Progress Energy triples Q2 loss

Progress Energy Resources Corp. — the Calgary company in the process of being sold for $6 billion — tripled its second-quarter net loss to $31.5 million from $11.4 million a year ago.

The B.C. shale gas explorer reported Wednesday a loss per share of 13 cents, up from five cents in the same three-month period of 2011, while revenue fell to $75 million from $99 million on lower commodity prices and an unrealized financial instrument loss.

Last week, Progress announced that its chosen suitor, Malaysian state-owned oil company Petroliam Nasional Bhd. or Petronas, had been forced to raise its bid to $22 per share from the previously accepted $20.45 to trump an alternative bid received by the target company.

The new bid would value Progress at nearly $6 billion, including assumed debt, up from $5.5 billion under t he original offer announced in June.

Shareholders are to vote on the Petronas sale on Aug. 28.

Production averaged 44,600 barrels of oil equivalent per day in the second quarter, up 10 per cent over the second quarter of 2011 despite the affect of planned natural gas well shutins and the deferral of tie-ins and completions representing 10 to 15 per cent of production, Progress reported.

The company generated cash flow of $27.8 million in the quarter versus $54.6 million.

Progress reported capital spending on the joint venture lands it shares with Petronas in northeastern B.C. totalled $71.6 million, of which $8.9 million was net to Progress. It drilled three horizontal Montney wells.

The first joint venture production was brought on stream in mid-May through newly constructed facilities at Lily, it said.

It added a detailed feasibility study on the joint venture natural gas liquefaction facility at Prince Rupert, B.C., is to be completed by the end of August and studies by two pipeline companies on transporting gas from the joint venture to the LNG facility are to be completed in early September.

Analyst Grant Daunheimer of Dundee Securities said in a note the Q2 results were in line with forecasts.

“With nothing more than four per cent off our estimates, we consider this quarter a wash and see nothing that would impact the pending acquisition by Petronas,” he said.

“We believe the consideration being offered by Petronas is fair but with the stock trading at a premium to the offered value the market appears to believe another higher bid may occur.”

Progress closed down 16 cents at $22.60 on Wednesday. It rose as high as $22.94 on Friday.