Bellatrix forms C$300 million partnership with South Korean company

Tue Jan 22, 2013 9:21am EST
 

(Reuters) - Bellatrix Exploration Ltd (BXE.TO: Quote) said it will form a C$300 million ($302 million) joint venture with a South Korean company to develop its shale deposits in west-central Alberta, making it the latest Canadian oil and natural gas producer to partner with an Asian firm.

Bellatrix did not disclose the name of the South Korea-based company, but said the partner will pay C$150 million for a 33 percent working interest in a planned 83-well program.

TransCanada Corp (TRP.TO: Quote) last year partnered with Korea Gas Corp 036460.KS, Mitsubishi Corp (8058.T: Quote) and PetroChina Co Ltd (601857.SS: Quote) to build a C$4 billion line from northeastern British Columbia to a LNG facility at the port of Kitimat.

State-run Korea National Oil Corp KOILC.UL in late 2009 bought Canadian oil and gas producer Harvest Energy Trust for $1.7 billion. (here)

Bellatrix, with assets in Alberta, Saskatchewan and British Columbia's Peace River Arch region, continues to focus on its core assets in Cardium, a light oil shale field, and Notikewin/Falher.

The company said its net capital expenditure for this year is now expected to increase to between C$230 million and C$240 million from the earlier forecast of C$180 million. It expects average daily production of 24,000-25,000 barrels of oil equivalent per day.

"The company remains on track for a good 2013 with a strong balance sheet, good natural gas hedges in place and a positive growth profile," said Paradigm Capital analyst Ken Lin, who raised his price target on the stock to C$5.75 from C$5.50.

The agreement with the South Korean company is effective from April 1, Bellatrix said.

Shares of Calgary, Alberta-based Bellatrix, formed in November 2009, closed at C$4.12 on Monday on the Toronto Stock Exchange.

($1 = 0.9939 Canadian dollars)

(Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Maju Samuel)