Perpetual Energy Inc. Confirms February 2011 Cash Dividends and Releases 2010 Year-End ReservesBy Perpetual Energy Inc., PRNE
Tuesday, February 8, 2011
CALGARY, Canada, February 9, 2011 - Perpetual Energy Inc. ("Perpetual" or the "Corporation") is pleased to
confirm that its dividend to be paid on March 15, 2011 in respect of income
received by Perpetual for the month of February 2011, for shareholders of
record on February 23, 2011, will be $0.03 per share. The ex-dividend date is
February 18, 2011. The February 2011 dividend brings cumulative dividends
(including distributions paid since the inception of Perpetual's predecessor,
Paramount Energy Trust) to $14.384 per share. Perpetual reviews dividends on
a monthly basis. Future dividends are subject to change as dictated by
commodity price markets, operations, capital considerations and future
business development opportunities.
The Corporation also advises that there will continue to be no shares
available under either the Premium DividendTM or dividend reinvestment
component of the Premium DividendTM and Dividend Reinvestment Plan (the
"Plan") for the Corporation's February 2011 dividend payable on March 15,
2011 and until further notice. At such time as the Corporation elects to
reinstate either or both components of the Plan, shareholders who were
enrolled at suspension and remain enrolled at reinstatement will
automatically resume participation in the Plan.
YEAR-END 2010 RESERVES
The Corporation is pleased to release a summary of the company's year-end
2010 reserves information, as evaluated by the independent engineering firm
McDaniel and Associates Consultants Ltd. ("McDaniel").
Year-End Reserve Highlights
- In 2010, Perpetual added 40.0 Bcfe of proved and probable reserves, excluding production. - After dispositions of 53.1 Bcfe and production of 55.9 Bcfe in 2010, proved and probable reserves decreased three percent from 471.6 Bcfe at year-end 2009 to 455.6 Bcfe and proved reserves decreased three percent to 235.9 Bcfe at year-end 2010. - Excluding downward revisions related solely to changes in natural gas pricing at year-end 2010 of 22.3 Bcfe, Perpetual's reserves grew one percent year over year from 471.6 Bcfe to 477.9 Bcfe, offsetting production of 55.9 Bcfe and net dispositions of 9.8 Bcfe, which included the disposition of 34.2 Bcf of probable shut-in gas over bitumen reserves where the effective funds flow through the Government of Alberta's financial solution was retained by Perpetual. - Reserve additions largely offsetting production and dispositions were a result of total net capital spending of $163.2 million, including investment of $114.1 million in exploration and development capital spending programs excluding spending for the development of Perpetual's gas storage asset at Warwick ("Warwick Gas Storage"), as well as various asset acquisitions in the Edson and Birchwavy areas during the year. - Including changes in future development capital ("FDC"), Perpetual realized finding and development costs ("F&D") of $1.87 per Mcfe ($11.22 per BOE) on a proved and probable reserve basis in 2010. - Perpetual's realized finding, development and acquisition costs ("FD&A"), including changes in FDC, was $2.49 per Mcfe ($14.94 per BOE) on a proved and probable basis. FD&A costs were significantly impacted by relatively low disposition metrics on a reserve basis associated with the sale of probable shut-in gas over bitumen reserves without the related effective funds flow from future royalty reductions in the Legend, Liege and Surmont areas of 34.2 Bcf for net proceeds of $39.8 million. Perpetual retained the effective funds flow for these shut-in gas over bitumen reserves making the asset sales incomparable to other transactions, therefore the proceeds and reserves associated from these dispositions have been removed for purposes of the FD&A calculation. - No reserves were recorded at year-end 2010 for the Corporation's extensive acreage position and three gross (1.4 net) horizontal wells penetrating the Montney formation at Elmworth. An independent contingent resource assessment report was prepared by McDaniel for 42 gross sections of Perpetual's Montney acreage in the Elmworth area which on a preliminary basis estimates gross original gas in place ("OGIP") on company interest lands of 987.5 Bcf plus associated natural gas liquids ("NGLs"). Assuming a range in recovery factors from 20 to 50 percent, gross recoverable sales gas is estimated from a low of 167.9 Bcf with 5.9 MMbbls of NGLs (203.4 Bcfe) to a high of 419.7 Bcf with 24.7 MMbbls NGLs (567.8 Bcfe), with McDaniel's best estimate at 35 percent recovery factor translating to 293.8 Bcf with 13.8 MMbbls NGLs (376.7 Bcfe). On a working interest basis, the best estimate recoverable contingent resource is estimated at 177.9 Bcfe. Perpetual has an additional 34 gross sections in the Elmworth area which have not yet been evaluated through drilling in the Montney formation. - Perpetual's reserve to production ratio ("reserve life index" or "RLI") is 8.4 years on a proved and probable reserves basis (4.8 years on a proved reserves basis) at year-end 2010. - Perpetual's reserve-based net asset value ("NAV") at year-end 2010 was estimated at $5.02 per Share discounted at eight percent.
Company interest reserves included herein are before royalty burdens and
including royalty interests. Reserves information is based on an independent
reserves evaluation report prepared by McDaniel dated February 7, 2011 with
an effective date of December 31, 2010 (the "McDaniel Report"), and has been
prepared in accordance with National Instrument 51-101 ("NI 51-101") using
McDaniel's forecast prices and costs. Complete NI 51-101 reserves disclosure
including after-tax reserve values, reserves by major property and
abandonment costs will be included in Perpetual's Annual Information Form
("AIF"), which will be filed in March 2011.
Approximately 94 percent of Perpetual's proved and proved and probable
reserves are natural gas and as such the Corporation reports reserves in Mcf
equivalent (Mcfe). Mcfe may be misleading, particularly if used in isolation.
In accordance with NI 51-101 a Mcfe conversion ratio for oil of 1 Bbl: 6 Mcf
has been used, which is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not necessarily represent a
value equivalency at the wellhead.
Perpetual's reserves at year-end 2010 are summarized below.
Reserves at December 31, 2010 Light and Natural Company Interest Medium Heavy Natural Gas (Working plus Crude Oil Oil Natural Gas Gas Liquids Equivalent Royalty Interest) (Mbbl) (Mbbl) (MMcf) (Mbbl) (MMcfe) Proved Producing 625 338 187,223 1,397 201,380 Proved - - 17,779 59 18,132 Non-Producing Proved 92 128 13,601 243 16,377 Undeveloped Total Proved 716 466 218,603 1,698 235,887 Probable 207 161 62,515 510 67,776 Producing Probable - 103 31,882 237 33,926 Non-Producing excl GOB Probable 46 86 88,602 244 90,852 Undeveloped Probable Shut-in - - 27,196 - 27,196 Gas over Bitumen Total Probable 253 349 210,194 991 219,750 Total Proved and 969 816 428,798 2,689 455,637 Probable
The proved producing reserves comprise 85 percent of the total proved
reserves and 44 percent of the total proved and probable reserves, while
proved and probable developed producing reserves are 60 percent of the total
proved and probable reserves. Total proved reserves account for 52 percent of
the total proved and probable reserves. McDaniel estimates the FDC required
to convert non-producing and undeveloped reserves to producing reserves at
Reserves Reconciliation Company Interest (Working Interest + Royalty Interest) Natural Gas Proved Equivalent (MMcfe) Opening Balance 244,372 Discoveries and Extensions 28,418 Technical Revisions 31,744 Acquisitions, net of Dispositions 11,243 Production -55,933 Economic Factors -23,987 Closing Balance 235,887 Natural Gas Probable Equivalent (MMcfe) Opening Balance 227,204 Discoveries and Extensions 16,271 Technical Revisions -4,333 Acquisitions, net of Dispositions -21,096 Production 0 Economic Factors 1,704 Closing Balance 219,750 Natural Gas Proved and Probable Equivalent (MMcfe) Opening Balance 471,576 Discoveries and Extensions 44,689 Technical Revisions 27,441 Acquisitions, net of Dispositions -9,853 Production -55,933 Economic Factors -22,283 Closing Balance 455,637
Perpetual disposed of 34.2 Bcfe of proved and probable reserves
associated with natural gas interests in the Legend, Liege and Surmont areas
that were shut-in as a result of the gas over bitumen regulatory issue.
Perpetual retained the effective funds flow from the reduction of future
royalties related to the financial solution in place for the shut-in gas and
this is reflected in proven future net revenues.
Year over year, McDaniel recorded net positive technical revisions
totaling 27.4 Bcfe on a proved and probable basis. These positive revisions
were due to improved performance and improved operating costs in all areas.
These positive revisions were offset by a substantially reduced price
forecast at year-end 2010 relative to year-end 2009 resulting in negative
revisions of 22.3 Bcfe due to increased economic limits which primarily
affected the forecast for wells as they neared their end of productive life.
Included in the downward price revisions are those future projects whose
return on investment at the current price forecast results is negative.
McDaniel's price forecast utilized in the evaluation is summarized below.
McDaniel January 1, 2011 Price Forecast Year West Texas Edmonton Light Natural Gas at Foreign Intermediate Crude Oil AECO Exchange Crude Oil ($Cdn/Bbl) ($Cdn/MMBtu) ($US/$Cdn) ($US/Bbl) 2011 85.00 84.20 4.25 0.975 2012 87.70 88.40 4.90 0.975 2013 90.50 91.80 5.40 0.975 2014 93.40 94.80 5.90 0.975 2015 96.30 97.70 6.35 0.975 2016 99.40 100.90 6.75 0.975 2017 101.40 102.90 7.10 0.975 2018 103.40 104.90 7.40 0.975 2019 105.40 107.00 7.60 0.975 2020 107.60 109.20 7.75 0.975 2021 109.70 111.30 7.85 0.975 2022 111.90 113.60 8.05 0.975 2023 114.10 115.80 8.20 0.975 2024 116.40 118.10 8.40 0.975 Escalate thereafter at 2% 2% 2% 0.975
RESERVE LIFE INDEX ("RLI")
Perpetual's proved and probable reserves to production ratio, also
referred to as reserve life index, was 8.4 years at year-end 2010 while the
proved RLI was 4.8 years, based upon the 2011 production estimates in the
McDaniel Report. The following table summarizes PET's historical calculated
Reserve Life Index(1) 2010 2009 2008 2007 2006 Total 4.8 4.8 4.5 4.7 3.6 Proved Proved 8.4 8.8 7.5 7.6 4.9 and Probable (1) Calculated as year-end reserves divided by year one production estimate from McDaniel Report.
NET PRESENT VALUE ("NPV") OF RESERVES SUMMARY
Perpetual's light and medium oil, natural gas and natural gas liquids
reserves were evaluated by McDaniel using McDaniel's product price forecasts
effective January 1, 2011 prior to provision for financial natural gas price
hedges, income taxes, interest, debt service charges and general and
administrative expenses. The following table summarizes the net present value
of funds flows from recognized reserves at January 1, 2011, assuming various
discount rates. It should not be assumed that the discounted future net funds
flows estimated by McDaniel represent the fair market value of the potential
future production revenue of the company.
NPV of Funds Flow Using McDaniel January 1, 2011 Forecast Prices and Costs Discounted at ($ thousands) Undiscounted 5% 10% 15% Proved Producing $784,904 $630,014 $532,180 $463,874 Proved Non-Producing 91,188 39,468 23,444 17,305 Proved Undeveloped 28,873 20,348 14,419 10,097 Total Proved 904,965 689,830 570,043 491,276 Probable Producing 292,665 182,640 129,817 99,343 Probable Non-Producing excl GOB 114,605 79,070 59,916 47,531 Probable Undeveloped 180,321 117,739 78,959 54,170 Probable Shut-in Gas over Bitumen 105,907 73,644 52,952 39,142 Total Probable 693,498 453,093 321,644 240,186 Total Proved and Probable $1,598,463 $1,142,923 $891,686 $731,462
At a 10 percent discount factor, the proved producing reserves comprise
60 percent of the total proved and probable value while proved and probable
developed producing reserves represent 74 percent of the total proved and
probable value. Total proved reserves account for 64 percent of the proved
and probable value.
A preliminary resource assessment was conducted for the Montney Formation
in the Elmworth area by McDaniel as at year-end 2010, the results of which
are summarized below.
Contingent Resource(1,4) Working Interest Recoverable Recoverable Recoverable Original Raw Sales Natural Natural Natural Gas in Recoverable Recoverable Gas Gas Gas Place Gas (3) Gas Liquids Equivalent Equivalent (MMcf) (MMcf) (MMcf) (Mbbl) (MMcfe) (MMcfe) Low (2) 987,470 197,494 167,870 5,925 203,419 96,100 Best (2) 987,470 345,615 293,770 13,825 376,718 177,900 High (2) 987,470 493,735 419,680 24,687 567,801 268,200
(1) Contingent resources have been evaluated by McDaniel using the
definitions is as defined in section five of the Canadian Oil and Gas
Evaluators Handbook, Volume 1. All volumes are reported before the deduction
of royalties payable to others. Contingent resource assignments are in
addition to any reserve assignments associated with these assets. (2) A Low
estimate (90% chance the ultimate recoverable resource will be equal or
greater than the stated value), means higher certainty, a Best estimate (50%
chance that the ultimate recoverable resource will be greater than or equal
to the stated value) means most likely and a High estimate means lower than a
50% chance that the ultimate recoverable resource will be greater than or
equal to the stated value (3) McDaniel has assigned recovery factors of 20%
(Low), 35% (Best) and 50% (High) in their assessment of recoverable resource.
(4) Contingent resources can be sub-classified into economic and uneconomic
portions based on a number of assumptions on capital costs, timing, price
forecast, etc. Currently sub-classification of these preliminary estimates
has not been completed pending a discussion of the above parameters.
The primary contingencies identified for the Montney resource are
infrastructure and access to market. Once development plans are in place
which can define a commercial project, it is expected that a portion of these
estimates would shift into proved and probable reserves subject to standard
booking practice for undeveloped reserves.
NET ASSET VALUE ("NAV")
The following net asset value table shows what is normally referred to as
a "produce-out" NAV calculation under which the Corporation's reserves would
be produced at forecast future prices and costs. The value is a snapshot in
time and is based on various assumptions including commodity prices and
foreign exchange rates that vary over time. It should not be assumed that the
NAV represents the fair market value of Perpetual Shares. The calculations
below do not reflect the value of the Corporation's prospect inventory to the
extent that the prospects are not recognized within the NI-51-101 compliant
Of particular note, there are no reserves assigned to the company's
Elmworth Montney project where three gross (1.4 net) horizontal wells
estimate have been drilled by Perpetual and its partners. McDaniel has
recognized as its best case, contingent recoverable resource of 178 Bcfe to
Perpetual's working interest lands. Development scenarios for the over one
Tcfe of natural gas and NGLs in place in the Montney at Elmworth will be
evaluated by Perpetual and its partners in 2011. In addition, no reserves or
contingent resources are yet assigned to any of Perpetual's heavy oil
projects in northeast Alberta. The incremental value of Perpetual's extensive
prospect inventory for its game-changing opportunities in the Montney at
Elmworth, Cardium light oil at Carrot Creek, Wilrich liquids-rich gas at
Edson, the Colorado shallow shale gas in east central Alberta and the bitumen
projects in northeast Alberta, above the nominal amount which is currently
recognized by McDaniel, is captured only through the assessment of the fair
market value of undeveloped land based on current land sale valuation
Of further note, the value of the Corporation's Warwick Gas Storage asset
has been recorded at cost in the net asset value calculation below.
Construction of the Warwick Gas Storage facility was completed in the fourth
quarter of 2010 and withdrawal has now commenced on the preliminary test
cycle which will be complete at the end of March 2011. Information gathered
during the test cycle will define the developed working gas capacity of the
storage reservoir at that time. This in turn will lead to a more
comprehensive valuation of the asset.
Pre-tax Net Asset Value at December 31, 2010(1) Discounted at ($millions except as noted) Undiscounted 5% 8% 10% Total Proved and Probable Reserves(2) $1,598 $1,143 $977 $892 Fair Market Value of Undeveloped Land(3) 204 204 204 204 Market Value of TriOil Resources Ltd. Shares 6 6 6 6 Warwick Gas Storage(4) 65 65 65 65 Net Bank Debt (unaudited)(5) (206) (206) (206) (206) Convertible Debentures (unaudited) (235) (235) (235) (235) Estimate of Additional Future Abandonment and Reclamation Costs(6) (83) (49) (37) (31) Mark to McDaniel's cost of WGSI Forward Sale Obligation(7) (40) (34) (31) (29) Net Asset Value $1,310 $894 $744 $666 Shares Outstanding (million) - basic 148.3 148.3 148.3 148.3 Net Asset Value per Share ($/Share) $8.84 $6.03 $5.02 $4.49
(1) Financial information is per Perpetual's 2010 unaudited consolidated
financial statements. (2) Reserve values per McDaniel Report as at December
31, 2010. (3) Third party estimate.
(4) Book value recorded at cost as at December 31, 2010.
(5) Includes $10 million held in escrow at year-end relating to the Warwick
Gas Storage facility funding arrangement. (6) Amounts are net of salvage
value and in addition to amounts in the McDaniel Report for future well
abandonment costs related to developed reserves. See "ABANDONMENT AND
RECLAMATION COSTS". (7) Value of Perpetual's open hedging transactions
related to the Warwick Gas Storage funding arrangement at year end 2010
assuming settlement against the McDaniel price forecast.
In the absence of adding reserves to the Corporation, the NAV per share
will decline as the reserves are produced out. The funds flow generated by
the production relates directly to the cash dividends paid to Perpetual
shareholders. The above evaluation includes future capital expenditure
expectations required to bring undeveloped reserves recognized by McDaniel
that meet the criteria for booking under NI 51-101 on production.
FAIR MARKET VALUE OF UNDEVELOPED LAND
Perpetual's third party estimate of the fair market value of its
undeveloped acreage by region for purposes of the above net asset value
calculation is based on recent Crown land sale activity adjusted for tenure
and other considerations and is as follows:
Fair Market Value of Undeveloped Land Area Acres Total Value ($) $/Acre North 1,000,197 $41,042,433 $41.03 South 405,289 $59,761,578 $147.45 West Central 140,978 $66,848,275 $474.18 New Ventures 25,350 $8,607,925 $339.56 Heavy Oil 333,259 $27,809,494 $83.45 Totals 1,905,073 204,069,705 $107.12
ABANDONMENT AND RECLAMATION COSTS
In addition to the abandonment cost estimates provided by McDaniel
inclusive in their reserve assessment, Perpetual compiles annually a detailed
internal estimate of the Corporation's total future asset retirement
obligation based on net ownership interest in all wells, facilities and
pipelines, including estimated costs to abandon the wells, facilities and
pipelines and reclaim the sites, and the estimated timing of the costs to be
incurred in future periods. Pursuant to this evaluation, the estimated value
of Perpetual's future asset retirement obligations, net of the estimated
salvage value of facilities and equipment and discounted at 8 percent is $74
million as at December 31, 2010. The McDaniel Report includes an undiscounted
amount of $83 million with respect to expected future well abandonment costs
related specifically to proved and probable reserves and such amount is
included in the values captioned "Total Proved and Probable Reserves" in the
NPV of Funds Flow table (see "NET PRESENT VALUE ("NPV") OF RESERVES
SUMMARY"). Of the total future well abandonment costs included in the
McDaniel Report an undiscounted amount of $56 million relates to Perpetual's
developed reserves. The following table presents the estimated future asset
retirement obligations and estimated net salvage values at various discount
Abandonment and Reclamation Costs Discounted at ($millions, net to Perpetual) Undiscounted 5% 8% 10% Well abandonment costs for developed reserves included in McDaniel Report $56 $35 $27 $23 Well abandonment costs for undeveloped reserves included in McDaniel Report $27 $14 $9 $7 Well abandonment costs for Total Proved and Probable reserves included in McDaniel Report $83 $49 $37 $30 Estimate of other abandonment and reclamation costs not included in McDaniel Report $232 $137 $103 $86 Total estimated future abandonment and reclamation costs $315 $186 $140 $117 Salvage value ($148) ($88) ($66) ($455) Abandonment and reclamation costs , net of salvage $167 $98 $74 $62 Well abandonment costs for developed reserves included in McDaniel Report ($83) ($49) ($37) ($31) Estimate of additional future abandonment and reclamation costs, net of salvage(1) $83 $49 $37 $31
(1) Future abandonment and reclamation costs not included in the McDaniel
Report, net of salvage value.
FINDING, DEVELOPMENT AND ACQUISITION ("FD&A") COSTS
Under NI 51-101, the methodology to be used to calculate FD&A costs
includes incorporating changes in future development capital required to
bring the proved undeveloped and probable reserves to production. For
continuity, Perpetual has presented herein FD&A costs calculated both
excluding and including FDC. Changes in forecast FDC occur annually as a
result of development activities, acquisitions and disposition activities and
capital cost estimates that reflect the independent evaluator's best estimate
of what it will cost to bring the proved undeveloped and probable reserves on
production. The decrease in FDC is the result of projects being deemed to be
uneconomic under the current McDaniel price forecast. Perpetual believes that
the underlying resource is still present and those projects will be added
back if natural gas prices increase in the future.
The following table summarizes Perpetual's F&D cost as well as finding,
development and acquisition costs, before and after the inclusion of changes
in FDC. Finding and development costs, including changes in FDC were $1.87
per Mcfe ($11.22 per BOE) on a proved and probable basis in 2010.
The same metrics are presented below with the impact of the sale of
probable shut-in gas over bitumen reserves in the Legend, Liege and Surmont
areas removed, as the dispositions are not comparable to other acquisitions
and dispositions since Perpetual retained the effective funds flow related to
the Government of Alberta's gas over bitumen financial solution through
royalty reductions associated with the shut-in properties. Including changes
in FDC, FD&A costs were $2.49 per Mcfe ($14.94 per BOE) on a proved and
Perpetual has also summarized in the table below these same metrics with
the effect of the price-related revisions removed. Perpetual believes that
the majority of these reserves will return to the books with a recovery in
natural gas prices as the technical merits for booking the reserves have not
changed, only the economic circumstances. Excluding the effects of negative
reserve revisions related to substantially lower forward gas prices,
including changes in FDC, Perpetual's F&D costs were $1.30 per Mcfe ($7.80
per BOE) for proved and probable reserves and FD&A costs were $1.91 per Mcfe
($11.46 per BOE) in 2010 on a proved and probable basis.
2010 FD&A Costs - Company Interest Reserves Proved Excluding Proved GOB Excluding Disposition& GOB Price ($millions (unaudited), Proved Disposition Revisions except as noted) (2,) (2,4) F&D Costs, Excluding FDC Exploration and Development Capital Expenditures(1) $114.0 $114.0 $114.0 Reserve Additions Including Revisions - Bcfe 36.2 36.2 60.2 F&D - $/Mcfe(6) $3.15 $3.15 $1.89 F&D Costs, Including FDC Exploration and Development Capital Expenditures $114.0 $114.0 $114.0 Total Change in FDC ($26.4) ($26.4) ($26.4) Total F&D Capital including Change in FDC $87.6 $87.6 $87.6 Reserve Additions Including Revisions - Bcfe 36.2 36.2 60.2 F&D Costs- $/Mcfe(6) $2.42 $2.42 $1.46 FD&A Costs, Excluding FDC Exploration and Development Capital Expenditures $114.0 $114.0 $114.0 Net Acquisitions $51.3 $91.1 $91.1 FD&A Capital Expenditures Including Net Acquisitions $165.3 $205.1 $205.1 Reserve Additions Including Net Acquisitions - Bcfe 47.4 47.4 71.4 FD&ACosts - $/Mcfe(6) $3.48 $4.32 $2.87 FD&A Costs, Including FDC FD&A Capital Expenditures Including Net Acquisitions $165.3 $205.1 $205.1 Total Change in FDC ($26.4) ($26.4) ($26.4) Total FD&A Capital Including Change in FDC $138.9 $178.7 $178.7 Reserve Additions Including Net Acquisitions - Bcfe 47.4 47.4 71.4 FD&A Costs Including FDC - $/Mcfe(6) $2.93 $3.77 $2.50
Proved and Probable Proved and Excluding Probable GOB Excluding Disposition& Proved & GOB Price ($millions (unaudited), Probable Disposition Revisions except as noted) (2,3) (2,3,5) F&D Costs, Excluding FDC Exploration and Development Capital Expenditures(1) $114.0 $114.0 $114.0 Reserve Additions Including Revisions - Bcfe 49.8 49.8 72.1 F&D - $/Mcfe(6) $2.29 $2.29 $1.58 F&D Costs, Including FDC Exploration and Development Capital Expenditures $114.0 $114.0 $114.0 Total Change in FDC ($20.6) ($20.6) ($20.6) Total F&D Capital including Change in FDC $93.4 $93.4 $93.4 Reserve Additions Including Revisions - Bcfe 49.8 49.8 72.1 F&D Costs- $/Mcfe(6) $1.87 $1.87 $1.30 FD&A Costs, Excluding FDC Exploration and Development Capital Expenditures $114.0 $114.0 $114.0 Net Acquisitions $51.3 $91.1 $91.1 FD&A Capital Expenditures Including Net Acquisitions $165.3 $205.1 $205.1 Reserve Additions Including Net Acquisitions - Bcfe 40.0 74.2 96.5 FD&ACosts - $/Mcfe(6) $4.13 $2.77 $2.13 FD&A Costs, Including FDC FD&A Capital Expenditures Including Net Acquisitions $165.3 $205.1 $205.1 Total Change in FDC ($20.6) ($20.6) ($20.6) Total FD&A Capital Including Change in FDC $144.7 $184.6 $184.6 Reserve Additions Including Net Acquisitions - Bcfe 40.0 74.2 96.5 FD&A Costs Including FDC - $/Mcfe(6) $3.62 $2.49 $1.91
(1) $57.7 MM of capital associated with the Warwick Gas Storage project
has been excluded, includes $14.2 MM of undeveloped land. (2) Disposition
proceeds totaling $39.8 MM associated with the Legend, Liege and Surmont
dispositions have been added back into the net acquisition capital. (3) 34.2
Bcf of probable reserves associated with the Legend, Liege and Surmont
dispositions have been added back into the net acquired reserves. (4) 24.0
Bcf of proved reserves associated with price related revisions have been
added back into the total reserve additions and revisions. (5) 22.3 Bcf of
proved and probable reserves associated with price related revisions have
been added back into the total reserve additions and revisions. (6) "Mcfe"
may be misleading, particularly if used in isolation. An Mcfe conversion
ratio of 1 bbl: 6 Mcf is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead.
Certain information regarding Perpetual in this news release including
management's assessment of future plans and operations may constitute
forward-looking statements under applicable securities laws. The forward
looking information includes, without limitation, future dividends,
statements regarding estimated production and timing thereof, prospective
drilling, completions and development activities, estimated recoverable
contingent resources, estimates of gross recoverable gas sales, prospective
impact of the Montney development at Elmworth, estimated net asset value,
prospective oil and natural gas liquids production capability, commodity
prices, and gas price management. Various assumptions were used in drawing
the conclusions or making the forecasts and projections contained in the
forward-looking information contained in this press release, which
assumptions are based on management analysis of historical trends,
experience, current conditions and expected future developments pertaining to
Perpetual and the industry in which it operates as well as certain
assumptions regarding the matters outlined above. Forward-looking information
is based on current expectations, estimates and projections that involve a
number of risks, which could cause actual results to vary and in some
instances to differ materially from those anticipated by Perpetual and
described in the forward-looking information contained in this press release.
Undue reliance should not be placed on forward-looking information, which is
not a guarantee of performance and is subject to a number of risks or
uncertainties, including without limitation those described under "Risk
Factors" in Paramount Energy Trust's MD&A for the year ended December 31,
2009 and those included in reports on file with Canadian securities
regulatory authorities which may be accessed through the SEDAR website
(www.sedar.com) and at Perpetual's website (
www.perpetualenergyinc.com). Readers are cautioned that the foregoing
list of risk factors is not exhaustive. Forward-looking information is based
on the estimates and opinions of Perpetual's management at the time the
information is released and Perpetual disclaims any intent or obligation to
update publicly any such forward-looking information, whether as a result of
new information, future events or otherwise, other than as expressly required
by applicable securities law.
This news release contains financial measures that may not be calculated
in accordance with generally accepted accounting principles in Canada
("GAAP"). Readers are referred to advisories and further discussion on
non-GAAP measures contained in the "Significant Accounting Policies and
Non-GAAP Measures" section of Paramount Energy Trust's Perpetual's
predecessor) MD&A for the year ended December 31, 2009.
Mcf equivalent (Mcfe) may be misleading, particularly if used in
isolation. In accordance with National Instrument 51-101 ("NI 51-101"), an
Mcfe conversion ratio for oil of 1 Bbl: 6 Mcf has been used, which is based
on an energy equivalency conversion method primarily applicable at the burner
tip and does not necessarily represent a value equivalency at the wellhead.
Perpetual Energy Inc. is a natural gas-focused Canadian energy company.
Perpetual's shares and Convertible Debentures are listed on the Toronto Stock
Exchange under the symbols "PMT", "PMT.DB.C", "PMT.DB.D" and "PMT.DB.E".
Further information with respect to Perpetual can be found at its website at
The Toronto Stock Exchange has neither approved nor disapproved the
information contained herein.
For further information: Perpetual Energy Inc. Suite 3200, 605 - 5 Avenue SW Calgary, Alberta, Canada T2P 3H5 Telephone: +1-403-269-4400 Fax: +1-403-269-4444 Email: email@example.com Susan L. Riddell Rose, President and Chief Executive Officer Cameron R. Sebastian, Vice President, Finance and Chief Financial Officer Sue M. Showers, Investor Relations and Communications Advisor
For further information: Perpetual Energy Inc., Suite 3200, 605 - 5 Avenue SW Calgary, Alberta, Canada T2P 3H5, Telephone: +1-403-269-4400 Fax: +1-403-269-4444, Email: info at perpetualenergyinc.com . Susan L. Riddell Rose, President and Chief Executive Officer, Cameron R. Sebastian, Vice President, Finance and Chief Financial Officer, Sue M. Showers, Investor Relations and Communications Advisor .
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