Business
Peyto Energy Trust private placement February 15, 2006
Peyto Energy Trust private placement February 15, 2006.
About this update from Peyto Exploration & Development Corp.
[{"type":"text","content":"\n\n\n\n\nSYMBOL: PEY.UN - TSX\n\nCALGARY, March 14 /CNW/ - Peyto Energy Trust (Peyto) was first contacted\nyesterday by the Financial Post and later in the day was contacted by the\nToronto Stock Exchange (TSX) with respect to a private placement made to\nemployees, including officers, and key consultants on February 15, 2006. The\nprivate placement consisted of 312,370 units at a price of $22.18/unit. Peyto\nis also aware of an article contained in today's Financial Post titled \"TSX\nPROBES PEYTO ENERGY TRUST BONUS PAYOUT\". Yesterday, the TSX indicated they\nwere concerned about the timing of this private placement. The concerns did\nnot relate to the \"bonus payout\" which is suggested in the title of today's\narticle in the Financial Post.\nThe TSX concerns relate to the fact that the price for the private\nplacement was calculated immediately prior to the release of the 2005 year end\nreserve report and Peyto's fifth distribution increase. The private placement\nprice was calculated based on a five day weighted average market price which\nended the day of the news release. We understand the TSX's concern with\nrespect to the timing of the private placement and are committed to resolving\nthis situation in a timely manner.\nPeyto's reserve value performance based compensation (RVPBC) is quite\nunique in the energy business. This form of variable compensation is\ncalculated by isolating the proved developed producing (PDP) value created\nduring the year, independent of changes in commodity prices, and adjusts for\nchanges in debt and equity. The proved developed producing reserve category is\nchosen because it is the most certain reserve category. Peyto believes that\nthe PDP reserves are essentially the finished product and paying for growth in\nother categories may not ultimately benefit unitholders. This compensation is\npaid out in cash once the year end reserve report is complete.\nThe private placement provides a mechanism for employees to voluntarily\nre-invest a portion of their cash from the RVPBC. The calculation of the RVPBC\nhas nothing to do with the price of the private placement.\nPeyto prides itself on a high level of accountability, transparency and\nfairness to current and prospective unitholders. Peyto is known for its long\nreserve life, 18.9 years and its low operating costs. If you are interested in\nl...