NAL Oil & Gas Trust
TSX : NAE.UN

NAL Oil & Gas Trust

March 11, 2009 05:00 ET

NAL Oil & Gas Trust Announces March Distribution and Reinstatement of the DRIP

CALGARY, ALBERTA--(Marketwire - March 11, 2009) - NAL Oil & Gas Trust (the "Trust" or "NAL") (TSX:NAE.UN) will pay a distribution of $0.09 per unit on April 15, 2009, to Unitholders of record on March 23, 2009. The units will begin trading on an ex-distribution basis on March 19, 2009. The current distribution represents a $0.02 per unit reduction from the previous monthly distribution level of $0.11 per unit.

Given the Trust's strong commitment to operate within forecast cash flow and belief that prudence in these uncertain times is critical, the Board of Directors has decided the proper course of action is to reduce the current distribution level.

NAL's cash flow forecast is based on full year commodity assumptions of US$45/bbl WTI and C$5.00/GJ AECO with a foreign exchange assumption of US/CAD $1.25. These assumptions, combined with a current capital expenditure budget of $95 million necessitate the revised level of distribution and permit the Trust to preserve its balance sheet advantage for opportunities that may exist in the market.

The current monthly distribution annualized totals $1.08 per unit, and represents an 18.2% cash-on-cash yield based on the March 10, 2009 closing unit price of $5.94.

NAL Oil & Gas Trust's Board of Directors sets distribution levels taking into consideration commodity prices, forecast cash flow of the Trust, financial market conditions, availability of financing, internal capital investment opportunities and taxability.

The Trust will continue to actively monitor commodity prices and financial market conditions, making adjustments up or down to the capital program and distribution level as required throughout the year.

REINSTATEMENT OF THE DISTRIBUTION REINVESTMENT PLAN

NAL also announces today that the Trust intends to reinstate the Distribution Reinvestment Plan ("DRIP") effective with the March distribution payable on April 15, 2009.

The DRIP, which has been suspended since October, 2008, provides eligible Unitholders with the opportunity to reinvest the cash distributions payable by the Trust on their units toward the purchase of new units at a 5% discount to the volume weighted average price of the units over the "Pricing Period" as defined in the DRIP. Further details and enrollment forms for the DRIP are available on NAL's website at: http://www.nal.ca/investors/unit-distributions/reinvestment-plan.

Unitholders that were participating in the DRIP prior to the suspension of the program in October 2008 will be automatically re-enrolled and no action is required.

Eligible Unitholders that had previously not opted in to the DRIP but now wish to do so, may elect to participate by contacting their broker, investment dealer or financial institution holding their trust units and requesting them to enroll on their behalf before March 23, 2009. Unitholders who are not residents of Canada are not permitted to participate in the DRIP.

DRIP proceeds will be directed toward NAL's ongoing 2009 capital program and the reduction of outstanding bank debt.

About NAL

NAL Oil & Gas Trust provides investors with a yield-oriented opportunity to participate in the Canadian Upstream Conventional Oil and Gas Industry. The Trust generates monthly cash distributions for its Unitholders by pursuing a strategy of acquiring, developing, producing and selling crude oil, natural gas and natural gas liquids from pools in southeastern Saskatchewan, central Alberta, northeastern British Columbia and Lake Erie, Ontario. Trust units trade on the Toronto Stock Exchange under the symbol "NAE.UN".

Contact Information

  • NAL Oil & Gas Trust
    Clayton Paradis
    Manager, Investor Relations
    (403) 294-3620 or Toll Free: 1-888-223-8792
    (403) 515-3407 (FAX)
    Email: investor.relations@nal.ca
    Website: www.nal.ca