Parallel Energy Trust

Parallel Energy Trust

April 14, 2011 19:13 ET

Parallel Energy Trust Files Final Prospectus for $342,000,000 Initial Public Offering

CALGARY, ALBERTA--(Marketwire - April 14, 2011) -

NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES

Parallel Energy Trust ("Parallel" or the "Trust") is pleased to announce that it has entered into an underwriting agreement for its initial public offering of trust units and obtained a receipt for its final prospectus for the offering from the securities regulatory authorities in each of the provinces of Canada.

Pursuant to offering, Parallel will issue a total of 34.2 million trust units at a price of $10.00 per unit for total gross proceeds of $342 million. Closing of the offering is scheduled for April 21, 2011 (subject to customary closing conditions). The offering is being made through a syndicate of underwriters co-led by CIBC, RBC Capital Markets and Scotia Capital Inc., and including BMO Capital Markets, TD Securities Inc., Canaccord Genuity Corp., National Bank Financial Inc., Desjardins Securities, HSBC Securities (Canada) Inc., FirstEnergy Capital Corp. and Peters & Co. Limited.

The net proceeds of the offering and an advance under a credit facility will be used by Parallel to acquire a 51% interest in a liquids rich natural gas property located in the West Panhandle Field in Texas (the "Panhandle Interest") for US$377.4 million. The Panhandle Interest consists of long-life reserves well suited for a yield-focused entity. Management expects to participate in a well-defined, lower risk drilling and sidetrack program to fully exploit the Panhandle Interest.

The underwriters have also been granted an over-allotment option, exercisable for a period of 30 days from the date of the closing of the offering, to purchase up to an additional 5.13 million trust units at the offering price of $10.00 per unit to cover over-allotments, if any. If the over-allotment option is exercised in full, gross proceeds of the offering will be $393.3 million. If the over-allotment option is exercised, some or all of the proceeds to be received by the Trust pursuant to the exercise of the over-allotment option may be used to increase its interest in the property by up to an additional 8%.

Parallel intends to make monthly distributions of a portion of its available cash to unitholders. The Trust expects that the initial monthly cash distribution rate will be $0.075 per unit. The initial cash distribution, which will be for the period from and including the date of closing of the offering to May 31, 2011, is expected to be paid on June 15, 2011 to unitholders of record on May 31, 2011 and is estimated to be $0.10 per unit (assuming that the closing of the offering occurs on April 21, 2011).

Parallel has received conditional approval for the listing of its units on the Toronto Stock Exchange ("TSX") under the symbol "PLT.UN", subject to the Trust fulfilling all of the listing requirements of the TSX.

The final prospectus, which contains important information relating to Parallel and the trust units, may be obtained on the SEDAR website at www.sedar.com under Parallel's profile.

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.

ABOUT PARALLEL ENERGY TRUST

Parallel's objective is 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, located 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.

Parallel intends to qualify as 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).

FORWARD-LOOKING STATEMENTS

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 "Notice to Investors-Forward-Looking Statements" in Parallel's final prospectus (collectively, "forward-looking information"). Forward-looking information in this news release includes, but is not limited to, information concerning the proposed initial public offering, its completion and receipt of necessary approvals, Parallel's objectives, the acquisition of the Panhandle Interest, Parallel's expectations and estimates regarding distributions to unitholders and Parallel's intended drilling program. Parallel cautions investors in the 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.

All material information pertaining to Parallel Energy Trust may be found at www.sedar.com.

No securities regulatory authority has either approved or disapproved of the contents of this news release.

Contact Information

  • Parallel Energy Trust
    Dennis Feuchuk
    President and Chief Executive Officer
    403-781-7841

    Parallel Energy Trust
    Rick Miller
    Chief Financial Officer
    403-781-7842