One year ago, we wrote about how weak global economic and financial market conditions had dominated the headlines, creating a challenging environment in which to operate an oil and gas business. We also wrote, that it is during these times of uncertainty that well managed companies with strong balance sheets may find opportunity. Today, I am pleased to report that over the past 12 months, NAL has created positive momentum through consistent and reliable operations in southeast Saskatchewan, the emergence of the Cardium oil resource play in central Alberta and the successful execution of several transactions to add attractive opportunities, all while maintaining a strong balance sheet position.
 
After posting another solid quarter, the Trust remains on track to deliver results within guidance for 2009. Financially, NAL continues to retain more than $200 million in available credit on its $450 million credit facility. We have recently completed the mid-year review on our bank line and all banks have confirmed the $450 million line of credit. With nine months of operations behind us in 2009, management has tightened the Trust’s guidance to reflect increased confidence in attaining our targets. The capital budget is expected to be $135 million and provide full year production volumes in the range of 23,500 boe/d – 24,000 boe/d. The Trust’s 2009 total payout ratio (including capital) is anticipated to be in the 110 percent range, well within our financial capability.

With three significant transactions already completed this year, the recently announced Breaker transaction is another example of a deal that fits the Trust’s strategic direction and acquisition criteria well. This $400 million transaction adds a concentrated low risk opportunity base in a high working interest operated portfolio. These opportunities complement NAL’s horizontal drilling experience in Saskatchewan and multi-stage fracture stimulation applications in the Cardium oil resource in Central Alberta. Breaker’s production is 46 percent weighted to oil and allows the Trust to maintain a balanced 50/50 oil and gas ratio going forward. Breaker has been on the Trust’s radar screen for some time and the opportunity to acquire quality assets with running room is unique in the junior sector. We are excited about this transaction and look forward to welcoming Breaker’s shareholders. The deal is expected to close on or about December 10, 2009.

As we look toward 2011, we remain committed to a plan of converting to a dividend paying corporation and will strive to deliver results and to capture value adding opportunities with our financial partner Manulife Financial Corporation.

Andrew B. Wiswell
President & Chief Executive Officer