CALGARY, Jan. 11 /PRNewswire-FirstCall/ -- Focus Energy Trust ("Focus") (FET.UN - TSX) announces today that the Board of Directors of FET Resources Ltd. has set the distribution policy for the first quarter of 2007 at monthly distributions of $0.14 per trust unit. Further, Focus has declared a distribution of $0.14 per trust unit to be paid on February 15, 2007 in respect of January production, for unitholders of record on January 31, 2007. The ex-distribution date is January 29, 2007.
Ex-Distribution Distribution Distribution
Record Date Date Payment Date per Unit
--------------- ----------------- ----------------- ---------------
January 31 January 29, 2007 February 15, 2007 $0.14
February 28 February 26, 2007 March 15, 2007 $0.14(x)
March 31 March 28, 2007 April 16, 2007 $0.14(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 approximately equal to cash flow. As the forward strip for natural gas has continued to weaken significantly over the last several months, there has been a corresponding reduction in expected 2007 cash flow which has prompted an examination of our capital programs and distribution levels. We remain concerned about further short term weakness in natural gas prices and believe that we need to act in a prudent and proactive manner to ensure sustainability. To that end we have elected to reduce our distributions and trim back our capital programs for 2007. As a result, our production and capital guidance for 2007 will be closer to the lower end of the ranges provided in our 2006 Third Quarter Report. Our inventory of quality drilling prospects continues to be profitable at a flat $5.00/GJ gas price. We are prepared to expand our capital programs should we see a reduction in capital costs or an increase in natural gas prices. Low natural gas prices are tempering the record drilling levels and service costs, and we are encouraged by early signs of increased capital efficiencies, and ultimately greater opportunities within the industry. Focus is well positioned going forward with its sustainable business strategy, extensive drilling inventory, and a strong financial position.
The Trust continues to use price protection through longer term physical delivery contracts and financial contracts to reduce the volatility in commodity prices. The following is a summary of Focus' current financial and physical forward sales arrangements.
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Price Protection 2007 2008
(volume and -------------------------------------------------
reference price) Q1 Q2 Q3 Q4 Q1
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Natural gas mmcf/d 81.9 77.5 77.5 45.0 28.3
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CDN$/mcf $8.68 $8.01 $8.01 $8.26- $8.62-
$8.43 $9.02
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Crude oil bbls/d 400 400 400 400 -
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CDN$/bbl $70.00- $70.00- $70.00- $70.00- -
$79.00 $79.00 $79.00 $79.00
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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.
