2014

Perpetual Energy Inc. confirms repayment of convertible debentures June 30, 2012 and updates commodity price risk management position

CALGARY, July 13, 2012 /PRNewswire/ - (TSX: PMT) - Perpetual Energy Inc. ("Perpetual" or the "Corporation") is pleased to confirm the repayment of Perpetual's $75 million 6.5% convertible debentures (TSX: PMT.DB.C) in cash upon their maturity on June 30, 2012. Debentureholders should have now received the proceeds of the repayment.

The Corporation is also pleased to provide an update on its commodity price risk management positions as discussed below.

COMMODITY PRICE RISK MANAGEMENT

With recent modest strength in natural gas prices with the erosion of the storage surplus caused by extreme hot weather throughout much of North America, Perpetual terminated its 2013 forward sales positions realizing proceeds of $1.0 million. Financial and physical forward natural gas sales arrangements at the AECO trading hub as at July 13, 2012 are now as follows:

Type of
Contract
Term Volumes
at
AECO
(GJ/d)(1)
Price
($/GJ)(1)
Futures
Market
($/GJ)(2)
% of
2012E Gas
Production(3)
Financial - AECO Jul - Dec 2012 45,250 3.72 2.38 33
Financial - AECO Jul - Oct 2012 10,000 2.85 2.20 7
Financial - AECO Jul - Dec 2012 19,000 2.60 2.38 14
Physical - AECO Jul - Dec 2012 25,000 2.59 2.38 18

(1)  Average price calculated using weighted average price for net open sell contracts. NYMEX prices in $US/MMBtu.
(2)  Futures market reflects AECO settled and forward market prices as at July 13, 2012.
(3)  Calculated using 2012 estimated gas production of 136,500 GJ/d including gas over bitumen deemed production.
   

Perpetual also has in place the following costless collar oil sales arrangements, to reduce exposure to fluctuations in the WTI index:

Type of
Contract
  Term Volumes
at WTI
(bbl/d)
Floor Price
($US/bbl)(1)
Ceiling
Price
($US/bbl)(1)
Futures
Market
($US/bbl)(2)
% of
2012E
Production(3)
Collar   Jan - Dec 2012 500 82.00 91.00 86.80 14
Collar   Jan - Dec 2012 500 80.00 89.00 86.80 14
Collar   Jan - Dec 2012 500 85.00 96.75 86.80 14
Collar   Mar - Dec 2012 500 90.00 109.25 86.80 14
Period Total   Jan - Dec 2012 2,000 84.25 96.56 86.80 57
Collar   Jan-Dec 2013 500 95.00 118.15(4) 89.51 14
Collar   Jan-Dec 2013 500 95.00 108.75 89.51 14
Collar   Jan-Dec 2013 500 80.00 89.65 89.51 14
Collar   Jan-Dec 2013 500 82.00 90.25 89.51 14
Period Total   Jan - Dec 2013 2,000 88.00 101.70 89.51 57

(1) Average price calculated using weighted average price for net open contracts.
(2)  Futures market reflects WTI forward prices at July 13, 2012.
(3)  Calculated using 2012 estimated oil and NGL production of 3,500 bbl/d
(4)  If WTI settles above $118.15 in any month Perpetual will receive $100.00 per bbl.
   

The Company has also fixed the WTI to oil price differential (WCS differential) on 900 bbl/d at an average price of $US23.68/bbl for the 2012 calendar year.

In addition, the Corporation has sold oil call options exercisable and expiring as follows:

Type of
Contract
Term Expiry Volumes
at WTI
(bbl/d)
Strike Price
($US WTI)
Futures Market
($US/bbl)(1)
Call Jan - Dec 2013 Dec 31, 2012 1,000   95.00 89.51
Call Jan - Dec 2013 Monthly 2013 1,000 105.00 89.51
Call Jan - Dec 2014 Monthly 2014 2,000 105.00 87.84

(1) Futures market reflects WTI forward prices at February July 13, 2012.
   

The current mark to market value of these hedging transactions is approximately $12 million.

Forward-Looking Information

Certain information regarding Perpetual in this news release including management's assessment of future plans and operations may constitute forward-looking statements under applicable securities laws. The forward-looking information includes, without limitation, future production levels. 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's MD&A and Annual Information Form for the year ended December 31, 2011 and those included in other reports on file with Canadian securities regulatory authorities which may be accessed through the SEDAR website (www.sedar.com and at Perpetual's website www.perpetualenergyinc.com). 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.

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 www.perpetualenergyinc.com .

The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.

SOURCE Perpetual Energy Inc.




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