PrimeWest Energy Trust announces distribution level, 2004 taxability, legislative update and corporate guidance for 2005

PrimeWest Energy Trust announces distribution level, 2004
taxability, legislative update and corporate guidance for 2005 


CALGARY, Dec. 8  /PRNewswire-FirstCall/ -- (TSX: PWI.UN; PWX; PWI.DB.A;
PWI.DB.B NYSE: PWI) - PrimeWest Energy Trust (PrimeWest) today announces that
the distribution payable January 14th, 2005 will be $0.30 Canadian per trust
unit payable to all unitholders of record on December 22nd, 2004. The ex-
distribution date will be December 20th, 2004.

Using a Canadian dollar to U.S. dollar exchange ratio of 1.23, this
distribution amount would be approximately U.S. $0.24 per unit. The actual U.S.
dollar equivalent distribution will be based upon the actual Canadian/U.S.
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.

PrimeWest also announces the taxability of distributions paid to Canadian
unitholders during 2004. For the 2004 taxation year, unitholders were paid
total distributions of $3.315 Canadian per trust unit. The company has
determined that 45% or $1.49 per trust unit is deemed a tax deferred return of
capital and 55% or $1.82 per Trust Unit is taxable to Canadian unitholders as
other income (taxed at the same rate as interest income). For unitholders
resident in the United States, the tax treatment for the 2004 distributions
will be announced early in 2005.

On December 6, 2004, the Canadian Government tabled legislation to follow up on
its budget announcement of March 23, 2004, regarding proposed changes to
non-resident withholding taxes and the placement of non-resident ownership
restrictions upon the income trust sector. The proposed legislation, which
would become effective January 1, 2005, provides for a 15% withholding tax on
the total distribution to non-resident unitholders, including both the return
of capital portion and the return on capital portion. The 15% withholding tax
has been applied to non-resident taxable accounts holding PrimeWest units in
the past. However, under the terms of the proposed legislation, the withholding
tax will also apply to non-resident tax-exempt accounts. PrimeWest recommends
that non-resident unitholders contact their tax advisors in order to obtain
details of the implications arising from the implementation of this withholding
tax.

In addition, the Canadian Government has suspended activities pertaining to
non-resident ownership of income trusts. This suspension includes the
requirement to comply with non-resident ownership restrictions by January 1,
2007. PrimeWest, through its membership in the Canadian Association of Income
Funds ("CAIF"), will actively participate in any further dialogue with the
Canadian Government.

As previously announced on August 16, 2004, PrimeWest has commenced an asset
divestiture program to sell certain non-core properties. In conjunction with
the Calpine acquisition, the divestiture of non-core assets is part of the
ongoing effort to upgrade the asset portfolio. The company has entered into
agreements with third parties to sell properties representing 2,700 BOE per day
production for total consideration of approximately $88 million. To date,
PrimeWest has closed $47 million of asset dispositions, with the remaining $41
million expected to close by year-end. Sale proceeds will be applied towards
debt reduction.

Production volumes for calendar year 2004, reflecting a proportionate amount of
the volumes acquired through the Calpine acquisition, are estimated to be
approximately 35,500 BOE per day with operating expenses for the year estimated
at approximately $6.70 per BOE. As a result of the asset divestiture program,
PrimeWest anticipates an exit production rate of approximately 42,500 BOE per
day at December 31, 2004. PrimeWest expects development capital in 2004 to
reach $125 million. PrimeWest plans to release its 2004 financial and operating
results on February 24, 2005.

        -------------------------------------------
         CORPORATE GUIDANCE         2004      2005
        -------------------------------------------

        -------------------------------------------
         Production Volumes
        -------------------------------------------
         BOE/day(x)               35,500    41,000
        -------------------------------------------

        -------------------------------------------
         Development Capital        $125      $125
         (C$ millions)
        -------------------------------------------

        -------------------------------------------
         Financial ($ per BOE)
        -------------------------------------------
         Operating Costs           $6.70     $6.45
        -------------------------------------------
         G&A                       $1.20     $1.20
        -------------------------------------------


        (x) All calculations required to convert natural
            gas to a crude oil equivalent (BOE) have been
            made using a ratio of 6,000 cubic feet of
            natural gas to one barrel of crude oil.



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". Five-year convertible debentures of PrimeWest trade
on the TSX under the symbol "PWI.DB.A" and the seven-year convertible
debentures trade under the symbol "PWI.DB.B".

To learn more about PrimeWest, please visit our Website at
http://www.primewestenergy.com/. 

DATASOURCE: PrimeWest Energy Trust



CONTACT: Investor Relations inquiries: George Kesteven, Manager,

Investor Relations, [phone], Toll-free: 1-877-968-7878,

e-mail: ; Diane Zuber, Investor Relations

Advisor, [phone];

To request a free copy of this organization's annual report, please go to

http://www.newswire.ca/ and click on reports@cnw.

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