Bellatrix Exploration (BXE-T) despite the release on Tuesday of a reserve report and operational update, which if nothing else impressed one analyst. On Wednesday, Canaccord Genuity analyst Anthony Petrucci upgraded the stock to "speculative buy" from "hold," although he also reduced his price target to $1.50 from $1.60. He likes Bellatrix's "improved risk/reward profile" and its "potential to return to a growth platform" in 2017. Bellatrix spent much of 2016 shrinking by selling off assets to reduce debt. Its efforts have paid off, in Mr. Petrucci's opinion, as Bellatrix is now "in the fortunate position that it doesn't need to 'bank on the banks' for liquidity." Net debt was less than $400-million as of Dec. 31, 2016, down from over $700-million a year earlier, and virtually nothing is due until 2020. As for Bellatrix's "growth platform," Mr. Petrucci reckons that the company is in good shape to complete its drill program for the first half of the year before spring breakup. The first-half program consists of nine wells, mostly in the liquids-rich Spirit River play. One of the company's most recent Spirit River wells produced 18.1 million cubic feet a day over its first 30 days, nicely above the modelled rate of around 11 million cubic feet a day.
Despite its efforts, Bellatrix has not been able to get its stock far above the $1 mark, or even near the $1 (U.S.) mark in New York, where it closed today at 77 U.S. cents. The New York Stock Exchange warned Bellatrix last August that it would face the loss of its listing unless its stock traded consistently above $1 (U.S.) by early February. The day before the listing review was set to end, Bellatrix won an extension to the review, which will now end on the date of the company's next shareholder meeting. A SEDAR filing yesterday scheduled this meeting for May 17. Bellatrix has said it may ask shareholders to approve a rollback at the meeting so that it can save its NYSE listing. It currently has 246 million shares outstanding.
In addition to possible rollback proposal, the May 17 meeting will include some different faces. Ray Smith will not be there, having retired as president, CEO and a director last month, a few months after he took a leave of absence to focus on a medical situation. Brent Eshleman, Bellatrix's chief operating officer, has taken over as the new president and CEO. Long-time director Doug Baker also resigned last month, citing personal and family reasons. He was replaced by newcomer Tom MacInnis. Mr. McInnis was one of the founders of Tristone Capital Global, a Calgary-based energy investment firm that was acquired by Macquarie Group in 2009. The day after Tristone was acquired, Mr. McInnis jumped ship and headed to National Bank, where he would head the Calgary office for the next eight years. He retired at the end of January and joined Bellatrix's board a week later. This appears to be his first time on the board of a public company.
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