Daylight Resources Trust

Daylight Resources Trust

July 07, 2009 17:06 ET

Daylight Provides Q2 2009 Operational Update, Maintains $0.08 Monthly Distributions for Q3 2009

CALGARY, ALBERTA--(Marketwire - July 7, 2009) - Daylight Resources Trust ("Daylight" or the "Trust") (TSX:DAY.UN) is pleased to provide an update on our operational results for Q2 2009. The success and follow-up potential from our program combined with the acquisition of Intrepid Energy Corporation ("Intrepid") on June 5, 2009 provides the basis for increasing our full year 2009 production guidance to 23,500 to 24,500 boe/d while maintaining a capital program of $140 million and monthly distributions of $0.08 per unit for Q3 2009.

Updated Guidance

After a very active first quarter of drilling activity designed to take advantage of multiple farmin opportunities that continued to increase Daylight's significant resource play land base in the Elmworth area, Daylight has elected to defer several capital projects until later in 2009. This decision is based primarily on weak current natural gas prices. There are several potential benefits to this action including continued reductions in service costs that will allow Daylight to realize a better economic return for our planned capital expenditures and will also allow Daylight to take advantage of any potential improvement in natural gas prices in the later stages of 2009. As a result of this decision, Daylight has now deferred the majority of its planned natural gas expenditures for Q2 2009 and early Q3 2009 to late Q3 2009 and Q4 2009. Daylight has also delayed the on-going field maintenance of certain production equipment on low production rate natural gas wells and left these wells temporarily shut-in. These wells will be returned to production when natural gas prices improve. The assets acquired in the Intrepid transaction are expected to produce approximately 2,500 boe/d for H2 2009. Given the current economic conditions, Daylight has elected not to allocate any capital to the acquired assets during 2009. With the Intrepid assets producing their expected 2,500 boe/d for H2 2009, Daylight is increasing our guidance for 2009 to 23,500 to 24,500 boe/d with expected Q2 2009 production of approximately 23,000 boe/d. The mid-range of Daylight's annual production guidance for 2009 represents 14% growth over Daylight's record 2008 annual production.

New Elmworth Resource Play

Daylight has been very actively developing a number of resource play opportunities in the Deep Basin area of Alberta, in particular the Cadomin and uphole Cretaceous zones in Elmworth and the Montney and Bluesky zones in our West Central properties including Kaybob. As Daylight was growing our land position in Elmworth, we were carefully monitoring the development of a potentially significant new resource play in the Nikanassin zone, which underlies the Cadomin zone at depths between 2,700 and 3,200 metres. In Elmworth during Q1 2009, Daylight drilled two vertical wells (1.5 net) into the Nikanassin zone and encountered average sand thicknesses of over 100 metres in the two wells. These wells were brought on production in March and April 2009 and showed initial production rates between 2.0 and 3.0 mmcf/d. Daylight's preliminary review of the geology of the Nikanassin zone indicates that it is present across all of our lands in Elmworth, where we hold the Nikanassin rights in over 80 net sections (51,200 acres) of land. Although the quality and thickness of the Nikanassin zone will be delineated through additional drilling across our property base, natural gas in place in our two sections of land where we have drilled indicate the presence of approximately 100 Billion cubic feet ("Bcf") per section of land. This resource potential is in addition to our Cadomin and uphole Cretaceous potential in the Elmworth area. Daylight is currently developing a strategy to begin development of this resource, including investigating the potential for using the same advanced horizontal drilling and multi-stage fracturing technologies that we have successfully applied in the Cadomin zone. Daylight expects to drill an additional vertical delineation well and a horizontal well into the Nikanassin prior to the end of the 2009-2010 winter drilling season.

Cash Distributions

Daylight's Q3 2009 distributions have been maintained at our Q2 2009 level of $0.08 per unit per month. Details of these distributions are as follows:

Ex-Distribution Distribution Distribution Per
Record Date Date Payment Date Unit
July 31, 2009 July 29, 2009 August 17, 2009 $0.08
August 31, 2009 August 27, 2009 September 15, 2009 $0.08
September 30, 2009 September 28, 2009 October 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 122 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.

Forward-Looking Statements

This press release contains statements that constitute "forward-looking statements" and "forward-looking information" (collectively "forward-looking statements") within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends", "potential" and similar expressions are intended to identify forward-looking statements. More particularly and without limitation, this press release contains forward-looking statements concerning estimates of petroleum and natural gas production, capital expenditures, reserves and resources (including original gas in place), business strategy, future development and growth opportunities, prospects and asset base, future distributions and their timing, costs of labour and service, and oil and natural gas prices.

The forward-looking statements in this press release are based on certain key expectations and assumptions made by Daylight, including expectations and assumptions concerning: prevailing commodity prices and exchange rates, applicable royalty rates and tax laws, future well production rates, reserve and resource volumes, the performance of existing wells, the success obtained in drilling new wells, the sufficiency of budgeted capital expenditures in carrying out planned activities, the availability and cost of labour and services. Although Daylight believes that the expectations and assumptions on which such forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Daylight can give no assurance that they will prove to be correct.

Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to the risks associated with the oil and gas industry in general such as: operational risks in development, exploration and production, delays or changes in plans with respect to exploration or development projects or capital expenditures, the uncertainty of reserve estimates, the uncertainty of estimates and projections relating to reserves, production, costs and expenses, health, safety and environmental risks, commodity price and exchange rate fluctuations, marketing and transportation or petroleum and natural gas and loss of markets, environmental risks, competition, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefits of acquisitions, ability to access sufficient capital from internal and external sources, failure to obtain required regulatory, shareholder and other third party approvals, and changes in legislation, including but not limited to tax laws, royalty rates and environmental regulations. Accordingly, readers should not place undue reliance on the forward-looking statements contained in this press release concerning these times. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the operations or financial results of Daylight are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (

The forward-looking statements contained in this press release are made as of the date hereof and Daylight undertakes no obligation to update publicly or revise any forward-looking statements whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Barrels of Oil Equivalent

"Boe" means barrel of oil equivalent on the basis of 1 boe to 6,000 cubic feet of natural gas. Boe's may be misleading, particularly if used in isolation. A boe conversion ratio of 1 boe for 6,000 cubic feet of natural gas 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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