Parallel Energy Trust Announces Fourth Quarter and Year End 2013 Financial Results; 2013 Year End Reserve Report and

Parallel Energy Trust Announces Fourth Quarter and Year End 2013 Financial  Results; 2013 Year End Reserve Report and Operational Update  CALGARY, ALBERTA -- (Marketwired) -- 03/20/14 --   Parallel Energy Trust ("Parallel" or the "Trust") (TSX: PLT.UN)(TSX: PLT.DB) is pleased to announce its financial and operating results for the three and twelve months ended December 31, 2013, and to provide a summary of its 2013 year end reserve report.  Parallel's audited year end financial statements and accompanying Management's Discussion and Analysis ("MD&A") will be filed shortly on the SEDAR website at and on the Trust's website at  Summary of 2013 Financial and Operating Results                                                 ----------------------------------                                          Quarter  Quarter     Year     Year                                            ended    ended    Ended    Ended                                          Dec. 31, Dec. 31, Dec. 31, Dec. 31, ($000s, except where indicated)             2013     2012     2013     2012 --------------------------------------------------------------------------- Production                                                                    Natural gas (mcf/day)                   14,842   14,945   14,594   12,331   Condensate (bbls/day)                    1,803    1,821    1,715    1,423   Natural Gas Liquids (bbls/day)           2,943    2,684    3,000    2,448 ---------------------------------------------------------------------------   Total (@6:1) (boe/day)                   7,220    6,996    7,147    5,926 ---------------------------------------------------------------------------   Average sales price (US$ per boe)          44.49    40.18    42.62    39.85 ---------------------------------------------------------------------------   Revenue, net of royalties                 25,274   20,882   93,430   70,441 Funds from operations(1)                  11,306    7,847   41,964   35,049 Net income                                 9,912  (84,602)  10,088  (69,956) Distributions                              8,028   10,920   31,862   44,205 Capital expenditures excluding                                               acquisitions                                720    5,743   11,367   27,119   Bank debt outstanding (US$)              154,039  148,651  154,039  148,651 Convertible debentures (CAD$)             63,000   63,000   63,000   63,000   Unitholder's equity                      286,481  281,409  286,481  281,409 --------------------------------------------------------------------------- (1) Non-GAAP measure. Readers are referred to Advisories at the end of the      press release for additional information.                                Fourth Quarter 2013 Financial and Operating Highlights  During the fourth quarter of 2013, Parallel:        --  Recorded average daily production of 7,220 boe/day (66% natural gas     liquids and condensate), an improvement of 2% compared to production of     7,100 boe/day in the third quarter of 2013.  --  Realized an average sales price (prior to hedging) of US$44.49 per boe,     representing approximately 46% of the average WTI price during the     quarter.  --  Generated funds from operations of $11.3 million ($0.21 per unit, basic)     an increase of 5% compared to $10.8 million funds from operations in the     third quarter of 2013.  --  Recorded a net impairment reversal of $7.4 million on the Trust's oil     and gas assets which was predominantly due to higher reserve volumes in     the Sneed and Carson operating areas, partially offset by lower     forecasted commodity prices.  --  Reduced bank debt by approximately US$4.2 million during the quarter.     This resulted in total bank debt of US$154.0 million drawn against the     Trust's borrowing base of US$190.0 million.  --  Declared total distributions of $0.15 during the quarter, representing     $0.05 per unit per month for October, November and December.   2013 Year End Financial and Operating Highlights  During the full year 2013, Parallel:        --  Achieved record annual average daily production of 7,147 boe/day, which     exceeded the Trust's full year guidance of 7,000 boe/day.  --  Drilled, completed and tied-in a total of 12 gross wells (11.2 net     wells) in the Texas and Oklahoma operating areas and experienced a 100%     success rate. The average 30 day initial production ("IP30") rate was 40     boe/day, resulting in drilling efficiencies of approximately $14,000 per     flowing boe/day.  --  Completed 91 cleanouts to the Trust's existing wells and confirmed     Parallel's decline rates of 8-10%.  --  Generated funds from operations of $42.0 million ($0.79 per unit,     basic).  --  Completed the acquisition of the Cargray operating area which added     approximately 200 boe/day of liquids-rich natural gas to the Trust's     production base at accretive metrics.  --  Declared total distributions of $0.60 during the year, equal to $0.05     per unit per month.   2013 Year End Reserve Report  The following information is provided on the Trust's reserves as at December 31, 2013, as evaluated by the Trust's independent reserves engineering firm, Ryder Scott. The evaluation of Parallel's petroleum and natural gas reserves was conducted pursuant to National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities - ("NI 51-101") and the Canadian Oil and Gas Evaluation Handbook ("COGEH") reserves definitions.  2013 Reserves Summary  (Company interest before royalties - December 31, 2013)                                                   --------------------------------                                            2013 Total       2012 Total                                                        Oil              Oil                                                 Equivalent       Equivalent                                                      (mboe)   %       (mboe)   % --------------------------------------------------------------------------- Proved developed producing (PDP)               32,985   67      30,307   64 Proved undeveloped                              9,521   19       9,397   20 ---------------------------------------------------------------------------   Total proved                                 42,506   86      39,703   84 Probable                                        6,994   14       7,507   16 ---------------------------------------------------------------------------   Total proved plus probable (P+P)             49,500  100      47,210  100 ---------------------------------------------------------------------------  Net Present Value of Future Revenue  (Company interest - December 31, 2013 escalated price forecast)                                                    -------------------------------                                              2013 10%         2012 10%      Present value of cash flows before tax       Discount         Discount      (US$000s)                                        Rate    %        Rate    % --------------------------------------------------------------------------- PDP                                         $ 373,856   76   $ 366,334   74 Proved undeveloped                             50,981   10      62,279   12 ---------------------------------------------------------------------------   Total proved                                424,837   86     428,614   86 Probable                                       66,437   14      71,885    14 ---------------------------------------------------------------------------   P+P                                       $ 491,274  100   $ 500,500  100 --------------------------------------------------------------------------- CAD/US Exchange Rate at Dec. 31              $ 1.0636         $ 0.9949        P+P (C$000s)                              $ 522,519        $ 497,947      ---------------------------------------------------------------------------  2013 Year End Reserve Report Highlights        --  Increased proved developed producing reserves by 9% and total proved     plus probable reserves by 5% between December 31, 2012 and December 31,     2013. The increase was primarily due to above forecasted drilling     results in 2013 and the Trust's assets experiencing a lower decline rate     than previously forecast.  --  Reported a reserve life index of 13 years for PDP reserves and 19 years     for P+P reserves based on the mid-point of the Trust's 2014 production     guidance of 7,200 boe/day.  --  Reported a total of over 150 gross potential drilling locations after     having drilled 12 gross wells in 2013. At the 2014 estimated drilling     pace of 14 gross wells, this represents over 10 years of drilling     locations.   Operational Update  Many oil and gas producing areas in the United States experienced extreme winter weather conditions between November 2013 and March 2014. During these winter months, the Trust's operating areas in Northern Texas experienced over 30 days in which the temperature fell below 20 degrees Fahrenheit (-7 degrees Celsius), which is the highest number of days in almost 20 years and double the average during that period. At temperatures below 20 degrees Fahrenheit, oil and gas operating areas in certain regions of the United States tend to experience equipment freezing, facility and transportation disruptions, power outages and other operating challenges which can materially impact oil and gas production levels. The Trust's operating areas were not immune to these challenges and, as a result, the Trust has recorded average daily production to date in 2014 of approximately 6,500 boe/day based on field data, which exceeded the Trust's three to five per cent contingency for downtime in the first quarter. However, weather conditions in Parallel's operating areas have begun to normalize and the Trust's production is beginning to return to expected levels. Despite the year-to-date performance, Parallel retains its full year production guidance of 7,100 to 7,300 boe/day in 2014.  To date in 2014, Parallel has drilled, completed and tied-in a total of four wells in the Carson operating area. Not all of the wells have been on production for 30 days; however, initial results indicate that the wells are achieving, on average, production levels that at least meet or exceed Parallel's 2014 initial production rate guidance of 35 to 40 boe/day.  President's Message - Rick Alexander, President & CEO  "In 2013 we implemented several changes to stabilize our operations and better manage our business. These changes led to record annual production and cash flow which significantly improved our ability to manage a sustainable business model that supports our $0.05 monthly distribution. Building on this momentum, we set what we believe are realistic production and cash flow targets for 2014 and, while we have experienced challenging operating conditions to date, we remain confident that we can achieve our full year guidance."  "Our 2013 reserve report confirmed our analysis that our assets have a lower decline rate than previously believed. In 2013, we increased total reserves by five per cent and replaced nearly double our 2013 total production, which reflects our lower decline rates and improved drilling results during the year. Our total reserve life index also increased to 13 years for proved developed producing reserves and 19 years for total proved plus probable reserves, which are at or near the highest in the industry and ideal for a distribution-paying energy income trust."  "Our success over the past year is largely due to the hard work and dedication of our U.S. operating team. Thanks to their efforts, we are well positioned to execute our 2014 drilling and workover programs and we expect to begin to realize the benefits of these programs in the coming months. We look forward to providing updates on our 2014 drilling program with the release of our first quarter financial and operating results in early-May."  ABOUT PARALLEL ENERGY TRUST  Parallel's objectives are to create stable, consistent returns for investors through the acquisition and development of conventional oil and natural gas reserves and production with unexploited low risk potential in certain regions of the United States, and to pay out a portion of available cash to holders of trust units on a monthly basis. The trust units of Parallel are listed on the Toronto Stock Exchange ("TSX") under the symbol "PLT.UN" and the debentures are listed on the TSX under the symbol "PLT.DB".  Parallel is a "mutual fund trust" under the Income Tax Act (Canada) (the "Tax Act"). The Trust will not be a "SIFT trust" (as defined in the Tax Act), provided that the Trust complies at all times with its investment restriction which precludes the Trust from holding any "non-portfolio property" (as defined in the Tax Act). Further information relating to Parallel is set out in Parallel's annual information form dated March 21, 2012, which may be obtained on the SEDAR website at under Parallel's profile.  ADVISORIES  Forward-Looking Information  This news release contains forward-looking information that involves substantial known and unknown risks and uncertainties, most of which are beyond the control of Parallel, including, without limitation, those listed under "Risk Factors" in Parallel's annual information form dated March 21, 2012 (collectively, "forward-looking information"). Forward-looking information in this news release includes, but is not limited to, Parallel's objectives and status as a mutual fund trust and not a SIFT trust and Parallel's expectations and estimates regarding current and future production rates and drilling results. Parallel cautions investors in Parallel's securities about important factors that could cause Parallel's actual results to differ materially from those projected in any forward-looking statements included in this news release. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and may be forward-looking and may involve estimates, assumptions and uncertainties which could cause actual results or outcomes to differ materially from those expressed in such forward-looking statements. No assurance can be given that the expectations set out in Parallel's final prospectus or herein will prove to be correct and accordingly, prospective investors should not place undue reliance on these forward-looking statements. These statements speak only as of the date of this press release and Parallel does not assume any obligation to update or revise them to reflect new events or circumstances.  In this news release, Parallel and its subsidiaries are referred to collectively as the "Trust" or "Parallel" for purposes of  convenience.  Non-GAAP Measures  This press release contains the term "funds from operations". This term is not a recognized measure under Canadian generally accepted accounting principles (GAAP). Parallel believes that in addition to net income, funds from operations is a useful supplemental measurement. Funds from operations provides an indication of the funds generated by the Trust's principal business activities and is defined as "cash from operating activities" prior to workovers and "change in non-cash working capital related to operating activities" in the Statement of Cash Flows.  Oil and Gas Measures and Definitions  This press release contains disclosure expressed as "boe" and "boe/day". All oil and natural gas equivalency volumes have been derived using the ratio of six thousand cubic feet of natural gas to one barrel of oil. Equivalency measures may be misleading, particularly if used in isolation. A conversion ratio of six thousand cubic feet of natural gas to one barrel of oil is based on an energy equivalency conversion method primarily.  Contacts: Parallel Energy Trust Curtis Pelletier Manager, Investor Relations 403-781-7888 or Toll-Free: 1-855-781-7888    
Press spacebar to pause and continue. Press esc to stop.