CALGARY, AB, March 25, 2022 /CNW/ - (TSX: PMT) -
Perpetual Energy Inc. ("Perpetual" or the "Company") today received
the Alberta Court of Appeal (the
"Court of Appeal") judgment with respect to the appeal heard on
February 10, 2022 relating to the
sale by Perpetual of legacy shallow gas properties in October 2016 to an arm's length third party
purchaser after an extensive and lengthy marketing, due diligence
and negotiation process (the "Sequoia Disposition").
As previously disclosed, on February 25, 2020, Perpetual filed an application
to strike and summarily dismiss the claim brought under Section 96
of the Bankruptcy and Insolvency Act (the "BIA
Claim") by PricewaterhouseCoopers Inc. ("PwC"), in its capacity as
trustee in bankruptcy of Sequoia Resources Corp. ("Sequoia"). On
January 14, 2021, the Court of
Queen's Bench released its decision with respect to this summary
dismissal application, finding that PwC could not establish a
necessary element of the BIA Claim as Sequoia was not
insolvent at the time of, nor rendered insolvent by, the Sequoia
Disposition. The Court of Queen's Bench therefore concluded there
is "no merit" to the BIA Claim and it was summarily
dismissed. On January 21, 2021, PwC
filed a notice of appeal of this judgment to the Court of Appeal
and the appeal was heard on February 10,
2022.
In today's Memorandum of Judgment, the Court of Appeal
allowed PwC's appeal on the basis that the Court of Queen's Bench
erred in law in its handling of the end-of-life obligations and
that based on the record, it could not be concluded the error was
without consequence, and that the Court of Queen's Bench also erred
in agreeing to hear the second summary dismissal application. On
this basis, the BIA Claim has been directed to
trial.
Perpetual received the Statement of Claim in August 2018. As opposed to proceeding to a full
trial at that time, Perpetual filed a Statement of Defence and
Application for Summary Dismissal later in August 2018. All allegations made by PwC were
denied and the summary dismissal application was made on the basis
that there was no merit to any of the claims and that the claims
constituted an abuse of process. Through various Court of Queen's
Bench proceedings, including a second summary dismissal
application, as at January 14, 2021,
all claims against the Company had been struck or summarily
dismissed. Subsequently, through various Court of Appeal
proceedings, certain aspects of the appeals filed by PwC have been
granted by the Court of Appeal, with certain aspects of outstanding
claims being directed to trial by the Court of Appeal, putting
Perpetual in a similar situation as it was in August 2018.
Perpetual continues to believe that all of the outstanding
claims brought by PwC in relation to the Sequoia Disposition are
completely opportunistic and entirely without merit and it will
continue to vigorously defend itself against them. The Company
remains highly confident that it will be completely successful in
defending the outstanding aspects of PwC's claims.
The Memorandum of Judgment of the Court of Appeal has been
posted to the Company's website at www.perpetualenergyinc.com or
may be obtained by reviewing the public court documents that
pertain to appeal number 2101-0021AC, as filed with the Court of
Appeal.
About Perpetual
Perpetual is an oil and natural gas exploration, production and
marketing company headquartered in Calgary, Alberta. Perpetual owns a diversified
asset portfolio, including liquids-rich conventional natural gas
assets in the deep basin of West Central Alberta, heavy crude oil
and shallow conventional natural gas in Eastern Alberta and undeveloped bitumen leases
in Northern Alberta. Additional
information on Perpetual can be accessed at www.sedar.com or from
the Company's website at www.perpetualenergyinc.com.
The Toronto Stock Exchange has neither approved nor disapproved
the information contained herein.
FORWARD-LOOKING INFORMATION
Certain information in this news release including management's
assessment of future plans, outcomes and operations may constitute
forward-looking information or statements (together
"forward-looking information") under applicable securities laws.
The forward-looking information includes, without limitation,
statements with respect to: statements relating to the claims, the
intended purpose of the claims, the Company's intention to defend
itself and the expected outcome of the claims. Forward-looking
information is based on current expectations, estimates and
projections that involve a number of known and unknown 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 news release. In
particular and without limitation of the foregoing, material
factors or assumptions on which the forward-looking information in
this news release is based include: the ability of it to
successfully defend itself with respect to the claims; forecast
commodity prices and other pricing assumptions; forecast production
volumes based on business and market conditions; foreign exchange
and interest rates; near-term pricing and continued volatility of
the market; accounting estimates and judgments; future use and
development of technology and associated expected future results;
the ability to obtain regulatory approvals; the successful and
timely implementation of capital projects; ability to generate
sufficient cash flow to meet current and future obligations; the
ability of Perpetual to obtain and retain qualified staff and
equipment in a timely and cost-efficient manner, as applicable; the
retention of key properties; forecast inflation and other
assumptions inherent in Perpetual's current guidance and estimates;
the continuance of existing tax, royalty, and regulatory regimes;
the accuracy of the estimates of reserves volumes; ability to
access and implement technology necessary to efficiently and
effectively operate assets; and the ongoing and future impact of
the coronavirus and Russia's
military actions in Ukraine on
commodity prices and the global economy, among others. 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 herein and under "Risk Factors" in Perpetual's Annual
Information Form and MD&A for the year ended December 31, 2021 and in other 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). In addition,
defence costs of legal claims can be substantial, even with respect
to claims that have no merit and due to the inherent uncertainty of
the litigation process, the resolution of the legal proceeding to
which the Company has become subject could have a material effect
on the Company's financial position and results of operations.
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 law.
SOURCE Perpetual Energy Inc.