Calgary-based Bonavista Energy Trust announced Tuesday it has entered into an agreement whereby, through a series of transactions, it will pay C$275 Million for all of the Canadian oil and natural gas assets from a privately held U.S.-controlled corporation.

The assets are mainly long-life, high quality natural gas and light oil producing properties concentrated in the Peace River Arch area, Central and Eastern Alberta, the Bonavista announcement said. Payment will include 10,400,000 equivalent trust units of Bonavista, plus C$100 million in cash with a transaction date effective Nov. 1, 2003.

The acquisition is expected to close Dec. 1, 2003 and completion of the transaction is subject to customary regulatory approvals and other conditions. For accounting purposes, the purchase price consideration upon closing is estimated to be approximately C$275 million, subject to final adjustments.

The assets are located adjacent to Bonavista’s existing properties in the Peace River Arch, Central and Eastern Alberta core areas. Current production from the assets is approximately 7,800 barrels of oil equivalent per day (boe/d), including 30 MMcf/d of natural gas and 2,800 barrels per day (bbls/d) of light 37 degree API oil and liquids.

The transaction will increase Bonavista’s overall current production by 22% to approximately 42,800 boe/d. The acquisition also includes approximately 252,000 net acres of highly prospective undeveloped land, which has been valued independently at C$22.1 million and over 16,000 kms of 2D and over 200 square kms of 3D seismic data covering these lands.

Bonavista, one of the largest royalty trusts in North American, said the acquisition provides the following financial and operational benefits to unitholders of the royalty trust:

Bonavista is a conventional oil and gas royalty trust created through the re-organization of Bonavista Petroleum Ltd. in July 2003. Its base of operations are geographically focused within Alberta and Saskatchewan. As of Sept. 1, 2003, the trust had production of approximately 34,500 boe/d consisting of 55% natural gas, 25% light and medium oil, and 20% heavy oil.

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