The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from Marketwire

Parallel Energy Trust Announces Third Quarter 2011 Financial and Operating Results

Monday, November 14, 2011

Parallel Energy Trust Announces Third Quarter 2011 Financial and Operating Results08:00 EST Monday, November 14, 2011CALGARY, ALBERTA--(Marketwire - Nov. 14, 2011) -THIS PRESS RELEASE IS NOT FOR DISTRIBUTION TO ANY UNITED STATES NEWSWIRE SERVICES OR OTHERWISE FOR DISTRIBUTION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIES LAWS.Parallel Energy Trust ("Parallel" or the "Trust") (TSX:PLT.UN) is pleased to report its financial and operating results for the third quarter ended September 30, 2011. Parallel's unaudited interim financial statements and accompanying Management's Discussion and Analysis will be filed shortly on the SEDAR website (www.sedar.com) and on the Trust's website at www.parallelenergy.ca.Highlights for the quarter ended September 30, 2011Production for the three month period ended September 30, 2011 averaged 3,662 boe/day. Production during the quarter was negatively impacted by approximately 200 boe/day due to operational issues related to extreme heat in Texas during the summer months and an unscheduled outage at a gas plant which processes approximately 2/3 of the Trust's volumes. Ten gross wells (six net wells) were drilled during the quarter. All wells are currently on production. The Trust entered into several costless collars which fixed the floor price for WTI oil price at an average of US$84.00 for 400 bbls/day for the May to December 2012 period and 200 bbls/day for January to December 2013. These hedges are in addition to existing oil hedges which fixes the floor price of WTI at an average of US$105.35 for 800 bbls/day through April 2012. Funds from operations was $9.1 million ($26.92 per boe). Distributions announced during the quarter totaled $0.225 per unit for a total of $8.85 million. The distributions were $0.075 per month for July, August and September. Quarter ended September 30,Quarter ended June 30,Summary of Operating and Financial Results20112011(2)($000s except were indicated)Natural gas (mcf/day)7,7666,588Condensate (bbls/day)729752NGLs (bbls/day)1,6391,368Total (@6:1) (boe/day)3,6623,218Revenue, net of royalties13,3739,621Funds from operations (1)9,0686,385Net income5,7685,382Distributions8,8496,883Capital expenditures4,7643,327Working capital2,126(947)Bank loan (C$ equivalent of US$ debt)62,43251,567Unitholder's equity386,904362,209(1)Non-GAAP measure. Readers are referred to Advisories at the end of the press release for additional information.(2)Represents results from April 21, 2011 initial public offering date to June 30, 2011 Based on current expenditure levels, the Trust expects to spend approximately US$10.3 million on drilling for 2011, a slight increase from the estimate in early August. The Trust is still anticipating a 2011 exit production rate of 4,350 boe/day. Current production is approximately 4,100 boe/day based on field data. The Trust will be releasing its 2012 capital expenditure plans and production forecasts by the end of November. "While production levels were impacted in the second and third quarter from weather related issues and plant outages, we are pleased that our base production continues to meet our expectations." said Dennis Feuchuk, CEO of the Trust "Our drilling program continues to add production at attractive metrics. In the third quarter, we began drilling dual-lateral wells, allowing us to drill two lateral sidetracks from one wellbore at less than the cost of drilling two stand-alone lateral wells. With our estimated exit production rate of 4,350 boe/day, we are on track to increase production by over 25% in the nine months from the time our preliminary prospectus was filed." ABOUT PARALLEL ENERGY TRUSTParallel's objectives are to create stable, consistent returns for investors through the acquisition and development of conventional oil and natural gas reserves and production with unexploited low risk potential in certain regions of the United States, and to pay out a portion of available cash to holders of trust units on a monthly basis. The trust units of Parallel are listed on the Toronto Stock Exchange under the symbol "PLT.UN".Parallel is a "mutual fund trust" under the Income Tax Act (Canada) (the "Tax Act"). The Trust will not be a "SIFT trust" (as defined in the Tax Act), provided that the Trust complies at all times with its investment restriction which precludes the Trust from holding any "non-portfolio property" (as defined in the Tax Act). Further information relating to Parallel and the trust units is set out in Parallel's final prospectus dated April 14, 2011. ADVISORIESForward-Looking InformationThis news release contains forward-looking information that involves substantial known and unknown risks and uncertainties, most of which are beyond the control of Parallel, including, without limitation, those listed under "Risk Factors" and "Notice to Investors-Forward-Looking Statements" in Parallel's final prospectus filed April 14, 2011 (collectively, "forward-looking information"). Forward-looking information in this news release includes, but is not limited to, Parallel's objectives and status as a mutual fund trust and not a SIFT trust, Parallel's expectations and estimates regarding capital expenditure plans, current and future production rates, commodity prices and foreign exchange rates, funds from operations and distributions. Parallel cautions investors in Parallel's securities about important factors that could cause Parallel's actual results to differ materially from those projected in any forward-looking statements included in this news release. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and may be forward-looking and may involve estimates, assumptions and uncertainties which could cause actual results or outcomes to differ materially from those expressed in such forward-looking statements. No assurance can be given that the expectations set out in Parallel's final prospectus or herein will prove to be correct and accordingly, prospective investors should not place undue reliance on these forward-looking statements. These statements speak only as of the date of this press release and Parallel does not assume any obligation to update or revise them to reflect new events or circumstances.Non-GAAP MeasuresThis press release contains the term "funds from operations". This term is not a recognized measure under Canadian generally accepted accounting principles (GAAP). Parallel believes that in addition to net income, funds from operations is a useful supplemental measurement. Funds from operations provides an indication of the funds generated by the Trust's principal business activities and is defined as "cash from operating activities" prior to workovers and "change in non-cash working capital related to operating activities" in the Statement of Cash Flows.Oil and Gas Measures and DefinitionsThis press release contains disclosure expressed as "boe" and "boe/day". 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 FOR FURTHER INFORMATION PLEASE CONTACT: Dennis FeuchukParallel Energy TrustPresident and CEO403-781-7888 or Toll Free: 1-855-781-7888ORRick MillerParallel Energy TrustChief Financial Officer403-781-7888 or Toll Free: 1-855-781-7888investor@parallelenergy.ca