CALGARY - Paramount Energy Trust (TSX:PMT.UN) has signed a deal to acquire oil and natural gas assets in the Edson area of west central Alberta from an unidentified company for $126 million.
The trust said the deal includes 1,685 barrels of oil equivalent per day in production with 80 per cent of it coming from natural gas as well as gathering and processing infrastructure and undeveloped land.
"This is another strategic acquisition for PET in west central Alberta, further expanding our operating base and enhancing our production with high quality liquids-rich gas while also increasing our inventory of higher impact resource-style prospects," Paramount president and chief executive Sue Riddell Rose said in a statement.
Paramount said it will pay for the deal with bank debt and a $50-million offering of trust units.
The trust said it has signed a deal with a syndicate of underwriters led by BMO Capital Markets to sell, on a bought deal basis, 10.53 million subscription receipts at a price of $4.75 each.
Each subscription receipt represents the right to receive one trust unit on the closing of the acquisition.
Units in the trust, which were halted pending the announcement of the deal, were up 18 cents at $5.05 on the Toronto Stock Exchange on Wednesday.
For 2009, Paramount said it earned $14.4 million or 12 cents per unit on $418.3 million in revenue. That compared with a gain of $30.8 million or 28 cents per unit on $545.7 million in revenue in 2008.
The trust also said recently that its board of directors has unanimously approved the conversion of the trust to a corporation, which is expected to be completed by June 17.