CALGARY, ALBERTA--(Marketwire - Oct. 4, 2012) -
THIS PRESS RELEASE IS NOT FOR DISTRIBUTION TO ANY UNITED STATES NEWSWIRE SERVICES OR OTHERWISE FOR DISTRIBUTION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIES LAWS.
Parallel Energy Trust ("Parallel" or the "Trust") (TSX:PLT.UN) is pleased to announce that it has completed its previously announced installation of a pipeline to connect the Carson operating area with a third party processing plant. As a result, Parallel is able to divert natural gas currently being flared due to the curtailment of the natural gas pipeline downstream of the processing plant that currently serves the Carson operating area. Parallel is diverting 5 million cubic feet of natural gas per day to the other processing plant although this amount may fluctuate, as capacity allows, up to an amount sufficient to completely eliminate the current gas volumes being flared. The 5 million cubic feet of natural gas per day being processed through the other plant results in approximately 600 boe/day of natural gas being sold rather than being flared. As noted in the Trust's press release of August 21, 2012, approximately 1,000 boe/day of natural gas was previously being flared. The diversion of natural gas production to the other processing plant will have minimal impact on natural gas liquids and condensate production from the field.
The original estimate from the operator of the pipeline that is being curtailed was that the curtailment would last until mid to late September. The operator is now estimating that it may take until mid to late October for the curtailment to be removed.
"We're very happy that we have been able to resume some portion of our flared gas from our Carson operating area, particularly now that prices for natural gas have improved" said Dennis Feuchuk, CEO of the Trust. "The signing of the back-up processing contract and completion of the connecting pipeline is a very important step in improving the reliability of our production and demonstrates our ability to find solutions to problems that we have encountered. The back-up processing plant provides another potential solution to future pipeline or plant issues in the Carson operating area."
In addition, the Trust is pleased to announce the following:
- The Trust has entered into an agreement to acquire a third operating area, located in Roberts County, Texas. This new operating area produces from the Granite Wash and is in close proximity to the Trust's Sneed and Carson operating areas. The property currently produces approximately 200 boe/day net to Parallel, of which approximately 5 bbls/day is oil, with the balance being liquids rich natural gas (approximately 100 bbls of liquids per mmcf of natural gas). The property is being purchased for approximately US$23,000 per flowing boe/day and is expected to close on October 5, 2012.
- Current production for Parallel, assuming no flaring of natural gas, is estimated to be approximately 7,000 boe/day based on field data. With the acquisition, production would be approximately 7,200 boe/day and this level is expected to be at least maintained through the balance of the year with the planned fourth quarter drilling program of utilizing one rig. The Trust maintains its previously announced estimated 2012 exit rate of 7,200 boe/day.
- The Trust has seen improvement in pricing for its natural gas liquids production since the lows reached in June of this year, although, prices remain below the levels that Parallel was realizing earlier in the year. The Trust continues to monitor the natural gas liquids pricing environment.
"We are very pleased that we've been able to add a third operating area, and to have acquired the Roberts County assets at metrics which are accretive to our unitholders" said Dennis Feuchuk. "In light of production levels we have seen from our Sneed and Carson operating areas, resulting in great part from our continued production reliability efforts, we are confident that we will meet our 2012 exit target of 7,200 boe/day."
ABOUT PARALLEL ENERGY TRUST
Parallel's objectives are to create stable, consistent returns for investors through the acquisition and development of conventional oil and natural gas reserves and production with unexploited low risk potential in certain regions of the United States, and to pay out a portion of available cash to holders of trust units on a monthly basis. The trust units of Parallel are listed on the Toronto Stock Exchange under the symbol "PLT.UN" and the debentures are listed on the TSX under the symbol "PLT.DB".
Parallel is a "mutual fund trust" under the Income Tax Act (Canada) (the "Tax Act"). The Trust will not be a "SIFT trust" (as defined in the Tax Act), provided that the Trust complies at all times with its investment restriction which precludes the Trust from holding any "non-portfolio property" (as defined in the Tax Act). Further information relating to Parallel is set out in Parallel's annual information form dated March 21, 2012, which may be obtained on the SEDAR website at www.sedar.com under Parallel's profile.
This news release contains forward-looking information that involves substantial known and unknown risks and uncertainties, most of which are beyond the control of Parallel, including, without limitation, those listed under "Risk Factors" in Parallel's annual information form dated March 21, 2012 (collectively, "forward-looking information"). Forward-looking information in this news release includes, but is not limited to, Parallel's objectives and status as a mutual fund trust and not a SIFT trust, Parallel's expectations and estimates regarding production levels from the Carson field, current and future production rates, timing of the removal of curtailment of production in the Carson field, amount of gas production to be diverted to the other processing plant and the timing of completion of the Roberts County acquisition. Parallel cautions investors in Parallel's securities about important factors that could cause Parallel's actual results to differ materially from those projected in any forward-looking statements included in this news release. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and may be forward-looking and may involve estimates, assumptions and uncertainties which could cause actual results or outcomes to differ materially from those expressed in such forward-looking statements. No assurance can be given that the expectations set out in Parallel's final prospectus or herein will prove to be correct and accordingly, prospective investors should not place undue reliance on these forward-looking statements. These statements speak only as of the date of this press release and Parallel does not assume any obligation to update or revise them to reflect new events or circumstances.
In this news release, Parallel and its subsidiaries are referred to collectively as the "Trust" or "Parallel" for purposes of convenience.
Oil and Gas Measures and Definitions
This press release contains disclosure expressed as "boe" and "boe/day". All oil and natural gas equivalency volumes have been derived using the ratio of six thousand cubic feet of natural gas to one barrel of oil. Equivalency measures may be misleading, particularly if used in isolation. A conversion ratio of six thousand cubic feet of natural gas to one barrel of oil is based on an energy equivalency conversion method primarily.