True Energy Trust announces plan to convert to a growth-oriented E&P company



    CALGARY, Aug. 19 /CNW/ - True Energy Trust ("True" or the "Trust ") (TSX:
TUI.UN) is pleased to announce that it plans to convert to a growth oriented,
exploration and production company (the "Reorganization").

    Details of the Reorganization

    It is contemplated that the Reorganization will be undertaken pursuant to
a plan of arrangement under the Business Corporations Act (Alberta). Pursuant
to the Reorganization, holders ("Unitholders") of trust units of the Trust
("Trust Units") will receive common shares ("Common Shares") of a newly-formed
corporation ("Newco") on the one-for-one basis. Holders of exchangeable shares
(the "Exchangeable Shares") will exchange their Exchangeable Shares for Common
Shares based on the current exchange ratio of the Exchangeable Shares. The
Reorganization will result in Newco holding the assets and business operations
previously held and operated by the Trust and its subsidiaries. All members of
the Board of Directors and senior officers of True Energy Inc. ("True Energy")
will continue as the directors and officers of Newco. The Reorganization will
result in Newco having approximately 78.8 million Common Shares issued and
outstanding after closing. It is not anticipated that Newco will, following
the Reorganization, pay any dividends or distributions on its outstanding
Common Shares.
    The Reorganization will not trigger any change of control or other
termination payments pursuant to any employment agreements or arrangements. In
addition, the Reorganization will not trigger the acceleration of vesting of
any outstanding incentive rights or options of the Trust (collectively the
"Options") and following Reorganization outstanding Options will entitle the
holders to acquire Common Shares of Newco in lieu of Trust Units on the same
terms and conditions that exists prior to the Reorganization including as to
exercise price, vesting and expiry dates. True's outstanding convertible
debentures bearing an interest rate of 7.5% per annum will be assumed by Newco
and will be convertible into Common Shares of Newco on the same basis, with no
other change to the terms thereof.
    The Reorganization will be structured to allow Unitholders and holders of
Exchangeable Shares resident in Canada to receive Common Shares of Newco on a
tax deferred basis for Canadian income tax purposes.

    Rationale for Reorganization

    Management and the Board of Directors of the Trust have investigated and
considered various restructuring alternatives available to it and considered
the Trust's strategic objectives to ensure the Trust's long-term viability and
sustainability. Over the past year, management and the Board of Directors of
the Trust have taken significant steps in restructuring the operations of the
Trust including the following:

    
    -   Management is now comprised of a proven team of professional
        management in all key operational areas of the organization including
        a team experienced in providing organic growth through full cycle
        exploration, exploitation and development.

    -   Commencing in the first quarter of 2009, the Trust implemented a cost
        control strategy and has reduced operating expenses and general
        administrative expenses in excess of 30% from 2008 level.

    -   Production levels have been maintained, with minimal capital spent,
        by diligent field optimization programs designed to arrest declines.

    -   As recently announced, the Trust has completed the divestiture of a
        majority of its oil and natural gas assets in Saskatchewan, resulting
        in net proceeds of approximately of $86 million, resulting in a
        significant reduction in net debt.

    -   On August 17, 2009, the Trust finalized new $85 million credit
        facilities consisting of a $10 million demand operating facility and
        a $75 million extendable revolving term credit facility, with the
        borrowing base subject to redetermination on March 10, 2010.

    -   In February 2009, the Trust suspended distributions to Unitholders
        and no distributions have been made by the Trust since that date.
    

    As a result of significant steps taken in 2008 and 2009 to improve its
balance sheet by reducing outstanding indebtedness and streamlining its
operating cost structure, the Trust now has the financial flexibility to
pursue a business plan as a growth-oriented exploration and production company
with a strong balance sheet.

    Approvals and Timing

    The Reorganization will be subject to receipt of all required regulatory,
stock exchange and Court of Queen's Bench approvals as well as approval of at
least 66% of the votes by Unitholders and holders of Exchangeable Shares
present and in person or by proxy in a duly convened special meeting (the
"Special Meeting") of the Trust. It is anticipated that an information
circular and proxy statement in connection with the Special Meeting will be
mailed to securityholders of Trust in late September and that the Special
Meeting will be held in late October. Subject to receiving all necessary
approvals, closing of the Reorganization is expected to occur in late October.

    Forward Looking Statements: Certain information set forth in this news
release, including management's assessments of the future plans and
operations, plans with respect to Reorganization, including the timing
thereof, the approvals required, and the effect thereof may contain
forward-looking statements, and necessarily involve risks and uncertainties,
certain of which are beyond True's control, including risks associated with
the timing of receipt of required regulatory approvals and whether all
necessary regulatory, shareholder and other approvals are obtained in
connection with the Reorganization, 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, stock market volatility and ability to access sufficient capital
from internal and external sources and economic or industry condition changes.
Actual results, performance or achievements 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 (www.sedar.com), at True's
website (www.trueenergytrust.com). 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.




For further information:

For further information: Raymond G. Smith, President and CEO, (403)
750-2420; Edward Brown, Vice President, Finance and CFO, (403) 750-2655; Troy
Winsor, Investor Relations, (800) 663-8072


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