Avenir Diversified Income Trust
TSX : AVF.UN

Avenir Diversified Income Trust

November 15, 2005 09:00 ET

Avenir Diversified Income Trust Posts Third Quarter 2005 Results

CALGARY, ALBERTA--(CCNMatthews - Nov. 15, 2005) - AVENIR DIVERSIFIED INCOME TRUST (TSX:AVF.UN) (the "Trust") is pleased to announce the financial and operational results for the three and nine months ended September 30, 2005 and to announce they have filed the complete Management Discussion and Analysis and Unaudited Consolidated Financial Statements for the three and nine months ended September 30, 2005 on SEDAR. An electronic copy of these documents may be obtained on the Trust's SEDAR profile at www.sedar.com.



Third Quarter 2005 FINANCIAL HIGHLIGHTS

------------------------------------------------------------------------
For the periods ended Three months Nine months
Ended Ended
Sept 30 Sept 30
------------------------------------------------------------------------
2005 2004 2005 2004
------------------------------------------------------------------------
FINANCIAL
Gross Revenue $102,196,091 $6,222,299 $186,393,527 $12,365,794
Net Revenue $ 96,847,926 $5,326,013 $171,777,083 $10,291,258
Funds From
Operations
(FFO)1 $ 16,360,170 $2,806,379 $ 32,990,474 $ 5,563,080
FFO Per Unit(1)
- Basic $ 0.67 $ 0.39 $ 1.59 $ 1.26
Distributions $ 8,389,202 $ 2,015,805 $ 20,532,864 $ 3,617,782
Distributions
Per Unit
- Basic $ 0.34 $ 0.28 $ 0.99 $ 0.82
Distribution
Payout Ratio(2) 51% 72% 62% 65%
Net Income (loss) $ 6,592,212 $ 780,599 $ 8,732,675 $ 1,058,758
Net Income
(loss) Per Unit
- Basic $ 0.27 $ 0.11 $ 0.42 $ 0.24
Total Assets $401,226,507 $109,945,145 $401,226,507 $109,945,145
Working Cap.
(Net Debt)
including
mortgages(1) $(83,944,095)$(48,308,300) $(83,944,095)$(48,308,300)
Wtd. Avg.
Units
Outstanding
- Basic 24,518,236 7,199,303 20,737,474 4,409,696
Units Outstanding
(incl. escrowed
units) 24,631,254 7,199,303 24,631,254 7,199,303

OPERATING
Production
Oil and NGL's
- bbls per day 1,572 344 1,606 302
Gas - Mcf per day 11,540 3,901 9,526 2,986
Total BOE(3) per day 3,495 995 3,193 800
Average Pricing
Oil & NGL
($/Bbl)
before
hedging(5) $ 61.00 $ 44.38 $ 50.85 $ 42.09
Oil & NGL
($/Bbl) after
hedging(5) $ 57.09 $ 38.28 $ 47.11 $ 36.61
Natural Gas
($/Mcf) $ 9.09 $ 6.24 $ 7.89 $ 6.37
Average Price
Per BOE(3)
before
hedging(5) $ 56.59 $ 39.69 $ 48.42 $ 39.70
Average Price
Per BOE(3)
after
hedging(5) $ 54.83 $ 37.58 $ 46.55 $ 37.63
------------------------------------------------------------------------
------------------------------------------------------------------------

(1) Funds from operations, Funds per unit, net back, and working capital
(net debt) are not recognized measures under Canadian generally accepted
accounting principles (GAAP). Funds from operations is calculated by
taking net income and adding back non-cash balances such as depletion,
depreciation and amortization, asset retirement obligation accretion,
gain on sale of real estate properties, stock based compensation
expense, unrealized (gain) loss on financial instruments and future
income tax recovery. Working capital (net debt) is calculated by taking
current assets less current liabilities including mortgages (upon
mortgage maturity it is the Trust's intention to renew the mortgages on
a long term basis at or below current rates) and long-term debt.
Management believes that these measures are useful supplemental measures
to analyze operating performance as they demonstrate the Trust's ability
to generate the Funds from operations necessary to fund future
distributions and capital investments. The Trust's method of calculating
these measures may differ from other issuers, and accordingly, they may
not be comparable to measures used by other issuers. Investors should be
cautioned that "Funds from operations" and "Funds per unit" should not
be construed as an alternative to net income, cash flow from operating
activities or other measures of financial performance calculated in
accordance with GAAP.

(2) Distribution Payout Ratio is calculated by dividing the
Distributions by the Funds from operations.

(3) Natural Gas conversion ratio of 6:1


President's Message

Results for the third quarter were at or ahead of forecast with particular strength in energy services and commodity prices in our oil and gas division. With the fourth quarter and first quarter being the Trust's traditional strong quarters due to seasonal strengths in energy services and natural gas liquids marketing, the Trust is positioned operationally for a very robust six months. Record cashflow, low pay-out ratio and balance sheet strength affords Avenir the ability to take advantage of opportunities and review our current distribution level.

The third quarter of 2005 saw the Trust take a key step forward in our diversification strategy with the initiation of the acquisition of the joint venture management company of the EnerVest Group of Funds. This purchase further solidified our Financial Services business unit and gave us a great cornerstone for future diversification and growth within our business units.

Our oil and gas division continued to make positive strides with the integration of our earlier acquisitions and adding Makah Energy Corp. ("Makah") in August. Our oil and gas team has identified several development projects within our current portfolio consisting of greater than $50 million in work-overs, re-completions and drilling opportunities. Development projects in this portfolio should add oil and gas production at approximately $20,000 per producing BOE per day, and will be added throughout the balance of 2005 and into 2006. Current production is approximately 3,700 BOE per day with about 100 BOE per day shut-in due to service work requirements and a pipeline dispute. We continue to review new and existing opportunities and are also continuing to evaluate farm-out options on our lands.

Our energy services division had a very successful and busy third quarter despite wet conditions in September throughout southern Alberta. With the addition of Westvac Services Ltd. in late August, we added hydro-vac, vacuum truck and steaming operations in an area that we had not been previously active. This acquisition, along with our existing energy services operation, gives the Trust sufficient critical mass to compete and provide outstanding, quality service across most of Alberta and northeast British Columbia. The fourth and first quarters are typically the strongest quarters for this division and we are well positioned to exceed budgets through the winter months. With our growth to date this division is now approaching the size of a stand-alone Trust in this sector.

Elbow River Marketing LP ("Elbow River") continued to gear up for what we believe will be a strong winter season. The winter is traditionally Elbow River's busy season and judging by activity and pre-sales this period we are on track to meet or surpass budget expectations.

Subsequent to the third quarter, the Trust closed a $196.2 million bought deal equity financing. Proceeds from this financing were used to pay for the acquisitions of the joint venture that is the sole shareholder of the management company of EnerVest Diversified Income Trust, Makah, and to pay down bank lines. The Trust currently has very little in the way of bank debt and has the financial flexibility to react quickly to acquisition opportunities.

The Federal Government's recent announcement regarding a review of the trust sector has created an air of uncertainty in the marketplace and has largely contributed to the recent sell off and market price erosion in the trust sector. We are pleased the Finance Minister has indicated a willingness to provide a quick resolution to the issue and is reviewing a number of economic and taxation considerations, not just the impact of trust distributions on tax revenues. Avenir, as an indictor of the economic growth provided by the trust sector, has increased its size through internal growth and acquisitions by over 50 times and has increased distributions by over 60% in less than the three years since inception. It is the current uncertainty surrounding the government review of the income trust sector and potential taxation impacts, however, that makes it very difficult to make prudent business decisions when we do not know the rules.

We remain focused and diligent with respect to our operations and acquisitions and continue to see, evaluate opportunities and plan to remain active on the acquisition front. We firmly believe that we will continue to provide sustainable distributions and accretive growth on a per unit basis.

REVIEW OF FINANCIAL RESULTS

The Trust had net income for the quarter ended September 30, 2005 of $6,592,212. Net Income is up 745% over the $780,599 net income for the quarter ended September 30, 2004. Net income was affected by the non-cash mark-to-market opportunity loss related to risk management contracts. Excluding the unrealized mark-to-market loss of $2,504,278 on the Trust's hedging contracts, and the resulting future income tax impact of $857,465, the Trust had a net income of $8,239,025 for the quarter. Net income for the nine months ended September 30, 2005 was $8,732,675 or $0.42 per unit versus $1,058,758 or $0.24 per unit for the first nine months of 2004. The nine month 2005 net income figures were impacted by the recognition of $7,698,333 in unrealized losses on financial instruments. In its oil and gas division, consistent with most oil and gas firms of the Trust's size, the Trust does not follow hedge accounting for those contracts due to the onerous monitoring and regulatory requirements.

Funds from operations for the third quarter 2005 were $16,360,170 or $0.67 per unit versus $2,806,379 or $0.39 per unit for the third quarter 2004. For the nine months ended September 30, 2005, funds from operations were $32,990,474 compared to $5,563,080 for the same period in 2004, a 493% increase. The increase in the funds from operations were primarily the result of growth in the Trust's business units, including: oil and gas acquisitions, high commodity prices, the energy services acquisitions, additional financial services contracts, and the initial inclusion of the Elbow River Marketing acquisition April 1, 2005.

The Trust distributed $8,389,202 or $0.34 per unit for the quarter ended September 30, 2005 versus $2,015,805 or $0.28 per unit distributed for the quarter ended September 30, 2004. For the quarter ended September 30, 2005 the payout ratio was 51% of funds from operations. For the nine months ended September 30, 2005 the payout ratio was 62% versus 65% for the first nine months of 2004 and a target payout ratio of 75% to 80%.

a. OIL & GAS OPERATIONS

Production increases over the second quarter of 2005 resulted primarily from the inclusion of the Makah properties for a portion of the quarter. On a quarter over quarter basis average oil production was down slightly (7%) compared to the second quarter at 1,465 BOE per day due to natural declines and some production issues at Shekilie. Minor temporary production losses have occurred on operated oil producing properties through the quarter due to voluntary shut-ins to allow for work-over and re-completion programs to proceed as discussed below. Gas production increased from 9.6 Mmcf per day to 11.9 Mmcf per day. On a BOE basis production averaged 3,495 BOE per day in the third quarter compared to 3,246 in the second, an increase of 8%. Increases from the inclusion of Makah were offset by temporarily shut-in production at several properties. Production for the quarter was negatively impacted by about 37 BOE per day due to ongoing facility constraints at Noel in northeast British Columbia. This property was producing at close to capacity during September. Some additional downtime occurred in October but production should remain near capacity through the winter. Production for the quarter was further impacted by approximately 140 BOE per day on average due to ongoing weather related access problems and gathering system access issues in the Shekilie area in northwest Alberta. Some work to rectify these issues was accomplished during the quarter but further work is required. During September approximately 42 boed of gas production (12 BOE per day average for the quarter) was shut-in due to a dispute over access to a gathering line in the Taber area. This production remains shut-in pending a hearing which is schedule before the Alberta Energy and Utilities Board in November.

At quarter end the exit production was estimated at 3,642 BOE per day with approximately 192 BOE per day shut-in due to issues described above. It is expected that these issues will all be resolved in the near future and production will return to near full capacity of approximately 3,800 BOE per day.

The addition of key technical staff in both the office and field has allowed the Trust to develop and begin to execute a capital investment program aimed at low risk production and reserve additions. During the third quarter the Trust initiated a program including 11 work-overs, 9 re-activations, 2 re-completions, battery upgrades and one tie-in on properties located in the Java and Antelope Lake areas of southwest Saskatchewan. Preliminary results from this program have been very encouraging and will lead to the assessment of infill drilling programs early in 2006. The Trust has a 100% working interest in most of these properties. In the Trust's core southern Alberta area of Grand Forks a similar program of work-overs, reactivations and equipment upgrades is underway and yielding positive initial results. The Trust has begun operations on a number of lower interest non-operated properties in our southern and central Alberta core areas and is working to secure drilling rig windows to begin drilling on its low-risk higher-interest operated properties in southeast Saskatchewan and Provost. Production increases related to these capital investment programs will begin to appear in the fourth quarter.

During the quarter, effective August 4, 2005, the Trust completed the acquisition of Makah Energy Corp. This acquisition has added approximately 650 BOE per day of predominantly sweet gas production in the Trust's central Alberta core area. Total Proved plus Probable reserves are approximately 1.5 million BOE. The Makah assets are largely operated with high working interests and excellent upside drilling opportunities that the Trust is evaluating to either drill or farm-out. Consideration for the acquisition was $29.8 million less approximately $4.0 million in net debt and transaction costs. After allowing for the value of undeveloped land, proprietary 3D seismic and a transaction to sell certain Coal Bed Methane rights, the Trust acquired proved plus probable reserves at a cost of $17.00 per BOE or $37,000 per producing BOE.

b. ENERGY SERVICES OPERATIONS

The third quarter was another busy period for the energy services division of the Trust as better weather allowed activity levels in the southern Alberta area to return to higher levels following the wet conditions experienced in the second quarter. The companies that make up the division, Cascade Services, Millard Oilfield, Cardinal Well, Endless Tubing and Westvac Service all enjoyed results that exceed expectations. The oil and gas industry is expected to see very high activity levels for the foreseeable future and the upcoming fourth and first quarters are typically the busiest for oilfield services companies. Current high commodity prices place a premium on the essential production services provided by Avenir's service companies. High utilization coupled with higher equipment rates have led to growing revenues while cost pressures have been effectively contained, in part by the implementation of fuel surcharges. While the availability of skilled and experienced workers continues to be a challenge for the oilfield service industry, all of the Trust's service companies have been able to retain and increase their workforce to accommodate the increased demand for services from the oil and gas industry.

Effective September 1, 2005, the Trust acquired a 90% interest in Westvac Service Ltd. for $9 million less debt and adjusted for working capital. Mr. Rod MacDonald, the owner of Westvac, retained a 10% partnership interest and will 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 forty 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. The acquisition of Westvac continues to focus the Trust's Energy Service division on essential production services, greatly expands the pressure truck, vacuum truck and steamer truck business line and extends its geographic reach through central Alberta.

The Trust has acquired options and placed orders for approximately $6.0 million of new equipment to expand all of its existing businesses over the next six to eight months to be able to keep up with demand. The Trust also continues to evaluate acquisition opportunities.

II. FINANCIAL SERVICES BUSINESS UNIT REVIEW

i. Rentcash Inc. Financial Services Contracts

In January 2003, Avenir Financial acquired its first financial services contract with an affiliate of a financial services provider, Rentcash Inc. ("Rentcash"), to provide funding of $600,000 for Rentcash end users. Rentcash provides cash advance, cheque cashing and payday loan services. Since that time the Trust has entered into a number of contracts with Rentcash and currently now holds $19.9 million in cheque cashing contracts. This segment provides very good returns and represents about 7% of Avenir Trust's annual cashflow; however this has continued to become a smaller part of Avenir Trust's business as we have grown into other areas.

Avenir is effectively responsible for loan losses up to a level that provides a return to Avenir of $0.07 per $100 loaned per day. Losses beyond that fall back to Rentcash under terms of the administrative services agreement. As a result, Avenir Trust's cashflow from this division has not been negatively impacted nor has there been any impairment of our principal balances with Rentcash.

ii. Elbow River Marketing Limited Partnership

Elbow River Resources Ltd. ("Elbow River") was acquired by the Trust on April 1, 2005. Elbow River is a wholesale broker, transporter and supplier of butane to major refineries and propane to major retailers in the United States, Canada and Mexico. For Q3 2005, Elbow River was essentially on budget as most of the transitional issues were resolved and the liquids market returned to normal levels after initially digesting the shock of higher commodity prices in Q2 2005. The market price volatility allowed for favourable margins to be locked in during the quarter and has resulted in a significant presales program for Q4 2005 and Q1 2006. The start of the winter season has seen one of the tightest rail car markets ever which has aided early winter sales and should bode well for the remainder of the year and into Q1 2006. The Specialty Products group has continued to grow by expanding the product line as well as the customer base.

iii. EnerVest Management Ltd. Joint Venture ("EnerVest Management Company")

Subsequent to the quarter, on October 4, 2005, the Trust was pleased to further add to the Financial Services business unit with the acquisition of the joint venture that is the sole shareholder of the EnerVest Management Company, Manager of the EnerVest Diversified Income Trust ("EnerVest"), the EnerVest Natural Resource Fund and the Enervest Flow-Through Limited Partnerships. The Trust expects that the acquisition will add approximately $14.0 million of stable distributable cash flow to the Trust and further diversify the Financial Services division. In addition, the Trust believes this asset will allow for consistent organic growth. Cypress Capital Management Ltd. ("Cypress") remains as the investment manager of EnerVest. The sale of the joint venture interests will have no impact on the investment management agreement between the EnerVest Management Company and Cypress and EnerVest will operate independently of Avenir. EnerVest is an actively managed, closed-end trust which invests in a diversified portfolio of income, royalty and real estate investment trusts, and limited partnerships, all of which trade on the Toronto Stock Exchange under the symbol "EIT.UN".

III. REAL ESTATE BUSINESS UNIT REVIEW

At September 30, 2005 the Trust's real estate portfolio consisted of five properties with approximately 400,000 square feet of leasable area. The properties are located in Toronto, London (Ontario), Calgary, Fort Saskatchewan and Edmonton (Alberta). A property management company, Tonko Realty Advisors, administers the day to day operations of the Trust's real estate business unit. Currently the portfolio is 93% leased. Subsequent to the quarter end, the Trust has re-mortgaged two of its buildings at rates approximately 2% less than the previous mortgages and this interest savings will be reflected in future period's earnings and funds from operations. The Trust continues to evaluate opportunities, but to date has been reluctant to undertake acquisitions at the historically low cap rates in the current environment.

For additional information on the Trust, including the Annual Information Form (AIF), please go to the company's profile on SEDAR at www.sedar.com or the Trust's website at www.avenirtrust.com.



Submitted on behalf of the Board of Directors by:

William M. Gallacher Gary Dundas
President & CEO Vice President Finance & CFO


Forward Looking Statements

Except for historical financial information contained herein, the matters discussed in this document may be considered forward-looking statements. Such statements include declarations regarding management's intent, belief or current expectations. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties; actual results could differ materially from those indicated by such forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: (i) that the information is of a preliminary nature and may be subject to further adjustment, (ii) the possible unavailability of financing, (iii) risks related to the exploration and development of oil and gas properties, (iv) the impact of price fluctuations and the demand and pricing for oil and natural gas, (v) the seasonal nature of the business, (vi) start-up risks, (vii) general operating risks, (viii) dependence on third parties, (ix) changes in government regulation, (x) the effects of competition, (xi) dependence on senior management, (xii) financial condition of real estate tenants and financial services counterparts, (xiii) impact of the Canadian economic conditions or the demand for real estate leasing opportunities, (xiv) fluctuations in currency exchange rates and interest rates.



Avenir Diversified Income Trust

CONSOLIDATED BALANCE SHEETS
(unaudited)
September 30, 2005 December 31, 2004
$ $
------------------------------------------------------------------------

ASSETS
Current
Cash and cash equivalents 127,666 327,217
Restricted cash 364,539 160,227
Accounts receivable and
prepaid expenses 55,243,662 9,847,972
Inventory 27,588,901 -
Marketable securities 12,515 -
Risk management asset - 1,147,127
------------------------------------------------------------------------
83,337,283 11,482,543
------------------------------------------------------------------------

Property and equipment 206,371,472 120,822,688
Investment in financial
services contracts 20,446,005 12,472,055
Intangibles and other assets 21,737,740 2,356,422
Goodwill 69,334,007 8,181,145
------------------------------------------------------------------------
401,226,507 155,314,853
------------------------------------------------------------------------
------------------------------------------------------------------------

LIABILITIES AND UNITHOLDERS' EQUITY
Current
Bank indebtedness 85,617,169 31,475,000
Accounts payable and accrued liabilities 47,920,942 9,470,009
Distributions payable 2,802,725 1,237,182
Deferred revenue 200,439 230,805
Due to non-controlling interest owner 108,020 66,667
Risk management liability 6,538,791 -
Notes payable 7,500,000 -
Current portion of capital
lease obligations - 32,459
Current portion of long-term debt 1,243,510 693,888
Current portion of mortgages 4,273,610 5,024,920
------------------------------------------------------------------------
156,205,206 48,230,930
------------------------------------------------------------------------
Long-term debt 1,341,719 911,775
Mortgages 9,734,453 7,108,761
Asset retirement obligation 9,730,898 8,033,301
Future income taxes 19,916,099 9,626,982
Non-controlling interest 987,517 259,755
------------------------------------------------------------------------

Commitments

Unitholders' equity
Unitholder capital 217,865,042 84,662,250
Contributed surplus 1,086,726 322,064
Accumulated earnings 13,416,863 4,684,187
Accumulated cash distributions (29,058,016) (8,525,152)
------------------------------------------------------------------------
203,310,615 81,143,349
------------------------------------------------------------------------
401,226,507 155,314,853
------------------------------------------------------------------------
------------------------------------------------------------------------


Avenir Diversified Income Trust

CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED EARNINGS
(unaudited)
Three months ended Nine months ended
September 30, September 30, September 30, September 30,
2005 2004 2005 2004
$ $ $ $
------------------------------------------------------------------------

REVENUE
Oil and gas
revenue 17,905,399 3,534,847 41,163,004 8,416,832
Oil and gas
transportation
costs (276,103) (98,162) (585,132) (173,919)
Royalties, net
of ARTC (2,567,784) (601,687) (6,332,979) (1,317,879)
Unrealized gain
(loss) on financial
instruments (2,504,278) (196,437) (7,698,333) (582,738)
------------------------------------------------------------------------
12,557,234 2,638,561 26,546,560 6,342,296
Real estate revenue 820,405 703,836 2,206,063 1,569,018
Energy services
revenue 9,905,666 1,493,312 20,727,179 1,493,312
Financial services
revenue 73,405,265 400,454 121,833,203 782,818
Interest and other
revenue 159,356 89,850 235,643 103,814
Gain on sale of
property and
equipment - - 228,435 -
------------------------------------------------------------------------
96,847,926 5,326,013 171,777,083 10,291,258
------------------------------------------------------------------------
EXPENSES
Oil and gas
operating 3,881,114 696,545 10,283,458 1,659,181
Real estate
operating 274,790 231,978 681,970 665,144
Energy services
operating 4,743,543 776,158 10,436,988 776,158
Financial services
operating 68,870,773 - 114,161,078 -
General and
administrative 3,931,891 756,738 8,400,825 1,678,164
Foreign exchange 554,600 - 524,968 -
Short-term interest
and bank fees 898,174 13,955 1,676,803 141,654
Long-term interest 291,180 238,429 699,322 464,328
Capital taxes 190,389 19,206 443,938 30,516
Depletion,
depreciation and
amortization 8,371,452 1,742,712 18,878,903 3,677,813
Asset retirement
obligation
accretion 202,186 44,059 572,232 113,908
------------------------------------------------------------------------
92,210,092 4,519,780 166,760,485 9,206,866
------------------------------------------------------------------------

Income before income
tax and
non-controlling
interest 4,637,834 806,233 5,016,598 1,084,392
Future income
tax recovery 2,023,551 - 3,888,351 -
------------------------------------------------------------------------
Net income before
non-controlling
interest 6,661,385 806,233 8,904,949 1,084,392
Non-controlling
interest (69,173) (25,634) (172,274) (25,634)
------------------------------------------------------------------------
Net income for
the period 6,592,212 780,599 8,732,675 1,058,758
Accumulated
earnings,
beginning of
the period 6,824,651 947,895 4,684,188 669,736
------------------------------------------------------------------------
Accumulated
earnings, end of
the period 13,416,863 1,728,494 13,416,863 1,728,494
------------------------------------------------------------------------
------------------------------------------------------------------------
Net income per
unit basic and
diluted 0.27 0.11 0.42 0.24
------------------------------------------------------------------------
------------------------------------------------------------------------


Avenir Diversified Income Trust

CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

For the
Three months ended Nine months ended
September 30, September 30, September 30, September 30,
2005 2004 2005 2004
$ $ $ $
------------------------------------------------------------------------

OPERATING ACTIVITIES
Net income
for the period 6,592,212 780,599 8,732,675 1,058,758
Add (deduct)
non-cash items:
Gain on sale of
property and
equipment - - (228,435) -
Non-cash general
and
administrative 356,239 42,597 764,662 129,888
Depletion,
depreciation
and
amortization 8,371,452 1,742,712 18,878,903 3,677,813
Asset retirement
obligation
accretion 202,186 44,034 572,232 113,883
Unrealized
foreign
exchange 288,181 - 288,181 -
Unrealized (gain)
loss on
financial
instruments 2,504,278 196,437 7,698,333 582,738
Future income
tax recovery (2,023,551) - (3,888,351) -
Non-controlling
interest 69,173 - 172,274 -
------------------------------------------------------------------------
Funds from
operations 16,360,170 2,806,379 32,990,474 5,563,080
Asset retirement
costs incurred
during period (462,888) - (462,888) -
Change in
non-cash
working
capital (16,077,500) (128,042) (33,465,291) 231,576
------------------------------------------------------------------------
Cash provided by
operating
activities (180,218) 2,678,337 (937,705) 5,794,656
------------------------------------------------------------------------

FINANCING ACTIVITIES
Issue of trust
units, net of
issue costs - (6,924) 118,286,432 26,373,202
Distributions
to unitholders (8,237,671) (1,627,797) (18,967,322) (3,166,813)
Increase
(decrease)
in bank
indebtedness 42,257,051 33,650,000 42,882,268 29,145,000
Increase in
notes payable 7,500,000 - 7,500,000 -
Repayment of
subordinated
debt (192,271) - (192,271) -
Increase
in mortgages 203,411 - 4,118,411 -
Repayment
of mortgages (110,758) (103,821) (2,244,029) (205,730)
Repayments of
capital lease
obligations - (15,440) (32,459) (45,411)
Increase in
long-term debt 35,914 - 232,979 542,258
Repayment of
long-term debt (400,477) (354,673) (806,654) (896,930)
Change in
non-cash
working capital (43,009) - 283 -
------------------------------------------------------------------------
Cash provided
by financing
activities 41,012,190 31,541,345 150,777,638 51,745,576
------------------------------------------------------------------------

INVESTING ACTIVITIES
Purchase of
Western Spirit
Investments Ltd. - (60,010) - (3,218,697)
Purchase of Cascade
Services Partnership - (10,678) - (3,492,451)
Purchase of
Indy Oilfield Ltd. - (265,961) - (265,961)
Purchase of
Val Vista
Energy Ltd. (258,406) - (13,027,076) -
Purchase of
Eagle Oilfield
Services Ltd. - - (771,833) -
Purchase of
Elbow River (12,765) - (52,629,213) -
Purchase of
Endless Tubing - - (11,178,600) -
Purchase of
Millard - - (7,775,852) -
Purchase of
Cardinal (15,088) - (7,418,779) -
Purchase of
Westvac (5,060,521) - (5,060,521) -
Purchase of
Makah (28,170,348) - (28,170,348) -
Oil and gas
property
acquisitions (248,370) (32,691,326) (248,370) (44,388,772)
Oil and gas
property
disposals 1,301,089 18,137 1,441,319 1,251,503
Oil and gas
development
expenditures (3,118,248) (511,664) (5,630,120) (955,896)
Financial
services
development
expenditures (5,047,105) - (5,102,435) -
Purchase of
energy services
assets (1,391,984) (421,233) (7,049,955) (421,233)
Net proceeds on
sale of energy
services assets 22,000 - 40,575 -
Purchase of
other assets (67,650) (11,590) (218,168) (37,150)
Purchase of
financial
services
contracts (1,505,550) (4,376,441) (11,018,930) (6,019,013)
Redemption of
financial
services
contracts 3,000,000 - 3,000,000 -
Purchase of
real estate
properties - - (2,915,290) -
Real estate
development
expenditures - - (162,355) -
Proceeds on
sale of real
estate
properties - - 3,718,794 -
Change in
restricted
cash (202,974) - (204,312) (338,950)
Change in
non-controlling
interest (88,889) (2,144) 313,465 (2,144)
Changes in
non-cash
working capital 160,503 220,366 28,520 548,829
------------------------------------------------------------------------
Cash used in
investing
activities (40,704,306) (38,112,544)(150,039,484) (57,339,935)
------------------------------------------------------------------------
Increase in
cash and cash
equivalents
during the
period 127,666 (3,892,862) (199,551) 200,297
Cash and cash
equivalents,
beginning of
period - 4,350,031 327,217 256,872
------------------------------------------------------------------------
Cash and cash
equivalents,
end of period 127,666 457,169 127,666 457,169
------------------------------------------------------------------------
------------------------------------------------------------------------

Cash interest paid 722,865 248,339 1,857,350 587,231
------------------------------------------------------------------------
------------------------------------------------------------------------



Contact Information

  • Avenir Diversified Income Trust
    William M. Gallacher
    President & CEO
    (403) 237-9949
    or
    Avenir Diversified Income Trust
    Gary Dundas
    Vice President Finance & CFO
    (403) 237-9949
    or
    Avenir Diversified Income Trust
    300, 808 - First Street S.W.
    Calgary, Alberta T2P 1M9
    (403) 237-9949
    (403) 237-0903 (FAX)
    Website: www.avenirtrust.com