PrimeWest Energy Trust Announces Distribution Level for November 2006
OCT 10, 2006 - 13:37 ET
CALGARY, ALBERTA--(CCNMatthews - Oct. 10, 2006) - PrimeWest Energy Trust (TSX:PWI.UN)
(TSX:PWX) (TSX:PWI.DB.A) (TSX:PWI.DB.B) (NYSE:PWI) (PrimeWest or the Trust) announces
that the distribution payable November 15th, 2006 will be $0.25 per Trust Unit.
The ex-distribution date is October 19th, 2006 and the record date is October 23rd,
2006. This represents an 11% annualized pre-tax cash-on-cash yield based on the
October 6th closing price.
Using a Canadian to U.S. dollar exchange rate of 0.88, the distribution amount is
approximately US$0.22 per Trust Unit. The actual U.S. dollar equivalent distribution
will be based upon the U.S./Canadian dollar exchange rate in effect on the payment
date, net of applicable Canadian withholding taxes.
This reduction in the distribution level is necessitated by continued weakness in
natural gas prices. Natural gas prices for November delivery (at October 6th) traded
at C$6.43 per thousand cubic feet, down 50% from November 2005 levels. Natural gas
prices for the winter heating season November to March (at October 6th) traded at
C$7.70 per thousand cubic feet.
Throughout 2006, natural gas markets have experienced downward pressure due to a
warmer than average winter, which led to above average storage levels. The above-average
storage levels have been sustained throughout the summer months, placing continued
downward pressure on prices. Natural gas demand tends to soften during the shoulder
season of September and October, due to variable heating and/or cooling demand.
The above-average storage levels have exacerbated this situation. For the remainder
of 2006, PrimeWest has approximately 70% of natural gas production hedged through
costless collars and 52% of natural gas production hedged in the first quarter 2007,
which protects the downside price received for natural gas sales while providing
for participation in upside movement in commodity prices.
Production guidance for 2006 remains within the range of 39,000 to 40,000 barrels
of oil equivalent (BOE) per day, with over 68% of production currently weighted
to natural gas. PrimeWest has reduced the 2006 capital program to approximately
$275 million from the $300 million announced in July 2006, reflecting the continued
weakness in commodity prices. PrimeWest anticipates providing 2007 guidance in November
2006.
PrimeWest is a Calgary-based conventional oil and gas royalty trust that actively
acquires, develops, produces and sells natural gas, crude oil and natural gas liquids
for the generation of monthly cash distributions to Unitholders. Trust Units of
PrimeWest are traded on the Toronto Stock Exchange (TSX) under the symbol "PWI.UN"
and on the New York Stock Exchange under the symbol "PWI". Exchangeable Shares of
PrimeWest Energy Inc. are listed on the TSX under the symbol "PWX". Five-year Convertible
Debentures of PrimeWest trade on the TSX under the symbol "PWI.DB.A" and the Seven-year
Convertible Debentures trade under the symbol "PWI.DB.B".
FOR FURTHER INFORMATION PLEASE CONTACT:
PrimeWest Energy Trust
Diane Zuber, CFA
Investor Relations Advisor
(403) 699-7356 or Toll-Free: 1-877-968-7878
Email: investor@primewestenergy.com
Website: www.primewestenergy.com