Paramount Energy Confirms July 2008 Distribution and Updates Hedging


    CALGARY, July 22 /CNW/ - Paramount Energy Trust ("PET" or the "Trust")
pleased to confirm that its distribution to be paid on August 15, 2008 in
respect of income received by PET for the month of July 2008, for Unitholders
of record on July 31, 2008, will be $0.10 per Trust Unit. The ex-distribution
date is July 29, 2008. The July distribution brings cumulative distributions
paid since the inception of the Trust to $12.624 per Trust Unit.
    Natural gas prices continue to be highly volatile largely due to
uncertainty regarding weather and its effect on natural gas demand and
storage, the global factors influencing LNG shipments to North America, demand
changes related to the impact of increased energy prices on the United States
and global economies, as well as the sentiment controlling rapidly changing
crude oil markets. PET closely monitors the market drivers with respect to
natural gas prices and will continue to proactively manage the Trust's forward
price exposure to mitigate risk. Financial and physical forward sales
arrangements at the AECO and NYMEX trading hubs as at July 22, 2008 are as

                                 % of             Forward
               Volumes at      Budget               Price
    Type of       AECO (2) Production     Price        (4)
    contract        (GJ/d)         (3)    ($/GJ)    ($/GJ)              Term
    Financial       82,000                 7.55                  August 2008
    Physical        19,000                 7.55                  August 2008
    Period total
     AECO, net (1) 101,000         47      7.55      9.05        August 2008
     NYMEX          10,000             7.70 US$                  August 2008
    Period total
     NYMEX, net
     (1)            10,000          5  7.70 US$ 10.09 US$        August 2008
    Period total,
     net (1)       111,000         52                            August 2008
                                                                 September -
    Financial       82,000                 7.55                 October 2008
                                                                 September -
    Physical        10,500                 6.82                 October 2008
    Period total                                                 September -
     AECO, net (1)  92,500         43      7.47      8.56       October 2008
    Financial                                                    September -
     NYMEX          10,000             7.70 US$                 October 2008
    Period total                                                 September -
     NYMEX, net (1) 10,000          5  7.70 US$ 10.25 US$       October 2008
    Period total,                                                September -
     net (1)       102,500         48                           October 2008
                                                             November 2008 -
    Financial       96,000                 7.77                   March 2009
                                                             November 2008 -
    Physical         2,500                 8.37                   March 2009
    Period total,                                            November 2008 -
     net (1)        98,500         46      7.79      9.38         March 2009
    Financial        5,000                11.11                 January 2009
    Period total,
     net (1)         5,000          2     11.11      9.57       January 2009
                                                                     April -
    Financial       55,000                 8.79                 October 2009
    Period total,                                                    April -
     net (1)        55,000         26      8.79      8.57       October 2009
                                                             November 2009 -
    Financial       22,500                 9.99                   March 2010
    Period total,                                            November 2009 -
     net (1)        22,500         10      9.99      9.33         March 2010
    (1) Weighted average prices are calculated by netting the volumes of the
        lowest-priced financial and physical sold/bought contracts together
        and measuring the net volume at the weighted average "sold" price for
        the remaining financial and physical contracts. Included in the
        November 2008 - March 2009 volume summary is a collar to sell forward
        5,000 GJ/d at a floor price of $7.00 per GJ at AECO and a ceiling
        price of $8.00 per GJ. The ceiling price is used in the weighted
        average price calculation.
    (2) All transactions at AECO unless identified specifically as a NYMEX
    (3) Includes actual and gas over bitumen deemed projected production
    (4) Average AECO forward price for August through December 2008 as at
        July 22, 2008 is $8.83 per GJ.

    Based on current and forward market natural gas prices, PET's current
monthly distribution level is highly sustainable. Incorporating PET's current
hedging portfolio and the forward market for natural gas prices into the
Trust's production, operations and cash flow forecasts for 2008, the current
level of distribution annualized would result in an annual average payout
ratio of approximately 44 percent for 2008 and bank debt at year end of less
than $265 million. With current bank credit capacity of $410 million, PET is
considering expansion of its current 2008 spending plans to reinvest in
additional capital activity within its core operations or to pursue other new
venture opportunities. The Trust continues to focus on what we believe is a
sustainable distribution model that balances short term cash returns to our
Unitholders and long term value creation through capital reinvestment. PET
reviews distributions on a monthly basis. Future distributions are subject to
change as dictated by changes in commodity price markets, operations and
future business development opportunities.

    Forward-Looking Information

    Certain information regarding PET in this news release, including
management's assessment of year end bank debt levels, production levels, cash
flows, capital spending plans and payout ratios, may constitute
forward-looking statements under applicable securities laws and necessarily
involve risks including, without limitation, risks associated with gas
exploration, development, exploitation, production, marketing and
transportation, changes to the proposed royalty regime prior to implementation
and thereafter, loss of markets, volatility of commodity prices, currency
fluctuations, imprecision of reserve estimates, environmental risks,
competition from other producers, inability to retain drilling rigs and other
services, capital expenditure costs, including drilling, completion and
facilities costs, unexpected decline rates in wells, delays in projects and/or
operations resulting from surface conditions, wells not performing as
expected, delays resulting from or inability to obtain required regulatory
approvals and ability to access sufficient capital from internal and external
sources. As a consequence, actual results may differ materially from those
anticipated in the forward-looking statements. Readers are cautioned that the
foregoing list of factors is not exhaustive. Additional information on these
and other factors that could affect PET's operations and financial results are
included in reports on file with Canadian securities regulatory authorities
and may be accessed through the SEDAR website ( and at PET's
website ( Furthermore, the forward-looking statements
contained in this news release are made as at the date of this news release
and PET does not undertake any obligation to update publicly or to revise any
of the forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required by applicable securities

    Non-GAAP Measures

    This news release contains financial measures that may not be calculated
in accordance with generally accepted accounting principles in Canada
("GAAP"). Readers are referred to advisories and further discussion on
non-GAAP measures contained in the "Significant Accounting Policies and
non-GAAP Measures" section of management's discussion and analysis.

    PET is a natural gas-focused Canadian energy trust. PET's Trust Units and
convertible debentures are listed on the Toronto Stock Exchange under the
symbol "PMT.UN" and "PMT.DB", "PMT.DB.A", "PMT.DB.B" and "PMT.DB.C",
respectively. Further information with respect to PET can be found at its
website at

    The Toronto Stock Exchange has neither approved nor disapproved the
    information contained herein.

For further information:

For further information: Paramount Energy Trust, Sue Riddell Rose,
President and Chief Executive Officer, (403) 269-4400 or Paramount Energy
Trust, Cam Sebastian, Vice President, Finance and Chief Financial Officer,
(403) 269-4400 or Paramount Energy Trust, Sue Showers, Investor Relations and
Communications Advisor, (403) 269-4400, (403) 269-6336 (FAX) or Paramount
Energy Operating Corp, Administrator of Paramount Energy Trust, Suite 3200,
605 - 5 Avenue SW Calgary, Alberta T2P 3H5, Email:,

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