NuVista Energy Ltd.

NuVista Energy Ltd.

February 24, 2005 22:32 ET

NuVista Energy Ltd. Announcing 2004 Year End Results


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: NUVISTA ENERGY LTD.

TSX SYMBOL: NVA

FEBRUARY 24, 2005 - 22:32 ET

NuVista Energy Ltd. Announcing 2004 Year End Results

CALGARY, ALBERTA--(CCNMatthews - Feb. 24, 2005) - NuVista Energy Ltd.
(TSX:NVA) is pleased to announce its financial and operating results for
the three months and year ended December 31, 2004 as follows:



------------------------------------------------------------------------
Corporate Highlights
------------------------------------------------------------------------
Three Months Year
ended ended
December 31, % December 31,
2004 2003 Change 2004
------------------------------------------------------------------------
(restated)
Financial
($ thousands,
except per share)
Production revenue 24,601 13,061 88 79,398
Cash flow from
operations (1) 15,222 8,052 89 49,871
Per share - basic 0.38 0.22 73 1.29
Per share - diluted 0.36 0.21 71 1.25
Net income (2) 5,715 2,878 99 18,322
Per share - basic 0.14 0.08 75 0.47
Per share - diluted 0.14 0.08 75 0.46
Total assets 173,531 94,374 84 173,531
Bank loan, net of
working capital 33,805 13,079 158 33,805
Shareholders' equity 115,110 72,017 60 115,110
Net capital expenditures 13,823 13,437 3 89,686
Weighted average
common shares
outstanding
(thousands):
Basic 40,559 37,338 9 38,725
Diluted 41,826 38,355 9 39,897

------------------------------------------------------------------------
Operating
(boe conversion
- 6:1 basis)

Production:
Natural gas (mmcf/day) 31.2 19.7 58 25.3
Oil and liquids
(bbls/day) 1,511 1,035 46 1,338
Total oil equivalent
(boe/day) 6,703 4,316 55 5,550

Product prices: (3)
Natural gas ($/mcf) 6.83 5.64 21 6.61
Oil and liquids ($/bbl) 32.59 26.56 23 34.03

Operating expenses:
Natural gas ($/mcf) 0.73 0.60 22 0.69
Oil and liquids ($/bbl) 4.19 4.38 (4) 4.04
Total oil equivalent
($/boe) 4.34 3.79 15 4.13

General & administrative
expenses ($/boe) 0.53 0.35 51 0.41

Cash costs ($/boe) 5.66 4.38 29 5.02

Cash flow netback
($/boe) (1) 24.69 20.28 22 24.55
------------------------------------------------------------------------

December 31, %
2004 2003 Change
------------------------------------------------------------------------

Undeveloped land:
Gross acres 345,428 254,169 36
Net acres 310,796 221,389 40
Average working interest 90% 87% 3

Reserves (NI 51 - 101)
- January 1, 2005
Proven and probable:
Natural gas (bcf) 64.9 39.8 63
Oil and liquids (mbbls) 3,580 3,313 8
Total barrels of oil
equivalent (mboe) 14,388 9,949 45
% of Reserves Proven Producing 68% 59% 9
% of Reserves Total Proven 78% 78% -
% of Reserves Probable 22% 22% -
Net present value of future cash
flows before tax ($millions):
@ 10% discount rate 209.1 121.6 72
@ 15% discount rate 181.6 107.3 69

Finding and development
costs ($/boe): (4) (5)
Total proven 16.70 7.82 114
Proven and probable 14.38 6.12 135

Recycle ratio (cash flow net back
per boe/finding and development
costs per boe): (5)
Total proven 1.5 2.6 (42)
Proven and probable 1.7 3.3 (48)
------------------------------------------------------------------------

NOTES:

(1) Cash flow from operations is used before changes in non-cash working
capital to analyze operating performance and leverage. Cash flow
does not have a standardized measure prescribed by Canadian
Generally Accepted Accounting Principles and therefore may not be
comparable with the calculations with similar measures for other
companies.
(2) Net income and net income per share for 2003 have been restated for
the adoption of new accounting standards for asset retirement
obligations and stock-based compensation. See note 2 of the interim
consolidated financial statements for details of this restatement.
(3) Product prices are net of transportation costs.
(4) Includes changes in future capital expenditures.
(5) Amounts for 2004 are for the year ended December 31, 2004 and the
amounts for 2003 are for the period from July 2, 2003 to December
31, 2003.


MESSAGE TO SHAREHOLDERS

NuVista Energy Ltd. ("NuVista") is pleased to report to shareholders its
financial and operating results for the three months and year ended
December 31, 2004. NuVista has now completed eighteen months of
operations and the Board of Directors and management are very pleased
with the results, accomplishments and corresponding value created for
its shareholders. The results of the fourth quarter of 2004 represent
the sixth consecutive quarter of continuous profitable growth for
NuVista, since its creation on July 2, 2003, through the Plan of
Arrangement involving Bonavista Petroleum Ltd. and Bonavista Energy
Trust (collectively "Bonavista").

In summary, the significant highlights for NuVista in 2004 include:

- Increased production by 56% to the exit level of 7,100 boe per day,
consisting of 33.1 mmcf per day of natural gas and 1,575 bbls per day of
oil and liquids;

- Added 6.5 mmboes of proven and probable reserves replacing production
by over three times, at a finding and development cost of $14.38 per boe
(including changes in future capital expenditures), resulting in a
proven and probable recycle ratio of over 1.7 to 1;

- Increased undeveloped land by 40%, to over 310,000 net acres from the
221,000 net acres at the beginning of 2004, further enhancing the
drilling prospect inventory in its Core Regions;

- Acquired 1,450 kilometers of 2D and 150 square kilometers of 3D
seismic to further compliment the prospectivity of NuVista's undeveloped
land;

- Participated in 81 (64.8 net) wells, with an overall success rate of
86%;

- Completed six minor property acquisitions and one strategic private
company acquisition, which expanded NuVista's position in its Eastern
Core Region and created two new core areas in Alberta at Provost and
Pembina. These acquisitions also provide NuVista with an expanded
inventory of prospects in three core areas. All three areas continue to
experience positive additions in 2005;

- Continued focus on controllable cash costs has been a top priority,
with recorded cash costs of $5.02 per boe for the year ended December
31, 2004, leaving NuVista in the top decile of its industry peers; and

- In October 2004, completed the expansion of the bank facility to $55
million, an increase of 72% since inception, leaving significant
financial flexibility to fund future opportunities as they arise.

Our total capital expenditures for 2004 were $89.7 million,
approximately $5 million less than originally budgeted. This is a direct
result of accelerated industry activity resulting in delays in
implementing our planned fourth quarter program. The reduced capital
expenditures also resulted in NuVista's exit production of 7,100 boe per
day for 2004, being slightly lower than the 7,500 boe per day originally
budgeted. However, since the end of 2004, NuVista has completed the
originally budgeted capital programs in Pembina and Oyen and the results
have exceeded our expectations. These programs, in addition to our
acquisitions, have resulted in current production levels of 7,900 boe
per day, consisting of 34.0 mmcf per day of gas and 2,325 bbls per day
of oil and natural gas liquids. NuVista is on track for achieving
average production levels of 8,200 to 8,600 boe per day in 2005 with the
implementation of our planned $100 million capital program.

MANAGEMENT'S DISCUSSION AND ANALYSIS

Management's discussion and analysis ("MD&A") of financial conditions
and results of operations should be read in conjunction with the interim
consolidated financial statements for the three months and year ended
December 31, 2004 and NuVista's audited consolidated financial
statements and MD&A for the period from July 2, 2003 to December 31,
2003. Barrels of oil equivalent ("boe") have been calculated using a
conversion rate of six thousand cubic feet of natural gas to one barrel
of oil.

Forward-Looking Statements - Certain information set forth in this
document, including management's assessment of NuVista's future plans
and operations, contains forward-looking statements. By their nature,
forward-looking statements are subject to numerous risks and
uncertainties, some of which are beyond NuVista's control, including the
impact of general economic conditions, industry conditions, volatility
of commodity prices, currency fluctuations, imprecision of reserve
estimates, environmental risks, competition from other industry
participants, the lack of availability of qualified personnel or
management, stock market volatility and ability to access sufficient
capital from internal and external sources. Readers are cautioned that
the assumptions used in the preparation of such information, although
considered reasonable at the time of preparation, may prove to be
imprecise and, as such, undue reliance should not be placed on
forward-looking statements. NuVista's actual results, performance or
achievement could differ materially from those expressed in, or implied
by, these forward-looking statements, or if any of them do so, what
benefits that NuVista will derive therefrom. NuVista disclaims any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.

New accounting policies - Effective January 1, 2004, NuVista
retroactively adopted and implemented new accounting policies pursuant
to requirements of the Canadian Institute of Chartered Accountants
("CICA") Handbook. The new accounting policies adopted included:
"Stock-based Compensation and Other Stock-based Payments", "Asset
Retirement Obligations" and "Hedge Accounting" and are detailed further
in the Notes to the Consolidated Financial Statements.

Operating activities - During the fourth quarter of 2004, NuVista
participated in 27 wells with an average working interest of 77% and
operated 26 of the 27 wells drilled. The success rate of 85% in this
drilling program resulted in 16 natural gas wells and seven oil wells.
Two projects, one in Pembina and one in Oyen experienced delays in the
fourth quarter with only three of the 11 planned wells being drilled and
no production being added until the first quarter of 2005. For the year
ended December 31, 2004, NuVista participated in a total of 81 wells
with an average working interest of 80%, while achieving a success rate
of 86%. This program resulted in 55 natural gas wells, 15 oil wells and
11 dry and abandoned wells. To date in 2005, NuVista has participated in
17 wells, with an average working interest of 77% and achieved a 94%
success rate resulting in 11 natural gas wells, five oil wells and one
dry and abandoned well. NuVista continues to actively drill in each of
its three core areas, with over 30 wells planned for the first quarter.

Reserves - NuVista's year end 2004 proven reserves amounted to 11.2
mmboe or a 43.3% increase over the closing balance at year end 2003.
NuVista's proven and probable reserves climbed by 44.6% to 14.4 mmboes
when compared to the equivalent opening balance of 9.9 mmboe at year end
2003. Finding and development costs in 2004, including an adjustment for
future capital and after revisions, amounted to $16.70 per barrel of oil
equivalent on a proven basis and $14.38 per barrel of oil equivalent on
a proven and probable basis.

Positive proven reserve revisions totaled 0.9 mmboe, or approximately
12.2% of the opening proven reserve balance. On a proven and probable
basis, a slight positive revision of 0.3 mmboe, a 3.1% increase, was
experienced when compared to the December 31, 2003 proven probable
reserve balance. All of NuVista's reserves as at December 31, 2004, were
evaluated independently by Gilbert Laustsen Jung Associates Ltd.

Additional reserve disclosure tables, as required under NI 51-101, will
be contained in the Annual Information Form that will be filed on SEDAR
on or before March 31, 2005. The reserve estimates contained in the
following table are working interest reserves before the deduction of
royalties:



------------------------------------------------------------------------
Light and
Natural Medium Crude Total Oil
Gas Oil Equivalent
------------------------------------------------------------------------
Proven: (bcf) (mbbls) (mboe)
December 31, 2003 31.2 2,581 7,782
Exploration and development 14.3 117 2,498
Revisions 2.2 579 947
Acquisitions 10.8 165 1,958
Dispositions - - -
Production (9.3) (490) (2,031)
------------------------------------------------------------------------
December 31, 2004 49.2 2,952 11,154
------------------------------------------------------------------------
------------------------------------------------------------------------
Proven and Probable:
December 31, 2003 39.8 3,309 9,945
Exploration and development 21.1 242 3,753
Revisions - 319 310
Acquisitions 13.3 200 2,411
Dispositions - - -
Production (9.3) (490) (2,031)
------------------------------------------------------------------------
December 31, 2004 64.9 3,580 14,388
------------------------------------------------------------------------
------------------------------------------------------------------------


Production - For the fourth quarter of 2004 NuVista's average production
was 6,703 boe per day, which was comprised of 31.2 mmcf per day of
natural gas and 1,511 bbls per day of oil and liquids and represents a
55% increase over the same period of 2003. A portion of NuVista's fourth
quarter natural gas drilling success will be brought on-stream in the
first quarter of 2005. NuVista's production results for the twelve
months ended December 31, 2004 benefited from continued success in its
overall capital programs and consisted of 25.3 mmcf per day of natural
gas and 1,338 bbls per day of oil and liquids.

Revenues - Revenues for the three months ended December 31, 2004 were
$24.6 million, an 88% increase from $13.1 million for the same period of
2003. These revenues were comprised of $20.0 million of natural gas and
$4.6 million of oil and liquids for the three months ended December 31,
2004. The increase in revenues for the three months ended December 31,
2004 versus the same period of 2003 results from a 55% increase in
production and a 21% increase in commodity prices. The increase in
commodity prices, net of transportation costs, is made up of a 21%
increase in the natural gas price to $6.83 per mcf from $5.64 per mcf
and a 23% increase in the oil and liquids price to $32.59 per bbl from
$26.56 per bbl. Revenues for the twelve months ended December 31, 2004
were $79.4 million.

Commodity hedging - As part of our financial management strategy,
NuVista has adopted a disciplined commodity-hedging program. The purpose
of the hedging program is to reduce volatility in the financial results,
protect acquisition economics and stabilize cash flow against the
unpredictable commodity price environment. At any given period of time
our hedging strategy is restricted to a maximum hedge of 50% of forecast
production, net of royalties and primarily utilizes costless collars.
This strategy limits NuVista's exposure to downturns in commodity prices
while allowing for participation in commodity price increases. In the
fourth quarter of 2004, our hedging program was virtually neutral and
resulted in a net loss of only $5,000 and for the twelve months ended
December 31, 2004 a net loss of $735,000 was experienced due to the
stronger than expected commodity prices realized throughout the period.
A summary of hedging contracts in place as at December 31, 2004 is
outlined in note 10 of the Notes to the Consolidated Financial
Statements.

Royalties - Royalties of $5.4 million for the three months ended
December 31, 2004 were 83% higher than the $3.0 million for the same
period of 2003. The increase in royalties in the fourth quarter resulted
from higher revenues compared to the same period of 2003, largely
generated by higher production volumes and higher commodity prices. As a
percentage of revenue, the average royalty rate for the fourth quarter
of 2004 was 21.9% compared to 22.6% for the comparative period of 2003.
Royalties by product for the fourth quarter of 2004 were 22.8% for
natural gas and 18.2% for oil and liquids versus 26.6% for natural gas
and 16.1% for oil and liquids for the similar period in 2003. The
decrease in natural gas royalties results from gas cost allowance
credits received during the fourth quarter of 2004. Royalties for the
twelve months ended December 31, 2004 were $17.7 million or 22.3% of
revenues, 23.8% for natural gas and 16.7% for oil and liquids.

Transportation costs - Transportation costs were $496,000 ($0.80 per
boe) for the three months ended December 31, 2004 as compared to
$326,000 ($0.82 per boe). The 52% increase in transportation costs
results from higher production rates in the fourth quarter of 2004
versus 2003. For the year ended December 31, 2004 transportation costs
were $1.6 million ($0.80 per boe).

Operating - Operating expenses were $2.7 million for the three months
ended December 31, 2004 versus $1.5 million for the same period of 2003,
a 78% increase. This increase resulted primarily from the higher
production volumes and higher per unit natural gas operating costs
associated with the private company acquisition. In the fourth quarter
of 2004, natural gas operating expenses averaged $0.73 per mcf and oil
and liquids operating expenses were $4.19 per bbl as compared to $0.60
per mcf and $4.38 per bbl respectively for the same period of 2003. On a
boe basis, operating costs increased 15% to $4.34 per boe in the fourth
quarter of 2004 as compared to $3.79 per boe for the same period of
2003, primarily due to higher per unit costs of the newly acquired
natural gas assets and increasing cost pressures facing the entire
industry. Despite these increases, NuVista still remains in the top
decile for oil and natural gas companies in its peer group. Operating
expenses for the twelve months ended December 31, 2004 were $8.4 million
or $4.13 per boe. By commodity, operating expenses were $0.69 per mcf
for natural gas and $4.04 per boe for oil and liquids for the twelve
months ended December 31, 2004. Overall, NuVista's cash costs, which
include operating, general and administrative, interest expenses and
Large Corporations Tax, were $5.66 per boe in the fourth quarter of 2004
compared to $4.38 per boe for the same period of 2003 and $5.02 for the
twelve months ended December 31, 2004. This too, places us among the top
in our peer group in this performance criteria.

General and administrative - General and administrative expenses, net of
overhead recoveries for the fourth quarter of 2004, were $326,000 ($0.53
per boe), an increase of 131% over the $141,000 ($0.35 per boe) for the
three months ended December 31, 2003, and is directly attributable to
the higher production base in NuVista and the allocation of overhead
costs and bonuses in accordance with the Technical Services Agreement
with Bonavista. General and administrative expenses, net of overhead
recoveries were $834,000 ($0.41 per boe) for the twelve months ended
December 31, 2004. Included in these expenses is an allocation of
$508,000 for the three months ended and $1.3 million for the twelve
months ended December 31, 2004, charged pursuant to the Technical
Services Agreement with Bonavista. For the three months ended December
31, 2003, $197,000 was allocated to NuVista under the Technical Services
Agreement. The Technical Services Agreement, entered into as part of the
Plan of Arrangement, has allowed NuVista to initiate and continue with
its successful and active capital programs, through the use of
Bonavista's personnel in managing its operations and at the same time
take advantage of Bonavista's low overhead cost structure. As a result
of adopting the new accounting rules, NuVista recorded a stock-based
compensation charge of $302,000 for the three months and $1.0 million
for the year ended December 31, 2004, in connection with the issuance of
both the Class B Performance Shares and stock options. The stock-based
non-cash compensation charge to net income for the three months ended
December 31, 2003 was $231,000.

Interest - Interest expense during the fourth quarter of 2004 was
$244,000 ($0.40 per boe) versus $38,000 ($0.10 per boe) for the same
period of 2003 because of higher average debt levels, offset by higher
production volumes in the fourth quarter of 2004. For the twelve months
ended December 31, 2004, financing charges were $574,000 ($0.28 per
boe). Currently, NuVista's average borrowing rate is approximately 4.0%.

Depreciation, depletion and accretion - Depreciation, depletion and
accretion expenses were $6.3 million for the fourth quarter of 2004
compared to $2.9 million for the same period in 2003. The average cost
per unit was $10.28 per boe in the fourth quarter of 2004 versus $7.28
per boe for the same period in 2003, due to higher costs of adding
reserves, primarily from the acquisition of the private company, in the
third quarter as compared to historic levels. Depreciation, depletion
and accretion expenses were $19.7 million for the twelve months ended
December 31, 2004, or $9.71 per boe.

Income and other taxes - For the fourth quarter of 2004, the provision
for income and other taxes was $3.1 million for an effective tax rate of
35.2%, as compared to $2.1 million with an effective tax rate of 41.7%
for the same period in 2003, resulting primarily from lower statutory
income tax rates in 2004. For the twelve months ended December 31, 2004,
the provision for income and other taxes was $11.2 million for an
effective tax rate of 37.9%.

Capital expenditures - Capital expenditures were $13.8 million during
the fourth quarter of 2004 consisting of exploration and development
spending of $12.8 million and $1.0 million of net acquisitions. For the
twelve months ended December 31, 2004, capital expenditures were $89.7
million.

Cash flow and net income - In the fourth quarter of 2004, cash flow was
$15.2 million ($0.38 per share, basic), an 89% increase over the $8.1
million ($0.22 per share, basic) for the same period in 2003. For the
twelve months ended December 31, 2004, NuVista's cash flow was $49.9
million ($1.29 per share, basic). Net income also increased 99% during
the fourth quarter of 2004 to $5.7 million ($0.14 per share, basic) from
the $2.9 million ($0.08 per share, basic) for the same period in 2003.
For the twelve months ended December 31, 2004 net income was $18.3
million ($0.47 per share, basic). All of these increases resulted from
stronger commodity prices and increased production rates as NuVista
continues to maintain a strong net income to cash flow ratio of 37.6%
for the fourth quarter ending December 31, 2004 and 36.7% for the twelve
months ended December 31, 2004.

Liquidity and capital resources - As at December 31, 2004, total bank
debt (net of working capital) was $33.8 million, resulting in a debt to
running cash flow ratio of approximately 0.5 to 1. NuVista has
approximately $21.2 million of unused bank borrowing capability based on
the current line of credit of $55 million, which provides substantial
flexibility to fund expanded capital programs into the future. As at
February 24, 2005, there were 40,560,049 common shares and 880,503 Class
B Performance Shares outstanding. In addition, there were 1,944,312
stock options outstanding, with an average exercise price of $7.29 per
share.

Quarterly financial information - The following table highlights
NuVista's performance for the quarterly reporting periods from September
30, 2003 to December 31, 2004. NuVista commenced operations on July 2,
2003 through the Plan of Arrangement involving Bonavista:



------------------------------------------------------------------------
2004 2003
------------------------------------------------------------------------
December September June March December September
31 30 30 31 31 30
------------------------------------------------------------------------
(thousands,
except per
share amounts) (restated) (restated)

Production
revenue $24,601 $22,020 $16,982 $15,795 $13,061 $12,697

Net income 5,715 4,335 4,540 3,732 2,878 2,746

Net income
per share:
Basic $ 0.14 $ 0.11 $ 0.12 $ 0.10 $ 0.08 $ 0.08
Diluted 0.14 0.11 0.12 0.10 0.08 0.07
------------------------------------------------------------------------


BUSINESS RISKS AND OUTLOOK

NuVista's management remains committed to the same principles and
disciplined growth strategy that has led to it's considerable success
over the first year and a half and the tremendous success of Bonavista
as a high growth exploration and production company. In the first
quarter of 2005, NuVista increased its employee base with the
establishment of separate technical teams in each of its Core Regions.
These personnel were a combination of Bonavista employees who had
previously worked on the development of NuVista's Core Regions as well
as several new hires. With the undeveloped land base now exceeding
310,000 net acres, an increased drilling inventory, coupled with our
strong balance sheet, NuVista is well positioned to continue posting
strong operational and financial results for the first quarter of 2005
and beyond. NuVista will continue to focus on its core strategy of
applying the expertise of its own technical staff to its operating
regions in a prudent and disciplined manner, through both the drill bit
and strategic acquisitions. The execution of these strategies will
enable NuVista to continue to grow its production, cash flow and net
income consistently and profitably. Furthermore, our solid financial
position will enable us to execute our 2005 capital program and remain
positioned to pursue additional strategic opportunities as they arise.
We remain unwavering in our commitment to enhance shareholder value over
the long-term by accessing the broad depth and expertise of our team in
a diligent and prudent manner.

For 2005 NuVista's Board of Directors has approved a capital program of
$100 million, which is expected to result in production averaging
between 8,200 and 8,600 boe per day for the year. Using commodity price
estimates of $6.53 per gj at AECO for natural gas and US $47.75 per bbl
WTI for oil, this production forecast should result in cash flow in the
range of $70 million to $75 million ($1.70 per share to $1.85 per share)
for 2005.



Consolidated Balance Sheets
December 31,
2004 2003
---------------------------------------------------------------------
(thousands) (restated)

Assets

Accounts receivable $ 12,071 $ 6,251
Oil and natural gas properties and
equipment (notes 3, 4 and 5) 152,021 79,959
Goodwill (note 3) 9,439 -
Future tax asset (note 9) - 8,164
---------------------------------------------------------------------
$ 173,531 $ 94,374
---------------------------------------------------------------------
---------------------------------------------------------------------

Liabilities and Shareholders' Equity

Accounts payable and accrued liabilities $ 17,524 $ 12,402
Bank loan (note 7) - 6,928
---------------------------------------------------------------------
17,524 19,330

Bank loan (note 7) 28,352 -
Asset retirement obligations (note 6) 5,990 3,027
Future income taxes (note 9) 6,555 -

Shareholders' equity:
Share capital (note 8) 89,876 65,932
Contributed surplus (note 8) 1,288 461
Retained earnings 23,946 5,624
---------------------------------------------------------------------
115,110 72,017
---------------------------------------------------------------------
$ 173,531 $ 94,374
---------------------------------------------------------------------
---------------------------------------------------------------------


Consolidated Statement of Operations and Retained Earnings

Three Months Year Period(1)
ended ended ended
December 31, December 31, December 31,
2004 2003 2004 2003
------------------------------------------------------------------------
(thousands, except per (restated) (restated)
share amounts)

Revenues:
Production $ 24,601 $ 13,061 $ 79,398 $ 25,758
Royalties, net (5,391) (2,950) (17,701) (6,079)
Transportation costs (496) (326) (1,630) (624)
------------------------------------------------------------------------
18,714 9,785 60,067 19,055
------------------------------------------------------------------------
Expenses:
Operating 2,677 1,505 8,392 2,792
General and
administrative 326 141 834 268
Interest 244 38 574 282
Stock-based compensation 302 231 1,035 461
Depreciation, depletion
and accretion 6,339 2,936 19,727 5,963
------------------------------------------------------------------------
9,888 4,851 30,562 9,766
------------------------------------------------------------------------
Income before income and
other taxes 8,826 4,934 29,505 9,289
Income and other taxes
(note 9) 3,111 2,056 11,183 3,665
------------------------------------------------------------------------
Net income 5,715 2,878 18,322 5,624
Retained earnings,
beginning of period 18,231 2,746 5,668 -
Retroactive application
of changes in accounting
policies (note 2) - - (44) -
------------------------------------------------------------------------
Retained earnings,
end of period $ 23,946 $ 5,624 $ 23,946 $ 5,624
------------------------------------------------------------------------
------------------------------------------------------------------------
Net income per share
- basic $ 0.14 $ 0.08 $ 0.47 $ 0.15
------------------------------------------------------------------------
------------------------------------------------------------------------
Net income per share
- diluted $ 0.14 $ 0.08 $ 0.46 $ 0.15
------------------------------------------------------------------------
------------------------------------------------------------------------

(1) Period is from July 2, 2003 to December 31, 2003.



Consolidated Statement of Cash Flows
(thousands)
Three Months Year Period(1)
ended ended ended
December 31, December 31, December 31,
2004 2003 2004 2003
------------------------------------------------------------------------
(restated) (restated)
Cash provided by
(used in):

Operating Activities:
Net income $ 5,715 $ 2,878 $ 18,322 $ 5,624
Items not requiring
cash from operations:
Depreciation,
depletion and
accretion 6,339 2,936 19,727 5,963
Stock-based
compensation 302 231 1,035 461
Future income taxes 2,866 2,007 10,787 3,558
------------------------------------------------------------------------
Funds flow from
operations 15,222 8,052 49,871 15,606
Asset retirement
expenditures (112) (109) (131) (110)
Decrease (Increase)
in non-cash working
capital items (366) 134 (6,801) 106
------------------------------------------------------------------------
14,744 8,077 42,939 15,602
------------------------------------------------------------------------
Financing Activities:
Issue (Repurchase)
of share capital 13 (48) (24) 17,478
Increase (Decrease)
in bank loan (4,952) 2,940 21,424 (18,163)
------------------------------------------------------------------------
(4,939) 2,892 21,400 (685)
------------------------------------------------------------------------
Investing Activities:
Business acquisition
(note 3) - - (22,882) -
Oil and natural gas
properties and
equipment additions (13,823) (13,437) (45,368) (20,960)
Proceeds on disposal of
oil and natural gas
properties and equipment - - 102 -
Decrease in non-cash
working capital items 4,018 2,468 3,809 6,043
------------------------------------------------------------------------
(9,805) (10,969) (64,339) (14,917)
------------------------------------------------------------------------
Decrease in cash - - - -
Cash, beginning of period - - - -
------------------------------------------------------------------------
Cash, end of period $ - $ - $ - $ -
------------------------------------------------------------------------
------------------------------------------------------------------------

(1) Period is from July 2, 2003 to December 31, 2003.


NUVISTA ENERGY LTD.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2004.

1. Significant accounting policies:

NuVista Energy Ltd. ("NuVista") was established with an effective date
of July 2, 2003 under a Plan of Arrangement entered into by Bonavista
Energy Trust (the "Trust"), Bonavista Petroleum Ltd. ("Bonavista") and
NuVista. Under the Plan of Arrangement, various assets of Bonavista
comprising of certain producing and exploration assets were transferred
to NuVista. The comparative consolidated financial statements reflect
the results of operations for the period from July 2, 2003 to December
31, 2003.

The amounts recorded for depreciation and depletion of oil and natural
gas properties and equipment and the provision for asset retirement
obligations are based on estimates. The ceiling test is based on
estimates of proved reserves, production rates, oil and natural gas
prices, future costs and other relevant assumptions. By their nature,
these estimates are subject to measurement uncertainty and the effect on
the financial statements of changes in such estimates in future periods
could be significant.

(a) Oil and natural gas properties and equipment:

Oil and natural gas properties and equipment are evaluated in each
reporting period to determine that the carrying amount in a cost centre
is recoverable and does not exceed the fair value of the properties in
the cost centre.

The carrying amounts are assessed to be recoverable when the sum of the
undiscounted cash flows expected from the production of proved reserves,
the lower of cost and market of unproved properties and the cost of
major development projects exceeds the carrying amount of the cost
centre. When the carrying amount is not assessed to be recoverable, an
impairment loss is recognized to the extent that the carrying amount of
the cost centre exceeds the sum of the discounted cash flows expected
from the production of proved and probable reserves, the lower of cost
and market of unproved properties and the cost of major development
projects of the cost centre. The cash flows are estimated using expected
future product prices and costs, and are discounted using a risk-free
interest rate.

Effective January 1, 2004, NuVista adopted the new accounting standard
relating to full cost accounting. The adoption of this new policy on
January 1, 2004 resulted in no write-down to the carrying value of oil
and natural gas assets. Prior to January 1, 2004 the ceiling test amount
was the sum of the undiscounted cash flows expected from the production
of proved reserves, the lower of cost or market of unproved properties
and the cost of major development projects less estimated future costs
for administration, financing, site restoration and income taxes. The
cash flows were estimated using period end prices and costs.

(b) Joint venture accounting:

A portion of NuVista's oil and natural gas operations is conducted
jointly with others. Accordingly, the consolidated financial statements
reflect only NuVista's proportionate interest in such activities.

(c) Goodwill:

Goodwill is tested for impairment on an annual basis in the fourth
quarter. If indications of impairment are present, a loss would be
charged to earnings for the amount that the carrying value of goodwill
exceeds its fair value.

(d) Asset retirement obligation:

NuVista records a liability for the fair value of legal obligations
associated with the retirement of long-lived tangible assets in the
period in which they are incurred, normally when the asset is purchased
or developed. On recognition of the liability there is a corresponding
increase in the carrying amount of the related asset known as the asset
retirement cost, which is depleted on a unit-of-production basis over
the life of the reserves. The liability is adjusted each reporting
period to reflect the passage of time, with the accretion charged to
earnings, and for revisions to the estimated future cash flows. Actual
costs incurred upon settlement of the obligations are charged against
the liability. The impact of the adoption of the new standard is
described in note 2.

(e) Revenue recognition:

Revenues from the sale of petroleum and natural gas are recorded when
title passes to an external party.

(f) Financial instruments:

(i) Hedge relationships:

From time to time, NuVista may use swap agreements or other financial
instruments to hedge its exposure to fluctuations in oil and natural gas
prices. Gains and losses arising from these swap arrangements are
reported as adjustments to the related revenue account over the term of
the financial instrument. Financial instruments are not used for
speculative purposes. The carrying values of NuVista's monetary assets
and liabilities approximate their fair values. The CICA issued
Accounting Guideline 13 - Hedging Relationships, which deals with the
identification, designation, documentation and effectiveness of hedging
relationships for the purpose of applying hedge accounting. NuVista
formally assesses, both at the hedge's inception and on an ongoing
basis, whether the derivatives that are used in the hedging transactions
are highly effective in offsetting changes in fair value or cash flows
of the hedged item. These derivative contracts, accounted for as hedges,
are not recognized on the balance sheet. Realized gains and losses on
these contracts are recognized in petroleum and natural gas revenue and
cash flows in the same period in which the revenues associated with the
hedged transaction are recognized. Premiums paid or received are
deferred and amortized to earnings over the term of the contract.

(ii) Credit risk:

NuVista accounts receivable are with customers and joint venture
partners in the petroleum and natural gas business and are subject to
normal credit risks. Concentration of credit risk is mitigated by
marketing production to numerous purchasers under normal industry sale
and payment terms. NuVista routinely assesses the financial strength of
its customers. NuVista may be exposed to certain losses in the event of
non-performance by counterparties to commodity price contracts. NuVista
mitigates this risk by entering into transactions with highly rated
major financial institutions.

(g) Stock-based compensation:

NuVista has equity incentive plans, which are described in note 8. These
stock-based compensation plans for employees do not involve the direct
award of stock, or call for the settlement in cash or other assets. Upon
the exercise of stock options, consideration received together with the
amount previously recognized in contributed surplus is recorded as an
increase to share capital. Compensation costs are recognized in the
financial statements for the performance shares. NuVista uses the fair
value method for valuing stock option grants on or after January 1,
2002. Under this method, the compensation cost attributable to all share
options granted is measured at fair value at the grant date and expensed
over the vesting period with a corresponding increase to contributed
surplus.

(h) Income taxes:

NuVista follows the liability method of accounting for future income
taxes.

(i) Per share amounts:

Diluted per share amounts reflect the potential dilution that could
occur if securities or other contracts to issue common shares were
exercised or converted to common shares. The treasury stock method is
used to determine the dilutive effect of stock options and other
dilutive instruments.

2. Changes in accounting policies:

a) Asset retirement obligations:

On January 1, 2004, NuVista adopted the new accounting policies on Asset
Retirement Obligations. This change in accounting policy has been
applied retroactively with the restatement of the prior period presented
for comparative purposes. Previously, NuVista recognized a provision for
future site reclamation and abandonment costs calculated on the
unit-of-production method over the life of the oil and natural gas
properties based on total estimated proved reserves and the estimated
future liability.

As a result of this change in accounting policy, net income increased by
$313,000 ($481,000, net of a future tax expense of $168,000) or $0.01
per share on a basic and diluted basis for the period from inception on
July 2, 2003 to December 31, 2003. The Asset Retirement Obligations
increased by $1.7 million, oil and natural gas properties and equipment,
net of accumulated depreciation and depletion increased by $3.2 million,
future tax asset decreased by $509,000, share capital increased by
$642,000 and retained earnings increased by $313,000 as at December 31,
2003.

b) Stock-based compensation:

NuVista has retroactively adopted the new accounting standard for
stock-based compensation, which requires the use of the fair value
method for valuing stock option grants on or after January 1, 2002.
Under this method, the compensation cost attributable to all share
options granted is measured at fair value at the grant date and expensed
over the vesting period with a corresponding increase to contributed
surplus. Upon the exercise of the stock options, consideration received
together with the amount previously recognized in contributed surplus is
recorded as an increase to share capital. NuVista has incorporated an
estimated forfeiture rate of 10% for stock options.

As a result of adopting the new accounting standard, net income
decreased by $357,000, or $0.01 per share on a basic and diluted basis
for the period from July 2, 2003 to December 31, 2003. The completion of
this change in accounting policy resulted in an increase of $357,000 to
a contributed surplus and a decrease of $357,000 to retained earnings as
at December 31, 2003.

3. Acquisition of Grid Resources Ltd.:

On July 29, 2004, NuVista acquired all of the issued and outstanding
shares of Grid Resources Ltd. ("Grid"), a private oil and natural gas
company. NuVista purchased Grid through a series of transactions, which
included the disposition of certain non-core assets to a private company
and the residual assets being acquired in an existing partnership, owned
approximately 76% by NuVista and 24% by Bonavista Petroleum. The
acquisition has been accounted for using the purchase method, with
results of operations included from the date of acquisition. The
purchase equation, which reflects the NuVista portion of the
acquisition, is as follows:



------------------------------------------------------------------------
Amount
------------------------------------------------------------------------
(thousands)
Net assets acquired:

Oil and natural gas properties $ 44,420
Goodwill 9,439
Natural gas hedge liability (915)
Asset retirement obligations (991)
Future income taxes (3,931)
------------------------------------------------------------------------

Net assets acquired $ 48,022
------------------------------------------------------------------------
------------------------------------------------------------------------

(thousands)
Purchase consideration:

Issue of common shares $ 23,760
Cash and assumption of bank loan 22,882
Assumption of working capital deficiency 1,380
------------------------------------------------------------------------

Total purchase consideration $ 48,022
------------------------------------------------------------------------
------------------------------------------------------------------------


4. Formation and related party transactions:

Under the Plan of Arrangement in July 2003, Bonavista transferred to
NuVista certain assets, being certain producing and exploratory oil and
natural gas properties in Bonavista's Eastern Core Region, and an
allocation of its bank loan. The producing oil and natural gas
properties were transferred into a general partnership that was 70%
owned by NuVista and 30% owned by Bonavista. As this was a related party
transaction, assets and liabilities were transferred at their book
value. Details are as follows:



------------------------------------------------------------------------
Amount
------------------------------------------------------------------------
(thousands) (restated)

Oil and natural gas assets and equipment $ 64,671
Future income tax asset 11,410
------------------------------------------------------------------------
Total assets transferred 76,081
Bank loan (29,103)
Asset retirement obligations (2,846)
------------------------------------------------------------------------
Net assets received and common shares issued $ 44,132
------------------------------------------------------------------------
------------------------------------------------------------------------


Under the Plan of Arrangement, NuVista entered into a Technical Services
Agreement with Bonavista. Under this agreement, Bonavista receives
payment for certain technical and administrative services provided by it
to NuVista, on a cost recovery basis. Pursuant to the Technical Services
Agreement, there were fees of $1,348,000 charged relating to general and
administrative activities and $750,000 of fees were charged relating to
capital expenditure activities for the year ended December 31, 2004
(period from July 2, 2003 to December 31, 2003 - $372,000 and $317,000,
respectively). As at December 31, 2004, amounts payable to Bonavista
were $3.5 million (2003 - $1.7 million).



5. Oil and natural gas properties and equipment:

------------------------------------------------------------------------
Accumulated
depreciation Net book
December 31, 2004 Cost and depletion value
------------------------------------------------------------------------
(thousands)

Oil and natural gas
properties $ 145,616 $ 23,170 $ 122,446
Facilities and well equipment 31,714 2,139 29,575
------------------------------------------------------------------------
$ 177,330 $ 25,309 $ 152,021
------------------------------------------------------------------------
------------------------------------------------------------------------


------------------------------------------------------------------------
Accumulated
depreciation Net book
December 31, 2003 Cost and depletion value
------------------------------------------------------------------------
(thousands) (restated)

Oil and natural gas properties $ 68,359 $ 5,363 $ 62,996
Facilities and well equipment 17,478 515 16,963
------------------------------------------------------------------------
$ 85,837 $ 5,878 $ 79,959
------------------------------------------------------------------------
------------------------------------------------------------------------


Unproved property costs of $15.9 million were excluded from the
depreciation and depletion calculation for the year ended December 31,
2004 (period from July 2 to December 31, 2003 - $10.7 million).

NuVista has performed the ceiling test under AcG-16 as of December 31,
2004. The impairment test was calculated using the benchmark reference
prices at January 1 for the years 2005 to 2009 and adjusted for
commodity differentials specific to NuVista:



Benchmark Reference Price Forecasts: Year
------------------------------------------------------------------------
2005 2006 2007 2008 2009
------------------------------------------------------------------------
WTI ($U.S./bbl) 42.00 40.00 38.00 36.00 34.00
------------------------------------------------------------------------
AECO ($Cdn/mcf) 6.60 6.35 6.15 6.00 6.00
------------------------------------------------------------------------


6. Asset retirement obligations:

NuVista's asset retirement obligations result from net ownership
interests in oil and natural gas assets including well sites, gathering
systems and processing facilities. NuVista estimates the total
undiscounted amount of cash flows required to settle its asset
retirement obligations is approximately $31.0 million, which will be
incurred over the next 51 years. The majority of the costs will be
incurred between 2010 and 2034. A credit-adjusted risk-free rate of 8%
was used to calculate the fair value of the asset retirement obligations.

A reconciliation of the asset retirement obligations is provided below:



------------------------------------------------------------------------
Period from
Year ended July 2 to
December 31, 2004 December 31, 2003
------------------------------------------------------------------------
(thousands)

Balance, beginning of period $ 3,027 $ 2,846

Accretion expense 295 85
Liabilities incurred 1,808 206
Liabilities acquired 991 -
Liabilities settled (131) (110)
------------------------------------------------------------------------
Balance, end of period $ 5,990 $ 3,027
------------------------------------------------------------------------
------------------------------------------------------------------------


7. Bank loan:

In October 2004, NuVista and its lenders agreed to amend the Company's
revolving bank loan facility to increase the maximum borrowing to $55
million. The bank loan facility provides that borrowing may be made by
prime loans, bankers' acceptances and/or US libor advances. These
advances bear interest at the bank's prime rate and/or at money market
rates plus a stamping fee. The loan is secured by a first floating
charge debenture, general assignment of book debts and NuVista's oil and
natural gas properties and equipment. The facility is subject to an
annual review by the lenders, at which time a lender can request
conversion to a term loan for one year. Under the term period, no
principal payments would be required until June 30, 2006 or later, after
the annual review. As such, this loan facility is classified as a
long-term liability. Cash paid for the interest expense was $248,000 for
the three months and $560,000 for the year ended December 31, 2004 (for
the period from July 2 to December 31, 2003 - $282,000).

8. Share capital:

(a) Authorized:

Unlimited number of voting Common Shares and 1,200,000 Class B
Performance Shares.

(b) Issued:

Prior to the Plan of Arrangement, NuVista completed the private
placement of 2,000,000 Common Shares and 1,200,000 Class B Performance
Shares for gross proceeds of $4,012,000.



(i) Common Shares

------------------------------------------------------------------------
Number Amount
------------------------------------------------------------------------
(thousands)

Outstanding as at July 2, 2003 2,000 $ 4,000

Issued pursuant to the Plan of Arrangement (note 4) 32,839 44,132
Issued for cash 2,500 18,375
Reacquired and cancelled (1) (2)
Costs associated with shares issued, net of
future tax benefit - (585)
------------------------------------------------------------------------

Outstanding as at December 31, 2003 (restated) 37,338 65,920

Issued on acquisition of Grid Resources Ltd.
(note 3) 3,000 23,760
Conversion of Class B Performance Shares 223 3
Stock-based compensation - 208
Exercise of stock options 4 25
Reacquired and cancelled (6) (15)
Cost associated with shares issued, net of
future tax benefit - (34)
------------------------------------------------------------------------

Outstanding as at December 31, 2004 40,559 $ 89,867
------------------------------------------------------------------------
------------------------------------------------------------------------

(ii) Contributed Surplus
------------------------------------------------------------------------
Amount
------------------------------------------------------------------------
(thousands)

Balance as at July 2, 2003 -

Stock-based compensation 461
------------------------------------------------------------------------
Balance as at December 31, 2003 (restated) 461

Stock-based compensation 1,035
Conversion of Class B Performance shares (208)
------------------------------------------------------------------------
Balance as at December 31, 2004 $ 1,288
------------------------------------------------------------------------
------------------------------------------------------------------------


(iii) Class B Performance Shares

Each Class B Performance Share was issued for a price of $0.01 per share
and is convertible into the fraction of a Common Share equal to the
closing trading price of the Common Shares on the Toronto Stock Exchange
on the day prior to such conversion less $2.00, if positive, divided by
the Common Share closing price. The Class B Performance Shares will
automatically convert into Common Shares as to 25% of the Class B
Performance Shares outstanding on a pro-rata basis from holders on each
of July 1, 2004, 2005, 2006 and 2007. If the NuVista Closing Price less
$2.00 is not positive on any conversion date, NuVista will, subject to
applicable law, redeem the Class B Performance Shares that would have
otherwise been converted at the redemption price of $0.01 per share. The
fair value of each Class B Performance Share was determined, at date of
issuance, using the Black-Scholes model with the variables described in
note 8(e). This amount is amortized over the life of the Class B
Performance Shares and is included in stock-based compensation expense.
Upon conversion or exercise the related charge to stock-based
compensation is re-classed into equity.



------------------------------------------------------------------------
Number Amount
------------------------------------------------------------------------
(thousands)

Outstanding as at July 2, 2003 1,200 $ 12
Reacquired and cancelled (4) -
------------------------------------------------------------------------
Outstanding as at December 31, 2003 1,196 12

Converted to Common Shares (297) (3)
Reacquired and cancelled (15) -
------------------------------------------------------------------------
Outstanding as at December 31, 2004 884 $ 9
------------------------------------------------------------------------
------------------------------------------------------------------------


(c) Per share amounts:

During the year ended December 31, 2004, there were 38,725,401 (period
from July 2, 2003 to December 31, 2003 - 36,359,841) weighted average
shares outstanding. On a diluted basis, there were 39,897,355 (period
from July 2 to December 31, 2003 - 37,336,785) weighted average shares
outstanding after giving effect for dilutive stock options.

(d) Stock options:

NuVista has established a stock option plan whereby officers, directors,
employees and service providers may be granted options to purchase
Common Shares. Options granted vest at the rate of 25 percent per year
and expire two years after the date of vesting to a maximum term of six
years. The total stock options outstanding plus the Class B Performance
Shares cannot exceed 10% of the outstanding Common Shares.

The summary of stock options transactions for the year ended December
31, 2004 and for the period from July 2, 2003 to December 31, 2003 is as
follows:



------------------------------------------------------------------------
2004 2003
------------------------------------------------------------------------
Weighted Weighted
average average
exercise exercise
Number price Number price
------------------------------------------------------------------------

Outstanding as at
beginning of period 1,365,300 $ 6.35 - -
Granted 381,100 $ 8.49 1,369,800 $ 6.35
Exercised (4,013) $ 6.36 - -
Cancelled (32,350) $ 6.30 (4,500) $ 6.30
------------------------------------------------------------------------

Outstanding as at
December 31 1,710,037 $ 6.82 1,365,300 $ 6.35
------------------------------------------------------------------------
------------------------------------------------------------------------

The following table summarizes stock options outstanding and exercisable
under the plan at December 31, 2004:

------------------------------------------------------------------------
Options outstanding Options exercisable
------------------------------------------------------------------------
Weighted
average Weighted Weighted
Range of Number remaining average Number average
exercise outstanding contractual exercise exercisable exercise
prices at year-end life price at year-end price
------------------------------------------------------------------------

$ 6.30
to $ 7.42 1,337,037 4.5 $ 6.35 345,812 $ 6.35

$ 7.70
to $ 9.91 373,000 5.0 $ 8.49 1,000 $ 7.88
---------- ---------
1,710,037 $ 6.82 346,812 $ 6.35
------------------------------------------------------------------------
------------------------------------------------------------------------


(e) Stock-based compensation:

The Company uses the fair value based method for the determination of
the stock-based compensation costs.

The fair value of each option granted was estimated on the date of grant
using the Black-Scholes option pricing model. In the pricing model, the
risk free interest rate was 3.5%; volatility of 25%; and an expected
life of 4.5 years.

9. Income taxes:

The provision for income tax differs from the result of which would have
been obtained by applying the combined Federal and Provincial income tax
rate to the income before taxes. This difference results from the
following items:



-----------------------------------------------------------------------
Three Months ended Year ended
December 31, 2004 December 31, 2004
-----------------------------------------------------------------------
(thousands)

Expected tax expense at 39% $ 3,442 $ 11,507

Non deductible crown payments, net 1,123 3,753
Resource allowance (1,281) (4,197)
Effect of change in tax rate (536) (680)
Other 118 404
Capital taxes 245 396
-----------------------------------------------------------------------

Provision for income taxes $ 3,111 $ 11,183
-----------------------------------------------------------------------
The provision for income
taxes consists of:
Current $ 245 $ 396
Future 2,866 10,787
-----------------------------------------------------------------------

Provision for income taxes $ 3,111 $ 11,183
-----------------------------------------------------------------------
-----------------------------------------------------------------------

The significant components of the future income taxes (asset) as at
December 31, 2004 and 2003 are:

-----------------------------------------------------------------------

2004 2003
-----------------------------------------------------------------------
(thousands) (restated)

Oil and natural gas properties $ 8,196 $ (5,948)
Facilities and well equipment 789 (1,073)
Asset retirement obligations (2,157) (1,047)
Share issue costs (198) (239)
Other (75) 143
-----------------------------------------------------------------------

Future income taxes (asset) $ 6,555 $ (8,164)
-----------------------------------------------------------------------
-----------------------------------------------------------------------

Cash income taxes paid for the year ended December 31, 2004 was
$125,000 (for the period from July 2 to December 31, 2003 - Nil).


10. Hedging activities:

a) Financial instruments:

As at December 31, 2004, NuVista has hedged by way of costless collars
the following crude oil:



------------------------------------------------------------------------
Average Price
WTI (U.S. $/bbl) Term
------------------------------------------------------------------------
250 bbls per day $ 40.00-$ 65.00 January 1, 2005 - March 31, 2005
250 bbls per day $ 40.00-$ 60.00 April 1, 2005 - June 30, 2005
250 bbls per day $ 40.00-$ 55.00 July 1, 2005 - October 31, 2005
250 bbls per day $ 35.00-$ 57.25 October 1, 2005 - December 31, 2005
------------------------------------------------------------------------


As at December 31, 2004, the market value of these financial instruments
was approximately $171,000.

b) Physical purchase contracts:

As at December 31, 2004, NuVista has entered into direct sale costless
collars to sell natural gas as follows:



------------------------------------------------------------------------
Average Price
AECO (Cdn $/gj) Term
------------------------------------------------------------------------
8,300 gj's per day $ 5.78-$ 9.75 January 1, 2005 - March 31, 2005
10,000 gj's per day $ 6.13-$ 9.06 April 1, 2005 - October 31, 2005
------------------------------------------------------------------------


INVESTOR INFORMATION

NuVista is an independent Canadian oil and natural gas exploration,
development and production company with its common shares trading on the
Toronto Stock Exchange under the symbol "NVA".

Corporate information provided herein contains forward-looking
information. The reader is cautioned that assumptions used in the
preparation of such information, which are considered reasonable by
NuVista at the time of preparation, may be proven to be incorrect.
Actual results achieved during the forecast period will vary from the
information provided herein and the variations may be material. There is
no representation by NuVista that actual results achieved during the
forecast period will be the same in whole or in part as those forecast.

-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    NuVista Energy Ltd.
    Keith A. MacPhail
    Chairman
    (403) 213-4315
    or
    NuVista Energy Ltd.
    Alex G. Verge
    President and Chief Executive Officer
    (403) 538-8501
    or
    NuVista Energy Ltd.
    Glenn A. Hamilton
    Vice President and Chief Financial Officer
    (403) 213-4302