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PrimeWest Energy Trust announces distribution level for March 2004, and 2003
taxability, and provides operating guidance for 2004
CALGARY, Feb. 11 /PRNewswire-FirstCall/ -- (TSX: PWI.UN; PWX; NYSE: PWI) -
PrimeWest Energy Trust (PrimeWest) today announces that the distribution payable
March 15th, 2004 will be $0.25 Canadian per trust unit payable to all
unitholders of record on February 20th, 2004. The ex-distribution date will be
February 18th, 2004.
Using a U.S. dollar to Canadian dollar exchange rate of 1.32, this distribution
amount would be approximately U.S. $0.19 per unit. The actual U.S. dollar
equivalent distribution will be based upon the actual U.S./Canadian exchange
rate applied on the payment date net of applicable Canadian withholding taxes.
This distribution level is consistent with PrimeWest's practice of targeting a
payout ratio of 70 to 90% of available cash flow during the calendar year. The
retention of cash flow will allow PrimeWest to maintain balance sheet strength
permitting greater financial flexibility, while reducing the cost and potential
dilution associated with financing activities. Maintenance of balance sheet
strength is in the best long-term interest of PrimeWest unitholders and should
provide support to long-term unit price, as the cash flow retained can be
invested in maintaining production, and the pursuit of acquisition
opportunities.
Production volumes for calendar year 2004 are estimated to be approximately
30,000 BOE per day with operating expenses for the year estimated at
approximately $6.75 per BOE. This estimated 2004 production volume includes the
anticipated April 1st shut-in of gas at Ells due to the gas over bitumen issue,
and the restriction of gas and liquids production at Whiskey Creek due to third
party processing capacity constraints. PrimeWest plans to invest $65 to $90
million during 2004 pursuing development opportunities in order to add
incremental volumes and develop additional reserves.
PrimeWest also announces the taxability of distributions paid during 2003. For
the 2003 taxation year, unitholders of the Trust were paid $4.40 Canadian per
Trust Unit in distributions. Of this distribution amount, 42% or $1.85 per Trust
Unit is deemed a tax deferred return of capital, and58% or $2.55 per Trust Unit
is taxable to Canadian unitholders as other income (taxed at the same rate as
interest income).
For PrimeWest unitholders resident in the United States, the entire 2003
distribution should be treated as a tax deferred return of capital. Taxability
of distributions for unitholders resident in the U.S. is calculated using U.S.
tax rules, which allow for the deduction of crown royalties and accounting based
depletion. A 15% withholding tax applies to distributions paid to U.S.
unitholders. Further details regarding this withholding tax is available on
PrimeWest's website.
PrimeWest is a Calgary-based conventional oil and gas royalty trust that
actively acquires, develops, produces, and sells natural gas, crude oil, and
natural gas liquids for the generation of monthly cash distributions to
unitholders. Trust units of PrimeWest are traded on the Toronto Stock Exchange
(TSX) under the symbol "PWI.UN" and on the New York Stock Exchange under the
symbol "PWI". Exchangeable shares of PrimeWest Energy Inc. are listed on the TSX
under the symbol "PWX".
Learn more about PrimeWest on our Web site, http://www.primewestenergy.com/.
DATASOURCE: PrimeWest Energy Trust
CONTACT: Investor Relations inquiries: George Kesteven, Manager,
Investor Relations, (403) 699-7367; Cindy Gray, Investor Relations Advisor,
(403) 699-7356; Toll-free: 1-877-968-7878,
e-mail: ;
To request a free copy of this organization's annual report, please go to
http://www.newswire.ca/ and click on reports@cnw.