CALGARY, Aug. 6, 2018 /CNW/ - (TSX:PMT) - Perpetual Energy Inc. ("Perpetual" or the "Company") announces that it has received a Statement of Claim filed by PricewaterhouseCoopers Inc. LIT ("PwC"), in its capacity as trustee in bankruptcy of Sequoia Resources Corp. ("Sequoia"), with the Alberta Court of Queen's Bench (the "Court"), against Perpetual, Perpetual Operating Trust, Perpetual Operating Corp. and Susan Riddell Rose. The claim relates to an almost two year old transaction when, on October 1, 2016, Perpetual sold its then legacy shallow gas assets in east central and northeast Alberta (the "Shallow Gas Properties") to an arm's length third party at fair market value at the time after an extensive and lengthy marketing, due diligence and negotiation process. This transaction was one of several completed by Sequoia. Sequoia assigned itself into bankruptcy on March 23, 2018. PwC is seeking an order from the Court to either set this transaction aside and declare it void or damages of approximately $217 million.
Perpetual acted in good faith, lawfully and appropriately in all aspects of this transaction. In light of Sequoia's bankruptcy, coupled with recent industry participant and government and regulatory initiatives relating to the Alberta orphan well fund, the claim appears to be an opportunistic and tactical attempt to pass Sequoia's future asset retirement obligations relating to the Shallow Gas Properties on to Perpetual and related parties. Perpetual believes it is being unfairly targeted and is unaware of any fact or circumstance that would support any of the allegations being made by PwC and, accordingly, believes that the claim is entirely without merit. The Company has engaged appropriate advisors and will vigorously defend itself against this claim using all available legal avenues.
Perpetual is an oil and natural gas exploration, production and marketing company headquartered in Calgary, Alberta. Perpetual operates a diversified asset portfolio, including liquids-rich natural gas assets in the deep basin of west central Alberta, heavy oil and shallow natural gas in eastern Alberta, with longer term opportunities through undeveloped oil sands leases in northern Alberta. Additional information on Perpetual can be accessed at www.sedar.com or from the Corporation's website at www.perpetualenergyinc.com.
The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.
Certain information regarding Perpetual in this news release including management's assessment of future plans, outcomes and operations may constitute forward-looking information or statements under applicable securities laws. The forward-looking information includes, without limitation, statements relating to the claim, the intended purpose of the claim, the Company's intention to defend itself and the expected outcome of the claim. Various assumptions were used in drawing the conclusions or making the forecasts and projections contained in the forward-looking information contained in this news release, which assumptions are based on management's 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 news 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 Annual Information Form and MD&A for the year ended December 31, 2017 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). In addition, defense costs of legal claims can be substantial, even with respect to claims that have no merit and due to the inherent uncertainty of the litigation process, the resolution of the legal proceeding to which the Company has become subject could have a material effect on the Company's financial position and results of operations. 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 law.
SOURCE Perpetual Energy Inc.
For further information: For additional information please contact: Perpetual Energy Inc., Suite 3200, 605 - 5 Avenue SW Calgary, Alberta, Canada T2P 3H5; Telephone: 403 269-4400, Fax: 403 269-4444, Email: [email protected]; Susan L. Riddell Rose, President and Chief Executive Officer; W. Mark Schweitzer, Vice President Finance and Chief Financial Officer