CALGARY, July 13, 2012 /CNW/ - (TSX: PMT) - Perpetual Energy Inc. ("Perpetual" or the "Corporation") is pleased to confirm the repayment of Perpetual's $75 million 6.5% convertible debentures (TSX: PMT.DB.C) in cash upon their maturity on June 30, 2012. Debentureholders should have now received the proceeds of the repayment.
The Corporation is also pleased to provide an update on its commodity price risk management positions as discussed below.
COMMODITY PRICE RISK MANAGEMENT
With recent modest strength in natural gas prices with the erosion of the storage surplus caused by extreme hot weather throughout much of North America, Perpetual terminated its 2013 forward sales positions realizing proceeds of $1.0 million. Financial and physical forward natural gas sales arrangements at the AECO trading hub as at July 13, 2012 are now as follows:
| Type of
| % of
|Financial - AECO||Jul - Dec 2012||45,250||3.72||2.38||33|
|Financial - AECO||Jul - Oct 2012||10,000||2.85||2.20||7|
|Financial - AECO||Jul - Dec 2012||19,000||2.60||2.38||14|
|Physical - AECO||Jul - Dec 2012||25,000||2.59||2.38||18|
|(1)||Average price calculated using weighted average price for net open sell contracts. NYMEX prices in $US/MMBtu.|
|(2)||Futures market reflects AECO settled and forward market prices as at July 13, 2012.|
|(3)||Calculated using 2012 estimated gas production of 136,500 GJ/d including gas over bitumen deemed production.|
Perpetual also has in place the following costless collar oil sales arrangements, to reduce exposure to fluctuations in the WTI index:
| Type of
| Floor Price
| % of
|Collar||Jan - Dec 2012||500||82.00||91.00||86.80||14|
|Collar||Jan - Dec 2012||500||80.00||89.00||86.80||14|
|Collar||Jan - Dec 2012||500||85.00||96.75||86.80||14|
|Collar||Mar - Dec 2012||500||90.00||109.25||86.80||14|
|Period Total||Jan - Dec 2012||2,000||84.25||96.56||86.80||57|
|Period Total||Jan - Dec 2013||2,000||88.00||101.70||89.51||57|
|(1)||Average price calculated using weighted average price for net open contracts.|
|(2)||Futures market reflects WTI forward prices at July 13, 2012.|
|(3)||Calculated using 2012 estimated oil and NGL production of 3,500 bbl/d|
|(4)||If WTI settles above $118.15 in any month Perpetual will receive $100.00 per bbl.|
The Company has also fixed the WTI to oil price differential (WCS differential) on 900 bbl/d at an average price of $US23.68/bbl for the 2012 calendar year.
In addition, the Corporation has sold oil call options exercisable and expiring as follows:
| Type of
| Strike Price
| Futures Market
|Call||Jan - Dec 2013||Dec 31, 2012||1,000||95.00||89.51|
|Call||Jan - Dec 2013||Monthly 2013||1,000||105.00||89.51|
|Call||Jan - Dec 2014||Monthly 2014||2,000||105.00||87.84|
|(1)||Futures market reflects WTI forward prices at February July 13, 2012.|
The current mark to market value of these hedging transactions is approximately $12 million.
Certain information regarding Perpetual in this news release including management's assessment of future plans and operations may constitute forward-looking statements under applicable securities laws. The forward-looking information includes, without limitation, future production levels. Various assumptions were used in drawing the conclusions or making the forecasts and projections contained in the forward-looking information contained in this press release, which assumptions are based on management analysis of historical trends, experience, current conditions, and expected future developments pertaining to Perpetual and the industry in which it operates as well as certain assumptions regarding the matters outlined above. Forward-looking information is based on current expectations, estimates and projections that involve a number of risks, which could cause actual results to vary and in some instances to differ materially from those anticipated by Perpetual and described in the forward looking information contained in this press release. Undue reliance should not be placed on forward-looking information, which is not a guarantee of performance and is subject to a number of risks or uncertainties, including without limitation those described under "Risk Factors" in Perpetual's MD&A and Annual Information Form for the year ended December 31, 2011 and those included in other reports on file with Canadian securities regulatory authorities which may be accessed through the SEDAR website (www.sedar.com and at Perpetual's website www.perpetualenergyinc.com). Readers are cautioned that the foregoing list of risk factors is not exhaustive. Forward-looking information is based on the estimates and opinions of Perpetual's management at the time the information is released and Perpetual disclaims any intent or obligation to update publicly any such forward-looking information, whether as a result of new information, future events or otherwise, other than as expressly required by applicable securities laws.
Perpetual Energy Inc. is a natural gas-focused Canadian energy company. Perpetual's shares and convertible debentures are listed on the Toronto Stock Exchange under the symbol "PMT", "PMT.DB.D" and "PMT.DB.E", respectively. Further information with respect to Perpetual can be found at its website at www.perpetualenergyinc.com .
The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.
For further information:
Susan L. Riddell Rose
President and Chief Executive Officer
Cameron R. Sebastian
Vice President, Finance and Chief Financial Officer
Claire A. Rosehill
Business and Investor Relations Analyst