Bellamont Exploration Ltd. announces third quarter 2009 results

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

CALGARY, Nov. 27 /CNW/ - Bellamont Exploration Ltd. (the "Corporation" or "Bellamont") (TSXV:BMX.A) (TSXV:BMX.B) is pleased to provide a summary of its 2009 third quarter results. The unaudited financial statements and notes as well as management's discussion and analysis pertaining to the period are available on Bellamont's website at www.bellamont.com and on SEDAR at www.sedar.com.

FINANCIAL AND OPERATIONAL HIGHLIGHTS

    
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                                          Three Months Ended September 30
                                              2009         2008     % Change
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    FINANCIAL ($)
    Petroleum and natural gas sales      2,238,856    3,463,349        (35.4)
    Funds generated from operations(1)     745,196    1,013,686        (26.5)
      Per share basic and diluted             0.01         0.02        (50.0)
    Net loss                              (969,209)    (508,150)       (90.7)
      Per share basic and diluted            (0.02)       (0.01)      (100.0)
    Capital expenditures                 3,012,392    3,246,137         (7.2)
    Working capital surplus              5,132,055    9,104,148        (43.6)
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    OPERATING
    Production
      Crude Oil (Bbls per day)                 168          159          5.7
      Natural gas (Mcf per day)              3,768        2,267         66.2
      Natural gas liquids (Bbls per day)        26           11        136.4
      Total (Boe per day)                      822          548           50
    Average realized prices
      Crude Oil ($ per Bbl)                  68.04       115.08        (40.9)
      Natural gas ($ per Mcf)                 3.02         7.92        (61.9)
      Natural gas liquids ($ per Bbl)        60.16       120.93        (50.3)
      Average realized price ($ per Boe)     29.62        68.66        (56.9)
    Netbacks(1) ($ per Boe)
      Petroleum and natural gas sales        29.62        68.66        (56.9)
      Royalties                              (4.39)      (15.21)       (71.1)
      Operating expenses                    (10.15)      (17.76)       (42.8)
      Transportation expenses                (1.06)       (1.99)       (46.7)
      Operating netback                      14.02        33.70        (58.4)
    Undeveloped land holdings
      Gross acres                           64,842       59,526          8.9
      Net acres                             40,357       35,826         12.6
      Average working interest                 62%          61%          1.6
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    COMMON SHARES
    Shares outstanding, end of period
      Class A shares                    56,280,781   44,649,115         26.1
      Class B shares                     1,012,000    1,012,000            -
    Weighted average shares
      Basic and diluted(2)              56,488,354   52,742,199          7.1
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                                           Nine Months Ended September 30
                                              2009         2008     % Change
    -------------------------------------------------------------------------
    FINANCIAL ($)
    Petroleum and natural gas sales      6,855,143    8,212,318        (16.5)
    Funds generated from operations(1)   1,498,604    3,042,624        (50.7)
      Per share basic and diluted             0.03         0.06        (50.0)
    Net loss                            (3,898,546)    (673,913)      (478.5)
      Per share basic and diluted            (0.07)       (0.01)        (600)
    Capital expenditures                 7,505,162   14,753,085        (49.1)
    Working capital surplus              5,132,055    9,104,148        (43.6)
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    OPERATING
    Production
      Crude Oil (Bbls per day)                 181          126         43.7
      Natural gas (Mcf per day)              3,624        1,714        111.4
      Natural gas liquids (Bbls per day)        18           10         80.0
      Total (Boe per day)                      802          421         90.5
    Average realized prices
      Crude Oil ($ per Bbl)                  57.62       110.78        (48.0)
      Natural gas ($ per Mcf)                 3.78         8.74        (56.8)
      Natural gas liquids ($ per Bbl)        56.64       109.99        (48.5)
      Average realized price ($ per Boe)     31.30        71.18        (56.0)
    Netbacks(1) ($ per Boe)
      Petroleum and natural gas sales        31.30        71.18        (56.0)
      Royalties                              (3.98)      (12.77)       (68.8)
      Operating expenses                    (11.82)      (16.93)       (30.2)
      Transportation expenses                (1.29)       (2.25)       (42.7)
      Operating netback                      14.21        39.23        (63.8)
    Undeveloped land holdings
      Gross acres                           64,842       59,526          8.9
      Net acres                             40,357       35,826         12.6
      Average working interest                 62%          61%          1.6
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    COMMON SHARES
    Shares outstanding, end of period
      Class A shares                    56,280,781   44,649,115         26.1
      Class B shares                     1,012,000    1,012,000            -
    Weighted average shares
      Basic and diluted(2)              55,348,492   46,846,533         18.1
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    (1) Funds generated from operations and Netbacks as presented do not have
        any standardized meaning prescribed by Canadian GAAP and therefore
        may not be comparable with the calculation of similar measures for
        other entities. Please refer to the Non-GAAP Measures section of the
        MD&A for more details.
    (2) For the period ended September 30, 2009 the Class B shares are
        converted at the minimum Class A share price of $1.00 and added to
        the Class A shares. Thus each Class B share converted to 10 Class A
        shares for the basic and diluted share calculation.
    

THIRD QUARTER HIGHLIGHTS

    
    -   Daily production averaged 822 Boe/d, an increase of 50% from 548
        boe/d from the same period last year;
    -   Generated funds from operations of $745,000;
    -   Reduced operating expenses to $10.15 per Boe, a reduction of 16.0%
        from Q2 2009;
    -   Incurred capital expenditures of $3.0 million;
    -   Successfully extended the Corporation's Montney oil discovery in the
        Grimshaw area by drilling a horizontal well (100% BPO; 70% APO) which
        production tested at 400 bbl/d;
    -   Entered into multiple farmin agreements giving the Corporation access
        to earn up to 18 sections (9.2 net) located in the Corporation's
        core Valhalla area;
    -   Added Mr. Greg Bay, President and CEO of Cypress Capital Management
        Ltd. to the Corporation's board of directors;
    -   Closed a $7.1 million bought deal dollar financing; and
    -   Prudently managed its balance sheet by exiting the quarter with a
        $5.1 million working capital surplus.
    

Subsequent to the third quarter, the Corporation achieved the following:

    
    -   Announced an acquisition of assets located in the its core Peace
        River Arch area with production of approximately 210 boe/d; comprised
        of 164 bbl/d of high quality light gravity (40 degree API) oil and
        279 mcf/d of natural gas, 80% of which is operated.
    -   Closed a bought deal financing and a private placement financing
        raising total gross proceeds of $13,331,500, a portion of which
        ($9,269,000) was in the form of Subscription Receipts that will be
        exchanged for Bellamont Class A common shares upon closing of the
        Acquisition.
    

CORE AREA ACQUISITION

On November 4, 2009 Bellamont announced it entered into an agreement to acquire assets located in the central area of the Peace River Arch adjacent to the Corporation's Sinclair and Saddle Hills properties (the "Acquisition"). Current production from the properties is approximately 210 boe/d; comprised of 164 bbl/d of high quality light gravity (40 degree API) oil and 279 mcf/d of natural gas, 80% of which is operated. The purchase price for the assets was $17,150,000, comprised of $14,000,000 cash and 5,080,645 Bellamont Class A shares issued to the vendor, Storm Exploration Inc., at a deemed price of $0.62 per share. This Acquisition doubles the Corporation's Doe Creek oil production and is consistent with Bellamont's strategy 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. Closing is scheduled for December 1, 2009.

OPERATIONAL UPDATE

In the Grimshaw Area, the Corporation's first horizontal multi-stage fraced Montney oil well has been tied into a newly constructed oil battery. The startup of the well and battery is underway and initial production is expected to be 150 bbl/d. In addition, Bellamont has drilled and cased two (1.4 net) new horizontal wells from the same surface location as the battery and first well. The new wells will be completed via multi-staged fracs and if successful, tied into the new oil battery with initial production expected by year end.

At Valhalla, Bellamont has spud its first horizontal Falher natural gas development well (100% working interest), the results of which will be known by year end. If successful, the Corporation expects to have the new well tied in for mid January. In addition, Bellamont is in the process of constructing a pipeline immediately offsetting the new horizontal well for a successful re-entry well (100% working interest) that tested gas in excess of 1.1 mmcf/d. The re-entry well should also be tied in and on production by mid January.

At Rycroft, the Company has begun operations to shoot a 100% owned 27 square mile 3D seismic program The Corporation's land base holds multi zonal potential for oil in the Montney and Charlie Lake Formations and natural gas in the Dunvegan, Gething, Bluesky, Kiskatinaw and Doig Formations. Bellamont expects the program to be completed and interpreted by year end, enabling the Corporation to drill in the first quarter of 2010.

OUTLOOK

Bellamont has a strong, technically focused management team that internally generates and develops high quality, large resource based prospects. Specific to the Peace River Arch area, the Corporation has compiled an undeveloped land inventory of 46,245 gross acres (31,574 net). Bellamont has successfully built significant land positions around discoveries in three areas in the Peace River Arch - Grimshaw (Montney oil), Rycroft (Montney oil) and Valhalla (Falher natural gas). In addition, with the closing of the Acquisition, the Corporation has built a solid foundation of long reserve life Doe Creek Formation light oil production in the Sinclair, Saddle Hills and Gold Creek Areas.

Including the production from the Acquisition, the Corporation expects to exit 2009 at approximately 1,125 boe/d of production. Based on risked success of the remaining capital program for 2009, Bellamont expects to average 1,350 boe/d (approximately 40% light oil) in the first quarter of 2010.

The Corporation's balance sheet remains strong with an estimated $0.3 million working capital deficiency as of December 1, 2009 (i.e. pro forma closing of the Acquisition). Bellamont has renewed with its line of credit with its lender and is pleased to announce it has agreed with its lender to increase its line from $7.25 million to $12 million, subject to the Corporation satisfying certain customary closing conditions relative to the Acquisition. As a result, the Corporation is well positioned to pursue an active capital program in 2010. The Corporation intends to announce its 2010 budget once it has compiled all the results of its current drilling and completions program.

Bellamont balance sheet also gives it significant flexibility to continue to pursue acquisitions. The Corporation intends to maintain its discipline and concentrate on strategic acquisition opportunities that are accretive on cash flow, production and reserves on a per share basis, while maintaining a strong balance sheet.

Readers are encouraged to visit the Corporation's web page at www.bellamont.com to view the current corporate presentation.

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 61,830,781 Class A shares, 14,950,000 Subscription Receipts (exchangeable into Class A shares upon closing of the Acquisition) and 1,012,000 Class B shares outstanding.

FORWARD LOOKING STATEMENTS

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, capital expenditures and number and drilling locations to be drilled in 2009. The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Bellamont, including expectations with respect to the anticipated closing date of the proposed financing and assumptions concerning the success of future drilling and development activities, the performance of existing wells, the performance of new wells and prevailing commodity prices. Although Bellamont believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward looking statements because Bellamont can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent 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, uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures, and failure to obtain necessary approvals for or otherwise satisfy conditions to completion of the proposed financing. 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.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts 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

SOURCE BELLAMONT EXPLORATION LTD.

For further information: For further information: Steve Moran, President and Chief Executive Officer, (403) 802-1355, 200, 1324-17th Avenue S.W., Calgary, Alberta, T2T 5S8, Email: info@bellamont.com, www.bellamont.com

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