Fort Chicago announces 2009 fourth quarter and annual results, and updated
2010 guidance

/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES./

    
    Trading Symbol: FCE.UN
    Exchange: TSX
    

CALGARY, March 2 /CNW/ - Fort Chicago Energy Partners L.P. ("Fort Chicago" or "the Partnership") today announced its results for the three and 12 months ended December 31, 2009. Mr. Stephen H. White, President and Chief Executive Officer commented, "We are pleased with our performance in 2009. Our pipeline and NGL businesses either met or exceeded our expectations by generating strong results from operations. Our power business was also on track to report solid financial results, but was dealt a regulatory setback in California in August, which resulted in our taking a significant non-cash charge this quarter."

    
    Highlights for the Three Months and Year Ended December 31, 2009

    -   Net income for the year of $37.6 million or $0.28 per Unit
    -   Adjusted net income for the year of $83.5 million or $0.61 per Unit
    -   Distributable cash for the year of $149.1 million or $1.10 per Unit
    -   Cash from operating activities for the year of $210.7 million
    -   Net loss for the three months of $24.5 million or $0.18 per Unit
    -   Adjusted net income for the three months of $19.2 million or $0.14
        per Unit
    -   Distributable cash for the three months of $34.0 million or $0.25 per
        Unit
    -   Cash from operating activities for the three months of $43.7 million
    -   Aux Sable acquired Septimus Gas Plant in December
    -   Construction of East Windsor Cogeneration Facility completed and
        placed into service in November
    -   Acquisition of Glen Park hydro-power generation facility announced in
        December


    Financial Highlights

    -------------------------------------------------------------------------
                                    Three months ended            Year ended
                                           December 31           December 31
    -------------------------------------------------------------------------
    ($ Thousands, except
     per Unit amounts)                 2009       2008       2009       2008
    -------------------------------------------------------------------------
    Revenues
    Pipeline(1)                     110,269    116,963    422,912    426,999
    NGL                              57,534     28,291    149,709    180,351
    Power                            18,027     23,187     75,709     93,429
    Fort Chicago - Corporate             43        188        803        651
    -------------------------------------------------------------------------
                                    185,873    168,629    649,133    701,430
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net income (loss) before tax
    Pipeline                         25,383     26,096    105,923    113,897
    NGL                              27,393     (1,601)    50,805     63,926
    Power                           (82,866)   (26,658)   (81,346)   (17,001)
    Fort Chicago - Corporate        (16,215)   (18,822)   (46,093)   (72,167)
    -------------------------------------------------------------------------
                                    (46,305)   (20,985)    29,289     88,655
    Tax recovery (expense)           21,851      3,036      8,286    (27,156)
    -------------------------------------------------------------------------
    Net income (loss)               (24,454)   (17,949)    37,575     61,499
    Per Unit ($)                      (0.18)     (0.13)      0.28       0.46
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Net of intersegment eliminations.
    

For the three months ended December 31, 2009, Fort Chicago incurred a net loss of $24.5 million or $0.18 per Unit compared to a net loss of $17.9 million or $0.13 per Unit for the same period in 2008. The decrease is attributable to a non-cash asset impairment loss of $78.1 million recorded in the fourth quarter of 2009. Fort Chicago's California cogeneration facilities were adversely affected by a regulatory energy pricing decision. Consequently, under accounting standards Fort Chicago was required to write down the book value of these assets. The net loss for the fourth quarter of 2008 included an impairment loss of $21.1 million arising from Fort Chicago's write down of goodwill. The increased net loss for the fourth quarter of 2009 was partially offset by:

    
    -   a $9.5 million gain relating to Aux Sable's liability settlement in
        association with its off-gas facility;
    -   a net $24.9 million tax recovery relating to the asset impairment
        loss and Aux Sable's settlement gain; and
    -   a $20.1 million increase in margin-based lease revenues recognized by
        Aux Sable, from $0.3 million in the fourth quarter of 2008 to
        $20.4 million in the fourth quarter of 2009. Fractionation margins
        for the fourth quarter of 2009 were considerably higher than during
        the same period of the prior year, when the economic downturn
        severely weakened NGL market conditions.

    For the year ended December 31, 2009, net income was $37.6 million or
$0.28 per Unit compared to $61.5 million or $0.46 per Unit for 2008. In
addition to the effect of the fourth quarter asset impairment loss discussed
above, the decrease in net income reflects:

    -   an $18.4 million decrease in margin-based lease revenues, from
        $67.7 million in 2008 to $49.3 million in 2009, as 2009 NGL market
        conditions did not reach the record levels of the first nine months
        of 2008; and
    -   the absence of non-recurring gains recognized in the first quarter of
        2008 relating to Alliance's cash settlement with Calpine Energy
        Services Canada Partnership and a non-cash gain arising from the
        dilution of the Partnership's ownership interest in Pristine Power
        Inc.

    These decreases were partially offset by a $19.8 million reduction in the
deemed realization of corporate foreign exchange losses previously deferred
and recorded in other comprehensive income.

    -------------------------------------------------------------------------
                                    Three months ended            Year ended
                                           December 31           December 31
    -------------------------------------------------------------------------
    ($ Thousands, except
     per Unit amounts)                 2009       2008       2009       2008
    -------------------------------------------------------------------------
    Adjusted net income (loss)
     before tax(2)
      Pipeline                       25,383     26,096    105,923    103,877
      NGL                            17,921     (1,601)    41,333     63,926
      Power                          (4,815)    (5,553)      (853)       (96)
      Fort Chicago - Corporate      (16,215)   (18,822)   (46,093)   (72,167)
    -------------------------------------------------------------------------
                                     22,274        120    100,310     95,540
    Tax recovery (expense)           (3,052)     3,036    (16,771)   (23,436)
    -------------------------------------------------------------------------
    Adjusted net income              19,222      3,156     83,539     72,104
    Per Unit ($)                       0.14       0.02       0.61       0.54
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (2) This item is not a standard measure under GAAP and may not be
        comparable to similar measures presented by other entities. See
        reconciliation of adjusted net income to net income in the schedules
        attached to this news release. For more information about non-GAAP
        measures used by Fort Chicago, see the section entitled "Non-GAAP
        Financial Measures" contained in Fort Chicago's 2009 Management's
        Discussion and Analysis.
    

Adjusted net income for the three months ended December 31, 2009, which excludes non-recurring items, was $19.2 million or $0.14 per Unit compared to $3.2 million or $0.02 per Unit for the same period last year, primarily reflecting a $20.1 million increase in Aux Sable's margin-based lease revenues. Fourth quarter adjusted net income from the Partnership's pipeline and power businesses was consistent with the same period last year.

Adjusted net income for the year ended December 31, 2009 was $83.5 million or $0.61 per Unit compared to $72.1 million or $0.54 per Unit for 2008, primarily reflecting a significant decrease in the deemed realization of corporate foreign exchange losses previously deferred and recorded in other comprehensive income. This was partially offset by an $18.4 million decrease in margin-based lease revenues from Aux Sable, reflecting the year-over-year change in NGL market conditions. 2009 adjusted net income from the Partnership's pipeline and power businesses was consistent with last year.

    
    -------------------------------------------------------------------------
                                    Three months ended            Year ended
                                           December 31           December 31
    -------------------------------------------------------------------------
    ($ Thousands, except
     per Unit amounts)                 2009       2008       2009       2008
    -------------------------------------------------------------------------
    Distributable cash(3)
      Pipeline                       32,650     33,151    134,413    137,228
      NGL                            18,934        579     45,584     69,504
      Power                          (2,006)       856     14,841      9,943
      Fort Chicago - Corporate       (9,760)    (7,507)   (29,812)   (32,213)
      Taxes                          (5,817)    (4,595)   (15,959)   (24,313)
    -------------------------------------------------------------------------
                                     34,001     22,484    149,067    160,149
    -------------------------------------------------------------------------
        Per Unit                       0.25       0.17       1.10       1.20
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Cash from operating activities   43,687     39,279    210,743    262,612
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (3) This item is not a standard measure under GAAP and may not be
        comparable to similar measures presented by other entities. See
        reconciliation of distributable cash to cash from operating
        activities in the schedules attached to this news release. For more
        information about Non-GAAP measures used by Fort Chicago, see the
        section entitled "Non-GAAP Financial Measures" contained in Fort
        Chicago's 2009 Management's Discussion and Analysis.


    Distributable cash for the three months ended December 31, 2009 was $34.0
million or $0.25 per Unit compared to $22.5 million or $0.17 per Unit for the
same period in 2008. The increase primarily reflects:

    -   significantly higher distributions from Aux Sable, due to the
        recovery of NGL market conditions in 2009 from the severe downward
        shift experienced in the fourth quarter of 2008;

    partially offset by:

    -   lower energy margins from the power business, which was adversely
        affected by a regulatory decision and higher maintenance capital
        expenditures at the California cogeneration facilities;
    -   higher corporate costs due to increased administration and business
        development activity and interest associated with the $200 million
        senior notes issued by the Partnership in July 2009; and
    -   higher cash taxes associated with increased Aux Sable earnings.

    Distributions from the Partnership's pipeline business approximated
amounts generated during the same period last year.

    Distributable cash for the year ended December 31, 2009 was $149.1 million
or $1.10 per Unit compared to $160.1 million or $1.20 per Unit for 2008. The
decrease primarily reflects:

    -   lower distributions from Aux Sable, which generated record levels of
        cash flows in the first nine months of 2008;
    -   lower distributions from Alliance due to the absence of funds
        received in the first quarter of 2008 from the Calpine settlement,
        partially offset by the effect of the weaker Canadian dollar in 2009;

    partially offset by:

    -   higher distributable cash from the power business, as incremental
        cash flows from the London cogeneration facility and Brush, combined
        with lower maintenance capital costs in 2009 more than offset the
        lower energy margins earned at the California facilities in the
        latter half of the year;
    -   lower corporate costs, primarily reflecting lower interest costs for
        the year and the impact of a realized foreign exchange gain; and
    -   lower cash taxes associated with decreased Aux Sable earnings.
    

Fort Chicago generated cash from operating activities of $43.7 million for the three months ended December 31, 2009, a $4.4 million increase from the same period of the prior year as increased operating cash flows from Aux Sable offset lower operating cash flows from Alliance and higher corporate cash outflows.

For the year ended December 31, 2009, Fort Chicago generated cash from operating activities of $210.7 million compared to $262.6 million for the prior year. This decrease reflects significantly lower operating cash flows from Aux Sable due to overall NGL market conditions and increased cash outflows from corporate activities, reflecting a significant income tax payment in the first quarter of 2009 related to Aux Sable's 2008 earnings.

Regulatory Change in California Energy Pricing

In August 2009, the California Public Utilities Commission ("CPUC") released a decision on Short Run Avoided Cost ("SRAC") energy pricing for certain power facilities, including the Partnership's Ripon and San Gabriel cogeneration facilities. "The profitability of our California power assets was adversely impacted by a regulatory decision issued by the CPUC," commented Mr. White. "The SRAC changes make it less economic for us to dispatch electricity from these facilities. As a result, we expect annual cash flows to be lower by US$3 million to US$4 million going forward. Importantly, the regulator did not alter capacity payment calculations, which is the primary source of cash flows for these facilities."

"When this kind of change occurs, we are required to reassess the value of the affected assets for accounting purposes. The financial statement impact is a significant, one-time non-cash write down in the value of our California power facilities, offsetting a large portion of our other 2009 earnings. I am very disappointed we have had to cap an otherwise strong year with this sizable write down."

Key Accomplishments

"Our biggest power business-related achievement was completing the 86 megawatt East Windsor Cogeneration facility in November," commented Mr. White. "This new power facility, in which we hold a 50 percent ownership interest, will generate highly predictable cash flows under a 20-year contract with the Ontario Power Authority. This achievement was the culmination of years of hard work."

In December 2009, the Partnership announced an agreement to acquire the Glen Park facility, a 33 megawatt run-of-river hydro-power generation facility located on the Black River in upstate New York. "This long-life, environmentally-friendly facility will contribute a new source of cash flow for our business," said Mr. White. "The power business provides an important growth platform for Fort Chicago and we are committed to finding new opportunities to increase the value of this business segment.

Alliance continues to focus on expanding its reach and the value of its unique rich-gas system. Alliance and Aux Sable are working collaboratively to find new sources of liquids-rich gas to process at the Channahon facility. The massive shale gas discoveries in the Montney region of British Columbia and solution gas associated with the shale oil discoveries in the Bakken region of Saskatchewan and North Dakota provide exciting new opportunities for Alliance and Aux Sable.

A significant development in this area is the Prairie Rose Pipeline, developed by Pecan Pipeline (North Dakota) Inc. Pecan and Alliance have executed a 10-year firm transportation contract under which Pecan is delivering high heat content natural gas from the Bakken to Aux Sable's Channahon facility for processing through Prairie Rose's interconnection with Alliance.

Another important step in this direction is the strategic partnership Aux Sable developed with Crew Energy Inc. This partnership led to Aux Sable purchasing the Septimus Gas Plant from Crew in December 2009. The plant is located in the liquids-rich Montney region. Aux Sable is further leveraging its position by constructing a 20-inch, 20-kilometre gas pipeline. The pipeline is expected to be in service in the second quarter of 2010. It will transport sweet, rich gas from Septimus to an interconnection point on the Alliance pipeline for ultimate delivery to Channahon. Aux Sable and Crew are exploring other related initiatives, including expanding the capacity of the Septimus plant.

"While the advent of shale gas in the Montney and Bakken regions will benefit Alliance and Aux Sable, natural gas from the shale regions of North America could affect the ultimate timing of our LNG terminal and related gas pipeline projects, Jordan Cove and Pacific Connector," said Mr. White. In December, Jordan Cove and Pacific Connector reached significant project milestones, each receiving U.S. Federal Energy Regulatory Commission approval to construct and operate their respective facilities. "Further development of these facilities is dependent on our ability to secure necessary commercial commitments to drive the projects forward."

Updated 2010 Guidance

Fort Chicago today updated its guidance for 2010 distributable cash to be in the range of $0.85 per Unit to $1.30 per Unit, increasing the low end of the range from previously issued guidance by $0.05 per Unit. The updated range reflects Aux Sable's solid start to 2010 and an incremental contribution expected from the Glen Park acquisition. The updated guidance range also reflects an increase in the expected number of Units outstanding for 2010, as the forecast assumes Fort Chicago will leave its Distribution Reinvestment Plan activated for the remainder of 2010. Further details concerning 2010 guidance can be found in the "Investor Information" section of Fort Chicago's website - www.fortchicago.com.

Webcast

Fort Chicago Energy Partners L.P. will hold a conference call and webcast at 9:00 a.m. Mountain time (11:00 a.m. Eastern time) on Wednesday, March 3, 2010, to discuss the 2009 fourth quarter and annual results. The call can be accessed at 1-888-231-8191 or 1-647-427-7450 (conference ID 54742526) and will be broadcast live on the Internet. This can be accessed either through a link contained in the "Event" section located on the home page of Fort Chicago's website or through the following URL:

http://w.on24.com/r.htm?e=192215&s=1&k=C07D152ED6677363A125CCD96E9E82D2

A replay will be available shortly thereafter at 1-800-642-1687 and 1-416-849-0833. The access code is 54742526 (followed by the pound sign).

Fort Chicago is a publicly traded limited partnership based in Calgary, Alberta, that owns and operates energy infrastructure assets across North America. Its Class A Units are listed on the TSX under the symbol FCE.UN. Fort Chicago is engaged in three principal businesses: a pipeline transportation business comprised of interests in two pipeline systems, the Alliance Pipeline and the Alberta Ethane Gathering System; an NGL extraction business which includes a significant interest in a world-class extraction facility near Chicago; and a power business with cogeneration facilities in Ontario, Colorado and California, district energy systems in Ontario and Prince Edward Island and waste heat power facilities along the Alliance Pipeline. Fort Chicago and its businesses are also actively developing a number of greenfield investment opportunities that will be a key source of future growth, including LNG and pipeline facilities on the U.S. west coast, Alberta-based ethane and NGL extraction facilities, repowering and expansion opportunities at the California power facilities and a Nova Scotia-based underground natural gas storage and pipeline facilities.

    
                     Class A Unit Ownership Restrictions
    

Fort Chicago is organized in accordance with the terms and conditions of a limited partnership agreement which provides that no Class A Units may be transferred to, among other things, a person who is a "non-resident" of Canada, a person in which an interest would be a "tax shelter investment" or a partnership which is not a "Canadian partnership" for purposes of the Income Tax Act (Canada).

Certain information contained herein relating to, but not limited to, Fort Chicago and its businesses constitutes forward-looking information under applicable securities laws. All statements, other than statements of historical fact, which address activities, events or developments that Fort Chicago expects or anticipates may or will occur in the future, are forward-looking information. Forward-looking information typically contains statements with words such as "may", "estimate", "anticipate", "believe", "expect", "plan", "intend", "target", "project", "forecast" or similar words suggesting future outcomes or outlook. Forward-looking statements in this news release include, but are not limited to, statements with respect to: the sources of additional gas supplies for transportation on the Alliance pipeline; the potential expansion of Aux Sable's Septimus gas plant; the timing of in service for Aux Sable's Septimus pipeline; Fort Chicago's ability to realize its growth objectives; Fort Chicago's ability to secure commercial commitments for the Jordan Cove LNG terminal and Pacific Connector gas pipeline projects; the timing under which Fort Chicago's acquisition of the Glen Park facility will close; and the ability of each of its businesses to generate distributable cash in 2010. The risks and uncertainties that may affect the operations, performance, development and results of Fort Chicago's businesses include, but are not limited to, the following factors: the ability of Fort Chicago to successfully implement its strategic initiatives and achieve expected benefits; levels of oil and gas exploration and development activity; the status, credit risk and continued existence of contracted customers; the availability and price of capital; the availability and price of energy commodities; the availability of construction services and materials; fluctuations in foreign exchange and interest rates; Fort Chicago's ability to successfully obtain regulatory approvals; changes in tax, regulatory, environmental, and other laws and regulations; competitive factors in the pipeline, NGL and power industries; operational breakdowns, failures, or other disruptions; and the prevailing economic conditions in North America. Additional information on these and other risks, uncertainties and factors that could affect Fort Chicago's operations or financial results are included in its filings with the securities commissions or similar authorities in each of the provinces of Canada, as may be updated from time to time. Readers are also cautioned that the foregoing list of factors and risks is not exhaustive. The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these factors are independent and management's future course of action would depend on its assessment of all information at that time. Although Fort Chicago believes that the expectations conveyed by the forward-looking information are reasonable based on information available on the date of preparation, no assurances can be given as to future results, levels of activity and achievements. Undue reliance should not be placed on the information contained herein, as actual result achieved will vary from the information provided herein and the variations may be material. Fort Chicago makes no representation that actual results achieved will be the same in whole or in part as those set out in the forward-looking information. Furthermore, the forward-looking statements contained herein are made as of the date hereof, and Fort Chicago does not undertake any obligation to update publicly or to revise any forward-looking information, whether as a result of new information, future events or otherwise. Any forward-looking information contained herein is expressly qualified by this cautionary statement.

Certain financial information contained in this news release may not be standard measures under Generally Accepted Accounting Principles ("GAAP") in Canada and may not be comparable to similar measures presented by other entities. These measures are considered to be important measures used by the investment community and should be used to supplement other performance measures prepared in accordance with GAAP in Canada. For further information on non-GAAP financial measures used by Fort Chicago see Management's Discussion and Analysis, in particular, the section entitled "Non-GAAP Financial Measures" contained in the annual Management Discussion and Analysis, filed by Fort Chicago with Canadian securities regulators.

    
    Fort Chicago Energy Partners L.P.
    -------------------------------------------------------------------------

    Consolidated Statement of Financial Position
    -------------------------------------------------------------------------
                                                    December 31, December 31,
    ($ Thousands; unaudited)                               2009         2008
    -------------------------------------------------------------------------

    Assets
    Current assets
      Cash and short-term investments                    57,945       53,308
      Restricted cash                                     3,084       23,036
      Transportation security deposits and revenue
       adjustments                                        8,538        7,989
      Receivables                                        59,155       61,935
      Inventory                                           5,071        3,913
      Prepaid expenses and other                          9,848       12,349
    -------------------------------------------------------------------------
                                                        143,641      162,530

    Long-term receivables                               351,629      273,392
    Pipeline, plant and other capital assets          2,286,255    2,547,701
    Intangible assets                                    59,647      121,267
    Other assets                                         23,727       22,789
    -------------------------------------------------------------------------
                                                      2,864,899    3,127,679
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities
    Current liabilities
      Payables                                           91,264      112,623
      Transportation security deposits                    4,008        5,581
      Distribution payable                                6,406       11,162
      Current portion of long-term senior debt          145,014       88,773
      Subordinated convertible debentures and
       exchangeable debentures                           49,302       25,717
    -------------------------------------------------------------------------
                                                        295,994      243,856

    Long-term senior debt                             1,534,689    1,753,503
    Subordinated convertible debentures                       -       23,909
    Future taxes                                        291,279      239,823
    Other long-term liabilities                          44,211       66,001
    -------------------------------------------------------------------------
                                                      2,166,173    2,327,092
    -------------------------------------------------------------------------

    Partners' Equity
    Partners' capital account                         1,057,239    1,013,278
    Cumulative other comprehensive loss                 (54,624)      (7,306)
    Cumulative net income                               583,718      546,143
    Cumulative distributions                           (887,607)    (751,528)
    -------------------------------------------------------------------------
                                                        698,726      800,587
    -------------------------------------------------------------------------
                                                      2,864,899    3,127,679
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Fort Chicago Energy Partners L.P.
    -------------------------------------------------------------------------

    Consolidated Statement of Income and Cumulative Income
    -------------------------------------------------------------------------
                                    Three months ended   Twelve months ended
                                           December 31           December 31
    -------------------------------------------------------------------------
    ($ Thousands, except per
     Unit amounts; unaudited)          2009       2008       2009       2008
    -------------------------------------------------------------------------

    Revenues
      Operating revenues            174,264    168,087    633,729    683,952
      Interest and other             11,609        542     15,404     17,478
    -------------------------------------------------------------------------
                                    185,873    168,629    649,133    701,430
    -------------------------------------------------------------------------
    Expenses
      Operations and maintenance     62,975     70,184    204,466    241,486
      Depreciation and amortization  34,574     36,244    140,903    131,095
      Interest and other finance     26,297     27,300    103,401    108,577
      General, administrative and
       project development           25,272     24,718     89,146     80,474
      Foreign exchange and other      5,009     10,063      1,435     30,038
      Asset impairment loss          78,051     21,105     80,493     21,105
    -------------------------------------------------------------------------
                                    232,178    189,614    619,844    612,775
    -------------------------------------------------------------------------
    Net income (loss) before taxes  (46,305)   (20,985)    29,289     88,655
      Current taxes                   5,923      4,597     16,330     24,378
      Future taxes                  (27,774)    (7,633)   (24,616)     2,778
    -------------------------------------------------------------------------
    Net income (loss)               (24,454)   (17,949)    37,575     61,499
    Cumulative net income at the
     beginning of the period        608,172    564,092    546,143    484,644
    -------------------------------------------------------------------------
    Cumulative net income at the
     end of the period              583,718    546,143    583,718    546,143
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net income (loss) per Unit
      Basic and diluted               (0.18)     (0.13)      0.28       0.46
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Consolidated Statements of Comprehensive Income and Cumulative Other
    Comprehensive Income
    -------------------------------------------------------------------------
                                    Three months ended   Twelve months ended
                                           December 31           December 31
    -------------------------------------------------------------------------
    ($ Thousands; unaudited)           2009       2008       2009       2008
    -------------------------------------------------------------------------

    Net income (loss)               (24,454)   (17,949)    37,575     61,499
    Other comprehensive income
     (loss), net of taxes
      Cumulative translation
       adjustment
        Unrealized foreign exchange
         gain (loss) on translation
         of self-sustaining foreign
         operations                  (9,974)    68,900    (72,148)    94,140
        Deemed realization of
         cumulative translation
         adjustment reclassified
         to net income                5,015      5,878      7,150     26,957
        Gain (loss) on hedge of
         self-sustaining foreign
         operation                    1,035    (18,446)    15,419    (24,190)
      Fair value loss transferred
       to net income                      -          -      1,427          -
      Other                            (222)    (1,480)       834     (2,121)
    -------------------------------------------------------------------------
                                     (4,146)    54,852    (47,318)    94,786
    -------------------------------------------------------------------------
    Comprehensive income (loss)     (28,600)    36,903     (9,743)   156,285
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Cumulative other comprehensive
     loss at the beginning of
     the period                     (50,478)   (62,158)    (7,306)  (102,092)
    Other comprehensive income
     (loss), net of taxes            (4,146)    54,852    (47,318)    94,786
    -------------------------------------------------------------------------
    Cumulative other comprehensive
     loss at the end of the period  (54,624)    (7,306)   (54,624)    (7,306)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Fort Chicago Energy Partners L.P.
    -------------------------------------------------------------------------

    Consolidated Statement of Cash Flows
    -------------------------------------------------------------------------
                                    Three months ended   Twelve months ended
                                           December 31           December 31
    -------------------------------------------------------------------------
    ($ Thousands; unaudited)           2009       2008       2009       2008
    -------------------------------------------------------------------------

    Operating
      Net income (loss)             (24,454)   (17,949)    37,575     61,499
      Non-cash transportation
       revenue                       (9,117)   (12,316)   (12,571)   (18,003)
      Depreciation, amortization
       and other non-cash items      31,674     38,418    138,716    127,457
      Unrealized foreign exchange
       loss                           8,674     12,740      4,030     33,796
      Future taxes                  (27,774)    (7,633)   (24,616)     2,778
      Asset impairment loss          78,051     21,105     80,493     21,105
      Changes in non-cash working
       capital                      (13,367)     4,914    (12,884)    33,980
    -------------------------------------------------------------------------
                                     43,687     39,279    210,743    262,612
    -------------------------------------------------------------------------
    Financing
      Long-term debt issued,
       net of issue costs            64,888          -    263,003          -
      Long-term debt repaid         (35,025)   (31,551)   (73,198)   (68,562)
      Net change in credit
       facilities                   (50,029)    (3,702)  (249,424)    49,961
      Distributions paid            (20,066)   (33,516)   (96,876)  (132,942)
      Other                          (4,661)    15,992     (4,744)    15,816
    -------------------------------------------------------------------------
                                    (44,893)   (52,777)  (161,239)  (135,727)
    -------------------------------------------------------------------------
    Investing
      Acquisition of Brush II
       Generation Facility, net
       of cash acquired                   -         46          -    (33,969)
      Pipeline, plant and other
       capital assets               (28,796)   (42,125)   (50,887)  (139,026)
      Restricted cash                 1,244     12,648     19,134     56,615
      Other                          (1,460)      (700)    (1,610)   (12,007)
      Changes in non-cash
       investing working capital      2,880      2,656     (6,455)       855
    -------------------------------------------------------------------------
                                    (26,132)   (27,475)   (39,818)  (127,532)
    -------------------------------------------------------------------------
    Increase (decrease) in cash
     and short-term investments
     before the effect of foreign
     exchange rate changes on cash
     and short-term investments     (27,338)   (40,973)     9,686       (647)
    Effect of foreign exchange
     rate changes on cash and
     short-term investments          (1,262)     8,675     (5,049)    10,504
    Cash and short-term
     investments at the beginning
     of the period                   86,545     85,606     53,308     43,451
    -------------------------------------------------------------------------
    Cash and short-term
     investments at the end of
     the period                      57,945     53,308     57,945     53,308
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Fort Chicago Energy Partners L.P.
    -------------------------------------------------------------------------

    Distributable Cash(1)
    -------------------------------------------------------------------------
                                    Three months ended   Twelve months ended
                                           December 31           December 31
    -------------------------------------------------------------------------
    ($ Thousands, except where
     noted; unaudited)                 2009       2008       2009       2008
    -------------------------------------------------------------------------

    Cash inflows
      Alliance distributions, prior
       to withholdings for capital
       expenditures and net of
       debt service                  28,960     29,229    119,536    121,439
      AEGS distributable cash,
       after non-recoverable
       capital expenditures and
       debt service                   3,690      3,922     14,877     15,789
      Aux Sable distributions,
       net of support payments,
       non-recoverable debt
       service costs and
       maintenance capital           18,934        579     45,584     69,504
      Fort Chicago Power
       distributable cash, after
       maintenance capital
       expenditures and debt
       service                       (2,596)       856     12,931      8,918
      NRGreen distributions,
       prior to withholding for
       project development costs        590          -      1,910      1,025
      Realized foreign exchange
       gains, interest income
       and other                         41        127      4,029        576
    -------------------------------------------------------------------------
                                     49,619     34,713    198,867    217,251

    Cash outflows
      General and administrative     (4,231)    (3,143)   (16,148)   (13,362)
      Interest and other finance     (4,762)    (3,580)   (14,248)   (16,170)
      Taxes                          (5,817)    (4,595)   (15,959)   (24,313)
      Principal repayments on
       senior debt                     (808)      (911)    (3,445)    (3,257)
    -------------------------------------------------------------------------
                                    (15,618)   (12,229)   (49,800)   (57,102)
    -------------------------------------------------------------------------

    Distributable cash(1)            34,001     22,484    149,067    160,149
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Distributable cash per
     Unit ($)(2)                       0.25       0.17       1.10       1.20
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Distributions paid/payable(3)    34,591     33,513    136,079    133,150
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Distributions paid/payable
     per Unit ($)                      0.25       0.25       1.00       1.00
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (1) Distributable cash is not a standard measure under generally accepted
        accounting principles in Canada and may not be comparable to similar
        measures presented by other entities. Distributable cash represents
        the cash available to Fort Chicago for distribution to holders of
        Units after providing for debt service obligations and any capital
        expenditures that are not growth-oriented or recoverable but does not
        include distribution reserves, if any, available in Fort Chicago's
        jointly held businesses, or project development costs, which
        represent discretionary costs, the recoverability of which has not
        been established, incurred to assess the commercial viability of new
        greenfield business initiatives unrelated to the Partnership's
        operating businesses. Distributable cash is an important measure used
        by the investment community to assess the source and sustainability
        of Fort Chicago's cash distributions and should be used to supplement
        other performance measures prepared in accordance with generally
        accepted accounting principles in Canada. See the following table for
        the reconciliation of distributable cash to cash flow from operating
        activities.
    (2) The number of Units used to calculate distributable cash per Unit is
        based on the average number of Units outstanding at each record date.
        For the three months ended December 31, 2009, the average number of
        Units outstanding for this calculation was 138,420,675 (2008 -
        134,110,877) and 140,682,296 (2008 - 136,372,498) on a basic and
        diluted basis, respectively. For the year ended December 31, 2009,
        the average number of units outstanding for this calculation was
        136,133,938 (2008 - 133,206,799) and 138,395,599 (2008 - 136,418,546)
        on a basic and diluted basis, respectively. The number of Units
        outstanding would increase by 2,261,621 (2008 - 2,261,621) Units if
        the outstanding Convertible Debentures as at December 31, 2009 were
        converted into Units.
    (3) Includes $14.9 million (2008 - nil) and $44.0 million (2008 - nil) of
        distributions for the three and 12 months ended December 31, 2009,
        respectively, satisfied through the issuance of Units under the
        Partnership's Distribution Reinvestment Plan.



    Fort Chicago Energy Partners L.P.
    -------------------------------------------------------------------------

    Reconciliation of Distributable Cash to Cash Flow from Operating
    Activities
    -------------------------------------------------------------------------
                                    Three months ended   Twelve months ended
                                           December 31           December 31
    -------------------------------------------------------------------------
    ($ Thousands; unaudited)           2009       2008       2009       2008
    -------------------------------------------------------------------------

    Consolidated cash flow from
     operating activities            43,687     39,279    210,743    262,612
    Add (deduct): Cash flow
     generated from operating
     activities applicable to
     jointly held businesses(1)      (8,133)    (2,347)   (90,164)   (70,236)
    -------------------------------------------------------------------------
    Cash flow from operating
     activities applicable to
     wholly-owned businesses(2)      35,554     36,932    120,579    192,376

    Add (deduct) amounts
     applicable to wholly-owned
     businesses:
      Project development costs(3)    2,224      3,506     10,632     11,628
      Change in non-cash working
       capital                       (4,137)    (5,512)    10,019    (19,293)
      Principal repayments on
       senior notes                  (1,457)    (1,523)    (6,001)    (5,657)
      Maintenance capital
       expenditures                  (2,913)      (685)    (3,498)    (7,330)
      Distributions earned greater
       than distributions
       received(4)                    4,730    (10,234)    17,336    (11,575)
    -------------------------------------------------------------------------

    Distributable cash               34,001     22,484    149,067    160,149
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Represents the cash flow from operating activities applicable to
        jointly held businesses which is not under the sole control of the
        Partnership and, as a consequence, is not included in distributable
        cash until such time as distributions are declared by the jointly
        held businesses.
    (2) Net of support payments made to Alliance Canada Marketing of
        $3.6 million and $10.0 million for the three and 12 months ended
        December 31, 2009 respectively (2008 - $0.8 million and $3.0 million,
        respectively).
    (3) Represents costs incurred by the Partnership and its wholly-owned
        businesses in relation to projects where the recoverability of such
        costs has not yet been established. Amounts incurred for the three
        and 12 months ended December 31, 2009 relate primarily to the Jordan
        Cove LNG terminal project, the Pacific Connector Gas Pipeline
        project, and the Alton Gas Storage project.
    (4) Represents the difference between distributions declared by jointly
        held businesses and distributions received.



    Reconciliation of Adjusted Net Income(5) to Net Income
    -------------------------------------------------------------------------
                                    Three months ended   Twelve months ended
                                           December 31           December 31
    -------------------------------------------------------------------------
    ($ Thousands; unaudited)           2009       2008       2009       2008
    -------------------------------------------------------------------------

    Net income (loss)               (24,454)   (17,949)    37,575     61,499
    Adjustments to net income
     (loss) for non-recurring
     (gains) losses:
      Pipeline - Alliance shipper
       claim settlement(6)                -          -          -    (10,020)
      NGL - Aux Sable settlement(7)  (9,472)         -     (9,472)         -
      Power - asset impairment
       loss(8)(9)                    78,051     21,105     78,051     21,105
      Power - fair value loss
       reclassified from other
       comprehensive income(10)           -          -      2,442          -
      Power - gain on dilution
       of investment(6)                   -          -          -     (4,200)
      Tax expense (recovery)(11)    (24,903)         -    (25,057)     3,720
    -------------------------------------------------------------------------

    Adjusted net income              19,222      3,156     83,539     72,104
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (5) Adjusted net income is not a standard measure under generally
        accepted accounting principles in Canada and may not be comparable to
        similar measures presented by other entities. Adjusted net income
        represents net income adjusted for specific items that are
        significant, but are not reflective of Fort Chicago's underlying
        operations. Specific items are subjective, however, the Partnership
        uses its judgement and informed decision-making when identifying
        items to be included or excluded in calculating adjusted net income.
        Specific items may include, but are not limited to, certain income
        tax adjustments, bankruptcy settlements, gains or losses on sales of
        assets, certain fair value adjustments, and asset impairment losses.
        Fort Chicago believes its use of adjusted net income provides useful
        information to management and its investors by improving the ability
        to compare financial results among reporting periods, and by
        enhancing the understanding of its operating performance and ability
        to fund distributions.
    (6) 2008 net income included Alliance's settlement with Calpine Energy
        Services Canada Partnership and a non-cash dilution gain related to
        the Partnership's investment in Pristine Power Inc. Fort Chicago
        does not expect these items to recur and, as such, has deducted them
        from net income in arriving at adjusted net income.
    (7) Net income for the three and 12 months ended December 31, 2009
        included Aux Sable's off-gas facility settlement. Fort Chicago does
        not expect this item to recur and, as such, has deducted it from net
        income in arriving at adjusted net income.
    (8) Net income for the three and 12 months ended December 31, 2009
        included a $78.1 million asset impairment loss. The Partnership
        recorded this non-cash charge in relation to its California
        cogeneration facilities, which were adversely impacted by a
        regulatory decision. Fort Chicago does not expect this item to recur
        and, as such, has deducted it from net income in arriving at adjusted
        net income.
    (9) Net income for the three and 12 months ended December 31, 2008
        included a $21.1 million asset impairment loss. Fort Chicago does not
        expect this item to recur and, as such, has deducted it from net
        income in arriving at adjusted net income.
    (10)Net income for the year ended December 31, 2009 included a non-cash
        expense transferred from other comprehensive income to net income in
        the first quarter of 2009, representing the fair value decrease of
        the Partnership's investment in Pristine Power Inc. from Pristine's
        initial public offering in March 2008. As the Partnership considers
        such permanent decreases in the fair value of its investments to be
        non-typical, it has added this amount back to net income in arriving
        at adjusted net income.
    (11)This represents the related taxes on the adjusted items described
        above.
    

SOURCE Veresen Inc.

For further information: For further information: Stephen H. White, President and C.E.O., Richard G. Weech, Vice President, Finance and C.F.O., Fort Chicago Energy Partners L.P., Livingston Place, Suite 440, 222 - 3rd Avenue S.W., Calgary, AB, T2P 0B4, Phone: (403) 296-0140, Fax: (403) 213-3648, www.fortchicago.com

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