CALGARY, ALBERTA--(Marketwire - May 8, 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 first quarter ended March 31, 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.
Highlights for the quarter ended March 31, 2012
- Production for the three month period ended March 31, 2012 averaged 3,882 boe/day for the Trust's 59% interest in the property.
- Ten gross wells (six net wells) were drilled during the quarter. All wells are currently on production.
- Funds from operations was $8.1 million, an increase of 5.4% from the fourth quarter of 2011 as lower operating and general and administrative expenses were partially offset by lower realized prices.
- Distributions announced during the quarter totaled $0.225 per unit for a total of $9.0 million. The distributions per unit were $0.075 per month for January, February and March.
- Parallel announced the acquisition of the remaining 41% of the West Panhandle Field on March 21. The acquisition closed on April 12, with an effective date of April 1. The transaction was financed by the issuance of 8,500,000 units at $7.05 per unit and $60 million of convertible debentures with a 6.5% coupon, plus an advance of approximately US$75 million under the Trust's credit facility. Concurrent with the acquisition, the monthly distribution amount was increased to $0.08 per unit to reflect the accretive nature of the transaction.
|Summary of Operating and Financial Results||
March 31 ,2012
|($000s except were indicated)|
|Natural gas (mcf/day)||8,069|
|Total (@6:1) (boe/day)||3,882|
|Revenue, net of royalties||13,219|
|Funds from operations (1)||8,144|
|Bank loan (C$ equivalent of US$ debt)||62,907|
(1) The methodology for presenting production was revised in Q1 2012 as compared to 2011. For 2012 and thereafter, natural gas production will be presented prior to processing fees taken-in kind compared to the methodology utilized in 2011 in which natural gas production was shown net of processing fees. The impact on production data is to increase natural gas production by approximately 9% and total production by approximately 3% from the previous presentation methodology. There is no impact of the change in methodology on the financial statements for either 2011 or 2012.
(2) Non-GAAP measure. Readers are referred to Advisories at the end of the press release for additional information.
Production for the Trust's 100% interest in the property is currently averaging 6,900 boe/day based on field data, a 5% increase over the average production rate in the first quarter of 2012.
"We are very pleased that we completed the acquisition of the remaining 41% interest in the West Panhandle Field in April. The acquisition was at a very attractive price and was accretive on all metrics." said Dennis Feuchuk, CEO of the Trust. "We are currently in the process of transitioning operatorship of the property to Parallel with the operating team, headed by Tony Swindell our new VP of Mid-Continent, largely in place. Our drilling program and operations initiatives for 2012 are well underway and we look forward to providing updates on our progress."
ABOUT PARALLEL ENERGY TRUST
Parallel'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" 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.
This 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.
This 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 Definitions
This 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