Avenir Diversified Income Trust
TSX : AVF.UN

Avenir Diversified Income Trust

September 06, 2005 14:02 ET

Avenir Diversified Income Trust Acquires Energy Service Company and Southern Alberta Oil & Gas Producing Assets

CALGARY, ALBERTA--(CCNMatthews - Sept. 6, 2005) -

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

Avenir Diversified Income Trust (the "Trust") (TSX:AVF.UN) is pleased to announce that it has entered into an acquisition agreement whereby Avenir Operating Trust., an indirect wholly-owned subsidiary of the Trust, has purchased 90% of the shares of Westvac Service Ltd. ("Westvac"), through a partnership structure. Mr. Rod MacDonald, the owner of Westvac, will retain a 10% partnership interest and remain with Westvac in the capacity of President of Westvac Service Partnership to manage the day to day operations. Westvac provides production related services to the oil and gas industry with a fleet of 40 vacuum trucks, pressure trucks, steamers and hydro-vacs. Westvac is based in Edmonton, Alberta and provides services across west central Alberta primarily in the Swan Hills, Wabasca and Pelican Lake areas.

Total consideration for the transaction of $9 million less debt and working capital was funded from existing credit facilities and the issuance of approximately 170,455 units of the Trust. The acquisition is accretive to the Trust's cash flow and further adds to the Trust's Energy Service portfolio of companies which provide essential production services to the oil and gas industry from southwest Saskatchewan through Alberta to northeast British Columbia.

The Trust is also pleased to announce that it has entered into a purchase and sale agreement to acquire producing oil and gas assets in the Grand Forks area of southern Alberta. The assets consist of approximately 130 barrels per day of medium gravity oil production, 245,000 barrels of oil equivalent reserves on a total proved plus probable basis and almost 6,400 acres of undeveloped land immediately adjacent to the Trust's Grand Forks core area. The Trust has identified opportunities for facility consolidation and future development that will enhance the value of both this acquisition and the Trust's existing Grand Forks assets. Consideration for this acquisition is $2,800,000 cash and closing is expected to occur on December 1, 2005.

The Trust is a diversified royalty and business trust which combines the cash flow streams from the three business segments of Energy, Financial Services and Real Estate with a target payout ratio of 75% to 80% in order to provide sustainable distributions.

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.

Forward Looking Statements

Certain information regarding Avenir Diversified Income 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.

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Avenir Diversified Income Trust
    William Gallacher
    President & CEO
    (403) 237-9949
    (403) 237-0903 (FAX)
    or
    Avenir Diversified Income Trust
    Gary Dundas
    Vice President & CFO
    (403) 237-9949
    (403) 237-0903 (FAX)
    or
    Avenir Diversified Income Trust
    Suite 300, 808 - Street S.W.
    Calgary, Alberta T2P 1M9