Parallel Energy Trust

Parallel Energy Trust

April 12, 2012 08:17 ET

Parallel Energy Trust Announces Closing of Trust Unit and Convertible Debenture Financing

CALGARY, ALBERTA--(Marketwire - April 12, 2012) -


Parallel Energy Trust (TSX:PLT.UN) ("Parallel" or the "Trust") is pleased to announce that it has completed its previously announced bought deal offering of 8,500,000 trust units of the Trust (the "Units") at a price of $7.05 per Unit and $60,000,000 aggregate principal amount of 6.50% convertible unsecured subordinated debentures due June 30, 2017 (the "Debentures") at a price of $1,000 per Debenture for aggregate gross proceeds of $119,925,000. The underwriting syndicate was co-led by Scotiabank, RBC Capital Markets and CIBC, and included TD Securities Inc., National Bank Financial Inc., BMO Nesbitt Burns Inc., Canaccord Genuity Corp. and Desjardins Securities Inc.

The Debentures bear interest at 6.50% per annum, payable semi-annually on the last day of June and December commencing on June 30, 2012, and mature on June 30, 2017. The Debentures are convertible at the holder's option into trust units of the Trust at a conversion price of $9.50 per trust unit, subject to adjustment in certain circumstances and satisfaction of certain conditions.

The Debentures are not redeemable before June 30, 2015. On or after June 30, 2015 and at any time prior to maturity, the Debentures may be redeemed in whole or in part from time to time at the Trust's option, at a price equal to their principal amount plus accrued and unpaid interest, provided that the volume weighted average trading price of the trust units on the Toronto Stock Exchange ("TSX") for the 20 consecutive trading days ending on the fifth trading day preceding the date on which the notice of redemption is given is not less than 125% of the conversion price.

The proceeds of the financing and an advance under a credit facility will be used by Parallel to fund the previously announced acquisition of the remaining 41% interest in the West Panhandle Field currently owned by Bravo Natural Gas, LLC. The acquisition is scheduled to close later today.

The underwriters have been granted an over-allotment option to purchase up to an additional 425,000 Units at a price of $7.05 per Unit, exercisable in whole or in part from time to time, for a period of 30 days following the closing date and an over-allotment option to purchase up to an additional $3,000,000 aggregate principal amount of Debentures, exercisable in whole or in part from time to time, for a period of 30 days following the closing date. If both over-allotment options are exercised in full, gross proceeds of the financing will be $125,921,250.


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 Units of Parallel are listed on the TSX under the symbol "PLT.UN". The Debentures will be listed today 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, the Units and the Debentures is set out in Parallel's annual information form dated March 21, 2012 and Parallel's final prospectus dated April 4, 2012, which may be obtained on the SEDAR website at under Parallel's profile.

No securities regulatory authority has either approved or disapproved of the contents of this news release. The securities being offered have not been, and will not be, registered under the United States Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States unless pursuant to an exemption there from. This press release is for information purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities of Parallel Energy Trust in any jurisdiction.


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" and " Forward-Looking Statements" in Parallel's final prospectus filed April 4, 2012 and 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, the use of proceeds, the completion of the acquisition of the remaining 41% interest in the West Panhandle Field currently owned by Bravo Natural Gas, LLC, exercise of the over-allotment options, Parallel's expectations and estimates regarding capital expenditure plans, drilling plans, drilling locations, drilling costs per well, current and future production rates, production decline rates, reserve information, production mix, operating costs, royalty rates, processing fees, general and administrative expenses, commodity prices and foreign exchange rates, availability under bank facility, funds from operations distributions, basic payout ratios, all-in payout ratios, sustainability of distributions and proceeds from the Trust's dividend reinvestment plan and Premium DRIP™. Parallel cautions investors 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 any documents incorporated therein 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.

Contact Information

  • Parallel Energy Trust
    Dennis Feuchuk
    President and CEO
    403-781-7888 or Toll Free: 1-855-781-7888

    Parallel Energy Trust
    Rick Miller
    Chief Financial Officer
    403-781-7888 or Toll Free: 1-855-781-7888