CALGARY, Feb. 6, 2014 /PRNewswire/ - (TSX:PMT) - Perpetual Energy Inc. ("Perpetual", the "Corporation" or the "Company") is providing additional information as follows to provide further clarity with respect to its 2014 sensitivities including commodity price assumptions.
Perpetual's strategic priorities for 2014 are as follows:
- Reduce debt and manage downside risks;
- Grow Edson liquids-rich gas production, reserves, cash flow, inventory and value;
- Maximize value of Mannville heavy oil;
- Maximize cash flow from shallow gas; and
- Advance and broaden portfolio of high impact opportunities with risk-managed investment.
Perpetual is targeting capital spending in 2014 to be fully funded by 2014 funds flow. The Company's Board of Directors has approved a $70 to $80 million capital budget for full calendar year 2014. First quarter spending is on track to be approximately $32 to $34 million. The table below summarizes the capital plans in accordance with Perpetual's 2014 Strategic Priorities.
|2014 Capital Budget|
|($ millions, except as noted)||Q1 2014||# Wells||Q2 - Q4 2014||# Wells|
|West Central Liquids-rich gas||$16 - $18||3 (2.0 net)||$22 - $26||up to 7 (3.5 net)|
|Mannville Heavy Oil||$11||10 (8.7 net)||$12 - $15||up to 13 (9.3 net)|
|Shallow Gas||$5||-||$4 - $5||-|
|Total||$32 - $34||13 (10.7 net)||$38 - $46||20 (12.8 net)|
Perpetual estimates that 2014 funds flow will total $75 to $85 million based on current forward commodity prices at February 4, 2014 (calendar year 2014 average $4.05 per GJ at AECO for natural gas and a WTI oil price of $US 92.97 per barrel) with oil and liquids production averaging close to 3,400 bbl/d and natural gas sales averaging approximately 90 to 95 MMcf/d (96,000 to 103,000 GJ/d, reflecting the enriched heat content of Perpetual's west Edson gas production). The table below describes the sensitivity of Perpetual's 2014 forecasted funds flow to operational changes and changes in the business environment:
|2014 Funds Flow Sensitivity Analysis|
|($ millions, except as noted)||Change||
Estimated Impact on
2014 Funds Flow
|Natural gas price at AECO, excluding hedging||$0.25/Mcf||$9.1|
|Natural gas price at AECO, including current hedges||$0.25/Mcf||$4.4|
|Oil price at WTI, excluding hedging||$US5.00/bbl||$5.3|
|Oil price at WTI, including current hedges||$US5.00/bbl||$2.6|
|Interest rate on bank debt||1%||$0.7|
|Natural gas production||5 MMcf/d||$6.6|
|Oil and NGL production||100 bbl/d||$2.6|
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, anticipated amounts and allocation of capital spending; statements regarding estimated production and timing thereof; prospective drilling, forecast average production; completions and development activities; infrastructure expansion and construction; prospective oil and natural gas liquids production capability; projected realized natural gas prices and funds flow; projected ending 2013 net debt; commodity prices and foreign exchange rates; and oil gas price management. 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 for the year-ended December 31, 2012 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 law.
SOURCE Perpetual Energy Inc.