Bonterra Energy Corp.

Bonterra Energy Corp.

November 06, 2008 23:59 ET

Bonterra Energy Income Trust Announces Cash Distribution/Dividend for October Payable November 28, 2008

CALGARY, ALBERTA--(Marketwire - Nov. 6, 2008) - Bonterra Energy Income Trust (www.bonterraenergy.com) (TSX:BNE.UN) announces that the monthly cash distribution (or dividend assuming the conversion of Bonterra to a corporation proceeds as previously announced) that will be paid on November 28, 2008, to all securityholders will be lowered to $0.26 from the previous amount of $0.32 (reduction of 18.75 percent).

The majority of the issued securities of Bonterra are held by Canadian individuals or entities outside of tax shelters. On an after tax basis, a $0.26 dividend with a 19 percent combined Federal and Provincial tax rate, will still exceed the $0.32 distribution that was taxed on a combined Federal and Provincial tax basis at rates of 39.5 to 46.5 percent, depending on the holder's Province of residence. These taxation rates may not be applicable to securities held by foreign investors or by individuals or entities in tax shelters. Reduced taxes may also be available to Canadian taxable corporations. All securityholders should consult their own tax advisors for advice with regard to their respective taxation.

If the previously announced Plan of Arrangement closes as anticipated on or about November 13, 2008, the payment will be paid as a dividend to shareholders of record as of November 24, 2008, with an ex-dividend date of November 20, 2008. If the Plan of Arrangement does not close as scheduled, the payment will be paid as a distribution to unitholders of record on November 17, 2008. The ex-distribution date for such a distribution will be November 13, 2008.

The recent significant decrease in crude oil and natural gas prices has resulted in a decrease in cash flow. The Board of Directors will continue to monitor production volumes (that will be higher in Q4, 2008, due to acquisitions and drilling), distribution/dividend levels, payout ratios, and capital expenditures on a monthly basis. Bonterra currently intends to continue to pay out between 70 and 80 percent of its cash flow and retain the remainder for capital expenditures. The announced reduction is necessary to preserve balance sheet strength and maintain Bonterra's financial flexibility to pursue potential opportunities to further add long-term value for its securityholders.

Certain information set forth in this press release, including management's assessment of Bonterra's future plans and operations, contains forward-looking statements. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Bonterra's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Bonterra'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 by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that Bonterra will derive therefrom. Bonterra disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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Contact Information

  • Bonterra Oil & Gas Ltd.
    George F. Fink
    President, and CEO
    (403) 262-5307
    Fax: (403) 265-7488
    or
    Bonterra Oil & Gas Ltd.
    Garth E. Schultz
    Vice President - Finance, and CFO
    (403) 262-5307
    Fax: (403) 265-7488
    info@bonterraenergy.com
    www.bonterraenergy.com