The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from Marketwire

Parallel Energy Trust Announces 2012 Capital Expenditure Plans and Production Forecast and Updates Commodity Hedge Position

Monday, November 28, 2011

Parallel Energy Trust Announces 2012 Capital Expenditure Plans and Production Forecast and Updates Commodity Hedge Position17:33 EST Monday, November 28, 2011CALGARY, ALBERTA--(Marketwire - Nov. 28, 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) announced today its capital expenditure plans for 2012. The Trust has established a capital expenditure budget of US$16.5 million for the year, comprised of US$16 million for drilling and workovers and US$0.5 million for facilities infrastructure. Based on these expenditures and currently realized capital efficiencies from the drilling and workover program completed to date in 2011, production is anticipated to average between 4,600 and 4,800 boe/day for 2012. These production levels would represent a 33% to 39% increase in production since the filing of the Trust's preliminary prospectus in March 2011. While the capital budget has been established for the year, the capital program will be reviewed quarterly and may be adjusted based on commodity price levels and results achieved.The Trust also announced that it has entered into additional commodity price hedges for the full year 2012. The Trust has executed a costless collar for 200 bbls/day of crude oil based on WTI price at a floor of US$91.75 and a ceiling of US$101.75. The Trust also recently entered into forward price contracts for 500 bbls/day equivalent of natural gas liquids at an average price of US$54.00 per bbl. The Trust has now established commodity hedges for an average of 1,600 boe/day for calendar 2012 as follows:Natural Gas:- January to April 2012: 2,000 mmbtu/day at a floor of US$4.20 and a ceiling of US$5.20Crude Oil:- January to December 2012: 1,000 bbls/day at an average floor price of US$92.50 and an average ceiling of US$103.00Natural Gas Liquids:- January to December 2012: 500 bbls/day equivalent at a forward price of US$54.00"With the capital program established for 2012 and the results achieved to date, we are well positioned to continue to grow production at attractive metrics." said Dennis Feuchuk, CEO of the Trust "Based on current commodity prices, cash flow after our current level of distributions is forecasted to fully fund our capital program in 2012, not taking into account any proceeds we might receive from our recently announced distribution reinvestment programs. Given our low level of debt and our commodity hedge position, we believe the Trust will be able to fully fund both our capital program and the current level of distributions through a broad range of commodity prices."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.In this news release, Parallel and its subsidiaries are referred to collectively as the "Trust" or "Parallel" for purposes of convenience.FOR FURTHER INFORMATION PLEASE CONTACT: Dennis FeuchukParallel Energy TrustPresident and CEO403-781-7888 or Toll Free: 1-855-781-7888investor@parallelenergy.caORRick MillerParallel Energy TrustChief Financial Officer403-781-7888 or Toll Free: