CALGARY,
July 24, 2014 /CNW/ - Argent
Energy Trust ("Argent" or the "Trust") (TSX: AET.UN) is
pleased to report that second quarter 2014 production averaged
approximately 6,373 barrels of oil equivalent per day ("boe/d"),
(approximately 69% oil and NGLs), exceeding previously announced
second quarter production guidance of 6,100 to 6,200 boe/d. During
the month of July, Argent achieved a new all-time daily production
high, a milestone that is reflected in the Trust's 30-day
production average of approximately 7,200 boe/d. This production
level reflects initial flush rates from planned new Eagle Ford oil
and South Escobas natural gas wells that were brought on that are
subject to high decline rates.
During the second quarter, Argent successfully
completed and brought onstream one new South Escobas well,
Violeta Ranch #8, and two new Eagle
Ford wells, namely the Makers 1H and Makers 3H. In addition, the
Trust successfully drilled two new Eagle Ford wells, Haydens 2H and
Haydens 3H, both of which were successfully completed and brought
onstream subsequent to the quarter's end. The Haydens 2H and
Haydens 3H wells are in the initial stages of flowback and it will
be a number of weeks before the results of the wells can be fully
evaluated. Further commentary will be provided in conjunction with
the release of the second quarter financial results. This marks the
completion of Argent's 2014 drilling program.
The Trust continues to review plans to
rationalize a portion of its assets. As part of this review
process, Argent has recently entered into a purchase and sale
agreement to sell certain properties located in Kansas for approximately US$10 million. Current production from these
properties is approximately 95 boe/d. This transaction is expected
to close by August 13, 2014.
Proceeds will be used to reduce the amounts drawn under the credit
facility, which remains at US$160
million following its recent annual review. Upon completion
of the sale, Argent will have approximately US$50 million of undrawn capacity on its credit
facility. With the drilling component of the 2014 capital program
having drawn to a close, Argent expects indebtedness to continue to
decrease over the balance of the year. The Trust is also currently
evaluating offers on its third party operated production payment
and royalty interest; however the timeline to close has been
extended as a result of the recently announced Forest Oil
Corporation (the operator) and Sabine Oil & Gas LLC
transaction.
Given the above, Argent is revising its average
annual production guidance for 2014 from approximately 6,000 boe/d
(approximately 68% oil and NGLs) to an expected range of 6,200 to
6,300 boe/d, and increasing its Q3 2014 guidance to an expected
range of 6,400 to 6,500 boe/d from previous guidance of 6,100 to
6,200 boe/d.
The Trust will release full operating and
financial results for the second quarter ended June 30, 2014 on Wednesday, August 13, 2014.
Note About Forward-Looking Statements
This press release includes forward-looking
information within the meaning of applicable Canadian and
United States securities
legislation. All statements, other than statements of
historical facts, that address activities, circumstances, events,
outcomes and other matters that Argent budgets, forecasts, plans,
projects, estimates, expects, believes, assumes or anticipates (and
other similar expressions) will, should or may occur in the future,
are considered forward-looking information.
In particular, forward-looking information
contained in this press release includes, but is not limited to,
Argent's capital program, drilling and completion plans, oil,
natural gas and NGL production rates, operating costs, production
growth, availability under credit facilities, ability to close on
sale of its third party operated production payment, source of
funding for capital expenditures and the Trust's expectation
regarding its average working interest production rate for the
third quarter and year 2014. With respect to forward-looking
statements contained in this press release, assumptions have been
made regarding, among other things, future oil and natural gas
prices, future currency exchange and interest rates, the regulatory
framework governing taxes in the US and Canada and the Trust's status as a "mutual
fund trust" and not a "SIFT trust", estimates of anticipated
production from the Trust's assets, which estimates are based on
the proposed drilling program with a success rate that, in turn, is
based upon historical drilling success and an evaluation of the
particular wells to be drilled, future recoverability of reserves
from the assets, future capital expenditures and the ability of the
Trust to obtain financing on acceptable terms for its capital
projects and future acquisitions, and the Trust's capital budget
(which is subject to change in light of ongoing results, prevailing
economic circumstances, commodity prices and industry conditions
and regulations).
The forward-looking information provided in this
press release is based on management's current beliefs,
expectations and assumptions, based on currently available
information as to the outcome and timing of future events.
Argent cautions that its future oil, natural gas and natural gas
liquids production, revenues, cash flows, liquidity, plans for
future operations, expenses, outlook for oil and natural gas
prices, timing and amount of future capital expenditures, and other
forward-looking information is subject to all of the risks and
uncertainties normally incident to the exploration for and
development and production and sale of oil and gas.
These risks include, but are not limited to, oil
and natural gas price volatility, Argent's access to cash flows and
other sources of liquidity to fund its capital expenditures, its
level of indebtedness, its ability to replace production, the
impact of the current financial climate on Argent's anticipated
business and financial condition, a lack of availability of or
increases in costs of goods and services, environmental risks,
drilling and other operating risks, regulatory changes, the
uncertainty inherent in estimating future oil and gas production or
reserves, economic conditions and other risks as described in
documents and reports that Argent files with the securities
commissions or similar authorities in applicable Canadian
jurisdictions on the System for Electronic Document Analysis and
Retrieval (SEDAR). Any of these factors could cause Argent's
actual results and plans to differ materially from those contained
in the forward-looking information.
There are many factors that could result in
production levels being less than anticipated, including greater
than anticipated declines in existing production due to poor
reservoir performance, the unanticipated encroachment of water or
other fluids into the producing formation, mechanical failures or
human error or inability to access production facilities, among
other factors.
Forward-looking information is subject to a
number of risks and uncertainties, including those mentioned above,
that could cause actual results to differ materially from the
expectations set forth in the forward-looking information.
Forward-looking information is not a guarantee of future
performance or an assurance that our current assumptions and
projections are valid. All forward-looking information speaks
only as of the date of this press release, and Argent assumes no
obligation to, and expressly disclaims any obligation to, update or
revise any forward-looking information, except as required by
law. You should not place undue reliance on forward-looking
information. You are encouraged to closely consider the
additional disclosures and risk factors contained in Argent's
periodic filings on SEDAR that discuss in further detail the
factors that could cause future results to be different than
contemplated in this press release.
Note regarding barrel of oil equivalency
Barrels of oil equivalent (boe) may be
misleading, particularly if used in isolation. A boe
conversion ratio of six Mcf to one bbl is based on an energy
equivalency conversion method primarily applicable at the burner
tip and do not represent a value equivalency at the wellhead.
Given that the value ratio based on the current price of oil as
compared to natural gas is significantly different from the energy
equivalency conversion ratio of six to one, utilizing a boe
conversion ratio of six Mcf to one bbl may be misleading as an
indication of value.
Argent is a mutual fund trust under the Income
Tax Act (Canada) (the "Tax
Act"). Argent's objective is to create consistent returns for
investors through the acquisition and development of oil and
natural gas reserves and production with low risk exploration
potential, located primarily in the
United States. Material information pertaining to
Argent Energy Trust may be found on www.sedar.com or
www.argentenergytrust.com
SOURCE Argent Energy Trust