PrimeWest Energy Trust announces third quarter 2004 results

PrimeWest Energy Trust announces third quarter 2004 results 


CALGARY, Nov. 2  /PRNewswire-FirstCall/ -- (TSX: PWI.UN; PWX; PWI.DB.A-T;
PWI.DB.B-T; NYSE: PWI) - PrimeWest Energy Trust (PrimeWest or the Trust) today
announced interim operating and financial results for the third quarter ended
September 30, 2004. Unless otherwise noted, all figures contained in this
report are in Canadian dollars.

  Third Quarter Highlights:

  -  On September 2, 2004, PrimeWest completed the acquisition of Calpine
     Canada assets at a cost of $806 million acquiring approximately
     14,500 BOE per day of production and a 25% interest in Calpine Natural
     Gas Trust. Transaction costs associated with the acquisition were
     $8.7 million. PrimeWest entered into a series of transactions that
     hedged up to 90% of the volumes acquired from Calpine. This was
     achieved through the use of wide costless collar instruments that
     continue through to the first quarter of 2006.

  -  In the third quarter, PrimeWest increased the monthly cash
     distributions by approximately 20% or $0.05 per month to $0.30 per
     unit effective with the October 15, 2004 distribution.

  -  During the quarter, PrimeWest concluded a financing of $550 million
     comprised of a $300 million equity issuance and $250 million of
     convertible unsecured subordinated debentures. These funds, together
     with additional bank borrowings, were used to acquire the Calpine
     assets.

  -  Debt to annualized third quarter 2004 cash flow is 1.7 times.

  -  Third quarter production averaged 35,460 barrels of oil equivalent
     (BOE) per day, compared to the second quarter 2004 rate of 31,185 BOE
     per day.

  -  Distributions of $0.83 per unit represent a payout ratio of
     approximately 74%, compared to second quarter 2004 distributions of
     $0.75 per unit, representing a payout ratio of 72%.

  -  Cash flow from operations of $68.3 million ($1.06 per unit) compared
     to $58.2 million ($1.05 per unit) in the second quarter of 2004,
     primarily due to a continued strong commodity price environment and
     increased production volumes for the month of September from the
     Calpine asset acquisition.

  -  Following the completion of the Calpine transaction where
     the assets were acquired with full tax pools, PrimeWest has
     re-evaluated its taxability of the 2004 distributions. For unitholders
     resident in Canada, PrimeWest anticipates that approximately 55% of
     2004 distributions will be taxable and 45% will be deemed a return of
     capital.

  Subsequent Events

  -  On October 4, 2004, PrimeWest commenced an asset divestiture program
     targeting to sell approximately $100 million of non-core assets. Bids
     are due on November 4, 2004 and the targeted closure of successful
     asset sales is December 31, 2004.


  Management's Discussion and Analysis



The following is management's discussion and analysis (MD&A) of PrimeWest's
operating and financial results for the quarter ended September 30, 2004,
compared with the preceding quarter and the corresponding period in the prior
year as well as information and opinions concerning the Trust's future outlook
based on currently available information. This discussion should be read in
conjunction with the Trust's audited consolidated financial statements for the
years ended December 31, 2003 and 2002, together with accompanying notes, as
contained in the Trust's 2003 Annual Report.