CALGARY, March 12, 2013 /PRNewswire/ – (TSX:PMT) – Perpetual Energy Inc. (“Perpetual” or the “Corporation”) is pleased
to announce that it has closed the previously announced sale of its
Elmworth property for net proceeds to Perpetual of $77.5 million,
subject to certain closing adjustments and transaction costs.

The Elmworth property consists of 3 gross (1.5 net) non-producing
horizontal Montney gas wells at Elmworth, one vertical well at Wapiti,
and undeveloped land, including 20,256 net acres of Montney rights. At
year-end 2012, McDaniel estimated total proved and probable reserves of
13.1 MMboe net to Perpetual at Elmworth. Furthermore, McDaniel
estimated $122.8 million of future development capital (“FDC”) would be
required to convert these undeveloped reserves to producing reserves.
There is currently no production or funds flow from operations at the
Elmworth property. This disposition will have no negative effect on
Perpetual’s 2013 projected production or funds flow, and interest
expense will be reduced by approximately $4.0 million on an annual
basis, assuming that the proceeds are used to permanently reduce bank
debt.

Proceeds from this disposition will initially be applied to reduce
outstanding bank debt and, along with the interest savings on reduced
bank debt, will significantly bolster Perpetual’s financial flexibility
to continue to deploy capital to its chosen key commodity-diversifying
growth strategies in Mannville heavy oil and Edson liquids-rich Wilrich
gas development. It will also allow Perpetual to continue to advance
the Corporation’s portfolio of medium and long term value and growth
plays with risk-managed investment. In addition, this transaction
provides added optionality for managing the Corporation’s long term
debt obligations.

Upon closing, net bank debt is estimated to be approximately $21
million, reflecting funds flow and capital program spending to date
since year end 2012. Proforma for the disposition and the Corporation’s
planned first quarter 2013 capital spending program, and assuming the
current forward markets for commodity prices, Perpetual expects to exit
the first quarter of 2013 drawn approximately $35 to $40 million on its
credit facility. Although there was no lending value associated with
the Elmworth property, upon closing of the Elmworth sale, Perpetual’s
lenders have limited availability under the credit facility to $110
million, pending conclusion of the annual borrowing base review which
is underway and expected to be completed by April 30, 2013.

Net asset value (“NAV”)

The following table shows a pro forma adjustment to the Corporation’s
December 31, 2012 NAV table for the Elmworth disposition. The table
shows what is normally referred to as a “produce-out” NAV calculation
under which the Corporation’s reserves would be produced at forecast
future prices and costs. The value is a snapshot in time and is based
on various assumptions including commodity prices and foreign exchange
rates that vary over time. It should not be assumed that the NAV
represents the fair market value of Perpetual’s Shares. The
calculations below do not reflect the value of the Corporation’s
prospect inventory as the prospects are not recognized within the NI
51-101 compliant reserve assessment.

The above evaluation includes future capital expenditure expectations
required to bring undeveloped reserves recognized by McDaniel that meet
the criteria for booking under NI 51-101 on production. The fair market
value of undeveloped land does not reflect the value of the Company’s
prospect inventory which will be converted into reserves and production
over time through future capital investment.

Forward-Looking Information

Certain information regarding Perpetual in this news release including
management’s assessment of future plans and operations may constitute
forward-looking statements under applicable securities laws. The
forward-looking information includes, without limitation, statements
regarding prospective drilling activities; forecast debt levels and
credit facility draws; forecast and realized commodity prices; expected
funding and timing of capital expenditures; projected use of funds
flow; planned drilling and development and the results thereof;
expected dispositions and the use of proceeds therefrom; effects of
dispositions on production, cash flow, debt levels, liquidity and
financial flexibility; commodity prices; and estimated interest
expense. Forward-looking information is based on current expectations,
estimates and projections that involve a number of risks, which could
cause actual results to vary and in some instances to differ materially
from those anticipated by Perpetual and described in the forward
looking information contained in this press release. Undue reliance
should not be placed on forward-looking information, which is not a
guarantee of performance and is subject to a number of risks or
uncertainties, including without limitation those described under “Risk
Factors” in Perpetual’s management’s discussion and analysis for the
year ended December 31, 2012 and those included in reports on file with
Canadian securities regulatory authorities which may be accessed
through the SEDAR website (www.sedar.com and at Perpetual’s website www.perpetualenergyinc.com). Readers are cautioned that the foregoing list of risk factors is not
exhaustive. Forward-looking information is based on the estimates and
opinions of Perpetual’s management at the time the information is
released and Perpetual disclaims any intent or obligation to update
publicly any such forward-looking information, whether as a result of
new information, future events or otherwise, other than as expressly
required by applicable securities laws.

SOURCE Perpetual Energy Inc.