Duke Energy Income Fund

Duke Energy Income Fund

August 22, 2006 09:22 ET

Duke Energy Income Fund Completes $109 Million Offering of Subscription Receipts

CALGARY, ALBERTA--(CCNMatthews - Aug. 22, 2006) - Duke Energy Income Fund (TSX:DET.UN) ("the Fund") has closed its recently announced equity offering of 8,951,000 subscription receipts at a price of $12.15 per subscription receipt for aggregate gross proceeds of $108,754,650. The syndicate of underwriters was co-led by CIBC World Markets Inc. and BMO Capital Markets, and included Scotia Capital Inc., TD Securities Inc., Clarus Securities Inc. and HSBC Securities (Canada) Inc.

The subscription receipts will be exchangeable into Fund units on a one-for-one basis upon the closing of the Fund's indirect purchase (the "Acquisition") of Westcoast Gas Services Inc. which holds interests in four raw gas processing plants and related gas gathering systems located primarily in British Columbia. The Acquisition, which was announced on August 1, 2006, is conditional upon the approval of the Fund's unitholders, other than affiliates of Westcoast Energy Inc., and is expected to close on or before September 29, 2006. The Fund also announced its intention, contingent on the closing of the Acquisition, to increase its monthly cash distributions from $0.067 per unit to $0.07 per unit, or $0.84 per unit on an annualized basis. Unitholders of record on October 31, 2006 will be entitled to the initial expected increased distribution, payable in November, 2006.

The gross proceeds from the sale of the subscription receipts will be held in escrow. If the closing of the Acquisition occurs on or before October 31, 2006, Fund units will be issued to holders of record of subscription receipts as at the close of business on the date of the Acquisition closing. Upon the issuance of units pursuant to the subscription receipts, holders thereof will be entitled to receive an amount in cash equivalent to any distributions paid to Fund unitholders for those record dates that occur between the closing of the equity offering and the date immediately preceding the closing of the Acquisition. If the Acquisition fails to close by October 31, 2006, or if the Acquisition is terminated at an earlier time, the escrow agent will return to the holders of subscription receipts the subscription price plus an amount equal to their proportion of the interest actually earned on the investment of the escrowed funds between the date of the closing of the offering of subscription receipts and the date of termination of the Acquisition. Upon the closing of the Acquisition, the proceeds of the subscription receipt offering plus amounts drawn on an existing credit facility will be used to finance the Acquisition.

Forward-Looking Statements

This news release includes statements that do not directly or exclusively relate to historical facts, referred to as "forward-looking statements". You can typically identify forward-looking statements by the use of forward-looking words, such as "may", "will", "could", "should", "project", "believe", "anticipate", "expect", "estimate", "continue", "potential", "plan", "forecast" and other similar words. The forward-looking statements reflect management's current intentions, plans, expectations, beliefs and assumptions about future events, including the outlook for general economic trends, industry trends, commodity prices, capital markets, and the governmental, legal and regulatory environment.

Forward-looking statements relate to, among other things, anticipated financial performance, business prospects, strategies, regulatory developments, new services, market forces, commitments and technological developments. These statements are subject to various known and unknown risks and uncertainties that are outside our control and could cause actual results to differ materially from the results expressed or implied by the forward-looking statements. Those risks and uncertainties include market and general economic conditions, future costs, treatment under government regulatory, tax and environmental regimes and the other material risks discussed in the Fund's Annual Information Form dated March 31, 2006, under "Risk Factors" and in the management's discussion and analysis of the Fund and Duke Energy Facilities LP under the headings "Risk Profile" contained in the Fund's annual report for the year ended December 31, 2005. Undue reliance should not be placed on this forward-looking information, which is given as of the date of this release, and the Fund undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise.

About Duke Energy Income Fund

Duke Energy Income Fund is an unincorporated open-ended trust established under the laws of the Province of Alberta and owns a 42.41 percent interest in Duke Energy Midstream. Duke Energy Midstream is one of the largest independent midstream operators in the Western Canadian Sedimentary Basin (WCSB) with interests in nine natural gas processing plants with a net processing capacity of 616 mmcf/d and over 1,400 kilometres of natural gas gathering pipelines located throughout natural gas prone areas in the western extent of the WCSB. More information on Duke Energy Income Fund can be found at: http://www.dukeenergyincomefund.com.

Duke Energy Gas Transmission (DEGT) is a North American leader in the long-haul transportation and storage of natural gas. For more than a half-century, DEGT and its predecessor companies have developed the critically important pipelines and related energy infrastructure that connect natural gas supply sources to premium markets. Based in Houston, Texas, the company's assets include more than 18,500 miles of transmission pipeline and more than 250 billion cubic feet of storage capacity in the U.S. and Canada. DEGT also has natural gas gathering, processing and distribution assets and natural gas liquids operations that are among the largest in Canada. More information can be found at: http://www.degt.duke-energy.com.

Duke Energy is a diversified energy company with a portfolio of natural gas and electric businesses, both regulated and unregulated, and an affiliated real estate company. Duke Energy supplies, delivers and processes energy for customers in the Americas. Headquartered in Charlotte, N.C., Duke Energy is a Fortune 500 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available on the Internet at: http://www.duke-energy.com.

Contact Information

  • Duke Energy Income Fund
    Bob Bissett
    Director, Business Development and Investor Relations
    (403) 705-2008 or 24-Hour: (704) 382-8333