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Bellatrix Announces Senior Unsecured Noteholders, Convertible Debentureholders and Shareholders Approve Recapitalization Transaction


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Source: Bellatrix Exploration Ltd.

CALGARY, Alberta, May 23, 2019 (GLOBE NEWSWIRE) — Bellatrix Exploration Ltd. (“Bellatrix” or the “Company”) (TSX: BXE) today announced that at the meetings (the “Meetings”) of holders of the Company’s outstanding 8.5% senior unsecured notes due 2020 (the “Senior Unsecured Noteholders”), holders of the Company’s outstanding 6.75% convertible debentures due 2021 (the “Convertible Debentureholders”) and holders of the Company’s common shares (the “Existing Shareholders”) held today, the Senior Unsecured Noteholders, Convertible Debentureholders and Existing Shareholders approved the Company’s previously announced recapitalization transaction (the “Recapitalization Transaction”) to be implemented pursuant to a plan of arrangement (the “Plan of Arrangement”) under the Canada Business Corporations Act (the “CBCA”).

Approval of the Plan of Arrangement

At the Meetings, 100% of the votes cast by Senior Unsecured Noteholders, 99.51% of the votes cast by Convertible Debentureholders and 87.18% of the votes cast by Existing Shareholders were voted in favour of the Plan of Arrangement.

Election of Directors

The eight candidates nominated for election to Bellatrix’s board of directors (the “Board of Directors”) as listed in the Company’s management information circular dated April 18, 2019 (the “Information Circular”) and voted upon at the annual and special meeting of Existing Shareholders (the “Shareholders’ Meeting”) were elected by Existing Shareholders present or represented by proxy at the Shareholders’ Meeting. The voting results are as follows:

  Votes For Votes Withheld
Nominees Number % Number %
Brent A. Eshleman 13,773,939 70.74 5,698,411 29.26
John H. Cuthbertson 13,732,743 70.52 5,739,607 29.48
W.C. (Mickey) Dunn 13,687,313 70.29 5,785,037 29.71
Lynn Kis 13,690,043 70.31 5,782,307 29.69
Keith E. Macdonald 13,744,499 70.58 5,727,851 29.42
Thomas E. MacInnis 13,739,976 70.56 5,732,374 29.44
Murray B. Todd 13,704,217 70.38 5,768,133 29.62
Keith S. Turnbull 13,691,566 70.31 5,780,784 29.69

As described in the Information Circular, pursuant to the Recapitalization Transaction, the Senior Unsecured Noteholders that entered into the support agreement with the Company on March 28, 2019 (the “Initial Consenting Noteholders”) will have a one-time right as part of the implementation of the Recapitalization Transaction to designate nominees for the Board of Directors that will comprise such proportion of the Board of Directors upon implementation of the Recapitalization Transaction as agreed to by the Company and the Initial Consenting Noteholders, and the composition and size of the Board of Directors upon implementation of the Recapitalization Transaction shall be acceptable to the Initial Consenting Noteholders and the Company.  Accordingly, pursuant to the Plan of Arrangement, certain of the directors of Bellatrix at the time of the implementation of the Plan of Arrangement will resign, and the new directors determined by the Initial Consenting Noteholders pursuant to the Plan of Arrangement will be deemed to be appointed.  The Company will provide a further update on these matters at the appropriate time in connection with implementation of the Recapitalization Transaction.

Shareholder Approval of Other Matters

In addition to the above, at the Shareholders’ Meeting all other resolutions described in the Information Circular were approved by the Existing Shareholders as follows: (i) the special resolution approving the continuance of Bellatrix into the federal jurisdiction of Canada under the CBCA (the “Continuance”) and repealing and replacing the existing by-laws of Bellatrix with new by-laws upon completion of the Continuance was approved by 88.47% of the votes cast by Existing Shareholders; (ii) the special resolution to reduce the stated capital of Bellatrix’s common shares by $800 million (the “Stated Capital Reduction”) was approved by 85.70% of the votes cast by Existing Shareholders; (iii) the ordinary resolution approving the amendment to the exercise price of the warrants (the “Second Lien Exchange Warrants”) issued to the holders of the Company’s existing 8.5% second lien notes due 2023 (the “Existing Second Lien Noteholders”) and the issuance of certain additional warrants on the same terms as the amended Second Lien Exchange Warrants to the Existing Second Lien Noteholders as further described in the Information Circular was approved by 85.65% of the votes cast by Existing Shareholders; (iv) the ordinary resolution approving the appointment of KPMG LLP as the auditor of the Company was approved by 80.40% of the votes cast by Existing Shareholders; (v) the ordinary resolution approving all unallocated awards under the Company’s award plan was approved by 69.43% of the votes cast by Existing Shareholders; and (vi) the non-binding advisory resolution in respect of the Company’s approach to executive compensation was approved by 70.98% of the votes cast by Existing Shareholders.

The Company expects to complete the Continuance prior to seeking approval of the Plan of Arrangement by the Ontario Superior Court of Justice (Commercial List) (the “Court”).

Court Approval and Implementation

The hearing to seek Court approval of the Plan of Arrangement is currently scheduled for 10:00 a.m. (EDT) on May 28, 2019, or such other date as may be set by the Court. Subject to obtaining Court approval of the Plan of Arrangement and the satisfaction or waiver of the other conditions to the implementation of the Plan of Arrangement, the Company is working to complete the Recapitalization Transaction on or about May 30, 2019.

As part of seeking Court approval of the Recapitalization Transaction, the Company and its subsidiary, 11260049 Canada Limited (the “Bellatrix Subsidiary”), will seek a permanent waiver of: (a) defaults resulting from the commencement of its CBCA proceedings (the “CBCA Proceedings”) or the steps or transactions related to the CBCA Proceedings or the Recapitalization Transaction, and (b) third party change of control provisions that may be triggered by the implementation of the Recapitalization Transaction.

About Bellatrix

Bellatrix Exploration Ltd. is a publicly traded Western Canadian based growth oriented oil and gas company engaged in the exploration for, and the acquisition, development and production of oil and natural gas reserves, with highly concentrated operations in west central Alberta, principally focused on profitable development of the Spirit River liquids rich natural gas play.

For further information, please contact:

Steve Toth, CFA, Vice President, Investor Relations & Corporate Development (403) 750-1270

Bellatrix Exploration Ltd.
1920, 800 – 5th Avenue SW
Calgary, Alberta, Canada T2P 3T6
Phone: (403) 266-8670
Fax: (403) 264-8163
www.bxe.com

FORWARD LOOKING STATEMENTS: Certain information contained in this press release may contain forward looking statements within the meaning of applicable securities laws. The use of any of the words “continue”, “plan”, “propose”, “would”, “will”, “believe”, “expect”, “position”, “anticipate”, “improve”, “enhance” and similar expressions are intended to identify forward-looking statements. More particularly and without limitation, this document contains forward-looking statements concerning: the expected process for and timing of implementing the Recapitalization Transaction; the expectation and timing for the completion of the Continuance; the expectation around changes to the Company’s Board of Directors in connection with the implementation of the Plan of Arrangement and the provision of additional information in respect thereof; the expectation that the Company and the Bellatrix Subsidiary will attend a hearing before, and seek certain relief from, the Court and the expected timing for such hearing.

Forward-looking statements necessarily involve risks, including, without limitation, the ability of the Company to implement the Recapitalization Transaction on the terms described in this press release, the other press releases issued in respect of the Recapitalization Transaction and the Information Circular; the ability of the Company to receive all necessary regulatory, court, third party and stakeholder approvals in order to complete the Recapitalization Transaction; the ability of the Company to achieve its financial goals including with respect to the nature of any agreement with its debtholders; the ability of the Company to operate in the ordinary course during the CBCA Proceedings, including with respect to satisfying obligations to service providers, suppliers, contractors and employees; the ability of the Company to continue as a going concern; the ability of the Company to continue to realize its assets and discharge its liabilities and commitments; the ability of the Company to comply with its contractual obligations, including, without limitation, its obligations under debt arrangements; the general regulatory environment in which the Company operates; the tax treatment of the Company and the materiality of any legal and regulatory proceedings; the general economic, financial, market and political conditions impacting the industry and markets in which the Company operates; the ability of the Company to generate sufficient cash flow from operations; the impact of competition; the ability of the Company to obtain and retain qualified staff, equipment and services in a timely and efficient manner (particularly in light of the Company’s efforts to restructure its debt obligations); and the ability of the Company to retain members of the senior management team, including but not limited to, the officers of the Company.

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. In addition, forward looking statements or information are based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect and which have been used to develop such statements and information in order to provide stakeholders with a more complete perspective on Bellatrix’s future operations. Such information may prove to be incorrect and readers are cautioned that the information may not be appropriate for other purposes. Although the Company believes that the expectations reflected in such forward looking statements or information are reasonable, undue reliance should not be placed on forward looking statements because the Company can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding, among other things: the general stability of the economic and political environment in which Bellatrix operates; the timely receipt of any required regulatory approvals; future commodity prices; currency, exchange and interest rates; and the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which Bellatrix operates. 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 affect Bellatrix’s operations and financial results are included in reports, including under the heading “Risk Factors” in the Information Circular and the Company’s annual information form for the year ended December 31, 2018, on file with Canadian and United States securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com), through the SEC website (www.sec.gov), and at Bellatrix’s website (www.bxe.com). Furthermore, 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.



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