Restructuring / Bankruptcy Sale

Return Energy Acquires Bellatrix's Alberta Deep Basin Assets

By Deepak Sharma
April 24, 2020
a minute read
Oil Pumpjacks

TSX-listed E&P company Bellatrix Exploration Ltd. has entered into an agreement with Canadian compatriot Return Energy Inc. for the sale of substantially all of its oil & gas assets in west-central Alberta, for a cash consideration of C$87 million plus the assumption of approximately C$14.8 million of additional liabilities by Return Energy.

Previously, in October last year, Bellatrix Exploration had commenced a sale and investment solicitation process through a court-supervised restructuring process, and obtained an initial order from the Court of Queen’s Bench of Alberta for proceedings under the Companies’ Creditors Arrangement Act (CCAA).

Bellatrix’s assets are located in the Ferrier and Willesden Green areas of Alberta, and include approximately 130,000 net acres of properties primarily targeting the Spirit River, Cardium and Lower Mannville formations. The acquisition adds proven (1P) reserves of 185.5 million barrels of oil equivalent (MMboe), and proven + probable (2P) reserves of 268.0 MMboe to Return Energy’s portfolio, along with approximately 25,000 barrels of oil equivalent per day of production (~70% gas-weighted). In addition, the transaction also includes interests in 3 gas plants, including the 10-9 Alder Flats Gas Plant with a capacity of 230 million cubic feet per day (MMcf/d) and 96 MMcf/d of available excess capacity, and interests in 7 operated compressor stations with a capacity of 208 MMcf/d and 550 km of gas gathering lines connected to third-party area processing with excess capacity.

The completion of the deal remains subject to court and other necessary regulatory approvals, and is expected to be completed by the end of June. Concurrent with closing, Return Energy also plans to change its name to Spartan Delta Corp.

National Bank Financial acted as financial advisor and TD Securities acted as strategic advisor to Return Energy, while BMO Capital Markets advised Bellatrix Exploration on the transaction.

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