Perpetual Energy Inc. Releases Year End 2011 Financial and Operating Results, Updates Asset Divestiture Program, Operational Results and Commodity Price Risk Management
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 results; -- 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 initiatives.
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.
2011 ANNUAL HIGHLIGHTS
-- 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 year. -- 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 year.
-- 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 Edson. -- 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 2012. -- 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 production. -- 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 wells. -- 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 mid-March. -- 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.
COMMODITY PRICE RISK MANAGEMENT
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:
Volumes 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$28.75 per bbl, both for the 2012 calendar year.
In addition, the Corporation has sold oil call options exercisable and
expiring as follows:
Volumes Type of at WTI Strike Price Futures Market Contract Term Call Date (bbl/d) ($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.
2012 OUTLOOK AND SENSITIVITIES
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 production; -- 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, $28 million in cash G&A expenses and a 5.5 percent
interest rate on long-term bank debt.
The following table outlines estimated funds flow at various assumed
Funds Flow ($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 $120.00 37 39 40 42 43
Below is a table that shows sensitivities of Perpetual’s 2012 estimated
funds flow to operational changes and changes in the business
Impact on funds flow per Common Share Funds flow sensitivity Change Annual Monthly analysis ($ per Common Share) Business environment Natural gas price at $0.25 per Mcf 0.058 0.005 AECO Oil price at WTI $5.00 per bbl 0.041 0.003 Interest rate on bank 1% 0.007 0.001 debt Operational 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
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.
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 FINANCIAL 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 - debentures, 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 Capital expenditures Exploration 21 and development 38,269 38,158 - 139,214 115,202 Gas storage 327 11,171 (97) 11,207 57,587 (80) (166) 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 SHARES OUTSTANDING (thousands) 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 OPERATING Production Average (10) daily natural gas (MMcf/d) (6) 126.8 135.9 (7) 130.2 145.1 Average 63 daily oil and natural gas liquids ("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 feet equivalent/d/Common 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
FINANCIAL AND OPERATINGHIGHLIGHTSCONTINUED 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 acres) 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 drilledgross/net) (67)/ 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 (50)/ Gas storage -/- -/- -/- 3/3.0 6/6.0 (50) (100)/ Service -/- 1/1.0 (100) 1/1.0 1/1.0 -/- Oil sands evaluation -/- -/- -/- 7/7.0 -/- 100/100 (100)/ Dry -/- -/- -/- -/- 1/1.0 (100) (11)/ 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 period. (4) Based on Common Shares outstanding at each dividend payment date. (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 Analysis. (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.