Boston, MA 05/05/2014 (wallstreetpr) – Thursday’s positive news continued to drive shares of Bellatrix Exploration Ltd (NYSEMKT:BXE) higher on Friday as well. A day earlier, the Canada based oil and gas company had declared the Grafton Energy Co. Ltd’s plan to pledge another $50 million to its earlier announced Joint Venture.
Grafton Executes Option
Bellatrix Exploration Ltd (NYSEMKT:BXE) announced that Grafton Energy has opted to exercise their option as per their previous Joint Venture to increase their designated capital investment by another $50 million, thereby taking the total pledged investment to $250 million. The new capital addition will be governed by the terms and conditions as decided earlier.
To Support Development Of Land Holdings
Grafton’s fresh capital investment will aid the fast-tracked development of a part of Bellatrix’s widespread undeveloped land holdings. The Grafton Joint Venture is situated in the Willesden Green and Brazeau areas of West-Central Alberta. As per the terms of the modified agreement before the implementation of this option, Grafton had accepted to contribute to the extent of 82%, or $200 million of the total $244 million Joint Venture. By this, Grafton was to take share in an expected 58 net Cardium and Notikewin and Falher well program. Further, as per the agreement, Grafton will get 54% of working interest in each drilled well by Bellatrix Exploration Ltd (NYSEMKT:BXE) in the development program till the payout on the total program. After the total payout, Grafton was supposed to revert 33% of Bellatrix’s working interest, or WI. At any point of time during the entire program, Grafton was given an option to choose to transform all wells to a 17.5% “Gross Overriding Royalty” on the company’s pre-Joint Venture working interest.
The initial agreement for the Joint Venture took place on July 1, 2013 and had an initial effective term of 2 years. Therefore, with Grafton’s exercise of $50 million, Bellatrix gets an extended one year time to use up the additional capital.
