/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
FCE.UN Exchange: TSX
CALGARY, Dec. 14 /CNW/ - Fort Chicago Energy Partners L.P. ("Fort Chicago") announced today guidance for 2011 and the declaration of a cash distribution for December 2010.
2011 Guidance -------------
For 2011, Fort Chicago is forecasting distributable cash in the range of $0.80 to $1.20 per common share of Veresen Inc., which will be Fort Chicago's new identity following its conversion to a corporate structure on January 1, 2011. Based upon a forecast aggregate dividend payout for 2011 of $1.00 per common share of Veresen Inc., the corresponding range of the payout ratio for 2011 will be 83 percent to 125 percent. Mr. Stephen White, President and CEO of Fort Chicago commented "Our 2011 guidance reflects a conservative view for NGL market conditions during the year. We will see our development activity progress throughout the year, leading to various projects commencing operations in the latter part of 2011 and during 2012." For 2010, Fort Chicago maintains its previously announced guidance for distributable cash of $1.16 to $1.22 per Class A Unit, resulting in a payout ratio of 86% to 82%. Further details concerning 2010 and 2011 guidance can be found in the Investor Information section of Fort Chicago's website at www.fortchicago.com.
December Cash Distribution --------------------------
The board of directors of the General Partner also declared a cash distribution for December 2010 of $0.0833 per Class A limited partnership unit of Fort Chicago ("Class A Unit"). The distribution will be paid on January 21, 2011 to unitholders of record at the close of business on December 31, 2010.
Of this distribution, $0.0013 per Class A Unit will be considered U.S. source interest income, which may be subject to U.S. withholding taxes. The balance of the cash distribution of $0.0820 per Class A Unit will be distributed without any deduction for U.S. withholding taxes. While this distribution is considered to be a return of capital for Canadian income tax purposes, unitholders are allocated a proportionate share of Fort Chicago's taxable income. As a percent of projected cash distributions paid, taxable income allocations are expected to be in the range of 95% to 100% in 2010.
New Dividend Reinvestment Plan ------------------------------
Pursuant to the previously announced arrangement under Section 193 of the Business Corporations Act (Alberta) which will result in Fort Chicago being converted from a limited partnership to a taxable Canadian corporation, namely Veresen Inc., effective January 1, 2011, the Premium DistributionTM and Distribution Reinvestment Plan of Fort Chicago ("Plan") will be amended and restated effective January 1, 2011 in the form of a new Premium DividendTM and Dividend Reinvestment Plan of Veresen Inc. (the "Amended Plan"). As a consequence, shareholders of Veresen Inc. will, among other things, be permitted to participate in the Amended Plan with respect to cash dividends declared by Veresen Inc. after January 1, 2011.
Pursuant to the terms of the Amended Plan, a registered holder of Class A Units who is validly enrolled in either the distribution reinvestment component or the Premium Distribution(TM) component of the Plan prior to January 1, 2011, and as a result of the conversion of Fort Chicago to a corporation on January 1, 2011 becomes a registered shareholder of Veresen Inc. eligible to participate in the Amended Plan in accordance with its terms, will be deemed to be a participant in the dividend reinvestment component or the Premium Dividend(TM) component of the Amended Plan, as the case may be, without any further action. Registered holders of Class A Units who have not previously enrolled in the Plan and wish to enroll in the Plan with respect to the December 2010 cash distribution and for future dividends of Veresen Inc., must deliver a completed enrolment form to Computershare Trust Company of Canada, as Plan Agent, at or before 5:00 pm (Toronto time) on Thursday, December 23, 2010.
A beneficial owner of Class A Units (i.e., a holder of Class A Units that are not registered in the beneficial owner's name but are instead held through a broker, investment dealer, financial institution or other nominee) who is validly enrolled in either the distribution reinvestment component or the Premium Distribution(TM) component of the Plan prior to January 1, 2011 and, as a result of the conversion of Fort Chicago to a corporation on January 1, 2011, becomes a beneficial shareholder of Veresen Inc. eligible to participate in the Amended Plan in accordance with its terms, should contact such nominee to confirm their continued participation in the dividend reinvestment component or the Premium Dividend(TM) component of the Amended Plan, as the case may be. Beneficial holders of Class A Units who have not previously enrolled in the Plan and wish to participate in the Amended Plan with respect to the December 2010 cash distribution and for future dividends of Veresen Inc., should contact their broker, investment dealer, financial institution or other nominee to provide appropriate enrolment instructions and to ensure any deadlines or other requirements that such nominee may impose or be subject to are met.
Payment of the December 2010 Distribution under the Amended Plan ----------------------------------------------------------------
Pursuant to the terms of the Amended Plan, Fort Chicago's obligation to issue Class A Units under the Plan in respect of the December 2010 cash distribution will be satisfied by the issuance of common shares of Veresen Inc. ("Common Shares") reserved and authorized for issuance under the Amended Plan.
Fort Chicago has determined that, for purposes of the Amended Plan, the full amount of $0.0833 per Class A Unit, less the amount of any applicable U.S. withholding taxes, is eligible to be reinvested on January 21, 2011 by unitholders of Fort Chicago of record on December 31, 2010, at a 5% discount, in Common Shares under the dividend reinvestment component of the Amended Plan to be held for their account as shareholders of Veresen Inc. under the Amended Plan, or such unitholders of Fort Chicago may have these additional Common Shares delivered to a designated plan broker in exchange for a premium cash payment equal to 102% of the reinvested amount under the Premium DividendTM component of the Amended Plan. Any portion of a cash distribution that is not reinvested under the Amended Plan will be paid in the normal manner.
Fort Chicago is a publicly traded limited partnership based in Calgary, Alberta, that owns and operates energy infrastructure assets across North America. Its Class A Units are listed on the TSX under the symbol FCE.UN. Fort Chicago is engaged in three principal businesses: a pipeline transportation business comprised of interests in two pipeline systems, the Alliance Pipeline and the Alberta Ethane Gathering System; an NGL extraction business which includes a significant interest in a world-class extraction facility near Chicago; and a power business with power facilities in Ontario, New York, Colorado and California, district energy systems in Ontario and Prince Edward Island, waste heat power facilities in Saskatchewan and British Columbia, and renewable power projects in British Columbia. Fort Chicago and each of its pipeline, NGL extraction and power businesses are also actively developing a number of greenfield investment opportunities that will be a key source of future growth. In the normal course of its business, Fort Chicago and each of its businesses regularly evaluate and pursue acquisition and development opportunities.
Class A Unit Ownership Restrictions
Fort Chicago is organized in accordance with the terms and conditions of a limited partnership agreement which provides that no Class A Units may be held by or transferred to, among other things, a person who is a "non-resident" of Canada, a person in which an interest would be a "tax shelter investment" or a partnership which is not a "Canadian partnership" for purposes of the Income Tax Act (Canada).
Certain information contained herein relating to, but not limited to, Fort Chicago and its businesses constitutes forward-looking information under applicable securities laws. All statements, other than statements of historical fact, which address activities, events or developments that Fort Chicago expects or anticipates may or will occur in the future, are forward-looking information. Forward-looking information typically contains statements with words such as "may", "estimate", "anticipate", "believe", "expect", "plan", "intend", "target", "project", "forecast" or similar words suggesting future outcomes or outlook. Forward-looking statements in this news release include, but are not limited to, statements with respect to the amount of distributable cash to be generated by Fort Chicago and Veresen Inc. in 2010 and 2011, respectively, the outlook for NGL market conditions in 2011, the aggregate amount of dividends to be paid by Veresen Inc. in 2011, the taxable allocations to unitholders in 2010 and the development of greenfield investment opportunities. The risks and uncertainties that may affect the operations, performance, development and results of Fort Chicago's businesses include, but are not limited to, the following factors: the ability of Fort Chicago to successfully implement its strategic initiatives and achieve expected benefits; levels of oil and gas exploration and development activity; the status, credit risk and continued existence of contracted customers; the availability and price of capital; the availability and price of energy commodities; the availability of construction services and materials; fluctuations in foreign exchange and interest rates; Fort Chicago's ability to successfully obtain regulatory approvals; changes in tax, regulatory, environmental, and other laws and regulations; competitive factors in the pipeline, NGL and power industries; operational breakdowns, failures, or other disruptions; and the prevailing economic conditions in North America. Additional information on these and other risks, uncertainties and factors that could affect Fort Chicago's operations or financial results are included in its filings with the securities commissions or similar authorities in each of the provinces of Canada, as may be updated from time to time. Readers are also cautioned that the forgoing list of factors and risks is not exhaustive. The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these factors are independent and management's future course of action would depend on its assessment of all information at that time.
Although Fort Chicago believes that the expectations conveyed by the forward-looking information are reasonable based on information available on the date of preparation, no assurances can be given as to future results, levels of activity and achievements. Undue reliance should not be placed on the information contained herein, as actual result achieved will vary from the information provided herein and the variations may be material. Fort Chicago makes no representation that actual results achieved will be the same in whole or in part as those set out in the forward-looking information. Furthermore, the forward-looking statements contained herein are made as of the date hereof, and Fort Chicago does not undertake any obligation to update publicly or to revise any forward-looking information, whether as a result of new information, future events or otherwise. Any forward-looking information contained herein is expressly qualified by this cautionary statement.
(TM) denotes trademark of Canaccord Genuity Corp.
For further information: For further information: Stephen H. White, President and C.E.O.; Richard Weech, Vice President, Finance and C.F.O.; Fort Chicago Energy Partners L.P., Livingston Place, Suite 440, 222 - 3rd Avenue S.W., Calgary, AB, T2P 0B4, Phone: (403) 296-0140, Fax: (403) 213-3648, www.fortchicago.com