EnerVest Diversified Income Trust
TSX : EIT.UN

EnerVest Diversified Income Trust

March 18, 2008 13:31 ET

EnerVest Diversified Income Trust Announces Financial Results for the Year Ended December 31, 2007

CALGARY, ALBERTA--(Marketwire - March 18, 2008) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES OF AMERICA.

EnerVest Diversified Management Inc., the Manager of EnerVest Diversified Income Trust (TSX:EIT.UN) ("EnerVest"), is pleased to announce the financial results for the year ended December 31, 2007. The following is an excerpt from the management report of fund performance and annual financial statements of EnerVest for the year ended December 31, 2007. The management report of fund performance and annual financial statements can be found on our website at www.enervest.com or on SEDAR at www.sedar.com.

Management Report of Fund Performance

Results of Operations

The past year marked the fifth successive year of an overall increase in global equities. The subprime mortgage crisis worsened during the second half of 2007 and resulted in billions of dollars in write-downs. The subsequent global credit crisis that ensued was not anticipated. Concerns that this will lead to a significant slowdown in the United States and an ensuing slowdown in Canada are being weighed against the relief that lower interest rates will bring.

EnerVest's portfolio was well positioned for the challenges of a global credit crisis, royalty regime change, and future economic uncertainty. EnerVest's return based on its net asset value per unit was 8.2% for 2007, higher than both the BMO Capital Markets Trust Composite Index and S&P/TSX Income Trust Index returns of 7.4% and 6.6%, respectively. This performance is largely attributed to asset allocation and, to a lesser extent, individual security selection. During the year an overweight position was maintained in consumer and industrial business trusts and the portfolio held only one-half of the S&P/TSX Income Trust Index weight in royalty trusts which underperformed during the fourth quarter as a result of the royalty review by the Alberta government. EnerVest's return was 2.3% based on its market price, the result of a further widening of the discount between the trust's market price and its net asset value. The 20.8% discount at December 31 represents the highest month end discount experienced by EnerVest during 2007 due to the increasing market uncertainty prevailing at the time; this discount has significantly narrowed since year end.

The weighting of Real Estate Investment Trusts ("REITs") was reduced throughout the year as a number of trusts in the portfolio were eliminated through takeovers. This left the portfolio underweight its benchmark weighting in REITs at the end of the year which helped the relative performance of the fund. EnerVest realized a positive return of 5.7% in real estate in 2007 versus the BMO Capital Markets REIT Index return of negative 2.4%. This is due to individual security selection of a number of trust companies that were taken over at significant premiums to market values (e.g. Sunrise Senior Living REIT) or trusts that realized significant capital gains as a result of takeover bids (e.g. Alexis Nihon REIT, Legacy Hotels REIT, and Dundee REIT). Going forward, Canadian REIT fundamentals appear solid and more normal returns can be achieved once the global credit market turmoil has subsided.

Royalty trusts remained active acquirers in 2007, completing transactions of $12.4 billion which was roughly 31.8% of total energy transactions in 2007. While robust, this is lower than in the previous two years as a direct result of the Tax Fairness Plan which has limited both the life of the current income trust structure and growth prospects on acquisitions. In October 2007, Oil & Gas trusts were dealt another blow as Alberta unveiled the new royalty regime; this resulted in an immediate sell off and a sharp decline in the sector. As the industry digests the new royalty structure, more mergers are expected among equals to produce a combined entity that is stronger than the individual. This activity should continue until the Tax Fairness Plan goes into effect in 2011. EnerVest outperformed the BMO Royalty Trust Index with a return of 2.6% versus 2.3% as a result of specific security selection.

The Business Trust sector of the portfolio was the largest contributing factor to EnerVest's performance due to being overweight by 7.2% from the benchmark as well as individual security selection. The notable performance of Labrador Iron Ore Trust contributed approximately 1.7% to EnerVest's overall return. EnerVest was represented by a generally strong group of trusts in the Industrial sector, including Genivar Income Fund (up 105% in 2007), Davis & Henderson (up 49%), Badger Income Fund (up 55%), and Teranet Income Fund (up 24%).

Portfolio

With the exception of the Oil & Gas sector, the portfolio composition did not change dramatically during the year. The portfolio weighting for Oil & Gas increased to 28.9% from 22.0% to take advantage of favourable valuations and provide higher yields on the portfolio. Industrials and REITs were down slightly to 12.4% and 20.8% of the portfolio, respectively from 15.8% and 24.4%. The yield on the portfolio increased over the year to 8.6% of market value by moving more into those sectors with higher yields, namely royalty trusts and higher yielding business trusts.

Financial Performance

Approximately $187.3 million was received in distributions from portfolio assets during 2007, an increase of $15.2 million over 2006. This increase is mainly the result of the investments received on the exchange offers which closed in October 2006 and 2007 and the resulting distributions received on those assets.

Total expenses were $47.2 million for the year, of which management fees and interest and credit facility charges combined accounted for 82.9%. Management fees totalled $21.2 million, an increase of approximately $1.9 million over 2006 due to higher average net asset values during 2007. Approximately $17.9 million was incurred in interest and credit facility charges, an increase of $7.2 million over 2006 as a result of a higher average balance outstanding. An additional $2.8 million in broker commissions were expensed during 2007 as a result of a new accounting standard; these commissions were not expensed during 2006 under the old rules. Total expenses increased by $12.6 million over the prior year, with management fees, interest and broker fees accounting for $11.9 million, or 94.3%, of the increase, resulting in a per unit increase of $0.02.

EnerVest had net realized capital gains of $120.2 million. Unrealized gains in the portfolio decreased by $83.9 million, mostly due to the realization of gains on the disposition of Real Estate Investment Trusts and the current weakness in the REIT and oil & gas markets.

The increase in net assets from operations was $149.0 million, or $0.54 per unit. Distributions of $232.6 million were paid to unitholders during 2007. Opening net assets decreased by $7.7 million due to a fair value adjustment to revalue December 31, 2006 investments to bid prices as required under a new accounting standard. As a result of the increase from operations of $149.0 million, exchange offer proceeds of $201.5 million, distribution reinvestment plan proceeds of $7.3 million, distribution payments of $232.6 million and the $7.7 million fair value adjustment, net assets have increased $93.7 million. As at December 31, 2007, EnerVest's net assets totalled $2.0 billion, or $6.69 per unit.

One element of EnerVest's investment strategy is the use of leverage. EnerVest does not consider substantial levels of debt financing appropriate and its Declaration of Trust limits borrowing to 20% of the value of total assets after giving effect to the leverage. The differential between the current average portfolio distribution yield of 8.6% and an average annual interest rate on the credit facility of 5.0% adds additional distribution income which aids in the maintenance of EnerVest's current monthly distribution. The maximum borrowings during 2007 were $386.0 million while the minimum amount drawn was $279.0 million. As at December 31, 2007, $346.0 million was utilized.

Cash Distributions

EnerVest distributed $0.84 per unit during the year, consistently distributing $0.07 per unit per month. These distributions represent an annualized pre-tax yield of 13.8% based on EnerVest's weighted average market price of $6.07 per unit in 2007.

It is estimated that 27.5% of the distributions paid during 2007 will be non-taxable. This equates the 13.8% yield on EnerVest units to an equivalent pre-tax interest rate of 17.0%, assuming a 46.41% tax rate and payment of capital gains tax on the return of capital upon disposition of EnerVest units. Since inception EnerVest has paid a monthly distribution to unitholders on the last trading day of the month.

Trading Volume

The daily average trading volume of EnerVest units on the TSX was 732,389 units, an increase of 8.0% over the prior year. With a market capitalization of approximately $1.6 billion at December 31, 2007, EnerVest is both the largest and most liquid closed-end fund in Canada, providing our investors with the ability to easily move in and out of the market without a discernible effect on the price of EnerVest units.

Recent Developments

High Yield Demand

The subprime crisis highlighted that the global, aging population has been taking additional risk, knowingly or unknowingly, in the search for higher yield. Long term global interest rates will be continually under pressure due to this quest for yield as well as the excess liquidity evidenced by the savings rates of many eastern economies. Central Bank intervention and coordinated interest rate reductions at the Federal Reserve, Bank of Canada and worldwide should keep interest rates down and the demand for financial products offering higher yields strong.

Tax Fairness Plan

Bill C-52, an Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007, was given Royal Assent on June 22, 2007 thereby passing into law the Conservative's "Tax Fairness Plan" including the proposed tax on income trusts. Though this has removed some of the uncertainty on this issue since its October 31, 2006 announcement, further clarification is required on such areas as conversion of trusts into corporate structures, REIT exemptions and allowable growth. Until these issues are clarified many trusts will not be able to make strategic decisions on their future direction. As the 2011 Tax Fairness Plan deadline draws near, it is anticipated that more trusts will move out of tax-deferred and non-resident accounts and into taxable Canadian accounts. This ongoing turmoil should provide opportunities to acquire high quality trusts at attractive values. Given the strong demand for high yield product, business will likely continue to distribute income in some form to investors post-2011.

REIT Market

The REIT market experienced a material correction during 2007 as REITs became increasingly correlated with financial services companies amidst the credit market sell off. Canadian REIT fundamentals remain strong against a backdrop of demand for real estate from pension funds and private investors as well as low historical long bond yields. As the global credit markets stabilize, Canadian REITs are well positioned to enjoy a healthy rebound in 2008 and 2009.

Alberta Royalty Regime

The Canadian royalty trust sector was hit hard by the new Alberta royalty framework, resulting in an immediate sell off and a sharp decline in the sector. The Alberta government is already looking at easing some of the rules upon claims that some companies are unfairly treated in the new regime. There will be continued consolidation of smaller, high cost producers as the new rules are digested. Many large-cap producers have announced cuts to their Alberta budgets, directing their capital into other areas of Canada, and internationally, that have more favourable royalty regimes.

Commodity Prices

Though natural gas prices were depressed throughout 2007 due to excess storage levels and pressure from liquefied natural gas imports, prices have recently risen in response to colder winter weather and the resulting depleting storage levels. Valuations generally look favourable in gas-weighted trusts, but winter weather will remain the short-term catalyst to sector performance. Crude oil prices have risen to record levels and traded over US $100 per barrel recently.
However, further retraction in the United States and global growth will make it difficult for commodity prices to remain at these levels.

2007 Exchange Offer

On October 22, 2007, EnerVest completed an exchange offer whereby EnerVest issued 33,941,261 units for proceeds of $201.5 million in exchange for units of selected income, royalty and real estate investment trusts, limited partnerships and corporations or other securities listed on the Toronto Stock Exchange.

Credit Facility

In December, EnerVest extended its $400 million credit agreement between EnerVest, as borrower, and Canadian Imperial Bank of Commerce and Bank of Montreal for a further 364 days from January 29, 2008 to January 27, 2009.

Accounting Changes

On April 1, 2005, the Canadian Institute of Chartered Accountants ("CICA") issued new financial reporting standards for the accounting and disclosure of financial instruments. Of importance to investment funds are new definitions and requirements for determining the fair value of financial instruments, particularly investments. Since current securities regulations require that investment funds calculate Net Asset Value Per Share ("NAVPS") in accordance with Generally Accepted Accounting Principles ("GAAP"), these new standards impact the way in which net asset value is determined. For securities quoted on an open market, the new standards require the use of bid prices as opposed to the closing prices previously used. Bid prices are normally less than closing prices which will result in lower net asset values. Under the old rules, transaction costs such as broker commissions could be added to the cost base of investments purchased and deducted from the proceeds of investments sold. The new rules require that these costs be expensed. These new standards were effective for fiscal years beginning on or after October 1, 2006, therefore effective January 1, 2007 for EnerVest. Securities regulators have granted relief from the requirement to calculate NAVPS in accordance with GAAP. This relief is in effect until the date on which legislation with respect to calculating net asset value for purposes other than financial statements is changed. The Canadian Securities Administrators have proposed amendments to National Instrument 81-106 Investment Fund Continuous Disclosure, Form 81-106F1, Companion Policy 81-106CP, and other related consequential amendments, which modify the requirements regarding the calculation of net asset value following the introduction of the new accounting standards. Specifically it allows for investment funds to have two different net asset values: one for financial statements using bid prices (referred to as "net assets" or "net assets per unit"); and another for all other purposes using closing prices (referred to as "net asset value" or "net asset value per unit"). During the temporary relief period, EnerVest calculates NAVPS under the old method, specifically using closing rather than bid prices, for all purposes other than financial statements. This Management Report of Fund Performance has been completed based on the proposed amendments and the 2007 annual financial statements have been presented in accordance with the new accounting rules.

FINANCIAL HIGHLIGHTS

The following tables show selected key financial information about EnerVest and are intended to help you understand EnerVest's financial performance for the past five years.



EnerVest's Net Assets per Unit (1)
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2007 2006 2005 2004 2003
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Net assets, beginning of year 7.12 8.22 8.01 7.22 6.50
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Increase (decrease) from operations:
Total revenue 0.69 0.73 0.77 0.73 0.75
Total expenses (0.17) (0.15) (0.15) (0.15) (0.15)
Realized gains for year 0.44 0.18 0.24 0.18 0.07
Unrealized (losses) gains for year (0.31) (0.68) 0.68 1.49 1.56
Return of capital (0.11) (0.13) (0.20) (0.24) (0.26)
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Total increase (decrease) from
operations(2): 0.54 (0.05) 1.34 2.01 1.97
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Distributions:
From net investment income (0.41) (0.58) (0.60) (0.58) (0.59)
From capital gains (0.43) (0.17) (0.24) (0.17) (0.07)
Return of capital - (0.09) - (0.09) (0.18)
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Total distributions(3) (0.84) (0.84) (0.84) (0.84) (0.84)
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Net assets, at December 31 6.69 7.12 8.22 8.01 7.22
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(1) This information is derived from EnerVest's audited annual financial
statements. The net assets per unit presented in the financial
statements differs from the net asset value calculated for fund pricing
purposes. An explanation of these differences can be found in the notes
to the financial statements.
(2) Net assets and distributions are based on the actual number of units
outstanding at the relevant time. The increase/decrease from operations
is based on the weighted average number of units outstanding over the
financial period.
(3) Distributions were paid in cash, reinvested in additional units of
EnerVest, or both.
(4) This schedule is not a reconciliation of net assets since it does not
reflect unitholder transactions as shown on the Statement of Changes
in Net Assets. Columns may therefore not add.


Ratios and Supplemental Data
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2007 2006 2005 2004 2003
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Total net asset value
($000s)(1) (5) 2,017,336 1,914,596 1,597,955 1,187,695 723,366
Number of units
outstanding (000s)(1) 300,130 269,010 194,329 148,300 100,205
Management expense ratio
("MER") excluding issue
costs and interest (2) 1.34% 1.32% 1.37% 1.49% 1.68%
MER including issue costs
and interest (2) 2.25% 2.12% 2.45% 3.14% 3.72%
Trading expense ratio(3) 0.14% 0.12% 0.10% 0.15% 0.33%
Portfolio turnover rate(4) 34.89% 23.99% 17.27% 20.52% 37.61%
Net asset value per unit(5) $6.72 $7.12 $8.22 $8.01 $7.22
Closing market price $5.32 $5.96 $8.23 $8.40 $6.77
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(1) This information is provided as at December 31 of the year shown.
(2) Management expense ratio is based on total expenses (excluding
commissions and other portfolio transaction costs) for the stated period
and is expressed as an annualized percentage of daily average net asset
value during the period. The MER has been presented excluding and
including the cost of issuance of EnerVest units and interest expense
on the credit facility.
(3) The trading expense ratio represents total commissions and other
portfolio transaction costs expressed as an annualized percentage of
daily average net asset value during the period.
(4) EnerVest's portfolio turnover rate indicates how actively EnerVest's
portfolio advisor manages its portfolio investments. A portfolio
turnover rate of 100% is equivalent to EnerVest buying and selling all
of the securities in its portfolio once in the course of the year. The
higher a fund's portfolio turnover rate in a year, the greater the
trading costs payable by the fund in the year and the greater the chance
of an investor receiving taxable capital gains in the year. There is not
necessarily a relationship between a high turnover rate and the
performance of a fund.
(5) The net asset value and net asset value per unit calculated for fund
pricing purposes differs from the net assets and net assets per unit
presented in the financial statements. An explanation of these
differences can be found in the notes to the financial statements.


PAST PERFORMANCE

The performance data provided assumes that all distributions made by EnerVest in the periods shown were reinvested in additional units of EnerVest and does not take into account sales, distribution or other optional charges that would have reduced returns or performance. Past performance does not necessarily indicate how EnerVest will perform in the future.

Annual Compound Returns

The below table shows annual compound returns for the periods ended December 31, 2007 for EnerVest based on market price and net asset value and compared to the BMO Capital Markets Trust Composite Index.



EnerVest
------------------------------------- BMO Capital
Returns Based on Returns Based on Markets Trust
Market Price Net Asset Value Composite Index(1)
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One year 2.3% 8.2% 7.4%
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Three years (2.2)% 7.5% 10.6%
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Five years 9.3% 14.6% 19.0%
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Ten years 11.1% 13.7% 15.4%
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(1) BMO Capital Markets Trust Composite Index returns have been adjusted to
reflect the reinvestment of distributions on securities in the index.


SUMMARY OF INVESTMENT PORTFOLIO

Portfolio Breakdown

Oil & Gas 28.94%
Business Trusts 28.51%
Pipeline & Utilities 25.34%
Real Estate Investment Trusts 20.83%
Industrials 12.44%
Cash and Cash Equivalents 0.64%
Liabilities, net of Other Assets (16.70%)
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Net Assets 100.00%


Top 25 Holdings
Issuer Name % of Net
Asset Value(1)
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Yellow Pages Income Fund 6.06%
Canadian Oil Sands Trust 5.51%
CI Financial Income Fund 4.53%
Keyera Facilities Income Fund 4.49%
Canadian REIT 4.32%
BFI Canada Income Fund 4.31%
AltaGas Income Trust 4.08%
Fort Chicago Energy Partners L.P. 3.79%
Inter Pipeline Fund 3.78%
RioCan REIT 3.36%
Crescent Point Energy Trust 3.19%
Labrador Iron Ore Royalty Income Fund 3.12%
Cineplex Galaxy Income Fund 2.79%
Vermilion Energy Trust 2.50%
Bonavista Energy Trust 2.39%
H&R REIT 2.34%
Newalta Income Fund 2.21%
Taylor NGL Limited Partnership 2.14%
ARC Energy Trust 2.08%
Bell Aliant Regional Communications Income Fund 2.03%
Westshore Terminals Income Fund 2.02%
Davis + Henderson Income Fund 1.90%
Cominar REIT 1.90%
Allied Properties REIT 1.87%
Penn West Energy Trust 1.85%

(1) The above % of net asset value is based on closing market prices and
differs from the % of net assets presented in the Statement of
Investment Portfolio due to the use of bid prices used for financial
statement purposes.


Statements of Net Assets
December 31, 2007 and 2006
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2007 2006
($ thousands except per unit amounts) $ $
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ASSETS
Investments 2,332,136 2,169,141
Cash 12,996 27,106
Distributions receivable 17,547 15,519
Promissory notes receivable 19,678 9,433
Prepaid interest 1,324 -
Interest receivable 226 -
Other receivables 6 -
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2,383,913 2,221,199
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LIABILITIES
Credit facility 346,000 284,000
Distributions payable 21,009 18,831
Liability for purchase of portfolio assets 6,018 -
Accounts payable and accrued liabilities 2,583 3,772
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375,610 306,603
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NET ASSETS 2,008,303 1,914,596
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UNITS ISSUED AND OUTSTANDING (000s) 300,130 269,010
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NET ASSETS PER UNIT $6.69 $7.12
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Statements of Operations and Comprehensive Income
Years Ended December 31, 2007 and 2006
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2007 2006
($ thousands except per unit amounts) $ $
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INVESTMENT REVENUES
Distribution income 187,279 172,129
Securities lending revenue 1,365 256
Interest income 643 209
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189,287 172,594
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EXPENSES
Management fees 21,221 19,325
Interest and charges on credit facility 17,900 10,695
General and administrative 3,002 2,529
Brokerage commissions 2,789 -
Goods and services tax 1,497 1,454
Legal fees 208 179
Securityholder reporting costs 181 188
Independent Review Committee fees and expenses 137 -
Custodial fees 134 91
Directors' fees 55 63
Trustees' fees 42 40
Audit fees 37 35
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47,203 34,599
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NET INVESTMENT INCOME 142,084 137,995
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GAIN ON INVESTMENTS
Net realized gains on sale of portfolio assets 120,160 42,080
Net change in unrealized portfolio gains (83,879) (160,318)
Return of capital (29,354) (31,811)
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6,927 (150,049)
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INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS 149,011 (12,054)
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WEIGHTED AVERAGE UNITS OUTSTANDING (000s) 274,975 234,907
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INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS PER UNIT $0.54 ($0.05)
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Statements of Changes in Net Assets
Years Ended December 31, 2007 and 2006
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2007 2006
($ thousands) $ $
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NET ASSETS, BEGINNING OF YEAR 1,914,596 1,597,955
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FAIR VALUE ADJUSTMENT
Value adjustment to December 31, 2006
bid prices (7,746) -
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INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS 149,011 (12,054)
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UNITHOLDER TRANSACTIONS
Net proceeds on issuance of units 201,495 539,091
Proceeds from distribution reinvestment plan 7,286 7,049
Amounts paid for repurchase of units (23,759) (16,232)
Distributions to unitholders
- from net investment income (112,420) (137,995)
- from realized gains on sale of
portfolio assets (120,160) (42,080)
- from return of capital - (21,138)
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(47,558) 328,695
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NET ASSETS, END OF YEAR 2,008,303 1,914,596
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Statements of Cash Flows
Years Ended December 31, 2007 and 2006
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2007 2006
($ thousands) $ $
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CASH FLOW FROM OPERATING ACTIVITIES
Net investment income 142,084 137,995
Proceeds on disposition of portfolio assets 802,874 556,536
Purchase of portfolio assets (765,196) (822,955)
Net change in non-cash working capital items 1,245 5,386
Amortization of deferred financing costs - 85
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181,007 (122,953)
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CASH FLOW FROM FINANCING ACTIVITIES
Cash proceeds on issuance of units - 285,684
Compensation paid on issuance of units - (4,119)
Exchange offer issue costs (10,245) (11,320)
Repurchase of units (23,759) (16,232)
Cash proceeds from distribution
reinvestment plan 7 60
Drawings on credit facility 170,000 509,500
Repayments on credit facility (108,000) (443,072)
Cash distributions to unitholders (223,120) (194,223)
Payments received on promissory note - 1,887
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(195,117) 128,165
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NET (DECREASE) INCREASE IN CASH (14,110) 5,212

CASH, BEGINNING OF YEAR 27,106 21,894
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CASH, END OF YEAR 12,996 27,106
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SUPPLEMENTARY INFORMATION
Interest paid 20,021 9,827
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Statements of Investment Portfolio
December 31, 2007
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($ thousands)
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Units / Average Fair % of Net
Shares Cost Value Assets
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OIL & GAS (28.96%)

Conventional Oil & Gas
ARC Energy Trust 2,058,087 34,614 41,923 2.09%
Baytex Energy Trust 692,193 14,711 13,082 0.65%
Bonavista Energy Trust 1,692,693 43,657 48,039 2.39%
Crescent Point Energy Trust 2,588,873 37,641 63,919 3.18%
Daylight Resources Trust 2,602,129 31,940 18,709 0.93%
Enerplus Resources Fund 880,440 39,851 35,006 1.74%
Fairborne Energy Ltd. 2,690,552 26,417 17,515 0.87%
Focus Energy Trust 2,085,433 35,086 34,868 1.74%
NAL Oil & Gas Trust 453,900 5,647 5,243 0.26%
Paramount Energy Trust 1,085,000 13,239 6,792 0.34%
Pengrowth Energy Trust 483,085 10,197 8,512 0.42%
Penn West Energy Trust 1,443,200 50,768 37,249 1.85%
PrimeWest Energy Trust 1,148,016 30,230 30,893 1.54%
Progress Energy Trust 2,752,577 34,701 29,783 1.48%
Vault Energy Trust 810,717 3,474 2,894 0.14%
Vermilion Energy Trust 1,471,802 15,518 50,130 2.50%
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427,691 444,557 22.12%
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Unconventional Oil & Gas
Canadian Oil Sands Trust 2,872,161 72,925 111,066 5.53%
Freehold Royalty Trust 636,075 7,315 9,904 0.49%
Harvest Energy Trust 548,779 14,874 11,321 0.56%
Provident Energy Trust 531,982 6,635 5,288 0.26%
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101,749 137,579 6.84%
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BUSINESS TRUSTS (28.54%)

Consumer Services/Restaurants
The Consumers' Waterheater
Income Fund 1,149,983 13,493 16,905 0.84%
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13,493 16,905 0.84%
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Media
Cineplex Galaxy Income Fund 3,372,514 55,233 56,085 2.79%
Yellow Pages Income Fund 8,774,028 124,264 121,871 6.07%
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179,497 177,956 8.86%
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Telecommunications Services
BCE Inc. 682,177 27,310 27,014 1.35%
Bell Aliant Regional
Communications Income Fund 1,390,098 45,934 40,911 2.04%
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73,244 67,925 3.39%
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Health Care Services
CML Healthcare Income Fund 656,500 10,193 11,239 0.56%
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10,193 11,239 0.56%
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Consumer Staples
Connors Bros. Income Fund 2,006,689 28,528 15,512 0.77%
Menu Foods Income Fund 1,255,190 17,008 828 0.04%
Rogers Sugar Income Fund 2,673,452 9,664 12,485 0.62%
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55,200 28,825 1.43%
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Materials
Canfor Pulp Income Fund 1,067,400 16,507 11,656 0.58%
Labrador Iron Ore Royalty
Income Fund 1,325,074 24,374 62,663 3.12%
Noranda Income Fund 1,932,659 17,644 18,631 0.93%
PRT Forest Regeneration
Income Fund 372,200 3,585 2,576 0.13%
Royal Utilities Income Fund 1,300,264 15,617 13,770 0.69%
SFK Pulp Fund 3,530,467 15,192 7,802 0.39%
Supremex Income Fund 1,862,786 17,462 11,028 0.55%
TimberWest Forest Corp. 142,900 2,009 2,101 0.10%
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112,390 130,227 6.49%
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Diversified Financials
CI Financial Income Fund 3,255,063 96,248 90,946 4.53%
Davis + Henderson Income Fund 1,829,535 21,934 38,256 1.90%
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118,182 129,202 6.43%
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Information Technology
Teranet Income Fund 1,057,377 10,360 10,754 0.54%
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10,360 10,754 0.54%
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PIPELINE & UTILITIES (25.33%)

Energy
AltaGas Income Trust 3,111,863 71,423 81,842 4.08%
Essential Energy Services
Trust 1,595,739 12,277 4,867 0.24%
Fort Chicago Energy
Partners L.P. 7,042,309 71,139 76,268 3.80%
Inter Pipeline Fund 8,040,127 62,955 76,220 3.80%
Keyera Facilities Income Fund 4,552,545 73,556 90,004 4.48%
Pembina Pipeline Income Fund 965,280 11,490 16,883 0.84%
Spectra Energy Income Fund 2,015,950 17,819 18,043 0.90%
Taylor NGL Limited Partnership 3,862,479 27,832 42,912 2.14%
-------------------------------
348,491 407,039 20.28%
-------------------------------

Utilities
Algonquin Power Income Fund 974,225 8,200 8,174 0.41%
EPCOR Power L.P. 1,263,938 30,901 29,399 1.46%
Great Lakes Hydro Income Fund 1,595,704 20,075 31,930 1.59%
Innergex Power Income Fund 1,461,353 12,327 17,244 0.86%
Macquarie Power &
Infrastructure Income Fund 1,555,131 14,528 14,649 0.73%
-------------------------------
86,031 101,396 5.05%
----------------------------------------------------------------------------

INDUSTRIALS (12.43%)

Capital Goods
Badger Income Fund 669,609 10,025 14,356 0.71%
Vicwest Income Fund 335,351 3,645 3,726 0.19%
-------------------------------
13,670 18,082 0.90%
-------------------------------

Commercial Services & Supplies
BFI Canada Income Fund 3,257,355 58,193 86,646 4.31%
GENIVAR Income Fund 190,000 3,893 4,989 0.25%
Newalta Income Fund 2,443,215 66,702 44,467 2.21%
Resolve Business Outsourcing
Income Fund 2,186,470 21,568 17,164 0.85%
-------------------------------
150,356 153,266 7.62%
-------------------------------

Transportation
Jazz Air Income Fund 2,191,000 16,900 16,695 0.83%
Livingston International
Income Fund 1,275,214 26,001 21,169 1.05%
Westshore Terminals Income
Fund 2,817 19,147 40,733 2.03%
-------------------------------
62,048 78,597 3.91%
----------------------------------------------------------------------------

REAL ESTATE INVESTMENT
TRUSTS ("REIT") (20.86%)
Allied Properties REIT 1,804,350 27,758 37,296 1.86%
Boardwalk REIT 632,975 8,810 28,148 1.40%
Canadian Apartment Properties
REIT 500,000 9,270 7,990 0.40%
Canadian REIT 3,008,734 73,250 86,892 4.33%
Chartwell Seniors Housing REIT 2,833,695 33,264 32,049 1.60%
Cominar REIT 1,875,025 37,333 38,138 1.90%
Crombie REIT 1,628,413 16,161 18,010 0.90%
H&R REIT 2,379,260 41,686 47,086 2.34%
Innvest REIT 1,129,264 12,909 11,959 0.60%
Morguard REIT 1,032,908 14,922 13,325 0.66%
Northern Property REIT 1,213,712 20,365 27,066 1.35%
Retrocom Mid-Market REIT 722,823 3,579 2,985 0.15%
RioCan REIT 3,110,004 50,179 67,643 3.37%
--------------------------------
349,486 418,587 20.86%
----------------------------------------------------------------------------

2,112,081 2,332,136 116.12%
BROKERAGE COMMISSIONS (3,146) - -
--------------------------------
TOTAL INVESTMENT PORTFOLIO 2,108,935 2,332,136 116.12%
CASH & CASH EQUIVALENTS 12,996 0.65%
LIABILITIES, NET OF OTHER ASSETS (336,829) (16.77%)
--------------------------------
NET ASSETS 2,008,303 100.00%
----------------------------------------------------------------------------
----------------------------------------------------------------------------


EnerVest is an actively managed, closed-end trust which invests in a diversified portfolio of income, royalty and real estate investment trusts, limited partnerships, and corporations or other securities listed on the Toronto Stock Exchange. EnerVest's objectives are to maximize monthly distributions relative to risk and maximize net asset value while maintaining and expanding a diversified investment portfolio. EnerVest currently has 300,354,047 Units outstanding, a net asset value of approximately $1.9 billion and a daily average trading volume of 622,909 units for the first two months of 2008.

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.

Contact Information

  • EnerVest Diversified Management Inc.
    Kevin W. Wolfe
    President & Chief Executive Officer
    (403) 571-5550 or Toll Free: 1-800-459-3384
    or
    EnerVest Diversified Management Inc.
    Sean J. H. Morgan
    Chief Financial Officer
    (403) 571-5550 or Toll Free: 1-800-459-3384
    or
    EnerVest Diversified Management Inc.
    Kristie Allen
    Investor Relations
    (403) 571-5550 or Toll Free: 1-800-459-3384
    or
    EnerVest Diversified Management Inc.
    Linda Koroluk
    Investor Relations
    (403) 571-5550 or Toll Free: 1-800-459-3384
    (403) 571-5554 (FAX)
    or
    EnerVest Diversified Management Inc.
    Suite 2800, 700-9th Avenue S.W.
    Calgary, Alberta, T2P 3V4
    (403) 571-5550 or Toll Free: 1-800-459-3384
    (403) 571-5554 (FAX)
    Email: info@enervest.com
    Website: www.enervest.com