Paramount Energy Trust Confirms December Distribution and Closing of Real Estate Disposition



    
    TSX: PMT.UN, PMT.DB, PMT.DB.A,
    PMT.DB.B, PMT.DB.C
    

    CALGARY, Dec. 6 /CNW/ - Paramount Energy Trust (TSX:PMT.UN) ("PET" or the
"Trust") confirmed today that its distribution to be paid on January 15, 2008
in respect of income received by PET for the month of December 2007, for
Unitholders of record on December 31, 2007, will be $0.10 per Trust Unit. The
ex-distribution date is December 27, 2007. The December 2007 distribution
brings cumulative distributions paid since the inception of the Trust in
February 2003 to $11.924 per Trust Unit.The Trust is also pleased to confirm
the closing of the sale of the Calgary office building that it owned and
occupied on December 3, 2007. Concurrent with the real estate disposition, PET
has relocated its head office to 3200, 605 - 5th Avenue SW, Calgary, Alberta,
T2P 3H5.With the proceeds of approximately $35 million from this transaction
and PET's current payout ratio of approximately 50%, the Trust projects that
it will exit 2007 with less than $340 million of net bank debt, leaving more
than $60 million of availability on its bank lines of $400 million, which have
been confirmed at that level through May 2008.Natural gas prices continue to
be highly volatile largely around uncertainty regarding winter weather and its
effect on natural gas demand and storage. PET remains cautious in its outlook
with respect to near term natural gas prices and continues to actively manage
its risk management program. Financial and physical forward sales arrangements
at the AECO and NYMEX trading hubs as at December 6, 2007 are as follows:

    
              Volumes                        Current
                   at         % of           Forward
    Type of   AECO (2)     Current   Price   Price
    contract    (GJ/d)  Production   ($/GJ)  ($/GJ)                     Term
    -------------------------------------------------------------------------
    Financial  57,500                 7.31           January 2008-March 2008
    Physical   12,500                 7.43           January 2008-March 2008
    -------------------------------------------------------------------------
    Period
     total,
     net (1)   70,000           36    7.34    6.34    January 2008-March 2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Financial  55,000                 7.40                April-October 2008
    Physical    5,000                 6.68                April-October 2008
    -------------------------------------------------------------------------
    Period
     total
     AECO,
     net (1)   60,000                 7.34    6.45         April-October 2008
    -------------------------------------------------------------------------
    Financial
     NYMEX      7,500             7.78 US$                April-October 2008
    -------------------------------------------------------------------------
    Period
     total
     NYMEX,
     net (1)    7,500              7.78 US$ 7.58 US$      April-October 2008
    -------------------------------------------------------------------------
    Period
     total,
     net (1)   67,500           35                        April-October 2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Financial  57,500                  7.77         November 2008-March 2009
    Physical    7,500                  8.36         November 2008-March 2009
    -------------------------------------------------------------------------
    Period
     total,
     net (1)   65,000           34     7.84   7.52  November 2008-March 2009
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (1) Weighted average prices are calculated by netting the volumes of the
        financial and physical sold/bought contracts together and measuring
        the net volume at the weighted average "sold" price for the financial
        and physical contracts.
    (2) All transactions at AECO unless identified specifically as a NYMEX
        transaction.
    

    In addition to the mark to market gains inherent in the existing hedge
book of approximately $22 million, PET has realized gains totaling
approximately $62 million to-date in 2007 on financial and physical forward
sales contracts including the crystallization of forward positions. PET
crystallized gains totalling approximately $7 million on winter 2007-2008 and
calendar 2008 positions in late November. PET will continue to closely monitor
the market drivers with respect to near term natural gas prices and will
proactively manage the Trust's forward price exposure.The Board of Directors
of the Administrator of PET has approved a capital expenditure budget of $108
million for 2008, of which approximately $48 million will be spent in the
first quarter. The program is designed to maintain the Trust's natural gas
production. The actual magnitude of the Trust's capital spending program for
the final three quarters of 2008 will be in part dictated by commodity prices
and other market considerations.The following table reflects PET's projected
realized gas price, monthly funds flow and payout ratio at the current monthly
distribution of $0.10 per Trust Unit, for 2008 at certain AECO natural gas
price levels and incorporating all of the Trust's current financial hedges and
physical forward sales contracts and assuming the projects currently
identified in the 2008 budget are completed with the results as budgeted.
Actual projects and results will vary.

    
                                        Average AECO Monthly Index Gas Price
                                          January to December 2008 ($/GJ) (2)

    Funds flow sensitivity analysis              $5.50      $6.50      $7.50
    -------------------------------------------------------------------------
    Natural gas production (MMcfe/d) (1)           190        190        190
    Realized gas price ($/Mcfe)                   6.48       7.06       7.89
    Funds flow (3) ($million/month)               16.4       19.2       23.2
    Per Trust Unit ($/Unit/month)                0.147      0.172      0.208
    Payout ratio (3) (%)                            68         58         48
    Ending total net debt (4) ($million)           577        544        496
    Ending total net debt to funds flow
     ratio (4) (times)                             2.9        2.4        1.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (1) Includes working interest and royalty interest production.
    (2) Average AECO Monthly Index price for January-December 2008 at
        December 6, 2007 was approximately $6.53/GJ.
    (3) These are non-GAAP measures; see "Significant Accounting Policies and
        Non-GAAP measures" in Management's Discussion and Analysis in the
        Trust's Third Quarter Interim Report.
    (4) Calculated as ending total net debt (including convertible
        debentures) divided by annualized funds flow.
    

    Based on current natural gas prices, PET expects to maintain monthly
distributions at the current level for the foreseeable future. The Trust
continues to focus on what we believe is a sustainable distribution model that
balances short term cash returns to our Unitholders and long term value
creation through capital spending programs. PET reviews distributions on a
monthly basis based on cash flow projections which incorporate PET's base
production forecasts, current hedges and physical forward natural gas sales,
the forward market for natural gas prices, and the Trust's capital spending
program and projected production additions. Future distributions are subject
to change as dictated by changes in commodity price markets, operations and
future business development opportunities.

    Forward-looking Information

    This news release contains forward-looking information. Implicit in this
information, particularly in respect of cash distributions, are assumptions
regarding natural gas prices, production, royalties and expenses which,
although considered reasonable by PET at the time of preparation, may prove to
be incorrect. These forward-looking statements are based on certain
assumptions that involve a number of risks and uncertainties and are not
guarantees of future performance. Actual results could differ materially as a
result of changes in PET's plans, changes in commodity prices, general
economic, market, regulatory and business conditions as well as production,
development and operating performance and other risks associated with oil and
gas operations. There is no guarantee by PET that actual results achieved will
be the same as those forecast herein.

    Non-GAAP Measures

    This news release contains financial measures that may not be calculated
in accordance with generally accepted accounting principles in Canada
("GAAP"). Readers are referred to advisories and further discussion on
non-GAAP measures contained in the "Significant Accounting Policies and
Non-GAAP Measures" section of the Trust's Management's Discussion and
Analysis.
    Mcf equivalent (Mcfe) may be misleading, particularly if used in
isolation. In accordance with National Instrument 51-101 ("NI 51-101"), an
Mcfe conversion ratio for oil 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.
    Paramount Energy Trust is a natural gas-focused Canadian energy trust.
PET's Trust Units and Convertible Debentures are listed on the Toronto Stock
Exchange under the symbols "PMT.UN", "PMT.DB", "PMT.DB.A", "PMT.DB.B", and
"PMT.DB.C" respectively. Further information with respect to PET can be found
at its website at www.paramountenergy.com.

    
    The Toronto Stock Exchange has neither approved nor disapproved the
    information contained herein.
    





For further information:

For further information: Paramount Energy Trust, Susan L. Riddell Rose,
President and Chief Executive Officer, (403) 269-4400; or Paramount Energy
Trust, Cameron R. Sebastian, Vice President, Finance and Chief Financial
Officer, (403) 269-4400; or Paramount Energy Trust, Sue M. Showers, Investor
Relations and Communications Advisor, (403) 269-4400, (403) 269-4444 (FAX); or
Paramount Energy Operating Corp, Administrator of Paramount Energy Trust,
Suite 3200, 605 - 5 Avenue SW, Calgary, Alberta, Canada, T2P 3H5, Email:
info@paramountenergy.com, Website: www.paramountenergy.com


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890