Paramount Energy Trust (TSX:PMT.UN), has struck a major deal to acquire natural gas producing properties in east central Alberta for $392 million, increasing its reserve base by 100 per cent, the trust said Tuesday.

The properties, acquired from Virginia-based energy company Dominion, will boost Paramount’s natural gas production by 29 per cent to 207 million cubic feet of gas equivalent per day.

The buy also will expand Paramount’s proven plus probable reserves by 269.1 billion cubic feet equivalent of natural gas.

“This is a significant acquisition providing not only solid base production but also many additional years of conventional drilling and shallow gas resource play inventory in a year-round access area,” president and chief executive Sue Riddell Rose said.

Paramount’s acquisition includes 300,000 net acres of undeveloped lands acquired through the deal, representing a significant inventory the trust didn’t previously have, the company said in a conference call.

“And that gives us something that’s already on the books to shoot into future production,” said Cam Sebastian, the company’s chief financial officer.

The street has been anticipating energy trusts will acquire more undeveloped properties to provide long-term sustainability in the face of coming tax changes, according to Kristopher Zack of Raymond James Ltd.

“Paramount is repositioning themselves so that they have assets that will provide more incremental development potential,” said Zack.

Sebastian said the acquisition increased the company’s focus but didn’t change it.

“We consider, and always have considered ourselves to be fully functional oil and gas company, and just happened to be operating in the model of a trust,” he said.

The properties being acquired are located in a year-round access area within the trust’s southern core. The company said they are a strategic fit with its existing shallow gas operations.

Jill Angivine, with First Energy Capital Corp., said the acquisition was significant in building up the trust’s reserves, and its ability to drill year round, rather than be restricted to winter drilling.

“It continues to expand their inventory of what they can do, and expands their reserve life index, ” Angivine said.

She sdai Paramount had a five-year reserve life index and now is catching up to the investment company’s 10-year reserve life index average for gas-weighted trusts.

The acquisition will be funded through bank debt, an issue of $250.5 million in subscription receipts and $75 million worth of convertible debentures.

The transactions, announced late Tuesday, are slated to close by June 26, with an effective date of June 1.

The Paramount acquisitions were announced shortly before the close of stock trading Tuesday. The company’s units closed at $12.57, a drop of 56 cents, or 4.3 per cent, on the Toronto Stock Exchange.

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