Paramount Energy Trust Releases Year End 2007 Financial and Operating Results



    
    March 2008 Distribution Confirmed

    TSX: PMT.UN, PMT.DB
    

    CALGARY, March 11 /CNW/ - Paramount Energy Trust (TSX:PMT.UN) ("PET" or
the "Trust") is pleased to release its fourth quarter and year end 2007
financial and operating results. Increased production and gains from the
Trust's commodity hedging program helped offset weaker natural gas prices,
leading to solid financial results in 2007. The full text of the Trust's
audited consolidated financial statements and related management's discussion
and analysis can be found on PET's profile at:
    www.sedar.com and on PET's website at
www.paramountenergy.com/unitholder/regulatory_filings/ or
http://media3.marketwire.com/docs/311PMT_MD%26A.pdf and
http://media3.marketwire.com/docs/311PMT_FINANCIALS.pdf.
    PET is also pleased to confirm that its distribution to be paid on April
15, 2008 in respect of income received by PET for the month of March 2008, for
Unitholders of record on March 31, 2008, will be $0.10 per Trust Unit. The
ex-distribution date is March 27, 2008. The March 2008 distribution brings
cumulative distributions paid since the inception of the Trust in February
2003 to $12.224 per Trust Unit. The Trust also announces that there will be no
Trust Units available under the Optional Cash Payments component of its
Distribution Reinvestment Plan ("DRIP") following the Trust's distribution
payable on March 17, 2008. Optional Cash Payments that had been received by
Computershare Trust Company of Canada ("the Agent") in accordance with the
DRIP not less than three business days prior to the February 29 distribution
record date will be accepted with respect to the distribution payable on March
17, 2008 however no additional Optional Cash Payments will be accepted until
further notice. Optional Cash Payments received by the Agent subsequent to
February 29, 2008 will be returned by the Agent.

    Conference Call and Webcast

    PET will be hosting a conference call and webcast at 10:00 a.m., Mountain
Time, Wednesday March 12, 2008 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
1-416-644-3421; Outside Toronto 1-800-594-3615. The webcast will also be
archived shortly following the presentation. For a replay of this call please
dial: Toronto and area 1-416-640-1917; Outside Toronto 1-877-289-8525,
passcode 21265364No. until March 19, 2008. To participate in the live webcast
please visit:

    www.paramountenergy.com or http://www.newswire.ca/en/webcast/index.cgi.

    FOURTH QUARTER 2007 RESULTS

    
    -   Production increased 32 percent to average 190.3 MMcfe/d as compared
        to 144.6 MMcfe/d for the fourth quarter of 2006, primarily resulting
        from additional volumes from acquisitions completed in 2007.

    -   The Trust's realized natural gas price decreased to $7.07 per Mcfe
        for the three months ended December 31, 2007 from $7.83 per Mcfe for
        the three months ended December 31, 2006, consistent with the
        decrease in AECO gas prices from quarter to quarter.

    -   Funds flow totaled $59.6 million for the quarter or $0.55 per Trust
        Unit as compared to $58.2 million or $0.69 per Trust Unit in the
        fourth quarter of 2006, as lower realized natural gas prices in the
        current quarter partially offset the increase in production volumes.

    -   Capital spending totaled $20.3 million for the fourth quarter,
        including the drilling of 24 wells (19.3 net wells) primarily in east
        central and southern Alberta with a 95 percent net success rate.

    -   Distributions for the fourth quarter of 2007 totaled $0.30 per Trust
        Unit, paid on November 15, 2007, December 17, 2007 and January 15,
        2008. PET's payout ratio, which refers to distributions measured as a
        percentage of funds flow, was 55.0 percent for the quarter.

    -   PET closed the sale of the Calgary office building that it owned and
        occupied in December 2007 for net proceeds of $35.0 million after
        realtor fees, realizing a $22.0 million gain on disposition.

    -   PET disposed of a minor royalty interest in the fourth quarter of
        2007 for total proceeds of $8.1 million. In addition, several non-
        core dispositions were closed in January and February 2008 that will
        result in additional net proceeds of $6.4 million to the Trust, with
        minimal impact to production volumes.

    -   As a result of the building disposition and the Trust's relatively
        low payout ratio net bank debt at December 31, 2007 was reduced to
        $336 million as compared to net bank debt of $382 million at
        September 30, 2007.

    -   PET finished planning and began the execution of a $48 million 2008
        winter capital program targeting 15 to 20 MMcf/d of natural gas
        production additions through drilling, completion, tie-in and
        facility projects primarily in the Trust's three core areas in
        northeast Alberta.

    -   The Trust's bank credit facility borrowing base redetermination was
        completed during the quarter and resulted in PET's borrowing base
        remaining unchanged at $400 million through May 26, 2008.

    ANNUAL 2007 RESULTS

    -   In June 2007 PET closed a significant acquisition of predominantly
        natural gas producing properties in east central Alberta (the
        "Birchwavy Acquisition") for cash consideration of $391.8 million,
        plus $17.6 million in respect of working capital and acquisition
        costs of $3.8 million. The properties acquired ("Birchwavy Assets")
        are located in year round access areas within and adjacent to the
        Trust's core areas in southern Alberta and are an operational,
        geographical and strategic fit with PET's existing shallow gas
        operations. The properties acquired averaged daily production of
        approximately 44.5 MMcfe/d for the last six months of 2007, including
        41.6 MMcf/d of natural gas production and 475 Bbls/d of oil and
        natural gas liquids production. The Birchwavy Acquisition was
        financed through the issuance of 20,450,000 subscription receipts
        which were converted into Trust Units on closing of the acquisition,
        at a price of $12.25 each for gross proceeds of $250.5 million and
        $75 million aggregate principal amount of 6.50 percent convertible
        extendible unsecured subordinated debentures.

    -   PET also completed two other producing property acquisitions in the
        second quarter of 2007 in order to consolidate the Trust's assets in
        northeast Alberta for a total cost of $59 million.

    -   Daily average production increased 11 percent to a record 170.2
        MMcfe/d in 2007 as a result of the Birchwavy Acquisition and
        successful capital programs during the year. Average production from
        the Birchwavy Assets and other acquisitions contributed 27.0 MMcfe/d
        to production levels for 2007. Exploration and development capital
        spending of $110 million in 2007 worked to mitigate production
        declines on both the base and acquired assets. Further production
        additions from 2007 capital expenditures will continue to enhance the
        Trust's base production as wells drilled in the Trust's all-weather
        access areas in the fourth quarter of 2007 are completed, tied in and
        brought onstream in early 2008.

    -   Proved reserves increased 66 percent to 294.8 Bcfe and proved and
        probable reserves increased 95 percent to 509.9 Bcfe at December 31,
        2007 as compared to year-end 2006. Excluding future development
        capital, PET realized finding, development and acquisition costs of
        $2.75 per Mcfe for proved reserves and $1.59 per Mcfe for proved and
        probable reserves in 2007. Including future development capital,
        finding, development and acquisition costs for 2007 totaled $3.21 per
        Mcfe for proved reserves and $2.53 per Mcfe for proved and probable
        reserves.

    -   PET recorded funds flow of $239.1 million or $2.44 per Trust Unit for
        the year as compared to $236.7 million or $2.82 per Trust Unit for
        2006 as higher production levels were partially offset by higher
        operating, interest and general and administrative expenses. The
        decrease in funds flow per Trust Unit is a function of the higher
        number of Trust Units outstanding relating to the financing for the
        Birchwavy Acquisition.

    -   PET's average realized gas price was $7.44 per Mcfe in 2007, down one
        percent from $7.52 per Mcfe in 2006. PET's natural gas price before
        financial hedging and physical forward sales decreased three percent
        to $6.44 per Mcfe in 2007 from $6.61 in 2006, in line with the
        decrease in AECO prices for the year. The $1.00 per Mcfe increase in
        the Trust's realized natural gas price as compared to PET's gas price
        before financial hedging and physical forward sales can be attributed
        to fixed-price forward natural gas contracts entered into by the
        Trust in order to provide distribution stability for PET's
        Unitholders and to take advantage of periodic relative strength in
        the forward price curve for natural gas in 2007, despite weak spot
        prices in the second half of the year. As a result of price
        management activities, PET realized $62.5 million of additional
        revenue and funds flow in 2007.

    -   Exploration and development capital spending totaled $109.9 million
        in 2007, comprised of a $63 million winter capital program focused on
        activities in the Trust's three core areas in northeast Alberta with
        the remaining capital expenditures directed primarily towards PET's
        expanding all-season access asset base in east central Alberta. In
        total 137 wells were drilled (110.4 net), including 25 wells (23.9
        net) on lands acquired through the Birchwavy Acquisition. Land
        purchases totaling $8.0 million for 2007 added 203,000 net acres to
        the Trust's land inventory.


    SUMMARY OF RESULTS

    -------------------------------------------------------------------------
    FINANCIAL AND OPERATING HIGHLIGHTS        Three months ended December 31
    ($CDN thousands, except volume                                         %
     and per Trust Unit amounts)                     2007       2006  change
    -------------------------------------------------------------------------

    FINANCIAL
    Revenue (1) (2)                               123,747    104,166      19
    Funds flow (2)                                 59,622     58,166       3
     Per Trust Unit (2) (3)                          0.55       0.69     (20)
    Cash flow provided by operating activities     38,224     56,693     (33)
     Per Trust Unit (3)                              0.35       0.67     (48)
    Net earnings (loss)                            (4,970)   (68,254)    (93)
     Per Trust Unit (3)                             (0.05)     (0.80)    (94)
    Cash distributions                             32,756     50,968     (36)
     Per Trust Unit (4)                              0.30       0.60     (50)
    Payout ratio (%) (2)                             55.0       87.6     (37)
    -------------------------------------------------------------------------
    Total assets                                1,212,707    805,764      51
    Net bank and other debt outstanding (5)       335,671    245,484      37
    Convertible debentures, measured at
     principal amount                             236,109    161,134      47
    Total net debt (5)                            571,780    406,618      41
    Unitholders' equity                           330,935    202,713      63
    -------------------------------------------------------------------------
    Capital expenditures
     Exploration and development                   20,270     24,104     (16)
     Acquisitions, net of dispositions            (47,740)     2,536  (1,982)
     Other                                            389        456     (15)
     Net capital expenditures                     (27,081)    27,096    (200)
    -------------------------------------------------------------------------
    TRUST UNITS OUTSTANDING (thousands)

    End of period                                 109,557     85,186      29

    Weighted average                              109,013     84,841      28

    Diluted                                       109,013     84,841      28

    March 3, 2008                                 110,356
    -------------------------------------------------------------------------
    OPERATING
    Production
     Total (Bcfe) (6)                                17.5       13.3      32
     Average daily (MMcfe/d) (6)                    190.3      144.6      32
      Per Trust Unit (cubic feet
       equivalent/d/Unit) (3)                        1.75       1.70       3
     Gas over bitumen deemed production
     (MMcf/d) (7)                                    20.0       19.8       1
     Average daily (actual and deemed
      - MMcfe/d) (6) (7)                            210.3      164.4      28
      Per Trust Unit (cubic feet
       equivalent/d/Unit) (3)                        1.93       1.94      (1)
    Average natural gas prices ($/Mcfe)
     Before financial hedging and physical
      forward sales (8)                              6.19       6.59      (6)
     Including financial hedging and physical
      forward sales (8)                              7.07       7.83     (10)
    -------------------------------------------------------------------------
    RESERVES (Bcfe)
    Company interest - proved (9)                   294.8      177.1      66
    Company interest - proved and
     probable (9) (10) (11)                         509.9      261.5      95
     Per Trust Unit (Mcfe/Unit) (12)                 4.65       3.07      51
    Estimated present value before
     tax ($ millions) (11)
     Proved                                         972.0      675.2      44
     Proved and probable                          1,481.0      942.5      57
    -------------------------------------------------------------------------
    LAND (thousands of net acres)
    Total land holdings                             3,690      2,637      40
    Undeveloped land holdings                       2,001      1,273      57
    -------------------------------------------------------------------------

    DRILLING (wells drilled gross/net)
     Gas                                          23/18.3    19/13.0   21/41
     Dry                                            1/1.0          - 100/100
     Total                                        24/19.3    19/13.0   26/48
    Success Rate                                    96/95    100/100  (4)/(5)
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                                      Year ended December 31
                                                                           %
                                                     2007       2006  change
    -------------------------------------------------------------------------

    FINANCIAL
    Revenue (1) (2)                               462,409    420,846      10
    Funds flow (2)                                239,100    236,653       1
     Per Trust Unit (3) (2)                          2.44       2.82     (13)
    Cash flow provided by operating activities    222,937    228,581      (2)
     Per Trust Unit (3)                              2.27       2.72     (17)
    Net earnings (loss)                           (32,859)   (18,850)     74
     Per Trust Unit (3)                             (0.33)     (0.22)     50
    Cash distributions                            145,829    221,789     (34)
     Per Trust Unit (4)                              1.50       2.64     (43)
    Payout ratio (%) (2)                             61.0       93.7     (35)
    -------------------------------------------------------------------------
    Total assets                                1,212,707    805,764      51
    Net bank and other debt outstanding (5)       335,671    245,484      37
    Convertible debentures, measured at
     principal amount                             236,109    161,134      47
    Total net debt (5)                            571,780    406,618      41
    Unitholders' equity                           330,935    202,713      63
    -------------------------------------------------------------------------
    Capital expenditures
     Exploration and development                  117,958    138,259     (15)
     Acquisitions, net of dispositions            404,168     79,760     407
     Other                                          1,254      1,267      (1)
     Net capital expenditures                     523,380    219,286     139
    -------------------------------------------------------------------------
    TRUST UNITS OUTSTANDING (thousands)

    End of period                                 109,557     85,186      29

    Weighted average                               98,107     83,940      17

    Diluted                                        98,107     83,940      17

    March 3, 2008                                 110,356
    -------------------------------------------------------------------------
    OPERATING
    Production
     Total (Bcfe) (6)                                62.1       56.0      11
     Average daily (MMcfe/d) (6)                    170.2      153.4      11
      Per Trust Unit (cubic feet
       equivalent/d/Unit) (3)                        1.74       1.83      (5)
     Gas over bitumen deemed
      production (MMcf/d) (7)                        19.9       20.8      (4)
     Average daily (actual and
      deemed - MMcfe/d) (6) (7)                     190.1      174.2       9
      Per Trust Unit (cubic feet
       equivalent/d/Unit) (3)                        1.94       2.08      (7)
    Average natural gas prices ($/Mcfe)
     Before financial hedging and physical
      forward sales (8)                              6.44       6.61      (3)
     Including financial hedging and physical
      forward sales (8)                              7.44       7.52      (1)
    -------------------------------------------------------------------------
    RESERVES (Bcfe)
    Company interest - proved (9)                   294.8      177.1      66
    Company interest - proved and
     probable (9) (10) (11)                         509.9      261.5      95
     Per Trust Unit (Mcfe/Unit) (12)                 4.65       3.07      51
    Estimated present value before
     tax ($ millions) (11)
     Proved                                         972.0      675.2      44
     Proved and probable                          1,481.0      942.5      57
    -------------------------------------------------------------------------
    LAND (thousands of net acres)
    Total land holdings                             3,690      2,637      40
    Undeveloped land holdings                       2,001      1,273      57
    -------------------------------------------------------------------------

    DRILLING (wells drilled gross/net)
     Gas                                        129/103.2  148/111.8 (13)/(8)
     Dry                                            8/7.2      4/1.9 100/279
     Total                                      137/110.4  152/113.7 (10)/(3)
    Success Rate                                    94/93      97/98  (3)/(5)
    -------------------------------------------------------------------------
    (1)  Revenue includes realized gains and losses on financial instruments.
    (2)  This is a non-GAAP measure; please refer to "Significant accounting
         policies and non-GAAP measures" included in Management's Discussion
         and Analysis.
    (3)  Based on weighted average Trust Units outstanding for the period.
    (4)  Based on Trust Units outstanding at each cash distribution date.
    (5)  Net debt is measured as at the end of the period and includes net
         working capital (deficiency) before short-term financial instrument
         assets and liabilities related to the Trust's hedging activities.
         Total net debt includes convertible debentures.
    (6)  Production amounts are based on the Trust's interest before
         deduction of royalties.
    (7)  The Trust has 28.1 MMcf/d of natural gas production shut-in or
         denied production pursuant to various Alberta Energy and Utilities
         Board ("AEUB") decision reports, corresponding shut-in orders or
         general bulletins or through correspondence in relation to an AEUB
         ID 99-1 application on or prior to July 1, 2004. Deemed production
         is not actual gas sales but represents shut-in gas that is the basis
         of the gas over bitumen financial solution during the period which
         is received monthly from the Alberta Crown as a reduction against
         other royalties payable.
    (8)  PET's commodity hedging strategy employs both financial forward
         contracts and physical natural gas delivery contracts at fixed
         prices or price collars. In calculating the Trust's natural gas
         price before financial and physical hedging, PET assumes all natural
         gas sales based on physical delivery fixed-price or price collar
         contracts during the period were instead sold at AECO daily index.
    (9)  As evaluated by McDaniel & Associates Consultants Ltd. in accordance
         with National Instrument 51-101. See "Reserves" included in
         Management's Discussion and Analysis.
    (10) Reserves are presented on a company interest basis, including
         working interest and royalty interest volumes but before royalty
         burdens. Royalty interest volumes totaled 4.7 Bcfe on a proved and
         probable basis in 2007 (2006 - 2.2 Bcfe).
    (11) Discounted at five percent using consultant's forecast pricing.
         Includes gas over bitumen royalty adjustments (2007 - $77.5 million,
         2006 - $88.1 million) related to the financial solution described in
         Note 7 above and estimated probable gas over bitumen shut-in
         reserves (2007 - 27.3 Bcf and $68.7 million, 2006 - 21.6 Bcf and
         $53.9 million). Estimated present value amounts should not be taken
         to represent an estimate of fair market value.
    (12) Based on Trust Units outstanding at period end.

    2008 OUTLOOK AND SENSITIVITIES

    The following table shows PET's estimate of key measures for 2008 based on
PET's hedging portfolio, production levels and the Trust's estimated
exploration and development capital expenditures and targeted results for the
year under several different AECO gas price assumptions.


                              Average AECO monthly index gas price ($/GJ) (3)
    Funds flow outlook                            $6.00  $7.00  $8.00  $9.00
    -------------------------------------------------------------------------
    Realized gas price ($/Mcfe)                    7.15   7.66   8.20   8.69
    Funds flow (1) ($million)                       226    251    278    302
    Per Trust Unit (1) ($/Unit/month)              0.17   0.19   0.21   0.23
    Payout ratio (1) (%)                             59     53     48     44
    Ending net debt to funds flow ratio (2)
     (times)                                        2.4    2.1    1.8    1.6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) These are non-GAAP terms; please refer to "Significant accounting
        policies and non-GAAP measures" in this MD&A.
    (2) Calculated as ending net debt (including convertible debentures)
        divided by annualized cash flow.
    (3) Average forward AECO price for April-December 2008 as at March 7,
        2008 was $8.47/GJ.

    Below is a table that shows sensitivities of PET's 2008 estimated funds
flow to operational changes and changes in the business environment:

                                         Impact on funds flow per Trust Unit
    Funds flow sensitivity analysis
    ($ per Trust Unit)                              Change   Annual  Monthly
    -------------------------------------------------------------------------
    Business Environment
    Price per Mcfe                                  $ 0.25     0.06    0.005
    Interest rate on debt                                1%    0.03    0.002
    -------------------------------------------------------------------------
    Operational
    Production volume                            5 MMcfe/d     0.11    0.009
    Operating costs                            $ 0.10/Mcfe     0.06    0.005
    Cash G&A expenses                          $ 0.10/Mcfe     0.06    0.005
    -------------------------------------------------------------------------
    

    The Trust's outlook and sensitivities assume operating costs of $1.70 per
Mcfe, cash G&A expenses of $0.36 per Mcfe and an interest rate on bank debt of
5.75 percent. Cash G&A expenses are equal to G&A expenses before Trust
Unit-based compensation.

    Forward Looking Information

    Certain information regarding PET in this news release including
management's assessment of future plans and operations and the information
contained under the heading "2008 Outlook and Sensitivities" above may
constitute forward-looking statements under applicable securities laws and
necessarily involve risks including, without limitation, risks associated with
gas exploration, development, exploitation, production, marketing and
transportation, changes to the proposed royalty regime prior to implementation
and thereafter, loss of markets, volatility of commodity prices, currency
fluctuations, imprecision of reserve estimates, environmental risks,
competition from other producers, inability to retain drilling rigs and other
services, capital expenditure costs, including drilling, completion and
facilities costs, unexpected decline rates in wells, delays in projects and/or
operations resulting from surface conditions, wells not performing as
expected, delays resulting from or inability to obtain required regulatory
approvals and ability to access sufficient capital from internal and external
sources. As a consequence, actual results may differ materially from those
anticipated in the forward-looking statements. Readers are cautioned that the
forgoing list of factors is not exhaustive. Additional information on these
and other factors that could affect PET's operations and financial results are
included in reports on file with Canadian securities regulatory authorities
and may be accessed through the SEDAR website (www.sedar.com) and at PET's
website (www.paramountenergy.com). Furthermore, the forward-looking statements
contained in this news release are made as at the date of this news release
and PET does not undertake any obligation to update publicly or to revise any
of the forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required by applicable securities
laws.

    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 symbol "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 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