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Press release from Marketwire

Parallel Energy Trust Announces Record Production Volumes, Third Quarter 2012 Financial and Operating Results and Confirms November Distribution

Monday, November 12, 2012

Parallel Energy Trust Announces Record Production Volumes, Third Quarter 2012 Financial and Operating Results and Confirms November Distribution08:00 EST Monday, November 12, 2012CALGARY, ALBERTA--(Marketwire - Nov. 12, 2012) -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, 2012. 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.Operating HighlightsSubsequent to quarter end, and since the resumption of full natural gas sales from the Carson field on October 29, 2012, Parallel's production has averaged 7,300 boe/day based on field data marking record average production volumes for a two week period. Completed a new pipeline from the Carson field to a back-up processing plant that will allow for alternative processing if the main processing plant is unavailable. Installed cooling equipment in July 2012 to maintain condensate production during the summer months. During the third quarter, drilled nine wells at an average cost of $440,000 per well and an average 30 day initial production rate of 28 boe/day, resulting in a $16,000 drilling cost per flowing boe/day. Closed an acquisition in early October of a property producing 200 boe/day, at attractive metrics of $23,000 per flowing boe/day. The foregoing acquisition, along with the results from Parallel's third quarter and early fourth quarter drilling program has resulted in a 7% increase in the productive capacity of the Trust's assets from a 7,000 boe/day average in the third quarter to a 7,500 boe/day current average. The Trust maintains its targeted exit production rate of 7,200 boe/day for 2012. As previously announced, Parallel's lending syndicate completed their mid-year review of the bank facility and reaffirmed the borrowing base at US$175 million. Production during the third quarter was impacted by previously announced outages in July and the curtailment of natural gas production from the Carson field in August and September. Production for the three month period ended September 30, 2012 averaged 5,760 boe/day for the Trust's 100% interest in the property.Summary of Operating and Financial ResultsQuarter ended September 30, 2012($000s except were indicated)ProductionNatural gas (mcf/day)10,409Condensate (bbls/day)1,336NGLs (bbls/day)2,689Total (@6:1) (boe/day)5,760Revenue, net of royalties16,549Funds from operations (1)8,433Net loss(6,142)Distributions12,264Capital expenditures7,483Working capital(5,797)Bank loan (C$ equivalent of US$ debt)135,871Convertible debentures63,000Unitholder's equity368,032(1) Non-GAAP measure. Readers are referred to Advisories at the end of the press release for additional information."I am very proud of our team in Tulsa which, faced with unforeseen circumstances, was able to maximize our third quarter production by obtaining permission to flare gas during the curtailment and by completing a tie-in of the Carson field to a back-up processing plant that allowed us to redirect a majority of our natural gas production," said Dennis Feuchuk, CEO of the Trust. "While the third quarter was very challenging from a production standpoint, we were able to complete a number of operational projects that will enhance the reliability of our production going forward. In addition, both our current drilling program and our recent acquisition of the producing property in Roberts County are already showing very positive results. Our next step is to establish the capital expenditure budget and production and cash flow forecast for 2013, at which time we will also determine the appropriate distribution level. We plan to provide further information by the first week of December."The Trust also announced the resignation of Craig Glick from its Board of Directors and the appointment of F. H. "Mim" James as a replacement on the Board for Mr. Glick. Mr. James has over 30 years of experience in the oil and gas industry, including senior management positions in planning, finance, operations and business development. Mr. James retired as General Manager, Planning and Finance - ConocoPhillips Worldwide Exploration and Production in 2005. Mr. James has a Masters of Business Administration from Arizona State University and a Bachelor of Science from the University of Southwestern Louisiana. "I want to thank Craig for his guidance and support since our initial public offering. It has been a pleasure working with him," said Henry Sykes, Executive Chairman of the Trust. "I also want to welcome Mim to our Board. His broad range of experience in finance and operations in the oil and gas industry make him a very valuable addition to our team. His knowledge and insight will be of tremendous assistance as we execute our business plan."The Trust also confirms that its cash distribution to be paid on December 21, 2012, in respect of the period from and including November 1, 2012 to November 30, 2012, to unitholders of record on November 30, 2012 will be $0.08 per trust unit. The ex-distribution date is November 28, 2012.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 ("TSX") under the symbol "PLT.UN" and the debentures are listed on the TSX under the symbol "PLT.DB".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 is set out in Parallel's annual information form dated March 21, 2012, which may be obtained on the SEDAR website at www.sedar.com under Parallel's profile.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" in Parallel's annual information form dated March 21, 2012 (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.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: Contact Information: Parallel Energy TrustCurtis PelletierManager, Investor Relations403-781-7888 or Toll-Free: 1-855-781-7888investor@parallelenergy.ca