Daylight Resources Trust
TSX : DAY.UN

Daylight Resources Trust

March 19, 2007 19:12 ET

Daylight Resources Trust Provides 2006 Tax Information for Canadian Unitholders

CALGARY, ALBERTA--(CCNMatthews - March 19, 2007) -

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Daylight Resources Trust (TSX:DAY.UN) ("Daylight") is pleased to provide 2006 tax information for its Canadian unitholders. The information in this press release also applies to Daylight's predecessor trusts - Daylight Energy Trust and Sequoia Oil & Gas Trust.

2006 TAX INFORMATION FOR CANADIAN UNITHOLDERS

The information contained herein is intended to provide general guidance to assist in 2006 income tax reporting for Canadian resident individual holders of Daylight and its predecessor trust units. It is not intended to constitute legal or tax advice to any holder or potential holder of trust units. Readers should consult their own legal or tax advisors as to their particular tax consequences of holding Daylight and its predecessor trust units.

Daylight and its predecessor trusts qualified as mutual fund trusts under the Income Tax Act (Canada) and therefore trust units of the Trust are qualified investments for Registered Retirement Savings Plans ("RRSPs"), Registered Retirement Income Funds ("RRIFs"), Registered Education Savings Plans ("RESPs"), and Deferred Profit Sharing Plans ("DPSPs").

Daylight and its predecessor trusts are legal entities and are subject to Canadian income tax on a basis similar to that of an individual. These entities file Canadian income tax returns and any taxable income therein is allocated to unitholders. Distributions paid by Daylight and its predecessor trusts could be both tax-deferred (return of capital) and taxable (income). The allocation between return of capital and income is dependent on the tax deductions Daylight and its predecessor trusts claim against the taxable income earned by the entities for the year. The income is reported on a T3 return and is allocated to unitholders via T3 Supplementary slips prepared by Daylight and its predecessor trust's transfer agent, brokers or other intermediaries. Unitholders are generally required to include in income their pro-rata share of any taxable income earned by Daylight and its predecessor trusts in that year. The return of capital portion of distributions reduces the unitholders adjusted cost base ("ACB") of their units. The ACB of a unit generally equals the purchase price of the unit (including commissions) less any return of capital (tax deferred) distributions received or receivable from the date of acquisition. To the extent the ACB is reduced below zero, such amount will be deemed to be a capital gain to the unitholder in that year and the unitholder's ACB will be nil. Unitholders should maintain a record of all distributions that are classified as partially or entirely tax-deferred distributions while holding Daylight or Daylight predecessor trust units.

Units Held outside RRSPs, RRIFs, RESPs or DPSPs

During 2006, Daylight and its predecessor trusts made cash distributions and in addition to these cash distributions, Daylight Energy Trust and Sequoia Oil & Gas Trust also distributed Trafalgar Energy Ltd. common shares and arrangement warrants (the "Trafalgar Distribution") to unitholders of record on September 21, 2006. These 2006 distribution amounts by entity are as follows:

DAYLIGHT RESOURCES TRUST

- $0.78 per unit cash distribution.

DAYLIGHT ENERGY TRUST

- $1.12 per unit cash distribution, and

- 0.04170 Trafalgar Energy Ltd. common shares and 0.01208 Trafalgar Energy Ltd. arrangement warrants per unit for holders of record on September 21, 2006 with a combined deemed value of $0.1676 per unit.

SEQUOIA OIL & GAS TRUST

- $1.28 per unit cash distribution, and

- 0.05170 Trafalgar Energy Ltd. common shares and 0.01498 Trafalgar Energy Ltd. arrangement warrants per unit for holders of record on September 21, 2006 with a combined deemed value of $0.2078 per unit.

Daylight has determined that the cash portion of all distributions of Daylight and its predecessor trusts are 100% taxable (income). Daylight has also determined that the Trafalgar Distribution is 100% tax-deferred (return of capital).

Distributions to Unitholders of Daylight Resources Trust in 2006 are 100% taxable (income). Unitholders who held Daylight Energy Trust and received all of the 2006 distributions including the Trafalgar Distribution would have a 13% tax-deferred (return of capital) and 87% taxable (income) allocation applied to the total distributions. Unitholders who held Sequoia Oil & Gas Trust and received all of the 2006 distributions including the Trafalgar Distribution would have a 14% tax-deferred (return of capital) and 86% taxable (income) allocation applied to the total distributions. Each individual unitholder's combined rate of tax-deferred (return of capital) and taxable (income) will depend on which distributions they received.

Units Held within RRSPs, RRIFs, RESPs or DPSPs

Unitholders who held Daylight or its predecessor trust units in RRSPs, RRIFs, RESPs or DPSPs should not report any amount on their 2006 Income Tax Return.

2006 Summary of Canadian Tax Information

The following tables summarize, on a per unit basis, the taxability of distributions paid and related to 2006, which include distributions with record dates of January 31, 2006 to December 31, 2006.



2006 DISTRIBUTION INFORMATION FOR CANADIAN UNITHOLDERS ($/UNIT)

DAYLIGHT RESOURCES TRUST
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Return of
Total Taxable Capital
Record Date Payment Date Distribution Amount Amount
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September 29, 2006 October 16, 2006 $ 0.195 $ 0.195 $ 0.000
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October 31, 2006 November 15, 2006 $ 0.195 $ 0.195 $ 0.000
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November 30, 2006 December 15, 2006 $ 0.195 $ 0.195 $ 0.000
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December 31, 2006 January 15, 2007 $ 0.195 $ 0.195 $ 0.000
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Total Cash $ 0.780 $ 0.780 $ 0.000
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DAYLIGHT ENERGY TRUST
----------------------------------------------------------------------------
Return of
Total Taxable Capital
Record Date Payment Date Distribution Amount Amount
----------------------------------------------------------------------------
January 31, 2006 February 15, 2006 $ 0.1400 $ 0.1400 $ 0.0000
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February 28, 2006 March 15, 2006 $ 0.1400 $ 0.1400 $ 0.0000
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March 31, 2006 April 17, 2006 $ 0.1400 $ 0.1400 $ 0.0000
----------------------------------------------------------------------------
April 28, 2006 May 15, 2006 $ 0.1400 $ 0.1400 $ 0.0000
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May 31, 2006 June 15, 2006 $ 0.1400 $ 0.1400 $ 0.0000
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June 30, 2006 July 17, 2006 $ 0.1400 $ 0.1400 $ 0.0000
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July 31, 2006 August 15, 2006 $ 0.1400 $ 0.1400 $ 0.0000
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August 31, 2006 September 15, 2006 $ 0.1400 $ 0.1400 $ 0.0000
----------------------------------------------------------------------------
Total Cash $ 1.1200 $ 1.1200 $ 0.0000
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September 21, 2006 September 21, 2006 $ 0.1676 $ 0.0000 $ 0.1676
(1)
----------------------------------------------------------------------------
Combined $ 1.2876 $ 1.1200 $ 0.1676
----------------------------------------------------------------------------
(1) Trafalgar Distribution


SEQUOIA OIL & GAS TRUST
----------------------------------------------------------------------------
Return of
Total Taxable Capital
Record Date Payment Date Distribution Amount Amount
----------------------------------------------------------------------------
January 25, 2006 February 15, 2006 $ 0.1600 $ 0.1600 $ 0.0000
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February 24, 2006 March 15, 2006 $ 0.1600 $ 0.1600 $ 0.0000
----------------------------------------------------------------------------
March 24, 2006 April 17, 2006 $ 0.1600 $ 0.1600 $ 0.0000
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April 26, 2006 May 15, 2006 $ 0.1600 $ 0.1600 $ 0.0000
----------------------------------------------------------------------------
May 25, 2006 June 15, 2006 $ 0.1600 $ 0.1600 $ 0.0000
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June 26, 2006 July 17, 2006 $ 0.1600 $ 0.1600 $ 0.0000
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July 25, 2006 August 15, 2006 $ 0.1600 $ 0.1600 $ 0.0000
----------------------------------------------------------------------------
August 25, 2006 September 15, 2006 $ 0.1600 $ 0.1600 $ 0.0000
----------------------------------------------------------------------------
Total Cash $ 1.2800 $ 1.2800 $ 0.0000
----------------------------------------------------------------------------
September 21, 2006 September 21, 2006 $ 0.2078 $ 0.0000 $ 0.2078
(1)
----------------------------------------------------------------------------
Combined $ 1.4878 $ 1.2800 $ 0.2078
----------------------------------------------------------------------------
(1) Trafalgar Distribution


Daylight Resources Trust is a Calgary-based open-ended, unincorporated investment trust with a high quality balanced natural gas and crude oil property base, extensive prospect inventory and large undeveloped land base that is managed by a team of highly skilled technical professionals. Daylight's properties include focused high potential assets in the Peace River Arch and West Central Alberta complemented by stable production and repeatable opportunities in Southern and Eastern Alberta. Daylight's prospect inventory is balanced across natural gas and crude oil with near, medium, long-term and high impact opportunities that will generate significant increased value into the future. Daylight's large undeveloped land base will provide additional opportunities to create value through our highly skilled technical teams as well as through selective farm outs to targeted industry partners. Daylight has approximately 76 million trust units currently outstanding.

ADVISORY: Certain information regarding Daylight Resources Trust including management's assessment of future plans and operations, may constitute forward-looking statements under applicable securities law and necessarily involve risks associated with oil and gas exploration, production, marketing and transportation such as loss of market, volatility of prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers and ability to access sufficient capital from internal and external sources; as a consequence, actual results may differ materially from those anticipated in the forward-looking statements.

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