Daylight Resources Trust
TSX : DAY.UN
TSX : DAY.DB
TSX : DAY.DB.B

Daylight Resources Trust

February 27, 2008 18:05 ET

Daylight Resources Trust Provides 2007 Tax Information for U.S. Unitholders

CALGARY, ALBERTA--(Marketwire - Feb. 27, 2008) - Daylight Resources Trust (TSX:DAY.UN) ("Daylight") is pleased to provide 2007 tax information for its U.S. unitholders.

2007 U.S. TAX INFORMATION

The following information is being provided to assist U.S. individual unitholders of Daylight in reporting on their Internal Revenue Service ("IRS") Form 1040, "U.S. Individual Income Tax Return" ("Form 1040") distributions received from Daylight in 2007.

This summary is of a general nature only and is not intended to be legal or tax advice to any particular holder or potential holder of Daylight units. Holders or potential holders of Daylight units should consult their own legal and tax advisors as to their particular tax consequences of holding these units.

Qualified Dividends

In consultation with its U.S. tax advisors, Daylight believes that its trust units should be properly classified as equity in a corporation, rather than debt, and that dividends paid to individual U.S. unitholders should be "qualified dividends" for U.S. federal income tax purposes. As such, the portion of the distributions made during 2007 that are considered dividends for U.S. federal income tax purposes should qualify for the reduced rate of tax applicable to long-term capital gains. However, the individual taxpayer's situation must be considered before making this determination.

Daylight has not received an IRS letter ruling or a tax opinion from its tax advisors on these matters.

Daylight is aware that a database established on behalf a number of U.S. brokerage firms in the U.S. may not recognize Daylight - and many other non-SEC registered foreign entities that do not issue common shares - as "qualified foreign corporations". Accordingly, U.S. brokerage firms and other intermediaries may report a portion (or perhaps all) of Daylight's distributions received in 2007 as ordinary dividends. The IRS has provided guidance that they contemplate there will be situations where intermediaries may be required to report distributions as ordinary dividends on Form 1099-DIV although the U.S. taxpayer may be entitled to (and, therefore, should) report the distributions as qualified dividends. Likewise, they are also aware that there may be situations where the intermediaries report distributions as qualified dividends although the taxpayer knows they are not. In light of these potential differences, we have been advised by our U.S. tax advisors that the Form 1099-DIV reporting does not control how the taxpayer is entitled to report distributions.

Subject to the advice of a unitholder's legal and tax advisors, we recommend that this press release be referenced as support for the treatment of the 2007 distributions from Daylight as qualified dividends. Furthermore, unitholders may also wish to obtain a copy of a letter issued by KPMG LLP entitled "U.S. Investors in Canadian Income Trusts - Do Your Dividends Qualify for Low U.S. Tax Rate". A copy of the KPMG letter will be available on Daylight's website.

Daylight Units Held Outside of a Qualified Retirement Plan

With respect to the distributions paid during 2007 to U.S. individual unitholders, 87.69% should be reported as a qualified dividend, with the remaining amounts being a return of capital.

The portion of the distributions treated as qualified dividends should be reported on Line 9b of Form 1040, unless the fact situation of the U.S. individual unitholders determines otherwise. Commentary on page 19 of the Form 1040 Instruction Booklet for 2007 with respect to qualified dividends provides examples of individual situations where the dividends would not be qualified dividends. Where, due to individual situations, the dividends are not qualified dividends, the amount should be reported on Schedule B - Part II - Ordinary Dividends and Line 9a of Form 1040.

For U.S. federal income tax purposes, in reporting a return of capital with respect to distributions received, U.S. unitholders are required to reduce the cost base of their trust units by the total amount of distributions received that represent a return of capital. This amount is non-taxable if it is a return of cost base in the trust units. If the full amount of the cost base has been recovered, any further return of capital distributions should be reported as capital gains.

U.S. unitholders are encouraged to utilize the Qualified Dividends and Capital Gain Tax Worksheet of Form 1040 to determine the amount of tax that may be otherwise applicable.

The taxable portion (for Canadian income tax purposes) of the distributions is subject to a minimum 15% Canadian withholding tax that is withheld prior to any payments being distributed to unitholders. Beginning in 2005, the return of capital portion (for Canadian income tax purposes) of the distributions is also subject to a 15% withholding tax that is withheld prior to any payments being distributed to unitholders. Where trust units are held outside a qualified retirement account, the full amount of all withholding tax should be creditable, subject to numerous limitations, for U.S. tax purposes in the year in which the withholding taxes are withheld. Where trust units are held in qualified retirement account, the same withholding taxes apply but the amount is not creditable for U.S. tax purposes.

The amount of Canadian tax withheld should be reported on Form 1116, "Foreign Tax Credit (Individual, Estate, or Trust)". Information regarding the amount of Canadian tax withheld in 2007 should be determined from your own records and is not available from Daylight. Amounts over withheld, if any, from Canada should be claimed as a refund from the Canada Revenue Agency no later than two years after the calendar year in which the payment was paid and should not be claimed as a credit against your U.S. income tax liablity.

Investors should report their dividend income and capital gain (if any), and make adjustments to their tax basis in Daylight's units, in accordance with this information and subject to advice from their tax advisors. U.S. individual unitholders who hold their Daylight trust units through a stockbroker or other intermediary should receive tax reporting information from their stockbroker or other intermediary. We expect that the stockbroker or other intermediary will issue a Form 1099-DIV, "Dividends and Distributions" or a substitute form developed by the stockbroker or other intermediary. Daylight is not required to furnish such unitholders with Form 1099-DIV. Information on the Forms 1099-DIV issued by the brokers or other intermediaries may not accurately reflect the information in this press release for a variety of reasons. Investors should consult their brokers and tax advisors to ensure that the information presented here is accurately reflected on their tax returns. Brokers and/or intermediaries may or may not be required to issue amended Forms 1099-DIV.

Daylight Units Held Within a Qualified Retirement Plan

No amounts are required to be reported on a Form 1040 where Daylight trust units are held within a qualified retirement plan.

2007 DISTRIBUTION INFORMATION FOR U.S. UNITHOLDERS ($U.S./UNIT)



During 2007, for U.S. tax purposes, Daylight made cash distributions as
outlined below.

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Distri- Conver- Taxable
bution sion Distri- Qualified Return of
Record Date Payment Date ($CDN) Rate(1) bution Dividend Capital
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Dec. 31, 2006 Jan. 15, 2007 0.195 0.8561 $0.166940 $0.146390 $0.020550
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Jan. 31, 2007 Feb. 15, 2007 0.15 0.8592 $0.128880 $0.113015 $0.015865
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Feb. 28, 2007 March 15, 2007 0.15 0.8505 $0.127575 $0.111871 $0.015704
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March 30, 2007 April 16, 2007 0.15 0.8842 $0.132630 $0.116303 $0.016327
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April 30, 2007 May 15, 2007 0.15 0.9110 $0.136650 $0.119828 $0.016822
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May 31, 2007 June 15, 2007 0.15 0.9364 $0.140460 $0.123169 $0.017291
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June 29, 2007 July 16, 2007 0.15 0.9588 $0.143820 $0.126116 $0.017704
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July 31, 2007 Aug. 15, 2007 0.15 0.9306 $0.139590 $0.122406 $0.017184
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Aug. 31, 2007 Sept. 17, 2007 0.10 0.9701 $0.097010 $0.085068 $0.011942
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Sept. 28, 2007 Oct. 15, 2007 0.10 1.0248 $0.102480 $0.089865 $0.012615
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Oct. 31, 2007 Nov.15, 2007 0.10 1.0196 $0.101960 $0.089409 $0.012551
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Nov. 30, 2007 Dec. 17, 2007 0.10 0.9928 $0.099280 $0.087059 $0.012221
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Total Cash $1.645 $1.517275 $1.330499 $0.186776
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(1) Bank of Canada Noon Rate


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. Daylight's large undeveloped land base provides additional prospects to create value through our highly skilled technical teams as well as through selective farm outs to targeted industry partners. Daylight has approximately 78 million trust units currently outstanding which trade on the TSX under the symbol DAY.UN. Daylight Series A and Series B convertible debentures trade on the TSX under the symbols DAY.DB and DAY.DB.B respectively.

The information in this release is not meant to be an exhaustive discussion of all possible U.S. income tax considerations, but a general guideline and is not intended to be legal or tax advice to any particular holder or potential holder of Daylight units. Holders or potential holders of Daylight units should consult their own tax advisors as to their particular tax consequences of holding Daylight units. Daylight has not obtained a legal or tax opinion, nor has it requested a ruling from the IRS, on these matters.

ADVISORY:

Forward Looking Statements: This press release contains forward-looking statements as to the internal projections, expectations, estimates or beliefs relating to future events or future performance of Daylight Resources Trust ("Daylight"), including Daylight's guidance for 2008 and the amount and type of 2008 budgeted capital expenditures set forth herein. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "believes", "expects", "intends", "projects", "plans", "anticipates", "estimates" or "contains" or similar words or the negative thereof. These statements represent management's expectations or beliefs concerning, among other things, future capital expenditures and future operating results and various components thereof or the economic performance of Daylight and include, without limitation, statements with respect to the future financial position, business strategy, budgets, projected costs and plans, objectives of or involving Daylight or any of its respective affiliates; amounts to be retained by Daylight for growth; the amount and timing of the payment of distributions of Daylight; payout ratios; access to credit facilities; capital taxes; income taxes; commodity prices; administration costs; commodity price risk management activities; expectation of future production rates and components of cash flow and earnings. 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 the production performance of Daylight's oil and gas assets, the cost and competition for services throughout the oil and gas industry in 2007 and 2008 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. 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's) may be misleading, particularly if used in isolation. In accordance with NI 51-101, a BOE conversion ratio for natural gas of 6 Mcf:1bbl 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.

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW.

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