ENERGY TRUSTS / PrimeWest Energy Releases Engineering Reserve Report
And 1999 Financial Forecast, Extends Offers For Starcor And Orion
CALGARY, Jan. 13 /CNW/ - PrimeWest Energy Trust today:
January 1, 1999 Reserve Report: Released results of an independent
engineering report prepared by Gilbert Laustsen Jung Associates Ltd. that
assesses its reserves as at January 1, 1999 and provides the basis for 1999
operating and financial forecasts.
1999 Financial Forecast: Announced that PricewaterhouseCoopers,
PrimeWest's auditors, have completed their audit of PrimeWest's 1999
distribution forecast of $1.18 per PrimeWest trust unit.
Extension of Offers: Announced that it will be extending its offers
for the outstanding trust units of Starcor Energy Royalty Fund and Orion
Energy Trust on Thursday, January 14, 1999. The time during which the offers
are open for acceptance will be extended from 11:59 p.m. (Alberta time) on
January 22, 1999 to 11:59 p.m. (Alberta time) on January 29, 1999. Formal
documentation - summarizing the reserve report, containing the 1999 financial
forecast, and detailing the extension of the offers - will be mailed on
Thursday, January 14, 1999.
HIGHLIGHTS OF THE INDEPENDENT
ENGINEERING RESERVE REPORT
- Established reserves (proved plus half probable) increased 17.7
percent over January 1, 1998 levels, to 52.5 million barrels of oil
equivalent (boe).
- Total established reserve additions of 12.4 million boe replaced 280
percent of estimated 1998 production.
- Using industry consensus pricing, the estimated present worth of
PrimeWest's established reserves, discounted at 10.0 percent, is
$312.8 million.
- On an established reserves basis, PrimeWest's commodity mix remains
well balanced, at 54 percent oil and natural gas liquids, and 46
percent natural gas.
Summary
Established reserves as at January 1, 1999 1998
Oil and NGLs (million barrels) 28.3 22.0
Natural gas (billion cubic feet) 243.5 227.3
Total oil equivalent (million boe) 52.5 44.6
HIGHLIGHTS OF PRIMEWEST'S 1999 FINANCIAL FORECAST
- Production in 1999 is forecast to average 13,690 boe per day, an
increase of more than 10 percent over expected 1998 average
production.
- Cash distributions for 1999 are estimated to increase to $1.18 per
trust unit, using a reference price of US$13.50 WTI per barrel for
crude oil, and a plant gate price of Cdn$2.32 per mcf for natural gas.
- PrimeWest's debt-to-cash flow ratio (year beginning 1999 debt to 1999
estimated cash flow) is currently 1.8 times. Notwithstanding the
significant growth in production and reserves, PrimeWest's debt level
remained relatively constant - $69.6 million at the beginning of 1999
compared with $66.7 million at December 31, 1997.
RESPECTING THE OFFERS
''The independent engineering report reaffirms PrimeWest's strategy of
aggressive property enhancement and reserve additions,'' said Kent MacIntyre,
Vice-chairman and CEO of PrimeWest Energy Inc. ''We feel the report clearly
conveys that PrimeWest remains a strong and growing trust, and that Starcor
and Orion unitholders will benefit from a combination under our management.''
''Current facts are now available for analysis by all parties, and may
alter conclusions that have been drawn from outdated information. For example,
our 1999 distributions forecast of $1.18 per unit is 37 percent higher than
the figure of $0.86 that was used in the Starcor and Orion directors'
circulars.''
''Clearly, these deals would be accretive to all unitholders.''
Units of PrimeWest Energy Trust, Starcor Energy Royalty Fund and Orion
Energy Trust are traded on The Toronto Stock Exchange under the symbols
''PWI.UN'', ''STR.UN'' and ''OET.UN'', respectively. The company's website is
www.prime-west.com.
Certain statements in this news release are forward-looking. Such
forward-looking statements regard PrimeWest's future performance and involve
various risks and uncertainties. There can be no assurance that such
statements will prove to be accurate, and actual results and future events
could differ materially from those anticipated in such statements. Risk
factors are listed from time to time in PrimeWest's public disclosure
documents filed with The Toronto Stock Exchange and provincial securities
commissions. PrimeWest assumes no obligation to update information contained
in this news release.
|
