Bellamont Announces Grimshaw Montney Update

Bellamont Exploration Ltd. (the "Corporation") on Monday provided an operational update at the Corporation's Grimshaw Montney oil pool. In addition, Bellamont is pleased to announce a new oil property acquisition and establishment of a new core area.

Grimshaw Montney Oil Pool

In the first quarter of 2011, Bellamont successfully drilled and completed 2 (1.75 net) additional horizontal wells at its Grimshaw Triassic C Montney oil pool at 13-28-83-23W5M well (the "13-28") and 16-29-83-23W5M well (the "16-29"). Both wells were placed on production on April 7th, 2011. To date, the 16-29 (Bellamont 100% working interest) has produced an average daily rate of approximately 125 bbl/d of oil. The 13-28 (Bellamont 75% working interest) was facility restricted until May 2nd, but is now also producing approximately 125 bbl/d.

The economics of Grimshaw are excellent. The relatively shallow (~900 meters) vertical depth results in all-in cost per horizontal well of approximately $2.0 million. The average IP rate (first 30 days) for the 8 horizontal wells in the pool has been in excess of 110 bbl/d, resulting in on-stream costs of less than $20,000 per bbl/d. New wells qualify for a 5.0% royalty for the first 50,000 Boe or 18 months of production. Based on an oil price of $95 WTI (USD), new wells are expected to achieve a netback in excess of $60.00/boe, yielding a recycle ratio in excess of 5 times.

Bellamont has a total of 38 (~34 net) additional horizontal locations identified in this pool. Only three of these locations were booked in the Corporation's reserve report at the end of 2010. Bellamont will be drilling three 100% working interest infill wells in the pool immediately following spring breakup which should add in excess of 300 bbl/d of oil to Bellamont by August. Bellamont is planning to accelerate further delineation and development of this pool in 2011 with continued success.

Undeveloped Land Acquisition and New Core Area

Bellamont has signed an agreement with a private company to acquire a property in the Birch Area of British Columbia. The property directly offsets a light (38 API) oil pool producing from the Baldonnel formation. The vendor's independent reserves evaluator has assigned reserves to the acquired property of 0.6 million BOE, with a December 31, 2010 value of $5.7 million (NPV@10%BT). The reserve report included four 100% Baldonnel drilling locations. In total, the property includes 25 net sections of lands, with an average working interest of approximately 90%. The purchase price for the transaction was $3.5 million and is expected to close on May 10, 2011.

The wells in the offsetting pool have produced at an average initial rate of 150 boe/d (125 bbl/d of oil) and are expected to produce 139 mboe per well. The pool was largely developed in the mid 1990's via short reach horizontal wells that were not fracture stimulated. By utilizing modern drilling and completion techniques, Bellamont believes the potential exists to improve the initial rate on new wells to in excess of 400 boe/d (300 bbl/d oil). Bellamont plans to drill wells with up to twice the horizontal length as the offset wells and complete them with multi-staged fracture stimulations. Bellamont has identified 12 such drilling locations on lands immediately offsetting the existing pool and expects to drill its first well in the fall of 2011.

If Bellamont is successful implementing modern drilling and completion technology at Birch, the potential exists to extend the existing pool onto a large contiguous block of lands acquired in this transaction. The Corporation estimates the majority of the 25 net sections of land being acquired contain Discovered Petroleum Initially-In-Place equivalent 4 to 6 million barrels of light oil per section. Success in extending this pool would add significantly to the Corporation's light oil drilling inventory and could result in a repeatable light oil resource play for Bellamont.

Bellamont has now compiled a land position of 47 sections (36 net) in the Birch and Stoddart areas of British Columbia. Bellamont expects this region to become a new core area for Corporation. In addition to light oil in the Baldonnel Formation, Bellamont's lands are prospective for liquids rich natural gas in the Montney and Doig Formations. Other area operators have reported success drilling horizontal wells completed with multi-staged fracture stimulations and as a result, activity in this region has increased. Bellamont is well positioned on these emerging plays.


The Corporation has a drilling inventory consisting of 137 (123 net) drilling locations, only 19 (gross) of which are booked in the 2010 year end reserve report. The majority of the Corporation's drilling inventory, 101 net locations in total, target light oil and are lower risk and developmental in nature. This drilling inventory will provide Bellamont with a solid platform for growth over the next several years.

With a 2011 capital program heavily weighted to drilling oil targets, a conservatively managed balance sheet and solid cash flow base, Bellamont is well set up for continued per share growth.

Bellamont's strategy is to build a low risk reserve, production and cash flow base through acquiring, developing and exploring primarily in the Peace River Arch areas of Alberta and British Columbia. Bellamont has a strong technically focused management team that internally generates and develops high quality large resource based prospects. In addition, the Corporation has compiled an undeveloped land inventory of 75,873 net acres.

Bellamont is an oil and gas company focused on the acquisition, exploration, development and production of oil and natural gas in western Canada.