CALGARY, Oct. 1, 2014 /CNW/ - Parallel Energy Trust ("Parallel" or the "Trust") (TSX: PLT.UN, PLT.DB) today announced its estimated average daily production results for the third quarter and nine months ended September 30, 2014; its 2014 drilling program results; its estimated third quarter bank debt; and, the purchase of working interests in producing wells in the Trust's Garfield County, Oklahoma operating area.
During the third quarter of 2014, Parallel recorded average daily production of approximately 7,400 boe/day based on field data. This results in average daily production of approximately 7,050 boe/day for the nine months ended September 30, 2014. Parallel's third quarter production average reflects a period of normal operating conditions as well as the positive results from the Trust's 2014 drilling program.
In the third quarter of 2014, Parallel drilled and completed three wells in the Carson operating area. This concluded the Trust's 2014 drilling program which included a total of 13 wells in the Carson operating area as well as one well in the Garfield County operating area. The average 30 day initial production ("IP30") rate for the 14 wells completed in 2014 was approximately 60 boe/day, which exceeded the Trust's expected IP30 rate of 35 to 40 boe/day.
Parallel estimates that its bank debt is US$157.6 million as of September 30, 2014. This results in US$32.4 million of availability on the Trust's bank facility of US$190.0 million and represents a total bank debt reduction of US$1.4 million during the third quarter of 2014. Having completed its 2014 drilling program, Parallel has minimal capital expenditures planned for the remainder of the year and expects to further reduce its bank debt in the fourth quarter of 2014.
On October 1, 2014 Parallel closed the acquisition of an average 23 per cent working interest in eight producing wells in the Trust's Garfield County, Oklahoma operating area. The acquisition adds approximately 100 boe/day of liquids-rich natural gas and oil to Parallel's production base for a total cost of US$2.1 million. The producing wells are located adjacent to Parallel's existing wells in the Garfield County operating area, where the Trust maintains a non-operated position. The full cost of the acquisition will be funded through the use of the Trust's Premium Distribution™ and Distribution Reinvestment Plan (the "Plan"). Once the acquisition has been fully funded, the Trust will suspend the usage of the Premium Distribution™ component of the Plan.
"We are very pleased to announce the closing of our acquisition in the Garfield County operating area as well as the results of our 2014 drilling program," reports Rick Alexander, Parallel's President and CEO. "Our operating team has done an exceptional job of executing our drilling program and maintaining our production levels during the year and we are now realizing the full benefits of their efforts. To-date in 2014 we have recorded average daily production of approximately 7,050 boe/day which positions us well to achieve our full year production guidance of 7,100 to 7,300 boe/day."
ABOUT PARALLEL ENERGY TRUST
Established in March 2011, Parallel Energy Trust ("Parallel" or the "Trust") is a Calgary-based distribution-paying energy income trust. Parallel's assets and operations are located in the Mid-Continent Region of the United States and its portfolio consists of mature, liquids-rich natural gas assets. The Trust's business strategy is focused on acquiring and developing long-life, conventional oil and natural gas assets.
Parallel is considered to be a "mutual fund trust" under the Income Tax Act of Canada; however, the Trust is not subject to specified investment flow through ("SIFT") trust taxes as all of its properties are held outside of Canada. Parallel's common units are traded on the Toronto Stock Exchange ("TSX") under the symbol "PLT.UN" and the Trust's debentures are traded on the TSX under the symbol "PLT.DB".
This news release contains forward-looking information that involves substantial known and unknown risks and uncertainties, most of which are beyond the control of Parallel, including, without limitation, those listed under "Risk Factors" in Parallel's annual information form dated March 21, 2014 (collectively, "forward-looking information"). Forward-looking information in this news release includes, but is not limited to, Parallel's objectives and status as a mutual fund trust and not a SIFT trust and Parallel's expectations and estimates regarding current and future production rates and drilling results. Parallel cautions investors in Parallel's securities about important factors that could cause Parallel's actual results to differ materially from those projected in any forward-looking statements included in this news release. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and may be forward-looking and may involve estimates, assumptions and uncertainties which could cause actual results or outcomes to differ materially from those expressed in such forward-looking statements. No assurance can be given that the expectations set out in Parallel's final prospectus or herein will prove to be correct and accordingly, prospective investors should not place undue reliance on these forward-looking statements. These statements speak only as of the date of this press release and Parallel does not assume any obligation to update or revise them to reflect new events or circumstances.
In this news release, Parallel and its subsidiaries are referred to collectively as the "Trust" or "Parallel" for purposes of convenience.
Oil and Gas Measures and Definitions
This press release contains disclosure expressed as "boe" and "boe/day". All oil and natural gas equivalency volumes have been derived using the ratio of six thousand cubic feet of natural gas to one barrel of oil. Equivalency measures may be misleading, particularly if used in isolation. A conversion ratio of six thousand cubic feet of natural gas to one barrel of oil is based on an energy equivalency conversion method primarily.
SOURCE: Parallel Energy Trust
Curtis Pelletier, Manager, Investor Relations
403-781-7888 or Toll-Free: 1-855-781-7888