CALGARY, Jan. 15 /CNW/ - Progress Energy Resources Corp., formerly ProEx
Energy Ltd., ("Progress" or the "Company") today announced the closing of the
business combination between Progress Energy Trust ("Progress") and ProEx
Energy Ltd. ("ProEx"). On January 14, 2009, securityholders of both companies
voted strongly in favor of the Plan of Arrangement ("Arrangement") announced
on November 17, 2008.
"We are pleased that shareholders have given overwhelming support to our
announced business combination," said Michael Culbert, President and Chief
Executive Officer of Progress. "We believe that our high quality assets,
talented staff, low cost structure and prudent financial management provide
the right combination to navigate through these challenging times in the
equity and commodity markets and will make Progress a core holding for
investors in the North American energy sector over the long run."
Toronto Stock Exchange
The Toronto Stock Exchange has conditionally approved the listing of the
shares of ProEx issued pursuant to the Arrangement. It is anticipated that,
subject to approval of the Toronto Stock Exchange, trading in ProEx's common
shares under the new name "Progress Energy Resources Corp." and the trading of
the debentures assumed by ProEx from Progress will occur on or about January
21, 2009 and that Progress will trade under the new ticker symbol "PRQ". The
trust units of Progress, the exchangeable shares of PEL and the Progress
debentures will be delisted at this time as well.
Progress is currently producing over 36,000 barrels of oil equivalent per
day. The Company's 2009 capital investment budget is set at between $340 to
$360 million but with the current weak commodity environment, the Company has
slowed the planned pace of capital investment for the first half of 2009.
Progress expects to invest approximately 40 percent of its capital investment
budget in the first half of 2009 and maintain flexibility to expand or
contract the program in response to the commodity price outlook in the second
half of 2009.
Premier Natural Gas Assets
The business combination has created a mid-size, natural gas-weighted,
exploration and production company. The Company's large undeveloped land base
of over 1.1 million net undeveloped acres is focused in two premier growth
regions of the Western Canadian Sedimentary Basin; the Deep Basin of northwest
Alberta and the Foothills of northeast British Columbia.
In the Deep Basin, the Company is targeting the multiple, stacked
horizons in the Cretaceous and Triassic sections over its 280,000 net
undeveloped land base. Progress plans to have two rigs running consistently in
2009 and anticipates drilling approximately 30 to 35 wells in this area. "We
have built a large inventory of low-risk drilling opportunities based on our
extensive regional geologic mapping of the Deep Basin," said Mr. Culbert.
"With over 175 identified drilling locations, we have an inventory of
approximately four to five years at the current pace of drilling."
In the Foothills, Progress holds nearly 700,000 net undeveloped acres of
land and continues to explore and develop the regionally pervasive Triassic
Halfway tight sand which it has pursued commercially since 2001. The Halfway
sand has historically been developed vertically and recently the Company has
been testing horizontal drilling and various multi-stage fracturing techniques
to determine the most economic development plan for the Halfway formation. As
well, Progress continues to successfully explore and develop the Mississippian
Debolt and the multiple Cretaceous horizons present throughout the Foothills.
Progress expects to have four to six rigs running continuously in this region.
Industry activity surrounding the development of the Montney Shales has
continued to expand to the northwest and southeast from its initial
exploration focus in the Parkland, Dawson and Groundbirch areas in northeast
British Columbia. Progress holds approximately 680,000 net undeveloped acres
of Montney rights in the identified Montney fairway. Although early in its
program, the Company is encouraged by the results from its first four vertical
wells and plans to drill an additional four vertical wells and two horizontal
wells during the first half of 2009.
Board of Directors and Management of Progress
The Board of Directors of Progress is led by Mr. David Johnson as
Executive Chairman and includes Messrs. Donald Archibald, John Brussa, Howard
Crone, Michael Culbert, Brian Mclachlan, Gary Perron and Terrence Svarich.
The Progress management group is led by Mr. Michael Culbert, President
and Chief Executive Officer and includes Mr. Art MacNichol, Vice President,
Finance and Chief Financial Officer, Mr. Daniel Topolinsky, Senior Vice
President, Exploration, Mr. Greg Kist, Vice President, Investor Relations and
Marketing, Mr. Gary Miller, Vice President, Operations, Ms. Cindy Rutherford,
Vice President, Land, and Mr. Jim Stannard, Vice President, Engineering.
Credit Facility and Financial Information
Progress has secured a $650 million credit facility with a syndicate of
banks including Bank of Montreal, The Bank of Nova Scotia, Canadian Imperial
Bank of Commerce, National Bank of Canada, Alberta Treasury Branches, Union
Bank of California and Societe Generale.
Year-end 2008 financial and operational results are expected to be
announced in the last week of February. The historical accounting information
contained in Management's Discussion & Analysis ("MD&A) and the Consolidated
Financial Statements and Notes to the Consolidated Financial Statements
("Financial Statements") will be that of Progress Energy Trust. Year-end 2008
MD&A and Financial Statements for ProEx Energy will be filed on SEDAR on or
about the same time.
Advisory Regarding Forward-Looking Statements
This press release contains forward-looking statements and
forward-looking information within the meaning of applicable securities laws.
The use of any of the words "expect", "anticipate", "continue", "estimate",
"objective", "ongoing", "may", "will", "project", "should", "believe",
"plans", "intends" and similar expressions are intended to identify
forward-looking information or statements. More particularly and without
limitation, this press release contains forward looking statements and
information concerning the Company's capital investment plans and the timing
thereof; the Company's ability to maintain flexibility in its capital program;
undeveloped landholdings; drilling targets, locations, inventory and drilling
plans and the results therefrom; and expectations regarding the the timing of
the release of future financial results.
The forward-looking statements and information are based on certain key
expectations and assumptions made by Progress, including expectations and
assumptions concerning prevailing commodity prices and exchange rates,
applicable royalty rates and tax laws; future well production rates; reserve
and resource volumes; the performance of existing wells; the success obtained
in drilling new wells; and the sufficiency of budgeted capital expenditures in
carrying out planned activities; and the availability and cost of labour and
services. Although Progress believes that the expectations and assumptions on
which such forward-looking statements and information are based are
reasonable, undue reliance should not be placed on the forward looking
statements and information because Progress can give no assurance that they
will prove to be correct.
Since forward-looking statements and information address future events
and conditions, by their very nature they involve inherent risks and
uncertainties. Actual results could differ materially from those currently
anticipated due to a number of factors and risks. These include, but are not
limited to, the risks associated with the oil and gas industry in general such
as operational risks in development, exploration and production; delays or
changes in plans with respect to exploration or development projects or
capital expenditures; the uncertainty of reserve and resource estimates; the
uncertainty of estimates and projections relating to reserves, resources,
production, costs and expenses; health, safety and environmental risks;
commodity price and exchange rate fluctuations; marketing and transportation;
loss of markets; environmental risks; competition; incorrect assessment of the
value of acquisitions; failure to realize the anticipated benefits of
acquisitions; ability to access sufficient capital from internal and external
sources; failure to obtain required regulatory and other approvals; and
changes in legislation, including but not limited to tax laws, royalties and
environmental regulations. Accordingly, readers should not place undue
reliance on the forward-looking statements and information contained in this
press release concerning these times.
Readers are cautioned that the foregoing list of factors is not
exhaustive. Additional information on these and other factors that could
affect the operations or financial results of Progress are included in reports
on file with applicable securities regulatory authorities and may be accessed
through the SEDAR website (www.sedar.com). The forward-looking statements and
information contained in this press release are made as of the date hereof and
Progress undertakes no obligation to update publicly or revise any
forward-looking statements or information, whether as a result of new
information, future events or otherwise, unless so required by applicable
Barrels of Oil Equivalent
"Boe" means barrel of oil equivalent on the basis of 1 boe to 6,000 cubic
feet of natural gas. Boe's may be misleading, particularly if used in
isolation. A boe conversion ratio of 1 boe for 6,000 cubic feet of natural gas
is based on an energy equivalency conversion method primarily applicable at
the burner tip and does not represent a value equivalency at the wellhead.
For further information:
For further information: Greg Kist, Vice President, Investor Relations &
Marketing, Progress Energy Resources Corp., at (403) 539-1809,