Paramount Energy Trust
TSX : PMT.DB
TSX : PMT.UN

Paramount Energy Trust

September 11, 2007 20:23 ET

Paramount Energy Trust Confirms September 2007 Distribution and Announces Appointment of Vice President, Geoscience and New Ventures

CALGARY, ALBERTA--(Marketwire - Sept. 11, 2007) - Paramount Energy Trust (TSX:PMT.UN) ("PET" or the "Trust") confirmed today that its distribution to be paid on October 15, 2007 in respect of income received by PET for the month of September 2007, for Unitholders of record on September 28, 2007, will be $0.10 per Trust Unit. The ex-distribution date is September 26, 2007. The September 2007 distribution brings cumulative distributions paid since the inception of the Trust in February 2003 to $11.624 per Trust Unit.

Natural gas prices weakened dramatically late in the second quarter of 2007 as a result of the combination of increased storage inventories resulting from high liquefied natural gas imports into the United States and relatively mild early summer weather. While late summer cooling demand has reduced the year over year surplus gas in storage somewhat, PET continues to remain cautious in its outlook with respect to near term natural gas prices. The Trust continues to firmly focus on what we believe is a sustainable distribution model that balances short term cash returns to our Unitholders and long term value creation through capital spending programs.

PET continues to actively manage its risk management program. PET has significantly increased its hedging positions since last reported in early August. Financial and physical forward sales arrangements at the AECO and NYMEX trading hubs as at September 11, 2007 are as follows:



Volumes at
AECO (2) Price Current Forward
Type of contract (GJ/d) ($/GJ) Price ($/GJ) Term
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Financial 87,500 5.86 October 2007
Physical 5,000 5.85 October 2007
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Period total, net (1) 92,500 5.86 4.99 October 2007
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Financial NYMEX 7,500 5.77 US$ October 2007
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Period total, net (1) 7,500 5.77 US$ 5.93 US$ October 2007
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Financial 67,500 7.39 November 2007
- March 2008
Physical 10,500 7.43 November 2007
- March 2008
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Period total, net (1) 78,000 7.40 6.46 November 2007
- March 2008
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- March 2008
Financial 55,000 7.40 April -
October 2008
Physical 5,000 6.68 April -
October 2008
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Period total, net (1) 60,000 7.39 6.53 April -
October 2008
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Financial NYMEX 7,500 7.78 US$ April -
October 2008
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Period total, net (1) 7,500 7.78 US$ 7.53 US$ April -
October 2008
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Financial 55,000 7.97 November 2008
- March 2009
Physical 7,500 8.36 November 2008
- March 2009
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Period total, net (1) 62,500 8.01 7.60 November 2008
- March 2009
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Financial 7,500 7.46 January -
December 2008
Physical 2,500 7.46 January -
December 2008
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Period total, net (1) 10,000 7.46 6.71 January -
December 2008
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(1) Weighted average prices are calculated by netting the volumes of the
financial and physical sold/bought contracts together and measuring the
net volume at the weighted average "sold" price for the financial and
physical contracts.
(2) All transactions at AECO unless identified specifically as a NYMEX
transaction.


In addition to the mark to market gains inherent in the existing hedge book of approximately $34 million, PET has realized gains totaling approximately $48 million to-date in 2007 on financial and physical forward sales contracts including the crystallization of forward positions. PET will continue to closely monitor the market drivers with respect to near term natural gas prices and will proactively manage the Trust's forward price exposure.

PET's increased hedging position has significantly reduced its exposure to potential further downside in natural gas prices. The following table reflects PET's projected realized gas price, monthly funds flow and payout ratio at the current monthly distribution of $0.10 per Trust Unit, for July to December 2007 at certain AECO natural gas price levels and incorporating all of the Trust's current financial hedges and physical forward sales contracts.



Average AECO Monthly Index Gas Price
July to December 2007 ($/GJ) (1)
Funds flow sensitivity analysis $5.00 $6.00 $7.00 $8.00
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Natural gas production (MMcfe/d) 198.3 198.3 198.3 198.3
Realized gas price ($/Mcfe) 5.88 6.52 7.16 7.80
Funds flow ($million/month) 15.7 18.8 21.7 24.7
Funds flow per Trust Unit ($/Unit/month) 0.146 0.173 0.201 0.228
Payout ratio (%) 69 58 50 44
Ending total net debt ($million) 611 593 575 557
Ending total net debt to funds flow ratio
(times) (2) 2.6 2.4 2.1 1.9
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(1) Average AECO price for July-December based on settled prices for July-
September and AECO forward strip at September 11, 2007 was approximately
$5.48/GJ.
(2) Calculated as ending total net debt (including convertible debentures)
divided by annualized funds flow.


Based on current natural gas prices, PET expects to maintain monthly distributions at the current level for the foreseeable future. PET reviews distributions on a monthly basis based on cash flow projections which incorporate PET's base production forecasts, current hedges and physical forward natural gas sales, the forward market for natural gas prices, and the Trust's capital spending program and projected production additions. Future distributions are subject to change as dictated by changes in commodity price markets, operations and future business development opportunities.

PET is also very pleased to announce the appointment of Rick Warters as Vice President, Geoscience and New Ventures, effective September 4, 2007. Rick is a Professional Geologist with over 25 years of experience in exploration and development and will undoubtedly bring significant expertise to the technical management team as we continue to pursue opportunities to add value for PET's Unitholders. Rick most recently held the position of Senior Vice President of Exploration at ConocoPhillips Canada.

Forward-looking Information

This news release contains forward-looking information. Implicit in this information, particularly in respect of cash distributions, are assumptions regarding natural gas prices, production, royalties and expenses which, although considered reasonable by PET at the time of preparation, may prove to be incorrect. These forward-looking statements are based on certain assumptions that involve a number of risks and uncertainties and are not guarantees of future performance. Actual results could differ materially as a result of changes in PET's plans, changes in commodity prices, general economic, market, regulatory and business conditions as well as production, development and operating performance and other risks associated with oil and gas operations. There is no guarantee by PET that actual results achieved will be the same as those forecast herein.

Non-GAAP Measures

This news release contains financial measures that may not be calculated in accordance with generally accepted accounting principles in Canada ("GAAP"). Readers are referred to advisories and further discussion on non-GAAP measures contained in the "Significant Accounting Policies and Non-GAAP Measures" section of the Trust's Management's Discussion and Analysis.

Mcf equivalent (Mcfe) may be misleading, particularly if used in isolation. In accordance with National Instrument 51-101 ("NI 51-101"), an Mcfe conversion ratio for oil of 1 Bbl: 6 Mcf has been used, which is based on an energy equivalency conversion method primarily applicable at the burner tip and does not necessarily represent a value equivalency at the wellhead.

Paramount Energy Trust is a natural gas-focused Canadian energy trust. PET's Trust Units and Convertible Debentures are listed on the Toronto Stock Exchange under the symbols "PMT.UN", "PMT.DB", "PMT.DB.A", "PMT.DB.B", and "PMT.DB.C" respectively. Further information with respect to PET can be found at its website at www.paramountenergy.com.

The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.

Contact Information

  • Paramount Energy Trust
    Susan L. Riddell Rose
    President and Chief Executive Officer
    (403) 269-4400
    or
    Paramount Energy Trust
    Cameron R. Sebastian
    Vice President, Finance and Chief Financial Officer
    (403) 269-4400
    or
    Paramount Energy Trust
    Sue M. Showers
    Investor Relations and Communications Advisor
    (403) 269-4400
    (403) 269-6336 (FAX)
    or
    Paramount Energy Operating Corp,
    Administrator of Paramount Energy Trust
    Suite 500, 630 - 4 Avenue SW, Calgary, AB, Canada T2P 0J9
    Email: info@paramountenergy.com
    Website: www.paramountenergy.com