Progress Energy Announces the Closing of its Strategic Partnership with PETRONAS

abarrelfullabarrelfull wrote on 03 Aug 2011 12:09
Tags: canada lng petronas progress


Progress Energy Resources Corp. (“Progress” or the “Company”) (TSX:PRQ) announced today that it has closed the previously announced transaction to create a strategic
partnership with the Malaysian national oil and gas company, PETRONAS, to develop a portion of Progress’ Montney shale assets in the Foothills of northeast British Columbia (the “Transaction”). Under the Transaction, PETRONAS acquired 50 percent of Progress’ working interest in the Altares, Lily and Kahta properties (the “North Montney Joint
Venture”).

“Both parties have worked diligently and cooperatively towards the completion of the agreements that form the basis of our strategic partnership,” said Michael Culbert, President and Chief Executive Officer of Progress. “We will now move forward on building a strong gas production growth profile from the North Montney Joint Venture assets as well as initiating the feasibility study for the development of an LNG export facility on the west coast of British Columbia.”

PETRONAS is paying a total consideration of CDN$1.07 billion of which 25 percent of the total consideration (CDN$267.5 million) has been paid in cash upon closing and 75 percent of the total consideration will be paid in the form of a capital funding commitment
whereby PETRONAS will pay 75 percent of Progress’ share of future capital expenditures in the North Montney Joint Venture to a total of CDN$802.5 million.

PETRONAS and Progress have also established an LNG export joint venture (the “LNG Export Joint Venture”) which is 80 percent and 20 percent owned, respectively. The LNG Export Joint Venture will launch a feasibility study immediately to evaluate the potential of the LNG export facility on the west coast of British Columbia. PETRONAS will be
leading the development of the LNG export facility, and PETRONAS and Progress will jointly market the LNG utilizing PETRONAS’ well-established and extensive network of customers in LNG markets globally.

In connection with the LNG Export Joint Venture, at the time of a successful LNG Export investment decision, PETRONAS will provide a standby equity financing commitment of up to $600 million, for Progress’ capital requirements of the North Montney Joint Venture to supply gas for the LNG Export Joint Venture, subject to receipt of all regulatory approvals.

About PETRONAS

PETRONAS is the national oil and gas company of Malaysia. Incorporated in 1974, the company, ranked among the most profitable among the Fortune Global 500 entities, is engaged in the oil, gas and petrochemicals industries with strategic business assets and interests in more than 30 countries. It is one of the world’s leading LNG companies and is fully involved in every value chain of the LNG business, from natural gas production, liquefaction and shipping to re-gasification and trading. Apart from its Malaysian production facility, currently one of the world’s largest, PETRONAS also owns interests in LNG assets in Australia, Egypt and the United Kingdom.

About Progress Energy

Progress is a Calgary, Canada-based energy company focused on exploration, development and production of large, unconventional natural gas resources in northeast British Columbia and northwest Alberta. Throughout its history, Progress has a solid track record of growing reserves, production and the underlying value of the Company for its shareholders. Common shares of Progress are listed on the Toronto Stock Exchange under the symbol PRQ.


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