Swan Hills Energy Limited Partnership Announces Termination of Crude Petroleum and Natural Gas Purchase Agreement


    CALGARY, Nov. 1 /CNW/ - Swan Hills Energy Limited Partnership (SWE.UN -
TSX-V) ("Swan Hills") announced today that it has reached an agreement to
terminate the prepaid crude petroleum and natural gas purchase agreement dated
December 20, 2006 as amended June 27, 2007 and September 19, 2007, whereby
Swan Hills received a prepayment of approximately $160,000,000 in exchange for
the future sale and delivery of crude petroleum and natural gas (the
"Agreement"). The Agreement required Swan Hills to acquire assets capable of
producing at least 25% of total contract volume before January 1, 2008 or
alternative sources of supply to meet its delivery obligations under the
Agreement. Pursuant to the review of strategic alternatives announced on April
20, 2007, Swan Hills has concluded that it is unlikely that it will be
successful in acquiring sufficient assets to satisfy its obligations under the
Agreement. To avoid additional costs and uncertainty, Swan Hills has
terminated the Agreement. Pursuant to the termination agreement, Swan Hills
has agreed to pay approximately $161,694,000 in exchange for termination of
the Agreement and release of all obligations thereunder. In addition, all
security pledged to a Canadian chartered bank in respect of its delivery
obligations under the Agreement will be discharged. The ongoing operations of
Swan Hills should not be materially affected by the termination of the
    Additionally, as an update to the April 20, 2007 press release whereby
Swan Hills announced it was reviewing its strategic alternatives to enhance
unitholder value, Swan Hills advises that while the review is continuing there
are no current discussions or potential transactions currently under
consideration by the Board of Directors of Swan Hills Energy Ltd., the general
partner of Swan Hills.

    The TSX Venture Exchange has neither approved nor disapproved the
    information contained herein.

    Forward Looking Statements

    This press release contains certain forward looking statements relating
to, but not limited to, expectations relating to the consequences of entering
into an agreement terminating the Agreement and also Swan Hills' strategic
alternatives. These forward looking statements are based on current
expectations, estimates and projections that involve a number of risks and
uncertainties which could cause actual results or events to differ materially
from those presently anticipated. These include, but are not limited to, the
risks of the business of Swan Hills. There is no representation by Swan Hills
that actual results achieved will be the same in whole or in part as those set
out in the forward looking statements. Furthermore, the forward looking
statements contained in this press release are made as of the date hereof, and
Swan Hills undertakes no obligation, except as required by applicable
securities legislation, to update publicly or to revise any of the included
forward looking statements, whether as a result of new information, future
events or otherwise.

For further information:

For further information: D. Alan Ross, President, Swan Hills Energy
Limited Partnership, Telephone - (403) 294-6889, Fax - (403) 294-0105, Email -
aross@matcocap.com; David M. McGoey, Chief Financial Officer, Swan Hills
Energy Limited Partnership, Telephone - (403) 294-6497, Fax - (403) 294-0105,
Email - dmcgoey@matcocap.com

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