Progress Energy Grows 2010 Year-end Reserves by 63 Percent

Feb 9, 2011

Montney reserves grow to 600 billion cubic feet equivalent

CALGARY, Feb. 9 /CNW/ – (TSX-PRQ) – Progress Energy Resources Corp.
(“Progress” or the “Company”) today announced its 2010 year-end
reserves information. Progress grew its proved plus probable (“P+P”)
company interest reserve base by 63 percent to more than 253 million
barrels of oil equivalent (“mmboe”) or 1.5 trillion cubic feet
equivalent (“tcfe”). On a per-share, debt-adjusted basis, Progress’ P+P
reserves grew by 30 percent year-over-year.

Highlights

Progress grew its P+P Montney reserves by 386 percent to approximately
600 billion cubic feet equivalent (“bcfe”) in 2010;
At year-end 2010, the Company had 156 net Montney horizontal wells
booked in its reserve base. This represents less than two percent of
Progress’ identified Montney inventory of over 7,500 locations;
Progress had 22 gross producing Montney horizontal wells booked at year
end 2010 with an average P+P booking of 4.4 bcf per well;
P+P finding and development (“F&D”) costs, excluding changes in future
development capital (“FDC”) and acquisitions, were $4.67 per barrel of
oil equivalent (“boe”) or $0.78 per thousand cubic feet equivalent
(“mcfe”);
P+P F&D costs were $12.37 per boe including changes in FDC;
P+P finding, development and acquisition (“FD&A”) costs were $12.49 per
boe including changes in FDC;
2010 year-end P+P reserves grew by 63 percent to 253.4 mmboe with a
reserve life index of 15 years based on current production of
approximately 45,000 boe per day, annualized;
Total P+P reserve additions, excluding acquisitions, were 80.5 mmboe.
P+P reserve additions through the drillbit replaced 539 percent of
production;
Total P+P reserve additions were 113.0 mmboe. P+P reserve additions from
all sources replaced 758 percent of production.

*(unaudited)*	FD&A including changes in FDC *($/boe,* $/*mcfe)*	F&D including changes in FDC *($/boe,* *$/mcfe)*	F&D excluding changes in FDC *($/boe, $/mcfe)***
Proved	$16.23 / $2.71	$16.43 / $2.74	$9.22 / $1.54
Proved plus probable	$12.49 / $2.08	$12.37 / $2.06	$4.67 / $0.78
2010 Capital before FDC ($MM)	$712.7	$375.6

Year-end 2010 Results

Progress anticipates releasing its year-end 2010 financial results on
February 24, 2011 after market close. Exit rate production for 2010
was approximately 45,000 boe per day with fourth quarter production
averaging approximately 42,700 boe per day. Fourth quarter cash flow
from operating activities (before changes in non-cash working capital)
was approximately $59 million. Capital investment in 2010 was $375
million, before acquisitions and divestitures, and year-end 2010 bank
debt was approximately $333 million including working capital.

In addition to the detailed information disclosed in this news release
more detailed information will be included in Progress’ Annual
Information Form (“AIF”) anticipated to be filed in mid-March 2011.

In this news release, all estimates of natural gas and petroleum
reserves and production are presented on a “company interest” basis (as
defined below), unless expressly indicated that they have been
presented on a “gross” or “net” basis. The Company’s actual natural
gas and petroleum reserves and future production will be greater than
or less than the estimates provided in this news release. The
estimated future net revenue from the production of the Company’s
natural gas and petroleum reserves does not represent the fair market
value of the Company’s reserves.

Supplemental Reserve Reconciliation Information

The opening balance is equal to the Corporation’s 2009 closing balance
representing 102.3 mmboe of proved reserves and 155.1 mmboe of proved
plus probable reserves;
The closing balance for 2010 is 153.7 mmboe proved reserves and 253.4
mmboe proved plus probable reserves. This results in a 50% increase in
proved reserves and a 63% increase in proved plus probable reserves.

Replacement Costs (Unaudited)

2010 FD&A cost of $16.23 per boe, proved and $12.49 per boe, proved plus
probable, including the change in FDC;
2010 F&D cost of $16.43 per boe, proved and $12.37 per boe, proved plus
probable, including the change in FDC;
The three year average F&D cost of $17.04 per boe, proved and $13.02 per
boe, proved plus probable, including the change in FDC.

PRESENTATION OF PROGRESS’ NATURAL GAS AND PETROLEUM RESERVES AND
PRODUCTION INFORMATION

Disclosure of Information

In addition to the detailed information disclosed in this news release
more detailed information on a gross basis (working interest share
before deduction of royalties and without including any royalty
interests) will be included in Company’s Annual Information Form for
the year ended December 31, 2010 (“AIF”) in addition to the full
National Instrument 51-101 – Standards for Disclosure for Oil and Gas
Activities (“NI 51-101″), disclosure for the year ended December 31,
2010 which will be filed on or before March 31, 2011.

The Company has adopted the standard of 6 mcf:1 boe when converting
natural gas to boes and 1 barrel of oil to 6 mcf of gas when converting
oil to gas. Boe’s or mcfe’s may be misleading, particularly if used in
isolation. A boe conversion ratio of 6 mcf:1 boe and an mcfe
conversion ratio of 1 bbl:6 mcf is based on an energy equivalency
conversion method primarily applicable at the burner tip and does not
represent a value equivalency at the wellhead.

Certain of the following definitions and guidelines have been prepared
by the Standing Committee on Reserves Definitions of the CIM (Petroleum
Society). Further information is contained in Section 5.4 of Volume 1
of the COGE Handbook (First Edition, June 30, 2002). Readers should
consult the COGE Handbook for additional explanation and guidance.
Certain other terms used in this news release have the meanings
assigned to them in NI 51-101 and accompanying Companion Policy
51-101CP, adopted by the Canadian securities regulatory authorities and
in Staff Notice 51-324 of the Canadian Securities Administrators.

STATEMENT OF RESERVES DATA AND OTHER OIL AND GAS INFORMATION

PROGRESS ENERGY RESOURCES CORP.

The following tables set forth certain information relating to Progress’
crude oil, natural gas and natural gas liquid reserves and the net
present value of future net revenues associated with such reserves as
at December 31, 2010, as evaluated by GLJ Petroleum Consultants Ltd.
(“GLJ”) in its report dated February 8, 2011 based upon forecast price
and cost assumptions. The information set forth below is derived from
the GLJ Report that was prepared in accordance with the standards
contained in the COGE Handbook and the reserves definitions contained
in NI 51-101, Notice 51-324 and the COGE Handbook. Progress engaged
GLJ to provide an evaluation of proved and proved plus probable
reserves.

All future net revenues are stated prior to provision for interest,
general and administrative expenses and after deduction of royalties
and estimated future capital expenditures. Future net revenues have
been presented on a before tax basis. Estimated values of future net
revenue disclosed herein do not represent fair market value. Columns
may not add due to rounding.

It should not be assumed that the present worth of estimated future cash
flow presented in the tables below represent the fair market value of
the reserves. There is no assurance that the forecast prices and costs
assumptions will be attained and variances could be material. The
recovery and reserve estimates of Progress’ crude oil, natural gas
liquids and natural gas reserves provided herein are estimates only and
there is no guarantee that the estimated reserves will be recovered.
Actual crude oil, natural gas and natural gas liquid reserves may be
greater than or less than the estimates provided herein.

The aggregate of the exploration and development costs incurred in the
most recent financial year and the change during that year in estimated
future development costs generally will not reflect total finding and
development costs related to reserves additions for that year.

Summary of Oil and Gas Reserves and Net Present Values of Future Net
Revenue

As of December 31, 2010

Forecast Prices and Costs


	Light and		Heavy Oil		Conventional Natural Gas			Natural Gas		BOE
	Medium Oil		Heavy Oil		Conventional Natural Gas			Liquids		BOE
	Company Interest	Net	Company Interest	Net		Company Interest	Net	Company Interest	Net	Company Interest	Net
Reserve Category	(Mbbl)	(Mbbl)	(Mbbl)	(Mbbl)		(MMcf)	(MMcf)	(Mbbl)	(Mbbl)	(Mboe)	(Mboe)
Proved
Developed producing	3,384	2,916	463	361		470,464	392,700	7,170	5,368	89,429	74,094
Developed non-producing	328	293	0	0		48,390	40,292	669	504	9,062	7,512
Undeveloped	586	512	0	0		302,434	274,436	4,264	3,695	55,255	49,946
Total proved	4,298	3,721	463	361		821,289	707,429	12,103	9,566	153,746	131,553
Probable	1,345	1,133	135	101		544,293	470,874	7,470	6,060	99,666	85,773
Total proved plus probable	5,643	4,854	599	462		1,365,581	1,178,303	19,573	15,626	253,412	217,326

“Company interest“ means, in relation to Progress’ interest in production or reserves,
its working interest (operating or non-operating) share before
deduction of royalties, plus Progress’ royalty interests in production
or reserves. “Company interest” is not a term defined or recognized
under NI 51-101 and does not have a standardized meaning under
NI 51-101. Therefore, the “company interest” reserves of Progress may
not be comparable to similar measures presented by other issuers, and
investors are cautioned that “company interest” reserves should not be
construed as an alternative to “gross” or “net” reserves calculated in
accordance with NI 51-101.


	Net Present Value of Future Net Revenue
Reserve Category	Before Income Taxes						BTNPV
Reserve Category	Discounted at (%/year)						Disc 10%
		0	5	10	15	20	$/boe
($ thousands)
Proved
Developed Producing		1,840,528	1,337,244	1,059,190	883,367	762,130	11.84
Developed Non-Producing		179,859	122,037	90,420	70,912	57,809	9.98
Undeveloped		866,593	498,973	295,910	173,202	93,983	5.35
Total Proved		2,886,980	1,958,255	1,445,521	1,127,480	913,923	9.40
Total Probable		2,312,642	1,167,960	682,291	432,876	287,216	6.85
Total Proved Plus Probable		5,199,623	3,126,215	2,127,812	1,560,357	1,201,139	8.40

Notes:

(1)		The estimated net present value of future net revenue is based on current legislation in place December 31, 2010.
(2)		Natural gas reserves are reported at a base pressure of 14.65 pounds per square inch and a base temperature of 60°F.
(3)		Prices for oil F.O.B. Edmonton are based upon 40° API oil having less than 0.4% sulphur. Prices for natural gas are based upon a base pressure of 14.65 pounds per square inch and base temperature of 60ºF. The wellhead oil prices were adjusted for quality and transportation based on historical actual prices. The natural gas prices were adjusted, where necessary, based on historical pricing based on heating values and the differing costs of service applied by various purchasers. The natural gas liquids prices were adjusted to reflect historical average prices received.
(4)		The forecast prices and cost case assumes no legislative or regulatory amendments and includes the effects of inflation. The estimated future net revenue to be derived from the production of the reserves includes an inflation rate of 2.0% per year, an exchange rate as listed below, and the following price forecasts supplied by GLJ.

	Oil		Natural Gas Liquids
Year	WTI Cushing Oklahoma (US$/bbl)	Edmonton Par Price 40° API (Cdn$/bbl)	Cromer Medium 29° API (Cdn$/bbl)	Edmonton Propane (Cdn$/bbl)	Edmonton Butane (Cdn$/bbl)	Edmonton Pentanes Plus (Cdn$/bbl)	Inflation Rates (%/Year)	Exchange Rate (US$/Cdn$)
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020	88.00 89.00 90.00 92.00 95.17 97.55 100.26 102.74 105.45 107.56	86.22 89.29 90.92 92.96 96.19 98.62 101.39 103.92 106.68 108.84	82.78 83.04 83.64 84.59 87.54 89.75 92.26 94.57 97.08 99.04	54.32 56.25 57.28 58.56 60.60 62.13 63.87 65.47 67.21 68.57	67.26 68.75 70.01 71.58 74.07 75.94 78.07 80.02 82.15 83.80	90.54 91.96 92.74 94.82 98.12 100.59 103.42 106.00 108.82 111.01	2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0	.98 .98 .98 .98 .98 .98 .98 .98 .98 .98

Thereafter	+2.0%/yr	+2.0%/yr	+2.0%/yr	+2.0%/yr	+2.0%/yr	+2.0%/yr	2.0

Year

NYMEX Futures

Contract

(US$/MMBtu)

Midwest @

Chicago

(US$/MMBtu)

AECO Gas Price

(Cdn$/MMBtu)

Sumas Spot Gas

Price

(US$/MMBtu)

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

4.50

5.15

5.75

6.25

6.75

7.10

7.32

7.47

7.62

7.77

4.60

5.25

5.85

6.35

6.85

7.20

7.42

7.57

7.72

7.87

4.16

4.74

5.31

5.77

6.22

6.53

6.76

6.90

7.06

7.21

4.25

4.85

5.40

5.90

6.40

6.75

6.97

7.12

7.27

7.42

Thereafter

+2.0%/yr

In 2010, Progress received a weighted average price of $73.24 per barrel
(“bbl”) for crude oil, $55.10 per bbl for Natural Gas Liquids (“NGLs”)
and $4.13 per thousand cubic feet (“Mcf”) for natural gas.

The undiscounted total future net revenue by reserves category as of
December 31, 2010, using forecast prices and costs, is set forth below:

	($ millions)
Reserve Category	Revenue	Royalties, Mineral Tax	Operating Costs	Development Costs	Well Abandonment Costs	Future Net Revenue Before Income Taxes	Income Taxes	Future Net Revenue After Income Taxes
Forecast Prices and Costs
Proved	6,336	926	1,786	684	53	2,887	128	2,759
Proved plus probable	11,011	1,612	2,918	1,212	69	5,200	706	4,494

Reconciliation of Total Company Interest Reserves by Principal Product
Type

Forecast Prices and Costs

		Oil	Natural Gas	Natural Gas Liquids	BOE
		(mbbl)	(MMcf)	(mbbl)	(mboe)
Total Proved	Opening Balance (December 31, 2009)	4,105	544,887	7,370	102,290
	Technical Revisions	436	(12,391)	1,056	(573)
	Economic Factors	(22)	(15,530)	(130)	(2,740)
	Exploration Discoveries	-	43,819	814	8,117
	Drilling Extensions and Improved Recovery	246	198,174	2,662	35,936
	Acquisitions	1,457	156,855	2,018	29,618
	Dispositions	(746)	(16,538)	(461)	(3,963)
	Production	(714)	(77,986)	(1,228)	(14,940)
	Closing Balance (December 31, 2010)	4,762	821,289	12,103	153,746
Proved Plus Probable	Opening Balance (December 31, 2009)	5,283	834,195	10,825	155,141
	Technical Revisions	448	(35,360)	1,388	(4,057)
	Economic Factors	(23)	(8,872)	(92)	(1,593)
	Exploration Discoveries	-	102,282	1,845	18,892
	Drilling Extensions and Improved Recovery	386	372,135	4,870	67,280
	Acquisitions	1,843	201,198	2,568	37,944
	Dispositions	(980)	(22,010)	(604)	(5,253)
	Production	(714)	(77,986)	(1,228)	(14,940)
	Closing Balance (December 31, 2010)	6,242	1,365,581	19,573	253,412

Closing balances may be slightly higher than reported Company gross
reserves due to the inclusion of recoverable royalties.

The following table sets out the development costs deducted in the
estimation of future net revenue attributable to the reserves
categories described above.

Future Development Costs
($ thousands)	Forecast Prices and Costs
Year	Proved Reserves	Proved Plus Probable Reserves
2011	195,939	275,297
2012	293,774	537,219
2013	109,244	261,906
2014	13,871	35,896
2015	36,107	52,257
Total	683,913	1,211,776

2011 Production Estimates

The following table sets out the Company’s gross production estimated in
GLJ’s evaluation for 2011 which is reflected in the estimated future
net revenue disclosed above. There are no fields that account for 20%
or more of the total production.

Area	Light and Medium Oil (bbl/d)	Heavy Oil (bbl/d)	Associated And Non-Associated Gas (Mcf/d)	Natural Gas Liquids (bbl/d)	BOE (Boe/d)
Total Proved Daily Production	1,536	208	238,859	4,247	45,801
Total Probable Daily Production	44	4	17,691	339	3,335
Total Proved Plus Probable Production	1,580	212	256,549	4,586	49,136

Finding and Development Costs

Proved

P+P

Capital

Reserve

Proved

Reserve

P+P

Expenditures

Additions

Costs

Additions

Costs

Finding, Development and Net Acquisition Costs

($ million)

(mmboe)

($/boe)

(mmboe)

($/boe)

Total 2010 proved FD&A costs including change in FDC

$ 1,078

66.4

$ 16.23

Total 2010 P+P FD&A including change in FDC

$ 1,414

113.2

$ 12.49

Total 2009 proved FD&A costs including change in FDC

$ 1,386

51.2

$ 27.09

Total 2009 P+P FD&A including change in FDC

$ 1,516

76.7

$ 19.78

3-year average proved FD&A including change in FDC

$ 2,611

127.7

$ 20.45

3-year average P+P FD&A including change in FDC

$ 3,097

202.2

$ 15.31

Finding and Development Costs

Total 2010 proved F&D costs including change in FDC

$ 669

40.7

$ 16.43

Total 2010 P+P F&D including change in FDC

$ 996

80.5

$ 12.37

Total 2009 proved F&D costs including change in FDC

$ 421

22.4

$ 18.79

Total 2009 P+P F&D including change in FDC

$ 550

39.7

$ 13.88

3-year average proved F&D including change in FDC

$ 1,259

73.9

$ 17.04

3-year average P+P F&D including change in FDC

$ 1,736

133.4

$ 13.02

Finding and development cost calculations and finding, development and
acquisition cost calculations have been done in accordance with NI
51-101 (although total company interest reserves were used rather than
gross (working interest) reserves).

Advisory on Forward Looking Statements

Certain information regarding Progress set forth in this news release
contains forward-looking statements that involve substantial known and
unknown risks and uncertainties. The use of any of the words
“anticipate”, “continue”, “estimate”, “expect”, “may”, “will”,
“project”, “should”, “believe” and similar expressions are intended to
identify forward looking statements. Such statements represent
Progress’ internal projections, estimates or beliefs concerning, among
other things, the timing of release of its year end financial results
and the filing of its AIF. In addition, statements relating to
“reserves” are deemed to be forward looking statements, as they involve
the implied assessment, based on certain estimates and assumptions,
that the reserves described can be profitably produced in the future.
These statements are only predictions and actual events may differ
materially. Although Progress believes that the expectations reflected
in the forward-looking statements are reasonable, it cannot guarantee
future results, expected timing of filing of its financial results and
AIF, performance or achievement since such expectations are inherently
subject to significant business, economic, competitive, political and
social uncertainties and contingencies.

These forward-looking statements are subject to numerous risks and
uncertainties, certain of which are beyond the Company’s control,
including the impact of general economic conditions; volatility in
market prices for crude oil and natural gas; industry conditions;
volatility of commodity prices; currency fluctuation; imprecision of
reserve estimates; liabilities inherent in crude oil and natural gas
operations; environmental risks; incorrect assessments of the value of
acquisitions and exploration and development programs; competition from
other producers; the lack of availability of qualified personnel or
management; changes in income tax laws or changes in tax laws and
incentive programs relating to the oil and gas industry; hazards such
as fire, explosion, blowouts, cratering, and spills, each of which
could result in substantial damage to wells, production facilities,
other property and the environment or in personal injury; stock market
volatility; and the ability to access sufficient capital from internal
and external sources. Readers are cautioned that the foregoing lists of
factors are not exhaustive.

With respect to forward-looking statements contained in this news
release, Progress has made assumptions regarding: current commodity
prices and royalty regimes; availability of skilled labour; north
American sulphur prices; timing and amount of capital expenditures;
future exchange rates; the price of oil and natural gas; the impact of
increasing competition; conditions in general economic and financial
markets; availability of drilling and related equipment; effects of
regulation by governmental agencies; royalty rates and future operating
costs.

These forward-looking statements are made as of the date of this news
release and the Company disclaims any intent or obligation to update
publicly any forward-looking statements, whether as a result of new
information, future events or results or otherwise, other than as
required by applicable securities laws.

Barrels of Oil Equivalent

“Boe” means barrel of oil equivalent on the basis of 1 boe to 6,000
cubic feet of natural gas. Boe’s may be misleading, particularly if
used in isolation. A boe conversion ratio of 1 boe for 6,000 cubic feet
of natural gas is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead.

News Releases

Progress Energy Grows 2010 Year-end Reserves by 63 Percent