Paramount Energy Trust, Calgary, (Toronto: PMT.UN) plans to acquire a private Calgary-based company active in gas exploration and development in east-central Alberta for C$92 million. The acquisition will be funded from Paramount's available credit facilities. BMO Nesbitt Burns Inc. is advisor to Paramount. The company to be acquired is 100% gas weighted by production. For C$90 million in cash and the assumption of about C$2 million of net debt, the trust will acquire an estimated 9 million cubic feet per day of gas production (1,500 barrels of oil equivalent per day). The acquisition has approximately 54,600 net undeveloped acres at an average 98% working interest; a proved-plus-probable reserve-life index of 5.7 years; average working interest of 93%; more than 50 defined prospects which meet the trust's risk profile; and transaction metrics of approximately C$57,800 per flowing barrel of oil equivalent, excluding a undeveloped land and seismic value of C$3.25 million. Closing is expected in February 2006. Lock-up agreements in support of the transaction have been entered into with shareholders representing approximately 70% of the diluted common shares of the acquired company. Sue Riddell Rose, Paramount's president and chief executive, says, "Acquire Co.'s management team has done an admirable job in assembling this asset base and developing it to its current state in less than two years. A key component of the deal involves an extensive transition period with the management team, wherein the team will be exclusively working for Paramount to capitalize on the opportunities that are prevalent both on the existing asset base and in the surrounding area."
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