Hedging update. Parallel Energy Trust Announces Change of Operatorship of the West Panhandle Field and Operational and Hedging Update
CALGARY, ALBERTA--(Marketwire - July 9, 2012) -
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Parallel Energy Trust ("Parallel" or the "Trust") (TSX:PLT.UN) today announced that Parallel Energy LP, the US operating subsidiary of the Trust, has assumed operatorship of the West Panhandle Field. The changeover in operator from Bravo Natural Gas LLC ("Bravo") was scheduled as part of Parallel's purchase of the remaining 41% interest in the West Panhandle Field which closed on April 12, 2012. The US operating team is now headed by Tony Swindell, previously VP Operations of Bravo and now VP Mid-Continent for Parallel, plus a majority of the previous operating team from Bravo. With the takeover of operatorship, Parallel now has 12 employees in the Tulsa corporate office and 33 employees in the field.
Parallel continues to execute its plan to stabilize and increase production levels. Operational initiatives completed and underway include hiring of additional technical staff to monitor and maintain production levels, upgrades to compressors and installation of cooling equipment to stabilize condensate production during the summer months. As is normal in the oil and gas industry, production will continue to experience some level of volatility, however, the frequency and severity of operational issues has been significantly reduced as a result of the efforts of Tony Swindell and his team. Exit production for June was approximately 7,000 boe/day based on field data.
As previously announced, Parallel Trust has commodity hedges in place through 2014. A full listing of current hedges is provided on the Trust's website at www.parallelenergy.ca. The following is a summary of current commodity price hedges for the remainder of 2012 and 2013:
|
|
June to December 2012 |
|
January to June 2013 |
July to December 2013 |
|
|
Hedged Amount |
|
Average
Floor Price of Hedges |
|
Hedged Amount |
|
Average
Floor Price of Hedges |
Hedged Amount |
|
Average
Floor Price of Hedges |
|
|
|
|
|
|
|
|
|
|
|
|
| Crude Oil |
|
1,400 bbls/day |
|
US$92.30 |
|
1,400 bbls/day |
|
US$98.40 |
1,100 bbls/day |
|
US$93.00 |
| Propane |
|
300 bbls/day equivalent |
|
US$50.61 |
|
|
|
|
|
|
|
| Butane |
|
450 bbls/day equivalent |
|
US$64.10 |
|
370 bbls/day equivalent |
|
US$67.80 |
300 bbls/day equivalent |
|
US$62.90 |
| Natural Gas |
|
|
|
|
|
2,000 mmbtu/day |
|
US$2.98 |
2,000 mmbtu/day |
|
US$3.23 |
The above hedges represent approximately 60% of net revenue through to the end of 2013. As at June 30, 2012, the mark-to-market value of the commodity hedges was US$9.1 million, not including a realized hedging gain of US
.9 million for the month of June. The Trust does not currently have any foreign exchange hedges in place.
"We are very pleased that we have assumed formal operatorship of the West Panhandle Field. Tony and his team have done a fantastic job to get us in position to become the operator. We would also like to thank Bravo for all of their efforts over the past 16 months as previous operator of the field and in assisting in the transition." said Dennis Feuchuk, President and CEO of Parallel Energy Trust.
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