CALGARY,
AB, May 16, 2024 /CNW/ -
(TSX:PMT) – Perpetual Energy Inc.
("Perpetual", or the "Company") is pleased to announce that the
Alberta Court of King's Bench has
approved the previously announced settlement agreement with
PricewaterhouseCoopers Inc., LIT in its capacity as trustee in
bankruptcy (the "Trustee") of Sequoia Resources Corp. ("Sequoia")
related to the Sequoia litigation (the "Settlement"). After several
years of litigation, Perpetual previously announced that it had
entered into the Settlement to resolve the Sequoia litigation
without any party admitting liability, wrongdoing or violation of
law, regulations, public policy or fiduciary duties.
The Trustee has registered its second lien
security for the Settlement obligations and the Company has entered
into a new inter-creditor agreement between its existing first lien
lenders, the Trustee, and the trustee for the holders of the third
lien 2025 Senior Notes. The $10.0
million initial payment held in escrow since the execution
of the Settlement agreement on March 22,
2024 has been released to the Trustee, plus all accrued
interest has been applied against the Settlement amount owing, with
a remaining obligation outstanding of $19.9
million.
The Company currently has available
liquidity(1) of $29.7
million, comprised of the $30.0
million borrowing limit of Perpetual's first lien credit
facility and cash on hand of $1.0
million less letters of credit of $1.3 million, which compares to the available
liquidity as at March 31, 2024 of
$31.7 million.
The Settlement terminates what has been and
would otherwise continue to be, a lengthy litigation process and
allows Perpetual to advance its business plans with significantly
improved access to capital, affording the financial flexibility to
pursue value enhancing opportunities. The Company and Board of
Directors are pleased to put this matter behind us and move forward
to unlock Perpetual's inherent value potential.
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(1)
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Available Liquidity is
a non-GAAP financial measure and is defined as Perpetual's credit
facility borrowing limit, less current borrowings and letters of
credit issued under the credit facility. Management uses available
liquidity to assess the ability of the Company to finance capital
expenditures and expenditures on decommissioning obligations, and
to meet its financial obligations. This non-GAAP financial measure
does not have a standardized meaning prescribed under IFRS
Accounting Standards and therefore may not be comparable to similar
measures presented by other entities. This measure should not be
considered to be more meaningful than GAAP measures which are
determined in accordance with IFRS Accounting Standards, such as
net loss and comprehensive loss, cash flow from (used in) operating
activities, and cash flow used in investing activities, as
indicators of Perpetual's performance.
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ABOUT PERPETUAL
Perpetual is an oil and natural gas
exploration, production and marketing company headquartered in
Calgary, Alberta. Perpetual owns a
diversified asset portfolio, including liquids-rich conventional
natural gas assets in the deep basin of West Central Alberta,
and undeveloped bitumen leases in Northern Alberta. Additional information on
Perpetual can be accessed at SEDAR+ at
www.sedarplus.ca or from the Company's website
at www.perpetualenergyinc.com.
The Toronto Stock Exchange has neither
approved nor disapproved the information contained
herein.
FORWARD-LOOKING INFORMATION
Certain information in this news release
including management's assessment of future plans and operations
may constitute forward-looking information or statements (together
"forward-looking information") under applicable securities laws.
The forward-looking information includes, without limitation,
statements with respect to: the benefits of resolution of the
Sequoia litigation including the ability of the Company to advance
its business plans with significantly improved access to capital,
affording the financial flexibility to pursue value enhancing
opportunities and the ability to unlock Perpetual's inherent value
potential; and Perpetual's business plan.
Forward-looking information is based on
current expectations, estimates and projections that involve a
number of known and unknown risks, which could cause actual results
to vary and in some instances to differ materially from those
anticipated by Perpetual and described in the forward-looking
information contained in this news release. In particular and
without limitation of the foregoing, material factors or
assumptions on which the forward-looking information in this news
release is based include: forecast commodity prices and other
pricing assumptions; forecast production volumes based on business
and market conditions; foreign exchange and interest rates;
near-term pricing and continued volatility of the market including
inflationary pressures; accounting estimates and judgments; future
use and development of technology and associated expected future
results; the ability to obtain regulatory approvals; the successful
and timely implementation of capital projects; ability to generate
sufficient cash flow to meet current and future obligations
including those under the Settlement Agreement; the ability of
Perpetual to obtain and retain qualified staff and equipment in a
timely and cost-efficient manner, as applicable; the retention of
key properties; forecast inflation, supply chain access and other
assumptions inherent in Perpetual's current guidance and estimates;
climate change; severe weather events (including wildfires and
drought); the continuance of existing tax, royalty, and regulatory
regimes; the accuracy of the estimates of reserves volumes; ability
to access and implement technology necessary to efficiently and
effectively operate assets; risks of wars or other hostilities or
geopolitical events (including the ongoing war in Ukraine and conflicts in the Middle East), civil insurrection and
pandemics; risks relating to Indigenous land claims and duty to
consult; data breaches and cyber attacks; risks relating to the use
of artificial intelligence; changes in legislation, including but
not limited to tax laws, royalties and environmental regulations
(including greenhouse gas emission reduction requirements and other
decarbonization or social policies) and general economic and
business conditions and markets, among others.
Undue reliance should not be placed on
forward-looking information, which is not a guarantee of
performance and is subject to a number of risks or uncertainties,
including without limitation those described herein and under "Risk
Factors" in Perpetual's Annual Information Form and MD&A for
the year ended December 31, 2023 and
in other reports on file with Canadian securities regulatory
authorities which may be accessed through the SEDAR+ website
(www.sedarplus.ca) and at Perpetual's
website (www.perpetualenergyinc.com).
Readers are cautioned that the foregoing list of risk factors is
not exhaustive. Forward-looking information is based on the
estimates and opinions of Perpetual's management at the time the
information is released, and Perpetual disclaims any intent or
obligation to update publicly any such forward-looking information,
whether as a result of new information, future events or otherwise,
other than as expressly required by applicable securities
law.
SOURCE Perpetual Energy Inc.
