Bellatrix Exploration - Investor Presentation 2014

CORPORATE PRESENTATION April 9, 2014

TSX: BXE NYSE MKT: BXE

2 Bellatrix Corporate Presentation

Bellatrix

Drill bit driven growth oriented company

Focus on profit not product

Low cost finder and operator Strong balance

sheet

Employ modern technology coupled

with innovation

Targeted Accretive

Acquisitions

BELLATRIX STRATEGY


CORPORATE SNAPSHOT

Liquidity (past 3 months) +/- 1.7 mm shares/d

Annual Average Production guidance (2014e) 42,500 – 43,500 boe/d

Exit rate guidance (2014e) +/- 47,000 boe/d

Oil / liquids weighting (2014e) +/- 37 %

Capital structure

Common shares – basic +/- 171 mm

Common shares – diluted +/- 182 mm

Insider ownership (fully diluted) 10%

Approximate Combined Tax pools $1,228 mm


TRACK RECORD OF PRODUCTION GROWTH

AVERAGE ANNUAL PRODUCTION INCREASE

Pro

duct

ion

per m

m S

hare

s

25%

30%

38%

33%

30%

6,572 8,519

11,954

16,686

21,830

43,000

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

Q4 2009 2010 2011 2012 2013e 2014e

Average Production (boe/d)

+/-

554%


0

2

4

6

8

10

12

14

16

18

20

Q4 2008 2009 2010 2011 2012 2013 2014e

59%

OPERATING EXPENSES

TOTAL OPERATING EXPENSE ($/BOE)


0

100

200

300

400

500

600

700

2009 2010 2011 2012 2013 2014e

515%

$670

REVENUE ($mm’s)

$292

$219 $202

$118 $109

62% Liquids

60% Liquids

71% Liquids 69%

Liquids

52% Liquids

48% Liquids


CASH FLOW / BASIC SHARE

$0.39

$0.57

$0.91 $1.03

$1.27

$2.10

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

2009 2010 2011 2012 2013 2014e

438%


RESERVES GROWTH

0

20

40

60

80

100

120

140

160

180

200

220

Proved P+P Proved P+P Proved P+P Proved P+P Proved P+P

Oil and liquidsNatural Gas

2009 2011 2010

mm

boe

2012 2013

16.5 25.8 24.8

42.4 41.8

67.6 55.5

104

124

212

722%

37%

36%

30%

35% 38%

37% 40% 38% 28%

29%


INDUSTRY LEADING OPERATIONS METRICS

December 31, 2013 (P&P) FD&A costs

(including FDC) $9.67/boe

Reserve life index (P&P)

(as at December 31, 2013) 13.7 years

December 31, 2013 Recycle ratio

(excluding FDC and Acquisitions, P&P) 2.90x

December 31, 2013 Recycle ratio

(excluding FDC, proved) 1.88x


TOTAL RETURN COMPARISON

$0

$100

$200

$300

$400

$500

$600

$700

$800

31-Dec-08 31-Dec-09 31-Dec-10 31-Dec-11 31-Dec-12 31-Dec-13

Bellatrix Exploration Ltd.S&P/TSX Energy IndexS&P/TSX Composite Index

Data provided by National Bank Financial Markets

Valu

e of

a $

100

Inve

stm

ent


2014 ESTIMATED FINANCIAL FORECAST

2013 2014e Variance

Cash from operations ($mm)

$143 +/- $360 +152%

Cash per share $1.27 +/- $2.10 +65%

Net Cash Capital expenditures ($mm)

$303 +/- $370 +22%

Total Net Debt ($mm) $395 +/- $400 -

Debt Capacity ($mm) $500 $500 -

Light Oil & Condensate ($CDN/bbl)

$92.66 $92.50

AECO ($CDN/GJ) $3.03 $3.78


GROWING BELLATRIX

68%

27%

5%

2014 ESTIMATED NET BXE CAPITAL BUDGET (+/- $370 MM)

(+/- $610 Million Gross including JV Partner Capital)

Drilling and Completions

Facilities

Land and Seismic


COMMODITY RISK MANAGEMENT

Jan. 1 – Dec. 31, 2014 6,000 bbls/d $97.07 CDN/bbl

Feb. 1 – Dec. 31, 2014 95.7 mmcfd $4.21 CDN/mcf

Oil Gas*

o * Assumes conversion of a $/GJ to $/mcf is based on an average corporate heat content of 40.8 Mj/m3


FORMULA FOR GROWTH

o Inventory of low risk development locations − 2,000 net locations

o Extensive undeveloped land base of 416,631 net acres

o Stacked Hydrocarbon Bearing Reservoirs in WCA:

Belly River +/- 1,300 m

Cardium +/- 2,100 m

Second White Specs +/- 2,200 m

Viking +/- 2,300 m

Notikewin +/- 2,400 m

Falher +/- 2,500 m

Lower Mannville +/- 2,550 m

Rock Creek +/- 2,600 m

Duvernay +/- 3,400 m


BALANCED RESOURCE PLAY INVENTORY

Net Remaining Inventory

Cost per well ($ mm) Net Remaining Investment ($mm)

Belly River (HZ) 23 $2.5 58

Second White Specks (Vrt) 200 $0.25 50

Cardium (HZ) 742 $3.6 2,671

Viking (HZ) 80 $4.2 338

Notikewin/Falher (HZ) 381 $4.6 1,753

Mannville (HZ) 128 $4.2 538

Rock Creek (HZ) 31 $4.6 143

Duvernay (HZ) 415 $11.0 4,565

2,000 $10,116 Based upon internal estimates


CARDIUM LIGHT OIL RESOURCE PLAY

o Largest accumulation of light oil in the WCSB

o Approximately 20,000 square miles

o Approximately 1.8 Billion bbls produced to date

o Currently producing 155,000 bbl/d & 1.31 bcf/d

o LOE < $8.00/boe

o BXE Drilling Inventory

• 1,190 Gross

• 742 Net

o Planned wells for 2014

• 115 Gross

• 66 Net

o BXE Cardium Sections

• 453 Gross

• 338 Net

Edson

Pembina

Ferrier

Strachan

Harmattan

CARDIUM INDUSTRY LAND SUMMARY

338

300 295 275

204 194

149 134

110 102 100 94 92 90 80 78 75

61 60 52 49 48 47 45 40 38 35 25 20

0

100

200

300

400

Penn

Wes

t

Bella

trix

Bona

vist

a

Ligh

tstr

eam

Peng

row

th

Cono

coPh

illip

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Bont

erra

Verm

ilion

ARC

Tam

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Sino

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Whi

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Talis

man

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il

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rial

Yang

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Sunc

or

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orth

Apac

he

Devo

n

Ener

plus

Crew

Perp

etua

l

KNOC

Croc

otta

Husk

y

BP

Net

Car

dium

Sec

tions

938


CARDIUM FOCUS AREAS

Ferrier Strachan Harmattan


HORIZONTAL PLACEMENT IN CARDIUM SECTION

GR ML SP


CARDIUM OIL TYPE CURVE HORIZONTAL CARDIUM OIL WELL PRODUCTION

0

10

20

30

40

50

60

70

80

90

100

0

100

200

300

400

500

600

700

800

0 10 20 30 40 50

Cont

ribut

ing

Wel

ls

Wee

kly

Aver

age

Prod

uctio

n (b

oed)

Producing Weeks Cardium Weekly Production Well Count

Estimated 6-10% decline

2013 Type Curve

2012 Type Curve (Based on 54 Wells)

Incremental 31mboe over previous type curve.

Cardium Type Economics

Dril l , Case, Complete & Tie-In $3.6M

NPVBT @ 10% $6.1M Rate of Return 159%

Payout 0.8 yr

Economics based upon $90 CDN/bbl and $3.00 CDN/mmBTU gas


CARDIUM TYPE CURVES

Internal estimates based upon January 1, 2013 Sproule Evaluation and GLJ Evaluations Economics based upon 2013 $90 CDN/bbl and $3.00 CDN/mmBTU gas

0

100

200

300

400

500

600

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Cum

ulat

ive

Prod

uctio

n, m

boe

Ferrier Cardium, 30% Liquids Cardium High GOR, 65% liquids

Cardium Low GOR, 77% liquids Southern Cardium, 92% liquids


NOTIKEWIN/FALHER LIQUIDS RICH GAS o BXE Land Sections

• 181 Gross • 91 Net

o BXE Drilling Inventory • 750 Gross • 381 Net

o Regional Stacked Mannville Channels deposited in broad valleys

o 64 BXE and industry Notikewin/Falher gas wells average IP 9.6 Mmcfe/d

o Planned wells for 2014 • 31 Gross • 11 Net

o 2 mile Hz produced 2.1 Bcf gas with liquids in first 120 days

o 14 out of 15 best gas wells in Spirit River, Alberta in 2013


NOTIKEWIN/FALHER LIQUIDS RICH GAS

NEW FRAC TECHNIQUE

7.5 Bcf Performance Curve:

NPV 10% BIT = $15.4 MM

IRR = >500%

Payout = 0.4 Years

5 Bcf Performance Curve

LOE < $0.60/mcfe F&D (2P) $0.58/mcfe

NPV 10% BIT = $11.4 MM

IRR = 216%

Payout = 0.6 years

@ 2013 $3.00/mmBTU gas ($3.44/mcf based on corporate heat content) & $90 CDN/bbl C5+

0

2000

4000

6000

8000

10000

12000

0 2 4 6 8 10 12 14 16 18 20 22 24

Mon

thly

Ave

rage

Gas

Pro

duct

ion

(mcf

/d)

Producing Months


LOWER MANNVILLE LIQUIDS RICH GAS

o Stacked play potential o BXE Drilling Inventory

• 110 Gross • 100 Net

o BXE Land Sections • 311 Gross • 287 Net

o Liquids-rich gas plays; approximately 200 bbls/mmcf

o 31 horizontal Ellerslie wells drilled

o Ellerslie HZ oil discovery at Davey Lake; 300 boed IP30

Schematic Log

GR Porosity


DUVERNAY UNCONVENTIONAL RESOURCE o BXE Land Sections

• 122 Gross • 120 Net

o BXE Inventory • 415 – 600+ locations

o Potential BXE resource: over 10 Tcf OGIP

o Estimated 4 to 6 BCFE recoverable per well

o BXE 09-24 HZ highest recorded IP3 at 3.7 mmcf/d; 0.75 Bcf cum to date

o +75 Duvernay wells licensed in Greater Ferrier and Edson

o 5 wells currently on production o Reported offset NGL yields of 70-150

Bbls/mmcf o Highly over-pressured at 15.8 kPa/m


BXE FERRIER INFRASTRUCTURE Access to 9 plants o Total capacity 1,162

mmcf/d

Planned BXE Gas plant o 110 mmcf/d capacity o C3+ Recovery 99% o C4+ Recovery 100% o In service July 1, 2015 o Cost +/- $90 MM


GRAFTON JV

$244 MM Initial Joint Venture June 21, 2013 with $61 MM Extension Election April 9, 2014 o 58 Net Notikewin/Falher and Cardium o horizontal wells in initial program o 13 Net Mannville wells in extension o BXE contribution - $55 MM o Grafton contribution - $250 MM o Effective July 1, 2013 – June 21, 2016 JV Partner earning terms: o Pay 82% to earn 54% BPO o Reversion to 33% APO on payout o Payout: $250MM @ 8% IRR o One time election to convert 33% WI to 17.5%

GORR


TROIKA JV

$240 MM Joint Venture o 63 Gross Cardium horizontal wells o BXE contribution - $120 MM o Effective January 1, 2013 – December 31,

2014. o 20 additional Cardium wells planned in

2013; 43 Cardium Hz wells in 2014 JV Partner earning terms: o Pay 50% to earn 35% BPO o Reverting to 25% APO o Payout: $ 120 MM + 15% IRR


PROVIDING PER SHARE VALUE TO INVESTORS THROUGH DRILLING, DEVELOPMENT AND TARGETED ACQUISITION

SUMMARY

o Knowledgeable management team with a long history and proven track record of growing companies through the drill bit

o Prudent business management focused on per share growth, hedging and debt maintenance

o Top tier asset base with a significant high IRR inventory of drill ready locations ($10.1 billion)

o Low cost operator, low cost finder

o Near term growth catalysts with forecast 2014 exit rate of +/- 47,000


CORPORATE INFORMATION

BOARD OF DIRECTORS W.C. (Mickey) Dunn Chairman Doug N. Baker, FCA Murray L. Cobbe John H. Cuthbertson, QC Melvin M. Hawkrigg, BA, FCA, LLD (Hon.) Robert A. Johnson, P.Geol. Keith E. Macdonald, CA Raymond G. Smith, P. Eng. Murray B. Todd, B.Sc., P. Eng. Keith S. Turnbull, B.Sc., CA

OFFICERS Raymond G. Smith, P.Eng.

President & CEO

Edward J. Brown, C.A. Executive Vice President, Finance & CFO

Brent A. Eshleman, P.Eng. Executive Vice President

Tim A. Blair

Vice President, Land

Leanne K. Gress-Blue, C.A. Vice President, Finance

Kelly M. Nichol

Vice President, Business Development

Russell G. Oicle, P. Geol. Vice President, Exploration

Garrett K. Ulmer, P.Eng.

Vice President, Engineering

Ving Y. Woo, P.Eng. Vice President Engineering & COO

BANKERS National Bank of Canada

Alberta Treasury Branches HSBC Bank Canada

Canadian Imperial Bank of Commerce The Bank of Nova Scotia

Bank of Montreal The Toronto Dominion Bank Union Bank, Canada Branch

Wells Fargo Bank N.A., Canadian Branch Corporation Canada

EVALUATION ENGINEERS Sproule Associates Limited

REGISTRAR & TRANSFER AGENT

Computershare Trust Company of Canada

LEGAL COUNSEL Burnet, Duckworth & Palmer LLP

AUDITORS KPMG LLP

EXCHANGE LISTING

The Toronto Stock Exchange - BXE NYSE MKT - BXE


Analyst Firm

Jeremy McCrea AltaCorp Capital

Steve Toth Canaccord Genuity

Adam Gill CIBC

Brian Kristjansen Dundee Capital

Grant Daunheimer GMP Securities

Christina Lopez Macquarie Capital

Dan Payne National Bank Financial

Jared Lewis Northland Capital Markets

Ken Lin Paradigm Capital

Jason Bouvier Scotia Capital

Juan Jarrah TD Securities Inc

ANALYST COVERAGE


ADVISORY FORWARD LOOKING STATEMENTS: In the interest of providing Bellatrix’s shareholders and potential investors with information regarding Bellatrix, including management’s assessment of Bellatrix’s future plans and operations, certain statements made by the presenter and contained in these presentation materials (collectively, this “presentation”) are “forward looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking statements”. The forward-looking statements contained in this presentation speak only as of the date of this presentation and are expressly qualified by this cautionary statement. Certain information contained herein may contain forward looking statements including management's assessment of future plans and operations, drilling plans and the timing thereof, commodity price risk management strategies, expected 2014 average production and exit rate, estimates of commodity prices and exchange rates, estimated recovery from wells to be drilled in 2014 capital expenditures and nature of expenditures and method of financing thereof and drilling inventory and costs and time to develop, estimated 2014 Revenues, expected 2014 operating costs and estimated 2014 cash from operations, cash per share and estimated 2014 debt levels, may constitute forward-looking statements under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, actual results from wells to be drilled may not be similar to the results from previous wells drilled, environmental risks, competition from other producers, inability to retain drilling rigs and other services, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources. The recovery and estimates of Bellatrix's reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Events or circumstances may cause actual results to differ materially from those predicted, as a result of the risk factors set out and other known and unknown risks, uncertainties, and other factors, many of which are beyond the control of Bellatrix. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. Additional information on these and other factors that could effect Bellatrix's operations and financial results are included in reports on file with Canadian securities regulatory authorities and the U.S. Securities Exchange Commission, may be accessed through the SEDAR website (www.sedar.com) the SEC’s website (www.sec.gov) or at Bellatrix's website (www.bellatrixexploration.com). Estimated 2014 cash from operations, cash per share and 2014 year end debt levels may constitute financial outlooks under applicable securities laws and were approved by management on March 12, 2014. The forward-looking statements contained herein are made as at the date hereof and Bellatrix does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws. NON-GAAP MEASURES: This presentation contains the term "cash from operations" which should not be considered an alternative to, or more meaningful than "cash flow from operating activities" as determined in accordance with Canadian GAAP as an indicator of the Company's performance. Therefore reference to cash from operations or cash from operations per share may not be comparable with the calculation of similar measures for other entities. Management uses cash from operations to analyze operating performance and leverage and considers cash from operations to be a key measure as it demonstrates the Company's ability to generate the cash necessary to fund future capital investments and to repay debt. The reconciliation between cash flow from operating activities and funds flow from operations (the Company calculates funds flow from operations in the same manner as cash from operations) can be found in the Company's Management's Discussion and Analysis. Cash from operations per share is calculated using the weighted average number of shares for the period.


ADVISORY

FD&A COSTS: This presentation includes calculations of finding, development and acquisition ("FD&A") costs for the year ended December 31, 2013. National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101") requires that written disclosure of finding and development costs to be calculated in accordance with Section 5.15 of NI 51-101 which does not include the reserves additions associated with acquisitions or the costs of acquisitions in the calculation. The calculations of FD&A in this presentation include the reserves additions associated with acquisitions and the costs of acquisitions as the Company believes that including the effect of acquisitions provides useful information to investors. FD&A costs for the year ended December 31, 2013 and 2012 are $9.67/boe and $6.95/ proved plus probable boe respectively and the average FD&A for the last three completed years is $9.01/ proved plus probable boe. The finding and developments costs calculated in accordance with Section 5.15 of NI 51-101 for the years ended December 31, 2013 and 2012 are $10.67/proved boe ($9.65/proved plus probable boe) and $11.73/proved boe ($7.31/proved plus probable boe) and the average finding and development costs for the last three completed years is $11.47/proved boe ($8.86/proved plus probable boe). The aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserve additions for that year. BOE PRESENTATION The term barrels of oil equivalent (“boe”) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent (6 mcf/bbl) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value. All boe conversions in this presentation are derived from converting gas to oil in the ratio of six thousand cubic feet of gas to one barrel of oil. INITIAL PRODUCTION RATES: Initial Production rates discloses herein may not be indicative of long-term performance or ultimate recovery. ESTIMATED ULTIMATE RECOVERY (EUR): In this presentation, estimated ultimate recovery for Cardium oil wells is a representative value within the range of estimates of proved plus probable reserves per well as evaluated by Sproule Associates Limited effective December 31, 2013 based on forecast prices and costs. Estimated ultimate recovery for Notikewin wells is a representative value within the range of estimates of proved plus probable reserves per well as evaluated by Sproule Associates Limited effective December 31, 2013 based on forecast prices and costs. Estimated ultimate recovery for Duvernay wells does not represent an estimate of resources but has been provided to show management's assumptions used for its internal projections and plans. There is no certainty that any resources will be discovered for such Duvernay wells. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources.

CURRENCY: All dollar amounts in this presentation are Canadian dollars unless otherwise identified.


1920, 800 – 5th Avenue SW Calgary, Alberta Canada T2P 3T6 Tel: (403) 266-8670 Fax: (403) 264-8163 www.bellatrixexploration.com

Bellatrix Exploration - Investor Presentation 2014

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