Daniel Lewis Continues to Raise Activist Stake In Canadian Energy Company

Daniel LewisOrange Capital continues to boost its exposure to Bellatrix Exploration Ltd (NYSEMKT:BXE). The fund disclosed, today, ownership of 17.49 million Common Shares, which account for 9.2% of the company’s Common Shares outstanding, and makes of Orange Capital the largest shareholder. This is the third increase in its stake that the fund has disclosed since the beginning of September.

Bellatrix Exploration Ltd (NYSEMKT:BXE) is a $1.34 billion market cap Canadian oil and gas exploration and production company. Its assets comprise a portfolio of properties concentrated in key areas of Alberta, British Columbia, and Saskatchewan. Orange Capital first disclosed a position in Bellatrix Exploration Ltd (NYSEMKT:BXE), with 10.16 million Common Shares, in mid-August (although it started building it in early-July). Since that moment, it disclosed three increases in its bets on the company. To date, the fund spent a total of $134 million (CAD $146 million, including brokerage commissions), in the aggregate, to purchase the stock.

Daniel Lewis - Orange Capital

I should highlight that Orange Capital’s stake in Bellatrix Exploration Ltd (NYSEMKT:BXE) has an activist nature. As reported by Bloomberg in late-August, the fund is seeking changes in the Board of Directors, and exploring a possible sale of the company. According to one of the fund’s SEC filings, it intends to change the size, age and constitution of the Board, in addition to implementing a few measures that help increase the transparency for investors. Other measures proposed by Orange Capital include a possible sale or IPO of Bellatrix Exploration Ltd (NYSEMKT:BXE)’s midstream assets.

Other major institutional investors betting on Bellatrix Exploration Ltd (NYSEMKT:BXE) are David Dreman’s Dreman Value Management, which owns 853,333 Common Shares, Mark Rachesky’s MHR Fund Management, which started a position in the company, with 530,000 Common Shares, over the second quarter of 2014. Israel Englander’s Millennium Management also seems bullish about this oil and gas company; it last disclosed a steep boost in its exposure to the company, and now owns 368,700 shares valued at approximately $3.21 million.

Orange Capital is a New York-based hedge fund founded in 2005, and run by Daniel Lewis, who previously worked for Citigroup and its predecessor companies for eight years. According to its latest 13F filing, its equity portfolio, worth more than ¾ of a billion dollars, is mainly focused on consumer discretionary stocks (48.5%) and, to a lesser extent, on financial (38.1%) and industrials (11.5%) stocks.

Disclosure: Javier Hasse holds no positions in any stocks or funds mentioned