Creates a resource-play focused, natural gas exploration and production company
CALGARY, Nov. 17 /CNW/ - Progress Energy Trust ("Progress Trust") (TSX-PGX.UN) and ProEx Energy Ltd. ("ProEx") (TSX-PXE) today announced that their respective Boards of Directors have unanimously agreed to a strategic combination of the two entities (the "Transaction"). The combination will create a premier natural gas focused, mid-size exploration and production company under the name of Progress ("Progress" or the "Company").
"We believe this is a win-win for two successful companies and their respective securityholders," said Michael Culbert, President and Chief Executive Officer of Progress Trust. "The strategy of the combined company will build upon the outstanding growth prospects of both asset bases and target an annual growth rate of 10 to 15 percent while paying an annual dividend of $0.40 per share, which represents a three percent cash-on-cash yield."
"We are combining two high-quality asset bases into one premier growth-focused company," said David Johnson, President and Chief Executive Officer of ProEx. "At a time when scale has increased importance to future success in our industry, we are leveraging the strengths of the two entities to create even greater value for both sets of securityholders."
Under the terms of the agreement (the "Arrangement Agreement"), Progress Trust unitholders and exchangeable shareholders will receive 0.8125 of a ProEx common share for each Progress Trust unit and each Progress Trust unit issuable pursuant to the exchangeable shares of Progress Trust based on the exchange ratio of the exchangeable shares on the effective date of the Transaction. The Transaction is intended to be tax-deferred for Progress Trust unitholders and exchangeable shareholders for Canadian and U.S. income tax purposes, although it is intended that Progress Trust unitholders will be able to elect to treat the exchange as a taxable event for Canadian income tax purposes.
It is the current intention that, following completion of the Transaction, Progress will adopt a dividend policy of approximately $0.40 per share per annum, payable quarterly, with the first dividend expected to be paid in April to shareholders of record on March 31, 2009. Progress Trust will maintain its current distribution for the months of November and December. Completion of this transaction is subject to receipt of required Progress Trust and ProEx securityholder approvals as well as customary stock exchange, court, regulatory and bank approvals, and is expected to close mid-January 2009, all as described in further detail below.
Key attributes of the merger for ProEx shareholders: - Consolidates working interests in the Foothills of northeast British Columbia with the majority of land controlled 100 percent; - Provides ProEx with exposure to a high quality asset with a large low risk exploration and development drilling inventory in the northwest Alberta Deep Basin; - Ensures that an expanded capital program can be funded internally; - Ensures continuity of senior management and technical personnel expertise; and, - Introduces another element of financial discipline through the payment of a quarterly dividend. Key attributes of the merger for Progress Trust securityholders: - Establishes a clear go-forward strategy in response to the taxation of trusts in 2011; - Continues to pay cash back to securityholders in the form of a tax-effective dividend; - Provides a strong low-risk growth profile through an expanded capital budget; and, - Provides expanded participation in emerging resource-play opportunities.
Strategy
For 2009, Progress' strategy will be to target growth in underlying asset value by growing production and reserves by approximately 10 to 15 percent while fully funding the program internally. In addition, the current intention is that shareholders will receive an annualized dividend of $0.40 per share which will be paid quarterly. The dividend represents a cash-on-cash yield of three percent based on the closing price of ProEx's shares on the Toronto Stock Exchange on Friday, November 14, 2008.
"Our combined size, financial capacity and technical expertise provides additional strength as we compete for opportunities in our operating regions in northeast British Columbia and northwest Alberta," said Mr. Culbert. "We will have an attractive internal growth profile and the scale to capture opportunities while maintaining the financial discipline of paying out a quarterly dividend to our shareholders."
"Rapid advances in drilling and completions technologies have changed the competitive landscape in the Western Canadian Sedimentary Basin and have unlocked the large resource potential of the combined company's asset base," said Mr. Johnson. "Our new company will have the scale of operations, technical know-how, strong capital efficiencies, sound financial management and access to capital markets to expand our existing resource plays and pursue larger scale developments."
The combined Company will have: - An enterprise value of approximately $2.4 billion based on November 14, 2008 closing prices on the Toronto Stock Exchange; - A proved plus probable reserve base of 816 billion cubic feet of natural gas and 15.4 million barrels of liquids, equaling a combined 152 million barrels of oil equivalent as at September 1, 2008; - A 2009 forecasted average fourth quarter production of 41,000 to 42,000 boe per day representing a 10 to 15 percent increase over 2008 combined forecast average fourth quarter production of 36,000 to 37,000 boe per day; - A material natural gas production base in Western Canada of approximately 210 million cubic feet per day; - A substantial drilling inventory of over 500 drilling locations providing four years of drilling at the current pace of growth; - A 2009 capital investment program of $340 to $360 million; - An enviable undeveloped land base of over 1.1 million net acres in northeast British Columbia and northwest Alberta, which includes over 265,000 net undeveloped acres added in 2008 on an investment of $53.8 million; - A large seismic data inventory including over 3,000 square kilometers of 3-D data with plans to shoot a 200 square kilometer program this winter; - A strong management and technical team with a track-record of delivering growth in net asset value for shareholders; - A strong balance sheet with combined total debt (bank debt, working capital and convertible debentures) to trailing 12-month cash flow of 1.5 times as at September 30, 2008; - Tax pool coverage of approximately $1.6 billion as at September 30, 2008; and, - An initial dividend of $0.40 per share per annum, payable quarterly.
Semi-conventional and Unconventional Assets in Four Key Plays
Progress will focus its capital investment and growth opportunities in four key plays: the Halfway tight gas formation in the Foothills; the multi-zone Gold Creek project area in the Deep Basin; Montney shale gas fairway through northwest Alberta and northeast British Columbia; and Progress' conventional, high impact opportunities across its land base.
Halfway Formation - The Halfway formation is a thick, tight sandstone reservoir draped over the crests of underlying subthrusts in the shallow Foothills of northeast British Columbia; - Since 2002, Progress Trust and ProEx have jointly booked nearly 0.5 trillion cubic feet of natural gas in the Halfway formation which has been a cornerstone of each company's top quartile finding and on-stream costs; - Successful Halfway development programs are ongoing at Caribou, Beg North and Bubbles and two new exploration discoveries have recently been made on previously undrilled anticlines in the Caribou area; - In the past four years, Progress Trust and ProEx have drilled approximately 200 Halfway wells in the Foothills with a combined success rate of approximately 90 percent. Initial production rates have averaged 1.0 to 2.0 million cubic feet per day with reserve bookings averaging 2.0 billion cubic feet per well. At average costs of $2.1 million per well to drill, complete and tie-in, the vertical drilling of the Halfway formation continues to generate robust economics; - With 2,400 square kilometers of existing 3D seismic and approximately 700,000 net acres of undeveloped land, Progress will have a large inventory of Halfway exploration opportunities; and, - Progress Trust and ProEx have recently undertaken a program to evaluate the applicability of horizontal drilling and various multi-stage fracture stimulation techniques to further unlock the resource potential of the Halfway formation. Both companies believe the large gas-in-place and tight nature of the reservoir make it an excellent candidate for this evolving technology. Gold Creek Project Area - The Gold Creek area of the northwest Alberta Deep Basin is characterized by up to 14 distinct Cretaceous and Triassic horizons stacked in a highly heterogeneous environment. While each of these individual formations can be unpredictable in nature, the large number of prospective horizons allows for a low-risk drilling program; - Since 2004, Progress Trust has drilled 46 wells in the area with a success rate of 80 percent with average initial production rates of 1.8 million cubic feet per day and reserve bookings averaging 1.7 billion cubic feet per well; - The Gold Creek area benefits from its close proximity to a major service center at Grande Prairie. In addition, Progress Trust has significantly reduced its drilling and completion costs in the area by implementing new technology and rig-less completions. At approximately $2 million to drill, complete and tie-in, the cost of Progress Trust wells at Gold Creek are up to 50 percent lower than other operators in the Deep Basin; - Progress Trust has recently completed the co-development of a new completions technique with a major service company which is being successfully applied to unlock previously bypassed zones; - Based on historical results and the heterogeneity of the individual sands, Progress Trust believes the core Gold Creek project area can be downspaced to three to four wells per section without compromising the expected results per well. With this knowledge, Progress Trust has been aggressively acquiring land through Crown land sales and farm-ins over the past year and has now accumulated a drilling inventory of over 160 locations. Precedent for this type of resource development exists in other areas of the Deep Basin such as Wild River, Sundance and Kakwa; and, - With ownership in the Gold Creek, Wapiti and Karr gas plants as well as seven large operated compressor stations, Progress will be well positioned for growth. Montney Fairway - Over the past year, Progress Trust and ProEx have been monitoring the development of the Montney shale play as well as evaluating the Montney potential on their extensive land holdings in northeast British Columbia and the northwest Alberta Deep Basin; - Over that time, industry activity has now moved within ProEx and Progress Trust's large land positions in the Foothills and horizontal Montney wells have now been drilled or licensed offsetting ProEx and Progress Trust lands at Fort St. John, Pouce Coupe and Gold Creek; - Progress Trust and ProEx have drilled four Montney vertical tests across the combined company's land base. Two of the wells have been successfully tested, one well is currently being completed and one well will be completed early in the new year. Based on drilling results as well as offsetting competitor activity, four distinct horizontal development projects have been identified on existing Progress Trust and ProEx lands where offsetting vertical wells have tested at gas rates from 0.9 to 1.5 million cubic feet per day; - Progress plans on drilling four additional exploratory vertical tests and two horizontal wells into the Montney formation before the end of the first quarter; and, - With approximately 678,000 net undeveloped acres of Montney rights in the identified Montney fairway, Progress will be one of the largest holders of Montney rights and will be well positioned to participate in this exciting unconventional shale gas play. Conventional High Impact Horizons - In addition to the above resource plays, Progress Trust and ProEx currently have an inventory of over 120 conventional exploration and development locations that will provide exposure to high-impact opportunities; - At Copton and Ojay in the Deep Basin, Progress Trust has 20 locations targeting the Cadotte, Falher and Cardium sands; - In the Foothills, Progress Trust and ProEx have 40 locations identified targeting the faulted Mississippian Debolt formation; and, - The Foothills Cretaceous program continues to deliver solid results at Julienne and West Gundy. Progress Trust and ProEx have 45 additional locations identified targeting this shallow Cretaceous sand.
Board of Directors and Management of Progress
Mr. David Johnson, President and Chief Executive Officer of ProEx and Chairman of Progress Trust will serve as Executive Chairman of Progress, and Mr. Michael Culbert will serve as President and Chief Executive Officer of Progress. In addition to Messrs. Johnson and Culbert, the proposed Progress Board of Directors will include Messrs. Donald Archibald, John Brussa, Howard Crone, Brian Mclachlan, Gary Perron and Terrence Svarich.
Mr. Culbert will be joined on the management team by Mr. Art MacNichol, Vice President, Finance and Chief Financial Officer, Mr. Daniel Topolinsky, Senior Vice President, Exploration, Mr. Greg Kist, Vice President, Investor Relations and Marketing, Mr. Gary Miller, Vice President, Operations, Ms. Cindy Rutherford, Vice President, Land, and Mr. Jim Stannard, Vice President, Engineering, each of whom are currently executive officers of Progress Trust.
Mr. John Stewart, Chairman of ProEx, will be stepping down from the Board of ProEx upon closing of the Transaction. Mr. Steven Allaire, Vice President, Finance and Chief Financial Officer of ProEx and Senior Vice President of Progress Trust, has chosen to retire upon the closing of the Transaction. Both Messrs. Stewart and Allaire have been integral to the success of ProEx and its predecessor companies. We thank them for their commitment and advice over the years and wish them the best in their future endeavors.
Progress Staff
A key attribute of the Transaction is the continuity of operations that will be maintained after the combination of the two companies. Unlike other mergers, where two distinctly separate companies merge and capital programs and staff are rationalized, the Transaction is expected to transition smoothly since Progress Trust already provides all of the technical, financial and administrative support to ProEx via a technical services agreement. This lack of integration risk will ensure that capital investment efficiencies and operational performance remain consistent throughout the process and into the new company. In order to ensure long-term continuity of the staff, it is expected that Progress will implement a compensation program consisting of a whole-unit performance based plan and a share option plan which will be presented to securityholders for approval.
Over the past five years, Progress Trust has assembled an experienced technical and financial team that is well respected in the industry. Approximately 80 percent of the professional staff with the organization in 2004 continue to be with the organization today. Progress Trust staff are among the most efficient in the oil and gas business, having successfully managed approximately $2 billion of investment since 2004 at a combined proved plus probable finding and development cost of less than $2.00 per thousand cubic feet equivalent.
Financial Capacity
The current combined borrowing base of the companies is $600 million based on the credit facilities of both Progress Trust and ProEx. In conjunction with the closing of the Transaction, Progress intends to have an expanded credit facility. As at September 30, 2008, Progress Trust had bank debt of approximately $279.9 million and convertible debentures of $124.1 million and ProEx had bank debt of approximately $140.7 million.
As part of the Transaction, the merged Progress will assume all of the obligations of Progress Trust in respect of Progress Trust's outstanding convertible debentures such that, following completion of the Transaction, any conversions of the Progress Trust convertible debentures will be satisfied with shares of the new Progress in lieu of Progress Trust units, based on the exchange ratio set forth above.
Progress expects to have combined tax pool coverage of approximately $1.6 billion providing significant shelter for several years at current natural gas prices.
Progress will continue to use hedging to provide certainty to a portion of its revenue stream. The current hedging position has approximately 27 percent of the combined company's natural gas production hedged to the end of March 31, 2009. Each of Progress Trust and ProEx have also recently completed an AECO basis swap on 5,000 mmbtu per day for the period from April 1, 2009 to October 31, 2009.
Advisors
Peters & Co. Limited acted as financial advisor to the Independent Committee of the Board of Directors of ProEx (the "ProEx Board") with respect to the Transaction. Peters & Co. Limited has verbally advised the ProEx Independent Committee and the ProEx Board that it is of the opinion that the consideration to be paid by ProEx pursuant to the Transaction is fair from a financial point of view to ProEx shareholders. BMO Capital Markets acted as financial advisor to the Independent Committee of the Board of Directors of Progress Trust (the "Progress Trust Board") with respect to the Transaction. BMO Capital Markets has verbally advised the Progress Trust Independent Committee and the Progress Trust Board that it is of the opinion that the consideration to be received by Progress Trust unitholders and Progress Trust exchangeable shareholders pursuant to the Transaction is fair, from a financial point of view, to Progress Trust unitholders and Progress Trust exchangeable shareholders. Additionally, Scotia Waterous Inc. and Cormark Securities Inc. have been retained to act as special advisors to ProEx and CIBC World Markets Inc. and FirstEnergy Capital Corp. have been retained to act as special advisors to Progress Trust in connection with the Transaction.
Macleod Dixon LLP acted as independent legal counsel to the Independent Committee of the ProEx Board. Blake, Cassels & Graydon LLP acted as independent legal counsel to the Independent Committee of the Progress Trust Board. Burnet, Duckworth & Palmer LLP is counsel to Progress Trust and ProEx.
Tristone Capital Inc. has been jointly engaged by ProEx and Progress Trust to provide a formal valuation of the Progress Trust units and exchangeable shares and the ProEx common shares in accordance with certain Canadian securities laws applicable to related party transactions, given the common management between Progress Trust and ProEx.
Copies of the Peters & Co. Limited and BMO Capital Markets fairness opinions and the Tristone Capital Inc. formal valuation will be included in the joint information circular to be sent to securityholders in connection with the meetings to be called to approve the Transaction.
Transaction Details
The ProEx Board, based in part on the recommendation of the Independent Committee of the ProEx Board formed to consider the Transaction, has unanimously approved the Transaction and the Arrangement Agreement, has unanimously determined that the Transaction and the Arrangement Agreement are in the best interests of ProEx and the ProEx shareholders, and has unanimously determined that the Transaction is fair to ProEx shareholders (with interested and non-independent directors abstaining). The Progress Trust Board, based in part on the recommendation of the Independent Committee of the Progress Trust Board formed to consider the Transaction, has unanimously approved the Transaction and approved the Arrangement Agreement, has unanimously determined that the Transaction and the Arrangement Agreement are in the best interests of Progress Trust and the Progress Trust unitholders and exchangeable shareholders, and has unanimously determined that the Transaction is fair to Progress Trust unitholders and exchangeable shareholders and has resolved to unanimously recommend approval of the Transaction by Progress Trust unitholders, exchangeable shareholders and performance unitholders (with interested and non-independent directors abstaining).
The Transaction requires the approval of holders of ProEx shares and holders of Progress Trust units, exchangeable shares and performance units (as described below), along with customary regulatory, stock exchange, Court, bank and other approvals. A joint management information circular and proxy statement of ProEx and Progress Trust outlining the details of the Transaction and certain other matters will be mailed to holders of ProEx shares and holders of Progress Trust units, exchangeable shares and performance units in connection with meetings of holders of ProEx shares and holders of Progress Trust units, exchangeable shares and performance units relating to, among other matters, approval of the Transaction, which meetings are presently expected to be held in mid-January 2009 with the effective date of the Transaction presently anticipated to occur shortly thereafter.
To be implemented, it is anticipated the proposed Transaction will require approval by two-thirds of the votes cast by the holders of Progress Trust units, exchangeable shares (voting through special voting rights) and performance units, and a simple majority of Progress Trust units, exchangeable shares (voting through special voting rights) and performance units, after excluding votes cast in respect of Progress Trust units, exchangeable shares and performance units beneficially owned or over which control or direction is exercised by such persons whose votes may not be included in determining minority approval pursuant to Multilateral Instrument 61-101 - Protection of Minority Securityholders in Special Transactions ("MI 61-101").
In addition, completion of the proposed Transaction is conditional upon approval by a simple majority of the votes cast by ProEx shareholders at the ProEx meeting (after excluding ProEx shares beneficially owned or over which control or direction is exercised by such persons whose votes may not be included in determining minority approval pursuant to MI 61-101) approving: (a) the Arrangement Agreement and the issuance of ProEx shares in connection with the Transaction; (b) and the election of Messrs. Donald F. Archibald, John A. Brussa, Howard J. Crone and Michael R. Culbert, to the ProEx Board of Directors.
Support Agreements
Each of the officers and directors of ProEx, who together beneficially own an aggregate of approximately 10 percent of the outstanding ProEx shares have entered into support agreements pursuant to which they have agreed to vote their ProEx shares in favour of the Transaction and other matters to be considered at the ProEx meeting. Each of the officers and directors of Progress Energy Ltd., who together beneficially own an aggregate of approximately 12 percent of the outstanding Progress Trust units and Progress Trust exchangeable shares and approximately 46 percent of the outstanding Progress Trust performance units have entered into support agreements pursuant to which they have agreed to vote their Progress Trust securities in favour of the Transaction and other matters to be considered at the Progress Trust meeting. In addition, the directors and management teams of ProEx and Progress Trust have agreed to waive any change of control triggers in their employment contracts and to waive any accelerated vesting of incentive and/or compensation structures that may arise as a result of the Transaction.
Each of Progress Trust and ProEx has also agreed that it will not solicit or initiate any discussions concerning the sale of material assets or any other business combination, and has granted the other party a right to match any superior proposals. The parties have agreed to mutual non-completion fees in the amount of $20 million which are payable by Progress Trust or ProEx to the other, as the case may be, in certain circumstances if the Transaction is not completed.
Conference Call
A conference call and webcast will be held for investors, financial analysts, media and other interested persons on Monday, November 17, 2008 at 9:00 a.m. Calgary time (11:00 a.m. EST) to discuss the Transaction. Please call in 10 minutes before the start of the conference call.
Live-Call Audience Dial-In Number: Participant Number 416-644-3421 Participant Number 800-731-5774 Replay Audience Dial-in Number & Codes: Access Number: 416-640-1917 Passcode 21289722 followed by the pound sign Access Number: 877-289-8525 Passcode 21289722 followed by the pound sign Webcast A live audio webcast of the investor call is available via: http://w.on24.com/r.htm?e(equal sign)127562&s(equal sign)1&k(equal sign)C4A1C2D90E6E4124912B1D1DB83A9978 Statistical Summary - unaudited information ------------------------------------------------------------------------- Production Q3 - 2008 ProEx Progress Trust Combined ------------------------------------------------------------------------- Natural Gas (mmcf/d) 62.2 126.3 188.5 ------------------------------------------------------------------------- Liquids (bbls/d) 755 3,739 4,494 ------------------------------------------------------------------------- Total (boe/d) 11,122 24,783 35,905 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Financial - as at Sept. 30, 2008 ProEx Progress Trust Combined ------------------------------------------------------------------------- Market Capitalization ($mm) 770.0 1,354.4 2,124.4 ------------------------------------------------------------------------- Bank Debt ($mm) 140.7 279.9 420.6 ------------------------------------------------------------------------- Working Capital Deficiency ($mm) 19.9 5.0 24.9 ------------------------------------------------------------------------- Convertible Debentures ($mm) - 124.1 124.1 ------------------------------------------------------------------------- Enterprise Value ($mm) 930.6 1,758.4 2,689.0 ------------------------------------------------------------------------- Tax Pool Coverage ($mm) 470.0 1,130.0 1,600.0 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Reserves - P+P as at Sept. 1, 2008 ProEx Progress Trust Combined ------------------------------------------------------------------------- Natural Gas (mmcf) 346,060 469,985 816,045 ------------------------------------------------------------------------- Liquids (mbbls) 3,804 11,638 15,442 ------------------------------------------------------------------------- Total (mmboe) 61.5 90.0 151.5 ------------------------------------------------------------------------- Reserve Life Index using Q3-2008 annualized production (years) 15 10 11.6 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Land - as at Sept. 30, 2008 ProEx Progress Trust Combined ------------------------------------------------------------------------- Net Developed (acres) 119,396 342,235 461,631 ------------------------------------------------------------------------- Net Undeveloped (acres) 490,023 604,232 1,094,255 ------------------------------------------------------------------------- Total (acres) 609,419 946,467 1,555,886 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Securities - as at Sept. 30, 2008 ProEx Progress Trust Combined ------------------------------------------------------------------------- Basic (millions) 57.9 112.4 149.2 ------------------------------------------------------------------------- Diluted (millions) 59.5 113.7 151.9 ------------------------------------------------------------------------- Forecast Guidance for 2009 Q4 2008 combined forecast production: 36,000 to 37,000 boe/d Q4 2009 combined forecast production: 41,000 to 42,000 boe/d 2009 combined forecast capital investment: $340 to $360 million
Advisory Regarding Forward-Looking Statements
This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. More particularly and without limitation, this press release contains forward looking statements and information concerning the combined company and ProEx's and Progress Trust's production; reserves,resources and gas in place; undeveloped land holdings; reserve life index; product mix; business strategy; future development and growth prospects, profile targets and rates; prospects; asset base; tax pools; drilling locations and inventory, down-spacing potential; exploration risk; access to capital; anticipated benefits from the Transaction; future cash flow, value, debt levels and debt to cash flow; capital investment and expenditure programs and the funding thereof; anticipated cash-on-cash yield; net asset value; expanded credit facility; and statements with respect to levels of distributions and dividends to be paid to securityholders, dividend policy, and the timing of payment of such distributions and dividends.
The forward-looking statements and information are based on certain key expectations and assumptions made by ProEx and Progress Trust, including expectations and assumptions concerning prevailing commodity prices and exchange rates, applicable royalty rates and tax laws; future well production rates; reserve and resource volumes; the timing of receipt of regulatory and securityholder approvals, the performance of existing wells; the success obtained in drilling new wells; and the sufficiency of budgeted capital expenditures in carrying out planned activities; and the availability and cost of labour and services. Although ProEx and Progress Trust believe that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward looking statements and information because ProEx and Progress Trust can give no assurance that they will prove to be correct.
Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the oil and gas industry in general such as operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve and resource estimates; the uncertainty of estimates and projections relating to reserves, resources, production, costs and expenses; health, safety and environmental risks; commodity price and exchange rate fluctuations; marketing and transportation; loss of markets; environmental risks; competition; incorrect assessment of the value of acquisitions; failure to realize the anticipated benefits of acquisitions; ability to access sufficient capital from internal and external sources; failure to obtain required regulatory and other approvals; and changes in legislation, including but not limited to tax laws, royalties and environmental regulations. There are risks also inherent in the nature of the proposed Transaction, including incorrect assessments of the values of the other entity; and failure to obtain the required securityholder, court, regulatory and other third party approvals. This press release also contains forward-looking statements and information concerning the anticipated completion of the proposed Transaction and the anticipated timing for completion of the Transaction. ProEx and Progress Trust have provided these anticipated times in reliance on certain assumptions that they believe are reasonable at this time, including assumptions as to the time required to prepare meeting materials for mailing, the timing of receipt of the necessary regulatory, court and stock exchange approvals and the time necessary to satisfy the conditions to the closing of the Transaction. These dates may change for a number of reasons, including unforeseen delays in preparing meeting materials, inability to secure necessary regulatory or court approvals in the time assumed or the need for additional time to satisfy the conditions to the completion of the Transaction. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release concerning these times.
Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the operations or financial results of ProEx, Progress Trust, or the combined company are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). The forward-looking statements and information contained in this press release are made as of the date hereof and ProEx and Progress Trust undertake no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Barrels of Oil Equivalent
"Boe" means barrel of oil equivalent on the basis of 1 boe to 6,000 cubic feet of natural gas. Boe's may be misleading, particularly if used in isolation. A boe conversion ratio of 1 boe for 6,000 cubic feet of natural gas is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Original Gas in Place
Original gas in place includes both discovered and undiscovered resources, and there is no certainty that any portion of the undiscovered resources will be discovered and, if discovered, that any volumes will be economically viable or technically feasible to recover or produce. Original gas in place also includes volumes that have already been produced from such accumulations. Readers should not unduly rely upon estimates of original gas in place in terms of assessing the combined company's reserves or recoverable resources.
%SEDAR: 00020979E