Enerflex Systems Income Fund

Enerflex Systems Income Fund

August 30, 2006 23:59 ET

Enerflex Announces Mailing of Information Circular in respect of the Proposed Reorganization into an Income Trust

CALGARY--(CCNMatthews - Aug. 30) - Enerflex Systems Ltd. ("Enerflex") (TSX: EFX) announces the mailing of its Information Circular and Proxy Statement to its shareholders and optionholders with respect to the proposed plan of arrangement under the Canada Business Corporations Act (the "Arrangement") pursuant to which Enerflex will be reorganized into an income trust to be known as Enerflex Systems Income Fund (the "Fund"). Pursuant to an interim order of the Court of Queen's Bench of Alberta, the special meeting (the "Meeting") of the holders of common shares and options of Enerflex will be held in the Mayfair Room at the Westin Hotel, 320 - 4th Avenue S.W., Calgary, Alberta on September 27, 2006 at 9:00 a.m. (Calgary time) to consider, among other things, the Arrangement. In order for the Arrangement to become effective, a resolution approving the Arrangement must be approved by at least 66 2/3% of the votes cast by holders of common shares and options, voting together as a single class, present in person or represented by proxy, at the Meeting. The Arrangement will also require the final approval of the Court of Queen's Bench of Alberta.

If all conditions have been satisfied or waived, Enerflex expects the effective date of the Arrangement to be on or about October 2, 2006.

The Arrangement will give effect to a two-for-one share split, which the Board of Directors believes will benefit the Fund and Enerflex shareholders by increasing liquidity. Pursuant to the Arrangement, Enerflex shareholders will, subject to certain limits, receive in exchange for each of their common shares, at the shareholder's election, either:

1. two trust units of the Fund ("Trust Units");

2. two exchangeable limited partnership units ("Exchangeable LP Units");

3. one Trust Unit and one Exchangeable LP Unit.

A maximum of 7,100,000 Exchangeable LP Units will be issued pursuant to the Arrangement. In the event that Enerflex shareholders elect to receive more Exchangeable LP Units than are available, the Exchangeable LP Units will be prorated and shareholders will receive Trust Units in lieu of Exchangeable LP Units.

It is the current intention of Enerflex's management to distribute in the range of $0.25 to $0.26 per Trust Unit per fiscal quarter or between $1.00 and $1.04 per Trust Unit annually, with distributions to commence on a quarterly basis after the Arrangement is completed. Assuming an effective date of October 2, 2006, an initial cash distribution is expected to be paid to the unitholders of the Fund of record on or before January 15, 2007.

Subject to the receipt of the necessary approvals and satisfaction of the requirements of the Toronto Stock Exchange, the Trust Units will be listed and posted for trading following the effective date and the common shares of Enerflex will be delisted. The Exchangeable LP Units will not be listed. Further details with respect to the anticipated trading of the Trust Units will be provided closer to the effective date.

The Information Circular will be available on the internet at www.sedar.com and Enerflex's website at www.enerflex.com.

Enerflex Systems Ltd. is a leading Canadian supplier of products and services to the global oil and gas production industry. Our core expertise lies between the wellhead and the pipeline. Enerflex provides natural gas compression, power generation and process equipment for sale, rent or lease, hydrocarbon production and processing facilities, electrical, instrumentation and controls services and a comprehensive package of field maintenance and contracting capabilities. Through our ability to provide these products and services in an integrated manner, or as stand-alone offerings, Enerflex offers its customers a unique value proposition.

Headquartered in Calgary, Canada, Enerflex has approximately 2,700 employees. Enerflex, its subsidiaries, interests in affiliates and joint-ventures, operate in Canada, Australia, the Netherlands, the United States, Germany, Pakistan, Egypt and Indonesia. Enerflex's common shares trade on the Toronto Stock Exchange under the symbol "EFX".

Forward-Looking Statements


Certain information contained herein constitutes forward-looking information under applicable securities laws. All statements, other than statements of historical fact, which address activities, events or developments that we expect or anticipate may or will occur in the future, are forward-looking information. Forward-looking information typically contains statements with words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "potential", "targeting", "intend", "could", "might", "should", "believe" or similar words suggesting future outcomes or outlook. The following discussion is intended to identify certain factors, although not necessarily all factors, which could cause future outcomes to differ materially from those set forth in the forward-looking information. The risks and uncertainties that may affect the operations, performance, development and results of Enerflex's businesses include, but are not limited to, the following factors: the impact of general economic conditions; industry conditions, including the adoption of new environmental and other laws and regulations and changes in how they are interpreted and enforced; volatility of oil and gas prices; oil and gas product supply and demand; risks inherent in Enerflex's ability to generate sufficient cash flow from operations to meet its current and future obligations; increased competition; the lack of availability of qualified personnel or management; labor unrest; fluctuations in the foreign exchange or interest rates; stock market volatility, opportunities available to or pursued by Enerflex and other factors, many of which are beyond the control of Enerflex. The reader is cautioned that these factors and risks are difficult to predict and that the assumptions used in the preparation of such information, although considered reasonably accurate by Enerflex at the time of preparation, may prove to be incorrect or may not occur. Accordingly, readers are cautioned that the actual results achieved will vary from the information provided herein and the variations may be material. Readers are also cautioned that the foregoing list of factors and risks is not exhaustive. Additional information on these and other risks, uncertainties and factors that could affect Enerflex's operations or financial results are included in our filings with the securities commissions or similar authorities in each of the provinces of Canada, as may be updated from time to time. There is no representation by Enerflex that actual results achieved will be the same in whole or in part as those set out in the forward-looking information. Furthermore, the forward-looking statements contained herein are made as of the date hereof, and Enerflex does not undertake any obligation to update publicly or to revise any forward-looking information, whether as a result of new information, future events or otherwise, unless required by law. Any forward-looking information contained herein is expressly qualified by this cautionary statement.

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