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True Energy Trust Provides Operational Update

View All News Releases January 20, 2009


    CALGARY, Jan. 20 /CNW/ - True Energy Trust ("True" or the "Trust")
provides the following operational update:


    True's financial plan for 2009 is focused on preserving its liquidity
position and financial flexibility. On December 12, 2008, True declared a
fifty percent reduction in its monthly distribution to $0.02 per unit
commencing with the December 2008 distribution which was payable to
unitholders on January 15, 2009.
    As a result of the deterioration in economic conditions, including the
significant decline in crude oil prices, a weakening outlook for natural gas
demand and a heightened risk in the credit markets, True deemed it prudent to
ensure alignment between the distribution level and the prevailing environment
in order to preserve its liquidity and financial position.
    On January 8, 2009 True announced a January 2009 distribution of $0.02
per unit, which is payable to unitholders on February 17, 2009. Distribution
levels are subject to monthly confirmation by the Board of Directors, based on
commodity prices, hedging program, anticipated production volumes and market


    True's production and operations have been impacted by the extreme
weather conditions experienced in western Canada in December 2008 and January
2009. Approximately 950 boe/d was affected through a combination of delayed
servicing and freeze offs. Approximately 350 boe/d of the 950 boe/d affected
is back on line and another 350 boe/d is imminent. The remaining 250 boe/d
will remain shut-in awaiting improved commodity pricing and/or further
moderations in the weather.
    Q4 2008 field production volumes averaged approximately 10,750 boe/d,
contributing to a full year average of approximately 11,900 boe/d. Based on
minimal capital spending, and normal declines, 2009 production volumes are
anticipated to average 10,000 boe/d to 10,500 boe/d.


    During the fourth quarter of 2008, True drilled or participated in 10
(5.1 net) wells including 1.6 net natural gas wells and 2 net light oil wells.
1.5 net wells were dry and abandoned.
    During the third and fourth quarters of 2008 True drilled and completed 3
100% Viking light oil horizontal wells in the Kerrobert area. The Trust is
currently evaluating the results of the multi-stage fracturing completions and
will defer further development until commodity prices improve. Contingent upon
final well densities, up to 30 further locations have been identified.
    True continued its farm-out activities in non-core areas. During the
fourth quarter True was successful in farming out its interest in 12,700 net
acres located in British Columbia. The arrangement will see True carried
through the drilling and completion phases of the program with the ability to
retain a small working interest and remain involved in a key Montney play.
    At December 31, 2008 True's land base, located in Alberta, Saskatchewan,
and British Columbia consisted of 375,000 net undeveloped acres in addition to
301,000 net developed acres.

    2009 Capital Spending

    True intends to fund its 2009 capital program from available cash flow.
Based on the current commodity price outlook True's total 2009 capital program
is not expected to exceed $15 million and will reflect the prevailing view of
commodity pricing and cash flow, available business opportunities and industry
cost trends.
    The impressive depth of experience recently added to the management team
is focused on both increasing production from the existing assets and high
grading the Trust's extensive internal inventory and land base. In addition to
continued optimization and performing necessary maintenance programs, the
first half 2009 capital spending is currently planned to be limited to the
tie-in of Saddle Lake area natural gas wells drilled in the fourth quarter of

    Cost Reduction Initiatives

    True has targeted reductions in general and administrative expenses early
in 2009 and will continue to focus on opportunities to reduce operating costs.
Cost reductions, in combination with limiting capital spending in the first
half of 2009, will add to financial flexibility and better position True to
operate in the current difficult economic environment.
    As part of the general and administrative cost reductions, True has
streamlined its operations and reduced head office staffing levels and costs
by approximately one third.


    The Trust's capital structure includes a revolving bank credit facility
and unsecured subordinated convertible debentures.
    True's extendible, revolving bank credit facility was renewed on June 26,
2008 with an authorized loan amount of $152 million consisting of a $15
million demand operating facility and a $137 million extendible revolving term
syndicated credit facility. True's authorized loan amount was confirmed at
$152 million effective September 30, 2008 with the next borrowing base review
scheduled for March 31, 2009. As at December 31, 2008, True had approximately
$133 million drawn on the facility leaving $19 million available to assist in
managing our operations and capital program. True is fully compliant with all
of its debt covenants.
    Maturing on June 30 2011, the $86.25 million principal amount of the 7.5%
unsecured convertible debentures represents about $80 million, or
approximately 38%, of the Trust's total net debt of $213 million. True is
fully compliant with all the terms of its Trust Indenture.
    At September 30, 2008 the Trust and its operating subsidiaries had
approximately $472 million in quality tax pools available to deduct against
future income taxes.
    True maintains an active price risk management program. Approximately 25%
of the Trust's natural gas production is hedged through 2009 at an average
AECO price of about $8.28/mcf. Approximately 12% of first quarter 2010 natural
gas production is hedged at $8.79/mcf. No liquids volumes are currently

    An updated corporate presentation is available on True's website True Energy Trust is an exploration and production
oil and gas trust based in Calgary, Alberta, Canada.

    Forward Looking Statements: Certain information set forth in this news
release, including management's assessment of future plans and operations,
level of capital expenditures, the nature of such expenditures and the method
of funding, tie-in plans, production estimates and the timing of bringing
shut-in production back on-line, may contain forward-looking statements, and
necessarily involve risks and uncertainties, certain of which are beyond
True's control including, risks associated with oil and gas exploration,
development, exploitation, production, marketing and transportation, loss of
markets and other economic and industry conditions, volatility of commodity
prices, currency fluctuations, imprecision of reserve estimates, environmental
risks, competition from other producers, inability to retain drilling
services, incorrect assessment of value of acquisitions and failure to realize
the benefits therefrom, delays resulting from or inability to obtain required
regulatory approvals, the lack of availability of qualified personnel or
management, risks related to stock market volatility and ability to access
sufficient capital from internal and external source and economic or industry
conditions. Actual results, performance or achievements, including
confirmation of cash distributions could differ materially from those
expressed in, or implied by, these forward-looking statements and,
accordingly, no assurance can be given that any events anticipated by the
forward-looking statements will transpire or occur, or if any of them do so,
what benefits that True or its securityholders will derive therefrom.
Additional information on these and other factors that could affect True are
included in reports on file with Canadian securities regulatory authorities
and may be accessed through the SEDAR website (, at True's
website ( Furthermore, the forward-looking statements
contained in this news release are made as of the date of this news release,
and True does not undertake any obligation to update publicly or to revise any
of the included forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be expressly required
by applicable securities law.

    Barrels of oil equivalent ("boes"): may be misleading, particularly if
used in isolation. A boe conversion ratio of 6 mcf : 1 barrel, as utilized
herein, is based on an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value equivalency at the

    %SEDAR: 00021401E

Bellatrix Exploration Ltd.
1920, 800 5th Avenue SW
Calgary, Alberta T2P 3T6
Main: 403-266-8670
Fax: 403-264-8163
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