NEWS
RELEASE
Perpetual Energy inc. RELEASES YEAR
END 2012
FINANCIAL AND OPERATING RESULTS AND
Announces West Edson Development
Plan
Calgary, Alberta – March 11, 2013 (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:
1.
Maximize value of Mannville heavy
oil;
2.
Position for growth of Edson
liquids-rich gas;
3.
Manage downside risk and reduce
debt;
4.
Advance and broaden the portfolio of
high impact opportunities with risk-managed investment;
and
5.
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 expenses of $24 million and an interest rate
on long-term bank debt of 5.4 percent.
2013
Projected Funds Flow (1)(2) ($
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 per bbl
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.
For Additional Information, please
contact:
Perpetual Energy
Inc.
Suite 3200, 605 - 5 Avenue SW
Calgary, Alberta, Canada T2P 3H5
Telephone: 403 269-4400 Fax:
403 269-4444
Email:
info@perpetualenergyinc.com
|
Susan L. Riddell Rose
President and Chief Executive Officer
Cameron R. Sebastian
Vice President, Finance and Chief Financial
Officer
Claire A. Rosehill
Investor Relations and Business Analyst
|
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