Paramount Energy Trust Updates Hedging Portfolio $47.7 Million Hedge Crystallization Gains Reduce Bank Debt



    
    TSX: PMT.UN, PMT.DB, PMT.DB.A,
    PMT.DB.B, PMT.EB.C
    PINK SHEETS: PMGYF
    

    CALGARY, May 13 /CNW/ - Paramount Energy Trust ("PET" or the "Trust")
(TSX:PMT.UN) advises that it has crystallized the gains from all of its June
through October 2009 AECO-based financial fixed price natural gas swap
contracts. These transactions will result in the immediate receipt of $47.7
million which will be initially applied to reduce the Trust's current
outstanding net bank debt to approximately $250 million. These arrangements
are not expected to impact PET's borrowing capacity under its bank credit
facility as hedge arrangements in the six month period prior to the Trust's
next borrowing base redetermination, scheduled for October 31, 2009, are not
included in the lenders' evaluation of the borrowing base.
    In addition PET has entered into replacement financial fixed price
natural gas swap contracts for the period from June through October 2009 for
105,000 GJ/d at an average price of $4.22 per GJ. The Trust remains cautious
with respect to near term natural gas prices despite significant declines to
date in 2009, as strong supply from shale gas plays in the United States and
liquefied natural gas ("LNG") imports and weak industrial gas demand due to
the economic recession in North America have contributed to very high gas
storage levels compared to prior periods. As a result while PET has applied a
portion of the value of its hedge portfolio to its balance sheet, the Trust
also believes that continued downside protection is warranted at this time.
    PET's hedge positions beyond October 2009 remain intact and financial and
physical natural gas forward sales arrangements at May 12, 2009 are as
follows:

    
    Financial hedges and physical forward sales contracts


                                 % of
                  Volumes    Forecast                Futures
    Type of       at AECO  Production      Price      Market
     Contract   (GJ/d) (2)       (4)    ($/GJ) (1)  ($/GJ) (3)          Term
    -------------------------------------------------------------------------
    Financial     105,000                  4.22                    June 2009
    Physical       12,500                  3.06                    June 2009
    -------------------------------------------------------------------------
    Period
     Total       117,5000        57        4.10        4.28        June 2009
    -------------------------------------------------------------------------
    Financial -
     NYMEX          2,500         1    US $3.72    US $4.33        June 2009
    -------------------------------------------------------------------------
                                                                       July -
    Financial     105,000        51        4.22        4.28     October 2009
    -------------------------------------------------------------------------
    Financial
     NYMEX         12,500         6    US $3.93    US $4.56      August 2009
    -------------------------------------------------------------------------
                                                              November 2009 -
    Financial     105,000        51        8.01        5.92       March 2010
    -------------------------------------------------------------------------
                                                                      April -
    Financial     107,500        52        7.25        6.07     October 2010
    -------------------------------------------------------------------------
                                                              November 2010 -
    Financial     107,500                  7.78                   March 2011
    -------------------------------------------------------------------------
                                                              November 2010 -
    Physical       10,000                  7.75                   March 2011
    -------------------------------------------------------------------------
    Period                                                    November 2010 -
     Total        117,500        57        7.77        7.07       March 2011
    -------------------------------------------------------------------------
                                                                      April -
    Financial       7,500         4        6.60        6.67     October 2011
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Average price calculated using weighted average price for sell
        contracts.
    (2) All transactions are at AECO unless identified specifically as a
        NYMEX transaction.
    (3) Futures market reflects AECO/NYMEX forward market prices as at
        May 12, 2009. NYMEX transactions and forward prices are measured in
        US$ per MMBTU.
    (4) Calculated using 205,000 GJ/d and includes actual and gas over
        bitumen deemed projected production volumes.
    

    PET's financial hedging and physical forward sales portfolio will
continue to provide a level of stability to projected funds flows, despite a
significant decrease in AECO natural gas prices during the first four months
of 2009. As the current crystallization transactions will be recorded as funds
flow and a reduction in bank debt in the second quarter there will be no net
effect on PET's 2009 projected outlook and sensitivities given the replacement
hedges.

    Forward-Looking Information

    Certain information regarding PET in this news release including
management's assessment of future plans and operations and the effect of
hedging activities on the Trust's projections of funds flow and future credit
capacity, outlook and sensitivities 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 management's discussion and analysis.

    PET 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" and "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


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