Progress Announces Third Quarter Results

CALGARY, Nov. 1, 2012 /CNW/ - (TSX: PRQ) - Progress Energy Resources Corp. 
("Progress" or the "Company") announces results for the third quarter of 2012 
(the "Quarter"). Development of Progress' leading land base continued on 
pace during the Quarter with capital investment of $73.7 million, net to 
Progress, or $167.8 million, gross including the North Montney Joint Venture 
("NMJV"). In the Quarter, capital expenditures were prioritized to the NMJV, 
and the Company's proprietary North Montney properties in British Columbia. 
Agreement for Purchase by PETRONAS
On June 27, 2012 Progress entered into an arrangement agreement with PETRONAS 
International Corporation Ltd. and PETRONAS Carigali Canada Ltd. ("PETRONAS 
Canada") for the purchase by PETRONAS Canada of all of Progress' outstanding 
common shares and the purchase by Progress of its outstanding convertible 
unsecured debentures, by way of an arrangement under the Business Corporations 
Act (Alberta). The completion of the arrangement remains subject to the 
satisfaction or waiver of applicable conditions with the sole remaining 
condition being receipt of a notice from the Minister of Industry (the 
"Minister") under the Investment Canada Act that the acquisition of Progress 
by PETRONAS Canada is likely to be of net benefit to Canada. On October 19, 
2012 the Minister advised PETRONAS Canada that the Minister was not satisfied 
that the proposed investment was likely to be of net benefit to Canada. 
PETRONAS Canada has up to 30 days, or longer as mutually agreed to, to make 
any additional representations and submit any further undertakings. PETRONAS 
Canada and Progress have agreed to work together to ensure that the Minister 
has the necessary information to determine that the proposed acquisition of 
Progress is likely to be of net benefit to Canada. On October 27, PETRONAS 
Canada exercised its right under the arrangement agreement to extend the 
"Outside Date" under the agreement to November 30, 2012. 

    --  Generated cash flow of $22.7 million in the Quarter or $0.10
        per share, diluted;
    --  Produced an average of 43,045 barrels of oil equivalent ("boe")
        per day in the Quarter; volumes for the Quarter were impacted
        by the previously announced planned shut-ins and the deferral
        of tie-ins and completions representing approximately 10 to 15
        percent of production;
    --  Drilled a total of 11 Montney horizontal wells (6.3 net) during
        the Quarter;
    --  Drilled a total of 3 Dunvegan horizontal oil wells (2.9 net)
        during the Quarter;
    --  Constructed the 50 million cubic feet ("mmcf") per day Altares
        gas plant, set to start up in November;

North Montney Joint Venture 
Progress, along with its joint venture partner PETRONAS Canada, has begun 
aggressively developing the NMJV properties at Altares, Lily and Kahta. 
Gross capital spending on the NMJV in the Quarter was $107.5 million ($13.4 
net to Progress) comprised principally of drilling and completions and 
facilities expenditures. Eight horizontal Montney wells (4.0 net) were drilled 
in the Quarter, with three horizontals at Altares (two lower, one upper), two 
at Lily (one lower and one upper) and three targeting the lower Montney at 
Kahta. There are currently seven rigs running on the NMJV, with a new 50 mmcf 
per day gas plant set to begin operation early in the fourth quarter at 

As part of the total consideration of $1.07 billion that PETRONAS Canada paid 
to acquire a 50 percent working interest in the Altares, Lily and Kahta 
properties, $802.5 million will be paid in the form of a capital carry over 
the next three to five years. At the end of the Quarter, the remaining 
capital carry balance was approximately $678 million.

Financial Strength
Cash flow for the Quarter was $22.7 million or $0.10 per share, diluted. 
Capital investment was $167.8 million gross ($73.7 million net). As at 
September 30, 2012, the Company had drawn $75 million on its $650 million 
revolving credit facility. Debt-to-total capitalization as at September 30, 
2012 was nine percent.

Progress' average realized natural gas price in the Quarter was $2.27 per 
thousand cubic feet, excluding the impact of the Company's hedging program. 
Royalty rates averaged 7.0 percent in the Quarter as a result of lower natural 
gas prices. Progress expects royalties to average seven percent in 2012 
based on current commodity prices. Operating costs averaged $6.03 per boe in 
the Quarter reflecting the Company's continued focus on operational 
efficiencies and maximization of volumes through existing facilities.

Consolidated Financial Statements and MD&A
Consolidated Financial Statements for the Quarter and Notes to the 
Consolidated Financial Statements and Management's Discussion and Analysis for 
Progress have been filed on SEDAR ( under Progress' profile and 
can also be accessed on the Company's website at

Progress is a Calgary based energy company primarily focused on natural gas 
exploration, development and production in northeast British Columbia and 
northwest Alberta. The common shares of Progress are listed on the Toronto 
Stock Exchange under the symbol PRQ.
                                  Three Months Ended  Nine Months Ended
                                         September 30      September 30
                                     2012        2011     2012     2011

FINANCIAL HIGHLIGHTS                                                   

Income Statement ($ thousands, except per share                        

Petroleum and natural gas revenue  83,131     114,037  267,619  348,492

Cash flow(1)                       22,721      51,563   91,808  169,503
      Per share - diluted            0.10        0.22     0.39     0.74

Cash dividends declared(2)              -      23,395   47,007   69,666
      Per share                         -        0.10     0.20     0.30

Balance Sheet ($ thousands)                                            

Working capital deficiency         45,736    (89,702)   45,736 (89,702)

Bank debt                          75,000           -   75,000        -

Convertible debentures            364,926     353,100  364,926  353,100

Total debt                        485,662     263,398  485,662  263,398

Capital expenditures               73,690     113,759  211,114  300,136

Property dispositions                (42)        (77) (13,291) (35,421)

OPERATIONAL HIGHLIGHTS                                                 

Average Daily Production                                               

Natural gas (mcf/d)               220,606     224,629  228,673  222,407

Crude oil (bbls/d)                  2,308       2,037    2,468    2,064

Natural gas liquids (bbls/d)        3,969       3,462    4,231    3,539

Total daily production (boe/d)     43,045      42,937   44,811   42,671

Average Realized Prices                                                

Natural gas ($/mcf)                  2.27        3.73     2.25     3.83

Crude oil ($/bbl)                   83.41       89.99    85.68    90.85

Natural gas liquids ($/bbl)         50.93       61.27    57.97    65.23

Wells Drilled, Net                    9.2        12.0     27.5     36.5

(1) Represents cash flow from operating activities before changes in
    non-cash working capital.

(2) The dividends declared include distributions and dividends that
    grantees are entitled to on the vesting of the Share Unit Plan, the
    Long Term Incentive Plan and the Performance Unit Incentive Plan.

Advisory Regarding Forward-Looking Statements
This press release and financial highlights table (collectively the "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. In particular, forward looking statements in this press release 
include, but are not limited to, expected timing of commencement of operations 
of the Altares gas plant; anticipated average royalty rates for 2012; and 
statements regarding regulatory approvals and completion of the Arrangement.

The forward-looking statements and information are based on certain key 
expectations and assumptions made by Progress, including, amoung other things, 
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; the sufficiency of budgeted capital 
expenditures in carrying out planned activities; the availability and cost of 
labour and services and future operating costs; and the ability to obtain all 
required regulatory approvals for the transaction, including, but not limited 
regulatory approvals. 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; changes in legislation, including but not limited to tax laws, 
royalties and environmental regulations; risk that timing of commencement of 
operations of the Altares gas plant may be delayed; the risk that the 
transaction may not close when planned or at all or on the terms and 
conditions set forth in the arrangement agreement; and the failure to obtain 
the necessary regulatory approvals required in order to proceed with the 

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 (

Management has included the above summary of assumptions and risks related to 
forward-looking information provided in this press release in order to provide 
securityholders with a more complete perspective on the Company's future 
operations and such information may not be appropriate for other purposes. 
The Company's actual results, performance or achievement could differ 
materially from those expressed in, or implied by, these forward-looking 
statements and, accordingly, no assurance can be given that any of the events 
anticipated by the forward-looking statements will transpire or occur, or if 
any of them do so, what benefits that the Company will derive there from. 
Readers are cautioned that the foregoing lists of factors are not 
exhaustive. These forward-looking statements are made as of the date of this 
press release and the Company disclaims any intent or obligation to update 
publicly any forward-looking statements, whether as a result of new 
information, future events or results or otherwise, other than as 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. 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.

Greg Kist, Vice President, Marketing, Corporate and Government Relations 
Progress Energy Resources Corp. 403-539-1809 (

Kurtis Barrett, Analyst, Investor Relations and Marketing Progress Energy 
Resources Corp. 403-539-1843 (

SOURCE: Progress Energy Resources Corp.

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CO: Progress Energy Resources Corp.
ST: Alberta

-0- Nov/01/2012 23:20 GMT

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