Parallel Energy Trust Completes IPO

On April 21, 2011, Parallel Energy Trust (“Parallel”) completed its initial public offering of 34,200,000 trust units at a price of $10.00 per trust unit for aggregate gross proceeds of $342,000,000. On May 3, 2011, the over-allotment option was exercised by the underwriters to purchase an additional 5,130,000 trust units for additional gross proceeds of $51,300,000. The net proceeds of the offering and an advance under a credit facility were used by Parallel to acquire a 59 per cent interest in a liquids-rich natural gas property located in the West Panhandle Field, Texas for a purchase price of around US$436.6 million.

Calgary-based Parallel, focuses on creating stable, consistent returns for investors through the acquisition and development of conventional oil and natural gas reserves and production with unexploited low risk potential, and paying out a portion of available cash to holders of trust units on a monthly basis. Parallel is a “mutual fund trust” under the Income Tax Act (Canada) (the “Tax Act”). Parallel will not be a “SIFT trust” (as defined in the Tax Act), provided that it complies at all times with its investment restriction which precludes it from holding any “non-portfolio property” (as defined in the Tax Act).

The offering was completed through a syndicate of underwriters co-led by CIBC World Markets Inc., RBC Capital Markets and Scotia Capital Inc., and including BMO Capital Markets, TD Securities Inc., Canaccord Genuity Corp., National Bank Financial Inc., Desjardins Securities, HSBC Securities (Canada) Inc., FirstEnergy Capital Corp. and Peters & Co. Limited.

Parallel was represented internally by Nancy Dilts, Vice-President, Legal and Corporate Secretary of Parallel. Parallel was also represented by Bennett Jones LLP with a team that included John Kousinioris, Brent Kraus, Harinder Basra, Karen Keck and Amanda Coen (securities); Greg Johnson and Kyle Rousay (tax); Donald Greenfield and Krishna Koul (oil and gas); and Margaret Lemay, Karen Dawson and Greg Ramsay (banking); and in the United States by Thompson & Knight LLP, with a team that included David Wheat and John Cohn (tax); Lawrence Hall (oil and gas); Michael Titens and James Sutton (securities) and Shad Sumro and Brian Minyard (banking).

The underwriting syndicate was represented by McCarthy Tétrault LLP with a team that included David Phillips, David Frost and Janet Erskine (securities) and Bob McCue and James Morand (tax); and in the United States by Vinson & Elkins LLP, with a team that included James Prince and John Ivascu (securities) and Timothy Devetski (tax).