Bonavista Energy Trust

Bonavista Energy Trust

January 21, 2008 16:10 ET

Bonavista Energy Trust Announces Completion of Strategic Property Acquisition and Increased 2008 Budget

CALGARY, ALBERTA--(Marketwire - Jan. 21, 2008) - Bonavista Energy Trust (TSX:BNP.UN) ("Bonavista") is pleased to announce that it successfully closed its previously announced property acquisition involving certain producing and undeveloped properties in the Willesden Green area of our South Central Alberta core region and the Fireweed area located in our Northeast British Columbia core region for a net purchase price at closing of $167 million. These assets are characterized by high working interests, mainly operated and contain significant overlap with our existing base of operations in both of these areas. We have currently identified 36 drilling locations on the existing undeveloped land base of approximately 116,000 net acres, along with infrastructure synergies to optimize production. This acquisition is consistent with Bonavista's strategy of acquiring high quality, liquids rich, natural gas and oil assets with significant low risk development opportunities within our existing areas of operations.

Current production from the acquired assets is approximately 3,800 barrels of oil equivalent per day, including 14 million cubic feet per day of natural gas, 700 barrels per day of associated natural gas liquids and 800 barrels per day of light crude oil. The acquired production is 74% operated with an average working interest of 76%. This transaction has resulted in Bonavista's corporate production increasing to approximately 56,500 boe per day currently.

As a result of completing this strategic property acquisition, Bonavista is also pleased to announce that its Board of Directors has approved an expanded operating and capital program in 2008. In light of the current volatility in equity and commodity markets, Bonavista has decided to take a conservative approach and proceed with a base capital budget of $400 to $420 million. This capital budget includes property acquisitions totaling $170 million, with the remainder of the capital program allocated to Bonavista's exploration, exploitation and development programs which includes drilling approximately 190 to 210 wells on existing and recently acquired lands in our core regions. It is anticipated that the base capital program should result in Bonavista's 2008 production volumes averaging approximately 54,000 to 55,000 boe per day. This level of production factors in scheduled downtime anticipated in the second and third quarters, primarily due to two major third party plant turnarounds. Assuming current commodity prices in the futures market are realized, Bonavista's 2008 cashflow should increase to approximately $580 to $600 million. Bonavista has currently identified over 680 drilling prospects on its current land base and may accelerate the drilling of some of these prospects in the latter half of 2008, should market conditions warrant. In the interim, Bonavista will proceed prudently with its stated drilling program in the first half of the year to allow for maximum financial flexibility and remain opportunistic to further expand its capital program on additional acquisitions and/or drilling opportunities.

Bonavista Energy Trust is a Calgary based intermediate sized oil and gas royalty trust with a balanced production base. The Trust was created through the reorganization of Bonavista Petroleum Ltd in July 2003. Our operations are geographically focused within Alberta, Saskatchewan, and British Columbia, and possess a high level of operated properties. Bonavista is committed to maintaining its emphasis on operating high quality, low cost oil and natural gas properties, delivering consistent distributions to its unitholders and ensuring financial strength and sustainability. Bonavista's trust units trade on the Toronto Stock Exchange under the symbol BNP.UN.

Forward Looking Statements

Corporate information provided herein contains forward-looking information. The reader is cautioned that assumptions used in the preparation of such information, particularly those pertaining to cash distributions, production volumes, commodity prices, operating costs and drilling results, which are considered reasonable by Bonavista at the time of preparation, may be proven to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein and the variations may be material. There is no representation by Bonavista that actual results achieved during the forecast period will be the same in whole or in part as those forecast.

Contact Information

  • Bonavista Energy Trust
    Keith A. MacPhail
    President & CEO
    (403) 213-4300
    Ronald J. Poelzer
    Executive Vice President & CFO
    (403) 213-4300
    700, 311 - 6th Avenue SW
    Calgary, AB T2P 3H2
    (403) 213-4300