CALGARY, July 12 /PRNewswire-FirstCall/ -- Focus Energy Trust ("Focus") (FET.UN - TSX and FTX - TSX ) announces today that the Board of Directors of FET Resources Ltd. has set the distribution policy for the third quarter of 2006 at monthly distributions of $0.16 per trust unit. Further, Focus has declared a distribution of $0.16 per trust unit to be paid on August 15, 2006 in respect of July production, for unitholders of record on July 31, 2006. The ex-distribution date is July 27, 2006.
Record Ex-Distribution Distribution Distribution
Date Date Payment Date per Unit
------ --------------- ------------ ------------
July 31 July 27, 2006 August 15, $0.16
2006
August 31 August 29, 2006 September 15, $0.16 ((x))
2006
September 30 September 27, October 16,
2006 2006 $0.16 ((x))
((x)) Estimated distributions based upon current market outlook and
are subject to change.
Focus adheres to a business strategy of sustainability where the sum of capital expenditures and distributions is equal to cash flow. As the forward strip for natural gas has weakened significantly over the last several months, there has been a correspondingly large reduction in expected future cash flow, which has prompted an examination of our capital programs and distribution levels. We have reviewed our capital programs in detail and stress tested their profitability at a flat $5.00/GJ gas price. All of our projects remain profitable under this gas price assumption. We have also reviewed the drilling inventory on both our existing Focus assets and the recently acquired Profico properties, and remain encouraged by the depth and quality of opportunities available to us. As a result of this analysis, we have elected to maintain our capital programs and manage sustainability by reducing distributions.
The Trust continues to supplement its hedging and physical forward sales portfolio in light of the weakness in natural gas prices. The following is a summary of Focus' current financial and physical forward sales arrangements.
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2006 2007
Price Protection ----------------------------------------------
(volume and reference price) Q3 Q4 Q1
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Natural gas Mmcf/d 61.3 73.2 69.6
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CDN$/mcf $ 8.43-$ 8.69 $ 8.43-$ 8.50 $ 8.53
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Heat content
GJ/mcf 1.06 1.05 1.06
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Crude oil Bbls/d 700 700 -
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CDN$/bbl $62.73-$68.44 $62.73-$68.44 -
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The exchangeable shares of FET Resources Ltd. (FTX - TSX) are convertible into trust units of Focus based on the exchange ratio, which is adjusted monthly to reflect the distribution paid on the trust units. Cash distributions are not paid on the exchangeable shares.
Focus Energy Trust is a natural gas weighted energy trust. Focus is committed to maintaining its emphasis on operating high-quality oil and gas properties, delivering consistent distributions to unitholders, and ensuring financial strength and sustainability.
Forward-Looking Statements - Certain information set forth in this document, including management's assessment of Focus' future plans and operations, contains forward-looking statements. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Focus' control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Focus' actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance 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 Focus will derive therefrom. Focus disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
