Progress Energy Trust
TSX : PGX.UN

Progress Energy Trust

July 31, 2006 16:20 ET

Progress Energy Trust Announces $75 Million Offering of Convertible Debentures

CALGARY, ALBERTA--(CCNMatthews - July 31, 2006) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Progress Energy Trust (TSX:PGX.UN)("Progress" or the "Trust") announces that it has entered into an agreement to sell, to a syndicate of underwriters led by CIBC World Markets Inc. and BMO Capital Markets, and including Scotia Capital Inc., Peters & Co. Limited, FirstEnergy Capital Corp., Canaccord Adams, GMP Securities L.P., and Tristone Capital Inc., $75,000,000 principal amount of 6.25% convertible unsecured subordinated debentures (the "Debentures") on a bought-deal basis.

The Debentures will pay interest semi-annually, will have a maturity date of September 30, 2011 and will be convertible, at the option of the holder, at any time into fully paid trust units of Progress at a conversion price of $19.50 per trust unit. After September 30, 2009 and prior to maturity, the Debentures may be redeemed in whole or in part from time to time at the option of the Trust on not more than 60 days and not less than 30 days prior notice, at a price of $1,050 per Debenture after September 30, 2009 and on or before September 30, 2010 and at a price of $1,025 per Debenture after September 30, 2010 and before maturity, plus accrued and unpaid interest.

The net proceeds of the financing will be used to reduce outstanding bank indebtedness, which may be redrawn to fund general purposes. Closing is expected to occur on or about August 22, 2006.

The Debentures offered have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except in certain transactions exempt from the registration requirements of the U.S. Securities Act. This release does not constitute an offer for sale of Debentures or trust units in the United States.

Progress is a Calgary based, natural gas focused trust targeting sustainable production and reserves per trust unit through the utilization of its technical capability and capital investment efficiencies. Primary operating areas include the Deep Basin of northwest Alberta and the Foothills and Plains regions of northeast British Columbia. Trust units of Progress trade on the Toronto Stock Exchange ("TSX") under the symbol PGX.UN. Exchangeable Shares of Progress Energy Ltd. trade on the TSX under the symbol PGE and its existing convertible debentures trade on the TSX under the symbol PGX.DB.

Forward-Looking Statements - Certain information regarding Progress set forth in this document, including management's assessment of Progress' future plans and operations, contains forward looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond Progress' control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Progress' actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that Progress will derive therefrom.

Contact Information

  • Progress Energy Trust
    Mr. Michael Culbert
    President & Chief Executive Officer
    (403) 539-1820
    or
    Progress Energy Trust
    Mr. Greg Kist
    Vice President, Investor Relations & Marketing
    (403) 539-1809
    or
    Progress Energy Trust
    1400,440 -2nd Avenue S.W.
    Calgary, Alberta
    Toll Free: 1 (866) 216-2510
    (403) 216-2514 (FAX)
    ir@progressenergy.com
    www.progressenergy.com