserves evaluation.

HIGHLIGHTS

  • Increased proved plus probable reserves by 2.4 million Boe (61% oil and NGL), an increase of 19% on a per share basis to a total of 13.7 million Boe (47.5 oil and NGL) with a net present value $168.0 million (@NPV10% before tax);
  • Reserve replacement was 342% on proved plus probable and 140% on proved reserves;
  • Based on $22.6 million of net capital expenditures in 2011, incurred finding, development and acquisitions ("FD&A") costs on a proved plus probable basis of $7.46/Boe when excluding future development capital and $14.49/Boe when including changes in future development capital;
  • Three year average FD&A costs on a proved plus probable basis of $11.34/Boe when excluding future development capital and $14.34/Boe, when including changes in future development capital; and
  • Based on an estimated operating netback of approximately $28/Boe in 2011, Bellamont's recycle ratio is:
    • 1.9X on 2011 proved plus probable FD&A costs, when including changes in future development capital; and
    • 2.0X on the three year average proved plus probable FD&A costs, when including future development capital.

OIL & GAS RESERVES

The Corporation's December 31, 2011 reserves were independently evaluated by GLJ Petroleum Consultants Ltd. ("GLJ") in accordance with NI 51-101. The reserve information presented herein utilizes GLJ's January 1, 2012 price forecast and cost assumptions.  Readers are cautioned that certain financial estimates contained herein are unaudited.

Reserves Summary
  Light and Medium Oil Natural Gas Natural Gas Liquids Total Oil
Equivalent
  Corporate
Gross
Mbbl(1)
Corporate
Net
Mbbl(2)
Corporate
Gross
MMcf(1)
Corporate
Net
MMcf(2)
Corporate
Gross
Mbbl(1)
Corporate
Net
Mbbl(2)
Corporate
Gross
Mbbl(1)
Corporate
Net
Mbbl(2)
PROVED                
  Developed
Producing
2,180 1,750 12,959 11,289 253 163 4,592 3,794
  Developed
Non-Producing
27 25 125 116 3 2 51 46
  Undeveloped 877 763 6,498 5,888 152 111 2,112 1,856
TOTAL PROVED 3,083 2,537 19,582 17,294 409 276 6,755 5,696
TOTAL PROBABLE 2,481 1,958 23,428 20,806 524 357 6,910 5,782
TOTAL PROVED PLUS
PROBABLE(3)
5,564 4,495 43,010 38,099 933 633 13,665 11,478

Net Present Value of Future Net Revenue of Oil and Gas Reserves
  Net Present Values of Future Net Revenue Before Income Taxes
Discounted At (%/year)
                   
  0%   5%   10%   15%   20%
Reserves Category (M$)   (M$)   (M$)   (M$)   (M$)
                   
PROVED                  
  Developed Producing 136,913   102,584   82,855   69,963   60,856
  Developed Non-Producing 1,905   1,443   1,123   895   727
  Undeveloped 39,702   23,913   14,251   7,984   3,725
TOTAL PROVED 178,520   127,940   98,229   78,843   65,309
TOTAL PROBABLE 199,230   110,528   69,744   47,675   34,338
TOTAL PROVED PLUS PROBABLE(3) 377,749   238,468   167,973   126,518   99,646

(1) "Corporate Gross" reserves means Bellamont's working interest share before deduction of royalties and without including any royalty interests owned by Bellamont
(2)  "Corporate Net" reserves means Bellamont's working interest share after deduction of royalties and including royalty interests owned by Bellamont
(3) Due to rounding, certain columns may not add exactly

Corporate Gross Reserve Reconciliation for 2011
             
    Proved
(MBoe)
  Probable
(MBoe)
  Proved +
Probable
(MBoe)
December 31, 2010 Opening Balance   6,402   5,118   11,520
Drilling Extensions and discoveries   960   1,640   2,600
Infill drilling   204   95   299
Technical Revisions   (56)   (438)   (494)
Acquisitions Less Dispositions   133   495   628
Production   (888)   0   (888)
December 31, 2011 Closing Balance   6,755   6,910   13,665
             

2010 FINDING AND DEVELOPMENT COSTS 

NI 51-101 specifies how finding and development ("F&D") costs should be calculated if they are to be reported.  NI 51-101 requires that the total of the exploration and development costs incurred in the most recent financial year together with the change in future development costs during the most recent financial year be divided by the reserve additions for such year.  The costs are to be reported on both a proved and a proved plus probable basis, after eliminating the effects of acquisitions and dispositions.  Bellamont has chosen to report its F&D costs using the two following methods: 1) after eliminating the effects of acquisitions and disposition; and 2) including the effect of acquisitions and dispositions ("FD&A").  In addition, we have shown the F&D costs for the three year average from 2009 to 2011.

          

  2011   Three Year Average
(2009-2011)
  Total Proved Proved Plus
Probable
  Total Proved Proved Plus
Probable
Exploration and Development
Expenditures (M$) (1)
$24,426 $24,426   $72,804 $72,804
Net Acquisitions Expenditures (2) -$1,786 -$1,786    $75,135 $75,135
           
Reserve Additions (mBoe) (3)
- Exploration and Development (4)
- Acquisitions (5)
 
1,108
133
 
2,405
628
 
 
 
 
3,974
3,860
 
6,457
6,587
           
Finding and Development Costs ($/Boe) (6)
- Excluding FDC
- Including FDC
 
$22.05
$38.11
 
$10.16
$19.01
 
 
 
 
$18.32
$22.84
 
$11.28
$17.32
           
Acquisition Costs ($/Boe) $13.43 -$2.84   $19.47 $11.41
           
Finding, Development and Acquisition Costs ($/Boe)
- Excluding FDC
- Including FDC
 
$18.24
$32.58
 
$7.46
$14.49
 
 
 
 
$18.88
$21.18
 
$11.34
$14.34

(1) Exploration and development expenditures exclude capitalized administration costs
(2) Net Acquisitions Expenditures include property acquisitions of $7.5 million less property dispositions of $9.6 million
(3) Gross Corporation interest reserves are used in this calculation (interest reserves before deduction of any royalties and without including any royalty interests of the Corporation)
(4) Includes Technical Revisions
(5) Includes production from acquisitions during the applicable time period
(6) Total exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs generally do not reflect the total costs of reserve additions for that year
   

Bellamont continued its track record of reserves growth per share in 2011 despite the removal of 1.34 million Boe (~79% natural gas) from preliminary estimates, due to a reduced natural gas price forecast at year end. Since the corporation's first year end in 2006, Bellamont has grown its reserves at a compound annual growth rate of 36% per share. Management and the directors would like to thank the staff of Bellamont for all of their contributions over the last five years.  The growth rate of the corporation could not have been achieved without their dedication and hard work.

FORWARD LOOKING STATEMENTS

This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. More particularly and without limitation, this press release contains forward looking statements and information concerning the performance characteristics of Bellamont's oil and natural gas properties, oil and natural gas production levels and the quantity of oil and natural gas reserves. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ from those anticipated.  These risks include, but are not limited to: the risks associated with the oil and gas industry (e.g. operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price, price and exchange rate fluctuation and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures.  Additional information on these and other factors that could affect Bellamont's operations or financial results are included in Bellamont's reports on file with Canadian securities regulatory authorities.

The forward-looking statements or information contained in this news release are made as of the date hereof and Bellamont undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

It should not be assumed that the undiscounted or discounted net present value of future net revenue attributable to the Corporation's reserves estimated by GLJ represent the fair market value of those reserves.

Oil and Gas Advisory

This press release contains disclosure expressed as "Boe". All oil and natural gas equivalency volumes have been derived using the ratio of six thousand cubic feet of natural gas to one barrel of oil. Equivalency measures may be misleading, particularly if used in isolation. A conversion ratio of six thousand cubic feet of natural gas to one barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the well head.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. Not for distribution to U.S. newswire services or for dissemination in the United States.  Any failure to comply with this restriction may constitute a violation of U.S. securities law.

 

SOURCE Bellamont Exploration Ltd.

For further information:

Steve Moran, President and Chief Executive Officer, (403) 802-1355; or
Tavis Carlson, Vice President Finance and Chief Financial Officer (403) 802-0117
1208, 250- 2nd Street S.W. Calgary, Alberta T2P 0C1
Email: info@bellamont.com
www.bellamont.com

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