2009-09-24-2009-08-23

To acquire company with interests in AB, gaining 14,000 BOE/d, 31.2 MMBOE 2P.

Daylight Resources Trust, Calgary, (Toronto: DAY.UN) plans to acquire Alberta producer Highpine Oil & Gas Ltd., Calgary, (Toronto: HPX) for in a deal valued at C$530 million. Daylight will pay 0.85 unit or C$7 in cash per HighPine share, representing a 38% premium to the 20-day weighted average. Daylight estimates it will pay approximately C$37,900 per barrel of oil equivalent per day based on 14,000 barrels equivalent per day. The estimated proved plus probable reserve acquisition cost is approximately C$17 per barrel equivalent based on Daylight's internal reserve estimate of 31.2 million barrels equivalent. Highpine holds interests in Alberta, with 75% of production from the Pembina area near Drayton Valley targeting the Nisku formation. Additional interests include a 70% gross working interest in the West Central Alberta gas fairway and operations in the Bantry/Retlaw region. Highpine reports average production of 16,500 barrels of oil equivalent per day as of June 30. Highpine holds 309,000 undeveloped acres net (81,000 developed). Pro forma, the combined entity will have an enterprise value of more than $1.8 billion. Daylight anticipates production to average approximately 38,000 barrels of oil per day through year end. The deal will increase Daylight's proportion of oil and gas liquids production from 28% to 42% and working interest in undeveloped land holdings to approximately 600,000 acres. Proved plus probable reserves will be approximately 108.1 million barrels. Its tax pools will be in excess of C$1.4 billion. The combined entity will contain more than 600 drilling locations. Daylight president and chief executive Anthony Lambert says, "The transaction with Highpine takes us to the next level, combining the strong balance sheet and cash flow of Highpine with the exceptional resource play inventory of Daylight." Jonathan Lexier, president and CEO of Highpine, says, "The combination with Daylight provides Highpine's shareholders with immediate value for our high-quality assets and opportunities and provides exposure to Daylight's impressive conventional and resource play assets." GMP Securities LP is advisor to Daylight. Macquarie Tristone is advisor to Highpine and has provided a verbal fairness opinion. Closing is expected to occur in mid-October.