Esprit Energy Trust Announces Expansion of its Greater Olds Core Area through an Agreement to Acquire Private Oil and Gas Producer

Esprit Energy Trust Announces Expansion of its Greater Olds Core Area through an Agreement to Acquire Private Oil and Gas Producer

Esprit Energy Trust (“Esprit” or the “Trust”) today announced that it has entered into an agreement to acquire Trifecta Resources Inc., a privately-held, Calgary-based oil and gas producer. Esprit has agreed to acquire all of the issued and outstanding shares of the company for total consideration of $102 million. This acquisition is subject to customary closing adjustments and conditions.

“This acquisition is a value-adding strategic move for Esprit. It is a continuation of our portfolio management efforts to build our position where we have competitive advantage and monetize areas that are not core such as the Ante Creek divestiture announced in the first quarter. The majority of the assets included in this transaction are located adjacent to our core properties in the greater Olds area, further solidifying our competitive advantage in that area. In addition, the production is entirely sweet and will serve to decrease the percentage of sour gas production in Esprit’s portfolio to less than 50 percent.” said Paul Myers, Esprit’s President and Chief Executive Officer. He further commented that, “These assets also add a significant number of opportunities to our development inventory and will assist the Trust in continuing to grow its Olds core area”.

The strategic rationale for this acquisition is summarized below:

– The assets included in the acquisition complement Esprit’s existing asset base. A majority of the assets are located within the Trust’s key operating area of greater Olds, where Esprit has operational expertise and control of infrastructure; – The assets acquired include low-risk growth opportunities that have the potential to increase production from these assets by over 50 percent in the next year; – Production from the asset base receives high netbacks due to high natural gas liquids yields; and – The transaction adds value for unitholders; increasing net asset

value, cash flow, production and reserves on a per unit basis.

The majority of the assets acquired are located in the Garrington and Mikwan areas in Southern Alberta and are adjacent to Esprit’s existing key operating area in and around Olds. The acquired assets, which provide operational control and have an average working interest of 70 percent, currently produce approximately 1,400 barrels of oil equivalent (“boe”) per day. This production is made up of approximately 50 percent natural gas, 25 percent natural gas liquids and 25 percent light oil.

The complementary nature of these assets allows them to be readily integrated with the Trust’s existing operations and staff. Esprit also expects to be able to begin development of these properties quickly, given the Trust’s existing experience and expertise in the areas.

In addition to the assets’ current production, Esprit has identified future opportunities within these assets including in-fill drilling, re-completions and additional development drilling. Esprit expects to begin developing these opportunities in the second half of 2006.

Included in this acquisition is approximately 30,000 gross (22,200 net) acres of undeveloped land, bringing the Trust’s total undeveloped land position to approximately 300,000 net acres.

The reserves of the acquired company have been evaluated by an independent engineering company and have been estimated at 4.9 million boe proved plus probable, of which 3.5 million boe are classified as proved. The reserves are made up of approximately 55 percent natural gas, and 45 percent oil and natural gas liquids.

After giving effect to this transaction, Esprit’s proved plus probable reserve life index remains materially unchanged, moving from 10.7 years to 10.5 years.

Esprit’s production guidance has increased to reflect this acquisition. The Trust’s revised production guidance for full year 2006 is between 17,500 and 18,100 boe per day, an increase of 750 barrels per day. Production volumes are averaged over the full year; the acquired volumes reflect an expected effective date on or before July 14, 2006, in effect adding production from the acquired assets for six months of the year.

The acquisition will be funded from Esprit’s credit lines, Esprit expects that its credit facility will be expanded as a result of the acquisition. The Trust continues to plan to not only build in core areas but to divest in non-core areas as a means of strengthening its portfolio and managing its balance sheet.

In connection with this acquisition and consistent with its existing hedging practices, Esprit intends to hedge a sufficient amount of its production in order to increase the certainty of realizing its acquisition economics and future cash flows.

CIBC World Markets Inc. provided financial advisory services to Esprit with respect to the transaction.

Esprit is a Calgary based natural gas weighted income trust. Esprit’s operations are primarily concentrated in Alberta and are characterized by long life, gas focused assets. Trust units and convertible debentures of Esprit are traded on the Toronto Stock Exchange (TSX) under the symbols “EEE.UN” and “EEE.DB”, respectively.

Certain information regarding Esprit Energy Trust including management’s assessment of future plans and operations, constitutes forward-looking information or statements under applicable securities law and necessarily involve assumptions regarding factors and risks that could cause actual results to vary materially, including, without limitation, assumptions and risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefits of acquisitions and ability to access sufficient capital from internal and external sources. Forward looking statements include, but are not limited to: Esprit’s guidance, production performance, finding and operating costs, drilling program completion and results and other statements containing the words “expects”, “believes”, “will”, “should” or similar such language. The reader is cautioned that these factors and risks are difficult to predict and that the assumptions used in the preparation of such information, although considered reasonably accurate by Esprit at the time of preparation, may prove to be incorrect. Accordingly, readers are cautioned that the actual results achieved will vary from the information provided herein and the variations may be material. Readers are also cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect Esprit’s operations or financial results are included in Esprit’s reports on file with Canadian securities regulatory authorities. In particular see Esprit’s MD&A and the Risk Factors and Industry Conditions sections of Esprit’s Annual Information Form. Esprit’s reports may be accessed through the SEDAR website (www.sedar.com), at Esprit’s website (www.eee.ca) or by contacting Lisa Ciulka at Esprit Energy Trust. Consequently, there is no representation by Esprit that actual results achieved will be the same in whole or in part as those set out in the forward looking information. Furthermore, the forward-looking statements contained in this news release are made as of the date of this news release, and Esprit does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained herein are expressly qualified by this cautionary statement.

Boe’s may be misleading, particularly if used in isolation. A boe

conversion ratio of 1 bbl:6,000 cubic feet is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. References to “production

volumes” or “production” refer to average sales volumes.

For further information

please visit our web site at www.eee.ca or contact: Lisa Ciulka, Manager, Investor Relations, (403) 213-3770 or toll free 1-888-213-3713, lciulka@eee.ca

Source: Esprit Energy Trust

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