Progress Releases 2009 Year-end Reserves Information

CALGARY, Feb. 9 /CNW/ - (TSX-PRQ) - Progress Energy Resources Corp. ("Progress" or the "Corporation") today released its 2009 year-end reserves information. In January of 2009 Progress Energy Trust ("Trust") and ProEx Energy Ltd. ("ProEx") completed a plan of arrangement which resulted in a reverse take over of ProEx. As a result of the structure of the transaction the new public entity named Progress Energy Resources Corp. ("Progress" or the "Corporation") was created. The reserve reconciliation provided herein, is accounted for as a reverse takeover, whereby the Trust was deemed the acquirer of ProEx and therefore, as a result, the reserves information presented below reflect the history of the Trust with ProEx being the acquired entity in 2009.

    
    Highlights

    -   2009 year-ending proved plus probable reserves were 155.1 mmboe with
        a reserve life index of 13 years based on fourth quarter 2009
        production of 31,400 boe per day annualized;

    -   Total reserve additions, net of revisions and inclusive of the
        acquisition of ProEx, were 51.2 mmboe proved and 76.7 mmboe proved
        plus probable;

    -   Proved plus probable finding and development ("F&D") cost of $13.88
        per boe including the change in future development capital ("FDC");

    -   Proved plus probable finding, development and acquisition ("FD&A")
        cost of $19.78 per boe including the change in FDC;

    -   35 percent of the Corporation's 2009 capital activities focused on
        the pursuit of Montney exploration and delineation drilling in the
        Foothills of northeast British Columbia. As a result of these
        efforts, 16.7 mmboe of proved plus probable reserves were booked to
        the Montney play at the end of 2009;

    -   In the Town South project area, where the Company has initiated phase
        one of its Montney development program, 12.0 mmboe of proved plus
        probable reserves were booked.

    -   Several additional Montney discoveries have been made on Progress
        lands in 2010. These discoveries remain unbooked as the completion
        timing after year-end does not allow recognition of the reserves in
        this report;

    -   The Corporation's strong performance continued in the Gold Creek and
        Wapiti areas where 12.1 mmboe of proved plus probable reserves were
        added. Of these, 8.4 mmboe were in the form of 37.5 net future
        drilling locations where multiple stacked sands have been mapped over
        a continuous area. These locations represent approximately 15
        percent of the total locations identified by Progress in the area.
    

In this news release, all estimates of natural gas and petroleum reserves and production are presented on a "company interest" basis (as defined below), unless expressly indicated that they have been presented on a "gross" or "net" basis. The Company's actual natural gas and petroleum reserves and future production will be greater than or less than the estimates provided in this news release. The estimated future net revenue from the production of the Company's natural gas and petroleum reserves does not represent the fair market value of the Company's reserves.

    
    Supplemental Reserve Reconciliation Information

    -   The opening balance is equal to the Trust's 2008 closing balance
        representing 62.8 mmboe of proved reserves and and 90.2 mmboe of
        proved plus probable reserves;

    -   The closing balance for 2009 is 102.3 mmboe proved and 155.1 mmboe
        proved plus probable. Based on the 2008 year-end proforma reserves of
        each of the Trust and ProEx, this results in a three percent reduction
        in proved reserves and a two percent increase in proved plus probable
        reserves.

    -   A portion of the reserves recognized in ProEx's 2008 closing balance
        were not carried forward in the reserves recognized as acquired by
        Progress. Approximately 9% of the closing proved plus probable
        balance was not carried forward in association with undeveloped
        drilling locations where the expected recovery was adjusted to be
        inline with the performance of offsetting producers or where the
        location was dropped entirely. The Corporation is unlikely to
        deploy capital to these dropped locations in the foreseeable future
        due to its depth of other opportunities and the current gas price
        environment. In addition, 8% of the closing proven plus probable
        balance was not carried forward in association with certain producing
        wells in the Julienne, Caribou and Green properties where production
        declines over the past 12 months have warranted adjustments from the
        original estimates.

    Replacement Costs (Unaudited)

    -   FD&A cost of $27.09 per boe, proved and $19.78 per boe, proved plus
        probable, including the change in FDC;

    -   F&D cost of $18.79 per boe proved and $13.88 per boe, proved plus
        probable, including the change in FDC;

    -   The three year average F&D cost of $18.48 per boe, proved and $14.12
        per boe, proved plus probable including the change in FDC.

    In addition to the detailed information disclosed in this news release
more detailed information will be included in Progress' Annual Information
Form ("AIF").


                  PRESENTATION OF PROGRESS' NATURAL GAS AND
                PETROLEUM RESERVES AND PRODUCTION INFORMATION
    

Disclosure of Information

In addition to the detailed information disclosed in this news release more detailed information on a gross basis (working interest before deduction of royalties without including any royalty interests) will be included in Company's Annual Information Form ("AIF") in addition to the full NI 51-101 disclosure for the year ended December 31, 2009 which will be filed on or before March 31, 2010.

The Company has adopted the standard of 6 mcf:1 boe when converting natural gas to boes. Boe's may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 boe is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Certain of the following definitions and guidelines have been prepared by the Standing Committee on Reserves Definitions of the CIM (Petroleum Society). Further information is contained in Section 5.4 of Volume 1 of the COGE Handbook (First Edition, June 30, 2002). Readers should consult the COGE Handbook for additional explanation and guidance. Certain other terms used in this news release have the meanings assigned to them in NI 51-101 and accompanying Companion Policy 51-101CP, adopted by the Canadian securities regulatory authorities and in Staff Notice 51-324 of the Canadian Securities Administrators.

    
         STATEMENT OF RESERVES DATA AND OTHER OIL AND GAS INFORMATION
                       PROGRESS ENERGY Resources Corp.
    

The following tables set forth certain information relating to Progress' crude oil, natural gas and natural gas liquid reserves and the net present value of future net revenues associated with such reserves as at December 31, 2009, as evaluated by GLJ in the GLJ Progress Report dated February 8, 2010 based upon forecast price and cost assumptions. The information set forth below is derived from the GLJ Report that was prepared in accordance with the standards contained in the COGE Handbook and the reserves definitions contained in NI 51-101 and the COGE Handbook. Progress engaged GLJ to provide an evaluation of proved and proved plus probable reserves. Numbers in the following tables may not add due to rounding.

All future net revenues are stated prior to provision for interest, general and administrative expenses and after deduction of royalties and estimated future capital expenditures. Future net revenues have been presented on both a before and after tax basis.

It should not be assumed that the present worth of estimated future cash flow presented in the tables below represent the fair market value of the reserves. There is no assurance that the forecast prices and costs assumptions will be attained and variances could be material. The recovery and reserve estimates of Progress' crude oil, natural gas liquids and natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual crude oil, natural gas and natural gas liquid reserves may be greater than or less than the estimates provided herein.

    
     Summary of Oil and Gas Reserves and Net Present Values of Future Net
                       Revenue As of December 31, 2009
                          Forecast Prices and Costs


    -------------------------------------------------------------------------
                          Light and                             Conventional
                         Medium Oil         Heavy Oil            Natural Gas
                  -----------------------------------------------------------
                   Company       Net   Company       Net   Company       Net
    Reserve        Interest            Interest            Interest
     Category        (Mbbl)    (Mbbl)    (Mbbl)    (Mbbl)    (MMcf)    (MMcf)
    -------------------------------------------------------------------------
    Proved
    Developed
     producing       2,919     2,467       505       425   367,617   299,934
    Developed
     non-producing     329       290        16        16    48,185    38,670
    Undeveloped        335       287         0         0   129,060   106,269
    -------------------------------------------------------------------------
    Total proved     3,584     3,044       521       441   544,682   444,873
    Probable         1,056       880       122        98   289,305   238,917
    -------------------------------------------------------------------------
    Total proved
     plus probable   4,640     3,924       643       540   834,167   683,790
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                             Natural Gas
                                              Liquids               BOE
                                      ---------------------------------------
                                       Company       Net   Company       Net
    Reserve                            Interest            Interest
     Category                            (Mbbl)    (Mbbl)    (Mboe)    (Mboe)
    -------------------------------------------------------------------------
    Proved
    Developed producing                  5,134     3,635    69,828    56,516
    Developed non-producing                610       439     8,987     7,190
    Undeveloped                          1,625     1,211    23,470    19,210
    -------------------------------------------------------------------------
    Total proved                         7,370     5,285   102,285    82,916
    Probable                             3,455     2,497    52,851    43,294
    -------------------------------------------------------------------------
    Total proved plus probable          10,825     7,782   155,136   126,210
    -------------------------------------------------------------------------

    "company interest" means, in relation to Progress' interest in production
or reserves, its working interest (operating or non-operating) share before
deduction of royalties, plus Progress' royalty interests in production or
reserves. "Company interest" is not a term defined or recognized under NI
51-101 and does not have a standardized meaning under NI 51-101. Therefore,
the "company interest" reserves of Progress may not be comparable to similar
measures presented by other issuers, and investors are cautioned that "company
interest" reserves should not be construed as an alternative to "gross" or
"net" reserves calculated in accordance with NI 51-101.

    ------------------------------------------------------------------
                       Net Present Value of Future Net Revenue
    ------------------------------------------------------------------
                                 Before Income Taxes
    Reserve
    Category                    Discounted at (%/year)
    ------------------------------------------------------------------
                    0          5         10         15         20
    ------------------------------------------------------------------
    ($ thousands)

    Proved
    Developed
     Producing  1,886,143  1,339,129  1,062,863    892,160    775,422
    Developed
     Non-
     Producing    243,262    166,916    124,935     99,106     81,849

     Undeveloped  500,268    301,681    195,786    132,518     91,681
    ------------------------------------------------------------------
    Total
     Proved     2,609,672  1,807,726  1,383,584  1,123,784    948,953
    Total
     Probable   1,709,762    840,024    502,137    335,649    240,287
    ------------------------------------------------------------------
    Total
     Proved
     Plus
     Probable   4,319,434  2,647,749  1,885,721  1,459,433  1,189,240
    ------------------------------------------------------------------


    -------------------------------------------------------------------------
                       Net Present Value of Future Net Revenue
    -------------------------------------------------------------------------
                                  After Income Taxes                   BTNPV
    Reserve                                                             Disc
    Category                    Discounted at (%/year)                   10%
    ------------------------------------------------------------------
                    0          5         10         15         20      $/boe
    -------------------------------------------------------------------------
    ($ thousands)

    Proved
    Developed
     Producing  1,848,370  1,335,370  1,061,973    891,929    775,358  18.81
    Developed
     Non-
     Producing    182,446    142,511    114,447     94,330     79,565  17.38

     Undeveloped  375,201    234,743    157,597    109,706     77,557  10.19
    -------------------------------------------------------------------------
    Total
     Proved     2,406,017  1,712,624  1,334,017  1,095,965    932,479  16.69
    Total
     Probable   1,282,319    635,427    384,917    261,371    190,211  11.60
    -------------------------------------------------------------------------
    Total
     Proved
     Plus
     Probable   3,688,336  2,348,051  1,718,934  1,357,336  1,122,690  14.94
    -------------------------------------------------------------------------
    Note: May not add due to rounding

    Notes:

    (1) The estimated net present value of future net revenue is based on
        current legislation in place December 31, 2009.
    (2) Natural gas reserves are reported at a base pressure of 14.65 pounds
        per square inch and a base temperature of 60 degrees F.
    (3) Prices for oil F.O.B. Edmonton are based upon 40 degrees API oil
        having less than 0.4% sulphur. Prices for natural gas are based upon
        a base pressure of 14.65 pounds per square inch and base temperature
        of 60 degrees F. The wellhead oil prices were adjusted for quality
        and transportation based on historical actual prices. The natural gas
        prices were adjusted, where necessary, based on historical pricing
        based on heating values and the differing costs of service applied by
        various purchasers. The natural gas liquids prices were adjusted to
        reflect historical average prices received.
    (4) The forecast prices and cost case assumes no legislative or
        regulatory amendments and includes the effects of inflation. The
        estimated future net revenue to be derived from the production of the
        reserves includes an inflation rate of 2.0% per year, an exchange
        rate as listed below, and the following price forecasts supplied by
        GLJ, Progress' independent qualified reserves evaluator and are as
        noted below.


                             Oil
    -------------------------------------------------
                                Edmonton      Cromer
                        WTI    Par Price      Medium
                    Cushing   40 degrees  29 degrees
                   Oklahoma          API         API
    Year          (US$/bbl)   (Cdn$/bbl)  (Cdn$/bbl)
    -------------------------------------------------

    Historical
    2005              56.58        69.02       56.77
    2006              66.22        73.21       62.26
    2007              72.39        77.06       65.71
    2008              99.64       102.89       93.10
    2009              61.56        66.43       63.19

    Forecast

    2010              80.00        83.26       76.60
    2011              83.00        86.42       78.64
    2012              86.00        89.58       80.62
    2013              89.00        92.74       82.54
    2014              92.00        95.90       85.35
    2015              93.84        97.84       87.07
    2016              95.72        99.81       88.83
    2017              97.64       101.83       90.63
    2018              98.59       103.88       92.46
    2019             101.58       105.98       94.32

    Thereafter     +2.0%/yr     +2.0%/yr    +2.0%/yr
    -------------------------------------------------


                                       Natural Gas Liquids
    -------------------------------------------------------------------------
                                            Edmonton
                   Edmonton     Edmonton    Pentanes    Inflation   Exchange
                    Propane       Butane        Plus        Rates       Rate
    Year         (Cdn$/bbl)   (Cdn$/bbl)  (Cdn$/bbl)     (%/Year)  (US$/Cdn$)
    -------------------------------------------------------------------------

    Historical

    2005              43.04        51.80       69.57          2.2      0.826
    2006              43.85        60.17       75.41          2.0      0.882
    2007              49.56        61.78       77.38          2.2      0.935
    2008              58.38        75.33      104.78          2.4      0.943
    2009              37.58        47.31       67.99          0.3      0.880

    Forecast

    2010              52.46        64.11       84.93          2.0        .95
    2011              54.45        66.54       88.15          2.0        .95
    2012              56.43        68.98       91.37          2.0        .95
    2013              58.42        71.41       94.59          2.0        .95
    2014              60.42        73.84       97.82          2.0        .95
    2015              61.64        75.33       99.79          2.0        .95
    2016              62.88        76.85      101.81          2.0        .95
    2017              64.15        78.41      103.86          2.0        .95
    2018              65.45        79.99      105.96          2.0        .95
    2019              68.77        81.60      108.10          2.0        .95

    Thereafter     +2.0%/yr     +2.0%/yr    +2.0%/yr          2.0
    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
                          NYMEX        Midwest            AECO         Sumas
                        Futures           @             Gas      Spot Gas
                       Contract        Chicago           Price         Price
    Year             (US$/MMBtu)    (US$/MMBtu)    (Cdn$/MMBtu)   (US$/MMBtu)
    -------------------------------------------------------------------------
    Historical
    2005                   9.00           8.24            8.58          7.13
    2006                   6.99           6.93            7.16          6.27
    2007                   7.12           6.83            6.65          6.52
    2008                   8.90           8.91            8.16          8.33
    2009                   4.16           4.11            4.20          3.89

    Forecast

    2010                   6.00           6.10            5.96          5.60
    2011                   7.00           7.10            6.79          6.45
    2012                   7.10           7.20            6.89          6.55
    2013                   7.15           7.25            6.95          6.60
    2014                   7.35           7.45            7.05          6.80
    2015                   7.50           7.60            7.16          6.95
    2016                   7.75           7.85            7.42          7.20
    2017                   8.25           8.35            7.95          7.70
    2018                   8.79           8.89            8.52          8.24
    2019                   8.96           9.06            8.69          8.41

    Thereafter         +2.0%/yr       +2.0%/yr        +2.0%/yr      +2.0%/yr
    -------------------------------------------------------------------------

    In 2009, Progress received a weighted average price of $59.78 per bbl for
    crude oil, $42.05 per bbl for NGL's and $4.13 per Mcf for natural gas.

    The undiscounted total future net revenue by reserves category as of
    December 31, 2009, using forecast prices and costs, is set forth
    below:

                                               ($ millions)
                            -------------------------------------------------
                                         Royalties,
                                           Mineral    Operating  Development
    Reserve Category          Revenue          Tax        Costs        Costs
    -------------------------------------------------------------------------
    Forecast Prices and Costs
    Proved                      5,122          912        1,240          319
    Proved plus probable        8,203        1,441        1,881          510
    -------------------------------------------------------------------------


                                               ($ millions)
                            -------------------------------------------------
                                            Future                    Future
                                               Net                       Net
                                           Revenue                   Revenue
                                 Well       Before                     After
                          Abandonment       Income       Income       Income
    Reserve Category            Costs        Taxes        Taxes        Taxes
    -------------------------------------------------------------------------
    Forecast Prices and Costs
    Proved                         42        2,610          204        2,406
    Proved plus probable           52        4,319          631        3,688
    -------------------------------------------------------------------------


    The net present value of future net revenue before income taxes by
    reserves category and production group as of December 31, 2009, using
    forecast prices and costs and discounted at 10% per year, is set
    forth below:

                                      Future Net Revenue Before Income Taxes
                                               (discounted at 10%/year)
                                     ----------------------------------------
    Reserve
    Category      Production Group            ($ thousands)      (Per boe)
    -------------------------------------------------------------------------
    Proved        Light and medium crude oil(a)     68,834          26.58
                  Heavy oil                         16,245          23.09
                  Natural gas(b)                 1,296,503          16.32
                  Non-conventional Oil & Gas
                   Activities                        2,002          10.15
    -------------------------------------------------------------------------
                  Total                          1,383,584          16.69
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Proved Plus   Light and medium crude oil(a)     81,109          24.41
     Probable     Heavy oil                         18,348          21.42
                  Natural gas(b)                 1,783,738          14.65
                  Non-conventional Oil & Gas
                   Activities                        2,526          10.40
    -------------------------------------------------------------------------
                  Total                          1,885,721          14.94
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Note: May not add due to rounding
    (a) Includes solution gas and other by-products
    (b) Includes by-products but excluding solution gas from oil
        wells


    Reconciliation of Total Company Interest Reserves by Principal Product
    Type

                          Forecast Prices and Costs

                                                            Natural
                                                   Natural      Gas
                                              Oil      Gas  Liquids      BOE
    -------------------------------------------------------------------------
                                            (mbbl)   (MMcf)   (mbbl)   (mboe)
    -------------------------------------------------------------------------
    Total Proved
    Opening Balance (December 31, 2008)     3,805  325,510    4,777   62,833
                    Technical Revisions       426   -5,397      556       83
                    Drilling Extensions        68  122,585    1,561   22,060
                    Infill Drilling            54    1,193        7      260
                    Acquisition               485  163,287    1,310   29,009
                    Dispositions                0   -1,393      -14     -246
                    Production               -733  -60,924     -827  -11,714
    Closing Balance (December 31, 2009)     4,105  544,862    7,370  102,285
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Proved Plus
     Probable
    Opening Balance (December 31, 2008)     5,039  470,687    6,715   90,201
                    Technical Revisions       178  -24,660      460   -3,472
                    Drilling Extensions        95  239,894    2,767   42,844
                    Infill Drilling            71    1,322        9      300
                    Acquisition               634  209,716    1,719   37,306
                    Dispositions                0   -1,868      -19     -330
                    Production               -733  -60,933     -827  -11,714
    Closing Balance (December 31, 2009)     5,283  834,167   10,825  155,136
    -------------------------------------------------------------------------
    Closing balances may be slightly higher than reported Company gross
    reserves due to the inclusion of recoverable royalties.



                           Future Development Costs

                ($ millions)        Forecast Prices and Costs
                -----------------------------------------------------
                                                Proved Plus Probable
                 Year         Proved Reserves         Reserves
                -----------------------------------------------------
                 2010                   93,073          123,322
                 2011                   87,853          172,056
                 2012                   47,670           91,043
                 2013                   38,138           50,745
                 2014                   18,748           23,040
                -----------------------------------------------------
                 Total                 318,676          510,457
                -----------------------------------------------------
                -----------------------------------------------------



                                         Proved                 P+P
    Finding, Development      Capital   Reserve    Proved   Reserve       P+P
     and Net             Expenditures Additions     Costs Additions     Costs
     Acquisition Costs    ($ million)   (mmboe)   ($/boe)   (mmboe)   ($/boe)
                        -----------------------------------------------------
    Total 2009 proved
     FD&A costs
     including change
     in FDC               $  1,386.3      51.2   $ 27.09        na        na
    Total 2009 P+P FD&A
     including change
     in FDC               $  1,515.8        na        na      76.7   $ 19.78
    3-year average
     proved FD&A
     including change
     in FDC               $  2,017.0      83.2   $ 24.25        na        na
    3-year average
     P+P FD&A
     including change
     in FDC               $  2,189.0        na        na     119.3   $ 18.34


    Finding and Development Costs
    Total 2009 proved
     F&D costs
     including change
     in FDC               $    420.9      22.4   $ 18.79        na        na
    Total 2009
     P+P F&D
     including change
     in FDC               $    550.5        na        na      39.7   $ 13.88
    3-year average
     proved F&D
     including change
     in FDC               $    772.0      41.8  $  18.48        na        na
    3-year average
     P+P F&D
     including change
     in FDC               $    943.0        na        na      66.7   $ 14.12

    Finding and development cost calculations and finding, development and
    acquisition cost calculations have been done in accordance with
    NI 51-101.

    2010 Production Estimates

    Gold Creek is the only property that accounts for more than 20 percent of
    the total forecast production in 2010 and is identified in the following
    table. The following table indicates the Gross (working interest) average
    daily production for 2010 by area used in the GLJ report:

                                              Associated
                                                     And
                                                     Non-  Natural
                           Light and          Associated       Gas
                          Medium Oil Heavy Oil       Gas   Liquids       BOE
    Area                      (bbl/d)   (bbl/d)   (Mcf/d)   (bbl/d)   (Boe/d)
    -------------------------------------------------------------------------
    Total Proved
    Gold Creek                   369         0    46,407     1,538     9,641
    Other                        826       239   134,229     1,491    24,928
    -------------------------------------------------------------------------
    Total Proved
     Daily Production          1,195       239   180,636     3,029    34,569
    -------------------------------------------------------------------------
    Probable
    Gold Creek                     7         0     1,663        70       355
    Other                         14         5     8,345        65     1,475
    -------------------------------------------------------------------------
    Total Probable
     Daily Production             21         5    10,007       136     1,830
    -------------------------------------------------------------------------
    Total Proved Plus Probable
    Gold Creek                   376         0    48,070     1,608     9,996
    Other                        840       244   142,574     1,557    26,403
    -------------------------------------------------------------------------
    Total Proved Plus
     Probable Production       1,216       244   190,644     3,165    36,398
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

Advisory on Forward Looking Statements

Certain information regarding Progress set forth in this news release contains future plans and operations, and other forward-looking statements that involve substantial known and unknown risks and uncertainties. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward looking statements. Such statements represent Progress' internal projections, estimates or beliefs concerning, among other things, an outlook on the estimated amounts and timing of capital investment, anticipated future debt, revenues or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. These statements are only predictions and actual events or results may differ materially. Although Progress believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievement since such expectations are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause Progress' actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, Progress.

In particular, forward-looking statements included in this news release include, but are not limited to, the likelihood of Progress to deploy in the foreseeable future capital to portions of the reserves recognized as acquired by Progress; and future development costs. In addition, statements relating to "reserves" or "resources" are deemed to be forward looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the resources and reserves described can be profitably produced in the future.

These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the Company's control, including the impact of general economic conditions; volatility in market prices for crude oil and natural gas; industry conditions; volatility of commodity prices; currency fluctuation; imprecision of reserve estimates; liabilities inherent in crude oil and natural gas operations; environmental risks; incorrect assessments of the value of acquisitions and exploration and development programs; competition from other producers; the lack of availability of qualified personnel or management; changes in income tax laws or changes in tax laws and incentive programs relating to the oil and gas industry; hazards such as fire, explosion, blowouts, cratering, and spills, each of which could result in substantial damage to wells, production facilities, other property and the environment or in personal injury; stock market volatility; and the ability to access sufficient capital from internal and external sources.

With respect to forward-looking statements contained in this news release, Progress has made assumptions regarding: current commodity prices and royalty regimes; availability of skilled labour; north American sulphur prices; timing and amount of capital expenditures; future exchange rates; the price of oil and natural gas; the impact of increasing competition; conditions in general economic and financial markets; availability of drilling and related equipment; effects of regulation by governmental agencies; royalty rates and future operating costs.

Management has included the above summary of assumptions and risks related to forward-looking statements provided in this news release in order to provide Shareholders with a more complete perspective on Progress' future operations and such information may not be appropriate for other purposes. 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 the Company will derive there from. Readers are cautioned that the foregoing lists of factors are not exhaustive. These forward-looking statements are made as of the date of this news release and the Company disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.

    
    Finding and Development Costs
    -----------------------------
    

The aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserves additions for that year.

%SEDAR: 00020978E

SOURCE Progress Energy Canada Ltd.

For further information: For further information: Greg Kist, Vice President, Investor Relations and Marketing, Progress Energy Resources Corp., (403) 539-1809, (gkist@progressenergy.com)


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