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Veresen Announces 2012 Third Quarter Results and Affirms 2012 Guidance

Veresen Announces 2012 Third Quarter Results and Affirms 2012 Guidance 
/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION 
IN THE UNITED STATES./ 
CALGARY, Nov. 6, 2012 /CNW/ - Veresen Inc. ("Veresen" or the "Company") (TSX: 
VSN) announced today its financial and operating results for the three months 
ended September 30, 2012. 
Third quarter highlights include: 


    --  Financial performance from the Hythe/Steeprock complex exceeded
        expectations as a result of incremental processing volumes,
        generating $17.3 million in EBITDA(1) during the quarter.
        Veresen completed all remaining activities associated with the
        transition of operatorship of the Hythe/Steeprock complex from
        Encana.
    --  Veresen's Power business recorded EBITDA(1) of $21.5 million
        for the quarter, reflecting the continued positive
        contributions from the recently commissioned York Energy Centre
        and Grand Valley facilities.
    --  Weak market conditions surrounding the U.S. natural gas liquids
        environment persisted into the third quarter of 2012, adversely
        impacting earnings and cash flow from the Aux Sable midstream
        business.
    --  Net income attributable to Common Shares of $11.4 million or
        $0.06 per Common Share.
    --  Distributable cash of $61.4 million or $0.31 per Common Share.
    --  Cash from operating activities of $48.5 million.
    --  Veresen affirms the midpoint of its distributable cash guidance
        of $1.08 per Common Share which was previously issued on August
        8, 2012, reflecting the growing portion of the Company's
        distributable cash derived from its contracted, fee-for-service
        assets.
    --  On October 10, 2012, Alliance announced a proposed new services
        framework that will underpin the recontracting of the pipeline
        beyond December 2015, when the initial 15 year term of the
        original transportation contracts end. The proposed new
        services build on Alliance's advantage in providing low-cost,
        predictable transportation for high energy natural gas,
        together with providing producers with competitive direct
        access to premium U.S. markets for their natural gas and NGLs.
    --  On October 24, 2012, Veresen announced that Stephen White,
        President and Chief Executive Officer has decided to retire.
        The appointment of Mr. White's replacement, Don Althoff, will
        become effective November 8, 2012. Mr. Althoff is a senior
        business executive with a proven track record of delivering
        results across a range of energy businesses, including within
        BP PLC and Amoco Corporation. He brings to Veresen extensive
        operational expertise and his leadership will be instrumental
        in the Company's future growth.

"Veresen's contracted assets, primarily comprised of our independent midstream 
business, power business and cornerstone pipeline assets support the stability 
of our dividend," commented Stephen White, President and Chief Executive 
Officer. "Consistent with our strategy, we continue to grow the portion of our 
distributable cash generated from our strong, stable, fee-for-service assets, 
and effectively reduce our commodity price exposure from Aux Sable's midstream 
business."

FINANCIAL HIGHLIGHTS
                                                     
                               Three months ended   Nine months ended
                                     September 30        September 30

($ Millions, except per Common   2012        2011     2012       2011
Share amounts)

Net income (loss) before tax
and non-controlling interest                                
     

  Pipeline                       22.0        23.8     66.2       69.5

  Midstream                      21.9        23.6     56.4       57.5

  Power                           1.6      (11.7)    (1.7)     (14.8)

  Veresen - Corporate          (23.1)      (14.7)   (66.5)     (46.1)
                                 22.4        21.0     54.4       66.1

Tax expense                     (8.8)       (9.9)   (21.9)     (27.4)

Net (income) loss attributable
to non-controlling interest         -           -    (0.1)           -

Net income                       13.6        11.1     32.4       38.7

Preferred Share dividends       (2.2)           -    (5.5)          -

Net income attributable to       11.4        11.1     26.9       38.7
Common Shares

  Per Common Share  ($)          0.06        0.07     0.14       0.24

For the third quarter of 2012, Veresen generated net income attributable to 
Common Shares of $11.4 million or $0.06 per Common Share compared to $11.1 
million or $0.07 per Common Share for the same period last year.

Excluding the effect of unrealized fair value losses related to a 20-year 
interest rate hedge for the York Energy Centre, net income attributable to 
Common Shares was $11.8 million or $0.06 per Common Share for the third 
quarter compared to $23.2 million or $0.14 per Common Share for the same 
period in 2011. The decrease in net income primarily reflects reduced NGL 
fractionation margins realized from the Aux Sable midstream business. Third 
quarter earnings reflect a $2.0 million increase in development costs. 
primarily to advance the Jordan Cove Energy Project, a proposed liquefied 
natural gas (LNG) facility near Coos Bay, Oregon. The decrease in per Common 
Share earnings also reflects the impact of additional Common Shares issued, 
primarily to fund the Hythe/Steeprock acquisition.

Third quarter earnings from Veresen's pipeline business were consistent with 
expectations.

The Hythe/Steeprock complex, Veresen's independent midstream business, 
generated $17.3 million in EBITDA(1), and is primarily comprised of fee 
commitments provided for under a long-term, take-or-pay processing agreement 
but also includes margins generated from incremental third-party processing 
volumes. Net income before tax for the third quarter of 2012 was $8.0 million 
before corporate financing costs, which are classified in the corporate 
segment of Veresen's business.

____________________________________
(1) This is not a standard measure under GAAP and may not be comparable
to similar measures used by other entities. See the section entitled
"Non-GAAP Financial Measures" contained in Veresen's September 30, 2012
Management's Discussion & Analysis.

Aux Sable generated $13.9 million of equity income in the third quarter, 
representing a $9.7 million decrease compared to the same period last year. 
NGL market conditions continued to put downward pressure on fractionation 
margins as the industry works through high-inventory, infrastructure 
bottlenecks and the lagging impact of petrochemical plant maintenance 
turnarounds in the second quarter. With the strong preference for ethane and 
propane feedstocks and increased capability to use these advantaged 
feedstocks, Veresen believes NGL fractionation margins have stabilized and are 
forecast to improve somewhat in the fourth quarter.

Third quarter 2012 EBITDA from Veresen's Power business, as determined on a 
proportionately consolidated basis, was $21.5 million, a $4.7 million increase 
compared to the same period last year. Versen's gas-fired and district energy 
systems generated $6.1 million of the increase, primarily due to a $5.8 
million contribution from the York Energy Centre. Net income before tax and 
non-controlling interest from the Power business was $1.6 million for the 
third quarter of 2012, compared to a net loss of $11.7 million for the same 
period last year. Excluding the effect of the fair value loss related to York 
Energy's interest rate hedges, net income before tax and non-controlling 
interest was $2.1 million for the third quarter, a $2.3 million decrease 
compared to the same period last year.

Corporate expenses before taxes in the third quarter were $23.1 million, an 
$8.4 million increase compared to the same period last year. The increase 
reflects higher corporate administrative and interest costs, primarily 
associated with building Veresen's independent midstream business underpinned 
by the Hythe/Steeprock acquisition, and higher project development spending 
related to the Jordan Cove Energy Project. Administrative costs include $1.3 
million of non-recurring expenses which relate to the integration of 
Hythe/Steeprock operations.

Distributable Cash
                                                          
                               Three months ended Nine months ended
                                     September 30      September 30

($ Millions, except per Common   2012        2011   2012       2011
Share amounts)

Pipeline                         37.0        37.3  110.3      113.6

Midstream                        33.7        23.8   88.0       59.6

Power                            13.3        10.5   23.1       24.4

Veresen - Corporate            (17.0)      (12.4) (48.8)     (37.5)

Taxes                           (3.4)       (4.8) (12.2)     (20.3)

Preferred Share dividends       (2.2)           -  (5.5)          -

Distributable Cash ((1))         61.4        54.4  154.9      139.8
       Per Common Share ($)      0.31        0.33   0.80       0.86

Cash from Operating Activities   48.5        54.5  114.8      131.5

(1) See the reconciliation of distributable cash to cash from operating
    activities in the Non-GAAP Financial Measures section in the tables
    attached to this news release.

For the third quarter of 2012, Veresen generated distributable cash of $61.4 
million compared to $54.4 million for the same period last year. The increase 
reflects a $17.3 million contribution from the Hythe/Steeprock complex, and an 
aggregate $4.8 million contribution from the recently commissioned York Energy 
Centre and Grand Valley power facilities. These increases were partially 
offset by a $7.4 million decrease in distributions from Aux Sable driven by 
lower fractionation margins, higher corporate and interest costs associated 
with the Company's growth initiatives, and dividends on the Company's 
Preferred Shares, issued in February 2012.

On a per Common Share basis, distributable cash was $0.31, a $0.02 decrease 
compared to the same period last year. In addition to the variances described 
above, distributable cash per Common Share decreased as a result of Common 
Shares issued over the past 12 months to finance Veresen's growth initiatives.

For the third quarter of 2012, Veresen generated $48.5 million of cash from 
operating activities compared to $54.5 million for the same period last year. 
The decrease reflects changes in non-cash operating working capital in 
Veresen's Power business and higher corporate administrative and interest 
costs, partially offset by increased cash flows from the Company's midstream 
business.

OPERATING HIGHLIGHTS

Pipeline

Alliance's transportation deliveries for the third quarter of 2012 averaged 
1.448 bcf/d compared to 1.495 bcf/d for the same period last year. Third 
quarter AOS volumes shipped on the Alliance pipeline were impacted by 
requirements for Alliance's fall system outage.

On October 1, 2012, the Alliance system temporarily shut down to accommodate 
the relocation of a short section of the mainline in northwestern Alberta. 
Recent commercial development in the area resulted in a need to re-route the 
affected segment of the mainline. The duration of the outage was approximately 
four days while the new segment of pipeline was successfully connected, tested 
and put into operation. Firm service on the pipeline was impacted during this 
period and AOS was impacted in the days leading up to and after the outage. 
Alliance expects to recover all direct and indirect costs associated with this 
project through its tolls.

On October 10, 2012, Alliance announced a proposed new services framework that 
will underpin the recontracting of the pipeline beyond December 2015, when the 
initial 15 year term of the original transportation contracts end. The 
proposed new services build on Alliance's advantage in providing low cost, 
predictable transportation for high energy natural gas. Prospective shippers 
have been offered increased optionality through the introduction of a 
segmented service structure in Canada with two receipt zones, the creation of 
a new Canadian trading pool that would allow shippers to sell their natural 
gas out of the receipt zones, and a transmission zone to the U.S. border. 
Alliance further proposes to offer shippers fixed or index-based tolls and 
varying contract lengths. Alliance intends to continue to offer a full path 
service from Canadian receipt points to Chicago. Alliance is consulting with 
existing and prospective shippers regarding the new services framework and an 
open season is planned for 2013.

On September 20, 2012, Alliance received regulatory approval to construct and 
operate the 127-kilometre (79-mile) Tioga Lateral pipeline. In October 2012, 
having completed all precedent agreement conditions, Alliance executed a firm 
transportation agreement with Hess Corporation, the anchor shipper for the new 
pipeline. The pipeline is expected to be placed into service by summer 2013.

AEGS continues to operate reliably and transported toll volumes of 285.7 
mbbls/d for the third quarter, slightly lower than the 287.5 mbbls/d for the 
same period last year.

Midstream

During the third quarter of 2012, fee volumes at the Hythe/Steeprock complex 
averaged 397 mmcf/d, comprised of the minimum volume commitment under a 
long-term, take-or-pay processing agreement, and 23 mmcf/d of natural gas from 
other producers. Veresen continues to engage in discussions with producers in 
the prolific Montney shale gas region for the provision of midstream services 
using the balance of capacity of the complex.

For the three month period ended September 30, 2012, Aux Sable processed 98.1% 
of the natural gas delivered by Alliance, which compares favourably to 97.5% 
for the same period last year. Aux Sable sold 68.4 mbbls/d of NGLs during the 
third quarter of 2012 compared to 68.1 mbbls/d for the same period last year. 
Average ethane volumes decreased to 29.7 mbbls/d for the third quarter of 2012 
from 36.7 mbbls/d for the same period last year, as uneconomic margins for 
periods in the third quarter resulted in reinjection. Propane plus sales 
volumes were 38.7 mmbls/d for the third quarter of 2012, up from 31.4 mbbls/d 
for the same period last year due to increased production from the Bakken area 
in North Dakota.

Power

Operational performance from Veresen's gas-fired and district energy systems 
generally met expectations during the quarter. Veresen's Ontario gas-fired 
facilities performed particularly well in response to robust energy demand 
experienced through the summer months. With respect to Veresen's renewable 
power facilities, no significant operational issues were experienced during 
the third quarter; however, power production from Glen Park and Veresen's 
waste heat facilities were negatively impacted by reduced water flows and host 
compressor unit maintenance, respectively.

Business Development

Veresen continues to evaluate options for exporting LNG from Coos Bay, Oregon 
through the development of the Jordan Cove Energy Project. Veresen is engaged 
in discussions with potential strategic partners to secure long-term 
arrangements to produce LNG for Asian customers. This strategic project is 
advancing through the regulatory process with the Federal Energy Regulatory 
Commission. Veresen recently exercised its options to acquire the remaining 
land in the Coos Bay area to site the LNG terminal project.

Veresen is also focused on a number of power-related initiatives which 
complement the Company's existing assets. These activities are primarily 
focused on gas-fired generation and renewable power generation opportunities.

2012 GUIDANCE

As the year progresses, Veresen is able to narrow its guidance range. For 
2012, Veresen expectsdistributable cash to be in the range of $1.03 to $1.12 
per Common Share. The midpoint of $1.08 per Common Share is unchanged from 
previous guidance issued August 8, 2012, reflecting the growing portion of 
distributable cash derived from Veresen's contracted asset base. Further 
details regarding Veresen's 2012 guidance can be found in the "Investor 
Information" section of Veresen's web site - www.vereseninc.com.

Conference Call and Webcast

A conference call and webcast to discuss the results will be held on November 
6, 2012 at 2:30 pm MT (4:30 pm ET).

Dial-in: 1 (888) 231-8191 or 1 (647) 427-7450
Conference ID: 46717316

The link to the conference call webcast is available on Veresen's website 
under Investor Information, Presentations and Webcasts.

A replay of the call will be available from 4:30 pm MT (6:30 pm ET) on 
November 6, 2012 by dialing 1-855-859-2056 and 1-416-849-0833. The passcode is 
46717316, followed by the pound sign. The replay will expire at midnight (ET) 
on November 13, 2012.

About Veresen Inc.

Veresen is a publicly-traded dividend paying corporation based in Calgary, 
Alberta, that owns and operates energy infrastructure assets across North 
America. Veresen is engaged in three principal businesses: a pipeline 
transportation business comprised of interests in two pipeline systems, the 
Alliance Pipeline and the Alberta Ethane Gathering System; a midstream 
business which includes ownership interests in a world-class natural gas 
liquids extraction facility near Chicago, the Hythe/Steeprock complex, and 
other natural gas and NGL processing energy infrastructure; and a power 
business with renewable and gas-fired facilities and development projects in 
Canada and the United States, and district energy systems in Ontario and 
Prince Edward Island. Veresen is also actively developing a number of 
greenfield projects. In the normal course of its business, Veresen regularly 
evaluates and pursues acquisition and development opportunities.

Veresen's common shares, Series A Preferred Shares and 5.75% convertible 
unsecured subordinated debentures, Series C due July 31, 2017 are listed on 
the Toronto Stock Exchange under the symbols "VSN", "VSN.PR.A" and VSN.DB.C", 
respectively. For further information, please visit www.vereseninc.com.

Certain information contained herein relating to, but not limited to, Veresen 
and its businesses constitutes forward-looking information under applicable 
securities laws. All statements, other than statements of historical fact, 
which address activities, events or developments that Veresen expects or 
anticipates may or will occur in the future, are forward-looking 
information. Forward-looking information typically contains statements with 
words such as "may", "estimate", "anticipate", "believe", "expect", "plan", 
"intend", "target", "project", "forecast" or similar words suggesting future 
outcomes or outlook. Forward-looking statements in this news release 
include, but are not limited to, statements with respect to: NGL fractionation 
margins in the fourth quarter of 2012; the recovery of costs associated with 
the relocation of a portion of the Alliance Pipeline; the in-service date of 
the Tioga Lateral Pipeline; the ability of Alliance to successfully implement 
its new services framework; the Company's ability to realize its growth 
objectives; and the ability of each of its businesses to generate 
distributable cash in 2012. The risks and uncertainties that may affect the 
operations, performance, development and results of Veresen's businesses 
include, but are not limited to, the following factors: Veresen's ability to 
successfully integrate the operations of the Hythe/Steeprock complex; the 
ability of Veresen to successfully implement its strategic initiatives and 
achieve expected benefits; levels of oil and gas exploration and development 
activity; the status, credit risk and continued existence of contracted 
customers; the availability and price of capital; the availability and price 
of energy commodities; the availability of construction services and 
materials; fluctuations in foreign exchange and interest rates; Veresen's 
ability to successfully obtain regulatory approvals; changes in tax, 
regulatory, environmental, and other laws and regulations; competitive factors 
in the pipeline, midstream and power industries; operational breakdowns, 
failures, or other disruptions; and the prevailing economic conditions in 
North America. Additional information on these and other risks, 
uncertainties and factors that could affect Veresen's operations or financial 
results are included in its filings with the securities commissions or similar 
authorities in each of the provinces of Canada, as may be updated from time to 
time. Readers are also cautioned that the foregoing list of factors and 
risks is not exhaustive. The impact of any one risk, uncertainty or factor 
on a particular forward-looking statement is not determinable with certainty 
as these factors are independent and management's future course of action 
would depend on its assessment of all information at that time. Although 
Veresen believes that the expectations conveyed by the forward-looking 
information are reasonable based on information available on the date of 
preparation, no assurances can be given as to future results, levels of 
activity and achievements. Undue reliance should not be placed on the 
information contained herein, as actual result achieved will vary from the 
information provided herein and the variations may be material. Veresen 
makes no representation that actual results achieved will be the same in whole 
or in part as those set out in the forward-looking information. Furthermore, 
the forward-looking statements contained herein are made as of the date 
hereof, and Veresen does not undertake any obligation to update publicly or to 
revise any forward-looking information, whether as a result of new 
information, future events or otherwise. Any forward-looking information 
contained herein is expressly qualified by this cautionary statement.

Certain financial information contained in this news release may not be 
standard measures under Generally Accepted Accounting Principles ("GAAP") in 
the United States and may not be comparable to similar measures presented by 
other entities. These measures are considered to be important measures used 
by the investment community and should be used to supplement other performance 
measures prepared in accordance with GAAP in the United States. For 
further information on non-GAAP financial measures used by Veresen see 
Management's Discussion and Analysis, in particular, the section entitled 
"Non-GAAP Financial Measures" contained in the annual Management Discussion 
and Analysis, filed byVeresen with Canadian securities regulators.

Veresen Inc.                                                           
                                                                       

Consolidated Statement of Financial Position                           
                                                                       
                                             September 30, December 31,

 (Canadian $ Millions; unaudited)                     2012         2011
                                                                       

Assets                                                                 

Current assets                                                         

  Cash and short-term investments                     39.3         21.9

  Restricted cash                                      5.6        354.6

  Distributions receivable                            34.9         43.4

  Receivables                                         70.0         32.3

  Due from jointly-controlled businesses               1.4         25.5

  Deposit                                                -         50.0

  Other                                                8.7         25.5
                                                     159.9        553.2
                                                                       

Investments in jointly-controlled businesses         931.0        934.1

Rate-regulated asset                                  79.1         85.8

Pipeline, plant and other capital assets           1,421.8        768.7

Intangible assets                                    460.0        197.3

Due from jointly-controlled businesses                48.5          3.6

Other assets                                          17.4         15.4
                                                   3,117.7      2,558.1
                                                                       

Liabilities                                                            

Current liabilities                                                    

  Payables and accrued payables                       63.0         62.2

  Subscription receipts payable                          -        348.6

  Current portion of long-term senior debt            11.6         11.2
                                                      74.6        422.0
                                                                       
                                                                       

Long-term senior debt                              1,209.4        754.4

Subordinated convertible debentures                   86.2         86.2

Deferred taxes                                       315.5        321.7

Other long-term liabilities                           50.7         35.0
                                                   1,736.4      1,619.3
                                                                       

Shareholders' Equity                                                   

Share capital                                                          

  Preferred shares                                   195.2            -

  Common shares                                    1,793.6      1,391.0

Additional paid-in capital                             4.3            -

Cumulative other comprehensive loss                (170.1)      (159.2)

Accumulated deficit                                (441.8)      (324.7)
                                                   1,381.2        907.1

Non-controlling interest                               0.1         31.7
                                                   1,381.3        938.8
                                                   3,117.7      2,558.1



Veresen Inc.                                                      
                                                                  

Consolidated Statement of                                         
Income
                            Three months ended   Nine months ended
                                  September 30        September 30

 (Canadian $ Millions,
except per Common Share     2012          2011   2012         2011
amounts; unaudited) 
                                                                  

Equity income               33.2          30.0   97.4        105.7

Operating revenues          71.5          48.8  196.5        131.8

Operations and            (27.6)        (22.0) (81.4)       (62.1)
maintenance

General, administrative   (16.6)        (13.5) (52.0)       (36.6)
and project development

Depreciation and          (21.7)        (11.9) (61.6)       (36.3)
amortization

Interest and other        (15.4)        (12.0) (43.4)       (35.0)
finance

Foreign exchange and       (1.0)           1.6  (1.1)        (1.4)
other

Net income before taxes
and non-controlling         22.4          21.0   54.4         66.1
interest

Current taxes              (3.4)         (6.4) (12.2)       (19.8)

Deferred taxes             (5.4)         (3.5)  (9.7)        (7.6)

Net income before           13.6          11.1   32.5         38.7
non-controlling interest 

Non-controlling interest       -             -  (0.1)            -

Net income                  13.6          11.1   32.4         38.7

Preferred Share dividends  (2.2)             -  (5.5)            -

Net income attributable     11.4          11.1   26.9         38.7
to Common Shares
                                                                  

Net income per Common                                             
Share

  Basic and diluted         0.06          0.07   0.14         0.24
                                                                  
                                                                  
                                                                  

Consolidated Statement of                                         
Comprehensive Income 
                            Three months ended   Nine months ended
                                  September 30        September 30

 (Canadian $ Millions;      2012          2011   2012         2011
unaudited) 
                                                                  

Net income before           13.6          11.1   32.5         38.7
non-controlling interest

Other comprehensive                                               
income (loss)

  Cumulative translation                                          
  adjustment
    Unrealized foreign
    exchange gain (loss)  (16.2)          34.5 (10.9)         23.3
    on translation
    Cumulative
    translation
    adjustment                 -             -      -          0.8
    reclassified to net
    income

  Other                        -         (0.1)      -          1.8

Other comprehensive       (16.2)          34.4 (10.9)         25.9
income (loss)

Comprehensive income
(loss) before              (2.6)          45.5   21.6         64.6
non-controlling interest

Comprehensive income
attributable to                -             -  (0.1)            -
non-controlling interest

Comprehensive income       (2.6)          45.5   21.5         64.6
(loss)

Preferred Share dividends  (2.2)             -  (5.5)            -

Comprehensive income
(loss) attributable to     (4.8)          45.5   16.0         64.6
Common Shares





Veresen Inc.                                                   
                                                               

Consolidated Statement                                         
of Cash Flows
                         Three months ended   Nine months ended
                               September 30        September 30

(Canadian $ Millions;    2012          2011    2012        2011
unaudited) 
                                                               

Operating                                                      

  Net income before
  non-controlling        13.6          11.1    32.5        38.7
  interest

  Equity income        (33.2)        (30.0)  (97.4)     (105.7)

  Distributions from
  jointly-controlled     53.6          61.1   150.9       163.7
  businesses

  Depreciation and       21.7          11.9    61.6        36.3
  amortization

  Unrealized foreign
  exchange (gain) loss    2.9         (8.4)     0.6       (6.8)
  and other non-cash
  items

  Deferred taxes          5.4           3.5     9.7         7.6

  Changes in non-cash  (15.5)           5.3  (43.1)       (2.3)
  working capital 
                         48.5          54.5   114.8       131.5

Investing                                                      

  Acquisitions, net of  (1.3)             - (890.5)      (94.6)
  cash acquired 

  Investments in
  jointly-controlled   (34.0)        (85.2)  (63.0)     (110.1)
  businesses

  Return of capital
  from                    8.5             -     8.5           -
  jointly-controlled
  businesses

  Pipeline, plant and  (18.5)         (8.6)  (52.0)      (10.4)
  other capital assets

  Restricted cash           -           4.3     0.4       (2.0)

  Other                 (0.4)           4.0   (0.7)         4.7
                       (45.7)        (85.5) (997.3)     (212.4)

Financing                                                      

  Restricted cash         1.6             -   348.6           -

  Short-term debt
  issued, net of issue      -             -   249.1           -
  costs

  Short-term debt           -             - (250.0)           -
  repaid

  Long-term debt
  issued, net of issue      -             -   347.8        53.8
  costs

  Long-term debt        (2.0)        (24.3)   (7.6)      (53.9)
  repaid

  Net change in credit   49.0         (1.0)   113.0       133.5
  facilities

  Preferred Shares
  issued, net of issue      -             -   193.7           -
  costs

  Common Share         (38.4)         (9.5)  (65.5)      (30.4)
  dividends paid

  Preferred Share       (2.2)             -   (5.5)           -
  dividends paid

  Repayments from
  (advances to)           0.7        (13.3)  (20.8)      (13.3)
  jointly-controlled
  businesses

  Other                 (0.4)         (3.5)   (3.0)       (3.6)
                          8.3        (51.6)   899.8        86.1
                                                               

Increase (decrease) in
cash and short-term      11.1        (82.6)    17.3         5.2
investments

Effect of foreign
exchange rate changes   (0.1)           7.5     0.1         7.0
on cash and short-term
investments

Cash and short-term
investments at the       28.3         109.9    21.9        22.6
beginning of the
period

Cash and short-term
investments at the end   39.3          34.8    39.3        34.8
of the period



Veresen Inc.                                                    
                                                                

Distributable Cash (                                            
(1))
                          Three months ended   Nine months ended
                                September 30        September 30

(Canadian $ Millions,
except where noted;       2012          2011   2012         2011
unaudited) 
                                                                

Alliance distributions,
prior to withholdings
for capital               32.7          33.1   98.2        101.7
expenditures and net of
debt service

AEGS distributable
cash, after
non-recoverable capital    4.3           4.2   12.1         11.9
expenditures and debt
service

Hythe/ Steeprock
distributable cash,
after non-recoverable     17.3             -   43.7            -
maintenance capital
expenditures

Aux Sable
distributions, net of
support payments,
non-recoverable           16.4          23.8   44.3         59.6
maintenance capital
expenditures and debt
service

Power distributable
cash, after maintenance   13.3          10.5   23.1         24.4
capital expenditures
and debt service 
                          84.0          71.6  221.4        197.6

Corporate                                                       

  General and            (7.1)         (6.0) (21.3)       (17.1)
  administrative

  Interest and other     (9.9)         (6.4) (27.5)       (18.9)
  finance

  Principal repayments       -             -      -        (1.5)
  on senior debt
                        (17.0)        (12.4) (48.8)       (37.5)

  Taxes                  (3.4)         (4.8) (12.2)       (20.3)

  Preferred Share        (2.2)             -  (5.5)            -
  dividends
                        (22.6)        (17.2) (66.5)       (57.8)
                                                                

Distributable cash  (     61.4          54.4  154.9        139.8
(1))
                                                                

Distributable cash per    0.31          0.33   0.80         0.86
Common Share ($) ((2))
                                                                

Dividends paid/payable    49.1          41.1  144.1        121.5
( (3))
                                                                

Dividends paid/payable    0.25          0.25   0.75         0.75
per Common Share ($) 

(1) See "Non-GAAP Financial Measures" for reconciliation of
    distributable cash to cash flows from operating activities.

(2) The number of Common Shares used to calculate distributable cash
    per Common Share is based on the average number of Common Shares
    outstanding at each record date.  For the three months ended
    September 30, 2012 the average number of Common Shares outstanding
    for this calculation was 196,614,501 (2011 - 164,451,010) and
    202,521,009 (2011 - 170,358,430) on a basic and diluted basis,
    respectively. For the nine months ended September 30, 2012, the
    average number of Common Shares outstanding for this calculation
    was 192,248,429 (2011 - 162,057,352) and 198,155,013 (2011 -
    167,964,848) on a basic and diluted basis, respectively. The number
    of Common Shares outstanding would increase by 5,906,508 (2011 -
    5,907,192) Common Shares if the outstanding Convertible Debentures
    on September 30, 2012 were converted into Common Shares.

(3) Includes $10.7 million and $68.5 million of dividends for the three
    and nine months ended September 30, 2012 (2011 - $31.0 million and
    $92.1 million, respectively) satisfied through the issuance of
    Common Shares under our DRIP.



Veresen Inc.                                                     
                                                                 

Reconciliation of
Distributable Cash to Cash                                       
Flow from Operating Activities
                           Three months ended   Nine months ended
                                 September 30        September 30

(Canadian $ Millions;     2012           2011  2012          2011
unaudited) 
                                                                 

Cash from operating       48.5           54.5 114.8         131.5
activities

Add (deduct):                                                    

  Project development      4.7            3.4  16.9           8.6
  costs ((4))

  Change in non-cash      18.9          (0.2)  49.8           0.1
  working capital 

  Principal repayments   (2.8)          (2.4) (8.4)         (7.9)
  on senior notes

  Maintenance capital    (1.4)          (0.9) (4.8)         (1.8)
  expenditures 

  Distributions earned
  greater (less) than    (4.3)              - (7.9)           9.3
  distributions received
  ((5))

  Preferred Share        (2.2)              - (5.5)             -
  dividends
                                                                 

Distributable cash        61.4           54.4 154.9         139.8

(4) Represents costs incurred by us in relation to projects where the
    recoverability of such costs has not yet been established.  Amounts
    incurred for the three and nine months ended September 30, 2012
    relate primarily to the Jordan Cove LNG terminal project, the
    Pacific Connector Gas Pipeline project, and various power
    development projects.

(5) Represents the difference between distributions declared by
    jointly-controlled businesses and distributions received.



Veresen Inc.                                                                                     
                                                                                                 

Reconciliation of Proportionately Consolidated Power Business Results to US GAAP                 
                                                                                                 
                      Three months ended September 30, 2012 Three months ended September 30, 2011
                                         Reverse                               Reverse


                                  proportionate                         proportionate
(Canadian $                           consolidation;                        consolidation;
Millions;             Proportionately  apply equity    US   Proportionately  apply equity    US
unaudited)             Consolidated     accounting    GAAP   Consolidated     accounting    GAAP 
Proportionately
Consolidated EBITDA              21.5          (7.1)   14.4            16.8          (1.0)   15.8
((6)) 
Depreciation &                 (12.2)            3.7  (8.5)           (8.7)            0.6  (8.1)
amortization 
Interest                        (7.1)            3.4  (3.7)           (4.1)            0.1  (4.0) 
Fair value gains                (0.5)            0.5      -          (16.1)           16.1      -
(losses) 
Foreign exchange and            (0.1)            0.1      -             0.4          (0.3)    0.1
other 
Equity income (loss)                -          (0.6)  (0.6)               -         (15.5) (15.5) 
Net income before                                                                                
taxes and  
non-controlling                   1.6              -    1.6          (11.7)              - (11.7)
interest 


                                                                                                 
                                                                                                 
                      Nine months ended September 30, 2012  Nine months ended September 30, 2011
                                         Reverse                               Reverse


                                  proportionate                         proportionate
(Canadian $                           consolidation;                        consolidation;
Millions;             Proportionately  apply equity    US   Proportionately  apply equity    US
unaudited)             Consolidated     accounting    GAAP   Consolidated     accounting    GAAP 
Proportionately
Consolidated EBITDA              47.8         (13.0)   34.8            40.2          (2.6)   37.6
( (6)) 
Depreciation &                 (31.5)            6.2 (25.3)          (26.3)            1.3 (25.0)
amortization 
Interest                       (16.1)            5.7 (10.4)          (11.6)            0.5 (11.1) 
Fair value gains                (1.7)            1.7      -          (17.0)           17.0      -
(losses) 
Foreign exchange and            (0.2)            0.2      -           (0.1)            0.1      -
other 
Equity income (loss)                -          (0.8)  (0.8)               -         (16.3) (16.3) 
Net income before                                                                                
taxes and  
non-controlling                 (1.7)              -  (1.7)          (14.8)              - (14.8)
interest 
 (6) Under US GAAP, the Company accounts for each of York Energy, 


     NRGreen and Grand Valley using the equity method due to its joint
     control of these entities. However, the Company believes the
     presentation of the Power business' earnings on a proportionately
     consolidated line-by-line basis provides more insightful
     information. The Company and the investment community use EBITDA
     on a proportionately consolidated basis to assess the performance
     of the Power business. The above reconciles the results of its
     Power business.











Dorreen Miller Director, Investor Relations Phone: 403 213 3633 
Email:investor-relations@vereseninc.com

SOURCE: Veresen Inc.

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CO: Veresen Inc.
ST: Alberta
NI: OIL ERN CONF 

-0- Nov/06/2012 18:54 GMT