Shiningbank Energy Income Fund
TSX : SHN.UN

Shiningbank Energy Income Fund

August 05, 2005 09:00 ET

Shiningbank Energy Announces Second Quarter 2005 Financial Results

CALGARY, ALBERTA--(CCNMatthews - Aug. 5, 2005) - Shiningbank Energy Income Fund (TSX:SHN.UN) (the "Fund"), today announced its financial results for the three months ended June 30, 2005. Production for the second quarter was 18,891 barrels of oil equivalent per day (boe/d) where natural gas is converted to barrels of oil equivalent on the basis of 6 mcf per boe. Revenues, cash flow and net earnings all increased over the comparable period in 2004 due mainly to higher commodity prices. Operating results do not include any impact from the closing of one small corporate acquisition at the end of the quarter or the Blizzard Energy Inc. acquisition which closed after the end of the quarter. The Fund distributed $0.69 per Trust Unit in the quarter representing a 13% annualized pre-tax cash-on-cash distribution rate on the period closing price of Trust Units. The accompanying table provides additional highlights.



------------------------------------------------------------------------
Three months Six months
ended June 30, ended June 30,
------------------------------------------------------------------------
2005 2004 % 2005 2004 %
------------------------------------------------------------------------
FINANCIAL
($ thousands except
per Trust Unit
amounts)
Oil and
natural
gas sales $ 83,222 $ 80,723 3 $163,361 $150,348 9
Net earnings
before income
tax 17,015 12,851 32 29,904 26,336 14
Future income
tax recovery (1,766) (3,221) (45) (3,252) (8,532) (62)
Net earnings after
income tax 18,781 16,072 17 33,156 34,868 (5)
Cash flow before
change in non-cash
working capital 46,353 45,190 3 90,862 84,734 7
Distributions
to Unitholders 37,628 36,977 2 75,125 71,744 5
Distributions
per Trust Unit 0.69 0.69 - 1.38 1.38 -
Long term debt 207,432 168,618 23 207,432 168,618 23
Unitholders'
equity 482,289 477,546 1 482,289 477,546 1
------------------------------------------------------------------------
------------------------------------------------------------------------
OPERATIONS
Daily Production
Oil (bbl/d) 2,354 2,725 (14) 2,341 2,434 (4)
Natural gas
(mmcf/d) 81.7 89.6 (9) 84.2 85.8 (2)
Natural gas
liquids (bbl/d) 2,926 3,034 (4) 3,083 2,852 8
Oil equivalent
(boe/d) 18,891 20,693 (9) 19,458 19,586 (1)
Average Prices
(including hedging)
Oil ($/bbl) $ 56.75 $ 43.05 32 $ 56.50 $ 41.50 36
Natural gas
($/mcf) $ 7.80 $ 7.26 7 $ 7.41 $ 7.16 3
Natural gas
liquids ($/bbl) $ 45.29 $ 39.19 16 $ 45.61 $ 37.68 21
Oil equivalent
($/boe) $ 47.83 $ 42.87 12 $ 46.08 $ 42.01 10
------------------------------------------------------------------------
------------------------------------------------------------------------
UNIT TRADING
Units traded
(thousands) 8,916 10,752 (17) 18,490 21,387 (14)
Value traded
($ thousands) $186,959 $201,264 (7) $398,888 $388,635 3
Unit price
High $ 22.19 $ 19.74 $ 23.35 $ 19.74
Low $ 19.60 $ 17.44 $ 19.60 $ 16.51
Close $ 21.55 $ 19.15 $ 21.55 $ 19.15
Units outstanding
(thousands) 54,524 53,608 54,524 53,608
------------------------------------------------------------------------
------------------------------------------------------------------------


The following discussion and analysis of the operating and financial results of Shiningbank Energy Income Fund is for the three and six month periods ended June 30, 2005. This information is provided as of August 4, 2005. The second quarter and half- year results have been compared with the corresponding periods in 2004. This discussion and analysis should be read in conjunction with the Fund's audited consolidated financial statements for the years ended December 31, 2004 and 2003, together with the accompanying notes, and the December 31, 2004 Management Discussion & Analysis ("MD&A") and Annual Information Form ("AIF"). These documents and additional information about the Fund are available on SEDAR at www.sedar.com.

SUPPLEMENTAL DISCLOSURE

Management believes that distributions to Unitholders, cash flow and operating netbacks are useful supplemental measures. Distributions to Unitholders should not be construed as an alternative to net income as determined by Canadian generally accepted accounting principles ("GAAP"). All references to cash flow throughout this discussion and analysis are based on cash flow before changes in non-cash working capital, which management uses to analyze operating performance and leverage. Cash flow as presented is not intended to represent operating cash flow or operating profits, nor should it be viewed as an alternative to cash flow from operating activities, net earnings or other measures of financial performance calculated in accordance with Canadian GAAP. Operating netbacks, which are calculated as average unit sales price less royalties, transportation costs and operating costs, represent the cash margin for product sold, calculated on a boe basis. Distributions to Unitholders, cash flow and operating netbacks as presented do not have any standardized meanings prescribed by Canadian GAAP and therefore may not be comparable with the calculations of similar measures for other entities.

FORWARD-LOOKING STATEMENTS

This discussion and analysis contains forward-looking statements relating to future events. In some cases, forward-looking statements can be identified by such words as "may," "expects" or similar expressions. These statements represent management's best projections, but undue reliance should not be placed upon them as they are derived from numerous assumptions. These assumptions are subject to known and unknown risks and uncertainties, including the business risks discussed in this discussion and analysis and in the AIF, which may cause actual performance and financial results to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Accordingly, readers are cautioned that events or circumstances could cause results to differ materially from those predicted.

BARREL OF OIL EQUIVALENT

Barrel of oil equivalent (boe) volumes are reported at 6:1 with 6 mcf equals 1 bbl. The 6:1 boe conversion ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. While it is useful for comparative measures, it may not accurately reflect individual product values and may be misleading if used in isolation.

REPORTING CURRENCY

All figures are in Canadian dollars unless otherwise noted.

RESULTS OF OPERATIONS

PRODUCTION VOLUMES



Daily Production Volumes
------------------------------------------------------------------------
Three months Six months
ended June 30, ended June 30,
------------------------------------------------------------------------
2005 2004 % 2005 2004 %
------------------------------------------------------------------------
Oil (bbl/d) 2,354 2,725 (14) 2,341 2,434 (4)
Natural gas (mmcf/d) 81.7 89.6 (9) 84.2 85.8 (2)
Natural gas liquids
(bbl/d) 2,926 3,034 (4) 3,083 2,852 8
Oil equivalent
(boe/d) 18,891 20,693 (9) 19,458 19,586 (1)
------------------------------------------------------------------------
Natural gas %
of production 72% 72% - 72% 73% (1)
------------------------------------------------------------------------
------------------------------------------------------------------------


Daily production for the second quarter averaged 18,891 boe/d, down 9% from the same period last year. For the first half of the year, daily production volumes averaged 19,458 boe/d, 1% lower than in 2004. The decreases reflect normal declines in the production base which were not fully offset by production from new wells, as anticipated. Wet weather delayed the tie-in of wells drilled in fourth quarter 2004 and first quarter 2005. An additional 225 boe/d was lost in the second quarter from pipeline damage caused by unprecedented flooding in southern Alberta. A similar amount is expected to be lost in the third quarter as pipeline repairs are completed. However, total production will increase by an approximate 20% for the second half of the year due to the recent acquisitions of Outlook Energy Corp. ("Outlook") and Blizzard Energy Inc. ("Blizzard") with production expected to average from 23,500 to 24,000 boe/d.

PRICING - INCLUDING HEDGING ACTIVITY



Average Prices - After Hedging
------------------------------------------------------------------------
Three months Six months
ended June 30, ended June 30,
------------------------------------------------------------------------
2005 2004 % 2005 2004 %
------------------------------------------------------------------------
Average Prices
Oil ($/bbl) $ 56.75 $ 43.05 32 $ 56.50 $ 41.50 36
Natural gas ($/mcf) $ 7.80 $ 7.26 7 $ 7.41 $ 7.16 3
Natural gas liquids
($/bbl) $ 45.29 $ 39.19 16 $ 45.61 $ 37.68 21
Oil equivalent
($/boe) $ 47.83 $ 42.87 12 $ 46.08 $ 42.01 10
------------------------------------------------------------------------
------------------------------------------------------------------------
Benchmark Prices
WTI (US$/bbl) $ 53.20 $ 38.31 39 $ 51.51 $ 36.73 40
AECO natural gas
(Cdn$/mcf) $ 7.37 $ 6.80 8 $ 7.03 $ 6.70 5
------------------------------------------------------------------------
------------------------------------------------------------------------


Natural Gas

Shiningbank's realized natural gas prices averaged $7.80/mcf for the quarter, 7% higher than second quarter 2004. Year to date, the average price was 3% higher at $7.41. Hedging decreased the gas price by $0.05/mcf for the quarter but had no significant impact on the year to date price. This compares with a 2004 hedging loss of $0.09/mcf for the quarter and $0.05/mcf for the first six months. Futures prices remain high with upcoming winter prices averaging over $9.00/mcf.

Oil and Natural Gas Liquids

Realized oil prices for the quarter averaged $56.75/bbl, up 32% from second quarter 2004. Realized oil prices for the first half were $56.50/bbl, up 36% from 2004. Hedging reduced the price by $0.83/bbl for the quarter and $0.61/bbl year to date, compared with 2004 hedging losses of $3.66/bbl for the quarter and $2.97/bbl for the first six months.

The benchmark West Texas Intermediate ("WTI") price averaged 39% higher for the quarter and 40% year to date, however strength in the Canadian dollar partially offset this increase. Oil prices continue to be exceptionally high, with WTI futures averaging over $60.00/bbl for the remainder of 2005.

NGL prices were also strong reflecting high oil prices. The quarterly average NGL price was 16% higher than in second quarter 2004 at $45.29/bbl, and 21% higher year to date at an average $45.61/bbl.

Hedging

Shiningbank maintains an active hedging program designed to reduce the variability of cash flow and stabilize distributions. Under the Fund's hedging policy, not more than one-half of production volumes of any commodity can be hedged at any one time. Gains and losses from hedging activities are typically recorded when they are realized and are included in oil and natural gas sales unless a particular hedge is considered ineffective. Currently, Shiningbank has the following hedging contracts in place:



------------------------------------------------------------------------
Period Commodity Volume Price
------------------------------------------------------------------------
April 1, 2005
- December 31, 2005 Gas 5,000 GJ/d $5.00 /GJ floor
$6.39/GJ ceiling
April 1, 2005
- October 31, 2005 Gas 5,000 GJ/d $6.70/GJ
April 1, 2005
- October 31, 2005 Gas 5,000 GJ/d $6.65 /GJ floor
$7.75/GJ ceiling
May 1, 2005
- October 31, 2005 Gas 5,000 GJ/d $6.90 /GJ floor
$9.50/GJ ceiling
November 1, 2005
- March 31, 2006 Gas 5,000 GJ/d $7.50 /GJ floor
$12.00/GJ ceiling
January 1, 2005
- June 30, 2005 Oil 500 bbl/d US$37.00/bbl floor
US$50.50/bbl ceiling
February 1, 2005
- December 31, 2005 Oil 500 bbl/d US$40.00/bbl floor
US$55.40/bbl ceiling
------------------------------------------------------------------------
------------------------------------------------------------------------


REVENUES
------------------------------------------------------------------------
Three months ended June 30,
------------------------------------------------------------------------
% of % of
(000s) 2005 Revenue 2004 Revenue
------------------------------------------------------------------------
Oil $ 12,335 15 $ 11,583 14
Natural gas 58,364 70 59,947 74
Natural gas liquids 12,057 14 10,820 14
Other income (loss) 1,005 1 (5) -
Gas hedging (360) - (715) (1)
Oil hedging (179) - (907) (1)
------------------------------------------------------------------------
$ 83,222 100 $ 80,723 100
------------------------------------------------------------------------
------------------------------------------------------------------------

------------------------------------------------------------------------
Six months ended June 30,
------------------------------------------------------------------------
% of % of
(000s) 2005 Revenue 2004 Revenue
------------------------------------------------------------------------
Oil $ 24,193 15 $ 19,697 13
Natural gas 112,931 69 112,638 75
Natural gas liquids 25,453 15 19,558 13
Other income (loss) 1,077 1 610 -
Gas hedging (36) - (840) -
Oil hedging (257) - (1,315) (1)
------------------------------------------------------------------------
$ 163,361 100 $ 150,348 100
------------------------------------------------------------------------
------------------------------------------------------------------------


The accompanying table demonstrates the net effect of price and volume
variances on revenues.


Sales Variance Analysis (Including Hedging Activity)
------------------------------------------------------------------------
Three months Six months
ended June 30, ended June 30,
------------------------------------------------------------------------
(000s) 2005/2004 2005/2004
------------------------------------------------------------------------
Oil and natural gas liquids
Volume increase (decrease) $ (1,842) $ 666
Price increase 4,558 10,782
------------------------------------------------------------------------
Net increase $ 2,716 $ 11,448
------------------------------------------------------------------------
------------------------------------------------------------------------
Natural gas
Volume decrease $ (5,243) $ (2,675)
Price increase 4,016 3,773
------------------------------------------------------------------------
Net increase (decrease) $ (1,227) $ 1,098
------------------------------------------------------------------------
------------------------------------------------------------------------


ROYALTIES
------------------------------------------------------------------------
Three months Six months
ended June 30, ended June 30,
------------------------------------------------------------------------
2005 2004 % 2005 2004 %
------------------------------------------------------------------------
Total royalties,
net (000s) $ 17,063 $ 17,674 (3) $ 35,604 $ 31,450 13
As a % of revenue 20.5% 21.9% (6) 21.8% 20.9% 4
Per boe $ 9.93 $ 9.39 6 $ 10.11 $ 8.82 15
------------------------------------------------------------------------
------------------------------------------------------------------------


Royalty expense consists of royalties paid to provincial governments, freehold landowners and overriding royalty owners. The royalty rate decreased in second quarter 2005 due to the receipt of gas cost allowance credits for 2004. Excluding this one time adjustment, the royalty rate for the quarter would have been 21.7%. The Fund expects rates to average 22.5% for the remainder of 2005.



TRANSPORTATION COSTS
------------------------------------------------------------------------
Three months Six months
ended June 30, ended June 30,
------------------------------------------------------------------------
2005 2004 % 2005 2004 %
------------------------------------------------------------------------
Transportation
costs (000s) $ 1,075 $ 1,540 (30) $ 2,242 $ 2,875 (22)
Per boe $ 0.63 $ 0.82 (23) $ 0.64 $ 0.81 (21)
------------------------------------------------------------------------
------------------------------------------------------------------------


On a boe basis, transportation costs declined 23% from second quarter 2004 and 21% year to date. The decrease resulted from the termination of certain transportation service commitments. These terminations are not expected to impact the Fund's ability to market its production.



OPERATING COSTS
------------------------------------------------------------------------
Three months Six months
ended June 30, ended June 30,
------------------------------------------------------------------------
2005 2004 % 2005 2004 %
------------------------------------------------------------------------
Operating costs
(000s) $ 13,949 $ 12,607 11 $ 25,721 $ 23,713 8
Per boe $ 8.11 $ 6.69 21 $ 7.30 $ 6.65 10
------------------------------------------------------------------------
------------------------------------------------------------------------


Operating costs on a boe basis increased 21% from second quarter 2004 and 10% year over year, mainly due to two factors: higher field and plant maintenance costs in most areas, and extra costs associated with the second quarter flooding in southern Alberta. Operating costs should decrease slightly in the third quarter with the incorporation of the Blizzard assets which have lower costs. Operating costs are expected to average $7.00/boe for 2005.



OPERATING NETBACKS
------------------------------------------------------------------------
Three months Six months
ended June 30, ended June 30,
------------------------------------------------------------------------
($/boe) 2005 2004 % 2005 2004 %
------------------------------------------------------------------------
Oil and natural
gas sales $ 47.83 $ 42.87 12 $ 46.08 $ 42.01 10
Other income (loss) 0.58 - - 0.31 (0.17)(282)
Royalties (9.93) (9.39) 6 (10.11) (8.82) 15
Transportation costs (0.63) (0.82) (23) (0.64) (0.81) (21)
Operating costs (8.11) (6.69) 21 (7.30) (6.65) 10
------------------------------------------------------------------------
Operating netbacks $ 29.74 $ 25.97 15 $ 28.34 $ 25.56 11
------------------------------------------------------------------------
------------------------------------------------------------------------


Operating netbacks increased 15% quarter over quarter and 11% year over year due to higher commodity prices and lower transportation costs. Higher operating costs partially offset this increase.



GENERAL AND ADMINISTRATIVE COSTS
------------------------------------------------------------------------
Three months Six months
ended June 30, ended June 30,
------------------------------------------------------------------------
2005 2004 % 2005 2004 %
------------------------------------------------------------------------
General and
administrative
costs (000s) $ 1,750 $ 1,877 (7) $ 3,927 $ 3,424 15
Per boe $ 1.02 $ 1.00 2 $ 1.12 $ 0.96 17
Per average
Trust Unit $ 0.03 $ 0.04 (25) $ 0.07 $ 0.07 -
------------------------------------------------------------------------
------------------------------------------------------------------------


General and administrative costs remained relatively flat on a boe basis from second quarter 2004. Year over year costs increased 17% on a boe basis due to higher activity levels related to acquisitions, development activities and increasing costs due to additional regulatory requirements. Costs are expected to average $1.25/boe for the remainder of 2005.



INTEREST ON LONG TERM DEBT
------------------------------------------------------------------------
Three months Six months
ended June 30, ended June 30,
------------------------------------------------------------------------
2005 2004 % 2005 2004 %
------------------------------------------------------------------------
Interest on long
term debt (000s) $ 1,931 $ 1,431 35 $ 3,775 $ 2,902 30
Per boe $ 1.12 $ 0.76 47 $ 1.07 $ 0.81 32
Per average
Trust Unit $ 0.04 $ 0.03 33 $ 0.07 $ 0.06 17
------------------------------------------------------------------------
------------------------------------------------------------------------


Interest expense, which includes bank charges, increased 35% from second quarter 2004 and 30% year over year due to higher debt levels resulting from the funding of acquisitions and capital expenditures. Shiningbank is currently in compliance with all external debt covenants.



DEPLETION, DEPRECIATION AND ACCRETION
------------------------------------------------------------------------
Three months Six months
ended June 30, ended June 30,
------------------------------------------------------------------------
2005 2004 % 2005 2004 %
------------------------------------------------------------------------
Depletion,
depreciation and
accretion (000s) $ 29,367 $ 31,300 (6) $ 60,004 $ 56,948 5
Per boe $ 17.08 $ 16.62 3 $ 17.04 $ 15.98 7
------------------------------------------------------------------------
------------------------------------------------------------------------


Depletion, depreciation and accretion rose 3% per boe for the second quarter and 7% year over year. These increases were primarily related to the effect of the acquisitions in first quarter 2004.



TRUST UNIT INCENTIVE COMPENSATION
------------------------------------------------------------------------
Three months Six months
ended June 30, ended June 30,
------------------------------------------------------------------------
2005 2004 % 2005 2004 %
------------------------------------------------------------------------
Trust Unit incentive
compensation (000s) $ 607 $ 304 100 $ 1,222 $ 602 103
Per boe $ 0.35 $ 0.16 119 $ 0.35 $ 0.17 106
------------------------------------------------------------------------
------------------------------------------------------------------------


During second quarter 2005, three new issues aggregating 50,000 Trust Unit rights were granted. Four new issues of rights aggregating 767,500 (2004 - 495,000) have been granted during the year. The fair value of rights issued was determined using a Black-Scholes model and will be brought into income over the vesting period of the rights. The total second quarter 2005 expense of $607,000 (2004 - $304,000) represented the fair value of rights issued during 2003 through to 2005 and which vested in second quarter 2005. All of these costs are "non-cash" costs and are not deducted in calculating distributions to Unitholders.



INTERNALIZATION OF MANAGEMENT CONTRACT
------------------------------------------------------------------------
Three months Six months
ended June 30, ended June 30,
------------------------------------------------------------------------
2005 2004 % 2005 2004 %
------------------------------------------------------------------------
Internalization
of management
contract (000s) $ 368 $ 735 (50) $ 736 $ 1,469 (50)
Per boe $ 0.21 $ 0.39 (46) $ 0.21 $ 0.41 (49)
------------------------------------------------------------------------
------------------------------------------------------------------------


Effective October 9, 2002, the Fund internalized its management by acquiring all of the shares of Shiningbank Energy Management Inc., the former Manager of the Fund. Prior to the acquisition, the Fund paid fees of 3.25% of net operating income, a fee of 1.5% on the purchase price of acquisitions and a quarterly scheduled dividend in accordance with the terms of a management agreement. The acquisition eliminated all future fees and dividends.

Of the total purchase price of $20.6 million, $11.0 million was deferred, representing Exchangeable Shares subject to escrow provisions which are being amortized into income over specific vesting periods through 2007. During second quarter 2005, $368,000 (2004 - $735,000) was expensed, representing the amortization of these escrowed Exchangeable Shares.



TAXES
------------------------------------------------------------------------
Three months Six months
ended June 30, ended June 30,
------------------------------------------------------------------------
2005 2004 % 2005 2004 %
------------------------------------------------------------------------
Capital and large
corporation taxes
(000s) $ 97 $ 404 (76) $ 226 $ 629 (64)
Future income tax
recovery (000s) $ (1,766) $ (3,221) (45) $ (3,252) $ (8,532) (62)
Per boe $ (0.97) $ (1.50) (35) $ (0.86) $ (2.22) (61)
------------------------------------------------------------------------
------------------------------------------------------------------------


The Fund is obligated to pay provincial capital taxes and federal large corporations tax in its operating entities. Under the Fund's structure, payments are made between Shiningbank Energy Ltd. and the Fund. These payments provide the mechanism for transferring income to Unitholders along with tax benefits and future tax liabilities. Current income taxes are not presently payable by the Fund or its operating entities.

NET EARNINGS

Shiningbank's second quarter earnings were $18.8 million (2004 - $16.1 million) or $0.34 per Trust Unit, basic and diluted (2004 - $0.30 basic, $0.29 diluted). Year to date net earnings were $33.2 million (2004 - $34.9 million) or $0.61 per Trust Unit basic, $0.60 diluted (2004 - $0.69 basic, $0.68 diluted).



DISTRIBUTIONS TO UNITHOLDERS
------------------------------------------------------------------------
Three months Six months
ended June 30, ended June 30,
(000s except per -----------------------------------------------------
Trust Unit amounts) 2005 2004 % 2005 2004 %
------------------------------------------------------------------------
Cash flow before
change in non-cash
working capital $ 46,353 $ 45,190 3 $ 90,862 $ 84,734 7
Capital
expenditures (11,270) (9,618) 17 (25,732) (20,625) 25
Asset retirement
expenditures (437) (19) 2,200 (910) (218) 317
Working capital
adjustments 2,982 1,424 109 10,905 7,853 39
------------------------------------------------------------------------
Distributions to
Unitholders $ 37,628 $ 36,977 2 $ 75,125 $ 71,744 5
------------------------------------------------------------------------
------------------------------------------------------------------------
Distributions per
Trust Unit $ 0.69 $ 0.69 - $ 1.38 $ 1.38 -
------------------------------------------------------------------------
------------------------------------------------------------------------
Trust Units
outstanding 54,524 53,608 2 54,524 53,608 2
------------------------------------------------------------------------
------------------------------------------------------------------------


Total distributions to Unitholders increased 2% for the second quarter and 5% year to date over 2004. The increases were based on large gains in pricing for oil and NGL and strong gas prices.

On a per Trust Unit basis, distributions were consistent in both periods at $0.69 for the quarter and $1.38 year to date. The increase in the number of Trust Units outstanding offset the higher cash flow. The Fund paid out 81% of its cash flow from the second quarter 2005, 83% year to date.



QUARTERLY FINANCIAL INFORMATION
------------------------------------------------------------------------
(000s except per June 30, March 31, December 31, September 30,
Trust Unit amounts) 2005 2005 2004 2004
------------------------------------------------------------------------
Oil and natural
gas sales $ 83,222 $ 80,139 $ 82,453 $ 74,713
Net earnings before
income tax 17,015 12,889 13,974 12,297
Per Trust Unit
- basic 0.31 0.24 0.26 0.24
- diluted 0.31 0.23 0.25 0.23
Net earnings after
income tax 18,781 14,375 88,038 15,900
Per Trust Unit
- basic 0.34 0.26 1.62 0.30
- diluted 0.34 0.26 1.60 0.29
Cash flow before
change in non-cash
working capital 46,353 44,509 47,220 42,924
Per weighted average
Trust Unit 0.85 0.81 0.87 0.80
Distributions to
Unitholders 37,628 37,497 37,390 37,226
Per Trust Unit 0.69 0.69 0.69 0.69
Payout ratio 81% 84% 79% 87%
------------------------------------------------------------------------

------------------------------------------------------------------------
June 30, March 31, December 31, September 30,
2004 2004 2003 2003
------------------------------------------------------------------------
Oil and natural
gas sales $ 80,723 $ 69,625 $ 58,474 $ 63,046
Net earnings before
income tax 12,851 13,485 6,092 13,227
Per Trust Unit
- basic 0.24 0.29 0.14 0.30
- diluted 0.24 0.28 0.14 0.29
Net earnings after
income tax 16,072 18,796 5,354 15,517
Per Trust Unit
- basic 0.30 0.40 0.12 0.35
- diluted 0.29 0.39 0.12 0.35
Cash flow before
change in non-cash
working capital 45,190 39,544 30,082 35,057
Per weighted average
Trust Unit 0.84 0.84 0.68 0.79
Distributions to
Unitholders 36,977 34,767 30,629 30,442
Per Trust Unit 0.69 0.69 0.69 0.69
Payout ratio 82% 88% 102% 87%
------------------------------------------------------------------------
------------------------------------------------------------------------


Quarterly fluctuations are primarily the result of production increases due to acquisitions, volumes added through the Fund's development drilling program and realized commodity prices which can be extremely volatile.

Volume increases from acquisitions occurred in second quarter 2003 through the acquisition of assets at Ferrier/O'Chiese and again, in second quarter 2004 with the acquisition of Birchill Resources Limited. The Fund's development drilling program strives to replace natural declines on the production base, with results fluctuating depending on field access for equipment and drilling success. Shiningbank's drilling success rate in 2005 has been 98%.

Natural gas prices remained strong and relatively consistent through the eight quarters. Oil prices increased substantially in late 2004. With oil playing a small role in Shiningbank's overall revenues and with increased capital programs absorbing the extra cash flow, there was no change in distributions.

COSTS OF ACQUISITIONS AND DEVELOPMENT

During the second quarter, Shiningbank spent $31.4 million on the acquisition of Outlook. This acquisition is expected to add 600 boe/d to production for the remainder of the year.

A total of $11.3 million was spent on drilling and new facilities during the second quarter and $25.7 million in the first half of 2005, compared with $9.6 million and $20.6 million, respectively for the same periods in 2004. Cash flow funded $8.7 million of the second quarter expenditures and $15.7 million of the year to date expenditures, with the balance funded by debt and proceeds from the Fund's Distribution Reinvestment Plan. The capital program funded a successful development drilling and tie-in program concentrated in the Ferrier/O'Chiese area. While second quarter field operations were postponed due to wet weather, the Fund's drilling program will be more active in the summer and fall of 2005.

LIQUIDITY AND CAPITAL RESOURCES

Shiningbank's ability to grow depends on access to bank lines of credit and periodic equity infusions. Smaller acquisitions through the course of a year are funded by bank debt. Equity is issued to fund single large acquisitions, or to pay down debt acquired following a number of smaller acquisitions. When the proceeds of an equity issue are greater than acquisition costs, the excess is used to reduce bank debt.

LONG TERM DEBT

The Fund has a $330 million revolving credit facility with a syndicate of Canadian chartered banks of which $207.4 million was drawn at June 30, 2005. This facility was increased from $250 million as a result of the Blizzard acquisition. The revolving period extends to April 27, 2006, at which time the facility reverts to a two-year term with principal payments, if necessary, commencing on July 28, 2006. The facility is secured by a $600 million floating charge debenture on all assets of Shiningbank together with supporting debentures and guarantees from the Fund's operating subsidiaries and affiliates. Borrowings under the facility bear interest at an annual rate ranging from the banks' prime rate to the banks' prime rate plus 0.95%, depending on the total debt to cash flow ratio or, at Shiningbank's option, the bankers' acceptance rate plus a stamping fee. At June 30, 2005 the debt to cash flow ratio was 1:1. Draw-downs under this facility were used to fund the Blizzard acquisition and, as a result, Shiningbank will have an approximate 1.3 times debt to cash flow ratio in the third quarter.

UNITHOLDERS' EQUITY

A total of 204,621 Trust Units were issued during the second quarter (383,737 year to date) under the Trust Unit Rights Incentive Plan and under the Fund's Distribution Reinvestment Plan.

When equity is raised in a public equity issue, the intended use of proceeds is specified in the related prospectus. Each major equity issue has been undertaken to acquire properties or to reduce debt incurred from prior acquisitions. In all cases, the proceeds were used according to the purpose specified.

As of August 4, 2005, the Fund had 54,601,812 Trust Units, 263,482 non-escrowed Exchangeable Shares and 353,614 escrowed Exchangeable Shares outstanding. Exchangeable Shares held in escrow will be released over the next three years under the terms of two escrow agreements. Exchangeable Shares are not eligible for distributions until they are exchanged for Trust Units at the discretion of the holder. The exchange rate was initially one Trust Unit for each Exchangeable Share. The exchange rate increases with each distribution by an amount equal to the per unit distribution divided by the 10-day weighted average trading price of the Trust Units preceding the record date for that distribution. As of June 30, 2005, the exchange rate was 1 to 1.39023.



CONTRACTUAL OBLIGATIONS
------------------------------------------------------------------------
Payments Due by Period
------------------------------------------------------------------------
Less than 1 - 3 4 - 5 After
(000s) Total 1 Year Years Years 5 Years
------------------------------------------------------------------------
Long term debt
principal(1) $ 207,432 $ - $ 207,432 $ - $ -
Operating leases 8,102 1,443 3,143 3,248 268
Pipeline transportation 4,121 1,175 2,350 596 -
------------------------------------------------------------------------
Total obligations $ 219,655 $ 2,618 $ 212,925 $ 3,844 $ 268
------------------------------------------------------------------------
------------------------------------------------------------------------
(1) The long term debt obligation assumes that the revolving credit line
is not renewed in April 2006.


Shiningbank has on-going capital commitments in the ordinary course of business for development drilling, equipment and facilities. These are funded through a combination of cash flow, debt financing and periodic equity financing.


IMPACT OF NEW ACCOUNTING POLICIES

NON-CONTROLLING INTEREST

On March 8, 2005 and effective for second quarter 2005, the Emerging Issues Committee (EIC) of the Canadian Institute of Chartered Accountants amended its position on the reporting of exchangeable securities issued by subsidiaries of income trusts. The amendment states that exchangeable securities issued by a subsidiary of an income trust should be reflected as either non-controlling interest or debt on the consolidated balance sheet unless they meet certain criteria. Shiningbank's Exchangeable Shares meet the specified criteria and therefore, the current treatment of reporting exchangeable securities as equity on the balance sheet continues to be appropriate.

CRITICAL ACCOUNTING ESTIMATES

The Fund makes numerous accounting estimates in its financial statements in order to provide timely information to users. A critical accounting estimate is one that requires management to make assumptions about matters that are highly uncertain at the time the estimate is made and, if a different estimate was used, financial results would be materially different. The following estimates are considered critical:

RESERVES

The Fund must estimate its reserves. Reserves are evaluated and reported on annually by independent petroleum reserve evaluators who use various subjective factors and assumptions, including forecasts of costs based on geological and engineering data, projected future rates of production, and timing and amounts of future development costs. Although reserves are estimated, management believes the estimates are reasonable based on information available at the time the estimates were prepared. Management, the Fund's internal engineers, and the Board's Environmental, Corporate Governance and Reserve Review Committee all review and approve the estimates reported by the independent reserve evaluators.

As new information becomes available, changes are made to the reserve estimates and future development cost estimates. Historically, the Fund has had no significant changes to these estimates, with the exception of adjusting reserves for acquisitions and divestitures and the results of new drilling. Future actual results could vary greatly from the estimates made, resulting in material changes to the depletion calculation and asset impairment test.

ASSET RETIREMENT OBLIGATION

The Fund's estimated asset retirement obligation is based on estimated timing and costs to abandon and restore properties.



CONSOLIDATED BALANCE SHEETS

------------------------------------------------------------------------
June 30, December 31,
($ thousands) 2005 2004
------------------------------------------------------------------------
(unaudited) (audited)
ASSETS
Current assets
Accounts receivable $ 43,974 $ 50,712
Prepaid expenses 4,456 4,471
------------------------------------------------------------------------
48,430 55,183
Fixed assets (note 3)
Petroleum and natural gas properties
and equipment 1,188,914 1,133,426
Accumulated depletion and depreciation (423,695) (364,814)
------------------------------------------------------------------------
765,219 768,612
Goodwill 9,311 1,710
Other assets 889 1,292
------------------------------------------------------------------------
$ 823,849 $ 826,797
------------------------------------------------------------------------
------------------------------------------------------------------------

LIABILITIES AND UNITHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 44,519 $ 40,268
Trust Unit distributions payable 25,099 24,930
------------------------------------------------------------------------
69,618 65,198
Long term debt (note 2) 207,432 182,147
Future income taxes 37,814 33,266
Asset retirement obligation 26,696 30,242
Unitholders' equity
Trust Units (note 4) 713,718 706,954
Exchangeable Shares (note 4) 7,755 7,019
Contributed surplus (note 4) 2,230 1,416
Accumulated earnings 341,673 308,517
Accumulated Trust Unit distributions (583,087) (507,962)
------------------------------------------------------------------------
482,289 515,944
------------------------------------------------------------------------
$ 823,849 $ 826,797
------------------------------------------------------------------------
------------------------------------------------------------------------

See selected accompanying notes to the interim financial statements


CONSOLIDATED STATEMENTS OF EARNINGS AND UNITHOLDERS' EQUITY

(unaudited) ($thousands, except per Trust Unit amounts)
------------------------------------------------------------------------
------------------------------------------------------------------------
Three months Six months
ended June 30, ended June 30,
2005 2004 2005 2004
------------------------------------------------------------------------

Revenues
Oil and natural gas sales $ 83,222 $ 80,723 $163,361 $150,348
Royalties 17,063 17,674 35,604 31,450
------------------------------------------------------------------------
66,159 63,049 127,757 118,898
Expenses
Transportation 1,075 1,540 2,242 2,875
Operating 13,949 12,607 25,721 23,713
General and administrative 1,750 1,877 3,927 3,424
Interest on long term debt 1,931 1,431 3,775 2,902
Depletion, depreciation
and accretion 29,367 31,300 60,004 56,948
Trust Unit incentive
compensation (note 4) 607 304 1,222 602
Internalization of
management contract 368 735 736 1,469
------------------------------------------------------------------------
49,047 49,794 97,627 91,933
------------------------------------------------------------------------
Earnings before taxes 17,112 13,255 30,130 26,965
Capital and large
corporation taxes 97 404 226 629
Future income tax recovery (1,766) (3,221) (3,252) (8,532)
------------------------------------------------------------------------
Net earnings $ 18,781 $ 16,072 $ 33,156 $ 34,868

Unitholders' equity,
beginning of period 496,898 492,768 515,944 364,215
Issue of Trust Units (note 4) 3,472 4,766 6,764 148,347
Change in Exchangeable Shares,
net (note 4) 368 735 736 1,469
Change in contributed surplus 398 182 814 391
Distributions to Unitholders (37,628) (36,977) (75,125) (71,744)
------------------------------------------------------------------------

Unitholders' equity,
end of period $482,289 $477,546 $482,289 $477,546
------------------------------------------------------------------------
------------------------------------------------------------------------

Net earnings per Trust Unit
(note 4)
Basic $ 0.34 $ 0.30 $ 0.61 $ 0.69
Diluted $ 0.34 $ 0.29 $ 0.60 $ 0.68
------------------------------------------------------------------------
------------------------------------------------------------------------

See selected accompanying notes to the interim financial statements


CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited) ($thousands)
------------------------------------------------------------------------
------------------------------------------------------------------------
Three months Six months
ended June 30, ended June 30,
2005 2004 2005 2004
------------------------------------------------------------------------

Operating activities
Net earnings $ 18,781 $ 16,072 $ 33,156 $ 34,868
Items not requiring cash
Depletion, depreciation and
accretion 29,367 31,300 60,004 56,948
Internalization of
management contract 368 735 736 1,469
Trust Unit incentive
compensation 607 304 1,222 602
Gain on sale of other assets (1,004) - (1,004) (621)
Future income tax recovery (1,766) (3,221) (3,252) (8,532)
------------------------------------------------------------------------
Cash flow before change in
non-cash working capital 46,353 45,190 90,862 84,734
Asset retirement expenditures (437) (19) (910) (218)
Change in non-cash working
capital (note 5) 4,600 (9,208) 13,572 (19,639)
------------------------------------------------------------------------
50,516 35,963 103,524 64,877
------------------------------------------------------------------------
Financing activities
Increase in long term debt 28,686 3,754 25,285 46,927
Distributions to Unitholders (37,628) (36,977) (75,125) (71,744)
Issue of Trust Units 3,263 4,644 6,356 148,136
------------------------------------------------------------------------
(5,679) (28,579) (43,484) 123,319
Change in non-cash working
capital (note 5) 86 148 169 4,258
------------------------------------------------------------------------
(5,593) (28,431) (43,315) 127,577
------------------------------------------------------------------------
Total cash provided $ 44,923 $ 7,532 $ 60,209 $192,454
------------------------------------------------------------------------
------------------------------------------------------------------------

Investing activities
Property acquisitions $ (14) $ (1,722) $ (1,333) $ (2,167)
Corporate acquisitions (31,360) (31) (31,360) (177,020)
Capital expenditures (11,270) (9,618) (25,732) (20,625)
Long term investments - - - (21)
Proceeds on sale of fixed
assets (66) 2,374 (56) 2,542
Proceeds on sale of other
assets 1,004 - 1,336 1,000
------------------------------------------------------------------------
(41,706) (8,997) (57,145) (196,291)
Change in non-cash working
capital (note 5) (3,217) 1,465 (3,064) 3,837
------------------------------------------------------------------------
Total cash used $(44,923) $ (7,532) $(60,209) $(192,454)
------------------------------------------------------------------------
------------------------------------------------------------------------

See selected accompanying notes to the interim financial statements


Notes to the Consolidated Financial Statements

For the periods ended June 30, 2005 and 2004

1. Significant Accounting Policies

The interim consolidated financial statements of Shiningbank Energy Income Fund ("Shiningbank" or the "Fund") have been prepared by management in accordance with Canadian generally accepted accounting principles and follow the same accounting principles and methods of computation as the consolidated financial statements for the fiscal year ended December 31, 2004 unless otherwise disclosed. The disclosures provided below are incremental to those included with the annual consolidated financial statements. The interim consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto in Shiningbank's annual report for the year ended December 31, 2004.

2. Long Term Debt

Shiningbank Energy Ltd. (the "Corporation") has a $330 million revolving credit facility with a syndicate of Canadian chartered banks of which $207.4 million was drawn at June 30, 2005. The revolving period extends to April 27, 2006. If the revolving facility is not renewed on that date, it will revert to a two year term with principal payments commencing on July 28, 2006. The facility is secured by a $600 million floating charge debenture on all assets of the Corporation together with supporting debentures and guarantees from operating subsidiaries and affiliates. Borrowings under the facility bear interest at an annual rate ranging from the banks' prime rate to the banks' prime rate plus 0.95%, depending on the Fund's total debt to cash flow ratio, or, at Shiningbank's option, the bankers' acceptance rate plus a stamping fee.

3. Fixed Assets

Acquisition of Outlook Energy Corp.

Effective June 21, 2005 the Corporation acquired 99.9% of the issued and outstanding common shares of Outlook Energy Corp. ("Outlook") for $31.2 million. The transaction closed June 21, 2005. The acquisition was accounted for by the purchase method and the results of operations of Outlook are included in the accounts from the closing date. The following allocation of net assets acquired is a preliminary calculation which is subject to change with regards to closing adjustments and other items.



------------------------------------------------------------------------
Cash consideration $ 31,210
Related fees and expenses 150
------------------------------------------------------------------------
Cost of acquisition $ 31,360
------------------------------------------------------------------------
------------------------------------------------------------------------
Working capital deficiency $ (496)
Future income taxes (7,800)
Asset retirement obligation (806)
Goodwill 7,601
Petroleum and natural gas properties and equipment 32,861
------------------------------------------------------------------------
Total consideration $ 31,360
------------------------------------------------------------------------
------------------------------------------------------------------------


4. Trust Units

(a) Authorized
300,000,000 Trust Units

(b) Issued

------------------------------------------------------------------------
Number Amount (000s)
------------------------------------------------------------------------
Balance, December 31, 2004 54,140,619 $706,954
Issued on exercise of rights 201,667 2,510
Issued for cash under Distribution
Reinvestment Plan 182,070 3,910
Less: Commissions and issue costs (64)
Transfer from contributed surplus on exercise
of rights 408
------------------------------------------------------------------------
Balance, June 30, 2005 54,524,356 $713,718
------------------------------------------------------------------------


(c) Exchangeable Shares (1)

------------------------------------------------------------------------
Number Amount (000s)
------------------------------------------------------------------------
Balance, December 31, 2004 263,482 $7,019
Amortization of deferred portion 736
------------------------------------------------------------------------
Balance, June 30, 2005 263,482 $7,755
------------------------------------------------------------------------
Exchange ratio, June 30, 2005 1.39023
----------------------------------------------------------
Trust Units issuable upon conversion of
non-escrowed shares 366,301
Trust Units issuable upon conversion of
353,614 escrowed shares 491,605
----------------------------------------------------------
Total Trust Units issuable upon conversion
of all shares 857,906
----------------------------------------------------------
(1) The Exchangeable Shares are non-transferable.


(d) Trust Unit Rights Incentive Plan

At June 30, 2005, there were 1,937,734 (2004 - 1,578,335) rights
outstanding, of which 620,234 (2004 - 503,335) were exercisable at a
weighted average exercise price of $13.29 (2004 - $13.62).

------------------------------------------------------------------------
Weighted
Average
Exercise
Number Price
------------------------------------------------------------------------
Balance, December 31, 2004 1,396,901 $14.74
Granted 767,500 21.45
Exercised (201,667) 12.45
Forfeited (25,000) 18.83
------------------------------------------------------------------------
Balance before reduction of exercise price 1,937,734 $17.58
Reduction of exercise price (0.66)
------------------------------------------------------------------------
Balance, June 30, 2005 1,937,734 $16.92
------------------------------------------------------------------------


The following table summarizes information about Trust Unit rights
outstanding and exercisable at June 30, 2005:


------------------------------------------------------------------------
Rights Outstanding Rights Exercisable
------------------------------------------------------------------------
Weighted
Average Weighted Weighted
Range of Number Remaining Average Number Average
Exercise Outstanding Contractual Exercise Exercisable Exercise
Prices At 6/30/05 Life (Yrs) Price At 6/30/05 Price
------------------------------------------------------------------------
$9.00 to $12.99 640,235 6.7 $ 12.24 480,235 $ 12.37
$13.00 to $16.99 459,999 8.5 $ 16.58 139,999 $ 16.45
$17.00 to $21.50 837,500 9.5 $ 20.69 - -
------------------------------------------------------------------------
$9.00 to $21.50 1,937,734 8.3 $ 16.92 620,234 $ 13.29
------------------------------------------------------------------------
------------------------------------------------------------------------


Shiningbank recorded Trust Unit incentive compensation expense of $1,222,000 for the six months ended June 30, 2005 (2004 - $602,000) and $607,000 for the quarter (2004 - $304,000) for rights issued between 2003 and 2005, and which vested in 2005.

During the first half of 2005, $408,000 (2004 - $211,000) of contributed surplus was transferred to Trust Unit equity in respect of rights exercised during the period. For the second quarter, $209,000 (2004 - $124,000) was transferred.

The following table reconciles the movement in the contributed surplus balance:



------------------------------------------------------------------------
Contributed surplus Amount (000s)
------------------------------------------------------------------------
Balance, December 31, 2004 $ 1,416
Trust Unit incentive compensation 1,222
Net benefit on rights exercised (1) (408)
------------------------------------------------------------------------
Balance, June 30, 2005 $ 2,230
------------------------------------------------------------------------
------------------------------------------------------------------------
(1) Upon exercise, the net benefit is reflected as a reduction of
contributed surplus and an increase to Unitholders' capital.


The $3.6 million fair value of the 767,500 rights issued during the first half of 2005 ($223,000 fair value of 50,000 rights issued during the quarter) was estimated using a Black-Scholes option-pricing model with the following assumptions: risk-free interest rate of 3.81 to 4.21% (3.81 to 4.14% for the quarter), volatility of 60%, life of 10 years, and a distribution yield rate of 10% representing the difference between the anticipated distribution and the anticipated drop in the strike price. Users are cautioned that the assumptions made are estimates of future events and actual results could differ materially from those estimated.

For rights issued in 2002, Shiningbank has elected to disclose the pro forma effect as if the amended accounting standard had been adopted January 1, 2002. The rights granted on January 1, 2002 fully vested on January 1, 2005 and therefore, no Trust Unit incentive compensation expense related to those rights would have been recorded during the quarter. For the six months ended June 30, 2004, Shiningbank's net income would have decreased by $254,000 ($127,000 for the quarter) due to additional Trust Unit incentive compensation expense related to those rights. Neither basic nor diluted per Trust Unit figures would have changed as a result of this additional expense.

(e) Per Trust Unit amounts

For the six months ended June 30, 2005, the weighted average number of Trust Units and non-escrowed Exchangeable Shares outstanding was 54,714,567 (2004 - 50,253,923) and for the three months ended June 30, 2005 was 54,813,864 (2004 - 53,569,521). In computing diluted net earnings per Trust Unit, the dilutive effect of Trust Unit rights and escrowed Exchangeable Shares added 677,306 Trust Units (2004 - 956,302) for the six months and 596,453 (2004 - 972,407) for the quarter, to the weighted average number of Trust Units outstanding.



5. Other Cash Flow Disclosures

------------------------------------------------------------------------
Three Three Six Six
months months months months
ended ended ended ended
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
(000s) (000s) (000s) (000s)
------------------------------------------------------------------------
Change in non-cash operating
working capital
Accounts receivable $(1,193) $(7,897) $ 6,242 $(24,682)
Prepaid expenses 17 (170) 15 (1,713)
Accounts payable and
accrued liabilities 5,776 (1,141) 7,315 6,756
------------------------------------------------------------------------
$ 4,600 $(9,208) $ 13,572 $(19,639)
------------------------------------------------------------------------

Change in non-cash financing
working capital
Distributions payable to
Unitholders $ 86 $ 148 $ 169 $ 4,258
------------------------------------------------------------------------

Change in non-cash investing
working capital
Accounts payable for capital
accruals $(3,217) $ 1,465 $ (3,064) $ 3,837
------------------------------------------------------------------------

Cash payments
Cash payments made for taxes $ 88 $ 145 $ 92 $ 301
Cash payments made for interest $ 1,751 $ 507 $ 3,701 $ 2,003
------------------------------------------------------------------------


6. Financial Instruments

At June 30, 2005, Shiningbank held certain oil and natural gas hedge contracts, the terms of which are listed in the following table. The estimated market value at June 30, 2005, had the contracts been settled at that time, would have been a loss of $1.5 million.



------------------------------------------------------------------------
Period Commodity Volume Price
------------------------------------------------------------------------
April 1, 2005 -
December 31, 2005 Gas 5,000 GJ/d $5.00/GJ floor
$6.39/GJ ceiling
April 1, 2005 -
October 31, 2005 Gas 5,000 GJ/d $6.70/GJ
April 1, 2005 -
October 31, 2005 Gas 5,000 GJ/d $6.65/GJ floor
$7.75/GJ ceiling
May 1, 2005 -
October 31, 2005 Gas 5,000 GJ/d $6.90/GJ floor
$9.50/GJ ceiling
November 1, 2005 -
March 31, 2006 Gas 5,000 GJ/d $7.50/GJ floor
$12.00/GJ ceiling
January 1, 2005 -
June 30, 2005 Oil 500 bbl/d US$37.00/bbl floor
US$50.50/bbl ceiling
February 1, 2005 -
December 31, 2005 Oil 500 bbl/d US$40.00/bbl floor
US$55.40/bbl ceiling
------------------------------------------------------------------------


7. Subsequent Event

The Fund, the Corporation and Blizzard Energy Inc. ("Blizzard") entered into an arrangement agreement dated June 6, 2005, as amended and restated June 27, 2005. Pursuant to the Arrangement Agreement, the Fund will acquire the majority of Blizzard's natural gas assets, while certain of Blizzard's producing assets and undeveloped lands will be transferred to Zenas Energy Corp. As a result, pursuant to the Arrangement, Shiningbank issued 8,837,793 Trust Units and $46.6 million cash in exchange for all of the issued and outstanding shares of Blizzard and assumed debt and working capital deficiency of approximately $42.0 million. The Plan was approved by Blizzard Shareholders at a Special Meeting held on July 28, 2005.

Upon the above mentioned close, the Corporation's revolving credit facility was increased from $250 million to $330 million.

Shiningbank Energy Income Fund is a conventional oil and gas royalty trust listed on the Toronto Stock Exchange under the symbol SHN.UN.

Contact Information

  • Shiningbank Energy Income Fund
    David M. Fitzpatrick
    President and C.E.O.
    (403) 268-7477 or Toll Free (866) 268-7477
    or
    Shiningbank Energy Income Fund
    Bruce K. Gibson
    Vice President, Finance and C.F.O.
    (403) 268-7477 or Toll Free (866) 268-7477
    or
    Shiningbank Energy Income Fund
    Debbie Carver
    Investor Relations
    (403) 268-7477 or Toll Free (866) 268-7477
    (403) 268-7499 (FAX)
    Email: irinfo@shiningbank.com
    Website: www.shiningbank.com