Perpetual Energy Inc. Reports Unaudited Consolidated Earnings and Operating Results for the Second Quarter and Six Months Ended June 30, 2014; Provides Capital Expenditure Guidance for the Second Half of 2014
Aug 7 14
Perpetual Energy Inc. reported unaudited consolidated earnings and operating results for the second quarter and six months ended June 30, 2014. For the quarter, the company's oil and natural gas revenue was CAD 72,348,000 compared to CAD 57,187,000 a year ago. Funds flow was CAD 25,864,000 compared to CAD 17,286,000 a year ago. Funds flow per share was CAD 0.17 compared to CAD 0.12 a year ago. Net earnings was CAD 2,549,000 compared to net loss of CAD 4,566,000 a year ago. Basic and diluted earnings per share was CAD 0.02 compared to loss of CAD 0.03 a year ago. Total net debt was CAD 359,799,000 compared to CAD 360,164,000 a year ago. Capital expenditures - exploration and development was CAD 12,251,000 compared to CAD 9,861,000 a year ago.
For the quarter, the company's average production - natural gas (MMcf/d) was 97.8 compared to 91.9 a year ago. Average production Oil and NGL (bbl/d) was 3,738 compared to 4,384 a year ago. Gas over bitumen deemed production (MMcf/d) was 19.3 compared to 24.1 a year ago. Average daily (actual and deemed - boe/d) was 23,270 compared to 23,725 a year ago.
For the six months, the company's oil and natural gas revenue was CAD 137,102,000 compared to CAD 99,664,000 a year ago. Funds flow was CAD 43,248,000 compared to CAD 26,820,000 a year ago. Funds flow per share was CAD 0.29 compared to CAD 0.18 a year ago. Net loss was CAD 14,775,000 compared to net profit of CAD 28,198,000 a year ago. Basic and diluted loss per share was CAD 0.10 compared to profit of CAD 0.19 a year ago. Capital expenditures - Exploration and development was CAD 43,591,000 compared to CAD 48,543,000 a year ago.
For the six months, the company's average production - Natural gas (MMcf/d) was 95.0 compared to 90.2 a year ago. Average production Oil and NGL was 3,596 compared to 3,937 a year ago. Gas over bitumen deemed production (MMcf/d) was 19.4 compared to 24.5 a year ago. Average daily (actual and deemed - boe/d) was 22,661 compared to 23,063 a year ago.
For the second half, the company expects capital expenditures of 2014 CAD 128 million.
Perpetual Energy Inc. Announces the Closing of its Offering of CAD 125 Million of 8.75% Senior Unsecured Notes Due July 23, 2019
Jul 23 14
Perpetual Energy Inc. announced the closing of its offering of CAD 125 million aggregate principal amount of 8.75% Senior Unsecured Notes due July 23, 2019 at par. The Notes were offered in each Province of Canada on a private placement basis through a syndicate of underwriters led by Scotiabank, BMO Capital Markets and CIBC as joint book runners and including National Bank Financial, TD Securities, First Energy Capital and Peters & Co. The net proceeds from this offering will be used to redeem with cash all of Perpetual's outstanding 7.25% convertible debentures, due to mature on January 31, 2015 for total cash payments of $99.9 million. Perpetual has provided notice for the early redemption on August 25, 2014 of the 7.25% convertible debentures to the Trustee. The additional proceeds of $25 million will be used to repay existing bank indebtedness under Perpetual's credit facility, assist in the future repayment of its 7.00% convertible debentures due to mature on December 31, 2015 and for general corporate purposes.
Perpetual Energy Inc. Confirms Closing of East Edson Joint Venture; Announces Intention to Issue $100 Million of Senior Unsecured Notes
Jul 16 14
Perpetual Energy Inc. announced that it has successfully closed the previously announced East Edson Joint Venture (the East Edson JV). Proceeds to Perpetual include $50 million for the sale of a 50% gross overriding royalty on existing producing assets (the Producing Royalty) and an additional $70 million to fund Wilrich development activities to earn a second royalty (the Drilling Royalty). In combination, in exchange for the total acquisition and funding commitment of $120 million, the Drilling and Producing Royalties entitle the joint venture partner to receive on a priority basis 5.6 MMcf/d of natural gas from the East Edson Property plus oil and associated natural gas liquids (NGL) from July 1, 2014 to December 31, 2022 and declining thereafter at 10% per year until the Drilling Royalty and the Producing Royalty terminate on December 31, 2034. NGL yields are expected to average approximately 23 bbl/MMcf for the duration of the East Edson JV. Upon closing, $100 million of the total proceeds was placed in escrow accounts for the committed development of the East Edson JV properties. Activities are underway to execute close to $70 million in capital projects utilizing the escrowed funds prior to the end of 2014, with the remaining funds from escrow expected to be spent in 2015.
The company also announced that it intends to issue $100 million of 5-year Senior Unsecured Notes (the Notes). The Notes will be direct senior unsecured obligations of Perpetual ranking pari passu with all other present and future unsecured and unsubordinated indebtedness of the Company. The Notes are being offered in each Province of Canada and in the United States on a private placement basis through a syndicate of investment dealers, without the filing of a prospectus or registration statement. Closing is expected to occur on or about July 23, 2014 following a limited marketing process and determination of pricing. The net proceeds from this offering will be used for general corporate purposes and to redeem with cash Perpetual's $100 million 7.25% convertible debentures, due to mature on January 31, 2015. The 7.25% convertible debentures trade on the Toronto Stock Exchange under the symbol PMT.DB.D. Perpetual intends to provide notice for the early redemption of the 7.25% convertible debentures shortly after closing of the Notes offering. This offering not only provides Perpetual with the ability to repay these debentures earlier than their maturity on January 31, 2015, but benefits the Company by reducing exposure of Perpetual's credit capacity to future commodity prices. Moreover, the issuance of the Notes significantly extends the term of approximately one-third of the Company's total debt to provide increased certainty for funding planned capital investment projects which are expected to grow future funds flow. Perpetual's lenders under its credit facility have approved issuance of the Notes, subject to an adjustment to the borrowing base from $120 million to $100 million to account for future interest payment obligations on the Notes. Pro forma the Notes issuance and subsequent repayment of the 7.25% convertible debenture series, Perpetual expects to have net bank debt outstanding of approximately $31 million, as well as $100 million of joint venture cash on hand held in escrow accounts to be drawn exclusively for the development activities Perpetual has committed to execute in 2014 and 2015 in the East Edson JV area. Furthermore, close to 75% of Perpetual's total outstanding debt will have a term extending into 2018 and beyond.