CALGARY--(CCNMatthews - March 4) - NAL Oil & Gas Trust (TSX:NAE.UN)
(the "Trust" or "NAL") today provided the following guidance for 2005:
Production
NAL anticipates production for 2005 to total approximately 19,700
barrels of oil equivalent per day(*) ("boed"). This estimate includes
11 months of production from the recent acquisition of Addison Energy
Inc. The production mix in 2005 is expected to be approximately 57%
liquids and 43% natural gas.
Capital Expenditures
The Trust plans a very active year in 2005, which includes:
- continued oil development activities in southeast Saskatchewan;
- drilling on recently acquired central Alberta assets, including
pilot and development programs for coalbed methane in the areas
of Nevis and Clive;
- continuation of the Second White Specks shallow gas program at
Brent/Hanna in southeastern Alberta;
- participation in 20 new vertical wells offshore Lake Erie,
targeting gas
The total 2005 capital program is estimated to be $68 million.
Approximately 54% will be allocated to the expanded central Alberta
core areas, approximately 42% to southeast Saskatchewan, and the
balance to our Lake Erie operation.
Hedging
Although NAL continues to remain confident on the future strength of
oil and gas prices, one of the Trust's key strategies is disciplined
balance sheet management. The additional debt added by the recent
acquisition means that the Trust has more exposure to a downturn in
commodity prices than during the last eight months when no hedges were
in place. In order to mitigate this exposure, NAL has entered into the
following commodity price hedge arrangements:
- 3,900 barrels of oil per day, or about 50% of its net daily oil
production, at a fixed price of Cdn$63.85/barrel for the period
of April 1 to December 31, 2005
- 17,000 Gigajoules ("GJ") per day, or about 50% of its net daily
natural gas production, at a fixed price of Cdn$6.95/GJ for the
period of April 1 to October 31, 2005.
NAL Oil & Gas Trust is an open-end investment trust created to make
investments in high quality oil and natural gas assets. The Trust Units
trade on the Toronto Stock Exchange under the symbol "NAE.UN".
(*) When converting natural gas to equivalent barrels of oil within
this report, NAL uses the widely recognized standard of 6 thousand cubic
feet (mcf) to one barrel of oil equivalent (boe). However, boes may be
misleading, particularly if used in isolation. A boe conversion ratio
of 6 mcf : 1 bbl is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead.
Forward-Looking Statements
This disclosure contains certain forward-looking statements that
involve substantial known and unknown risks and uncertainties, many of
which are beyond NAL's control, including: the impact of general
economic conditions in Canada and in the United States, industry
conditions, changes in laws and regulations including the adoption of
new environmental laws and regulations and changes in how they are
interpreted and enforced, increased competition, the lack of
availability of qualified personnel or management, fluctuations in
foreign exchange or interest rates, stock market volatility and market
valuations of companies with respect to announced transactions and the
final valuations thereof, and obtaining required approval of regulatory
authorities. NAL's actual results, performance or achievement could
differ materially from those expressed in, or implied by, these
forward-looking statements and, accordingly, no assurances can be given
that any of the events anticipated by the forward-looking statements
will transpire or occur, or if any of them do so, what benefits,
including the amount of proceeds, that NAL will derive therefrom.
NAL Oil & Gas Trust Marie Buchmuller Investor Relations (403) 294-3620 or Toll Free: 888-223-8792 (403) 294-3699 (FAX) Email: Investor.Relations@nal.ca Website: www.nal.ca