Paramount rebuilds Alberta gas reserves

Paramount Energy Trust, created in mid-2002 from a Paramount Resources’ spin-off, has boosted its reserves by 44 percent following a C$290 million purchase of assets in northeastern Alberta.

Once the deal is closed, the trust will have proved plus probable reserves of 337 billion cubic feet and its output will increase by 40 percent to 170 million cubic feet per day.

The trust estimates its 2005 payout to unit holders will be about 75 percent of cash flow, projected at C$258 million for the full year.

The properties, whose owner was not identified, are close to the trust’s core areas, but well outside the boundaries of an area where Paramount was bogged down in a gas-over-bitumen dispute with oil sands producers and the Alberta Energy and Utilities Board.

More than 1,000 gas wells were shut in last year to preserve reservoir pressures and the value of 25.5 billion barrels of bitumen.

Paramount took the heaviest blow, losing 20.6 million cubic feet per day of production.

It was among 12 gas producers to receive royalty credits by way of compensation, in a deal that will cost the Alberta government C$175 million in the first two years of a 10-year agreement.

—Gary Park