Bellamont Exploration Ltd. Releases Second Quarter 2011 Financial and Operating Results

CALGARY, Aug. 25, 2011 /CNW/ -- 
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN
 THE UNITED STATES


CALGARY, Aug. 25, 2011 /CNW/ - Bellamont Exploration Ltd. (the
 "Corporation" or "Bellamont") (TSXV:BMX.A) (TSXV:BMX.B) is pleased to
 provide a summary of its financial and operating results for the three
 and six months ended June 30, 2011.


SECOND QUARTER 2011 HIGHLIGHTS 


    --  Second quarter funds generated from operations increased 25
        percent to $5.0 million from $4.0 million in the same period in
        2010;
    --  Increased average production to 2,549 Boe/d in the second
        quarter, an increase of 14 percent from the same period of
        2010;
    --  Increased average oil and liquids production to 1,185 Boe/d in
        the second quarter, an increase of 27 percent from the same
        period of 2010;
    --  Increased operating netback to $30.28/Boe, an increase of 37
        percent from the same quarter of 2010;
    --  Incurred $7.0 million of net capital expenditures, the
        significant components of which were as follows:
  o Captured a new light oil resource play in the Birch Area of British
    Columbia by closing an agreement with a private company to acquire
    a non-producing property for a purchase price of $3.5 million in
    cash.  The property has assigned reserves of 0.6 million BOE, with
    a December 31, 2010 value of $5.7 million (NPV@10%BT)(1); and
    includes 25 net sections of lands, with an average working interest
    of approximately 90 percent;
  o Acquired 2 sections of land (100 percent working interest) in
    Grande Prairie, immediately offsetting Bellamont's Grande Prairie
    Montney I pool, for $1.5 million in cash;
  o Equipped 2 (1.75 net) oil wells that were drilled in the first
    quarter of 2011;
  o Completed electrification of the producing pad sites in the
    Grimshaw area reducing future operating expenses.



______________________________ 
(1) Estimated values do not represent fair market value





AREA UPDATES


Grimshaw Triassic D Montney Oil Pool


Bellamont has successfully drilled and cased an additional 2 (2 net)
 infill horizontal wells at its Triassic D Montney Oil Pool discovery at
 Grimshaw (the "Triassic D Pool"). These wells are scheduled to be
 completed in September and expected to be brought on production in
 October.  Bellamont forecasts new wells in this pool to produce at an
 average initial thirty day rate of 90 bbl/d. Bellamont is currently
 producing approximately 420 Boe/d net (90% oil) at Grimshaw from a
 total of 9 wells (8.75 net), eight of which were drilled horizontally.
 In the second quarter, Bellamont's operating netback at Grimshaw was in
 excess of $44/Boe.


Over the past several months, Bellamont has been conducting special
 laboratory work evaluating core from a vertical pilot well located in
 the Triassic D Pool.  The purpose of this work is to evaluate the
 potential for water flood and assist in estimating the Discovered
 Petroleum Initially in Place ("DPIIP")(2).


The core analysis indicates favorable relative permeability of the
 Montney formation at Grimshaw, similar to the Dixonville Montney C
 Pool, located approximately 18 miles northwest.  The operator at
 Dixonville has successfully implemented a waterflood scheme and is
 forecasting an ultimate recovery factor over 23%. Preliminary analysis
 of the core at Grimshaw suggests a similar recovery factor to
 Dixonville is possible. Bellamont has now initiated a waterflood
 simulation study for the purpose of applying for waterflood approval
 from the Energy Resources Conservation Board.  The latest two infill
 horizontal wells drilled by Bellamont were strategically located for
 implementing a pilot waterflood. The Corporation expects waterflood
 approval should be obtained in early 2012, at which time the pilot
 program will be commenced.  Waterflooding at Grimshaw represents
 material upside to Bellamont as, to date, Bellamont's reserve
 evaluators have only assigned a primary recovery factor of 8.8% of the
 recognized DPIIP.


Bellamont's analysis of the Grimshaw Montney formation core indicates
 DPIIP up to 19.0 million barrels per section (i.e. 640 acres). 
 Bellamont estimates the wells drilled to date in the Triassic D Pool
 have established a DPIIP up to 50 million barrels over 1920 acres of
 land owned by Bellamont (96% average working interest).  As of December
 31, 2010, Bellamont's independent reserve evaluators have only
 recognized 10.7 million barrels of DPIIP located over an area of 1,105
 acres of land.  Bellamont expects the information obtained from its
 core analysis, in combination with results of the wells drilled to date
 in 2011, will lead to recognition by its reserve evaluators of
 considerably more DPIIP than is currently contained in the 2010 year
 end reserve report. Bellamont has identified another 15 (14.25 net) low
 risk development horizontal locations within the currently established
 boundary of the Triassic D Pool.


In September, Bellamont plans to drill and core 2 (1.75 net) vertical
 delineation test wells at Grimshaw.  The purpose of these wells is to
 expand the known areal extent of the Triassic D Pool and resultant
 DPIIP estimate. These wells are estimated to cost approximately $500
 thousand per well and were identified on the Corporation's
 interpretation of three dimensional seismic data. The Corporation
 believes the delineation wells could establish the existence of an
 additional 70 million barrels of DPIIP in the Triassic D Pool.  Success
 in the delineation program could lead to another 46 (35.5 net)
 horizontal locations. The information from the delineation wells is
 expected to be fully compiled by the end of September.


One of the delineation wells is being drilled as a test well pursuant to
 a Farmin agreement with a third party whereby Bellamont has secured the
 right to earn up to an additional 1,280 acres (768 net) of highly
 prospective lands.  Earning these lands will increase Bellamont's total
 acreage on this play to 10,240 acres (8,880net).


Ultimately, Bellamont believes the optimal development of the Triassic D
 pool will consist of 8 horizontal wells per section. In comparison, the
 Dixonville Montney C pool was developed with up to 16 horizontal wells
 per section.  The Corporation has built a 100% owned centralized
 battery that will facilitate continued growth of the property. 
 Bellamont is preparing to license and drill up to 10 (8.4 net)
 additional horizontal wells in the six months following its delineation
 program.


__________________________________
(2) Discovered Petroleum Initially in Place ("DPIIP") - is defined in the
 Canadian Oil and Gas Evaluation Handbook ("COGEH") as the quantity of
 hydrocarbons that are estimated to be in place within a known
 accumulation. Original Gas in Place ("OGIP") is a more commonly used
 industry term when referring to gas accumulations. DPIIP is divided
 into recoverable and unrecoverable portions, with the estimated future
 recoverable portion classified as reserves and contingent resources.
 There is no certainty that it will be economically viable or
 technically feasible to produce any portion of this DPIIP except for
 those portions identified as proved or probable reserves.





Grande Prairie Montney 


In the first six months of 2011 Bellamont has been producing an average
 of 1,000 Boe/d from six horizontal wells in its Grande Prairie Montney
 I pool, despite being completely shut in for two weeks in May due to a
 third party plant turnaround.  Bellamont optimized several wells in the
 pool in the first half of the year by installing plunger lifts,
 resulting in more efficient run times.  Notwithstanding persistently
 low natural gas prices, Bellamont enjoyed an operating netback of
 approximately $24/Boe during this period from these wells, as a result
 of high light oil and NGL content of the production stream (194 bbl/d
 of 42° API oil and 90 bbl/d of NGL's).


During the second quarter, Bellamont acquired a 100 percent interest in
 a section of land immediately offsetting its wells in the Grande
 Prairie Montney I pool.  Based on three dimensional seismic and well
 control, the Corporation's reserve evaluators estimate the acquired
 lands contain 1.9 MMboe of DPIIP. This acquisition increased the
 Corporation's drilling inventory in the known boundary of the Montney I
 pool to 21 (21 net) locations, based on 8 horizontal wells per
 section.  The Corporation has commenced licensing 3 (3 net) additional
 locations, which it intends to drill over the next 12 to 18 months. The
 average initial rate of the horizontal wells in this pool (first 90
 days) has been approximately 500 Boe/d.  Bellamont expects this pool to
 be a consistent source of production, cash flow and reserve growth for
 the next several years.


The Corporation has recently drilled and cased a potential Montney gas
 well on a new 4 (3.5 net) section block of lands located 2 miles north
 of the Montney I pool, acquired by Bellamont earlier this year.  Design
 of the completion of this well is pending detailed analysis of core
 obtained from the well.


New British Columbia Core Area - Light Oil Resource Potential


Early in 2011, Bellamont made a strategic decision to expand its
 opportunity portfolio and began building a land base in a new core area
 in British Columbia.  The Corporation's mandate was to build a land
 position in an area where it could see the potential for repeatable
 "resource type" plays.  Bellamont has now compiled a land position of
 54 sections (43 net) in the Birch and Stoddart areas of British
 Columbia.


The Corporation's primary target in the Birch and Stoddart areas is
 light oil (38° API) in the Baldonnel formation, a shallow marine
 dolomitized carbonate reservoir, typically located at a depth of 1,300
 metres. Over the past two years Bellamont has conducted a detailed
 study of the Baldonnel formation and believes that an oil saturated
 fairway exists between Birch and Stoddart. To date, the only commercial
 development of this potential resource play has been in the Birch and
 Stoddart areas.  Bellamont believes the answer to unlocking this play
 on a more regional basis may be the use of horizontal wells with
 multistage fracture stimulations.


Bellamont has accumulated 21.75 (16.3net) sections of lands directly
 offsetting the Birch Baldonnel "C" Pool (the "Baldonnel C Pool").  To
 date, the Baldonnel C Pool has produced a total of 3.5 million barrels
 of light (38°API) oil.  This pool was discovered with vertical wells,
 and then subsequently developed with short reach (i.e. ~400 metre)
 horizontal wells, prior to the development of multi-stage fracing
 technology.  The average horizontal wells in the Baldonnel C pool have
 produced an average initial oil rate of 125 bbl/d and are expected to
 produce an average cumulative total of 139 mboe per well. Recently, the
 operator of this pool has increased production by over 700 boe/d by
 drilling 4 wells and has licensed 8 more.  Bellamont believes it can
 enhance production rates and recoverable reserves per well by utilizing
 longer reach (up to 1,000 metres) horizontal wells with multistage
 fracture stimulations. Furthermore Bellamont believes it can use this
 technology to potentially extend the boundary of the Baldonnel C Pool.
 Bellamont has identified 12 (12 net) low risk horizontal locations on
 lands located within one mile of the Baldonnel C Pool, with the
 potential for another 12 (12 net) horizontal locations if this pool can
 be successfully extended.


In addition to the Baldonnel formation, the Birch area is also
 prospective for liquids rich (25-35 barrels/mmcf) natural gas in the
 Montney formation.  Bellamont now has a total of 8 (7.75 net sections)
 of Montney rights in this area.  Several other operators in the near
 vicinity have recently reported success drilling horizontal wells
 targeting the Montney formation.  In particular, three horizontal wells
 have been drilled by other operators.  One well was placed on
 production at a reported initial rate of 5.0 mmcf/d.  A second well was
 recently tested at a reported rate up to 6.3 mmcf/d.  The third well is
 awaiting completion via multistage fracture stimulations.  Bellamont's
 has mapped a considerable amount of natural gas over its lands in this
 area, based on log characteristics typically referenced by industry
 participants in the Montney resource natural gas play.  Accordingly,
 Bellamont should benefit if this play continues to be successfully
 advanced by others.  No capital is currently planned for the Montney
 formation in this area.


In the Stoddart area, Bellamont has accumulated 12.5 (12.5 net) sections
 of lands prospective for Baldonnel oil.  In this area, light oil has
 been produced from several vertical wells, the best of which produced
 at a rate over 70 bbl/d of oil.  Collectively, these wells have
 produced a cumulative total in excess of 80,000 bbls of light oil.  The
 production profiles from these wells are very similar to the vertical
 wells that were first drilled into the Birch Baldonnel C pool (i.e.
 prior to its subsequent development with horizontal wells).  As a
 result, Bellamont anticipates that development of Stoddart area with
 horizontal wells will yield results equivalent to the Birch area. 
 Bellamont is in the process of securing surface access and licensing
 its first horizontal well in Birch, which it expects to be ready to
 drill in the fourth quarter.  The well's location will be of low
 geological risk, as its location is offset between two of the existing
 producing Baldonnel oil wells in this area.  The Corporation has a
 total of 5 (5 net) firm horizontal Baldonnel oil locations in the
 Stoddart area with the potential for an additional 18 (18 net)
 horizontal locations.


SALE OF ASSET BACKED COMMERCIAL PAPER


On June 14, 2011, Bellamont closed agreements with two vendors for the
 sale of its investment in asset backed commercial paper ("ABCP"). 
 Gross proceeds totalled $5.22 million, representing a gain of $0.48
 million from the March 31, 2011 carrying value of $4.74 million.  The
 Corporation acquired the investment in ABCP through the acquisition of
 Standard Energy Inc. on February 11, 2010.  Funds from the sale of ABCP
 were applied against the Corporation's long-term debt related to
 investments facility of $5.22 million, after which, the facility was
 retired.


FINANCIAL AND OPERATING HIGHLIGHTS


The Corporation will file its unaudited interim financial report and
 related management's discussion and analysis ("MD&A") for the three and
 six months ended June 30, 2011, with Canadian securities regulatory
 authorities on SEDAR.  Copies of these documents may be accessed
 electronically on SEDAR at www.sedar.com or at www.bellamont.com.  Certain selected financial and operational information for the three
 and six months ended June 30, 2011 and 2010 are set out below and
 should be read in conjunction with Bellamont's interim financial report
 and MD&A.






                    Three months ended June       Six months ended June
                                        30,                         30,

                        2011           2010          2011          2010

FINANCIAL ($000s,                                                      
except per share)

Petroleum and         13,038          9,512        24,888        17,015
natural gas sales

Funds generated        5,035          4,032        10,212         7,426
from operations(
(1))

  Per Class A and       0.03           0.03          0.07          0.05
  Class B share(
  (2))

Net income/(loss)      1,773          (684)         1,480       (5,972)

  Per share basic       0.01              -          0.01        (0.05)
  and diluted((3))

Net capital            7,066          9,489        16,460        69,495
expenditures((4))

Net debt((1))         38,603         20,814        38,603        20,814

OPERATING                                                              

Production                                                             

  Crude Oil (Bbls      1,020            773         1,018           695
  per day)

  Natural gas (Mcf     8,182          9,491         8,466         7,903
  per day)

  Natural gas            165            160           165           112
  liquids (Bbls
  per day)

  Total (Boe per       2,549          2,515         2,594         2,125
  day)

Average realized                                                       
prices

  Crude Oil ($ per     94.16          71.08         88.91         73.50
  Bbl)

  Natural gas ($        4.23           4.15          4.16          4.52
  per Mcf)

  Natural gas          76.31          63.85         71.28         64.10
  liquids ($ per
  Bbl)

  Average realized     56.21          41.57         53.01         44.24
  price ($ per
  Boe)

Netbacks((1)) ($                                                       
per Boe)

  Petroleum and        56.21          41.57         53.01         44.24
  natural gas
  sales

  Royalties           (9.62)         (5.19)        (8.89)        (6.50)

  Production and     (16.31)        (14.27)       (15.16)       (13.76)
  operating
  expenses

  Operating            30.28          22.11         28.96         23.98
  netback

Undeveloped land                                                       
holdings

  Gross acres        104,493         91,286       104,493        91,286

  Net acres           79,530         61,775        79,530        61,775

  Average working        76%            68%           76%           68%
  interest

SECURITIES (000s)                                                      

Shares                                                                 
outstanding, end
of period

  Class A shares     140,998        140,788       140,998       140,788

  Class B shares       1,012          1,012         1,012         1,012

Weighted average                                                       
shares

  Basic ((3))        140,825        140,788       140,806       127,114

  Diluted((3))       151,924        140,788       151,930       127,114






(1)   Funds generated from operations, Net debt and Netbacks as
      presented do not have any standardized meaning prescribed by IFRS
      and therefore may not be comparable with the calculation of
      similar measures for other entities.  Please refer to the
      Non-IFRS Measures section of the MD&A for more details.

(2)   For the three and six month periods ended June 30, 2010 and June
      30, 2011, the Class B shares are converted at the minimum Class A
      share price of $1.00 and added to the Class A shares.  Thus, each
      Class B share converted to 10 Class A shares for the purpose of
      funds generated from operations per share.

(3)   Included in diluted earnings per share is the effect of stock
      options and convertible Class B shares as they were dilutive for
      the three and six month periods ended June 30, 2011.  For the
      three and six month periods ended June 30, 2010 the effect of
      stock options and convertible Class B shares were excluded from
      the diluted earnings per share as they were anti-dilutive.

(4)   Total net capital expenditures, including and acquisitions and
      dispositions.





OUTLOOK


To date in 2011, Bellamont has successfully broadened its opportunity
 inventory and now has established four key core growth areas with a
 focus on light oil and liquids rich gas at Grimshaw, Grande Prairie,
 Birch and Stoddart. The Corporation's Montney Oil pool development at
 Grimshaw has been very successful to date and is ready to be
 accelerated with success in the delineation program and implementation
 of water flood. Bellamont's prolific Montney I pool in Grande Prairie
 has been a solid cash flow generator and should provide production,
 reserve and cash flow growth for several years.  Finally, the newly
 acquired assets in British Columbia have cemented new core areas in
 Birch and Stoddart, prospective for repeatable "resource type"
 developments for Baldonnel light oil and liquids rich Montney natural
 gas.


Bellamont is currently producing approximately 2,500 Boe/d (47.0% oil
 and liquids) with an additional 300 boe/d (180 bbl/d oil) to be added
 in October from the two new horizontal wells in Grimshaw and behind
 pipe volumes.


During the course of 2011, Bellamont reallocated capital to capture 47.5
 net sections of undeveloped land in the Birch, Stoddart and Grande
 Prairie areas.  To date, $8.4 million has been spent on building its
 new core land positions.  Bellamont's management believes redirecting
 these expenditures has significantly deepened Bellamont's prospect
 inventory to a larger potential resource base.


The Corporation has a deep drilling inventory consisting of over 200
 drilling locations, only 19 (gross) of which are booked in the 2010
 year end reserve report.  Seventy five percent of the Corporation's
 drilling inventory target light oil and are lower risk and
 developmental in nature.  The drilling inventory will provide Bellamont
 with a solid platform for growth over the next several years.


The company plans to announce an updated capital program and guidance
 later in the third quarter which will be based on the results of the
 delineation program at Grimshaw and a detailed review of the newly
 acquired lands.


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 area of Alberta and British Columbia.  Bellamont has a
 strong technically focused management team that internally generates
 and develops high quality large resource based prospects.


Bellamont is an oil and gas company focused on the acquisition,
 exploration, development and production of oil and natural gas in
 western Canada and trades on the TSX Venture Exchange under the symbols
 "BMX.A" and "BMX.B".  The Corporation has 140,997,699 Class A shares
 and 1,012,000 Class B shares outstanding.


FORWARD LOOKING STATEMENTS


This press release may contain forward-looking statements including
 expectations of future production, cash flow, recycle ratios, netbacks
 and earnings. More particularly, this press release contains statements
 concerning Bellamont's future production estimates, expansion of oil
 and gas property interests, exploration and development drilling and
 capital expenditures. These statements are based on current
 expectations that involve a number of risks and uncertainties, which
 could cause actual results to differ from those anticipated.  These
 risks include, but are not limited to: the risks associated with the
 oil and gas industry (e.g. operational risks in development,
 exploration and production; delays or changes in plans with respect to
 exploration or development projects or capital expenditures; the
 uncertainty of reserve estimates; the uncertainty of estimates and
 projections relating to production, costs and expenses, and health,
 safety and environmental risks), commodity price, price and exchange
 rate fluctuation and uncertainties resulting from potential delays or
 changes in plans with respect to exploration or development projects or
 capital expenditures.  Additional information on these and other
 factors that could affect Bellamont's operations or financial results
 are included in Bellamont's reports on file with Canadian securities
 regulatory authorities.


The forward-looking statements or information contained in this news
 release are made as of the date hereof and Bellamont undertakes no
 obligation to update publicly or revise any forward-looking statements
 or information, whether as a result of new information, future events
 or otherwise, unless so required by applicable securities laws


OIL AND GAS ADVISORY


This press release contains disclosure expressed as "Boe/d". All oil and
 natural gas equivalency volumes have been derived using the ratio of
 six thousand cubic feet of natural gas to one barrel of oil.
 Equivalency measures may be misleading, particularly if used in
 isolation. A conversion ratio of six thousand cubic feet of natural gas
 to one barrel of oil is based on an energy equivalency conversion
 method primarily applicable at the burner tip and does not represent a
 value equivalency at the well head.


Discovered Petroleum Initially in Place ("DPIIP") - Is defined in the
 Canadian Oil and Gas Evaluation Handbook ("COGEH") as the quantity of
 hydrocarbons that are estimated to be in place within a known
 accumulation. Original Gas in Place ("OGIP") is a more commonly used
 industry term when referring to gas accumulations. DPIIP is divided
 into recoverable and unrecoverable portions, with the estimated future
 recoverable portion classified as reserves and contingent resources.
 There is no certainty that it will be economically viable or
 technically feasible to produce any portion of this DPIIP except for
 those portions identified as proved or probable reserves.


The TSX Venture Exchange has not reviewed and does not accept
 responsibility for the adequacy or accuracy of this release. Not for
 distribution to U.S. newswire services or for dissemination in the
 United States.  Any failure to comply with this restriction may
 constitute a violation of U.S. securities law. 


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p Steve Moran, President and Chief Executive Officer, [phone]; orbr/ Tavis Carlson, Vice President Finance and Chief Financial Officer, (403)  802-0117br/ 1208, 250- 2supnd/sup Street S.W. Calgary, Alberta T2P 0C1br/ Email: a href="mailto:[e-mail]"[e-mail]/abr/ a href="http://www.bellamont.com"www.bellamont.com/a /p 

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