Progress Announces Increased Consideration under PETRONAS Arrangement

CALGARY, July 27, 2012 /CNW/ - (TSX - PRQ) - Progress Energy Resources Corp. ("Progress" or the "Company") is pleased to announce that it has entered into an amending agreement (the "Amending Agreement") to the arrangement agreement dated June 27, 2012 as amended on July 19, 2012 (the "Arrangement Agreement") with PETRONAS International Corporation Ltd. ("PICL") and PETRONAS Carigali Canada Ltd. (the "Purchaser") which provides for the acquisition by the Purchaser of all of the outstanding common shares (the "Common Shares") of Progress and the acquisition by Progress of all of the outstanding 5.25% Convertible Unsecured Subordinated Debentures of Progress due October 31, 2014 (the "2014 Debentures") and the 5.75% Series B Convertible Unsecured Subordinated Debentures of Progress due June 30, 2016 (the "2016 Debentures" and together with the 2014 Debentures, the "Debentures").

Pursuant to the Amending Agreement, the Purchaser has agreed to increase the consideration payable to holders of Common Shares ("Shareholders") under the plan of arrangement (the "Arrangement") contemplated under the Arrangement Agreement, from C$20.45 per Common Share to C$22.00 per Common Share.  As a result of the increase in the consideration payable for the Common Shares under the Arrangement, assuming an effective date (the "Effective Date") of September 25, 2012, the cash consideration under the Arrangement for each $1,000 principal amount of Debentures, and excluding accrued interest and notional interest, will now be increased to approximately $1,265 for the 2014 Debentures and $1,213 for the 2016 Debentures. Pursuant to the amended Arrangement, holders of Debentures ("Debentureholders") will continue to receive accrued and unpaid interest on the principal amount of such Debentures to but excluding the Effective Date and an amount equal to the amount of interest that would otherwise be payable thereon from and including the Effective Date to but excluding the date which is 32 days after the Effective Date.

The increase in the consideration resulted from Progress having received an unsolicited proposal from a third party.

The Board of Directors of Progress has unanimously determined that the amended Arrangement is in the best interests of Progress and is fair to Shareholders and Debentureholders. The Board of Progress has unanimously approved the amended Arrangement and determined to recommend that holders of Common Shares and Debentures vote in favour of the amended Arrangement.

The special meeting of holders of Common Shares and holders of Debentures to consider the Arrangement will continue to be held at 3:00 p.m. (Calgary time) on August 28, 2012 in the McMurray Room of the Calgary Petroleum Club, 319 - 5th Avenue S.W., Calgary, Alberta.

The parties continue to anticipate that the Arrangement will be completed on or about September 25, 2012 subject to obtaining shareholder and Court approval and the required governmental and regulatory approvals and satisfying other usual and customary conditions contained in the Arrangement Agreement.

If holders of Common Shares or holders of Debentures have any questions or need additional information, they should consult their financial, legal, tax or other professional advisor, or contact the information agent for the Arrangement, Laurel Hill Advisory Group, at 416-304-0211, or at its North American toll-free number: 1-877-304-0211 or by email at

PETRONAS' exclusive financial advisor for the transaction is Bank of America Merrill Lynch.  Norton Rose Canada LLP is acting as legal counsel to PETRONAS.

BMO Capital Markets is acting as exclusive financial advisor to Progress for the transaction and has provided the Board of Directors of Progress with a fairness opinion regarding the proposed transaction for the Shareholders and the Debentureholders.  Scotia Waterous has also provided the Board of Directors of Progress with an independent fairness opinion regarding the proposed transaction for the Shareholders and the Debentureholders.  Burnet, Duckworth & Palmer LLP is acting as legal counsel to Progress.

About Progress Energy

Progress is a Calgary, Canada based Energy Company focused on exploration, development and production of large, unconventional natural gas resources in northeast British Columbia and northwest Alberta. Progress holds the largest acreage position in the Montney shale gas play. Throughout its history, Progress has a solid track record of growing reserves, production and the underlying value of the Company for its shareholders. The Common Shares and the two series of Debentures are listed on the Toronto Stock Exchange under the symbols PRQ, PRQ.DB.B and PRQ.DB.C, respectively.

Cautionary Statement on Forward-Looking Information

This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking statements or information. In particular, forward looking statements in this press release include, but are not limited to, statements regarding the completion of the Arrangement, the timing of the meeting and the anticipated results therefrom.

The forward-looking statements and information are based on certain key expectations and assumptions made by Progress and the Purchaser, including, but not limited to, expectations and assumptions concerning the ability of Progress and the Purchaser to obtain all required regulatory approvals for the transaction, including, but not limited to, shareholder, Court and regulatory approvals.

Although Progress believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward looking statements and information because there can be no assurance that they will prove to be correct.

Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risk that the transaction may not close when planned or at all or on the terms and conditions set forth in the Arrangement Agreement; the failure of Progress to obtain the necessary shareholder, Court, regulatory and other third party approvals required in order to proceed with the transaction; operational risks in development, exploration and production for natural gas; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve and resource estimates; health, safety and environmental risks; commodity price and exchange rate fluctuations; marketing and transportation; loss of markets; environmental risks; competition; incorrect assessment of the value of acquisitions; ability to access sufficient capital from internal and external sources; and changes in legislation, including but not limited to tax laws, royalties and environmental regulations. Readers are cautioned that the foregoing list of factors is not exhaustive.

Management has included the above summary of assumptions and risks related to forward-looking statements and information provided in this press release in order to provide securityholders with a more complete perspective on the Arrangement and such information may not be appropriate for other purposes. Actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that Progress will derive there from.

The forward-looking statements and information contained in this press release are made as of the date hereof and Progress undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events, or results or otherwise, other than as required by applicable securities laws.

SOURCE: Progress Energy Resources Corp.

For further information:

Art MacNichol, Senior Vice President and Chief Financial Officer
Progress Energy Resources Corp.
403-539-1780 (

Kurtis Barrett, Analyst, Investor Relations and Marketing
Progress Energy Resources Corp.
403-539-1843 (

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