Arc Energy Trust, Calgary, (Toronto: ARX) plans to purchase shares in wholly owned subsidiary companies of Calgary-based Imperial Oil Resources (Toronto: IMO) and ExxonMobil Canada Energy that own a 45.57% working interest in the North Pembina Cardium Unit No. 1 and a principal interest in the Redwater Field in central Alberta for C$462 million. This acquisition is expected to close in mid-December. Arc will finance the acquisition with the proceeds of an equity issuance and the company's line of credit, which will be increased to C$950 million upon closing of this acquisition. Arc president and chief executive John Dielwart says, "These 'legacy' assets are two of the largest and highest quality light oil fields ever discovered in western Canada. Although these fields currently have high operating costs and Redwater has a material abandonment liability, the big prize is the remaining oil in the reservoir that has not been included in our reserve assessment. Our task will be to translate that potential into value for our unitholders." The companies being acquired hold large working interests and operatorship in two central Alberta oil fields with production of some 5,460 barrels of oil equivalent per day, proved reserves of 34.6 million barrels of oil equivalent and proved-plus-probable reserves of 40 million barrels, representing a 16% increase to Arc's proved-plus-probable reserves. The proved reserves give the acquisition a price of C$13.35 per proved barrel of oil equivalent and the proved reserve-life index is approximately 17 years. With the incremental debt acquired with this acquisition and upon completion of the trust units financing, Arc's debt-to-cash flow ratio will increase to approximately 1.0.

Comments