News Releases

Perpetual Energy Inc. Releases Year End 2012 Financial and Operating Results and Announces West Edson Development Plan

CALGARY, March 11, 2013 /CNW/ - (TSX:PMT) - Perpetual Energy Inc. ("Perpetual" or the "Corporation" or the "Company") is pleased to report fourth quarter and year end 2012 financial and operating results. Detailed results are presented in Perpetual's audited consolidated financial statements and related Management's Discussion and Analysis ("MD&A") which can be obtained through the Corporation's website at and SEDAR at

Perpetual is also pleased to announce that it is enhancing its area development plans in the West Edson area to include the construction of sales gas facilities and a pipeline. Further to this, Perpetual has entered into agreements with Aux Sable Canada and Alliance Pipeline Limited Partnership ("Alliance Canada") that provide access to premium markets in the midwest United States for its natural gas and natural gas liquids ("NGL or liquids") from the West Edson area.


Perpetual focused on four key strategic objectives in 2012:

  • Profitable capital investment in two chosen proven diversifying growth strategies to increase oil and NGL production;
  • Debt reduction;
  • Advancing the assessment and growing the value of other large scope, high impact resource opportunities with risk-managed investment; and
  • Managing downside risks related to commodity price volatility.

Significant progress was made towards these strategic priorities, the results of which are highlighted below.

Corporate Activity

  • In November 2011 Perpetual announced an asset disposition program 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 $74.9 million 6.50% unsecured convertible debentures (the "6.50% Debentures"). Proceeds from dispositions in 2012 totaled $167.2 million, providing additional liquidity while high-grading the Corporation's asset base. The disposed assets included approximately 13.2 MMcf/d of gas production and oil and NGL production of 744 bbl/d.

  • Perpetual repaid its $74.9 million 6.50% Debentures at maturity on June 30, 2012.


  • Total actual and deemed production decreased 12 percent to 147.6 MMcfe/d from 168.4 MMcfe/d in 2011, as lower natural gas production due to dispositions, shut-ins, third party facility downtime and natural declines was partially offset by higher oil and NGL production and higher deemed production related to the full year impact of additional gas over bitumen shut-ins. Total actual production was 120.9 MMcfe/d, down 15 percent from 142.0 MMcfe/d in 2011.

  • Average daily oil and NGL production increased 1,472 bbl/d to 3,448 bbl/d, a 74 percent increase from 2011 levels, driven by the Company's commodity diversification strategy and targeted heavy oil drilling in the Mannville area, and despite the disposition of 744 bbl/d of oil and NGL production from non-core assets.

  • Natural gas production decreased 23 percent to 100.2 MMcf/d as a result of non-core asset dispositions, shut-ins, third party facility downtime and limited capital spending on gas-focused projects, partially offset by the establishment of production in West Edson in the second quarter of 2012.

  • Total production from the greater Edson area increased 15 percent over 2011 to 24.1 MMcfe/d. Volumes are expected to continue to grow as facilities are expanded and wells drilled in the fourth quarter of 2012 are brought online. By the end of first quarter of 2013, production is expected to be approximately 31.2 MMcfe/d.

Commodity Prices

  • The average gas price before derivatives decreased 34 percent to $2.48 per Mcf from $3.77 per Mcf in 2011, in line with a 35 percent decrease in AECO Monthly Index prices. Natural gas prices including derivatives declined to $3.34 per Mcf from $3.82 per Mcf in the prior year due to the impact of lower market prices.

  • The average oil and NGL price before derivatives decreased $9.41 per bbl to $64.26 per bbl primarily as a result of wider Canadian heavy oil price differentials (Western Canadian Select ("WCS") to WTI price differential ("WTI-WCS differential")).


  • Total net debt was reduced 25 percent to $396.6 million on December 31, 2012 from $526.9 million at year-end 2011. Net debt decreased by $130.3 million in 2012 through successful execution of the asset disposition program announced in late 2011. Disposition proceeds, net of acquisitions, of $164.8 million was offset by capital spending that exceeded funds flow to enhance the asset base transformation and commodity diversification strategy. Net bank debt outstanding was $86.6 million on a borrowing base of $130 million as of December 31, 2012.

  • Production-related operating costs decreased six percent to $79.7 million ($1.80 per Mcfe) in 2012 as compared to $85.0 million ($1.64 per Mcfe) in 2011, primarily due to reduced labour costs and dispositions. Decreases were partially offset by increased well suspension costs and higher costs associated with Mannville oil operations. Gas storage business operating costs decreased 59 percent to $2.0 million from $5.0 million in 2011 as a result of the disposition of 90 percent of the Warwick Gas Storage business ("WGS LP") effective April 25, 2012 as well as reduced power and well workover costs.

  • Cash general and administrative ("G&A") expense totaled $27.1 million as compared to $32.3 million for the comparable period in 2011 primarily due to reduced staffing levels, lower consulting fees and reduced information technology costs, offset by lower overhead recoveries due to reduced capital spending in 2012.

  • Royalty expense decreased $7.9 million due to lower natural gas production volumes and lower commodity prices. The average royalty rate on oil, NGL and natural gas revenues before derivatives was 7.4 percent compared to 8.9 percent in 2011. Perpetual's royalty rate has decreased as natural gas prices decreased to lower levels on the price-adjusted sliding scale used for provincial royalty calculations.

  • Funds flow decreased 32 percent to $49.1 million ($0.33 per Common Share) from $72.7 million ($0.49 per Common Share) for 2011. The decrease was caused primarily by lower natural gas revenues, partially offset by higher oil and NGL production, realized gains on derivatives and a decrease in royalties and G&A expenses.

  • The Corporation recorded a net loss of $46.2 million or $0.31 per basic and diluted Common Share in 2012 as compared to a net loss of $100.2 million or $0.68 per basic and diluted Common Share in 2011. The decrease in the net loss was due to lower depletion and depreciation expense combined with increased gains on dispositions, partially offset by an increase in impairment losses related to lower forecast natural gas prices.

Exploration and Development Capital Activity

  • Exploration and development capital spending decreased to $79.7 million from $139.2 million in 2011 as Perpetual focused on its key strategic priorities; balancing investment for oil and NGL growth with overall debt reduction. A total of 44 (40.1 net) wells were drilled with 100 percent success, compared to 62 (60.5 net) wells in 2011.

  • In 2012, Perpetual invested minimal capital for drilling or recompletions in its legacy shallow gas properties, as capital was deployed to the Mannville heavy oil and Edson Wilrich plays to grow heavy oil and NGL production.

  • Conventional heavy oil expenditures of $45.8 million were concentrated on the drilling and completion of 35 (34.3 net) horizontal wells in the Mannville play of which 30 (29.3 net) are producing oil, two (2.0 net) are shut-in, and three (3.0 net) were standing awaiting facilities and start-up operations at year end.

  • Deep basin capital spending totaled $24.9 million, focused on further delineating the potential of the Wilrich play in the greater Edson area and constructing infrastructure to establish production at West Edson. Total capital activity on the Wilrich play consisted of six (4.0 net) wells and construction of a compression facility at West Edson. During the fourth quarter of 2012 and early 2013, three (1.5 net) horizontal wells targeting the Wilrich formation were drilled and completed to more fully delineate the West Edson acreage. Test rates on the wells exceeded the established type curves, ranging from 20 to 26 MMcf/d at flowing pressures higher than estimated initial pipeline flow conditions, with associated NGL of 10 to 27 bbl per MMcf.

  • Perpetual continued to advance evaluation of the Colorado shale shallow dry gas play in eastern Alberta with risk-managed spending in 2012. Vertical recompletions were performed in several zones within the Colorado formation to assess geological, geotechnical and geophysical characteristics as they relate to hydraulic fracture growth and flow parameters. Based on this, and monitoring of competitor activity, an eight-well pilot project is being designed for horizontal development of the Colorado and potentially the Viking formations. The program will aim to confirm well orientation, fracture techniques and play type curves to assess the expected economic returns of this material natural gas resource.

  • Perpetual has advanced pilot projects to test two unique recovery technologies in its Panny and Marten Hills bitumen properties. Approval has been received for Marten Hills and is expected imminently for Panny. Perpetual has entered into a joint venture arrangement on the Marten Hills project which is designed to test conductive heating in a thick Clearwater sand facies. The Panny pilot is designed to test electrical heat in combination with water and potentially solvent injection in a Bluesky sand reservoir. Both reservoirs are saturated with bitumen that is lower viscosity than conventional bitumen reservoirs, and as such, requires less heat to establish flow. Limited capital is required for these projects in 2013.

Warwick Gas Storage

  • On April 25, 2012, Perpetual sold a 90 percent interest in WGS LP for cash proceeds of $80.9 million, recording a gain on sale of $40.6 million.

  • As part of the sale Perpetual retained an option, exercisable within one year of closing, to buy back from the purchaser up to a 30 percent additional ownership interest in WGS LP at the same price as the initial sale plus working capital and other adjustments, less any dividends paid, for a final ownership interest post any exercise of the buy-back option of up to 40 percent ("WGS Call Option").

  • Gas storage revenue decreased to $4.2 million from $14.0 million in 2011 as after the sale WGS LP revenues were no longer accounted for on a consolidated basis. After the sale, Perpetual included dividends of $0.9 million from WGS LP in cash flows from operating activities and funds flow.

  • At the time of the sale, Perpetual entered into a Management Services and Operations Agreement to provide management and operational services to WGS LP for an annual fee, over an initial two-year term.

  • In the fourth quarter of 2012, WGS LP finished drilling and completed two new horizontal wells to increase the working gas capacity of the storage facility from 17 Bcf to 19 Bcf. Application has been made for delta pressuring to further increase the working gas capacity of the facility in 2013.

Acquisitions and Dispositions

  • Proceeds for asset sales in 2012 totaled $167.2 million. Disposition of non-core natural gas and oil properties in the West Central and Eastern districts generated net proceeds of $86.3 million, with the remaining sale proceeds of $80.9 million attributable to the disposition of the Corporation's 90 percent interest in WGS LP. Twenty-three transactions were closed for total gains on dispositions of $49.0 million.

  • Acquisitions of $2.4 million (2011 - $7.7 million) were focused on expanding Perpetual's horizontal drilling inventory in the Wilrich in the Edson area.

  • On December 18, 2012, Perpetual announced the Company had entered into a definitive purchase and sale agreement, along with its partner, to jointly divest its Elmworth Montney assets for gross proceeds of $155 million, $77.5 million net to Perpetual, subject to certain closing adjustments and transaction costs. There is currently no production or cash flow from operations at the Elmworth property. This transaction is expected to close on or prior to March 15, 2013.

Reserves and Resource Estimates

  • As previously disclosed on February 5, 2013, Perpetual added 19.5 MMboe of proved and probable reserves in 2012, excluding production, net dispositions and downward technical revisions related to lower commodity price forecasts. Reserve additions and net positive technical revisions due to performance offset 2012 production of 7.4 MMboe by 265 percent.

  • After net dispositions of 11.3 MMboe, production of 7.4 MMboe and negative revisions due to commodity prices of 6.6 MMboe in 2012, proved and probable reserves decreased just 5.8 MMboe (seven percent) from 80.8 MMboe at year-end 2011 to 75.0 MMboe. Proved reserves also decreased seven percent to 36.3 MMboe at year-end 2012.

  • Including changes in future development capital ("FDC"), Perpetual realized finding and development ("F&D") costs of $13.06 per boe on a proved and probable reserve basis. Since proceeds from dispositions exceeded exploration and development capital spending, Perpetual's realized finding, development and acquisition ("FD&A") costs, including changes in FDC, was ($12.75) per boe on a proved and probable basis.

  • Perpetual's reserve-based net asset value at year-end 2012 was estimated at $1.84 per Common Share discounted at eight percent.

  • Independent contingent resource assessment reports were prepared by McDaniel & Associates Consultants Ltd. "McDaniel" in 2011 and partially updated in the first quarter of 2013, resulting in the assignment of 1.36 billion barrels of discovered bitumen initially in place (best estimate) and 1.88 billion barrels of undiscovered bitumen initially in place (best estimate) on 27,113 acres of Perpetual's oil sands leases, primarily in the Panny Bluesky sandstone and Liege Grosmont and Leduc carbonate reservoirs.

  • Perpetual's best estimate Contingent Resource was estimated at 278.7 MMbbl at year end 2012, up 31 percent from 212.5 MMbbl at December 31, 2011. Additionally, best estimate Prospective Resource increased 12 percent to 467.0 MMbbl (2011 - 416.8MMbbl).


Perpetual is focused on five key strategic priorities for 2013:

  1. Maximize value of Mannville heavy oil;
  2. Position for growth of Edson liquids-rich gas;
  3. Manage downside risk and reduce debt;
  4. Advance and broaden the portfolio of high impact opportunities with risk-managed investment; and
  5. Prepare to maximize value from shallow gas base assets in gas price recovery.

The Corporation's Board of Directors has approved a capital spending plan of up to $75 million which will be highly focused on its commodity diversification strategy. The capital spending plan incorporates a two rig development drilling program for Mannville heavy oil in the first quarter, but allows flexibility to manage spending in the second half of the year by focusing on either Mannville heavy oil or liquids-rich gas at Edson depending on commodity prices.

Mannville heavy oil

Through the first quarter of 2013, 19 (18.7 net) heavy oil wells have been drilled in the Mannville area with an additional 6 to 8 (5.3 to 7.0 net) wells planned prior to spring break up. Depending on commodity prices, up to 12 (11.3 net) additional Mannville heavy oil wells are planned in the second half of 2013, including infill drilling in the Mannville I2I pool to prepare for the potential implementation of an enhanced recovery scheme in this Sparky pool in 2014.

Edson Wilrich liquids-rich gas

First quarter 2013 activity has been focused on completion and tie in of the fourth quarter 2012 drilling program. Perpetual and its partner are continuing to expand the production capability of the West Edson area. Expansion of the West Edson compressor station from its current 10 MMcf/d to 30 MMcf/d of gross capacity (50 percent net to Perpetual) is underway as planned. Construction is in progress on a trunk pipeline system through the West Edson acreage to bring on production from new wells in the first quarter of 2013. Two of the three new wells have commenced production at restricted rates, with the third well scheduled to be tied in prior to the start-up of the expanded compressor station in mid-March.

In early March, Perpetual entered into rich gas premium agreements with Aux Sable Canada and an interconnection agreement with Alliance Canada to allow access to a premium market in the mid-west United States. Further to these arrangements, Perpetual and its partner will enhance the West Edson compressor station with the installation of refrigeration and other related components to produce sales quality gas. In addition, a sales pipeline will be constructed beginning in the second quarter of 2013 to tie-in to the Alliance pipeline system. Start-up of the gas plant and sales pipeline is expected to commence prior to November 1, 2013. These actions are expected to alleviate uncertainty with respect to natural gas processing and NGL transportation and extraction capacity for development of the West Edson reserves, reduce operating costs, improve run times and provide competitive netbacks for NGL.

Depending on commodity prices and West Edson plant and sales gas pipeline construction timelines, Perpetual has plans in place to drill 2 to 6 (1.0 to 3.5 net) wells in the deep basin during the second half of 2013, primarily targeting the Wilrich formation at West Edson.

2013 Dispositions

Perpetual will continue to pursue dispositions in addition to the previously announced divestiture of its Elmworth Montney assets for $77.5 million scheduled to close on or prior to March 15, 2013. Proceeds from any potential divestitures will be utilized to strengthen the balance sheet and to enhance the Corporation's ability to pursue further investment opportunities, depending upon the outlook for commodity prices at that time.

Warwick Gas Storage

Perpetual is in the process of evaluating alternatives for the WGS LP Call Option which will expire on April 25, 2013. The exercise of the WGS LP Call Option is predicated on the impact of recent drilling and plans for delta pressuring that will increase storage capacity, and a view to improving seasonal spreads translating into increased future cash flows from the facility.


The following table reflects Perpetual's projected funds flow for 2013 at various commodity price levels. These sensitivities incorporate monthly settlement of existing derivatives, average daily production of 4,100 bbl/d of oil & NGL, 82.8 MMcf/d of natural gas, operating expense of $86 million, cash G&A expense of $24.0 million and an interest rate on long-term bank debt of 5.4 percent.

2013 Projected Funds Flow (1)(2) ($ millions)     AECO Gas Price ($/GJ)  
    $3.00    $3.25       $3.50    $3.75 $4.00
WCS oil
$55.00 25 32 41 47 55
$65.00 40 47 55 62 70
$75.00 55 62 70 77 85
$85.00 70 77 85 92 100
(1) The current settled and forward average AECO, WTI and WCS differential prices for 2013 as of March 11, 2013 were $3.28 per GJ, $US92.55 per bbl and $US23.23, respectively. $US to $CDN exchange rate assumed at par.
(2)  These are non-GAAP measures; see "Other non-GAAP measures" in this MD&A.

Below is a table that shows sensitivities of Perpetual's 2013 estimated funds flow to operational changes and changes in the business environment:

      Impact on funds flow
Funds flow sensitivity analysis ($ thousands) Change Annual Monthly
Business Environment      
Natural gas price at AECO $0.25 per Mcf 7,560 630
Oil price at WTI $5.00 per bbl 7,213 601
Interest rate on long-term bank debt 1% 372 31
Natural gas production 5 MMcf/d 5,767 481
Oil and NGL production 100 bbl/d 2,170 181
Operating expense $0.10 per Mcfe 3,890 324
Cash G&A expenses $0.10 per Mcfe 3,890 324


Financial and Operating Highlights Three months ended December 31 Year ended December 31
($CDN thousands, except volume and per Share amounts) 2012 2011 % change 2012 2011 % change
Revenue (1) (2) 52,156 62,431 (16) 207,619 251,591 (17)
Funds flow (2) 11,158 11,586 (4) 49,087 72,679 (32)
  Per Common Share (2) (3) 0.08 0.08 - 0.33 0.49 (33)
Cash flow provided by operating activities 17,375 5,902 194 48,599 56,580 (14)
  Per Common Share (2) (3) 0.12 0.04 200 0.33 0.38 (13)
Net loss (52,879) (42,998) 23 (46,178) (100,227) (54)
  Per Common Share (3) (0.36) (0.29) 24 (0.31) (0.68) (54)
Dividends declared - - - - 28,865 (100)
  Per Common Share (4) - - - - 0.195 (100)
Payout ratio (%) (2) - - - - 37.2 (100)
Total assets 721,104 1,016,694 (29) 721,104 1,016,694 (29)
Net bank debt outstanding (2) (5) 86,611 141,996 (39) 86,611 141,996 (39)
Senior notes, measured at principal amount 150,000 150,000 - 150,000 150,000 -
Convertible debentures, measured at principal amount 159,972 234,897 (32) 159,972 234,897 (32)
Total net debt (2) 396,583 526,893 (25) 396,583 526,893 (25)
Total equity 36,062 77,251 (53) 36,062 77,251 (53)
Capital expenditures            
  Exploration and development 21,185 38,269 (45) 79,724 139,214 (43)
  Gas storage - 327 (100) 51 11,207 (100)
  Acquisitions, net of dispositions (6,923) (2,746) 152 (164,763) (33,953) 385
  Other 23 97 (76) 220 588 (63)
  Net capital expenditures 14,285 35,947 (60) (84,814) 117,056 (172)
Common Shares Outstanding (thousands)            
End of year 147,455 146,966 - 147,455 146,966 -
Weighted average 147,184 146,905 - 147,085 147,694 -
March 11, 2013            
  Natural gas (MMcf/d) (6) 88.3 126.8 (30) 100.2 130.2 (23)
  Oil and NGL (bbl/d) (6) 3,536 2,481 43 3,448 1,976 74
  Total (MMcfe/d) (6) 109.5 141.7 (23) 120.9 142.0 (15)
  Gas over bitumen deemed production (MMcf/d) (7) 25.1 27.4 (8) 26.7 26.4 1
  Average daily (actual and deemed - MMcfe/d) (6) (7) 134.6 169.1 (20) 147.6 168.4 (12)
  Per Common Share (cubic feet
    equivalent/d/Common Share) (3) 0.91 1.15 (21) 1.00 1.15 (13)
Average prices            
  Natural gas - before derivatives ($/Mcf) (8) 2.99 3.35 (11) 2.48 3.77 (34)
  Natural gas - including derivatives ($/Mcf) (8) 3.56 3.30 8 3.34 3.82 (13)
  Oil and NGL - before derivatives ($/bbl) (8) 62.02 78.84 (21) 64.26 73.67 (13)
  Oil and NGL - including derivatives ($/bbl) (8) 71.29 92.52 (23) 64.13 78.00 (18)

  Three Months Ended December 31 Year Ended December 31
($CDN thousands, except volume and per Share amounts) 2012 2011 % change 2012 2011 % change
Reserves (Mboe)            
Company interest - proved (9) (10) 36,278 39,175 (7) 36,278 39,175 (7)
Company interest - proved and probable (9) (10) 75,048 80,784 (7) 75,048 80,784 (7)
  Per Common Share (Mboe/Common Share) (12)  0.51 0.55 (7) 0.51 0.55 (7)
Estimated present value before tax ($ millions) (11)            
  Proved 264.0 431.6 (39) 264.0 431.6 (39)
  Proved and probable 493.0 722.4 (32) 493.0 722.4 (32)
Land (thousands of net acres)            
Total land holdings 2,911 3,313 (12) 2,911 3,313 (12)
Undeveloped land holdings  1,590 1,849 (14) 1,590 1,849 (14)
Drilling (wells drilled gross/net)            
  Gas 4/2.5 5/5.0 (20)/(50) 8/5.5 16/15.5 (50)/(65)
  Oil 1/1.0 10/10.0 (90)/(90) 36/34.6 35/34.0 3/2
  Gas storage 2/0.2 -/- 200/20 2/0.2 3/3.0 (33)/(93)
  Service -/- -/-
-/- -/- 1/1.0 (100)/(100)
  Oil sands evaluation -/- -/- -/- -/- 7/7.0 (100)/(100)
  Dry -/- -/- -/- -/- -/- -/-
  Total (excluding gas storage) 5/3.5 15/15.0 (67)/(77) 44/40.1 62/60.5 (29)/(34)
Success rate 100/100 100/100 -/- 100/100 100/100 -/-
(1) Revenue includes realized gains and losses on derivatives and call option premiums received.
(2)      This is a non-GAAP measure; please refer to "non-GAAP measures" included in the MD&A.
(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 the MD&A.
(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 in accordance with National Instrument 51-101. See "Reserves" included in the MD&A.
(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 the MD&A. 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.

Forward-Looking Information

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 "2013 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, 2012 and those included in reports on file with Canadian securities regulatory authorities which may be accessed through the SEDAR website ( and at Perpetual's website 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.

In accordance with NI 51-101, an Mcfe and boe conversion ratio for crude oil and natural gas of 1 bbl: 6 Mcf has been used, which is based on an energy equivalency conversion method primarily applicable at the burner tip and does not necessarily represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

Under NI 51-101, the methodology to be used to calculate F&D and FD&A costs includes incorporating changes in FDC required to bring the proved undeveloped and probable reserves to production. For continuity, Perpetual has presented herein and/or in the MD&A F&D and FD&A costs calculated both excluding and including FDC. Changes in forecast FDC occur annually as a result of development activities, acquisitions and disposition activities, undeveloped reserve revisions and capital cost estimates that reflect the independent evaluator's best estimate of what it will cost to bring the proved and probable undeveloped reserves on production.

Non-GAAP Measures

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 the MD&A.

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.D" and "PMT.DB.E", respectively. Further information with respect to Perpetual can be found at its website at

Conference Call and Webcast

Perpetual will be hosting a conference call and webcast at 9:30 a.m., Mountain Time, Tuesday, March 12, 2013 to review this information. Interested parties are invited to take part in the conference call by dialing one of the following telephone numbers 10 minutes before the start time: Toronto and area - (647) 427-7451; outside Toronto - (888) 231-8192. For a replay of this call please dial: (855) 859-2056, passcode: 93528537 until Tuesday, March 19, 2013.

To participate in the live webcast please visit or The webcast will be archived and the webcast presentation will be posted on Perpetual's website shortly following the presentation. The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.



SOURCE: Perpetual Energy Inc.

Back to news releases