Daylight Resources Trust

Daylight Resources Trust

April 07, 2009 21:10 ET

Daylight Provides Q1 2009 Operational Update, Increases 2009 Guidance, Confirms Credit Facility and Maintains $0.08 Monthly Distributions for Q2 2009

CALGARY, ALBERTA--(Marketwire - April 7, 2009) - Daylight Resources Trust ("Daylight" or the "Trust") (TSX:DAY.UN) is pleased to provide an update on our operational results for Q1 2009. The success and follow-up potential from our program provides the basis for increasing our full year 2009 production guidance to 22,500 to 23,500 boe/d with an expanded capital program range of $125 million to $140 million. At current combined actual-to-date and forward strip commodity prices for 2009 of approximately Cdn$4.65 per mcf AECO and US$51.00 per bbl WTI with an exchange rate of US$0.80 per Cdn$1.00, this $15 million increase to the capital program is expected to be fully funded through higher funds from operations generated by our increased production volumes plus the expected royalty savings to be received under the recently announced Alberta three-point royalty incentive program. Daylight's financial strength continues with the renewal of our $350 million credit facility which, combined with increased production guidance for 2009, provides a solid basis to maintain our Q2 2009 cash distributions at $0.08 per unit per month.

Q1 2009 Operational Update, 2009 Production and Capital Guidance

Daylight delayed the on-stream timing of approximately 1,200 to 1,500 boe/d of new production from our Q1 2009 capital program that had not come on stream by March 3, 2009 (the announcement date of the Alberta three-point royalty incentive program) until the early stages of Q2 2009 to qualify this production for significantly lower royalty rates and significantly improved economic returns. With the deferral of these wells, Daylight's Q1 2009 production volumes are estimated at 22,800 boe/d and current production is approximately 24,000 boe/d with these wells coming on-stream during the early stages of Q2 2009. Daylight's continued operational success and 2009 capital program expansion generate an increase to our 2009 annual production guidance to 22,500 to 23,500 boe/d. The positive impact of the recently announced Alberta three-point royalty incentive program and the higher funds from operations generated by our revised production volumes are expected to fully fund the $15 million increase to our 2009 capital program. Daylight's 2009 capital program is established at a range of $125 million to $140 million.

Our continued solid results, both operational and financial, allow Daylight to target effective funding of our cash capital expenditures and distributions with internally generated funds from operations for 2009. This approach provides the Trust with the financial flexibility to execute on strategic opportunities as they arise.

Credit Facility Renewal and Financial Capacity

Daylight has recently renewed our $350 million credit facility with an expanded syndicate of high quality banks. Our expanded banking syndicate includes our seven existing banks plus two new banks that unanimously supported the renewal of our credit facility. Our credit facility has an annual renewal date of April 30, 2010.

The Trust exited 2008 in a solid financial position with a net debt to annualized cash flow ratio of 1.0 times, over $130 million of available capacity on our $350 million bank credit facility, an effective hedging program with 42% of guided 2009 production volumes locked in at attractive prices and an excellent portfolio of internal development prospects. The continued success of our oil and natural gas operations and the financial discipline we have exercised has positioned us quite favorably for the current economic circumstances. Utilizing this financial flexibility, Daylight will continue to pursue selected strategic acquisitions and opportunities that meet our rigorous criteria.

Cash Distributions

Daylight's Q2 2009 distributions are maintained at our Q1 2009 level of $0.08 per unit per month. Details of these distributions are as follows:

Distribution Payment Distribution
Record Date Ex-Distribution Date Date Per Unit
April 30, 2009 April 28, 2009 May 15, 2009 $0.08
May 29, 2009 May 27, 2009 June 15, 2009 $0.08
June 30, 2009 June 26, 2009 July 15, 2009 $0.08

Daylight's high-end technical team integrates and emphasizes our exploitation, reservoir engineering, production optimization, geological and geophysical expertise to identify and capture reserves and production addition opportunities for the delivery of long-term value creation to our Unitholders. Our team has developed a multi-year inventory of repeatable, low risk exploitation projects with substantial potential reserve additions on assets we currently own and control. Daylight's inventory includes a significant depth of prospects across our high quality asset base. Daylight has approximately 90 million Trust units currently outstanding which trade on the TSX under the symbol DAY.UN. Daylight Series A, Series B, and Series C convertible debentures trade on the TSX under the symbols DAY.DB, DAY.DB.B and DAY.DB.C respectively.

An updated corporate presentation is available on Daylight's website at


Forward-looking Statements: Contained in this news release are forward-looking statements. The reader is cautioned that these statements represent management's expectations or beliefs concerning, among other things, assumptions pertaining to the following:

- future production volumes and production on-stream dates;

- royalty expenses and royalty savings under the Alberta three-point incentive program;

- capital expenditures and the success of our capital program;

- funding of capital expenditures;

- funds from operations;

- reserves development and potential additions;

- Unitholder value creation;

- opportunities on our land base; and

- future distributions and funding of distributions.

Although these assumptions are considered reasonable by Daylight at the time of preparation, they may prove to be incorrect. Actual events or results may differ materially. The projections, estimates and beliefs contained in such forward-looking statements are based on management's estimates, opinions and assumptions at the time the statements were made including assumptions relating to economic conditions, industry conditions, the production performance of Daylight's oil and gas assets, commodity prices and exchange rates, the cost and competition for services throughout the oil and gas industry, interest rates, and the continuation of the current regulatory and tax regime in Canada, and necessarily involve known and unknown risks and uncertainties which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements, including those material risks discussed in Daylight's annual information form and under "Risk Factors" and in Daylight's MD&A under "Risks and Uncertainties." Accordingly, readers are cautioned that events or circumstances could cause results to differ materially from those predicted. Daylight does not undertake to update any forward-looking information contained in this press release whether as to new information, future events or otherwise except as required by securities rules and regulations.

Barrels of Oil Equivalency: Barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. In accordance with NI 51-101, a boe conversion ratio for natural gas of 6 mcf:1 bbl has been used, which is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.


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