CALGARY, Jan. 15 /CNW/ - Progress Energy Resources Corp., formerly ProEx Energy Ltd., ("Progress" or the "Company") today announced the closing of the business combination between Progress Energy Trust ("Progress") and ProEx Energy Ltd. ("ProEx"). On January 14, 2009, securityholders of both companies voted strongly in favor of the Plan of Arrangement ("Arrangement") announced on November 17, 2008.
"We are pleased that shareholders have given overwhelming support to our announced business combination," said Michael Culbert, President and Chief Executive Officer of Progress. "We believe that our high quality assets, talented staff, low cost structure and prudent financial management provide the right combination to navigate through these challenging times in the equity and commodity markets and will make Progress a core holding for investors in the North American energy sector over the long run."
Toronto Stock Exchange
The Toronto Stock Exchange has conditionally approved the listing of the shares of ProEx issued pursuant to the Arrangement. It is anticipated that, subject to approval of the Toronto Stock Exchange, trading in ProEx's common shares under the new name "Progress Energy Resources Corp." and the trading of the debentures assumed by ProEx from Progress will occur on or about January 21, 2009 and that Progress will trade under the new ticker symbol "PRQ". The trust units of Progress, the exchangeable shares of PEL and the Progress debentures will be delisted at this time as well.
Operations Update
Progress is currently producing over 36,000 barrels of oil equivalent per day. The Company's 2009 capital investment budget is set at between $340 to $360 million but with the current weak commodity environment, the Company has slowed the planned pace of capital investment for the first half of 2009. Progress expects to invest approximately 40 percent of its capital investment budget in the first half of 2009 and maintain flexibility to expand or contract the program in response to the commodity price outlook in the second half of 2009.
Premier Natural Gas Assets
The business combination has created a mid-size, natural gas-weighted, exploration and production company. The Company's large undeveloped land base of over 1.1 million net undeveloped acres is focused in two premier growth regions of the Western Canadian Sedimentary Basin; the Deep Basin of northwest Alberta and the Foothills of northeast British Columbia.
In the Deep Basin, the Company is targeting the multiple, stacked horizons in the Cretaceous and Triassic sections over its 280,000 net undeveloped land base. Progress plans to have two rigs running consistently in 2009 and anticipates drilling approximately 30 to 35 wells in this area. "We have built a large inventory of low-risk drilling opportunities based on our extensive regional geologic mapping of the Deep Basin," said Mr. Culbert. "With over 175 identified drilling locations, we have an inventory of approximately four to five years at the current pace of drilling."
In the Foothills, Progress holds nearly 700,000 net undeveloped acres of land and continues to explore and develop the regionally pervasive Triassic Halfway tight sand which it has pursued commercially since 2001. The Halfway sand has historically been developed vertically and recently the Company has been testing horizontal drilling and various multi-stage fracturing techniques to determine the most economic development plan for the Halfway formation. As well, Progress continues to successfully explore and develop the Mississippian Debolt and the multiple Cretaceous horizons present throughout the Foothills. Progress expects to have four to six rigs running continuously in this region.
Industry activity surrounding the development of the Montney Shales has continued to expand to the northwest and southeast from its initial exploration focus in the Parkland, Dawson and Groundbirch areas in northeast British Columbia. Progress holds approximately 680,000 net undeveloped acres of Montney rights in the identified Montney fairway. Although early in its program, the Company is encouraged by the results from its first four vertical wells and plans to drill an additional four vertical wells and two horizontal wells during the first half of 2009.
Board of Directors and Management of Progress
The Board of Directors of Progress is led by Mr. David Johnson as Executive Chairman and includes Messrs. Donald Archibald, John Brussa, Howard Crone, Michael Culbert, Brian Mclachlan, Gary Perron and Terrence Svarich.
The Progress management group is led by Mr. Michael Culbert, President and Chief Executive Officer and includes 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.
Credit Facility and Financial Information
Progress has secured a $650 million credit facility with a syndicate of banks including Bank of Montreal, The Bank of Nova Scotia, Canadian Imperial Bank of Commerce, National Bank of Canada, Alberta Treasury Branches, Union Bank of California and Societe Generale.
Year-end 2008 financial and operational results are expected to be announced in the last week of February. The historical accounting information contained in Management's Discussion & Analysis ("MD&A) and the Consolidated Financial Statements and Notes to the Consolidated Financial Statements ("Financial Statements") will be that of Progress Energy Trust. Year-end 2008 MD&A and Financial Statements for ProEx Energy will be filed on SEDAR on or about the same time.
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 Company's capital investment plans and the timing thereof; the Company's ability to maintain flexibility in its capital program; undeveloped landholdings; drilling targets, locations, inventory and drilling plans and the results therefrom; and expectations regarding the the timing of the release of future financial results.
The forward-looking statements and information are based on certain key expectations and assumptions made by Progress, 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 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 Progress believes 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 Progress 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. 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 Progress 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 Progress undertakes 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.
%SEDAR: 00020978E