Avenir Diversified Income Trust

Avenir Diversified Income Trust
Val Vista Energy Ltd.

Val Vista Energy Ltd.

January 20, 2005 18:54 ET

Avenir Diversified Income Trust Announces Acquisition of Val Vista Energy Ltd.


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: AVENIR DIVERSIFIED INCOME TRUST

TSX SYMBOL: AVF.UN

AND VAL VISTA ENERGY LTD.

TSX VENTURE SYMBOL: VVR

JANUARY 20, 2005 - 18:54 ET

Avenir Diversified Income Trust Announces Acquisition
of Val Vista Energy Ltd.

CALGARY, ALBERTA--(CCNMatthews - Jan. 20, 2005) - Avenir Diversified
Income Trust (TSX:AVF.UN) ("Avenir Trust") and Val Vista Energy Ltd.
(TSX VENTURE:VVR) ("Val Vista") announce that they have entered into a
binding acquisition agreement (the "Agreement") whereby Avenir Operating
Corp. ("Avenir"), an indirect wholly owned subsidiary of Avenir Trust,
will, subject to certain conditions, offer (the "Offer") to purchase all
of the issued and outstanding common shares of Val Vista. The
consideration under the Offer for each Val Vista common share is $1.43
cash, or 0.13364 of an Avenir trust unit, or any combination of cash and
trust units, subject to a maximum of $12,666,602 of cash being paid and
a maximum of 1,183,795 trust units being issued. This assumes that all
outstanding options of Val Vista will be exercised. Based on
yesterday's closing price of Val Vista's shares, the value to the Val
Vista shareholders represents an approximate 29% premium over the last
trading price.

The total value of the Offer for Val Vista is approximately $29.9
million, including the assumption of $6.5 million in net debt and
assuming proceeds from the exercise of outstanding options.

The Board of Directors of Val Vista has unanimously agreed to recommend
acceptance of the Offer. Certain shareholders, including the management
and directors of Val Vista, holding approximately 30% of the issued and
outstanding common shares, have agreed to tender their common shares to
the Offer. The Agreement provides that Val Vista shall not, directly or
indirectly, solicit or initiate any inquiries, discussions or
negotiations with any third party with respect to any take-over
proposal. Val Vista and Avenir have each agreed to pay a non-completion
fee in the amount of $400,000 in certain circumstances.

Peters & Co. Limited, subject to satisfaction of certain conditions,
will provide an opinion to the Board of Directors of Val Vista that the
Offer is fair, from a financial point of view, for Val Vista
shareholders.

Avenir expects that the Offer will be mailed to holders of Val Vista
Shares no later than February 16, 2005 and will be open for 35 days. The
Offer is subject to all necessary regulatory approvals and to customary
conditions, including that a minimum of 662/3% of Val Vista Shares,
calculated on a fully diluted basis, be tendered to the Offer.

At closing, the transaction adds approximately 780 boe per day (80%
natural gas and 20% light oil) to Avenir's Southern and Central Alberta
core areas. Reserves are estimated to be 1.7 million boe on a proved
plus probable basis. In addition, Avenir has identified numerous low
risk development opportunities which should add approximately 250 to 300
boe per day in the medium term and should provide additional growth
through farm-out opportunities. The acquisition equates to production
and reserve valuations of approximately $35,250 per producing boe and
$16.17 per proved plus probable reserves after deducting $2.4 million in
undeveloped land and seismic value.

Following the acquisition, Avenir's oil and gas production will be an
estimated 3,650 boe per day. The transaction is accretive to Avenir
Trust's cashflow and its oil and gas production base. Avenir Trust is a
diversified royalty and business trust which combines the cashflow
streams from the three business segments of Energy, Financial Services
and Real Estate.

Val Vista is a Calgary based company engaged in the exploration for, and
the development, production and acquisition of, natural gas and
petroleum interests primarily in central and southern Alberta.

This press release shall not constitute an offer to sell or the
solicitation of an offer to buy the securities in any jurisdiction. The
securities offered have not been and will not be registered under the
United States Securities Act of 1933, as amended (the "U.S. Securities
Act") or any state securities laws and may not be offered or sold in the
United States except in certain transactions exempt from the
registration requirements of the U.S. Securities Act and applicable
state securities laws.

Not for Distribution to U.S. Newswire Services or for Dissemination in
the United States

Forward Looking Statements

Certain information regarding Avenir Trust set forth in this document,
including management's assessment of the Trust's future plans and
operations contains forward looking statements that involve substantial
known and unknown risks and uncertainties. These forward looking
statements are subject to numerous risks and uncertainties, some of
which are beyond the Trust's and management's control, including but not
limited to, the impact of general economic conditions, industry
conditions, fluctuation of commodity prices, fluctuation of foreign
exchange rates, imperfection of reserve estimates, environmental risks,
industry competition, availability of qualified personnel and
management, stock market volatility, timely and cost effective access to
sufficient capital from internal and external sources. The Trust's
actual results, performance or achievement could differ materially from
those expressed in or implied by, these forward looking statements and
accordingly, no assurance can be given that any of the events
anticipated to occur or transpire from the forward looking statements
will provide what, if any benefits to the Trust.

-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Avenir Diversified Income Trust
    William Gallacher
    Chief Executive Officer
    (403) 237-9949
    or
    Avenir Diversified Income Trust
    Gary Dundas
    Chief Financial Officer
    (403) 237-9949
    or
    Avenir Diversified Income Trust
    Suite 300, 808 - 1st Street S.W.
    Calgary, Alberta
    T2P 1M9
    (403) 237-0903 (FAX)
    or
    Val Vista Energy Ltd.
    Greg R. Davidson
    President and Chief Executive Officer
    (403) 264-9990
    or
    Val Vista Energy Ltd.
    Lawrence F. Walter
    Chief Financial Officer
    (403) 264-9990
    or
    Val Vista Energy Ltd.
    Suite 950, 330 - 5th Avenue SW
    Calgary, Alberta
    T2P 0L4
    (403) 264-3888 (FAX)
    The Toronto Stock Exchange and the TSX Venture Exchange have not
    reviewed and do not accept responsibility for the adequacy or accuracy
    of this release.