CALGARY, Jan. 17 /CNW/ - Bellamont Exploration Ltd. (the "Corporation" or "Bellamont") (TSXV: BMX.A) (TSXV: BMX.B) is pleased to provide a summary of its 2010 year end reserves and an update on current operations.

Bellamont intends to file its audited financial statements and related management's discussion and analysis ("MD&A") for the year ended December 31, 2010, with Canadian securities regulatory authorities on the System for Electronic Document Analysis and Retrieval ("SEDAR") on or around March 28, 2011. Readers are cautioned that certain financial estimates contained herein are unaudited. 


  • Increased proved plus probable reserves by 123% (37% on a per share basis) to a total of 11.5 million Boe with a net present value $151.4 million (@NPV10% before tax);
  • Reserve replacement was 852 % on proved plus probable and 508% on proved reserves;
  • Based on $92.0 million of capital spending in 2010, incurred finding, development and acquisitions ("FD&A") costs on a proved plus probable basis of $12.45/Boe when including changes in future development capital;
  • Three year average FD&A costs of $12.49 on a proved plus probable basis, when excluding changes in future development capital;
  • Based on a current estimated operating netback of approximately $28/Boe, Bellamont's recycle ratio is:
    • 2.2X on 2010 proved plus probable FD&A costs, when including changes in future development capital;  and 
    • 2.2X on three year average proved plus probable FD&A costs, when excluding changes in future development capital.


The Corporation's December 31, 2010 reserves were independently evaluated by GLJ Petroleum Consultants ("GLJ") in accordance with NI 51-101. The reserve information presented herein utilizes GLJ's January 1, 2011 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 SEDAR before the end of April 2011, which will be accessible electronically at

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)
  Producing 2,040 1,630 15,492 13,373 335 223 4,957 4,082
  Developed Non-Producing 0 0 292 246 2 1 51 42
  Undeveloped 182 153 6,521 5,890 125 94 1,394 1,229
TOTAL PROVED 2,222 1,783 22,305 19,509 462 318 6,402 5,353
TOTAL PROBABLE 1,585 1,208 18,987 16,411 368 246 5,118 4,189
TOTAL PROVED PLUS PROBABLE(3) 3,807 2,991 41,291 35,919 830 564 11,520 9,542

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 148,288   112,591   92,558   79,417   70,026  
607   530   469   420     380  
  Undeveloped 21,457   13,267   8,298   5,134   3,036  
TOTAL PROVED 170,352   126,388   101,324   84,970   73,443  
TOTAL PROBABLE 142,191   79,725   50,094   33,636   23,554  
TOTAL PROVED PLUS PROBABLE(3) 312,544   206,113   151,418   118,606   96,997  

(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 2010

Proved +
December 31, 2009 Opening Balance 2,955 2,211 5,166
Drilling Extensions 1,538 699 2,237
Infill drilling 66 42 108
Technical Revisions 35 (66) (32)
Acquisitions Less Dispositions 2,654 2,231 4,886
Production (845) 0 (845)
December 31, 2010 Closing Balance 6,402 5,118 11,520


NI 51-101 specifies how 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 the three year average from 2008 to 2010.


  2010   Three Year Average
  Total Proved Proved Plus Probable   Total Proved Proved Plus Probable
Exploration and Development Expenditures (M$) (1) $31,735 $31,735   $60,480 $60,480
Acquisitions Expenditures (2) $60,253 $60,253   $83,511 $83,511
Reserve Additions (mBoe) (3)          
  • Exploration and Development (4)
1,639 2,313   3,423 5,237
  • Acquisitions (5)
2,654 4,886   3,670 6,293
Finding and Development Costs ($/Boe) (6)          
  • Excluding FDC
$19.25 $13.66   $17.61 $11.55
  • Including FDC
$13.93 $12.71   $19.84 $15.66
Acquisition Costs ($/Boe) $22.70 $12.33   $22.75 $13.27
Finding, Development and Acquisition Costs ($/Boe)          
  • Excluding FDC
$21.38 $12.76   $20.30 $12.49
  • Including FDC
$19.34 $12.45   $21.35 $14.36

(1) Exploration and development expenditures exclude capitalized administration costs
(2) The acquisition expenditures include the purchase price of corporate acquisitions rather than the amounts allocated to property, plant and equipment for accounting purposes and exclude acquisition costs
(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


The following table provides a calculation of the Corporation's net asset value based on the estimated future net revenue associated with Bellamont and Standard's combined proved plus probable reserves discounted at 10% (before tax) as presented in the December 31, 2010 reserve reports as evaluated by GLJ.

  Total Before tax
value (M$)(1)
Value per
basic share(2,3)
Value per diluted
Proved Producing Reserves 4,957 Mboe(5) $92,558 $0.61 $0.57
Total Proved Reserves 6,402 Mboe(5) $101,324 $0.67 $0.63
Probable Reserves 5,118 Mboe(5) $50,094 $0.33 $0.31
Total Proved + Probable Reserves 11,520 Mboe(5) $ 151,418 $1.00 $0.94
Undeveloped land (acres)(6) 54,058 $ 5,406 $0.04 $0.03
Net Debt estimate (December 31/10) $33 million $ (33,000) $(0.22) $(0.20)
Proceeds from stock options(4) $6.8 million       n/a    n/a $ 0.04
Total Net Asset Value   $123,824 $0.82 $ 0.81

(1) PV10 values Utilizing GLJ  Petroleum Consultants January 1, 2011 price forecast
(2) 140,787,699 Class A shares issued and outstanding as at December 31, 2010
(3) Assumes conversion of  the 1,012,000 Class B shares to Class A shares on a 10:1 basis
(4) Assumes the issuance of an additional 10,965,000 Class A shares issued pursuant to the Corporation's stock option plan at an average price of $0.62 resulting in total proceeds of $6,776,000.
(5) December 31, 2010 reserve report as evaluated by GLJ
(6) Internal estimate equivalent to $100 per net corporate undeveloped acre


Grande Prairie

Bellamont has successfully drilled another horizontal well at the Grande Prairie Montney I Oil Pool. This is the sixth successful horizontal well drilled in this pool.  The new well was drilled horizontally and has been successfully completed with a 14 stage, 588 tonne frac. The well flow tested at a rate of 110 bbls/d day of light oil (40° AP) and 1.2 mmcf/d of natural gas.  Bellamont is in the process of equipping this well and placing it on production in the next week at an initial rate of approximately 300 boe/d (27% oil and Ngl's). Approximately 50 percent of the 2,115 cubic metres of the frac fluids were recovered during the production test. Management expects the well's production to improve to approximately 500 boe/d once all of the frac fluids have been recovered. 

To date, the Montney I Pool has been developed by Bellamont at 400 meter inter well distance.  Bellamont's third party engineer estimates this pool contains both oil and gas, with an estimated Total Petroleum Initially In Place (TPIIP) of 4.8 MMbbl and 55 Bcf.   Bellamont believes this pool will ultimately be most effectively developed at 200 metres inter well distance, similar to densities as drilled by other operators in prolific Montney oil/gas pools. At 200 meter well inter well distance; Bellamont has 17 remaining locations in this pool, all defined by three dimensional seismic and well control.

Bellamont's two horizontal wells at its Grande Prairie Dunvegan oil pool have recently been placed on production and are currently producing 170 boe/d  (82% light oil) net to Bellamont.    


Bellamont has recently placed on production its two latest horizontal wells in its Grimshaw Triassic C Montney oil pool, adding 210 bbl/d of light oil (30° API) net to Bellamont.  There are now six successful horizontal wells drilled by Bellamont in this pool. Bellamont has also recently completed its construction of a centralized production battery. The average initial production rate of the horizontal wells in this pool (first 30 days) has been approximately 110 bbl/d.  These wells and have shown a relatively shallow decline profile and are producing an average of 60 bbl/d after 10 months. 

Bellamont recently completed a three dimensional seismic program over this pool. Management's analysis of this data has reinforced its interpretation that this pool contains approximately 50 million bbls of TPIIP.  Pools analogous to Bellamont's Grimshaw pool have been horizontally drilled to densities as high as 16 wells per section (i.e. 100 metres inter well distance) with estimated recovery factors of 15%. By utilizing multi-staged facing technology, Bellamont believes the Grimshaw Triassic C Montney oil pool could ultimately achieve a similar 15% recovery factor, at a drill density of only 8 wells per section (i.e. 200 metres inter well distance). Management estimates a potential recovery factor up to 20% is possible via water flood and is currently undertaking a study evaluating this alternative.  Bellamont has a total of 40 (~30 net) additional locations identified in this pool. The Corporation plans to drill two more wells in the pool in the first quarter of 2011.


The year of 2010 was one of significant achievement for Bellamont.  The Corporation has seen significant per share growth of production, reserves and cash flow.  Bellamont is currently producing 2,800 boe/d (~45% oil and natural gas liquids). Once the latest Grande Prairie well is placed on production, total corporate production will increase to approximately 3,100 boe/d to 3,300 boe/d, a record high for the Corporation. Another 250 boe/d (100% natural gas) is currently curtailed by third party restrictions and will be added over the next several months.

The Corporation has a $250 million inventory of capital projects consisting of 118 (100 net) drilling locations, the vast majority of which are lower risk and developmental in nature.  This drilling inventory will provide Bellamont with a solid platform for growth over the next several years.  Bellamont has expanded its technical team over the past six months and expects to accelerate its identification of new projects to add to its large existing inventory. 

Investors are encouraged to view an updated version of Bellamont's corporate presentation on its web page at  

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. In addition, the Corporation has compiled an undeveloped land inventory of 75,486 gross acres (54,058 net), of which 60,241 gross acres (45,687 net) is located in the Peace River Arch area of Alberta.   

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 has 140,787,699 Class A shares and 1,012,000 Class B shares outstanding.


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 and capital expenditures. 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.

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
1208, 250- 2nd Street S.W. Calgary, Alberta T2P 0C1

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