Last updated on April 18, 2014 at 21:21 EDT

Perpetual Energy Inc. Releases Year End 2011 Financial and Operating Results, Updates Asset Divestiture Program, Operational Results and Commodity Price Risk Management

March 12, 2012

CALGARY, March 12, 2012 /PRNewswire/ – (TSX: PMT) - Perpetual Energy Inc. (“Perpetual” or the “Corporation”) is pleased

        --  report fourth quarter and year end 2011 financial and operating
        --  report significant progress with its planned asset disposition
            program for the purpose of repaying the outstanding $75 million
            6.5% convertible debentures (TSX: PMT.DB.C) due June 30, 2012;
        --  announce continued success with its asset base transformation
            and commodity diversification program; and
        --  provide an update regarding commodity price risk management

A copy of Perpetual’s audited consolidated financial statements and
related management’s discussion and analysis (“MD&A”) can be obtained
through the Corporation’s website at www.perpetualenergyinc.com and SEDAR at www.sedar.com.


Corporate Activity

        --  In November 2011 Perpetual announced that initiatives were
            underway for the sale of certain assets in the fourth quarter
            of 2011 and 2012 targeting proceeds of $75 to $150 million to
            be used to strengthen the Corporation's balance sheet and
            provide for the redemption of Perpetual's $75 million 6.5%
            convertible debentures on June 30, 2012. In the fourth quarter
            of 2011, Perpetual closed multiple non-core asset dispositions
            for net proceeds of $3.8 million. Subsequent to the end of
            2011, several additional non-core asset dispositions have been
            closed for net proceeds of $63 million, including the
            disposition of a portion of the Corporation's common shares of
            TriOil Resources Ltd. The disposed assets are primarily
            non-core properties located in eastern and west central Alberta
            and include approximately 8 MMcf/d of gas production and oil
            and NGL production of 390 bbl/d.  Perpetual is continuing to
            pursue additional asset sales, including the disposition of all
            or a portion of its gas storage facility at Warwick, to reach
            the previously announced targeted proceeds in 2012.

Production and Pricing

        --  Actual and deemed production averaged 168.7 MMcfe/d in 2011,
            down 5 percent from 177.4 MMcfe/d in 2010.
        --  Daily average oil and NGL production increased by 782 bbl/d, or
            63 percent from 2010 levels, to 2,027 bbl/d, driven by
            successful heavy oil and liquids rich gas drilling during the
        --  Natural gas production decreased ten percent to 130.2 MMcf/d in
            2011 as a result of non-core asset dispositions, the shut-in
            and sale of natural gas production at Liege in November 2010
            due to gas over bitumen concerns and natural production
            declines, partially offset by high-impact drilling at Edson and
            low cost workover and recompletion activities in the Eastern
            district to mitigate decline rates.
        --  The Corporation's average gas price before derivatives
            decreased ten percent to $3.77 per Mcf in 2011 from $4.17 per
            Mcf in 2010, in line with an 11 percent decrease in AECO
            monthly index prices. Natural gas prices including derivatives
            declined to $3.82 per Mcf in 2011 from $7.10 per Mcf in the
            prior year due to a $151.5 million reduction in realized gains
            on derivative contracts.
        --  Average oil and NGL prices before derivatives increased eight
            percent to $73.90 per bbl for 2011, primarily as a result of
            higher reference prices. The increase in the Corporation's
            price is not as pronounced as the increase in posted prices due
            to the increasing percentage of heavy oil in Perpetual's oil
            and NGL production portfolio. The Corporation received $3.1
            million in the fourth quarter of 2011 for the sale of a forward
            call option for 500 bbl/d of 2013 oil production, boosting the
            realized oil and NGL price to $78.06 per bbl for the current


        --  Net bank debt decreased 36 percent from $214.5 million at
            December 31, 2010 to $137.7 million at December 31, 2011.
        --  On March 15, 2011 Perpetual issued $150 million of seven year
            senior unsecured notes (the "Senior Notes"). The Senior Notes
            bear interest at 8.75 percent, payable semi-annually, and
            mature on March 15, 2018.
        --  Production-related operating costs decreased six percent to
            $84.3 million ($1.62 per Mcfe) in 2011 as compared to $89.7
            million ($1.61 per Mcfe) in 2010, primarily due to lower
            production levels partially offset by higher costs associated
            with the increased oil volumes. Warwick Gas Storage ("WGSI")
            operating costs increased to $5.0 million in 2011 from $1.5
            million in 2010 as 2011 was the first full year of operations
            for the WGSI facility.
        --  Funds flow decreased 68 percent to $77.0 million in 2011 as
            compared to $237.5 million for 2010. The decrease was primarily
            due to a $151.5 million reduction in realized gains on
            derivatives from year to year. Excluding the effect of
            derivatives, funds flow decreased by $9.0 million due to lower
            natural gas production and pricing, partially offset by growing
            oil and liquids production and gas storage funds flow.
        --  The average royalty rate on oil, NGL and natural gas revenues
            before derivatives was consistent at 8.8 percent for both 2010
            and 2011. Higher natural gas royalties caused by lower gas cost
            allowance credits were offset by lower oil royalties, as the
            majority of Perpetual's oil production in 2011 is from new
            drills that qualify for a five percent royalty for the first
            year of production.
        --  Net loss for 2011 was $95.9 million, driven primarily by
            reduced fund flows and impairment losses related to low natural
            gas prices.
        --  The Corporation declared dividends of $28.9 million or $0.195
            per Common Share in 2011 as compared to $78.6 million or $0.56
            per Common Share in 2010. On October 19, 2011 Perpetual
            announced that, given the continued weakness in natural gas
            prices, dividends would be suspended until further notice.


        --  In 2011, Perpetual added 61.1 Bcfe (10.2 MMboe) of proved and
            probable reserves in 2011, excluding production and net
            dispositions. The majority of the reserve additions were
            related to activities driven by Perpetual's asset base
            transformation and diversification strategy, adding natural gas
            and liquids reserves in the Alberta deep basin and in eastern
            Alberta adding Mannville heavy oil reserves. At year end 2011,
            oil and NGL represent ten percent of Perpetual's total proved
            and probable reserves (12 percent of proved), up from six
            percent (eight percent of proved) at year-end 2010.
        --  After dispositions of 12.2 Bcfe (2.0 MMboe) and production of
            51.9 Bcfe (8.7 MMboe) in 2011, proved and probable reserves
            decreased less than one percent from 487.7 Bcfe (81.3 MMboe) at
            year-end 2010 to 484.7 Bcfe (80.8 MMboe) at December 31, 2011.
            Before downward revisions related solely to changes in natural
            gas pricing at year-end 2011 of 28.4 Bcfe, Perpetual's reserves
            grew five percent year over year from 487.7 Bcfe to 513.1 Bcfe.
        --  Including changes in future development capital ("FDC"),
            Perpetual realized finding and development costs ("F&D") of
            $2.86 per Mcfe ($17.16 per BOE) on a proved and probable
            reserve basis in 2011.
        --  Perpetual's realized finding, development and acquisition costs
            ("FD&A"), including changes in FDC, were $2.88 per Mcfe ($17.28
            per BOE) on a proved and probable basis. Excluding downward
            reserve revisions related solely to natural gas price
            reductions, FD&A including changes in FDC was $1.82 per Mcfe
            ($10.92 per BOE) on a proved and probable basis.

Exploration and Development Capital Activity

        --  Exploration and development expenditures excluding land
            measured $122.8 million in 2011 as compared to $101.4 million
            for 2010. Capital spending was concentrated on exploration and
            development of liquids-rich natural gas in the West Central
            district, heavy oil drilling at Mannville in eastern Alberta
            and evaluation of the Corporation's oil sands leases in
            northeast Alberta.
        --  Eastern district expenditures of $65 million were concentrated
            on the drilling and completion of 29 (29.0 net) heavy oil wells
            at Mannville, facilities optimization projects designed to
            reduce production costs, low-cost shallow gas recompletions to
            maintain production levels, and evaluation of the Corporation's
            oil sands leases at Panny and Liege.
        --  West Central District capital spending totaled $75 million,
            directed primarily to Cardium drilling in the first quarter of
            2011, Wilrich delineation and development, and land
            expenditures to extend Perpetual's Wilrich operations to West
        --  Perpetual drilled 62 gross wells (60.5 net) in 2011 with a 100
            percent success rate, as compared to 70 gross (63.9 net) in
            2010. Drilling activity included 35 gross (34.0 net) oil wells,
            16 gross (15.5 net) natural gas wells, 7 gross (7.0 net) oil
            sands evaluation wells and 3 gross (3.0 net) wells at the WGSI
            gas storage facility.
        --  Land acquisitions totaled $16.5 million in 2011, a $2.6 million
            increase from 2010. Current year spending was directed
            primarily towards several exploratory parcels in the West Edson
            area of west central Alberta as well as expanding Perpetual's
            land position in Mannville and Elmworth.

Warwick Gas Storage (‘WGSI”)

        --  Gas storage expenditures decreased to $11.2 million for 2011
            from $57.6 million for the prior year. Prior year costs
            included construction of the storage facility, whereas 2011
            expenditures were primarily directed to the drilling of three
            horizontal wells designed to increase the working gas capacity
            in the storage reservoir.
        --  Capacity was established at 17 Bcf for the second commercial
            storage cycle, which commenced April 1, 2011.  This working gas
            capacity has been reconfirmed for the third cycle expected to
            commence with injection operations in April 2012.
        --  The WGSI Facility generated net revenue of $9.0 million in
            2011, based upon working gas from the test cycle and primarily
            the injection portion of its second full-scale operations
            cycle.  It is expected that funds flow for 2012 from operations
            at the WGSI facility will exceed $11 million. WGSI provides a
            complementary diversified cash flow stream to the Corporation's
            existing oil and natural gas assets.

Acquisitions and Dispositions

        --  The Corporation disposed of non-core assets in the West Central
            and Northern districts for $41.7 million, providing additional
            liquidity while high-grading the Corporation's asset base. The
            disposed assets are primarily non-core properties located in
            eastern and west central Alberta and include approximately 8
            MMcf/d of gas production and oil and NGL production of 390
            bbl/d.  Perpetual is continuing to pursue additional asset
            sales to reach the previously announced targeted proceeds in
        --  Acquisition expenditures totaling $7.7 million were focused on
            adding to Perpetual's drilling inventory in Edson.


        --  Perpetual's oil and natural gas liquids (NGL) production
            averaged 3,316 bbl/d in the last week of December 2011, and is
            estimated to average over 3,600 bbl/d for calendar year 2012,
            giving effect to the asset dispositions discussed above and
            assuming a capital investment program of approximately $65
            million. This activity is expected to result in oil and NGL
            production representing more than 20 percent of 2012 exit
        --  Operational results from Perpetual's asset base diversification
            strategy continue to be very positive. For 2012, Perpetual is
            focused on two key priorities: heavy oil exploration and
            development in the Mannville area of eastern Alberta and the
            Wilrich liquids-rich gas play in the greater Edson area. With
            recent further weakness in natural gas prices, Perpetual's
            Wilrich drilling has been deferred pending price recovery and
            all capital is currently being directed to heavy oil drilling
            at Mannville.


        --  Thus far in the first quarter of 2012, Perpetual has drilled
            two (2.0 net) vertical exploration wells and nine (9.0 net)
            development wells for heavy oil, seven of which have been
            placed on production. With positive drilling results exceeding
            expectations and early production start-up from several of the
            new well pads, Perpetual's eastern Alberta heavy oil production
            is ahead of budgeted volumes, exceeding 2,600 bbl/d in the
            first week of March 2012 reflecting full scale operations.
        --  Perpetual has had a continuous heavy oil drilling program
            underway since May 2011.  This program has resulted in a
            thirteen-fold increase in oil production from the Corporation's
            eastern Alberta operating district, up from 200 bbl/d just one
            year ago.
        --  Prior to the end of the first quarter, an additional 8 wells
            will be drilled and placed on production to further increase
            Perpetual's oil production weighting. Perpetual plans to
            continue to pursue the economically attractive Mannville heavy
            oil, directing the vast majority of its remaining 2012 capital
            spending to this exploration and development program.


        --  In early January, the Corporation drilled one vertical
            exploration well and one horizontal development well in the
            Edson area which are awaiting completion. This brings the
            number of horizontal Wilrich wells drilled at Edson to 12 gross
        --  In addition, at West Edson, Perpetual recently completed and
            tested its second Wilrich horizontal well which was rig
            released in January 2012. Initial testing indicates a second
            exceptional well, testing at over 15.5 MMcf/d of natural gas at
            14 MPa flowing pressure. NGL yields are expected to be 40 bbl
            per MMcf, consistent with the offsetting discovery well drilled
            in the fourth quarter of 2011. Tie-in is scheduled for
        --  New facility construction at West Edson is expected to add
            additional gas and liquids production from the new drill as
            well as from the horizontal Wilrich discovery well at West
            Edson which commenced restricted production in December 2011 at
            4 MMcf/d (2.0 MMcf/d net). The facility is expected to increase
            production in West Edson to 12 MMcf/d (6 MMcf/d net) with 480
            bbl/d (240 bbl/d net) of NGL recovered through processing at
            the third party operated Edson deep cut plant.
        --  The Corporation internally recognizes approximately 80 net
            future horizontal drilling locations on its lands in the
            Greater Edson area. At year-end 2011, 10.1 net future
            development drilling locations were booked in Perpetual's
            independent reserve report prepared by McDaniel and Associates
            Consultants Ltd. in the Edson and West Edson areas.
        --  Due to the current depressed gas price environment, no further
            operations for the Wilrich play are planned for 2012 as
            economic returns on investment in the Corporation's heavy oil
            assets are superior at this time.


Increased oil and NGL production, combined with a substantial increase
in the Corporation’s 2012 hedging position, has significantly reduced
exposure to further potential weakness in natural gas prices. Financial
and physical forward natural gas sales arrangements at the AECO and
NYMEX trading hubs as at March 7, 2012 are as follows:

                             at                                  % of
       Type of              AECO      Price   Futures Market   2012E Gas
      Contract     Term   (GJ/d)(1) ($/GJ)(1)   ($/GJ)(2)    Production(3)

    Financial - Jan - Dec
    AECO        2012        45,250     3.72          2.09            35

    Financial - Mar 2012
    AECO                    40,000     2.20          1.97             3

    Financial - Mar 2012
    NYMEX                   50,000     2.52          2.45             3

    Financial - Apr - Oct
    AECO        2012        10,000     2.85          1.84             4

    Financial - Apr - Dec
    AECO        2012        19,000     2.60          1.99            11

    Physical -  Apr - Dec
    AECO        2012        25,000     2.59          1.99            14

    Financial - Jan - Dec
    AECO        2013        25,000     3.23          2.82            19

    (1)     Average price calculated using weighted average price for net
            open sell contracts. NYMEX prices in $US/MMBtu.

    (2)     Futures market reflects AECO and NYMEX settled and forward
            market prices as at March 7, 2012.

    (3)     Calculated using 2012 estimated gas production of 130,000 GJ/d
            including gas over bitumen deemed production.

Perpetual also has in place the following costless collar oil sales
arrangements, to reduce exposure to fluctuations in the WTI index:

                                    Floor    Ceiling   Futures  % of 2012E
                       Volumes at   Price     Price    Market   Oil and NGL
    Type of               WTI     ($US/bbl) ($US/bbl) ($US/bbl) Production
    Contract    Term    (bbl/d)      (1)       (1)       (2)        (3)

    Collar   Jan - Dec
                  2012      500      82.00     91.00                  14

    Collar   Jan - Dec
                  2012      500      80.00     89.00                  14

    Collar   Jan - Dec
                  2012      500      85.00     96.75                  14

    Collar   Jan - Dec
                  2012      500      90.00    109.25                  14

    Period   Jan - Dec
    Total         2012    2,000      84.25     96.50    106.46        56

    (1)      Average price calculated using weighted average price for net
             open contracts.

    (2)      Futures market reflects WTI settled and forward prices at
             March 7, 2012.

    (3)      Calculated using 2012 estimated oil and NGL production of
             3,600 bbl/d.

The Corporation has entered into two contracts to fix the WTI to oil
price differential (WCS differential) on 400 bbl/d at $US17.35 per bbl
and on 500 bbl/d at US$28.75 per bbl, both for the 2012 calendar year.

In addition, the Corporation has sold oil call options exercisable and
expiring as follows:

    Type of                         at WTI  Strike Price Futures Market
    Contract    Term     Call Date  (bbl/d)  ($US WTI)    ($US/bbl)(1)

    Call     Jan - Dec
                  2013 Dec 31, 2012  1,000       95.00         105.55

    Call     Jan - Dec
                  2013    monthly    1,000      105.00         105.55

    Call     Jan - Dec
                  2014    monthly    2,000      105.00         99.65

    (1)      Futures market reflects WTI forward prices at March 7, 2012.

The current mark to market value of these hedging transactions is
approximately $29 million.


Perpetual is nearing completion of a $34 million capital spending
program for the first quarter of 2012. Capital expenditures were
directed principally toward the advancement of Perpetual’s two key
commodity diversifying plays: horizontal development of the Wilrich in
greater Edson, and exploration and development of heavy oil at

        --  One vertical and two horizontal (2.3 net) wells were drilled at
            Edson, in addition to facility construction to tie-in new
        --  Two vertical and 17 horizontal (19.0 net) wells were drilled
            and tied-in at Mannville, and tie-in operations were completed
            for one well drilled in 2011.

As gas prices reached levels below $3.00 per Mcf in mid-January,
investment in all natural gas projects including the Wilrich program
was suspended and funds will be redirected to the highly profitable
Mannville heavy oil activities.

The Corporation’s Board of Directors has approved a capital spending
budget to remain within funds flow for 2012. Capital activity for the
remainder of the year will be focused on Mannville heavy oil
exploration and development.

Incorporating production additions from these capital expenditures, the
following table shows Perpetual’s estimate of funds flow for 2012 based
on its current hedging portfolio and cost estimates under several
different full year 2012 AECO gas price and WTI oil price assumptions,
and incorporating all non-core property dispositions closed to date in
2012. Perpetual estimates 2012 annual production of 3,600 bbl/d of oil
and NGL, 103 MMcf/d of natural gas, a $28 per bbl differential between
WTI and Western Canadian Select (“WCS”) reference prices, $96 million
in operating costs, $28 million in cash G&A expenses and a 5.5 percent
interest rate on long-term bank debt.

The following table outlines estimated funds flow at various assumed
commodity prices:

    Funds Flow ($millions)       AECOGas Price ($/GJ)

                           $1.75 $2.10 $2.50 $2.75 $3.00

    Edmonton      $80.00     30    32    34    35    36
    oil price
     ($/bbl)      $90.00     33    35    37    38    39

                 $100.00     37    39    40    42    43

                 $110.00     37    39    40    42    43

                 $120.00     37    39    40    42    43

Below is a table that shows sensitivities of Perpetual’s 2012 estimated
funds flow to operational changes and changes in the business

                                           Impact on funds flow per Common

    Funds flow sensitivity          Change Annual                  Monthly
    analysis ($ per Common

    Business environment                                                  

    Natural gas price at     $0.25 per Mcf  0.058                    0.005

    Oil price at WTI         $5.00 per bbl  0.041                    0.003

    Interest rate on bank               1%  0.007                    0.001


    Natural gas production        5 MMcf/d  0.012                    0.001

    Oil and NGL production       100 bbl/d  0.029                    0.002

    Operating costs         $0.10 per Mcfe 0.0266                    0.002

    Cash general and        $0.10 per Mcfe 0.0266                    0.002
    administrative expenses

Forward-Looking Information

Certain information regarding Perpetual in this news release including
management’s assessment of future plans and operations and including
the information contained under the heading “Outlook and Sensitivities”
above may constitute forward-looking statements under applicable
securities laws. The forward looking information includes, without
limitation, statements regarding expected access to capital markets;
forecast production, production capability, operations, funds flows,
and timing thereof; expected future funds flows generated by the gas
storage facility; forecast and realized commodity prices; forecast,
funding and allocation of capital expenditures; anticipated operating
cost sustainability; projected use of funds flow; planned drilling and
development and the results thereof; expected levels of indebtedness
under the credit facility; marketing and transportation; reserve
estimates; and estimated funds flow sensitivity. 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 Perpetual Energy Inc.’s MD&A for the year ended December
31, 2011 and those included in 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). 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 laws.

Non-GAAP Measures

This news release contains financial measures that may not be calculated
in accordance with generally accepted accounting principles (“GAAP”).
Readers are referred to advisories and further discussion on non-GAAP
measures contained in the “Non-GAAP Measures” section of management’s
discussion and analysis.

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 symbol “PMT”, “PMT.DB.C”, “PMT.DB.D” and
“PMT.DB.E”, respectively. Further information with respect to Perpetual
can be found at its website at www.perpetualenergyinc.com .

The Toronto Stock Exchange has neither approved nor disapproved the
information contained herein.


    FINANCIAL AND                                       Year endedDecember 31
    OPERATING                   Three months ended
    HIGHLIGHTS                         December 31

    ($CDN thousands,                                                        %
    except volume and                                                  change
    per Common Share                             %
    amounts)                 2011      2010 change      2011      2010


    Revenue (1) (2)        63,986   111,150   (42)   253,150   417,093   (39)

    Funds flow (2)         15,893    70,509   (77)    76,986   237,470   (68)

           Per Common                                                    (69)
    Share (2) (3)            0.11      0.48   (77)      0.52      1.69

    Cash flow provided                                                   (70)
    by operating
    activities              9,750    80,210   (88)    60,428   199,882

           Per Common                                                    (71)
    Share (2) (3)            0.07      0.54   (87)      0.41      1.42

    Net loss             (38,691)  (28,193)     37  (95,920) (100,719)    (5)

           Per Common                                                    (10)
    Share (basic and
    diluted) (3)           (0.26)    (0.19)     37    (0.65)    (0.72)

    Dividends declared     -         16,273  (100)    28,865    78,628   (63)

           Per Common                                                    (65)
    Share (4)              -           0.11  (100)     0.195      0.56

    Payout ratio (%)                                                       12
    (2)                    -           23.1  (100)      37.2      33.1

    Total assets        1,018,089 1,027,266    (1) 1,018,089 1,027,266    (1)

    Net bank debt                                                        (36)
    outstanding (2) (5)   137,689   214,546   (36)   137,689   214,546

    Senior notes,                                                         100
    measured at
    principal amount      150,000    -         100   150,000    -     

    Convertible                                                             -
    measured at
    principal amount      234,897   234,897      -   234,897   234,897

    Total net debt (2)                                                     16
    (5)                   522,586   449,443     16   522,586   449,443

    Shareholders'                                                        (60)
    equity                 81,558   203,904   (60)    81,558   203,904


           Exploration                                                     21
    and development        38,269    38,158      -   139,214   115,202

           Gas storage        327    11,171   (97)    11,207    57,587   (80)

    Acquisitions, net
    of dispositions       (2,746)  (34,253)   (92)  (33,953)    50,958

           Other               97       332   (71)       588       707   (17)

           Net capital                                                   (48)
    expenditures           35,947    15,408    133   117,056   224,454


    End of year           146,966   148,284    (1)   146,966   148,284    (1)

    Weighted average -                                                      5
    basic                 146,905   147,742    (1)   147,694   140,624

    Diluted               146,905   147,742    (1)   147,694   140,624      5

    March 1, 2012         146,990                    146,990                 



           Average                                                       (10)
    daily natural gas
    (MMcf/d) (6)            126.8     135.9    (7)     130.2     145.1

           Average                                                         63
    daily oil and
    natural gas
    ("NGL") (bbl/d) (6)     2,685     1,535     75     2,027     1,245

           Average                                                        (7)
    daily (MMcfe/d) (6)     142.9     145.1    (2)     142.3     152.6

           Gas over                                                         6
    bitumen deemed
    production (MMcf/d)
    (7)                      27.4      24.2     13      26.4      24.8

           Average                                                        (5)
    daily (actual and
    deemed - MMcfe/d)
    (6) (7)                 170.3     169.3      1     168.7     177.4

                  Per                                                    (10)
    Common Share (cubic

    Share) (3)               1.16      1.15      1      1.14      1.26

    Average prices                                                           

           Natural gas                                                   (10)
    - before
    derivatives ($/Mcf)
    (8)                      3.35      3.87   (13)      3.77      4.17

           Natural gas                                                   (46)
    - including
    derivatives ($/Mcf)
    (8)                      3.31      7.83   (58)      3.82      7.10

           Oil and NGL                                                      8
    - before
    derivatives ($/bbl)
    (8)                     79.16     75.88      4     73.90     68.29

           Oil and NGL                                                     14
    - including
    derivatives ($/bbl)
    (8)                     91.63     75.88     21     78.06     68.29


                                      Three Months Ended
                                             December 31   YearEnded December 31

                                                    %                       %
                                   2011    2010  change    2011    2010  change

    RESERVES (Bcfe)                                                             

    Company interest - proved
    (9) (10)                       235.1   250.4     (6)   235.1   250.4     (6)

    Company interest - proved
    and probable (9) (10)          484.7   487.7     (1)   484.7   487.7     (1)

      Per Common Share
      (Mcfe/Common Share) (12)      3.30    3.29       -    3.30    3.29       -

    Estimated present value
    before tax ($ millions) (11)                                                

      Proved                       431.6   581.8    (26)   431.6   581.8    (26)

      Proved and probable          722.4   928.2    (22)   722.4   928.2    (22)

    LAND (thousands of net

    Total land holdings            3,313   3,421     (3)   3,313   3,421     (3)

    Undeveloped land holdings      1,849   1,905     (3)   1,849   1,905     (3)

    DRILLING (wells

      Gas                          5/5.0   3/2.4  67/108 16/15.5 48/44.3    (65)

      Oil                        10/10.0   3/1.0 233/900 35/34.0 14/11.6 150/193

      Gas storage                    -/-     -/-     -/-   3/3.0   6/6.0    (50)

      Service                        -/-   1/1.0   (100)   1/1.0   1/1.0     -/-

      Oil sands evaluation           -/-     -/-     -/-   7/7.0     -/- 100/100

      Dry                            -/-     -/-     -/-     -/-   1/1.0   (100)

      Total                      15/15.0   7/4.4 114/241 62/60.5 70/63.9     (5)

    Success rate                 100/100 100/100     -/- 100/100   99/98     1/2

    (1)       Revenue includes realized gains and losses on derivatives and
              call option premiums received.

    (2)       This is a non-GAAP measure; please refer to "Significant
              accounting policies and non-GAAP measures" included in
              Management's Discussion and Analysis.

    (3)       Based on weighted average Common Shares outstanding for the

    (4)       Based on Common Shares outstanding at each dividend payment

    (5)       Net bank debt is measured as at the end of the period and
              includes net working capital (deficiency), excluding
              short-term derivative assets and liabilities related to the
              Corporation's hedging activities, the current portion of
              convertible debentures, assets and liabilities held for sale
              and the share based payment liability. Total net debt
              includes senior notes and convertible debentures, measured at
              principal amount.

    (6)       Production amounts are based on the Corporation's interest
              before deduction of royalties.

    (7)       Deemed production describes all gas shut-in or denied
              production pursuant to a decision report, corresponding order
              or general bulletin of the Alberta Energy and Utilities Board
              ("AEUB"), or through correspondence in relation to an AEUB ID
              99-1 application. This deemed production is not actual gas
              sales but represents shut-in gas that is the basis of the gas
              over bitumen financial solution received monthly from the
              Alberta Crown as a reduction of other royalties payable. See
              "Gas over bitumen royalty adjustments" in Management's
              Discussion and Analysis.

    (8)       Perpetual's commodity hedging strategy employs both financial
              forward contracts and physical commodity delivery contracts
              at fixed prices or price collars.

    (9)       As evaluated by McDaniel & Associates Consultants Ltd.
              ("McDaniel") in accordance with National Instrument 51-101.
              See "Reserves" included in this Management's Discussion and

    (10)      Reserves are presented on a company interest basis, including
              working interest and royalty interest volumes but before
              royalty burdens.

    (11)      Discounted at ten percent using McDaniel's forecast pricing.
              Reserves at various other discount rates are located in the
              "Reserves" section of Management's Discussion and Analysis.
              Estimated present value amounts should not be taken to
              represent an estimate of fair market value.

    (12)      Based on Common Shares outstanding at period end.




SOURCE Perpetual Energy Inc.

Source: PR Newswire