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FOR: NUVISTA ENERGY LTD.

TSX SYMBOL: NVA - |  View Quote |  View Chart |  View Financials | 

NuVista Energy Ltd.: Announcing 2003 Year End Results

Feb 24, 2004 - 20:00 ET

CALGARY, ALBERTA--NuVista Energy Ltd. ("NuVista") is pleased to 
announce today its financial and operating results for the three 
and six months ended December 31, 2003 as follows: 


/T/

---------------------------------------------------------------------
Corporate Highlights
---------------------------------------------------------------------
                                           Three Months        Period
                                                  ended         ended
                                               December      December
                                               31, 2003   31, 2003 (1)
---------------------------------------------------------------------

Financial
($ thousands, except per share amounts)
Production Revenue                               12,735        25,134
Cash flow from operations (2)                     8,052        15,606
  Per share - basic                                0.22          0.43
  Per share - diluted                              0.21          0.42
Net income                                        2,900         5,668
  Per share - basic                                0.08          0.16
  Per share - diluted                              0.08          0.15
Total assets                                                   91,674
Bank loan, net of working capital                              13,077
Shareholders' equity                                           71,062
Net capital expenditures                         13,437        20,960
Weighted average common shares outstanding
 (thousands)
  Basic                                          37,338        36,360
  Diluted                                        38,355        37,337
---------------------------------------------------------------------

Operating
(boe conversion - 6:1 basis)
Production:
  Natural gas (mmcf/day)                           19.7          18.7
  Crude oil (bbls/day)                            1,035         1,009
    Total oil equivalent (boe/day)                4,316         4,133
Product prices:
  Natural gas ($/mcf)                              5.64          5.81
  Crude oil ($/bbl)                               26.56         28.08
Operating expenses:
  Natural gas ($/mcf)                              0.60          0.58
  Crude oil ($/bbl)                                4.38          4.32
    Total oil equivalent ($/boe)                   3.79          3.69

General and administrative expenses ($/boe)        0.35          0.35
Cash costs ($/boe)                                 4.38          4.56
Cash flow netback ($/boe)                         20.28         20.63

Undeveloped land:
  Gross acres                                                 254,156
  Net acres                                                   221,389
  Average working interest                                         87%

Reserves (NI 51 - 101) - January 1, 2004
  Proven and probable:
    Natural gas (bcf)                                            39.8
    Oil and liquids (mbbls)                                     3,313
      Total barrels of oil equivalent (mboe)                    9,949
        % of Reserves Proven Producing                             59%
        % of Reserves Total Proven                                 78%
        % of Reserves Probable                                     22%
    Net present value of future cash flows
     before tax ($ millions):
      @ 10% discount rate                                       121.6
      @ 15% discount rate                                       107.3
    Net present value of future cash flows
     after tax ($ millions):
      @ 10% discount rate                                        97.1
      @ 15% discount rate                                        84.9

Finding and development costs ($/boe): (3)
  Total Proven                                                   7.82
  Proven and Probable                                            9.08

Recycle Ratio (Cash flow netback per boe/finding
 and development costs per boe):
  Total Proven                                                    2.6
  Proven and Probable                                             2.3
---------------------------------------------------------------------

(1) Period from July 2, 2003 to December 31, 2003
(2) Cash flow from operations is used before changes in non-cash
    working capital to analyze operating performance and leverage.
    Cash flow does not have a standardized measure prescribed by 
    Canadian Generally Accepted Accounting Principles and therefore
    may not be comparable with the calculations with similar measures
    for other companies.
(3) Calculated in accordance with National Instrument 51 - 101, which
    is after reserve revisions and includes changes in future capital
    expenditures.

/T/

MESSAGE TO SHAREHOLDERS 

NuVista Energy Ltd. ("NuVista") is pleased to report to 
shareholders its audited consolidated financial and operating 
results for the period from July 2, 2003 to December 31, 2003. 
NuVista was formed as part of the Plan of Arrangement dated July 
2, 2003 involving Bonavista Petroleum Ltd. ("Bonavista"). As part 
of the reorganization, Bonavista Energy Trust (the "Trust") 
retained approximately 90% of the oil and natural gas properties, 
with the remainder transferred to NuVista. In this initial period 
of operations, NuVista has employed the same strategies adopted 
by Bonavista, through focus on operatorship, high working 
interest ownership, concentrating and dominating in select core 
regions and low cost operations. Significant highlights of 
NuVista from July 2, 2003 to December 31, 2003 include: 

- Increased production by 30% from the 3,500 boe per day 
(consisting of 15.0 mmcf per day of natural gas and 1,000 bbls 
per day of crude oil) on July 2, 2003 to the 2003 exit production 
level of 4,550 boe per day consisting of 20.0 mmcf per day of 
natural gas and 1,215 bbls per day of crude oil. NuVista exceeded 
its initial 2003 exit volume target of 4,400 boe per day while 
spending only 70% of its capital expenditure budget; 

- Added 3.0 mmboes of proven reserves resulting in a 55% increase 
in proven reserves since July 2, 2003, which have been determined 
in accordance with NI 51 - 101. These additions equate to a 
finding and development cost of $7.82 per boe for proven reserves 
and replaced production by approximately 400%; 

- Increased undeveloped land by 28% to over 221,000 net acres in 
NuVista's Eastern Alberta Core Region from the 172,000 net acres 
on commencement of operations, further enhancing the drilling 
prospect inventory in this Core Region; 

- Participated in 40 (27.4 net) wells with an overall success 
rate of 90%; 

- Shot 45 km of 2D and 100 square km of 3D seismic to further 
enhance the prospectivity of NuVista's undeveloped land; 

- On completion of the Plan of Arrangement, NuVista commenced 
operations seamlessly and through the Technical Services 
Agreement with Bonavista was able to average general and 
administrative expenses of $0.35 per boe and overall cash costs 
(operating, general and administrative, interest expenses and 
capital taxes) of $4.56 per boe for the period, ranking in the 
top decile of its industry peers; and 

- Completed the issuance of 2.5 million shares for gross proceeds 
of $18.4 million, providing NuVista significant flexibility to 
finance current and future capital programs. 

MANAGEMENT'S DISCUSSION AND ANALYSIS 

Management's discussion and analysis ("MD&A") of financial 
conditions and results of operations should be read in 
conjunction with the audited consolidated financial statements 
for the period from July 2, 2003 to December 31, 2003. Barrels of 
oil equivalent ("boe") have been calculated using a conversion 
rate of six thousand cubic feet of natural gas to one barrel of 
oil. 

Operating activities - NuVista's exploration and development 
program from July 2, 2003 to December 31, 2003 led to the 
drilling of 40 (27.4 net) wells, with an overall success rate of 
90%. This program resulted in 18.7 net natural gas wells, 4.7 net 
oil wells and 4.0 net dry holes. NuVista operated 31 of the 40 
wells, with an average working interest of 82% in the operated 
wells. During the period, NuVista also participated in nine 
non-operated wells with an average working interest of 22.5%. 
NuVista continues to actively drill, with 70-80 wells planned for 
2004. 

Reserves - An evaluation of all of NuVista's reserves as at 
January 1, 2004 was conducted by independent engineers in 
accordance with the new reporting guidelines of NI 51 - 101. 
NuVista's reserves were not significantly impacted by the 
adoption of these new reporting guidelines. Proven reserves 
experienced a positive revision of 7.1% or 392 mboe, largely due 
to the conversion of reserves from the probable to proven 
categories because of enhanced performance on certain natural gas 
properties. Total proven and probable reserves experienced a 
negative revision of 5.3% or 428 mboe, primarily due to the 
application of risk on the opening balance of the probable 
reserve category. Finding and development costs for proven 
reserves calculated in accordance with NI 51 - 101 policy were 
$7.82 per boe and proven and probable finding and development 
costs were $9.08 per boe. These costs are presented after 
revisions and include the change in future capital expenditures 
required to bring base reserves on-stream.  Removing the impact 
of revisions would result in proven finding and development costs 
of $8.98 per boe and proven and probable finding development 
costs of $7.82 per boe. 

Production - NuVista's production for the period between July 2, 
2003 and December 31, 2003 averaged 4,133 boe per day 
representing an 18% increase since commencement of operations. At 
December 31, 2003, production for NuVista was 20.0 mmcf per day 
of natural gas and 1,215 bbls per day of crude oil for a total of 
4,550 boe per day. 

The increase in production over the period occurred as a result 
of an active and successful natural gas drilling program in its 
Eastern core region. Natural gas volumes exceeded our forecast to 
average 19.7 mmcf per day for the three months ended December 31, 
2003. Crude oil volumes remained relatively flat for the three 
months ended December 31, 2003 compared to the three months ended 
September 30, 2003, however, a 100% success rate in the oil 
drilling program at Amisk, occurring late in the three months 
ended December 31, 2003 resulted in NuVista attaining its exit 
rate of 1,215 bbls per day. 

Revenues - Revenues for the period from July 2, 2003 to December 
31, 2003 were $25.1 million, comprised of $19.9 million from 
natural gas revenues and $5.2 million from crude oil. The average 
natural gas price for the period was $5.81 per mcf and $28.08 per 
bbl for crude oil. 

Royalties - Royalties for the reporting period were $6.1 million, 
an average royalty rate of 24.2%. Natural gas royalties were $5.3 
million, an average royalty rate of 26.6% and crude oil royalties 
were $774,000 for an average royalty rate of 15.0%. 

Operating expenses - Operating expenses for the period ended 
December 31, 2003 were $2.8 million. Natural gas operating 
expenses averaged $0.58 per mcf and crude oil expenses were $4.32 
per bbl. On a boe basis, operating costs were $3.69 leaving 
NuVista in the top decile for oil and natural gas companies in 
its peer group. 

General and administrative - General and administrative expenses, 
net of overhead recoveries, were $268,000 or $0.35 per boe for 
the period from July 2, 2003 to December 31, 2003. Included in 
these expenses is an allocation of $372,000 from Bonavista, 
pursuant to the technical services agreement entered into as part 
of the Plan of Arrangement. The technical services agreement has 
allowed NuVista to initiate and continue with its successful and 
active programs through the use of Bonavista's personnel in 
managing its operations and at the same time benefit from 
Bonavista's low overhead cost structure. In addition, NuVista 
recorded a non-cash stock based compensation charge of $104,000 
in connection with the issue of the Class B Performance shares. 

Interest expenses - Interest expenses for the reporting period 
were $282,000 or $0.37 per boe. Currently, NuVista's average 
borrowing rate is approximately 3.5%. 

Depreciation, depletion and site restoration expenses - 
Depreciation, depletion and site restoration expenses were $6.4 
million for the period. The average unit cost was $8.52 per boe 
and is based on the cost of proven reserve additions and 
allocation of Bonavista's net book value of assets transferred to 
NuVista, in accordance with the Plan of Arrangement. 

Income and other taxes - The provision for income and other taxes 
was $3.5 million. Included in income taxes for the period is a 
provision of $107,000 for the Large Corporations Tax. 

Capital expenditures - Capital expenditures were $21.0 million 
during the period and consisted of only exploration and 
development spending. These expenditures were considerably lower 
than the planned amount of approximately $30 million for the 
period due to the reallocation of expenditures from acquisitions 
to more attractive exploration and development opportunities. In 
spite of the $9 million reduction in budgeted capital 
expenditures, NuVista exceeded its 2003 exit by 150 boe per day 
to achieve 4,550 boe per day. 

Cash flow and net income - For the period from July 2, 2003 to 
December 31, 2003, NuVista's cash flow was $15.6 million or $0.43 
per share. Net income during the period was $5.7 million or $0.16 
per share. This resulted in a strong net income to cash flow 
ratio of 36% for the reporting period. 

Liquidity and capital resources - As at December 31, 2003, total 
bank debt (net of working capital) was $13.1 million, resulting 
in a debt to cash flow ratio of approximately 0.4 to 1. This 
leaves NuVista with approximately $18.9 million of unused bank 
borrowing capability and combined with the equity issue completed 
in September 2003, NuVista has significant financial flexibility 
to carry out the capital programs for 2004 and for future years. 

BUSINESS RISKS AND OUTLOOK 

NuVista's management remains committed to the same principles and 
disciplined growth strategy that led to the tremendous success of 
Bonavista. With an undeveloped land base exceeding 221,000 net 
acres, an increasing drilling inventory, coupled with a strong 
balance sheet, NuVista is strategically positioned to continue 
posting strong operational and financial results for 2004 and 
beyond. 

The Board of Directors of NuVista has approved a base capital 
budget of $70 million for 2004, which will result in the drilling 
of 70 to 80 wells. NuVista will continue to focus on its core 
strategy of applying technical expertise to its operating regions 
in a prudent and disciplined manner, through both the drill bit 
and strategic acquisitions. The execution of these strategies 
will enable NuVista to continue to grow its production, cash flow 
and net income consistently and profitably both in aggregate and 
on a per share basis. With current production levels at 4,600 boe 
per day and continued expectations of exploration, development 
and acquisition success, NuVista is in an excellent position to 
achieve its forecasted average production level of 5,600 boe per 
day in 2004. Assuming an AECO natural gas price of $6.00 per gj 
and an oil price US $32.50 WTI, NuVista expects cash flow of $43 
million or $1.15 per share. 

Furthermore, our strong balance sheet with a 0.4:1 debt to cash 
flow ratio will enable us to execute our 2004 capital program and 
pursue additional strategic opportunities as they arise. 
Regardless of price volatility, NuVista has positioned itself to 
deliver profitable growth now and into the future. We remain 
unwavering in our commitment to enhance shareholder value by 
utilizing the broad depth and expertise of our dedicated team in 
a diligent and cost-effective manner. 


/T/

Balance Sheet
(thousands)                                         December 31, 2003
---------------------------------------------------------------------
                                                             (audited)
Assets
Accounts receivable                                          $  6,251
Oil and natural gas properties and equipment                   76,752
Future tax asset                                                8,671
---------------------------------------------------------------------
                                                             $ 91,674
---------------------------------------------------------------------
---------------------------------------------------------------------

Liabilities and Shareholders' Equity
Accounts payable and accrued liabilities                     $ 12,400
Bank loan                                                       6,928
---------------------------------------------------------------------

Total current liabilities                                      19,328

Site restoration provision                                      1,284

Shareholders' equity:
  Share capital                                                65,394
  Retained earnings                                             5,668
---------------------------------------------------------------------
                                                               71,062
---------------------------------------------------------------------
                                                             $ 91,674
---------------------------------------------------------------------
---------------------------------------------------------------------


Statements of Operations and Retained Earnings

                                           Three Months     Period (1)
                                                  ended         ended
                                               December      December
(thousands, except per share amounts)          31, 2003      31, 2003
---------------------------------------------------------------------
                                             (unaudited)     (audited)
Revenues:
  Production                                    $12,735       $25,134
  Royalties, net of Alberta Royalty Tax Credit   (2,950)       (6,079)
---------------------------------------------------------------------
                                                  9,785        19,055
---------------------------------------------------------------------
Expenses:
  Operating                                       1,505         2,792
  General and administrative                        141           268
  Financing charges                                  38           282
  Stock based compensation                           52           104
  Depreciation, depletion and site restoration    3,238         6,444
---------------------------------------------------------------------
                                                  4,974         9,890
---------------------------------------------------------------------
Income before income and other taxes              4,811         9,165
  Income and other taxes                          1,911         3,497
---------------------------------------------------------------------
Net income                                        2,900         5,668
Retained earnings, beginning of period            2,768             -
---------------------------------------------------------------------
Retained earnings, end of period                $ 5,668       $ 5,668
---------------------------------------------------------------------
---------------------------------------------------------------------
Net income per share - basic                    $  0.08       $  0.16
---------------------------------------------------------------------
---------------------------------------------------------------------
Net income per share - diluted                  $  0.08       $  0.15
---------------------------------------------------------------------
---------------------------------------------------------------------

(1) Period from July 2, 2003 to December 31, 2003


Statement of Cash Flows
                                           Three Months     Period (1)
                                                  ended         ended
                                               December      December
(thousands, except per share amounts)          31, 2003      31, 2003
---------------------------------------------------------------------
                                             (unaudited)     (audited)
Cash provided by (used in):

Operating Activities:
  Net income                                    $ 2,900       $ 5,668
  Items not requiring cash from operations:
    Depreciation, depletion and site restoration  3,238         6,444
    Stock based compensation expense                 52           104
    Future income taxes                           1,862         3,390
---------------------------------------------------------------------

Funds flow from operations                        8,052        15,606
Decrease in non-cash working capital items          134           106
---------------------------------------------------------------------
                                                  8,186        15,712
---------------------------------------------------------------------
Financing Activities:
  Issuance of share capital, net of share
   issue costs                                      (48)       17,478
  Increase (decrease) in bank loan                2,940       (18,163)
---------------------------------------------------------------------
                                                  2,892         (685)
---------------------------------------------------------------------
Investing Activities:
  Oil and natural gas properties and
   equipment additions                          (13,437)      (20,960)
  Site restoration expenditures                    (109)         (110)
  Decrease in non-cash working capital items      2,468         6,043
---------------------------------------------------------------------
                                                (11,078)      (15,027)
---------------------------------------------------------------------
Decrease in cash                                      -             -
Cash, beginning of period                             -             -
---------------------------------------------------------------------
Cash, end of period                                 $ -           $ -
---------------------------------------------------------------------
---------------------------------------------------------------------

(1) Period from July 2, 2003 to December 31, 2003.

/T/

NUVISTA ENERGY LTD. 



NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 

Period from July 2, 2003 to December 31, 2003. 

1. Significant accounting policies: 

As the determination of many assets, liabilities, revenues and 
expenses is dependent upon future events, the preparation of 
these financial statements requires the use of estimates and 
assumptions, which have been made using careful judgement. In the 
opinion of management, these financial statements have been 
properly prepared within reasonable limits of materiality and 
within the framework of the significant accounting policies 
summarized below. 

NuVista Energy Ltd. ("NuVista") was established with an effective 
date of July 2, 2003 under a Plan of Arrangement entered into by 
Bonavista Energy Trust (the "Trust"), Bonavista Petroleum Ltd. 
("Bonavista") and NuVista. Under the Plan of Arrangement, various 
assets of Bonavista comprising certain producing and exploration 
assets were transferred to NuVista. As NuVista is a new entity, 
these financial statements reflect the results of operations for 
the period from July 2, 2003 to December 31, 2003. 

(a) Oil and natural gas operations: 

NuVista follows the full cost method of accounting, whereby all 
costs associated with the exploration for and development of oil 
and natural gas reserves are capitalized in cost centres on a 
country-by-country basis. Such costs include land acquisitions, 
drilling, well equipment and geological and geophysical 
activities. General and administrative costs are not capitalized. 
Gains or losses are not recognized upon disposition of oil and 
natural gas properties unless crediting the proceeds against 
accumulated costs would result in a change in the rate of 
depletion of 20 percent or more. 

Costs capitalized in the cost centres, including well equipment, 
together with estimated future capital costs associated with 
proven reserves, are depreciated and depleted using the 
unit-of-production method which is based on gross production and 
estimated proven oil and natural gas reserves as determined by 
independent engineers. The cost of significant unproven 
properties is excluded from the depreciation and depletion base. 
For purposes of the depreciation and depletion calculations, oil 
and natural gas reserves are converted to a common unit of 
measure on the basis of their relative energy content. Facilities 
are depreciated using the declining balance method over their 
useful lives, which range from 12 to 15 years. 

The provision for future site restoration costs are calculated 
using the unit-of-production method and is included within the 
provision for depreciation, depletion and site restoration. Costs 
are estimated each year by management based upon current 
regulations, costs, technology and industry standards. Actual 
costs as incurred are charged against the accumulated liability. 

In applying the full cost method, NuVista calculates a ceiling 
test which restricts the capitalized costs less accumulated 
depreciation and depletion from exceeding an amount equal to the 
estimated undiscounted value of future net revenues from proven 
oil and natural gas reserves, based on year end prices and costs, 
plus the cost, net of impairments, of unproved properties and 
after deducting estimated future site restoration costs, general 
and administrative expenses, financing costs and income taxes. 

(b) Joint venture accounting: 

A portion of NuVista's oil and natural gas operations is 
conducted jointly with others. Accordingly, the financial 
statements reflect only NuVista's proportionate interest in such 
activities. 

(c) Financial instruments: 

From time to time, NuVista may use swap agreements or other 
financial instruments to hedge its exposure to fluctuations in 
oil and natural gas prices. Gains and losses arising from these 
swap arrangements are reported as adjustments to the related 
revenue account over the term of the financial instrument. 
Financial instruments are not used for speculative purposes. The 
carrying values of NuVista's monetary assets and liabilities 
approximate their fair values. 

(d) Stock based compensation: 

NuVista has equity incentive plans, which are described in note 
5. These stock based compensation plans for employees do not 
involve the direct award of stock, or call for the settlement in 
cash or other assets. Any consideration received on exercise of 
the stock options is credited to share capital. Compensation 
costs are recognized in the financial statements for the 
performance shares. Compensation expense relating to stock 
options is disclosed in note 5. 

(e) Income taxes: 

NuVista follows the liability method of accounting for future 
income taxes. 

(f) Per share amounts: 

Diluted per share amounts reflect the potential dilution that 
could occur if securities or other contracts to issue common 
shares were exercised or converted to common shares. The treasury 
stock method is used to determine the dilutive effect of stock 
options and other dilutive instruments. 

2. Transfer of assets and commencement of operations: 

Under the Plan of Arrangement, Bonavista transferred to NuVista 
certain assets, being certain producing and exploratory oil and 
natural gas properties in Bonavista's Eastern Core Region, and an 
allocation of its bank loan. The producing oil and natural gas 
properties were transferred into a general partnership that is 
70% owned by NuVista and 30% owned by Bonavista. As this was a 
related party transaction, assets and liabilities were 
transferred at its book value. Details are as follows: 


/T/

                                                              Amount
--------------------------------------------------------------------
(thousands)
Oil and natural gas assets and equipment                    $ 61,825
Future income tax asset                                       11,751
--------------------------------------------------------------------
Total assets transferred                                      73,576
Bankloan                                                     (29,103)
Provision for site restoration                                  (983)
--------------------------------------------------------------------
Net assets received and common shares issued                $ 43,490
--------------------------------------------------------------------
--------------------------------------------------------------------

/T/

The above amounts are estimates, which were made by management at 
the time of the Plan of Arrangement based on information 
available at the time. Under the Plan of Arrangement, NuVista 
entered into a Technical Services Agreement with Bonavista. Under 
this agreement, Bonavista receives payment for certain technical 
and administrative services provided by it to NuVista, on a cost 
recovery basis. Pursuant to the Technical Services Agreement, 
there was $372,000 of fees were charged relating to general and 
administrative activities and $317,000 of fees were charged 
relating to capital expenditure activities for the period from 
July 2, 2003 to December 31, 2003. 

3. Oil and natural gas properties and equipment: 


/T/

                                                  Accumulated
                                                 depreciation
                                                          and  Net book
December 31, 2003                          Cost     depletion     value
-----------------------------------------------------------------------
(thousands)

Oil and natural gas properties         $ 65,307       $ 5,518  $ 59,789

Facilities and well equipment            17,478           515    16,963
-----------------------------------------------------------------------

                                       $ 82,785       $ 6,033  $ 76,752
-----------------------------------------------------------------------
-----------------------------------------------------------------------

/T/

Unproved property costs of $10,713,000 as at December 31, 2003 
were excluded from the depreciation and depletion calculation. 
During the period ended December 31, 2003, NuVista recorded a 
provision of $411,000 for site restoration in the consolidated 
financial statements. 

4. Bank loan: 

NuVista has a $32 million revolving production loan facility with 
a syndicate of Canadian chartered banks, which provides that 
borrowings may be made by way of prime loans, bankers' 
acceptances and/or US dollar LIBOR advances. These advances bear 
interest at the banks' prime rate and/or at money market rates 
plus a stamping fee. The bank loan facility is secured by a first 
floating charge debenture, general assignment of book debts and 
NuVista's oil and natural gas properties and equipment. The 
facility is subject to an annual review by the lenders. 

5. Share capital: 

(a) Authorized: 

Unlimited number of voting Common Shares and 1,200,000 Class B 
Performance Shares. 

(b) Issued: 

Prior to the Plan of Arrangement, NuVista completed the private 
placement of 2,000,000 Common Shares and 1,200,000 Class B 
Performance Shares for gross proceeds of $4,012,000. 


/T/

(i) Common Shares

-----------------------------------------------------------------------
                                             Number              Amount
-----------------------------------------------------------------------
(thousands)

Outstanding as at July 2, 2003                2,000            $  4,000
 Issued pursuant to the Plan of
  Arrangement (Note 2)                       32,839              43,490
 Issued for cash                              2,500              18,375
 Stock based compensation                         -                 104
 Reacquired and cancelled                        (1)                 (2)
 Costs associated with shares issued,
  net of future tax benefit                       -                (585)
-----------------------------------------------------------------------

Outstanding as at December 31, 2003          37,338            $ 65,382
-----------------------------------------------------------------------
-----------------------------------------------------------------------

/T/

(ii) Class B Performance Shares 

Each Class B Performance Share was sold for a price of $0.01 per 
share and is convertible into the fraction of a Common Share 
equal to the closing trading price of the Common Shares on the 
Toronto Stock Exchange on the day prior to such conversion less 
$2.00, if positive, divided by the Common Share closing price. 
The Class B Performance Shares will automatically convert into 
Common Shares as to 25% of the Class B Performance Shares 
outstanding on a pro-rata basis from holders on each of July 1, 
2004, 2005, 2006 and 2007. If the NuVista Closing Price less 
$2.00 is not positive on any conversion date, NuVista will, 
subject to applicable law, redeem the Class B Performance Shares 
that would have otherwise been converted at the redemption price 
of $0.01 per share. The fair value of each Class B Performance 
Share was determined, at date of issuance, using the 
Black-Scholes model with the variables described in Note 5(e). 
This amount is amortized over the life of the Class B Performance 
Share and is included in stock based compensation expense. 


/T/

-----------------------------------------------------------------------
                                               Number            Amount
-----------------------------------------------------------------------
(thousands)

Outstanding as at July 2, 2003                  1,200               $12
  Reacquired and cancelled                         (4)                -
-----------------------------------------------------------------------
Outstanding as at December 31, 2003             1,196               $12
-----------------------------------------------------------------------
-----------------------------------------------------------------------

/T/

(c) Per share amounts: 

During the period from July 2, 2003 to December 31, 2003, there 
were 36,359,841 weighted average shares outstanding. On a diluted 
basis, there were 37,336,785 weighted average shares outstanding 
after giving effect for dilutive stock options. 

(d) Stock Options: 

NuVista has established a stock option plan whereby officers, 
directors, employees and service providers may be granted options 
to purchase Common Shares. Options granted vest at the rate of 25 
percent per year and expire two years after the date of vesting 
to a maximum term of six years. The total stock options 
outstanding plus the Class B Performance Shares cannot exceed 10% 
of the outstanding Common Shares. During the period from July 2, 
2003 to December 31, 2003, 1,369,800 stock options were granted 
with prices ranging from $6.30 per share to $7.42 per share. 

Stock option summary of transactions for the period from July 2, 
2003 to December 31, 2003 are as follows: 


/T/

-----------------------------------------------------------------------
                                                       Weighted average
                                                Number   exercise price
-----------------------------------------------------------------------

Outstanding as at July 2, 2003                       -                -
 Granted                                     1,369,800           $ 6.35
 Exercised                                           -                -
 Cancelled                                      (4,500)          $ 6.30
------------------------------------------------------

Outstanding, December 31, 2003               1,365,300           $ 6.35
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Exercisable, December 31, 2003                       -                -
-----------------------------------------------------------------------
-----------------------------------------------------------------------

/T/

(e) Stock-based compensation: 

Under the intrinsic value method, no compensation costs are 
recorded in the financial statements for stock options granted. 
If the fair value based method had been used, the stock-based 
compensation costs, pro forma net income and pro forma net income 
per share would be as follows: 


/T/

-----------------------------------------------------------------------
                                        Three Months        Period from
                                               ended    July 2, 2003 to
                                   December 31, 2003  December 31, 2003
-----------------------------------------------------------------------
(thousands, except per share
 amounts)

Stock based compensation
 (stock options)                             $    29            $   357

Net income
  As reported                                $ 2,900            $ 5,668
  Pro forma                                  $ 2,871            $ 5,311
Net income per common share
  Basic
    As reported                              $  0.08            $  0.16
    Pro forma                                $  0.08            $  0.15
  Diluted
    As reported                              $  0.07            $  0.15
    Pro forma                                $  0.07            $  0.14
-----------------------------------------------------------------------
-----------------------------------------------------------------------

/T/

The pro forma amounts include the compensation costs associated 
with stock options granted subsequent to July 2, 2003. The fair 
value of each option granted was estimated on the date of grant 
using the Black-Scholes option pricing model. In the pricing 
model the fair value of stock options granted was $2.41 per 
share; risk free interest rate was 3.5%; volatility of 40%; and 
an expected life of 4.5 years. 

6. Income taxes: 

The provision for income tax differs from the result of which 
would have been obtained by applying the combined Federal and 
Provincial income tax rate to the income before taxes. This 
difference results from the following items: 


/T/

-----------------------------------------------------------------------
                                     Three Months                Period
                                            ended     from July 2, 2003
                                December 31, 2003  to December 31, 2003
-----------------------------------------------------------------------
(thousands)
Expected tax expense at 40.6%             $ 1,954               $ 3,723

Non deductible crown payments, net          1,014                 1,846
Resource allowance                           (993)               (1,809)
Effect of change in tax rate                 (134)                 (412)
Other                                          21                    42
Capital taxes                                  49                   107
-----------------------------------------------------------------------
Provision for income taxes                $ 1,911               $ 3,497
-----------------------------------------------------------------------
-----------------------------------------------------------------------
The provision for income taxes
 consists of:
 Current                                  $    49               $   107
 Future                                     1,862                 3,390
-----------------------------------------------------------------------
Provision for income taxes                $ 1,911               $ 3,497
-----------------------------------------------------------------------
-----------------------------------------------------------------------


The significant components of the future tax asset as at December
31, 2003 are:

-----------------------------------------------------------------------
                                                                 Amount
-----------------------------------------------------------------------
(thousands)

Oil and natural gas properties                                  $ 6,915
Facilities and well equipment                                     1,073
Site restoration provision                                          444
Share issue costs                                                   239
-----------------------------------------------------------------------
Future tax asset                                                $ 8,671
-----------------------------------------------------------------------
-----------------------------------------------------------------------

/T/

7. Hedging activities: 

As at December 31, 2003, NuVista has entered into physical 
purchase contracts to sell 200 bbls per day for the period from 
January 1, 2004 to September 30, 2004 at prices ranging from U.S. 
$27.50 per bbl to U.S. $31.70 per bbl. In addition NuVista has 
sold 1,000 gj's per day for the period from April 1, 2004 to 
October 31, 2004 by way of a costless collar with a floor price 
of $5.00 per gj and a ceiling price of $6.25 per gj at AECO. 

INVESTOR INFORMATION 

NuVista is an independent Canadian oil and natural gas 
exploration, development and production company with its common 
shares trading on the Toronto Stock Exchange under the symbol 
"NVA". 

Corporate information provided herein contains forward-looking 
information. The reader is cautioned that assumptions used in the 
preparation of such information, which are considered reasonable 
by NuVista at the time of preparation, may be proven to be 
incorrect. Actual results achieved during the forecast period 
will vary from the information provided herein and the variations 
may be material. There is no representation by NuVista that 
actual results achieved during the forecast period will be the 
same in whole or in part as those forecast. 

-30-


FOR FURTHER INFORMATION PLEASE CONTACT:

NuVista Energy Ltd.
Keith A. MacPhail
Chairman
(403) 213-4315

or

NuVista Energy Ltd.
Alex G. Verge
President and Chief Executive Officer
(403) 213-4306

or

NuVista Energy Ltd.
Glenn A. Hamilton
Vice President and Chief Financial Officer
(403) 213-4302