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Provident Energy Announces March Cash Distribution and Releases 2007 Canadian Tax Reporting Information
News Release #05-08
March 19, 2008
All values are in Canadian dollars and conversions of natural gas volumes to barrels of oil equivalent (boe) are at 6:1 unless otherwise indicated.
"Provident delivered another year of strong financial and operating results in 2007,” said Provident President and Chief Executive Officer, Tom Buchanan. “Our diverse portfolio of assets delivered solid performance in the face of a volatile commodity price environment, stronger Canadian dollar, tighter equity and debt capital markets, and continued challenges related to government policy. We maintained stable distributions of $1.44 ($0.12 per month) for the fourth consecutive year. We strengthened our upstream business substantially in 2007 with the Capitol and Triwest acquisitions in Canada and four asset acquisitions in the U.S. including the $1.5 billion asset acquisition from Quicksilver Resources Inc. The Midstream business unit had another outstanding year, delivering record EBITDA of $226 million."
Highlights
• Consolidated funds flow from operations increased 8 percent to $468 million ($2.04 per unit) compared to $433 million ($2.20 per unit) in 2006. Consolidated earnings before interest, taxes, depletion, depreciation, accretion and other non-cash items (EBITDA) was $545 million in 2007, an increase of 10 percent compared to $496 million in 2006.
• The payout ratio in the fourth quarter of 2007 was strong at 57 percent, down from 64 percent in the fourth quarter of 2006. Full year payout ratio in 2007 was 77 percent, up from 67 percent in 2006.
• Consolidated funds flow from operations in the fourth quarter of 2007 increased 45 percent to $178 million ($0.72 per unit) compared to $123 million ($0.58 per unit) in the fourth quarter of 2006. Consolidated EBITDA in the fourth quarter of 2007 was $196 million, an increase of 39 percent compared to $141 million in the fourth quarter of 2006.
• Consolidated upstream production increased 22 percent to 38,600 barrels of oil equivalent per day (boed) in 2007, up from 31,700 boed in 2006. Canadian oil and gas production increased 10 percent to 26,500 boed in 2007, up from 24,000 boed in 2006, with a balanced production profile of 58 percent natural gas and 42 percent crude oil and natural gas liquids. In the fourth quarter of 2007, consolidated production averaged 48,200 boed compared to 33,800 boed in the fourth quarter of 2006 reflecting the acquisitions made in both Canada and the United States.
• Midstream EBITDA in 2007 was a record $226 million, up from $220 million in 2006, reflecting a favourable price environment and strong operating and marketing performance. In the fourth quarter of 2007, Midstream delivered EBITDA of $89 million, up 20 percent from $74 million in the fourth quarter of 2006.
• Consolidated upstream proved plus probable reserve life index (RLI) increased from 12.4 years to 16.9 years, reflecting the increasing quality of the assets and the sustainability of the Trust. Provident’s Canadian proved plus probable RLI increased 24 percent to 9.7 years. Factoring in the long-life midstream assets, Provident’s economic life on a consolidated basis is now approximately 18.5 years.
• On a consolidated basis, Provident drilled 159 net wells with a 99 percent success rate while in Canada 103 net wells were drilled with a 98 percent success rate. Provident’s drilling activities in 2007 were focused primarily on crude oil.
• Consolidated proved plus probable oil and gas reserves increased 111 percent to 322 million barrels of oil equivalent (boe). Canadian proved plus probable oil and gas reserves increased 37 percent to 101 million boe.
• Consolidated reserve additions including acquisitions and revisions, were 13 times greater than current year production. In Canada, reserve additions were 3.8 times greater than current year production.
• Consolidated finding, development and acquisition (FD&A) costs including revisions and future development capital (FDC) improved to $15.18 per boe of proved plus probable reserves, compared to $22.04 per boe in 2006. The three year average FD&A costs including revisions and FDC were $16.05 per boe of proved plus probable reserves in 2007 compared to $13.26 per boe in 2006.
• 2007 Canadian FD&A costs including revisions and FDC were $23.31 per boe of proved plus probable reserves compared to $23.04 per boe in 2006. The three-year average Canadian FD&A costs including revisions and FDC were $24.48 per boe of proved plus probable reserves in 2007 compared to $23.60 per boe in 2006. These figures reflect the high value oil acquisitions completed in 2007. Canadian finding and development (F&D) costs for proved plus probable additions including revisions and FDC were $24.42 per boe in 2007 compared to $23.99 per boe in 2006. The three-year average Canadian F&D costs for proved plus probable additions including revisions and FDC were $20.82 per boe in 2007 compared to $17.27 per boe in 2006.
This press release does not constitute and is not intended to be legal or tax advice to any particular holder or potential holder of Provident units. Holders or potential holders of Provident units are urged to consult their own legal and tax advisors as to their particular U.S. federal income tax consequences of holding Provident units.
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| Provident Energy Trust is a Calgary-based, open-ended energy income trust that owns and manages a oil and gas production business and a natural gas liquids midstream services and marketing business. Provident's energy portfolio is located in some of the most stable and predictable producing regions in Western Canada and the United States . Provident provides monthly cash distributions to its unitholders and trades on the Toronto Stock Exchange and the New York Stock Exchange under the symbols PVE.UN and PVX, respectively.
This document contains certain forward-looking statements concerning Provident, as well as other expectations, plans, goals, objectives, information or statements about future events, conditions, results of operations or performance that may constitute "forward-looking statements" or "forward-looking information" under applicable securities legislation. Such statements or information involve substantial known and unknown risks and uncertainties, certain of which are beyond Provident's control, including the impact of general economic conditions in Canada and the United States, industry conditions, changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, pipeline design and construction, fluctuations in commodity prices, foreign exchange or interest rates, stock market volatility and obtaining required approvals of regulatory authorities.
Such forward-looking statements or information are based on a number of assumptions which may prove to be incorrect. In addition to other assumptions identified in this news release, assumptions have been made regarding, among other things, commodity prices, operating conditions, capital and other expenditures, and project development activities.
Although Provident believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because Provident can give no assurance that such expectations will prove to be correct. Forward-looking statements or information are based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by Provident and described in the forward-looking statements or information.
The forward-looking statements or information contained in this news release are made as of the date hereof and Provident undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise unless so required by applicable securities laws. The forward-looking statements or information contained in this news release are expressly qualified by this cautionary statement. |
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Investor and Media Contact:
Dallas McConnell
Manager, Investor Relations
Phone: (403) 231-6710
Email: info@providentenergy.com
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Corporate Head Office:
800, 112 – 4th Avenue S.W.
Calgary, Alberta, Canada T2P
0H3
Phone: (403) 296-2233
Toll Free: 1-800-587-6299
Fax: (403) 294-0111
www.providentenergy.com |
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