EnerVest Diversified Income Trust

EnerVest Diversified Income Trust

March 25, 2010 19:07 ET

EnerVest Diversified Income Trust Releases 2009 Year-End Financials

CALGARY, ALBERTA--(Marketwire - March 25, 2010) -


EnerVest Diversified Income Trust ("EnerVest" or the "Fund") (TSX:EIT.UN) is pleased to announce its financial results for the year-ended December 31, 2009.

Our achievements for the year:

- Generated a total return of 47.2% on a net asset value basis, outperforming the benchmark S&P/TSX Composite (Total Return) index by 12.1%. On a market price basis, the Fund generated a 72.1% total return.

- Achieved an Increase in Net Assets from Operations of $453 million; $4.64 per unit. This marks a substantial increase over the same period in 2008 due to significant unrealized gains in the portfolio as market conditions improved during the year.

- Distributed $1.61 per unit (average yield of 15%), on a consolidated basis. The Fund's current distribution of $1.20 per year (approximate yield of 9%) is aligned with the portfolio income and sustainable investment returns, which the Fund should be capable of delivering over the long-term.

- The Fund remains conservatively leveraged with approximately 9% of total assets drawn on its credit facility as at year-end, down from 12% in the prior year.

- Transitioned the portfolio, with more than 55% of total assets currently invested in securities that will not be impacted by the federal income tax changes coming into effect in 2011.

- Executed the Value Enhancement Plan, a series of important initiatives intended to increase long-term, sustainable value for unitholders. This included the consolidation of units on a three to one basis and the addition of the annual capped redemption allowing investors to redeem up to 10% of the units of the Fund for a cash payment of 95% of the NAV per unit.

- Initiated a new monthly investor report providing investors with timely information on the Fund's returns, portfolio details and commentary from the portfolio manager.

The annual Management Report of Fund Performance (MRFP), audited financial statements and notes will be available on SEDAR and at www.enervest.com.

Portfolio Review and 2010 Outlook

The portfolio manager, Cypress Capital Management Ltd. ("Cypress"), has positioned the EnerVest portfolio well in anticipation of the tax changes that will impact income trusts in 2011. By transitioning the portfolio away from tax impacted trusts and towards more high-yielding, income-generating, and growth-oriented securities, EnerVest should not only achieve superior returns within the Fund but provide for a less volatile and a more diversified portfolio. The Fund has less than 45 percent of its assets in income trusts. The remaining trust investments are focused on a core group of high-quality organizations with strong underlying businesses which Cypress believes will continue to deliver superior returns post 2010. The Fund continues to have a substantial weighting in REITs, which are generally not impacted by the upcoming tax changes. In addition, many of the oil and natural gas royalty trust holdings are not expected to materially reduce their distributions as long as commodity prices remain at current levels. As such, given current market conditions, EnerVest is confident that the Fund will be able to continue to deliver unitholders a distribution of $0.10 per unit per month and potentially grow net asset value.

EnerVest considers the Fund to be a cornerstone investment for investors seeking both income and growth, provided through a diversified, actively managed portfolio. The Fund currently provides an attractive yield of approximately 9%, making it a competitive alternative to other income products.

About EnerVest

The Fund is Canada's largest, most liquid, diversified closed-end investment fund. The Fund is listed on the TSX under the symbol EIT.UN and is an actively managed, diversified portfolio of income-generating and capital growth oriented securities, listed primarily on the TSX, designed to maximize distributions and Net Asset Value for the benefit of its unitholders.

Certain statements included in this news release constitute forward-looking statements. The forward-looking statements are not historical facts but reflect EnerVest Management Ltd.'s and its affiliates (the "Administrator") current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Although the Administrator believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein. The Administrator undertakes no obligation to update publicly or otherwise revise any forward-looking statement or information whether as a result of new information, future events or other such factors which affect this information, except as required by law.

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