Perpetual Energy Inc. Releases Year End 2012 Financial and
Operating Results and Announces West Edson Development Plan
Mar 11, 2013
CALGARY, March 11, 2013 /CNW/ -
(TSX:PMT) - Perpetual Energy Inc. ("Perpetual" or
the "Corporation" or the "Company") is pleased to report fourth
quarter and year end 2012 financial and operating results. Detailed
results are presented in Perpetual's audited consolidated financial
statements and related Management's Discussion and Analysis
("MD&A") which can be obtained through the Corporation's
website at www.perpetualenergyinc.com
and SEDAR at www.sedar.com.
Perpetual is also pleased to announce that it is
enhancing its area development plans in the West Edson area to
include the construction of sales gas facilities and a pipeline.
Further to this, Perpetual has entered into agreements with Aux
Sable Canada and Alliance Pipeline Limited Partnership ("Alliance
Canada") that provide access to premium markets in the midwest
United States for its natural gas and natural gas liquids ("NGL or
liquids") from the West Edson area.
2012 ANNUAL HIGHLIGHTS
Perpetual focused on four key strategic
objectives in 2012:
- Profitable capital investment in two chosen proven diversifying
growth strategies to increase oil and NGL production;
- Debt reduction;
- Advancing the assessment and growing the value of other large
scope, high impact resource opportunities with risk-managed
investment; and
- Managing downside risks related to commodity price
volatility.
Significant progress was made towards these
strategic priorities, the results of which are highlighted
below.
Corporate Activity
- In November 2011 Perpetual announced an asset disposition
program targeting proceeds of $75 to $150 million to be used to
strengthen the Corporation's balance sheet and provide for the
redemption of Perpetual's $74.9 million 6.50% unsecured convertible
debentures (the "6.50% Debentures"). Proceeds from dispositions in
2012 totaled $167.2 million, providing additional liquidity while
high-grading the Corporation's asset base. The disposed assets
included approximately 13.2 MMcf/d of gas production and oil and
NGL production of 744 bbl/d.
- Perpetual repaid its $74.9 million 6.50% Debentures at maturity
on June 30, 2012.
Production
- Total actual and deemed production decreased 12 percent to
147.6 MMcfe/d from 168.4 MMcfe/d in 2011, as lower natural gas
production due to dispositions, shut-ins, third party facility
downtime and natural declines was partially offset by higher oil
and NGL production and higher deemed production related to the full
year impact of additional gas over bitumen shut-ins. Total actual
production was 120.9 MMcfe/d, down 15 percent from 142.0 MMcfe/d in
2011.
- Average daily oil and NGL production increased 1,472 bbl/d to
3,448 bbl/d, a 74 percent increase from 2011 levels, driven by the
Company's commodity diversification strategy and targeted heavy oil
drilling in the Mannville area, and despite the disposition of 744
bbl/d of oil and NGL production from non-core assets.
- Natural gas production decreased 23 percent to 100.2 MMcf/d as
a result of non-core asset dispositions, shut-ins, third party
facility downtime and limited capital spending on gas-focused
projects, partially offset by the establishment of production in
West Edson in the second quarter of 2012.
- Total production from the greater Edson area increased 15
percent over 2011 to 24.1 MMcfe/d. Volumes are expected to continue
to grow as facilities are expanded and wells drilled in the fourth
quarter of 2012 are brought online. By the end of first quarter of
2013, production is expected to be approximately 31.2 MMcfe/d.
Commodity Prices
- The average gas price before derivatives decreased 34 percent
to $2.48 per Mcf from $3.77 per Mcf in 2011, in line with a 35
percent decrease in AECO Monthly Index prices. Natural gas prices
including derivatives declined to $3.34 per Mcf from $3.82 per Mcf
in the prior year due to the impact of lower market
prices.
- The average oil and NGL price before derivatives decreased
$9.41 per bbl to $64.26 per bbl primarily as a result of wider
Canadian heavy oil price differentials (Western Canadian Select
("WCS") to WTI price differential ("WTI-WCS
differential")).
Financial
- Total net debt was reduced 25 percent to $396.6 million on
December 31, 2012 from $526.9 million at year-end 2011. Net debt
decreased by $130.3 million in 2012 through successful execution of
the asset disposition program announced in late 2011. Disposition
proceeds, net of acquisitions, of $164.8 million was offset by
capital spending that exceeded funds flow to enhance the asset base
transformation and commodity diversification strategy. Net bank
debt outstanding was $86.6 million on a borrowing base of $130
million as of December 31, 2012.
- Production-related operating costs decreased six percent to
$79.7 million ($1.80 per Mcfe) in 2012 as compared to $85.0 million
($1.64 per Mcfe) in 2011, primarily due to reduced labour costs and
dispositions. Decreases were partially offset by increased well
suspension costs and higher costs associated with Mannville oil
operations. Gas storage business operating costs decreased 59
percent to $2.0 million from $5.0 million in 2011 as a result of
the disposition of 90 percent of the Warwick Gas Storage business
("WGS LP") effective April 25, 2012 as well as reduced power and
well workover costs.
- Cash general and administrative ("G&A") expense totaled
$27.1 million as compared to $32.3 million for the comparable
period in 2011 primarily due to reduced staffing levels, lower
consulting fees and reduced information technology costs, offset by
lower overhead recoveries due to reduced capital spending in
2012.
- Royalty expense decreased $7.9 million due to lower natural gas
production volumes and lower commodity prices. The average royalty
rate on oil, NGL and natural gas revenues before derivatives was
7.4 percent compared to 8.9 percent in 2011. Perpetual's royalty
rate has decreased as natural gas prices decreased to lower levels
on the price-adjusted sliding scale used for provincial royalty
calculations.
- Funds flow decreased 32 percent to $49.1 million ($0.33 per
Common Share) from $72.7 million ($0.49 per Common Share) for 2011.
The decrease was caused primarily by lower natural gas revenues,
partially offset by higher oil and NGL production, realized gains
on derivatives and a decrease in royalties and G&A
expenses.
- The Corporation recorded a net loss of $46.2 million or $0.31
per basic and diluted Common Share in 2012 as compared to a net
loss of $100.2 million or $0.68 per basic and diluted Common Share
in 2011. The decrease in the net loss was due to lower depletion
and depreciation expense combined with increased gains on
dispositions, partially offset by an increase in impairment losses
related to lower forecast natural gas prices.
Exploration and Development Capital
Activity
- Exploration and development capital spending decreased to $79.7
million from $139.2 million in 2011 as Perpetual focused on its key
strategic priorities; balancing investment for oil and NGL growth
with overall debt reduction. A total of 44 (40.1 net) wells were
drilled with 100 percent success, compared to 62 (60.5 net) wells
in 2011.
- In 2012, Perpetual invested minimal capital for drilling or
recompletions in its legacy shallow gas properties, as capital was
deployed to the Mannville heavy oil and Edson Wilrich plays to grow
heavy oil and NGL production.
- Conventional heavy oil expenditures of $45.8 million were
concentrated on the drilling and completion of 35 (34.3 net)
horizontal wells in the Mannville play of which 30 (29.3 net) are
producing oil, two (2.0 net) are shut-in, and three (3.0 net) were
standing awaiting facilities and start-up operations at year
end.
- Deep basin capital spending totaled $24.9 million, focused on
further delineating the potential of the Wilrich play in the
greater Edson area and constructing infrastructure to establish
production at West Edson. Total capital activity on the Wilrich
play consisted of six (4.0 net) wells and construction of a
compression facility at West Edson. During the fourth quarter of
2012 and early 2013, three (1.5 net) horizontal wells targeting the
Wilrich formation were drilled and completed to more fully
delineate the West Edson acreage. Test rates on the wells exceeded
the established type curves, ranging from 20 to 26 MMcf/d at
flowing pressures higher than estimated initial pipeline flow
conditions, with associated NGL of 10 to 27 bbl per MMcf.
- Perpetual continued to advance evaluation of the Colorado shale
shallow dry gas play in eastern Alberta with risk-managed spending
in 2012. Vertical recompletions were performed in several zones
within the Colorado formation to assess geological, geotechnical
and geophysical characteristics as they relate to hydraulic
fracture growth and flow parameters. Based on this, and monitoring
of competitor activity, an eight-well pilot project is being
designed for horizontal development of the Colorado and potentially
the Viking formations. The program will aim to confirm well
orientation, fracture techniques and play type curves to assess the
expected economic returns of this material natural gas
resource.
- Perpetual has advanced pilot projects to test two unique
recovery technologies in its Panny and Marten Hills bitumen
properties. Approval has been received for Marten Hills and is
expected imminently for Panny. Perpetual has entered into a joint
venture arrangement on the Marten Hills project which is designed
to test conductive heating in a thick Clearwater sand facies. The
Panny pilot is designed to test electrical heat in combination with
water and potentially solvent injection in a Bluesky sand
reservoir. Both reservoirs are saturated with bitumen that is lower
viscosity than conventional bitumen reservoirs, and as such,
requires less heat to establish flow. Limited capital is required
for these projects in 2013.
Warwick Gas Storage
- On April 25, 2012, Perpetual sold a 90 percent interest in WGS
LP for cash proceeds of $80.9 million, recording a gain on sale of
$40.6 million.
- As part of the sale Perpetual retained an option, exercisable
within one year of closing, to buy back from the purchaser up to a
30 percent additional ownership interest in WGS LP at the same
price as the initial sale plus working capital and other
adjustments, less any dividends paid, for a final ownership
interest post any exercise of the buy-back option of up to 40
percent ("WGS Call Option").
- Gas storage revenue decreased to $4.2 million from $14.0
million in 2011 as after the sale WGS LP revenues were no longer
accounted for on a consolidated basis. After the sale, Perpetual
included dividends of $0.9 million from WGS LP in cash flows from
operating activities and funds flow.
- At the time of the sale, Perpetual entered into a Management
Services and Operations Agreement to provide management and
operational services to WGS LP for an annual fee, over an initial
two-year term.
- In the fourth quarter of 2012, WGS LP finished drilling and
completed two new horizontal wells to increase the working gas
capacity of the storage facility from 17 Bcf to 19 Bcf. Application
has been made for delta pressuring to further increase the working
gas capacity of the facility in 2013.
Acquisitions and Dispositions
- Proceeds for asset sales in 2012 totaled $167.2 million.
Disposition of non-core natural gas and oil properties in the West
Central and Eastern districts generated net proceeds of $86.3
million, with the remaining sale proceeds of $80.9 million
attributable to the disposition of the Corporation's 90 percent
interest in WGS LP. Twenty-three transactions were closed for total
gains on dispositions of $49.0 million.
- Acquisitions of $2.4 million (2011 - $7.7 million) were focused
on expanding Perpetual's horizontal drilling inventory in the
Wilrich in the Edson area.
- On December 18, 2012, Perpetual announced the Company had
entered into a definitive purchase and sale agreement, along with
its partner, to jointly divest its Elmworth Montney assets for
gross proceeds of $155 million, $77.5 million net to Perpetual,
subject to certain closing adjustments and transaction costs. There
is currently no production or cash flow from operations at the
Elmworth property. This transaction is expected to close on or
prior to March 15, 2013.
Reserves and Resource
Estimates
- As previously disclosed on February 5, 2013, Perpetual added
19.5 MMboe of proved and probable reserves in 2012, excluding
production, net dispositions and downward technical revisions
related to lower commodity price forecasts. Reserve additions and
net positive technical revisions due to performance offset 2012
production of 7.4 MMboe by 265 percent.
- After net dispositions of 11.3 MMboe, production of 7.4 MMboe
and negative revisions due to commodity prices of 6.6 MMboe in
2012, proved and probable reserves decreased just 5.8 MMboe (seven
percent) from 80.8 MMboe at year-end 2011 to 75.0 MMboe. Proved
reserves also decreased seven percent to 36.3 MMboe at year-end
2012.
- Including changes in future development capital ("FDC"),
Perpetual realized finding and development ("F&D") costs of
$13.06 per boe on a proved and probable reserve basis. Since
proceeds from dispositions exceeded exploration and development
capital spending, Perpetual's realized finding, development and
acquisition ("FD&A") costs, including changes in FDC, was
($12.75) per boe on a proved and probable basis.
- Perpetual's reserve-based net asset value at year-end 2012 was
estimated at $1.84 per Common Share discounted at eight
percent.
- Independent contingent resource assessment reports were
prepared by McDaniel & Associates Consultants Ltd. "McDaniel"
in 2011 and partially updated in the first quarter of 2013,
resulting in the assignment of 1.36 billion barrels of discovered
bitumen initially in place (best estimate) and 1.88 billion barrels
of undiscovered bitumen initially in place (best estimate) on
27,113 acres of Perpetual's oil sands leases, primarily in the
Panny Bluesky sandstone and Liege Grosmont and Leduc carbonate
reservoirs.
- Perpetual's best estimate Contingent Resource was estimated at
278.7 MMbbl at year end 2012, up 31 percent from 212.5 MMbbl at
December 31, 2011. Additionally, best estimate Prospective Resource
increased 12 percent to 467.0 MMbbl (2011 - 416.8MMbbl).
2013 OUTLOOK AND
SENSITIVITIES
Perpetual is focused on five key strategic
priorities for 2013:
- Maximize value of Mannville heavy oil;
- Position for growth of Edson liquids-rich gas;
- Manage downside risk and reduce debt;
- Advance and broaden the portfolio of high impact opportunities
with risk-managed investment; and
- Prepare to maximize value from shallow gas base assets in gas
price recovery.
The Corporation's Board of Directors has
approved a capital spending plan of up to $75 million which will be
highly focused on its commodity diversification strategy. The
capital spending plan incorporates a two rig development drilling
program for Mannville heavy oil in the first quarter, but allows
flexibility to manage spending in the second half of the year by
focusing on either Mannville heavy oil or liquids-rich gas at Edson
depending on commodity prices.
Mannville heavy oil
Through the first quarter of 2013, 19 (18.7 net)
heavy oil wells have been drilled in the Mannville area with an
additional 6 to 8 (5.3 to 7.0 net) wells planned prior to spring
break up. Depending on commodity prices, up to 12 (11.3 net)
additional Mannville heavy oil wells are planned in the second half
of 2013, including infill drilling in the Mannville I2I pool to
prepare for the potential implementation of an enhanced recovery
scheme in this Sparky pool in 2014.
Edson Wilrich liquids-rich gas
First quarter 2013 activity has been focused on
completion and tie in of the fourth quarter 2012 drilling program.
Perpetual and its partner are continuing to expand the production
capability of the West Edson area. Expansion of the West Edson
compressor station from its current 10 MMcf/d to 30 MMcf/d of gross
capacity (50 percent net to Perpetual) is underway as planned.
Construction is in progress on a trunk pipeline system through the
West Edson acreage to bring on production from new wells in the
first quarter of 2013. Two of the three new wells have commenced
production at restricted rates, with the third well scheduled to be
tied in prior to the start-up of the expanded compressor station in
mid-March.
In early March, Perpetual entered into rich gas
premium agreements with Aux Sable Canada and an interconnection
agreement with Alliance Canada to allow access to a premium market
in the mid-west United States. Further to these arrangements,
Perpetual and its partner will enhance the West Edson compressor
station with the installation of refrigeration and other related
components to produce sales quality gas. In addition, a sales
pipeline will be constructed beginning in the second quarter of
2013 to tie-in to the Alliance pipeline system. Start-up of the gas
plant and sales pipeline is expected to commence prior to November
1, 2013. These actions are expected to alleviate uncertainty with
respect to natural gas processing and NGL transportation and
extraction capacity for development of the West Edson reserves,
reduce operating costs, improve run times and provide competitive
netbacks for NGL.
Depending on commodity prices and West Edson
plant and sales gas pipeline construction timelines, Perpetual has
plans in place to drill 2 to 6 (1.0 to 3.5 net) wells in the deep
basin during the second half of 2013, primarily targeting the
Wilrich formation at West Edson.
2013 Dispositions
Perpetual will continue to pursue dispositions
in addition to the previously announced divestiture of its Elmworth
Montney assets for $77.5 million scheduled to close on or prior to
March 15, 2013. Proceeds from any potential divestitures will be
utilized to strengthen the balance sheet and to enhance the
Corporation's ability to pursue further investment opportunities,
depending upon the outlook for commodity prices at that time.
Warwick Gas Storage
Perpetual is in the process of evaluating
alternatives for the WGS LP Call Option which will expire on April
25, 2013. The exercise of the WGS LP Call Option is predicated on
the impact of recent drilling and plans for delta pressuring that
will increase storage capacity, and a view to improving seasonal
spreads translating into increased future cash flows from the
facility.
Sensitivities
The following table reflects Perpetual's
projected funds flow for 2013 at various commodity price levels.
These sensitivities incorporate monthly settlement of existing
derivatives, average daily production of 4,100 bbl/d of oil &
NGL, 82.8 MMcf/d of natural gas, operating expense of $86 million,
cash G&A expense of $24.0 million and an interest rate on
long-term bank debt of 5.4 percent.
2013 Projected Funds
Flow (1)(2) ($
millions) |
|
AECO Gas
Price ($/GJ) |
|
|
$3.00 |
$3.25 |
$3.50 |
$3.75 |
$4.00 |
WCS
oil
price
($/bbl) |
$55.00 |
25 |
32 |
41 |
47 |
55 |
$65.00 |
40 |
47 |
55 |
62 |
70 |
$75.00 |
55 |
62 |
70 |
77 |
85 |
$85.00 |
70 |
77 |
85 |
92 |
100 |
(1) |
The current settled and forward average AECO, WTI and WCS
differential prices for 2013 as of March 11, 2013 were $3.28 per
GJ, $US92.55 per bbl and $US23.23, respectively. $US to $CDN
exchange rate assumed at par. |
(2) |
These are non-GAAP measures; see "Other non-GAAP measures" in
this MD&A. |
|
|
Below is a table that shows sensitivities of
Perpetual's 2013 estimated funds flow to operational changes and
changes in the business environment:
|
|
|
Impact on funds flow |
Funds flow sensitivity analysis ($
thousands) |
Change |
Annual |
Monthly |
Business Environment |
|
|
|
Natural gas price at AECO |
$0.25 per Mcf |
7,560 |
630 |
Oil price at WTI |
$5.00 per bbl |
7,213 |
601 |
Interest rate on long-term bank debt |
1% |
372 |
31 |
Operational |
|
|
|
Natural gas production |
5 MMcf/d |
5,767 |
481 |
Oil and NGL production |
100 bbl/d |
2,170 |
181 |
Operating expense |
$0.10 per Mcfe |
3,890 |
324 |
Cash G&A expenses |
$0.10 per Mcfe |
3,890 |
324 |
FINANCIAL AND OPERATING
HIGHLIGHTS
|
|
|
Financial and Operating
Highlights |
Three months ended
December 31 |
Year ended
December 31 |
($CDN thousands, except volume and per
Share amounts) |
2012 |
2011 |
% change |
2012 |
2011 |
% change |
Financial |
|
|
|
|
|
|
Revenue (1)
(2) |
52,156 |
62,431 |
(16) |
207,619 |
251,591 |
(17) |
Funds flow (2) |
11,158 |
11,586 |
(4) |
49,087 |
72,679 |
(32) |
|
Per Common Share (2) (3) |
0.08 |
0.08 |
- |
0.33 |
0.49 |
(33) |
Cash flow provided by operating
activities |
17,375 |
5,902 |
194 |
48,599 |
56,580 |
(14) |
|
Per Common Share (2) (3) |
0.12 |
0.04 |
200 |
0.33 |
0.38 |
(13) |
Net loss |
(52,879) |
(42,998) |
23 |
(46,178) |
(100,227) |
(54) |
|
Per Common Share (3) |
(0.36) |
(0.29) |
24 |
(0.31) |
(0.68) |
(54) |
Dividends declared |
- |
- |
- |
- |
28,865 |
(100) |
|
Per Common Share (4) |
- |
- |
- |
- |
0.195 |
(100) |
Payout ratio (%) (2) |
- |
- |
- |
- |
37.2 |
(100) |
Total assets |
721,104 |
1,016,694 |
(29) |
721,104 |
1,016,694 |
(29) |
Net bank debt outstanding
(2) (5) |
86,611 |
141,996 |
(39) |
86,611 |
141,996 |
(39) |
Senior notes, measured at principal
amount |
150,000 |
150,000 |
- |
150,000 |
150,000 |
- |
Convertible debentures, measured at
principal amount |
159,972 |
234,897 |
(32) |
159,972 |
234,897 |
(32) |
Total net debt (2) |
396,583 |
526,893 |
(25) |
396,583 |
526,893 |
(25) |
Total equity |
36,062 |
77,251 |
(53) |
36,062 |
77,251 |
(53) |
Capital expenditures |
|
|
|
|
|
|
|
Exploration and development |
21,185 |
38,269 |
(45) |
79,724 |
139,214 |
(43) |
|
Gas storage |
- |
327 |
(100) |
51 |
11,207 |
(100) |
|
Acquisitions, net of dispositions |
(6,923) |
(2,746) |
152 |
(164,763) |
(33,953) |
385 |
|
Other |
23 |
97 |
(76) |
220 |
588 |
(63) |
|
Net capital expenditures |
14,285 |
35,947 |
(60) |
(84,814) |
117,056 |
(172) |
Common Shares Outstanding
(thousands) |
|
|
|
|
|
|
End of year |
147,455 |
146,966 |
- |
147,455 |
146,966 |
- |
Weighted average |
147,184 |
146,905 |
- |
147,085 |
147,694 |
- |
March 11, 2013 |
|
|
|
|
|
|
Operating |
|
|
|
|
|
|
Production |
|
|
|
|
|
|
|
Natural gas (MMcf/d) (6) |
88.3 |
126.8 |
(30) |
100.2 |
130.2 |
(23) |
|
Oil and NGL (bbl/d) (6) |
3,536 |
2,481 |
43 |
3,448 |
1,976 |
74 |
|
Total (MMcfe/d) (6) |
109.5 |
141.7 |
(23) |
120.9 |
142.0 |
(15) |
|
Gas over bitumen deemed production
(MMcf/d) (7) |
25.1 |
27.4 |
(8) |
26.7 |
26.4 |
1 |
|
Average daily (actual and
deemed - MMcfe/d) (6) (7) |
134.6 |
169.1 |
(20) |
147.6 |
168.4 |
(12) |
|
Per Common Share (cubic feet
|
|
|
|
|
|
|
|
|
equivalent/d/Common Share)
(3) |
0.91 |
1.15 |
(21) |
1.00 |
1.15 |
(13) |
Average prices |
|
|
|
|
|
|
|
Natural gas - before derivatives
($/Mcf) (8) |
2.99 |
3.35 |
(11) |
2.48 |
3.77 |
(34) |
|
Natural gas - including derivatives
($/Mcf) (8) |
3.56 |
3.30 |
8 |
3.34 |
3.82 |
(13) |
|
Oil and NGL - before derivatives
($/bbl) (8) |
62.02 |
78.84 |
(21) |
64.26 |
73.67 |
(13) |
|
Oil and NGL - including derivatives
($/bbl) (8) |
71.29 |
92.52 |
(23) |
64.13 |
78.00 |
(18) |
|
FINANCIAL AND OPERATING HIGHLIGHTS
CONTINUED |
|
|
|
Three Months Ended
December 31 |
Year Ended December
31 |
($CDN thousands, except volume and per
Share amounts) |
2012 |
2011 |
% change |
2012 |
2011 |
% change |
Reserves (Mboe) |
|
|
|
|
|
|
Company interest - proved
(9) (10) |
36,278 |
39,175 |
(7) |
36,278 |
39,175 |
(7) |
Company interest - proved and probable
(9) (10) |
75,048 |
80,784 |
(7) |
75,048 |
80,784 |
(7) |
|
Per Common Share (Mboe/Common Share)
(12) |
0.51 |
0.55 |
(7) |
0.51 |
0.55 |
(7) |
Estimated present value before tax ($
millions) (11) |
|
|
|
|
|
|
|
Proved |
264.0 |
431.6 |
(39) |
264.0 |
431.6 |
(39) |
|
Proved and probable |
493.0 |
722.4 |
(32) |
493.0 |
722.4 |
(32) |
Land (thousands of net
acres) |
|
|
|
|
|
|
Total land holdings |
2,911 |
3,313 |
(12) |
2,911 |
3,313 |
(12) |
Undeveloped land holdings |
1,590 |
1,849 |
(14) |
1,590 |
1,849 |
(14) |
Drilling (wells drilled
gross/net) |
|
|
|
|
|
|
|
Gas |
4/2.5 |
5/5.0 |
(20)/(50) |
8/5.5 |
16/15.5 |
(50)/(65) |
|
Oil |
1/1.0 |
10/10.0 |
(90)/(90) |
36/34.6 |
35/34.0 |
3/2 |
|
Gas storage |
2/0.2 |
-/- |
200/20 |
2/0.2 |
3/3.0 |
(33)/(93) |
|
Service |
-/- |
-/-
|
-/- |
-/- |
1/1.0 |
(100)/(100) |
|
Oil sands evaluation |
-/- |
-/- |
-/- |
-/- |
7/7.0 |
(100)/(100) |
|
Dry |
-/- |
-/- |
-/- |
-/- |
-/- |
-/- |
|
Total (excluding gas storage) |
5/3.5 |
15/15.0 |
(67)/(77) |
44/40.1 |
62/60.5 |
(29)/(34) |
Success rate |
100/100 |
100/100 |
-/- |
100/100 |
100/100 |
-/- |
(1) |
Revenue includes realized gains and
losses on derivatives and call option premiums received. |
(2) |
This is a non-GAAP measure; please
refer to "non-GAAP measures" included in the MD&A. |
(3) |
Based on weighted average Common
Shares outstanding for the period. |
(4) |
Based on Common Shares outstanding at
each dividend payment date. |
(5) |
Net bank debt is measured as at the
end of the period and includes net working capital (deficiency),
excluding short-term derivative assets and liabilities related to
the Corporation's hedging activities, the current portion of
convertible debentures, assets and liabilities held for sale and
the share based payment liability. Total net debt includes senior
notes and convertible debentures, measured at principal
amount. |
(6) |
Production amounts are based on the
Corporation's interest before deduction of royalties. |
(7) |
Deemed production describes all gas
shut-in or denied production pursuant to a decision report,
corresponding order or general bulletin of the Alberta Energy and
Utilities Board ("AEUB"), or through correspondence in relation to
an AEUB ID 99-1 application. This deemed production is not actual
gas sales but represents shut-in gas that is the basis of the gas
over bitumen financial solution received monthly from the Alberta
Crown as a reduction of other royalties payable. See "Gas over
bitumen royalty adjustments" in the MD&A. |
(8) |
Perpetual's commodity hedging
strategy employs both financial forward contracts and physical
commodity delivery contracts at fixed prices or price collars. |
(9) |
As evaluated by McDaniel in
accordance with National Instrument 51-101. See "Reserves" included
in the MD&A. |
(10) |
Reserves are presented on a company
interest basis, including working interest and royalty interest
volumes but before royalty burdens. |
(11) |
Discounted at ten percent using
McDaniel's forecast pricing. Reserves at various other discount
rates are located in the "Reserves" section of the MD&A.
Estimated present value amounts should not be taken to represent an
estimate of fair market value. |
(12) |
Based on Common Shares outstanding at
period end. |
Forward-Looking Information
Certain information regarding Perpetual in
this news release including management's assessment of future plans
and operations and including the information contained under the
heading "2013 Outlook and Sensitivities" above may constitute
forward-looking statements under applicable securities laws. The
forward looking information includes, without limitation,
statements regarding expected access to capital markets; forecast
production, production capability, operations, funds flows, and
timing thereof; expected future funds flows generated by the gas
storage facility; forecast and realized commodity prices; forecast,
funding and allocation of capital expenditures; anticipated
operating cost sustainability; projected use of funds flow; planned
drilling and development and the results thereof; expected levels
of indebtedness under the credit facility; marketing and
transportation; reserve estimates; and estimated funds flow
sensitivity. 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 Perpetual Energy Inc.'s MD&A for the year ended December 31,
2012 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 laws.
In accordance with NI 51-101, an Mcfe and
boe conversion ratio for crude oil and natural gas 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. Given
that the value ratio based on the current price of crude oil as
compared to natural gas is significantly different from the energy
equivalency of 6:1, utilizing a conversion on a 6:1 basis may be
misleading as an indication of value.
Under NI 51-101, the methodology to be used
to calculate F&D and FD&A costs includes incorporating
changes in FDC required to bring the proved undeveloped and
probable reserves to production. For continuity, Perpetual has
presented herein and/or in the MD&A F&D and 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, undeveloped reserve
revisions and capital cost estimates that reflect the independent
evaluator's best estimate of what it will cost to bring the proved
and probable undeveloped reserves on production.
Non-GAAP Measures
This news release contains financial measures
that may not be calculated in accordance with generally accepted
accounting principles ("GAAP"). Readers are referred to advisories
and further discussion on non-GAAP measures contained in the
"Non-GAAP Measures" section of the MD&A.
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
symbol "PMT", "PMT.DB.D" and "PMT.DB.E", respectively. Further
information with respect to Perpetual can be found at its website
at www.perpetualenergyinc.com.
Conference Call and Webcast
Perpetual will be hosting a conference call and
webcast at 9:30 a.m., Mountain Time, Tuesday, March 12, 2013 to
review this information. Interested parties are invited to take
part in the conference call by dialing one of the following
telephone numbers 10 minutes before the start time: Toronto and
area - (647) 427-7451; outside Toronto - (888) 231-8192. For a
replay of this call please dial: (855) 859-2056, passcode: 93528537
until Tuesday, March 19, 2013.
To participate in the live webcast please visit
www.perpetualenergyinc.com or
http://event.on24.com/r.htm?e=578903&s=1&k=97C5FB900DCC228D56105530CA184483.
The webcast will be archived and the webcast presentation will be
posted on Perpetual's website shortly following the presentation.
The Toronto Stock Exchange has neither approved nor disapproved the
information contained herein.
SOURCE: Perpetual Energy Inc.
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