CALGARY--(CCNMatthews - March 1) - NAL Oil & Gas Trust (TSX:NAE.UN) (the "Trust") is pleased to announce that it has reached an agreement in principle for the restructuring of the existing management agreement (the "Agreement") with NAL Resources Management Limited (the "Manager"). The Manager is a wholly-owned subsidiary of Manulife Financial Corporation ("Manulife"). The Agreement has been in place since the Trust's inception in 1996.

In connection with the restructuring of the Agreement, the Trust will pay a one time $30 million restructuring fee (the "Restructuring Fee") to the Manager. The Manager will then subscribe for 1,592,357 trust units of the Trust at a price of $18.84 per trust unit. The trust units will be subject to a contractual lock-up agreement which will restrict their disposition over a three year period. The transaction is expected to close on or about May 31, 2006.

The Trust, NAL Energy Inc. and the Manager have agreed to prepare and enter into a new management agreement (the "New Agreement"), which will provide the following principal benefits for the Trust:

- Eliminating the base and performance fees payable by the Trust effective January 1, 2006. These fees totaled approximately $21 million over the period 2003 to 2005, with $10 million being paid in full-year 2005.

- Maintaining the existing management team to manage the Trust's assets and the oil and gas assets of Manulife.

- Committing the Manager to a 10-year contract with two five-year renewal terms (at the Trust's option) with the Manager having the right to give an 18-month termination notice effective at the end of each of the five-year renewal periods. The Trust will be permitted to terminate the New Agreement at any time on 90 days notice with no further termination payment required.

- Enhancing the Trust's oversight and governance of the affairs of the Manager by including representatives of the Trust on the Manager's board of directors.

- Requiring the Manager and Manulife to obtain the consent of the Trust prior to the completion of certain transactions involving the Manager.

- Providing the Trust the right to purchase the Manager in certain circumstances for nominal value plus a portion of the book value of the capital assets of the Manager.

In addition to the benefits outlined above, the elimination of the base and performance fees payable by the Trust to the Manager is expected to be accretive to a unitholder on a net asset value per unit basis and 2006 cash flow per unit basis.

The restructuring transaction is subject to a number of terms and conditions including:

- the completion of definitive documentation;

- approval by the unitholders of the Trust at the annual general and special meeting of unitholders to be held on or about May 31, 2006; and

- receipt of all regulatory, governmental and other third party approvals and consents required to permit the completion of the restructuring transaction.

An independent committee (the "Independent Committee") consisting of four of the independent directors of the Trust evaluated various options with respect to the relationship between the Trust and the Manager and the restructuring of the Agreement. As a part of the process, the Independent Committee retained the services of RBC Capital Markets to provide independent financial advice on the proposed restructuring transaction and an opinion as to the fairness of the transaction to the Trust, from a financial point of view.

The Independent Committee had several objectives in pursuing the restructuring of the Agreement, including:

- maintaining the existing management team to manage the Trust's assets;

- enhancing the Trust's oversight and governance of the affairs of the Manager;

- ensuring that the economic benefits to unitholders realized by eliminating future fees would exceed the cost of the reorganization and be accretive to unitholders; and

- better aligning the interests of the Manager with the interests of unitholders.

RBC Capital Markets has provided the Independent Committee with a verbal opinion subject to a review of the definitive documentation, that the consideration to be paid to the Manager by the Trust is fair, from a financial point of view, to the Trust. The Independent Committee has approved the transaction.

Charles Caty, Chairman of the Board and of the Independent Committee stated, "The restructuring of the Agreement is a major milestone for the Trust. The New Agreement will eliminate base and performance fees, lock in a long-term relationship with the Manager and its management team, provide the Trust with flexibility in the event that the New Agreement is terminated and allow for direct involvement by the Trust's board in the governance and investment oversight of the Manager."

Leo de Bever, Executive Vice President of Manulife and member of the Board of the Trust commented, "We recognize the changes to management agreements in the marketplace, and look forward to building on the mutually beneficial relationship that has worked so well in the last decade."

Andrew Wiswell, President and CEO of the Trust, commented, "The New Agreement will clarify the rights and obligations of the Manager and the Trust. It will allow all parties to the New Agreement to continue to enjoy the ongoing benefits of the relationship and, through the elimination of management fees and enhanced governance, enable the Trust to continue building unitholder value."

NAL has scheduled a conference call and webcast for Thursday, March 2, 2006 at 8:00 a.m. MST (10:00 a.m. EST) at which time it will discuss 2005 fourth quarter and full year results as well as this restructuring of the Management Agreement. To participate in the conference call, please dial (403) 398.9531 in the Calgary area or (800) 814.4862 elsewhere in North America. A simultaneous webcast will be available at www.newswire.ca/en/webcast/viewEvent.cgi?eventID=1377420.

NAL Oil & Gas Trust is an open-end investment trust founded in 1996. It generates cash distributions through the acquisition, development, production and marketing of crude oil, natural gas and natural gas liquids. The Trust owns high quality assets in Alberta, Saskatchewan and Ontario. Trust units trade on the Toronto Stock Exchange under the symbol "NAE.UN".

Contact Information:

NAL Oil & Gas Trust
Gordon Currie
Manager of Investor Relations
(403) 294-3620 or Toll Free: 1-888-223-8792
Fax: (403) 515-3407
Email: Investor.Relations@nal.ca
Website: www.nal.ca