Bellamont Exploration Ltd. announces December 31, 2008 year end results


    CALGARY, April 1 /CNW/ - Bellamont Exploration Ltd. (the "Corporation" or
"Bellamont") (TSXV:BMX.A) (TSXV:BMX.B) is pleased to provide a summary of its
2008 year end results.


    -   Finding and development costs of $10.84/Boe on proved plus probable
        reserve additions, excluding changes in future development capital;
    -   Increased proved plus probable reserves by 101% (54% on a per share
        basis) to a total of 2.65 million Boe worth $36.3 million (@NPV10%
        before tax);
    -   Reserve replacement was 450% on proved reserves and 867% on proved
        plus probable;
    -   Net Asset Value at year-end 2008 of $0.80 per fully diluted Class A
        common share (for calculation, see section entitled "Net Asset
    -   $4.56 million working capital surplus at year end 2008, plus
        unutilized line of credit of $7.25 million;
    -   Drilled 9 wells (5.5 net) adding 265 Boe/d of initial production at
        $28,000/Boe/d resulting in:
           -  4 (3.2 net) oil well;
           -  4 (1.8 net) gas wells;
           -  1 (0.5 net) abandonment;
    -   Success rate of 89%;
    -   Performed 9 (6.1 net) recompletions and workovers adding 165 Boe/d of
        initial production at $15,000/Boe/d;
    -   Increased average production 328% from 2007 to 475 Boe/d;
    -   Fourth quarter production averaged 634 Boe/d;
    -   Current production of 725 Boe/d with an estimated 350 Boe/d behind
        pipe, 225 Boe/d of which will be placed on production in April 2009;
    -   Based on $19.7 million of capital spending in 2008, incurred finding,
        development and acquisitions ("FD&A") costs on a proved plus probable
        basis of:
           -  $12.91/Boe when excluding changes in future development
           -  $17.79/Boe when including changes in future development
    -   Based on an operating netback of $32.50, achieved a recycle ratio of
        3.0 on proved plus probable finding and development costs;
    -   Increased gross undeveloped lands by 47% to 67,478 acres (39,797
        net), including an average of 63.2% working interest in 45,915 gross
        acres located in the Peace River Arch area of Alberta;
    -   Approved a 2009 capital budget of $7.0 million to be financed with
        working capital, 2009 cash flow and supplemented with the unutilized
        line of credit
    -   Expected to exit 2009 with production exceeding 900 Boe/d and to
        average 825 Boe/d during the year


    The Corporation's December 31, 2008 reserves were independently evaluated
by GLJ Petroleum Consultants ("GLJ") in accordance with National Instrument
51-101 ("NI 51-101"). The reserve information presented herein utilizes GLJ's
January 1, 2009 price forecast and cost assumptions.
    The reserve data provided in this release represents only a portion of
the disclosure required under NI 51-101. All of the required disclosure
information will be contained in the Corporation's Annual Information Form to
be filed with System for Electronic Document Analysis and Retrieval ("SEDAR")
before the end of April 2009 and which will be accessible electronically at

                              Reserves Summary
                               Light and Medium Oil         Natural Gas
                               Corporate   Corporate   Corporate   Corporate
                                   Gross         Net       Gross         Net
                                  Mbbl(1)     Mbbl(2)     MMcf(1)     MMcf(2)
      Producing                      362         291       2,828       2,287
      Developed Non-Producing          -           -       2,160       1,489
      Undeveloped                     21          12           -           -
    TOTAL PROVED                     383         303       4,988       3,776
    TOTAL PROBABLE                   725         507       3,908       2,946
     PROBABLE(3)                   1,108         810       8,896       6,722

                              Reserves Summary
                                Natural Gas Liquids    Total Oil Equivalent
                               Corporate   Corporate   Corporate   Corporate
                                   Gross         Net       Gross         Net
                                  Mbbl(1)     Mbbl(2)     Mbbl(1)     Mbbl(2)
      Producing                       21          13         854         685
      Developed Non-Producing         12           7         372         255
      Undeveloped                      -           -          21          12
    TOTAL PROVED                      33          20       1,247         953
    TOTAL PROBABLE                    30          19       1,406       1,017
     PROBABLE(3)                      63          40       2,654       1,970

       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$)
      Producing                       25,449  21,344  18,489  16,387  14,766
      Developed Non-Producing          6,827   5,610   4,733   4,078   3,574
      Undeveloped                        169      74       5     -44     -81
    TOTAL PROVED                      32,495  27,027  23,227  20,421  18,258
    TOTAL PROBABLE                    33,026  20,093  13,088   8,796   5,959
    TOTAL PROVED PLUS PROBABLE(3)     65,521  47,120  36,316  29,217  24,218

    (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
    (3) Numbers may not add up due to rounding

               Corporate Gross Reserve Reconciliation for 2008
                                                                    Proved +
                                              Proved    Probable    Probable
                                               (MBoe)      (MBoe)      (MBoe)
    December 31, 2007 Opening Balance            638         681        1319
    Extensions                                   370         547         917
    Improved Recovery                              0         149         149
    Technical Revisions                          178         (69)        109
    Acquisitions                                 235          99         334
    Production                                  (174)          0        (174)
    December 31, 2007 Closing Balance           1247        1407        2654


    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 cost 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 2007 and since the Corporation's inception (December 7,

                             2008              2007         Since Inception
                                 Proved            Proved            Proved
                        Total     Plus    Total     Plus    Total     Plus
                        Proved  Probable  Proved  Probable  Proved  Probable
    Exploration and
     Expenditures (M$)  $12,737  $12,737  $16,227  $16,227  $31,231  $31,231
     Expenditures(1)     $6,956   $6,956   $4,026   $4,026  $14,086  $14,086

    Change in Future
     Costs (M$)            $777   $7,444    ($208)  $3,398   $1,937  $14,337

    Reserve Additions
      - Exploration
       and Development(3)   548     1175      131      416      836     1845
      - Acquisitions(4)     252      351      346      535      655     1050

    Finding and
     Development Costs
      - Excluding FDC    $23.24   $10.84  $123.87   $39.01   $37.36   $16.93
      - Including FDC    $24.66   $17.18  $122.28   $47.17   $39.67   $24.70

    Acquisition Costs
     ($/Boe)             $27.66   $19.84   $11.65    $7.52   $21.50   $13.41

    Finding, Development
     and Acquisition
     Costs ($/Boe)
      - Excluding FDC    $24.63   $12.91   $42.50   $21.29   $30.39   $15.65
      - Including FDC    $25.60   $17.79   $42.07   $24.86   $31.69   $20.61

    (1) The capital expenditures include the purchase price of corporate
        acquisitions rather than the amounts allocated to property, plant and
        equipment for accounting purposes. The capital expenditures also
        exclude capitalized administration costs and acquisition costs.
    (2) 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).
    (3) Includes Technical Revisions.
    (4) Includes production from acquisitions during the applicable time
    (5) Total exploration and development costs incurred in the most recent
        financial year and the change during that year in estimated future
        development costs generally not reflect the total costs of reserve
        additions for that year.


    The following table provides a calculation of the Corporations net asset
value based on the estimated future net revenue associated with Bellamont's
proved plus probable reserves discounted at 10% as presented in the December
31, 2008 reserve report as evaluated by GLJ.

                                                      Before Tax   After Tax
                                                       Value (M$)  Value (M$)
    Proved plus probable reserves - discounted
     at 10%(1)                                           $36,316     $31,756
    Undeveloped land value(2)                             $3,980      $3,980
    Working capital as of December 31, 2008               $4,564      $4,564
    Net asset value (basic shares outstanding)           $44,860     $40,300
    Proceeds from stock options                             $494        $494
    Net asset value (fully diluted)                      $45,354     $40,794
    Net asset value per share Class A Share(3)             $1.02       $0.91
    Net asset value per fully diluted Class
     A Share(4)(5)                                         $0.80       $0.72

    (1) Utilizes GLJ's January 1, 2009 price forecast
    (2) Internal estimate, equivalent to $100 per net Corporate acre as of
        December 31, 2008
    (3) As of December 31, 2008, there were 44,649,115 Class A shares issued
        and outstanding
    (4) Assumes the issuance of additional 2,045,000 Class A shares issued
        pursuant to the Corporations stock option plan.
    (5) Assumes conversion of 1,012,000 Class B shares into 10,120,000 Class
        A shares on a 10:1 basis. The Class B shares are convertible, at the
        option of the Corporation, at any time after March 1, 2010 and before
        March 1, 2012; or, if the Corporation fails to exercise the option to
        convert the Class A shares to Class B shares by such time, at the
        option of the shareholder after March 1, 2012 and before April 2,
        2012. The number of Class A shares obtained upon conversion of each
        Class B shares will be equal to $10.00 divided by the greater of
        $1.00 and the current market price for the Class A shares at the time
        of the conversion.


    The Corporation will file its audited financial statements and related
management's discussion and analysis ("MD&A") for the year ended December 31,
2008, with Canadian securities regulatory authorities on the SEDAR. Copies of
these documents may be accessed electronically on SEDAR at or at Certain selected financial and operational information for
the quarter and year ended December 31, 2008 and 2007 comparatives are set out
below and should be read in conjunction with Bellamont's financial statements
and MD&A.

                                  Three Months Ended              Year Ended
                                         December 31             December 31
                                    2008        2007        2008        2007
    Financial ($)
    Petroleum and natural gas
     sales                     2,649,561   1,230,965  10,861,879   2,226,728
    Funds generated (used)
     in operations(1)            739,498     385,974   3,782,122     (92,310)
      Per share basic and
       diluted                      0.01        0.01        0.08        0.00
    Cash flow from operating
     activities                  648,789    (248,891)  4,111,599  (1,321,788)
      Per share basic and
       diluted                      0.01       (0.01)       0.08       (0.05)
    Net Earnings (Loss) and
     Comprehensive Income
     (Loss)                     (936,851)      5,534  (1,610,764)   (795,109)
      Per share basic and
       diluted                     (0.02)       0.00       (0.03)      (0.03)
    Capital expenditures       5,265,000  11,654,000  20,017,000  20,529,000
    Net working capital
     surplus                   4,563,738   7,126,391   4,563,738   7,126,391
      Liquids (Bbls per day)         184          82         148          46
      Natural gas (Mcf per day)    2,702       1,020       1,962         389
      Barrels of oil equivalent
       (Boe per day, 6:1)            634         253         475         111
    Average realized price
      Crude oil ($ per Bbl)        54.55       84.34       93.00       78.60
      Natural gas ($ per Mcf)       6.84        6.34        8.08        6.38
      Natural gas liquids
       ($ per Bbl)                 79.44       78.16      101.68       75.87
      Barrels of oil equivalent
       ($ per Boe, 6:1)            45.40       52.83       62.52       54.93
    Netback per Boe (6:1) ($)
      Petroleum and natural
       gas sales                   45.40       52.83       62.52       54.93
      Royalties                    (9.49)      (8.10)     (11.67)      (9.83)
      Operating expenses          (14.88)     (16.17)     (16.24)     (22.25)
      Transportation expenses      (1.85)      (2.10)      (2.11)      (2.13)
    Operating Netback              19.18       26.46       32.50       20.72

    Undeveloped land holdings
      Gross acres                                         67,478      45,978
      Net acres                                           39,796      28,323
      Average working interest                             59.0%       61.0%

    Common Shares
    Shares outstanding,
     end of period
      Class A Shares          44,649,115  34,292,449  44,649,115  34,292,449
      Class B Shares           1,012,000   1,012,000   1,012,000   1,012,000
    Weighted average shares
      Basic and Diluted
       Shares Outstanding(2)  54,769,115  35,498,215  50,353,237  28,403,005

    (1) Management uses funds used in operations to analyze operating
        performance and leverage. Funds used in operations as presented do
        not have any standardized meaning prescribed by Canadian GAAP and
        therefore it may not be comparable with the calculation of similar
        measures for other entities.
    (2) For the period ended December 31, 2008 the Class B shares are
        converted at the minimum Class A share price of $1.00 and added to
        the Class A shares to calculate basic shares and the diluted shares


    Since late 2008, the Corporation has focused its activities on operations
which have been relatively low cost and low risk. We are pleased to report
these operations have successfully added a net 350 Boe/d (100% natural gas) of
productive behind pipe capacity to the Corporation at a net cost of $2.5
million, or $7,150/ Boe/d. These results are a reflection of the multi-zonal
nature of the Corporation's land holdings in the Peace River Arch area of
    The Corporations' current production is approximately 725 Boe/d based on
field estimates (~70% natural gas). The Corporation has deferred placing a
portion of its behind pipe volumes on production until April 1, 2009, in order
that such volumes may qualify for the reduced 5.0% Alberta crown royalty, as
announced by the Government of Alberta Energy on March 3, 2009. Accordingly,
the Corporation will be adding approximately 225 Boe/d of its behind pipe
production in April, 2009. The Corporation will place the remaining 125 Boe/d
of its behind pipe volumes on production following spring breakup. The
Corporation now expects to average 825 Boe/d of production in 2009 and exit
with greater than 900 Boe/d, an increase of 75 Boe/d and 100 Boe/d
respectively, from previous guidance.
    The Corporation's balance sheet remains strong with an estimated $2.5
million of positive working capital as of March 31, 2009 and a $7.25 million
utilized line of credit that is currently being reviewed with Bellamont's
lender. As a result, the Corporation is well positioned to execute its $7.0
million 2009 capital budget, which is weighted heavily to development projects
in the Peace River Arch Area of Alberta. The Corporation currently has no
flow-though obligations.
    Bellamont's strategy is to build a low risk reserve, production and cash
flow base through acquiring, developing and exploring primarily in the Peace
River Arch Area of Alberta. Bellamont has a strong technically focused
management team that internally generates and develops high quality large
resource based prospects. The Company has compiled an undeveloped land
inventory of 68,118 gross acres (40,715 net), of which 46,556 gross acres
(29,921 net) is located in the Peace River Arch area of Alberta.
    Bellamont has the financial flexibility to pursue acquisition and
exploration opportunities. The Corporation intends to maintain its discipline
and concentrate on strategic opportunities that are accretive on cash flow,
production and reserves on a per share basis, while maintaining a strong
balance sheet.

    Bellamont is an emerging oil and gas company focused on the acquisition,
exploration, development and production of oil and natural gas in western
Canada and trades on the TSX Venture Exchange under the symbols "BMX.A" and
"BMX.B". The Corporation now has 44,649,115 Class A shares and 1,012,000 Class
B shares outstanding.


    Bellamont's annual shareholder meeting will be held at 3:00 p.m. on June
18, 2009 in the Plaza Room at the Metropolitan Centre, 333 Fourth Avenue S.W.,
Calgary Alberta.


    This press release may contain forward-looking statements including
expectations of future production, cash flow and earnings. More particularly,
this press release contains statements concerning Bellamont's future
production estimates, expansion of oil and gas property interests, exploration
and development drilling, payout estimates, capital expenditures, number and
drilling locations to be drilled in 2008 and facilities upgrades. 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

    Oil and Gas Advisory
    This press release contains disclosure expressed as "Boe/d". 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.

    %SEDAR: 00024373E

For further information:

For further information: Steve Moran, President and Chief Executive
Officer, (403) 802-1355; or Danny Geremia, Vice President and Chief Financial
Officer, (403) 802-0160; 200, 1324-17th Avenue S.W., Calgary, Alberta, T2T
5S8, Email:,

Organization Profile


More on this organization

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890