CALGARY, Canada, February 9, 2011 /PRNewswire/ -- Perpetual Energy Inc. ("Perpetual" or the "Corporation") is pleased to confirm that its dividend to be paid on March 15, 2011 in respect of income received by Perpetual for the month of February 2011, for shareholders of record on February 23, 2011, will be $0.03 per share. The ex-dividend date is February 18, 2011. The February 2011 dividend brings cumulative dividends (including distributions paid since the inception of Perpetual's predecessor, Paramount Energy Trust) to $14.384 per share. Perpetual reviews dividends on a monthly basis. Future dividends are subject to change as dictated by commodity price markets, operations, capital considerations and future business development opportunities.
The Corporation also advises that there will continue to be no shares available under either the Premium DividendTM or dividend reinvestment component of the Premium DividendTM and Dividend Reinvestment Plan (the "Plan") for the Corporation's February 2011 dividend payable on March 15, 2011 and until further notice. At such time as the Corporation elects to reinstate either or both components of the Plan, shareholders who were enrolled at suspension and remain enrolled at reinstatement will automatically resume participation in the Plan.
YEAR-END 2010 RESERVES
The Corporation is pleased to release a summary of the company's year-end 2010 reserves information, as evaluated by the independent engineering firm McDaniel and Associates Consultants Ltd. ("McDaniel").
Year-End Reserve Highlights
- In 2010, Perpetual added 40.0 Bcfe of proved and probable reserves, excluding production. - After dispositions of 53.1 Bcfe and production of 55.9 Bcfe in 2010, proved and probable reserves decreased three percent from 471.6 Bcfe at year-end 2009 to 455.6 Bcfe and proved reserves decreased three percent to 235.9 Bcfe at year-end 2010. - Excluding downward revisions related solely to changes in natural gas pricing at year-end 2010 of 22.3 Bcfe, Perpetual's reserves grew one percent year over year from 471.6 Bcfe to 477.9 Bcfe, offsetting production of 55.9 Bcfe and net dispositions of 9.8 Bcfe, which included the disposition of 34.2 Bcf of probable shut-in gas over bitumen reserves where the effective funds flow through the Government of Alberta's financial solution was retained by Perpetual. - Reserve additions largely offsetting production and dispositions were a result of total net capital spending of $163.2 million, including investment of $114.1 million in exploration and development capital spending programs excluding spending for the development of Perpetual's gas storage asset at Warwick ("Warwick Gas Storage"), as well as various asset acquisitions in the Edson and Birchwavy areas during the year. - Including changes in future development capital ("FDC"), Perpetual realized finding and development costs ("F&D") of $1.87 per Mcfe ($11.22 per BOE) on a proved and probable reserve basis in 2010. - Perpetual's realized finding, development and acquisition costs ("FD&A"), including changes in FDC, was $2.49 per Mcfe ($14.94 per BOE) on a proved and probable basis. FD&A costs were significantly impacted by relatively low disposition metrics on a reserve basis associated with the sale of probable shut-in gas over bitumen reserves without the related effective funds flow from future royalty reductions in the Legend, Liege and Surmont areas of 34.2 Bcf for net proceeds of $39.8 million. Perpetual retained the effective funds flow for these shut-in gas over bitumen reserves making the asset sales incomparable to other transactions, therefore the proceeds and reserves associated from these dispositions have been removed for purposes of the FD&A calculation. - No reserves were recorded at year-end 2010 for the Corporation's extensive acreage position and three gross (1.4 net) horizontal wells penetrating the Montney formation at Elmworth. An independent contingent resource assessment report was prepared by McDaniel for 42 gross sections of Perpetual's Montney acreage in the Elmworth area which on a preliminary basis estimates gross original gas in place ("OGIP") on company interest lands of 987.5 Bcf plus associated natural gas liquids ("NGLs"). Assuming a range in recovery factors from 20 to 50 percent, gross recoverable sales gas is estimated from a low of 167.9 Bcf with 5.9 MMbbls of NGLs (203.4 Bcfe) to a high of 419.7 Bcf with 24.7 MMbbls NGLs (567.8 Bcfe), with McDaniel's best estimate at 35 percent recovery factor translating to 293.8 Bcf with 13.8 MMbbls NGLs (376.7 Bcfe). On a working interest basis, the best estimate recoverable contingent resource is estimated at 177.9 Bcfe. Perpetual has an additional 34 gross sections in the Elmworth area which have not yet been evaluated through drilling in the Montney formation. - Perpetual's reserve to production ratio ("reserve life index" or "RLI") is 8.4 years on a proved and probable reserves basis (4.8 years on a proved reserves basis) at year-end 2010. - Perpetual's reserve-based net asset value ("NAV") at year-end 2010 was estimated at $5.02 per Share discounted at eight percent.
Company interest reserves included herein are before royalty burdens and including royalty interests. Reserves information is based on an independent reserves evaluation report prepared by McDaniel dated February 7, 2011 with an effective date of December 31, 2010 (the "McDaniel Report"), and has been prepared in accordance with National Instrument 51-101 ("NI 51-101") using McDaniel's forecast prices and costs. Complete NI 51-101 reserves disclosure including after-tax reserve values, reserves by major property and abandonment costs will be included in Perpetual's Annual Information Form ("AIF"), which will be filed in March 2011.
Approximately 94 percent of Perpetual's proved and proved and probable reserves are natural gas and as such the Corporation reports reserves in Mcf equivalent (Mcfe). Mcfe may be misleading, particularly if used in isolation. In accordance with NI 51-101 a Mcfe conversion ratio for oil of 1 Bbl: 6 Mcf has been used, which is based on an energy equivalency conversion method primarily applicable at the burner tip and does not necessarily represent a value equivalency at the wellhead.
Perpetual's reserves at year-end 2010 are summarized below.
Reserves at December 31, 2010 Light and Natural Company Interest Medium Heavy Natural Gas (Working plus Crude Oil Oil Natural Gas Gas Liquids Equivalent Royalty Interest) (Mbbl) (Mbbl) (MMcf) (Mbbl) (MMcfe) Proved Producing 625 338 187,223 1,397 201,380 Proved - - 17,779 59 18,132 Non-Producing Proved 92 128 13,601 243 16,377 Undeveloped Total Proved 716 466 218,603 1,698 235,887 Probable 207 161 62,515 510 67,776 Producing Probable - 103 31,882 237 33,926 Non-Producing excl GOB Probable 46 86 88,602 244 90,852 Undeveloped Probable Shut-in - - 27,196 - 27,196 Gas over Bitumen Total Probable 253 349 210,194 991 219,750 Total Proved and 969 816 428,798 2,689 455,637 Probable
The proved producing reserves comprise 85 percent of the total proved reserves and 44 percent of the total proved and probable reserves, while proved and probable developed producing reserves are 60 percent of the total proved and probable reserves. Total proved reserves account for 52 percent of the total proved and probable reserves. McDaniel estimates the FDC required to convert non-producing and undeveloped reserves to producing reserves at $236.4 million.
Reserves Reconciliation Company Interest (Working Interest + Royalty Interest) Natural Gas Proved Equivalent (MMcfe) Opening Balance 244,372 Discoveries and Extensions 28,418 Technical Revisions 31,744 Acquisitions, net of Dispositions 11,243 Production -55,933 Economic Factors -23,987 Closing Balance 235,887 Natural Gas Probable Equivalent (MMcfe) Opening Balance 227,204 Discoveries and Extensions 16,271 Technical Revisions -4,333 Acquisitions, net of Dispositions -21,096 Production 0 Economic Factors 1,704 Closing Balance 219,750 Natural Gas Proved and Probable Equivalent (MMcfe) Opening Balance 471,576 Discoveries and Extensions 44,689 Technical Revisions 27,441 Acquisitions, net of Dispositions -9,853 Production -55,933 Economic Factors -22,283 Closing Balance 455,637
Perpetual disposed of 34.2 Bcfe of proved and probable reserves associated with natural gas interests in the Legend, Liege and Surmont areas that were shut-in as a result of the gas over bitumen regulatory issue. Perpetual retained the effective funds flow from the reduction of future royalties related to the financial solution in place for the shut-in gas and this is reflected in proven future net revenues.
Year over year, McDaniel recorded net positive technical revisions totaling 27.4 Bcfe on a proved and probable basis. These positive revisions were due to improved performance and improved operating costs in all areas. These positive revisions were offset by a substantially reduced price forecast at year-end 2010 relative to year-end 2009 resulting in negative revisions of 22.3 Bcfe due to increased economic limits which primarily affected the forecast for wells as they neared their end of productive life. Included in the downward price revisions are those future projects whose return on investment at the current price forecast results is negative.
McDaniel's price forecast utilized in the evaluation is summarized below.
McDaniel January 1, 2011 Price Forecast Year West Texas Edmonton Light Natural Gas at Foreign Intermediate Crude Oil AECO Exchange Crude Oil ($Cdn/Bbl) ($Cdn/MMBtu) ($US/$Cdn) ($US/Bbl) 2011 85.00 84.20 4.25 0.975 2012 87.70 88.40 4.90 0.975 2013 90.50 91.80 5.40 0.975 2014 93.40 94.80 5.90 0.975 2015 96.30 97.70 6.35 0.975 2016 99.40 100.90 6.75 0.975 2017 101.40 102.90 7.10 0.975 2018 103.40 104.90 7.40 0.975 2019 105.40 107.00 7.60 0.975 2020 107.60 109.20 7.75 0.975 2021 109.70 111.30 7.85 0.975 2022 111.90 113.60 8.05 0.975 2023 114.10 115.80 8.20 0.975 2024 116.40 118.10 8.40 0.975 Escalate thereafter at 2% 2% 2% 0.975
RESERVE LIFE INDEX ("RLI")
Perpetual's proved and probable reserves to production ratio, also referred to as reserve life index, was 8.4 years at year-end 2010 while the proved RLI was 4.8 years, based upon the 2011 production estimates in the McDaniel Report. The following table summarizes PET's historical calculated RLI.
Reserve Life Index(1) 2010 2009 2008 2007 2006 Total 4.8 4.8 4.5 4.7 3.6 Proved Proved 8.4 8.8 7.5 7.6 4.9 and Probable (1) Calculated as year-end reserves divided by year one production estimate from McDaniel Report.
NET PRESENT VALUE ("NPV") OF RESERVES SUMMARY
Perpetual's light and medium oil, natural gas and natural gas liquids reserves were evaluated by McDaniel using McDaniel's product price forecasts effective January 1, 2011 prior to provision for financial natural gas price hedges, income taxes, interest, debt service charges and general and administrative expenses. The following table summarizes the net present value of funds flows from recognized reserves at January 1, 2011, assuming various discount rates. It should not be assumed that the discounted future net funds flows estimated by McDaniel represent the fair market value of the potential future production revenue of the company.
NPV of Funds Flow Using McDaniel January 1, 2011 Forecast Prices and Costs Discounted at ($ thousands) Undiscounted 5% 10% 15% Proved Producing $784,904 $630,014 $532,180 $463,874 Proved Non-Producing 91,188 39,468 23,444 17,305 Proved Undeveloped 28,873 20,348 14,419 10,097 Total Proved 904,965 689,830 570,043 491,276 Probable Producing 292,665 182,640 129,817 99,343 Probable Non-Producing excl GOB 114,605 79,070 59,916 47,531 Probable Undeveloped 180,321 117,739 78,959 54,170 Probable Shut-in Gas over Bitumen 105,907 73,644 52,952 39,142 Total Probable 693,498 453,093 321,644 240,186 Total Proved and Probable $1,598,463 $1,142,923 $891,686 $731,462
At a 10 percent discount factor, the proved producing reserves comprise 60 percent of the total proved and probable value while proved and probable developed producing reserves represent 74 percent of the total proved and probable value. Total proved reserves account for 64 percent of the proved and probable value.
A preliminary resource assessment was conducted for the Montney Formation in the Elmworth area by McDaniel as at year-end 2010, the results of which are summarized below.
Contingent Resource(1,4) Working Interest Recoverable Recoverable Recoverable Original Raw Sales Natural Natural Natural Gas in Recoverable Recoverable Gas Gas Gas Place Gas (3) Gas Liquids Equivalent Equivalent (MMcf) (MMcf) (MMcf) (Mbbl) (MMcfe) (MMcfe) Low (2) 987,470 197,494 167,870 5,925 203,419 96,100 Best (2) 987,470 345,615 293,770 13,825 376,718 177,900 High (2) 987,470 493,735 419,680 24,687 567,801 268,200
(1) Contingent resources have been evaluated by McDaniel using the definitions is as defined in section five of the Canadian Oil and Gas Evaluators Handbook, Volume 1. All volumes are reported before the deduction of royalties payable to others. Contingent resource assignments are in addition to any reserve assignments associated with these assets. (2) A Low estimate (90% chance the ultimate recoverable resource will be equal or greater than the stated value), means higher certainty, a Best estimate (50% chance that the ultimate recoverable resource will be greater than or equal to the stated value) means most likely and a High estimate means lower than a 50% chance that the ultimate recoverable resource will be greater than or equal to the stated value (3) McDaniel has assigned recovery factors of 20% (Low), 35% (Best) and 50% (High) in their assessment of recoverable resource. (4) Contingent resources can be sub-classified into economic and uneconomic portions based on a number of assumptions on capital costs, timing, price forecast, etc. Currently sub-classification of these preliminary estimates has not been completed pending a discussion of the above parameters.
The primary contingencies identified for the Montney resource are infrastructure and access to market. Once development plans are in place which can define a commercial project, it is expected that a portion of these estimates would shift into proved and probable reserves subject to standard booking practice for undeveloped reserves.
NET ASSET VALUE ("NAV")
The following net asset value table shows what is normally referred to as a "produce-out" NAV calculation under which the Corporation's reserves would be produced at forecast future prices and costs. The value is a snapshot in time and is based on various assumptions including commodity prices and foreign exchange rates that vary over time. It should not be assumed that the NAV represents the fair market value of Perpetual Shares. The calculations below do not reflect the value of the Corporation's prospect inventory to the extent that the prospects are not recognized within the NI-51-101 compliant reserve assessment.
Of particular note, there are no reserves assigned to the company's Elmworth Montney project where three gross (1.4 net) horizontal wells estimate have been drilled by Perpetual and its partners. McDaniel has recognized as its best case, contingent recoverable resource of 178 Bcfe to Perpetual's working interest lands. Development scenarios for the over one Tcfe of natural gas and NGLs in place in the Montney at Elmworth will be evaluated by Perpetual and its partners in 2011. In addition, no reserves or contingent resources are yet assigned to any of Perpetual's heavy oil projects in northeast Alberta. The incremental value of Perpetual's extensive prospect inventory for its game-changing opportunities in the Montney at Elmworth, Cardium light oil at Carrot Creek, Wilrich liquids-rich gas at Edson, the Colorado shallow shale gas in east central Alberta and the bitumen projects in northeast Alberta, above the nominal amount which is currently recognized by McDaniel, is captured only through the assessment of the fair market value of undeveloped land based on current land sale valuation parameters.
Of further note, the value of the Corporation's Warwick Gas Storage asset has been recorded at cost in the net asset value calculation below. Construction of the Warwick Gas Storage facility was completed in the fourth quarter of 2010 and withdrawal has now commenced on the preliminary test cycle which will be complete at the end of March 2011. Information gathered during the test cycle will define the developed working gas capacity of the storage reservoir at that time. This in turn will lead to a more comprehensive valuation of the asset.
Pre-tax Net Asset Value at December 31, 2010(1) Discounted at ($millions except as noted) Undiscounted 5% 8% 10% Total Proved and Probable Reserves(2) $1,598 $1,143 $977 $892 Fair Market Value of Undeveloped Land(3) 204 204 204 204 Market Value of TriOil Resources Ltd. Shares 6 6 6 6 Warwick Gas Storage(4) 65 65 65 65 Net Bank Debt (unaudited)(5) (206) (206) (206) (206) Convertible Debentures (unaudited) (235) (235) (235) (235) Estimate of Additional Future Abandonment and Reclamation Costs(6) (83) (49) (37) (31) Mark to McDaniel's cost of WGSI Forward Sale Obligation(7) (40) (34) (31) (29) Net Asset Value $1,310 $894 $744 $666 Shares Outstanding (million) - basic 148.3 148.3 148.3 148.3 Net Asset Value per Share ($/Share) $8.84 $6.03 $5.02 $4.49
(1) Financial information is per Perpetual's 2010 unaudited consolidated financial statements. (2) Reserve values per McDaniel Report as at December 31, 2010. (3) Third party estimate. (4) Book value recorded at cost as at December 31, 2010. (5) Includes $10 million held in escrow at year-end relating to the Warwick Gas Storage facility funding arrangement. (6) Amounts are net of salvage value and in addition to amounts in the McDaniel Report for future well abandonment costs related to developed reserves. See "ABANDONMENT AND RECLAMATION COSTS". (7) Value of Perpetual's open hedging transactions related to the Warwick Gas Storage funding arrangement at year end 2010 assuming settlement against the McDaniel price forecast.
In the absence of adding reserves to the Corporation, the NAV per share will decline as the reserves are produced out. The funds flow generated by the production relates directly to the cash dividends paid to Perpetual shareholders. The above evaluation includes future capital expenditure expectations required to bring undeveloped reserves recognized by McDaniel that meet the criteria for booking under NI 51-101 on production.
FAIR MARKET VALUE OF UNDEVELOPED LAND
Perpetual's third party estimate of the fair market value of its undeveloped acreage by region for purposes of the above net asset value calculation is based on recent Crown land sale activity adjusted for tenure and other considerations and is as follows:
Fair Market Value of Undeveloped Land Area Acres Total Value ($) $/Acre North 1,000,197 $41,042,433 $41.03 South 405,289 $59,761,578 $147.45 West Central 140,978 $66,848,275 $474.18 New Ventures 25,350 $8,607,925 $339.56 Heavy Oil 333,259 $27,809,494 $83.45 Totals 1,905,073 204,069,705 $107.12
ABANDONMENT AND RECLAMATION COSTS
In addition to the abandonment cost estimates provided by McDaniel inclusive in their reserve assessment, Perpetual compiles annually a detailed internal estimate of the Corporation's total future asset retirement obligation based on net ownership interest in all wells, facilities and pipelines, including estimated costs to abandon the wells, facilities and pipelines and reclaim the sites, and the estimated timing of the costs to be incurred in future periods. Pursuant to this evaluation, the estimated value of Perpetual's future asset retirement obligations, net of the estimated salvage value of facilities and equipment and discounted at 8 percent is $74 million as at December 31, 2010. The McDaniel Report includes an undiscounted amount of $83 million with respect to expected future well abandonment costs related specifically to proved and probable reserves and such amount is included in the values captioned "Total Proved and Probable Reserves" in the NPV of Funds Flow table (see "NET PRESENT VALUE ("NPV") OF RESERVES SUMMARY"). Of the total future well abandonment costs included in the McDaniel Report an undiscounted amount of $56 million relates to Perpetual's developed reserves. The following table presents the estimated future asset retirement obligations and estimated net salvage values at various discount rates:
Abandonment and Reclamation Costs Discounted at ($millions, net to Perpetual) Undiscounted 5% 8% 10% Well abandonment costs for developed reserves included in McDaniel Report $56 $35 $27 $23 Well abandonment costs for undeveloped reserves included in McDaniel Report $27 $14 $9 $7 Well abandonment costs for Total Proved and Probable reserves included in McDaniel Report $83 $49 $37 $30 Estimate of other abandonment and reclamation costs not included in McDaniel Report $232 $137 $103 $86 Total estimated future abandonment and reclamation costs $315 $186 $140 $117 Salvage value ($148) ($88) ($66) ($455) Abandonment and reclamation costs , net of salvage $167 $98 $74 $62 Well abandonment costs for developed reserves included in McDaniel Report ($83) ($49) ($37) ($31) Estimate of additional future abandonment and reclamation costs, net of salvage(1) $83 $49 $37 $31
(1) Future abandonment and reclamation costs not included in the McDaniel Report, net of salvage value.
FINDING, DEVELOPMENT AND ACQUISITION ("FD&A") COSTS
Under NI 51-101, the methodology to be used to calculate FD&A costs includes incorporating changes in future development capital required to bring the proved undeveloped and probable reserves to production. For continuity, Perpetual has presented herein FD&A costs calculated both excluding and including FDC. Changes in forecast FDC occur annually as a result of development activities, acquisitions and disposition activities and capital cost estimates that reflect the independent evaluator's best estimate of what it will cost to bring the proved undeveloped and probable reserves on production. The decrease in FDC is the result of projects being deemed to be uneconomic under the current McDaniel price forecast. Perpetual believes that the underlying resource is still present and those projects will be added back if natural gas prices increase in the future.
The following table summarizes Perpetual's F&D cost as well as finding, development and acquisition costs, before and after the inclusion of changes in FDC. Finding and development costs, including changes in FDC were $1.87 per Mcfe ($11.22 per BOE) on a proved and probable basis in 2010.
The same metrics are presented below with the impact of the sale of probable shut-in gas over bitumen reserves in the Legend, Liege and Surmont areas removed, as the dispositions are not comparable to other acquisitions and dispositions since Perpetual retained the effective funds flow related to the Government of Alberta's gas over bitumen financial solution through royalty reductions associated with the shut-in properties. Including changes in FDC, FD&A costs were $2.49 per Mcfe ($14.94 per BOE) on a proved and probable basis.
Perpetual has also summarized in the table below these same metrics with the effect of the price-related revisions removed. Perpetual believes that the majority of these reserves will return to the books with a recovery in natural gas prices as the technical merits for booking the reserves have not changed, only the economic circumstances. Excluding the effects of negative reserve revisions related to substantially lower forward gas prices, including changes in FDC, Perpetual's F&D costs were $1.30 per Mcfe ($7.80 per BOE) for proved and probable reserves and FD&A costs were $1.91 per Mcfe ($11.46 per BOE) in 2010 on a proved and probable basis.
2010 FD&A Costs - Company Interest Reserves Proved Excluding Proved GOB Excluding Disposition& GOB Price ($millions (unaudited), Proved Disposition Revisions except as noted) (2,) (2,4) F&D Costs, Excluding FDC Exploration and Development Capital Expenditures(1) $114.0 $114.0 $114.0 Reserve Additions Including Revisions - Bcfe 36.2 36.2 60.2 F&D - $/Mcfe(6) $3.15 $3.15 $1.89 F&D Costs, Including FDC Exploration and Development Capital Expenditures $114.0 $114.0 $114.0 Total Change in FDC ($26.4) ($26.4) ($26.4) Total F&D Capital including Change in FDC $87.6 $87.6 $87.6 Reserve Additions Including Revisions - Bcfe 36.2 36.2 60.2 F&D Costs- $/Mcfe(6) $2.42 $2.42 $1.46 FD&A Costs, Excluding FDC Exploration and Development Capital Expenditures $114.0 $114.0 $114.0 Net Acquisitions $51.3 $91.1 $91.1 FD&A Capital Expenditures Including Net Acquisitions $165.3 $205.1 $205.1 Reserve Additions Including Net Acquisitions - Bcfe 47.4 47.4 71.4 FD&ACosts - $/Mcfe(6) $3.48 $4.32 $2.87 FD&A Costs, Including FDC FD&A Capital Expenditures Including Net Acquisitions $165.3 $205.1 $205.1 Total Change in FDC ($26.4) ($26.4) ($26.4) Total FD&A Capital Including Change in FDC $138.9 $178.7 $178.7 Reserve Additions Including Net Acquisitions - Bcfe 47.4 47.4 71.4 FD&A Costs Including FDC - $/Mcfe(6) $2.93 $3.77 $2.50
Proved and Probable Proved and Excluding Probable GOB Excluding Disposition& Proved & GOB Price ($millions (unaudited), Probable Disposition Revisions except as noted) (2,3) (2,3,5) F&D Costs, Excluding FDC Exploration and Development Capital Expenditures(1) $114.0 $114.0 $114.0 Reserve Additions Including Revisions - Bcfe 49.8 49.8 72.1 F&D - $/Mcfe(6) $2.29 $2.29 $1.58 F&D Costs, Including FDC Exploration and Development Capital Expenditures $114.0 $114.0 $114.0 Total Change in FDC ($20.6) ($20.6) ($20.6) Total F&D Capital including Change in FDC $93.4 $93.4 $93.4 Reserve Additions Including Revisions - Bcfe 49.8 49.8 72.1 F&D Costs- $/Mcfe(6) $1.87 $1.87 $1.30 FD&A Costs, Excluding FDC Exploration and Development Capital Expenditures $114.0 $114.0 $114.0 Net Acquisitions $51.3 $91.1 $91.1 FD&A Capital Expenditures Including Net Acquisitions $165.3 $205.1 $205.1 Reserve Additions Including Net Acquisitions - Bcfe 40.0 74.2 96.5 FD&ACosts - $/Mcfe(6) $4.13 $2.77 $2.13 FD&A Costs, Including FDC FD&A Capital Expenditures Including Net Acquisitions $165.3 $205.1 $205.1 Total Change in FDC ($20.6) ($20.6) ($20.6) Total FD&A Capital Including Change in FDC $144.7 $184.6 $184.6 Reserve Additions Including Net Acquisitions - Bcfe 40.0 74.2 96.5 FD&A Costs Including FDC - $/Mcfe(6) $3.62 $2.49 $1.91
(1) $57.7 MM of capital associated with the Warwick Gas Storage project has been excluded, includes $14.2 MM of undeveloped land. (2) Disposition proceeds totaling $39.8 MM associated with the Legend, Liege and Surmont dispositions have been added back into the net acquisition capital. (3) 34.2 Bcf of probable reserves associated with the Legend, Liege and Surmont dispositions have been added back into the net acquired reserves. (4) 24.0 Bcf of proved reserves associated with price related revisions have been added back into the total reserve additions and revisions. (5) 22.3 Bcf of proved and probable reserves associated with price related revisions have been added back into the total reserve additions and revisions. (6) "Mcfe" may be misleading, particularly if used in isolation. An Mcfe conversion ratio of 1 bbl: 6 Mcf is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
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 dividends, statements regarding estimated production and timing thereof, prospective drilling, completions and development activities, estimated recoverable contingent resources, estimates of gross recoverable gas sales, prospective impact of the Montney development at Elmworth, estimated net asset value, prospective oil and natural gas liquids production capability, commodity prices, and gas price management. 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 Paramount Energy Trust's MD&A for the year ended December 31, 2009 and those included in reports on file with Canadian securities regulatory authorities which may be accessed through the SEDAR website (http://www.sedar.com) and at Perpetual's website ( http://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 law.
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 Paramount Energy Trust's Perpetual's predecessor) MD&A for the year ended December 31, 2009.
Mcf equivalent (Mcfe) may be misleading, particularly if used in isolation. In accordance with National Instrument 51-101 ("NI 51-101"), an Mcfe conversion ratio for oil of 1 Bbl: 6 Mcf has been used, which is based on an energy equivalency conversion method primarily applicable at the burner tip and does not necessarily represent a value equivalency at the wellhead.
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 symbols "PMT", "PMT.DB.C", "PMT.DB.D" and "PMT.DB.E". Further information with respect to Perpetual can be found at its website at http://www.perpetualenergyinc.com .
The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.
For further information: Perpetual Energy Inc. Suite 3200, 605 - 5 Avenue SW Calgary, Alberta, Canada T2P 3H5 Telephone: +1-403-269-4400 Fax: +1-403-269-4444 Email: email@example.com Susan L. Riddell Rose, President and Chief Executive Officer Cameron R. Sebastian, Vice President, Finance and Chief Financial Officer Sue M. Showers, Investor Relations and Communications Advisor