Progress Energy Trust Continued Drilling Success



    Initiates Summer 2008 Hedging Program

    CALGARY, Jan. 15 /CNW/ - (TSX-PGX.UN) - The Board of Directors of
Progress Energy Ltd. ("Progress" or "Company") today announced that it will
maintain its current distribution policy for the first quarter of 2008 at
$0.10 per trust unit per month. "Since inception, investors have seen us
maintain a disciplined approach to operational and financial management," said
Michael Culbert, President and CEO of Progress. "Given the current outlook for
natural gas prices we expect the combination of current distributions and our
previously announced capital to be in balance with cash flow in 2008."
    Consequently, Progress has declared a distribution of $0.10 per trust
unit for the month of January. The distribution will be paid on February 15,
2008 to unitholders of record on January 31, 2008. The ex-distribution date is
expected to be January 29, 2008.

    
    Record Date              Payable Date             Distribution per unit
    January 31               February 15              $0.10
    February 29              March 17                 $0.10(*)
    March 31                 April 15                 $0.10(*)

    (*) Estimated distributions based upon current commodity price outlook
        and are subject to change.
    

    Hedging Summer 2008 Price Strength

    Progress has hedged 60,000 gigajoules (GJ) per day (approximately
54 million cubic feet per day), or 45 percent of its before royalty forecast
natural gas production, for the period from April 1, 2008 through to
October 31, 2008 at an average equivalent AECO floor price of C$7.80 per
thousand cubic feet (mcf) based on the Company's high heat content natural gas
production. The summer hedging program was completed using a series of swaps
and bull spread structures. The swap and bull spread structure that Progress
utilizes sets a relatively high floor in the current market and allows
participation up to an equivalent average summer 2008 AECO gas price of C$9.40
per mcf.

    Drilling Success Drives Production Growth

    The fourth quarter of 2007 was one of Progress' most active drilling
quarters since its inception in July 2004 drilling 39 wells (20.2 net) with a
96 percent success rate. Drilling success in the Deep Basin and Foothills
contributed to strong production averaging approximately 24,200 boe per day in
the quarter with approximately 1,500 boe per day behind pipe. In the Deep
Basin area, 5.6 net wells were drilled in the quarter with four being recently
completed and tested at rates of up to six million cubic feet per day. In the
Foothills of northeast British Columbia, Progress drilled 10 net wells
including 6 net wells in the Bubbles area. Elsewhere in the Foothills, the
Company, along with its working interest partner, continued to refine
completions techniques resulting in a significant increase in initial gas
rates for wells drilled in the Cretaceous interval. This completion method
will be utilized on other recently drilled wells and if positive results are
achieved could result in a large number of re-completion opportunities.
    On the drilling cost front, Progress maintains collaborative
relationships with its service and supply contractors and expects industry
costs to continue to trend lower in 2008 as industry wide activity slows as a
result of reduced drilling and field activities. "Our capital efficiencies
remain among the leaders in the oil and gas sector and given the depth of our
inventory of drilling opportunities we believe we can achieve the same strong
operational results as we have historically with capital investment targeted
at the lower end of our forecast range," said Mr. Culbert.
    Progress' strategy is to sustain production and reserves per unit from
internally generated opportunities. The outlook for natural gas remains
promising and Progress will continue to pursue sustainability in this
environment while maintaining a focus on balance sheet strength. The Company's
2008 capital investment program of between $110 to $125 million is expected to
be funded from internal sources.
    Progress also expects to maintain its low operating cost leadership with
2008 average operating costs in the range of $6.50 to $6.75 per boe.

    Financial Flexibility

    Progress' debt to trailing cash flow was 2.0 times at the end of the
third quarter and is in the same range for the fourth quarter of 2007. The
Company has a credit facility of $375 million of which approximately
$106 million was unused at September 30, 2007. Progress' total debt includes
approximately $121.5 million of convertible debentures which mature in 2010
and 2011. The Company's financial position also includes tax pools in excess
of $1 billion which will help to shield income well beyond 2011 when the
taxation of trust distributions is expected to be implemented.
    Progress will report year-end 2007 results, including reserve additions
and finding and development costs, after market close on Thursday,
February 28, 2008.

    Taxation Information for Preparers of Tax Forms

    Preparers of tax forms relating to the 2007 distributions of Progress may
access this information through the Canadian Depository for Securities (CDS)
website at www.cdsinnovations.ca/t3. Individuals wishing to obtain taxation
information relating to the distributions may access this information through
the Trust's website at www.progressenergy.com. Taxation information for U.S.
residents is expected to be posted to the website in early February.

    Progress is a Calgary based, natural gas focused trust targeting
sustainable production and reserves per unit through the utilization of its
technical capability and capital investment efficiencies. Primary operating
areas include the Deep Basin of northwest Alberta and the Foothills and Plains
regions of northeast British Columbia. Units of Progress trade on the Toronto
Stock Exchange (TSX) under the symbol PGX.UN. Exchangeable Shares of Progress
Energy Ltd. trade on the TSX under the symbol PGE and its convertible
debentures trade on the TSX under the symbols PGX.DB and PGX.DB.A.

    Forward-Looking Statements - Certain information regarding Progress set
forth in this document, including management's assessment of Progress' future
plans and operations, contains forward-looking statements that involve
substantial known and unknown risks and uncertainties. These forward-looking
statements are subject to numerous risks and uncertainties, certain of which
are beyond Progress' control, including the impact of general economic
conditions, industry conditions, volatility of commodity prices, currency
fluctuations, imprecision of reserve estimates, environmental risks,
competition from other producers, the lack of availability of qualified
personnel or management, stock market volatility and ability to access
sufficient capital from internal and external sources. Progress' actual
results, performance or achievement could differ materially from those
expressed in, or implied by, these forward-looking statements and,
accordingly, no assurance can be given that any of the events anticipated by
the forward-looking statements will transpire or occur, or if any of them do
so, what benefits that Progress will derive therefrom.
    In this news release, production and reserves information may be
presented on boe basis with six mcf of natural gas being equivalent to one
barrel ("barrel") of crude oil or natural gas liquids. Boe's may be misleading
particularly if used in isolation. A boe conversion ratio of 6 mcf:1 bbl is
based on an energy equivalency conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the wellhead.

    %SEDAR: 00020979E




For further information:

For further information: Mr. Michael Culbert, President & Chief
Executive Officer, Phone: (403) 539-1820; Mr. Greg Kist, Vice President,
Investor Relations & Marketing, Phone: (403) 539-1809; Progress Energy Ltd.,
1200, 205 - 5th Avenue S.W., Calgary, Alberta, T2P 4B9, Toll Free:
1-866-216-2510, Fax: (403) 216-2514, Email ir@progressenergy.com, Web:
www.progressenergy.com

Organization Profile

Progress Energy Canada Ltd.

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