Argent comments on recent market activity
CALGARY, March 7, 2014 /CNW/ - Argent Energy Trust ("Argent" or the "Trust") (TSX: AET.UN) notes that there continues to be high trading volume and price volatility in Argent units over the past few days, which may be related to recent analyst reports. On March 5th, 2014, the Trust released its year-end December 31, 2013 audited financial statements and management's discussion and analysis thereon, and there are no other material items to be disclosed.
The Trust believes that its expected funds flow from operations and the availability under its long term bank credit facility (being only US$90 million drawn on its US$160 million facility), together with DRIP program, will be sufficient to fund its working capital, its current capital investment program, enable it to meet all current and expected financial requirements, including interest payments and maintaining Unitholder distributions.
Furthermore, Management of the Trust reiterates that its net asset value per unit at December 31, 2013, based on independent third party audited data, is as follows:
| Cdn$(000s) | |||
| 2P Reserve Value (1) | 679,333 | ||
| Land Value (2) | 44,801 | ||
| Less: Deferred land purchase payment (3) | (13,827) | ||
| Credit Facility (4) | (81,897) | ||
| Convertible Debentures(5) | (149,250) | ||
| $ 479,160 | |||
| Net Asset Value Per Unit | $7.93 | ||
| (1) | Based on NPV10 of company interest proved plus probable reserves per GLJ independent reserve report as at December 31, 20133 of US$638,711,000 converted at year-end rate of US$1.0636 to Cdn $1. | |
| (2) | Based on carrying value of "Exploration and evaluation assets" in audited financial statements. | |
| (3) | Based on cash liability of US$13mm converted at year-end rate of US$1.0636 to Cdn $1. | |
| (4) | Based on year-end drawn amount of US$77mm converted at year-end rate of US$1.0636 to Cdn $1. | |
| (5) | Based on face value of debentures issued. | |
The drilling capital required to maintain the Trust's annual production at approximately 5,600 boe/d (in line with 2013 annual average daily production) is approximately US$30 million. However, the Trust has set a drilling budget of US$60 million, focused on the Eagle Ford prospects, in order to have a forecast annual average production of approximately 7,000 boe/d for 2014, representing a 25% year over year increase. In addition, the Trust is actively seeking ways to monetize a portion of its undeveloped asset base through joint ventures or land sales, to reduce indebtedness.
Argent is a mutual fund trust under the Income Tax Act (Canada) (the "Tax Act"). Argent's objective is to create stable, consistent returns for investors through the acquisition and development of oil and natural gas reserves and production with low risk exploration potential, located primarily in the United States. Material information pertaining to Argent Energy Trust may be found on www.sedar.com or www.argentenergytrust.com.
This press release contains statements that are forward looking. Investors should read the Note Regarding Forward- Looking Statements at the end of this press release. In this press release, references to "Argent" or the "Trust" include the Trust and its operating subsidiaries.
Note about forward-looking statements
This press release includes forward-looking information within the meaning of applicable Canadian and United States securities legislation. All statements, other than statements of historical facts, that address activities, circumstances, events, outcomes and other matters that Argent budgets, forecasts, plans, projects, estimates, expects, believes, assumes or anticipates (and other similar expressions) will, should or may occur in the future, are considered forward-looking information.
In particular, forward-looking information contained in this press release includes, but is not limited to, Argent's capital program and budget, drilling and completion plans (, oil, natural gas and NGL production rates, operating costs, production growth, the payment of cash distributions by the Trust, including the amount and timing of payment of cash distributions, source of funding for capital expenditures, the Trust's expectation regarding its average working interest production and average production rate for the year 2014, the Trust's ability to grow production, and the ability to monetize a portion of its undeveloped land base. With respect to forward-looking statements contained in this press release, assumptions have been made regarding, among other things, future oil and natural gas prices, future currency exchange and interest rates, the regulatory framework governing taxes in the US and Canada and the Trust's status as a "mutual fund trust" and not a "SIFT trust", estimates of anticipated production from the Trust's assets, which estimates are based on the proposed drilling and completion program with a success rate that, in turn, is based upon historical drilling and completion success and an evaluation of the particular wells to be drilled and completed, future recoverability of reserves from the assets, future capital expenditures and the ability of the Trust to obtain financing on acceptable terms for its capital projects, the level of participation in the Trust's DRIP program and the Trust's capital budget (which is subject to change in light of ongoing results, prevailing economic circumstances, commodity prices and industry conditions and regulations).
The forward-looking information provided in this press release is based on management's current beliefs, expectations and assumptions, based on currently available information as to the outcome and timing of future events. Argent cautions that its future oil, natural gas and natural gas liquids production, revenues, cash flows, liquidity, plans for future operations, expenses, outlook for oil and natural gas prices, timing and amount of future capital expenditures, and other forward-looking information is subject to all of the risks and uncertainties normally incident to the exploration for and development and production and sale of oil and gas.
These risks include, but are not limited to, oil and natural gas price volatility, Argent's access to cash flows and other sources of liquidity to fund its capital expenditures, its level of indebtedness, its ability to replace production, the impact of the current financial climate on Argent's anticipated business and financial condition, a lack of availability of or increases in costs of goods and services, a lack of performance of its staff or ability to retain experienced personnel, environmental risks, drilling and other operating risks, regulatory changes, the uncertainty inherent in estimating future oil and gas production or reserves, economic conditions and other risks as described in documents and reports that Argent files with the securities commissions or similar authorities in applicable Canadian jurisdictions on the System for Electronic Document Analysis and Retrieval (SEDAR). Any of these factors could cause Argent's actual results and plans to differ materially from those contained in the forward-looking information.
There are many factors that could result in production levels being less than anticipated, including greater than anticipated declines in existing production due to poor reservoir performance, the unanticipated encroachment of water or other fluids into the producing formation, mechanical failures or human error or inability to access production facilities, among other factors.
Forward-looking information is subject to a number of risks and uncertainties, including those mentioned above, that could cause actual results to differ materially from the expectations set forth in the forward-looking information. Forward-looking information is not a guarantee of future performance or an assurance that our current assumptions and projections are valid. All forward-looking information speaks only as of the date of this press release, and Argent assumes no obligation to, and expressly disclaims any obligation to, update or revise any forward-looking information, except as required by law. You should not place undue reliance on forward-looking information. You are encouraged to closely consider the additional disclosures and risk factors contained in Argent's periodic filings on SEDAR that discuss in further detail the factors that could cause future results to be different than contemplated in this press release.
Note regarding barrel of oil equivalency
Barrels of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of six Mcf to one bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and do not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of oil as compared to natural gas is significantly different from the energy equivalency conversion ratio of six to one, utilizing a boe conversion ratio of six Mcf to one bbl may be misleading as an indication of value.
Argent is a mutual fund trust under the Income Tax Act (Canada) (the "Tax Act"). Argent's objective is to create stable, consistent returns for investors through the acquisition and development of oil and natural gas reserves and production with low risk exploration potential, located primarily in the United States. Material information pertaining to Argent Energy Trust may be found on www.sedar.com or www.argentenergytrust.com
SOURCE: Argent Energy Trust
For further information concerning this press release, please contact:
Brian Prokop
Co-President & Chief Executive Officer
Sean Bovingdon
Chief Financial Officer
Argent Energy Trust
Website: www.argentenergytrust.com
Email: [email protected]
Telephone: (403) 770-4809
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