STRATEGIC ENERGY FUND
TSX : SEF.UN

STRATEGIC ENERGY FUND

August 02, 2005 11:22 ET

Strategic Energy Fund 'TSX:SEF.UN' Announces Offering Comprised of a Cash Option and Exchange Option

TORONTO, ONTARIO and CALGARY, ALBERTA--(CCNMatthews - Aug. 2, 2005) - Strategic Energy Fund (TSX:SEF.UN)

Strategic Energy Management Corp. is pleased to announce that Strategic Energy Fund (the "Fund") has filed a preliminary prospectus across Canada, qualifying units (the "Units") of the Fund (the "Offering") which prospective purchasers can acquire for cash or in exchange for units or shares ("Eligible Securities") of Exchange Eligible Issuers (the "Issuers") pursuant to the Exchange Option. The Offering is subject to receipt of all regulatory approvals, including the approval of the Toronto Stock Exchange.

Deposit Date

The Exchange Option will be open for acceptance by holders of securities of the 88 Issuers listed below until 4:00 pm (Toronto time) on August 25, 2005.

Offering Price

The price per Unit (the "Unit Price") shall be equal to the lesser of (i) the weighted average trading price of the Units on the Toronto Stock Exchange ("TSX") during the three consecutive trading days ending on August 25, 2005 (the "Deposit Date") as adjusted to reflect distributions declared by the Fund on or prior to the Deposit Date that will not be received by purchasers under the Offering, and (ii) the net asset value ("NAV") per unit on the Deposit Date as adjusted to reflect distributions declared by the Fund on or prior to the Deposit Date that will not be received by purchasers under the Offering and that have not already been accounted for in determining the NAV.

Cash Option

A prospective purchaser may purchase Units in cash.

Exchange Option

Units may be purchased by the exchange of Eligible Securities of any Issuer named below. The number of Units issued in exchange for Eligible Securities of any particular Issuer will be determined by multiplying the number of such Eligible Securities deposited pursuant to the Exchange Option by the Exchange Ratio. The Exchange Ratio for any particular Issuer will be determined by dividing the weighted average trading price of such Eligible Securities on the TSX during the three consecutive trading days ended August 25, 2005, as adjusted to reflect distributions declared by such Issuer that will not be received by the Fund, by the Unit Price.

Acceptance

In order to utilize the Exchange Option, a prospective purchaser of Units is required to deposit the Eligible Securities with Computershare Investor Services Inc. through The Canadian Depository for Securities ("CDS") prior to 4:00 pm (Toronto Time) on the the Deposit Date. Such deposit must be made by way of book-entry deposit through a CDS participant. CDS participants may have earlier deadlines for receiving instructions from their clients to make deposits in conection with the Exchange Option.

Commitment of Principal Unitholder

John F. Driscoll intends to participate, directly or indirectly, in the Offering to maintain his proportionate beneficial interest in the Fund (without taking into account any Units issued pursuant to the over-allotment option to be granted to the Agents in connection with the Offering).

Maximum Ownership Level

The maximum number of Eligible Securities of any Issuer which the Fund may aquire pursuant to the Offering is that number of Eligible Securities which when combined with Eligible Securities of such Issuer beneficially owned, or over which control or direction is exercised by the Manager and persons acting jointly or in concert with the Manager, constitutes 19.9% of the outstanding Eligible Securities of such Exchange Eligible Issuer, or would result in more than 10% of the Fund's Total Asset Value consisting of securities of Special Energy Issuers, or would result in more than 10% of the Fund's Total Asset Value consisting of securities such Exchange Eligible Issuer.



Exchange Eligble Issuers

Oil & Gas Trusts
Acclaim Energy Trust (AE.UN)
ARC Energy Trust (AET.UN)
Baytex Energy Trust (BTE.UN)
Bonavista Energy Trust (BNP.UN)
Canadian Oil Sands Trust (COS.UN)
Crescent Point Energy Trust (CPG.UN)
Daylight Energy Trust (DAY.UN)
Enerplus Resources Fund (ERF.UN)
Esprit Energy Trust (EEE.UN)
Fairborne Energy Trust (FEL.UN)
Focus Energy Trust (FET.UN)
Freehold Royalty Trust (FRU.UN)
Harvest Energy Trust (HTE.UN)
Ketch Resources Trust (KER.UN)
NAL Oil and Gas Trust (NAE.UN)
NAV Energy Trust (NVG.UN)
Paramount Energy Trust (PMT.UN)
Pengrowth Energy Trust Class B (PGF.B)
Penn West Energy Trust (PWT.UN)
Petrofund Energy Trust (PTF.UN)
Peyto Energy Trust (PEY.UN)
PrimeWest Energy Trust (PWI.UN)
Progress Energy Trust (PGX.UN)
Provident Energy Trust (PVE.UN)
Sequoia Oil and Gas Trust (SQE.UN)
Shiningbank Energy Income Fund (SHN.UN)
StarPoint Energy Trust (SPN.UN)
Thunder Energy Trust (THY.UN)
Trilogy Energy Trust (TET.UN)
Vault Energy Trust (VNG.UN)
Vermilion Energy Trust (VET.UN)
Viking Energy Royalty Trust (VKR.UN)
Zargon Energy Trust (ZAR.UN)

Midstream
AltaGas Income Trust (ALA.UN)
Enbridge Income Fund (ENF.UN)
Fort Chicago Energy Partners L.P. (FCE.UN)
Inter Pipeline Fund (IPL.UN)
Keyera Facilities Income Fund (KEY.UN)
Pembina Pipeline Income Fund (PIF.UN)
Taylor NGL Limited Partnership (TAY.UN)

Power
Algonquin Power Income Fund (APF.UN)
Atlantic Power Corporation (ATP.UN)
Boralex Power Income Fund (BPT.UN)
Calpine Power Income Fund (CF.UN)
Countryside Power Income Fund (COU.UN)
Gaz Metro Limited Partnership (GZM.UN)
Great Lakes Hydro Income Fund (GLH.UN)
Innergex Power Income Fund (IEF.UN)
Macquarie Power Income Fund (MPT.UN)
Northland Power Income Fund (NPI.UN)
TransAlta Power, L.P. (TPW.UN)
TransCanada Power, L.P. (TPL.UN)

Energy Services
Badger Income Fund (BAD.UN)
Builders Energy Services Trust (BET.UN)
Cathedral Energy Services Income Trust (CET.UN)
CCS Income Trust (CCR.UN)
Formost Industries Income Fund (FMO.UN)
Newalta Income Fund (NAL.UN)
Mullen Group Income Fund (MTL.UN)
Peak Energy Services Trust (PES.UN)
Phoenix Technology Income Fund (PHX.UN)
Stoneham Drilling Trust (SDG.UN)
Total Energy Services (TOT.UN)
Trimac Income Fund (TMA.UN)
Trinidad Energy Services Income Trust (TDG.UN)
Wellco Energy Services Trust (WLL.UN)

Corporations
Calfrac Well Services Ltd. (CFW)
Compton Petroleum Corporation (CMT)
Duvernay Oil Corp. (DDV)
Enbridge Inc. (ENB)
Enerflex Systems Ltd. (EFX)
Ensign Energy Services Inc. (ESI)
Husky Energy Inc. (HSE)
Nexen Inc. (NXY)
Niko Resources Ltd. (NKO)
NuVista Energy Ltd. (NVA)
Petro-Canada (PCA)
PetroKazakhstan Inc. (PKN)
Precision Drilling Corporation (PD)
Shell Canada Limited (SHC)
Suncor Energy Inc. (SU)
Talisman Energy Inc. (TLM)
TransCanada Corporation (TRP)
Real Resources Inc. (RER)
Western Oil Sands, Inc. (WTO)

Miscellaneous
Avenir Diversified Income Trust (ART.UN)
Fording Canadian Coal Trust (FDG.UN)
Westshore Terminals Income Fund (WTE.UN)


Restrictions

The Exchange Option is not a takeover bid for any of the Issuers and is not to be construed as an offering of any securities in the United States of America or to any resident thereof.

Strategic Energy Fund

Strategic Energy Fund is an investment trust that seeks to provide Unitholders with superior rates of return through a diversification strategy focused on investment opportunities within the Canadian energy sector. The Fund invests in established companies as well as early-stage energy companies and to a lesser extent special energy issuers, each with prospects for high growth in the near to medium term and the potential for long-term capital appreciation.

Trading information and NAV

Strategic Energy Fund units trade on the TSX under the symbol SEF.UN.

The Fund's Net Asset Value as at the close of business on July 27, 2005 was $14.63 per unit.

Sentry Select Capital Corp.

The Investment Advisor is Sentry Select Capital Corp., which is a wealth management company with gross assets under management in excess of $7 billion, including more than $1.4 billion in energy sector-related investments.

Agents

The syndicate for the Offering is being co-led by First Associates Investments Inc. and Canaccord Capital Corporation.

Forward looking statements

This news release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements relate to, among other things, the future performance of the Fund, including the potential for future distributions. When used in this news release, the words "in the future" and "believe" and the use of the future tense generally identify forward-looking statements. These statements reflect the Fund's and the Manager's current expectations, but are subject to a number of risks and uncertainties. Due to the many risks and uncertainties, The Fund and the Manager cannot assure that the forward-looking statements contained in this news release will be realized.



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