October 03, 2005 07:00 ET

TerraVest Completes Acquisition of Diamond Energy Services and Increases Annual Unitholder Distribution $0.05 per Unit

EDMONTON, ALBERTA--(CCNMatthews - Oct. 3, 2005) - TerraVest Income Fund (TSX:TI.UN) today announced that it has completed the purchase of an 87% interest in Diamond Energy Services Inc., an oil and natural gas well servicing company headquartered in Swift Current, Saskatchewan. Diamond is the Fund's fifth acquired business since it commenced operations in July 2004.

As a result of the accretive nature of the Diamond acquisition, TerraVest's trustees have approved a $0.05 increase in the annual distribution to $1.33 per Unit, effective with the distribution to be paid on November 15, 2005 to unitholders of record on October 31, 2005. This increase is the third since the Fund was established.

TerraVest invested $33.7 million for its interest in Diamond, using existing financial resources and debt facilities. Established in 1996, Diamond was privately owned by individual and institutional investors, who unanimously approved the acquisition by TerraVest on September 30. Diamond's management team retains ownership of the remaining 13% of the business.

With 130 employees, Diamond had revenue and EBITDA of $20.8 million and $5.9 million, respectively, for the 12 months ended July 2005.

Diamond provides well servicing to the oil and natural gas sector in southwestern Saskatchewan and Alberta. It operates through two divisions:

- Diamond Sage Well Services, which operates seventeen oil and gas well servicing rigs and one swabbing unit from facilities in Swift Current, Saskatchewan and Red Deer, Alberta

- Diamond Coiled Tubing, which operates six coiled tubing units from facilities in Swift Current, Saskatchewan and Medicine Hat, Alberta

Diamond's service rigs and coiled tubing units are contracted to operators of oil and natural gas production wells during their life cycle for new completions, maintenance, work-overs and abandonments.

"Diamond meets all of our investment criteria because of its diversified customer base, strong track record of profitable growth, excellent market position and skilled professional team," said Dale Laniuk, TerraVest's Chief Executive Officer.

Further information about Diamond can be obtained at the TerraVest web site: http://www.terravestincomefund.com or at http://www.diamondenergy.ca.

TerraVest is a publicly traded income trust with a portfolio of diversified
businesses and whose stated objective is to provide stable and increasing cash returns to its unitholders. The Fund has increased per unit distributions more than 25% since its inception in July, 2004. Its mandate is to build a diversified portfolio of 6-8 high quality, mid-sized companies over a 2-3 year period for outstanding growth in per unit distributions and income stability.

Information about TerraVest Income Fund

The Fund now has five investments:

- RJV is one of the largest providers of wellhead processing equipment for
the Canadian natural gas industry.

- Stylus is one of Canada's leading made-to-order upholstered furniture

- Don Park is one of Canada's leading manufacturers and suppliers of heating and ventilation equipment.

- Diamond Energy Services is an oil and natural gas well servicing company headquartered in Swift Current, Saskatchewan

- Ezee-On manufactures heavy duty equipment for large acreage grain farms and livestock operations.

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