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FOR: NUVISTA ENERGY LTD.

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

NuVista Energy Ltd.: Announcing First Quarter Results

May 12, 2004 - 21:01 ET

CALGARY, ALBERTA--(CCNMatthews - May 12, 2004) - NuVista Energy 
Ltd. ("NuVista") is pleased to announce today its financial and 
operating results for the three months ended March 31, 2004 as 
follows: 


/T/

-----------------------------------------------------------------------
                                     Three Months Ended,
                                  -----------------------     July 2 to
                                   March 31,  December 31, September 30,
Corporate Highlights                   2004          2003          2003
-----------------------------------------------------------------------

Financial
($ thousands, except per share)

Production revenue                   15,456        12,735        12,399

 Cash flow from operations (1)        9,599         8,052         7,554
  Per share - basic                    0.26          0.22          0.21
  Per share - diluted                  0.25          0.21          0.20


 Net income (2)                       3,732         2,878         2,746
  Per share - basic (2)                0.10          0.08          0.08
  Per share - diluted (2)              0.10          0.08          0.07

Total assets                         95,602        94,415        81,832

Bank loan, net of working capital    10,684        13,079         7,586

Shareholders' equity                 76,732        72,775        69,439

Capital expenditures                  7,174        13,437         7,523

Weighted average common shares
 outstanding (thousands)
 Basic                               37,335        37,338        35,382
 Diluted                             38,515        38,355        37,846
-----------------------------------------------------------------------
-----------------------------------------------------------------------

Operating
(boe conversion - 6:1 basis)

Production:
 Natural gas (mmcf/day)                20.9          19.7          17.8
 Crude oil (bbls/day)                 1,174         1,035           983
  Total oil equivalent (boe/day)      4,651         4,316         3,949

Product prices:
 Natural gas ($/mcf)                   6.35          5.64          6.02
 Crude oil (bbls/day)                 31.85         26.56         29.70

Operating expenses:
 Natural gas ($/mcf)                   0.63          0.60          0.56
 Crude oil ($/bbl)                     3.91          4.38          4.26
  Total oil equivalent ($/boe)         3.81          3.79          3.58

General and administrative
 expenses ($/boe)                      0.35          0.35          0.35

Cash costs ($/boe)                     4.31          4.38          4.77

Cash flow netback ($/boe) (1)         22.68         20.28         21.02
-----------------------------------------------------------------------
-----------------------------------------------------------------------

Notes:

(1) 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.

(2) Net income and net income per share for 2003 have been restated for
    the adoption of new accounting standards for asset retirement
    obligations and stock based compensation. See Note 1 of the
    interim consolidated financial statements for details of this
    restatement.

/T/

MESSAGE TO SHAREHOLDERS 

NuVista Energy Ltd. ("NuVista") is pleased to report to 
shareholders its financial and operating results for the three 
months ended March 31, 2004.  The results of the first quarter of 
2004 represents the third consecutive quarter of continuous 
profitable growth for NuVista since its creation through the Plan 
of Arrangement involving Bonavista Petroleum Ltd. ("Bonavista") 
and Bonavista Energy Trust (the "Trust") on July 2, 2003.  

In the first quarter of 2004, NuVista experienced another 
successful quarter, having drilled 18 wells with an average 
working interest of 75%.  The success rate of 89% in this 
drilling program resulted in 11 natural gas wells and five oil 
wells. Of these wells, nine were medium depth natural gas wells 
drilled in the Eastern Alberta Natural Gas Region. These natural 
gas wells were drilled late in the first quarter of 2004 and 
brought on stream in May 2004.  In the second quarter of 2004, 
NuVista has agreed to two minor acquisitions in the Eastern 
Alberta Natural Gas Region and will have added emphasis on 
natural gas with a 20 well drilling program in this area. NuVista 
has evaluated and submitted proposals on a number of acquisition 
opportunities in the first quarter of 2004.  However, the 
acquisition market has remained very competitive in this high 
commodity price environment and NuVista was unable to complete 
any large transactions which met our asset quality or economic 
criteria.  Despite not having completed any major acquisitions 
and only spending 75% of cash flow in the first quarter of 2004, 
NuVista still grew its production by 8% over the fourth quarter 
of 2003, with focused efforts towards low cost reserve additions 
through the drill bit.  Although we remain committed to our 
disciplined approach, with a large number of opportunities coming 
to market in the middle to latter part of 2004 we are optimistic 
that NuVista will complete acquisitions which meets our criteria. 
In the meantime, NuVista will continue to focus on organic growth 
through active land and seismic acquisitions and an increased 
number of drilling prospects.  NuVista is committed to employing 
the same proven strategy for profitable growth and stewardship of 
capital, which resulted in Bonavista's success over the past six 
years.   

The significant highlights of NuVista include: 

- Since inception, increased production by 33% to average 4,651 
boe per day for the first quarter of 2004, consisting of 20.9 
mmcf per day of natural gas and 1,174 bbls per day of crude oil  
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. 
This significant growth was accomplished while capital 
expenditures were only 1.1 times cash flow during this period; 

- Increased undeveloped land to over 251,000 net acres from the 
171,881 net acres on commencement of operations, further 
enhancing the drilling prospect inventory in this Core Region.  
In addition, NuVista has optioned over 25,000 net acres of 
undeveloped land through farm-in commitments with industry 
partners;  

- Reduced cash costs to $4.31 per boe for the first quarter of 
2004, leaving NuVista in the top decile of its industry peers; 

- Participated in 26 (19.3 net) wells with an overall success 
rate of 85% for the year to date in 2004;  

- Shot 262 miles of 2D and 35 square miles of 3D seismic to 
further enhance the prospectivity of NuVista's undeveloped land 
thus far in 2004; and 

- Presently in discussions with its bankers to expand the 
borrowing capability of NuVista to in excess of $40 million. 

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 unaudited financial statements for the three 
months ended March 31, 2004. 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. 

Forward-Looking Statements - Certain information set forth in 
this document, including management's assessment of NuVista's 
future plans and operations, contains forward-looking statements. 
By their nature, forward-looking statements are subject to 
numerous risks and uncertainties, some of which are beyond 
NuVista's control, including the impact of general economic 
conditions, industry conditions, volatility of commodity prices, 
currency fluctuations, imprecisions of reserve estimates, 
environmental risks, competition from other industry 
participants, the lack of availability of qualified personnel or 
management, stock market volatility and ability to access 
sufficient capital from internal and external sources. Readers 
are cautioned that the assumptions used in the preparation of 
such information, although considered reasonable at the time of 
preparation, may prove to be imprecise and, as such, undue 
reliance should not be placed on forward-looking statements. 
NuVista's actual results, performance or achievement could differ 
materially from those expressed in, or implied by, these 
forward-looking statements, or if any of them do so, what 
benefits that NuVista will derive therefrom. NuVista disclaims 
any intention or obligation to update or revise any 
forward-looking statements, whether as a result of new 
information, future events or otherwise. 

New accounting policies - In the first quarter of 2004, NuVista 
adopted and implemented new accounting policies pursuant to 
requirements of the Canadian Institute of Chartered Accountants 
("CICA") Handbook. The new accounting policies adopted included: 
"Stock-based Compensation and Other Stock-based Payments", "Asset 
Retirement Obligations" and "Hedge Accounting" and are detailed 
further in Note 1 of the Notes to the Consolidated Financial 
Statements. 

Operating activities - NuVista's exploration and development 
program for the period ended March 31, 2004 led to the drilling 
of 18 (13.5 net) wells, with an overall success rate of 89%. This 
program resulted in 11 natural gas wells, five oil wells and two 
dry holes. NuVista operated 15 of the 18 wells, with an average 
working interest of 75% in the operated wells. During the 
quarter, NuVista also participated in three non-operated wells 
with an average working interest of 40% in these wells. NuVista 
continues to actively drill, with 66 wells planned for the 
remainder of the year. 

Production - NuVista's production results for the three months 
ended March 31, 2004 benefited from continued success in its 
Eastern Core Region drilling program. NuVista's average 
production of 4,651 boe per day for the first quarter of 2004 
represents an increase of 8% over the fourth quarter of 2003 and 
a 13% increase over the last half of 2003. Production consisted 
of 20.9 mmcf per day of natural gas and 1,174 bbls per day of 
crude oil. NuVista has recently drilled 4 horizontal and 3 
vertical oil wells at Amisk. These wells will be brought on 
stream in the second quarter of 2004, along with production from 
the first quarter natural gas drilling program. 

Revenues - Revenues for the three months ended March 31, 2004 
were $15.5 million a 22% increase from $12.7 million for the 
three months ended December 31, 2003. These revenues were 
comprised of $12.1 million of natural gas revenues and $3.4 
million of crude oil revenues in 2004. The increase in revenues 
for the three months ended March 31, 2004 versus December 31, 
2003, results from an 8% increase in production and an increase 
in the prices of natural gas to $6.35 per mcf from $5.64 per mcf 
and crude oil to $31.85 per bbl from $26.56 per bbl respectively. 


Royalties - Royalties for the reporting period were $4.0 million, 
an average rate of 26.1% versus $3.0 million or 23.2% for the 
three months ended December 31, 2003. Natural gas royalties were 
$3.4 million with an average royalty rate of 28.6% and crude oil 
royalties were $587,000 with an average royalty rate of 17.3%. 
For the three months ended December 31, 2003, the natural gas 
royalty rate was 25.3% and the crude oil royalty rate was 14.6%. 

Operating expenses - Operating expenses for the period ended 
March 31, 2004 were $1.6 million, a 7% increase from $1.5 million 
for the three months ended December 31, 2003. This increase 
resulted primarily from the higher production in the three months 
ended March 31, 2004 from the three months ended December 31, 
2003. Natural gas operating expenses averaged $0.63 per mcf and 
crude oil expenses were $3.91 per bbl in the first quarter of 
2004 as compared to $0.60 per mcf and $4.38 per bbl respectively 
for the three months ended December 31, 2003. On a boe basis, 
operating costs were flat at $3.81 per boe in the first quarter 
of 2004 as compared to $3.79 per boe for the three months ended 
December 31, 2003, in spite of cost pressures facing the 
industry, leaving NuVista in the top decile for oil and natural 
gas companies in its peer group. Overall, NuVista's cash costs 
which include operating, general and administrative, interest 
expenses and Large Corporation Tax has consistently declined 
since inception to average $4.31 per boe in the first quarter of 
2004. This too would place it in the top decile in its peer group 
in this performance criteria. 

General and administrative - General and administrative expenses, 
net of overhead recoveries were $149,000 or $0.35 per boe for the 
three months ended March 31, 2004. Included in these expenses is 
an allocation of $260,000 from Bonavista, pursuant to the 
Technical Services Agreement entered into as part of the Plan of 
Arrangement. The Technical Services Agreement allowed NuVista to 
initiate and continue with successful and active programs, 
through the use of Bonavista's personnel in managing its 
operations and at the same time take advantage of Bonavista's low 
overhead cost structure. In addition, as a result of adopting the 
new accounting rules, NuVista recorded a stock based non-cash 
compensation charge of $232,000 in connection with both of the 
Class B Performance shares and stock options. 

Interest expenses - Interest expense for the reporting period was 
$51,000 for the first quarter of 2004 or $0.12 per boe versus 
$38,000 or $0.10 per boe for the three months ended December 31, 
2003 because of slightly higher average debt levels in the 
current quarter. Currently, NuVista's average borrowing rate is 
approximately 3.2%. 

Depreciation, depletion and accretion expenses - Depreciation, 
depletion and accretion expenses were $3.2 million for the 
period. The average cost per unit was $7.63 per boe in the first 
quarter of 2004 versus $7.28 per boe for the three months ended 
December 31, 2003 and is based on the allocation of Bonavista's 
net book value to NuVista on July 2, 2003 and capital spending 
program to March 31, 2003. The overall depreciation, depletion 
and accretion rate has been reduced as a result of the 
retroactive adoption of the new accounting rules relating to 
asset retirement obligations. 

Income and other taxes - The provision for income and other taxes 
was $2.4 million for an effective tax rate of 39%. Included in 
the future income tax provision is $258,000 resulting from the 
reduction in future tax asset because of the reduction in Alberta 
Corporate Income Tax rate. 

Capital expenditures - Capital expenditures were $7.2 million 
during the first quarter of 2004 and consisted of only 
exploration and development spending. These expenditures were 
considerably lower than the planned amount of approximately $17.6 
million for the quarter, NuVista did not complete any 
acquisitions in the quarter. However NuVista still exceeded its 
production and cash flow targets for the current reporting 
period. 

Cash flow and net income - For the three months ended March 31, 
2004, NuVista's cash flow was $9.6 million ($0.26 per share), a 
19% increase from $8.1 million ($0.22 per share) for the three 
months ended December 31, 2003. Net income increased 30% during 
the period to $3.7 million ($0.10 per share) from $2.9 million 
($0.08 per share), restated for the three months ended December 
31, 2003. These increases resulted from stronger commodity prices 
and increased production rates for the reporting period in 2004 
and allow NuVista to maintain a strong net income to cash flow 
ratio of almost 39%. 

Liquidity and capital resources - As at March 31, 2004, total 
bank debt (net of working capital) was $10.7 million, resulting 
in a debt to cash flow ratio of approximately 0.3 to 1. NuVista 
has approximately $21.3 million of unused bank borrowing 
capability based on the current line of credit of $32 million, 
which provides substantial flexibility to fund expanded capital 
programs into the future. 

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 251,000 net 
acres, an increased drilling inventory coupled with our strong 
balance sheet position, NuVista is positioned to continue posting 
strong operational and financial results for the remainder of 
2004 and beyond. NuVista continues to work towards 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 profitability. With continued 
expectations of exploration, development and acquisition success, 
NuVista is in an excellent position to average between 5,400 and 
5,800 boe per day in 2004. With the current commodity price 
environment, NuVista is positioned to exceed previous estimates 
of $1.15 per share, with forecasted cash flow to be in the range 
of $1.25 per share to $1.35 per share. Furthermore, our solid 
financial position with a 0.3:1 debt to cash flow ratio will 
enable us to execute our 2004 capital program and remain 
positioned to pursue additional strategic opportunities as they 
arise. Given the high commodity price environment and 
corresponding high prices currently being paid for property and 
corporate acquisitions, NuVista has not executed any major 
acquisitions of the 2004 capital budget. However, acquisition 
opportunities are currently abundant and we remain confident our 
disciplined and detailed analysis will lead to the consummation 
of larger acquisitions in the middle to latter part of 2004. 
Regardless of environment, NuVista has positioned itself to 
deliver profitable long term growth. We remain unwavering in our 
commitment to enhance shareholder value by accessing the broad 
depth and expertise of the Bonavista team in a diligent and 
prudent manner. 


/T/

Consolidated Balance Sheets
(thousands)                                 March 31,       December 31,
                                                2004               2003
-----------------------------------------------------------------------
                                          (unaudited)          (audited)
                                                              (restated)
Assets
Accounts receivable                          $  5,814          $  6,251
Oil and natural gas properties
 and equipment                                 83,271            79,243
Future tax asset                                6,517             8,922
-----------------------------------------------------------------------

                                             $ 95,602          $ 94,416
-----------------------------------------------------------------------

Liabilities and Shareholders' Equity
Accounts payable and accrued liabilities     $ 10,039          $ 12,402
Bank loan                                       6,459             6,928
-----------------------------------------------------------------------
                                               16,498            19,330

Asset retirement obligation                     2,372             2,311

Shareholders' equity:
 Share capital                                 66,683            66,690
 Contributed surplus                              693               461
 Retained earnings                              9,356             5,624
-----------------------------------------------------------------------

                                               76,732            72,775
-----------------------------------------------------------------------

                                             $ 95,602          $ 94,416
-----------------------------------------------------------------------
-----------------------------------------------------------------------


Statements of Operations and Retained Earnings

                                                              Three
(thousands, except per share amounts)                     Months ended
                                                         March 31, 2004
-----------------------------------------------------------------------
(unaudited)
Revenues:
 Production                                                    $ 15,456
 Royalties, net of Alberta Royalty Tax Credit                    (4,033)
-----------------------------------------------------------------------

                                                                 11,423
-----------------------------------------------------------------------

Expenses:
 Operating                                                        1,613
 General and administrative                                         149
 Financing charges                                                   51
 Stock based compensation expense                                   232
 Depreciation, depletion and accretion                            3,230
-----------------------------------------------------------------------

                                                                  5,275
-----------------------------------------------------------------------
Income before income and other taxes                              6,148
 Income and other taxes                                           2,416
-----------------------------------------------------------------------

Net income                                                        3,732
Retained earnings, beginning of period                            5,668
Retroactive application of changes
 in accounting policies (Note 1)                                    (44)
-----------------------------------------------------------------------

Retained earnings, end of period                               $  9,356
-----------------------------------------------------------------------
-----------------------------------------------------------------------

Net income per share - basic                                   $   0.10
-----------------------------------------------------------------------
-----------------------------------------------------------------------

Net income per share - diluted                                 $   0.10
-----------------------------------------------------------------------
-----------------------------------------------------------------------


Statements of Cash Flows                                      Three
(thousands)                                               Months ended
                                                         March 31, 2004
-----------------------------------------------------------------------
(unaudited)

Cash provided by (used in):

Operating Activities:
 Net income                                                     $ 3,732
 Items not requiring cash from operations:
  Depreciation, depletion and accretion                           3,230
  Stock based compensation expense                                  232
  Future income taxes                                             2,405
-----------------------------------------------------------------------

 Funds flow from operations                                       9,599
 Asset retirement expenditures                                      (23)
 Decrease in non-cash working capital items                      (1,926)
-----------------------------------------------------------------------
                                                                  7,650
-----------------------------------------------------------------------

Financing Activities:
 Issuance of share capital, net of share issue costs                 (7)
 Decrease in bank loan                                             (469)
-----------------------------------------------------------------------

                                                                   (476)
-----------------------------------------------------------------------

Investing Activities:
 Oil and natural gas properties and equipment additions          (7,174)
-----------------------------------------------------------------------

                                                                 (7,174)
-----------------------------------------------------------------------

Decrease in cash                                                      -
Cash, beginning of period                                             -
-----------------------------------------------------------------------

Cash, end of period                                             $     -
-----------------------------------------------------------------------
-----------------------------------------------------------------------

/T/

SELECTED NOTES TO INTERIM FINANCIAL STATEMENTS 

(unaudited) 

Three months ended March 31, 2004. 

The unaudited interim consolidated financial statements have been 
prepared by management in accordance with Canadian Generally 
Accepted Accounting Principles (GAAP), using the same accounting 
policies as those set out in note 1 to the consolidated financial 
statements for the year ended December 31, 2003 except as noted 
below. These interim consolidated financial statements should be 
read in conjunction with the consolidated financial statements 
for the period from July 2, 2003 to December 31, 2003. 

1. Changes in accounting policies: 

a) Oil and natural gas assets: 

Oil and natural gas assets are evaluated in each reporting period 
to determine that the carrying amount in a cost centre is 
recoverable and does not exceed the fair value of the properties 
in the cost centre. 

The carrying amounts are assessed to be recoverable when the sum 
of the undiscounted cash flows expected from the production of 
proved reserves, the lower of cost and market of unproved 
properties and the cost of major development projects exceeds the 
carrying amount of the cost centre. When the carrying amount is 
not assessed to be recoverable, an impairment loss is recognized 
to the extent that the carrying amount of the cost centre exceeds 
the sum of the discounted cash flows expected from the production 
of proved and probable reserves, the lower of cost and market of 
unproved properties and the cost of major development projects of 
the cost centre. The cash flows are estimated using expected 
future product prices and costs and are discounted using a 
risk-free interest rate. 

Effective January 1, 2004, NuVista adopted the new accounting 
standard relating to full cost accounting. The adoption of this 
new policy on January 1, 2004 resulted in no write-down to the 
carrying value of oil and natural gas assets. Prior to January 1, 
2004 the ceiling test amount was the sum of the undiscounted cash 
flows expected from the production of proved reserves, the lower 
of cost or market of unproved properties and the cost of major 
development projects less estimated future costs for 
administration, financing, site restoration and income taxes. The 
cash flows were estimated using period end prices and costs. 

NuVista has performed the ceiling test under AcG-16 as of January 
1, 2004. The impairment test was calculated using the benchmark 
reference prices at January 1 for the years 2004 to 2008 and 
thereafter as follows and adjusted for commodity differentials 
specific to NuVista: 


/T/

Average Price Forecasts:

                                               Year
-----------------------------------------------------------------------
                           2004      2005      2006      2007      2008
-----------------------------------------------------------------------
WTI ($U.S./bbl)           29.00     26.50     25.50     25.00     25.00
-----------------------------------------------------------------------
AECO ($Cdn/mcf)            5.80      5.47      5.14      4.94      4.78
-----------------------------------------------------------------------

/T/

b) Asset retirement obligations: 

NuVista adopted CICA Handbook Section 3110 "Asset Retirement 
Obligations". This change in accounting policy has been applied 
retroactively with the restatement of the prior period presented 
for comparative purposes. Previously, NuVista recognized a 
provision for future site reclamation and abandonment costs 
calculated on the unit-of-production method over the life of the 
oil and natural gas properties based on total estimated proved 
reserves and the estimated future liability. 

As a result of this change, net income for the period from 
inception on July 2, 2003 to December 31, 2003 increased by 
$313,000 ($481,000 net of a future income tax expense of 
$168,000). The Asset Retirement Obligation increased by $1.0 
million, oil and natural gas properties net increased by $252,000 
and share capital increased by $1.4 million as at December 31, 
2003. Basic and diluted net income per share increased by $0.01, 
as a result of the retroactive application of this new accounting 
policy. The completion of this change in accounting resulted in 
an increase of $313,000 to retained earnings as at January 1, 
2004. 

c) Stock-based compensation 

NuVista has retroactively adopted the new accounting standard for 
stock-based compensation, which requires the use of the fair 
value method for valuing stock option grants on or after January 
1, 2002. Under this method, the compensation cost attributable to 
all share options granted is measured at fair value at the grant 
date and expensed over the vesting period with a corresponding 
increase to contributed surplus. Upon the exercise of the stock 
options, consideration received together with the amount 
previously recognized in contributed surplus is recorded as an 
increase to share capital. NuVista has incorporated an estimated 
forfeiture rate of 10% for stock options that will not vest. 

As a result of adopting the new accounting standard on a 
retroactive basis, net income for the period from July 2, 2003 to 
December 31, 2003 decreased by $357,000, and contributed surplus 
increased by $357,000. Basic and diluted net income per share 
decreased $0.01 as a result of adopting this new accounting 
policy. The completion of this change in accounting policy 
resulted in a decrease of $357,000 to retained earnings as at 
January 1, 2004. 

d) Hedge relationships 

The Canadian Institute of Chartered Accountants ("CICA") issued 
Accounting Guideline 13 - Hedging Relationships, which deals with 
the identification, designation, documentation and effectiveness 
of hedging relationships for the purpose of applying hedge 
accounting. The guideline establishes conditions for applying 
hedge accounting. The guideline is effective for fiscal years 
beginning on or after July 1, 2003. Where hedge accounting does 
not apply, any changes in the fair value of the financial 
derivative contracts relating to a financial period can either 
reduce or increase net income and net income per share for that 
period. 

2. Asset retirement obligations: 

NuVista's asset retirement obligations result from net ownership 
interests in oil and natural gas assets including well sites, 
gathering systems and processing facilities. NuVista estimates 
the total undiscounted amount of cash flows required to settle 
its asset retirement obligations is approximately $7.9 million 
which will be incurred over the next 51 years. The majority of 
the costs will be incurred between 2018 and 2034. A 
credit-adjusted risk-free rate of 7.5% was used to calculate the 
fair value of the asset retirement obligations. 

A reconciliation of the asset retirement obligations is provided 
below: 


/T/

-----------------------------------------------------------------------
                                       Three Months         Period from
                                              ended          July 2, to
                                     March 31, 2004   December 31, 2003
-----------------------------------------------------------------------
(thousands)
Balance, beginning of period                $ 2,311             $ 2,130

Accretion expense                                60                  85
Liabilities incurred                             24                 206
Liabilities settled                             (23)               (110)
-----------------------------------------------------------------------
Balance, end of period                      $ 2,372             $ 2,311
-----------------------------------------------------------------------
-----------------------------------------------------------------------

/T/

3. Share capital: 

As at March 31, 2004 there were 37,334,418 common shares and 
1,193,750 Class B Performance Shares outstanding. In addition, 
there were 1,406,150 stock options, with an average exercise 
price of $6.40 per share as at March 31, 2004. 

4. Hedging activities: 

As at March 31, 2004, NuVista has entered into physical purchase 
contracts to sell 200 bbls per day for the period from April 1, 
2004 to September 30, 2004 at prices ranging from US $27.50 per 
bbl to US $28.50 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 $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
Website: www.nuvistaenergy.com