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FOR: NUVISTA ENERGY LTD.

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

NuVista Energy Ltd. Announcing 2004 Year End Results

Feb 24, 2005 - 22:32 ET

NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR:  NUVISTA ENERGY LTD.

TSX SYMBOL:  NVA

FEBRUARY 24, 2005 - 22:32 ET

NuVista Energy Ltd. Announcing 2004 Year End Results

CALGARY, ALBERTA--(CCNMatthews - Feb. 24, 2005) - NuVista Energy Ltd. 
(TSX:NVA) is pleased to announce its financial and operating results for 
the three months and year ended December 31, 2004 as follows:

/T/

------------------------------------------------------------------------
Corporate Highlights
------------------------------------------------------------------------
                                    Three Months                   Year
                                           ended                  ended
                                     December 31,       %   December 31,
                                2004        2003   Change          2004
------------------------------------------------------------------------
                                       (restated)
Financial
($ thousands,
 except per share)
Production revenue            24,601      13,061       88        79,398
Cash flow from
 operations (1)               15,222       8,052       89        49,871
  Per share - basic             0.38        0.22       73          1.29
  Per share - diluted           0.36        0.21       71          1.25
Net income (2)                 5,715       2,878       99        18,322
  Per share - basic             0.14        0.08       75          0.47
  Per share - diluted           0.14        0.08       75          0.46
Total assets                 173,531      94,374       84       173,531
Bank loan, net of
 working capital              33,805      13,079      158        33,805
Shareholders' equity         115,110      72,017       60       115,110
Net capital expenditures      13,823      13,437        3        89,686
Weighted average
 common shares
 outstanding
 (thousands):
  Basic                       40,559      37,338        9        38,725
  Diluted                     41,826      38,355        9        39,897

------------------------------------------------------------------------
Operating
(boe conversion
 - 6:1 basis)

Production:
 Natural gas (mmcf/day)         31.2        19.7       58          25.3
 Oil and liquids
  (bbls/day)                   1,511       1,035       46         1,338
  Total oil equivalent
   (boe/day)                   6,703       4,316       55         5,550

Product prices: (3)
 Natural gas ($/mcf)            6.83        5.64       21          6.61
 Oil and liquids ($/bbl)       32.59       26.56       23         34.03

Operating expenses:
 Natural gas ($/mcf)            0.73        0.60       22          0.69
 Oil and liquids ($/bbl)        4.19        4.38       (4)         4.04
  Total oil equivalent
   ($/boe)                      4.34        3.79       15          4.13

General & administrative
 expenses ($/boe)               0.53        0.35       51          0.41

Cash costs ($/boe)              5.66        4.38       29          5.02

Cash flow netback
 ($/boe) (1)                   24.69       20.28       22         24.55
------------------------------------------------------------------------

                                              December 31,            %
                                            2004     2003        Change
------------------------------------------------------------------------

Undeveloped land:
 Gross acres                             345,428  254,169            36
 Net acres                               310,796  221,389            40
 Average working interest                     90%      87%            3

Reserves (NI 51 - 101)
 - January 1, 2005
 Proven and probable:
  Natural gas (bcf)                         64.9     39.8            63
  Oil and liquids (mbbls)                  3,580    3,313             8
   Total barrels of oil
    equivalent (mboe)                     14,388    9,949            45
    % of Reserves Proven Producing            68%      59%            9
    % of Reserves Total Proven                78%      78%            -
    % of Reserves Probable                    22%      22%            -
  Net present value of future cash
   flows before tax ($millions):
   @ 10% discount rate                     209.1    121.6            72
   @ 15% discount rate                     181.6    107.3            69

 Finding and development
  costs ($/boe): (4) (5)
  Total proven                             16.70     7.82           114
  Proven and probable                      14.38     6.12           135

 Recycle ratio (cash flow net back
  per boe/finding and development
  costs per boe): (5)
  Total proven                               1.5      2.6           (42)
  Proven and probable                        1.7      3.3           (48)
------------------------------------------------------------------------

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 2 of the interim
    consolidated financial statements for details of this restatement.
(3) Product prices are net of transportation costs.
(4) Includes changes in future capital expenditures.
(5) Amounts for 2004 are for the year ended December 31, 2004 and the
    amounts for 2003 are for the period from July 2, 2003 to December
    31, 2003.

/T/

MESSAGE TO SHAREHOLDERS

NuVista Energy Ltd. ("NuVista") is pleased to report to shareholders its 
financial and operating results for the three months and year ended 
December 31, 2004. NuVista has now completed eighteen months of 
operations and the Board of Directors and management are very pleased 
with the results, accomplishments and corresponding value created for 
its shareholders. The results of the fourth quarter of 2004 represent 
the sixth consecutive quarter of continuous profitable growth for 
NuVista, since its creation on July 2, 2003, through the Plan of 
Arrangement involving Bonavista Petroleum Ltd. and Bonavista Energy 
Trust (collectively "Bonavista").

In summary, the significant highlights for NuVista in 2004 include:

- Increased production by 56% to the exit level of 7,100 boe per day, 
consisting of 33.1 mmcf per day of natural gas and 1,575 bbls per day of 
oil and liquids;

- Added 6.5 mmboes of proven and probable reserves replacing production 
by over three times, at a finding and development cost of $14.38 per boe 
(including changes in future capital expenditures), resulting in a 
proven and probable recycle ratio of over 1.7 to 1;

- Increased undeveloped land by 40%, to over 310,000 net acres from the 
221,000 net acres at the beginning of 2004, further enhancing the 
drilling prospect inventory in its Core Regions;

- Acquired 1,450 kilometers of 2D and 150 square kilometers of 3D 
seismic to further compliment the prospectivity of NuVista's undeveloped 
land;

- Participated in 81 (64.8 net) wells, with an overall success rate of 
86%;

- Completed six minor property acquisitions and one strategic private 
company acquisition, which expanded NuVista's position in its Eastern 
Core Region and created two new core areas in Alberta at Provost and 
Pembina. These acquisitions also provide NuVista with an expanded 
inventory of prospects in three core areas. All three areas continue to 
experience positive additions in 2005;

- Continued focus on controllable cash costs has been a top priority, 
with recorded cash costs of $5.02 per boe for the year ended December 
31, 2004, leaving NuVista in the top decile of its industry peers; and

- In October 2004, completed the expansion of the bank facility to $55 
million, an increase of 72% since inception, leaving significant 
financial flexibility to fund future opportunities as they arise.

Our total capital expenditures for 2004 were $89.7 million, 
approximately $5 million less than originally budgeted. This is a direct 
result of accelerated industry activity resulting in delays in 
implementing our planned fourth quarter program. The reduced capital 
expenditures also resulted in NuVista's exit production of 7,100 boe per 
day for 2004, being slightly lower than the 7,500 boe per day originally 
budgeted. However, since the end of 2004, NuVista has completed the 
originally budgeted capital programs in Pembina and Oyen and the results 
have exceeded our expectations. These programs, in addition to our 
acquisitions, have resulted in current production levels of 7,900 boe 
per day, consisting of 34.0 mmcf per day of gas and 2,325 bbls per day 
of oil and natural gas liquids. NuVista is on track for achieving 
average production levels of 8,200 to 8,600 boe per day in 2005 with the 
implementation of our planned $100 million capital program.

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 interim 
consolidated financial statements for the three months and year ended 
December 31, 2004 and NuVista's audited consolidated financial 
statements and MD&A 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.

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, imprecision 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 - Effective January 1, 2004, NuVista 
retroactively 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 the Notes to the Consolidated Financial Statements.

Operating activities - During the fourth quarter of 2004, NuVista 
participated in 27 wells with an average working interest of 77% and 
operated 26 of the 27 wells drilled. The success rate of 85% in this 
drilling program resulted in 16 natural gas wells and seven oil wells. 
Two projects, one in Pembina and one in Oyen experienced delays in the 
fourth quarter with only three of the 11 planned wells being drilled and 
no production being added until the first quarter of 2005. For the year 
ended December 31, 2004, NuVista participated in a total of 81 wells 
with an average working interest of 80%, while achieving a success rate 
of 86%. This program resulted in 55 natural gas wells, 15 oil wells and 
11 dry and abandoned wells. To date in 2005, NuVista has participated in 
17 wells, with an average working interest of 77% and achieved a 94% 
success rate resulting in 11 natural gas wells, five oil wells and one 
dry and abandoned well. NuVista continues to actively drill in each of 
its three core areas, with over 30 wells planned for the first quarter.

Reserves - NuVista's year end 2004 proven reserves amounted to 11.2 
mmboe or a 43.3% increase over the closing balance at year end 2003. 
NuVista's proven and probable reserves climbed by 44.6% to 14.4 mmboes 
when compared to the equivalent opening balance of 9.9 mmboe at year end 
2003. Finding and development costs in 2004, including an adjustment for 
future capital and after revisions, amounted to $16.70 per barrel of oil 
equivalent on a proven basis and $14.38 per barrel of oil equivalent on 
a proven and probable basis.

Positive proven reserve revisions totaled 0.9 mmboe, or approximately 
12.2% of the opening proven reserve balance. On a proven and probable 
basis, a slight positive revision of 0.3 mmboe, a 3.1% increase, was 
experienced when compared to the December 31, 2003 proven probable 
reserve balance. All of NuVista's reserves as at December 31, 2004, were 
evaluated independently by Gilbert Laustsen Jung Associates Ltd.

Additional reserve disclosure tables, as required under NI 51-101, will 
be contained in the Annual Information Form that will be filed on SEDAR 
on or before March 31, 2005. The reserve estimates contained in the 
following table are working interest reserves before the deduction of 
royalties:

/T/

------------------------------------------------------------------------
                                                 Light and
                                    Natural   Medium Crude    Total Oil
                                        Gas            Oil   Equivalent
------------------------------------------------------------------------
Proven:                                (bcf)        (mbbls)       (mboe)
 December 31, 2003                     31.2          2,581        7,782
 Exploration and development           14.3            117        2,498
 Revisions                              2.2            579          947
 Acquisitions                          10.8            165        1,958
 Dispositions                             -              -            -
 Production                            (9.3)          (490)      (2,031)
------------------------------------------------------------------------
 December 31, 2004                     49.2          2,952       11,154
------------------------------------------------------------------------
------------------------------------------------------------------------
Proven and Probable:
 December 31, 2003                     39.8          3,309        9,945
 Exploration and development           21.1            242        3,753
 Revisions                                -            319          310
 Acquisitions                          13.3            200        2,411
 Dispositions                             -              -            -
 Production                            (9.3)          (490)      (2,031)
------------------------------------------------------------------------
 December 31, 2004                     64.9          3,580       14,388
------------------------------------------------------------------------
------------------------------------------------------------------------

/T/

Production - For the fourth quarter of 2004 NuVista's average production 
was 6,703 boe per day, which was comprised of 31.2 mmcf per day of 
natural gas and 1,511 bbls per day of oil and liquids and represents a 
55% increase over the same period of 2003. A portion of NuVista's fourth 
quarter natural gas drilling success will be brought on-stream in the 
first quarter of 2005. NuVista's production results for the twelve 
months ended December 31, 2004 benefited from continued success in its 
overall capital programs and consisted of 25.3 mmcf per day of natural 
gas and 1,338 bbls per day of oil and liquids.

Revenues - Revenues for the three months ended December 31, 2004 were 
$24.6 million, an 88% increase from $13.1 million for the same period of 
2003. These revenues were comprised of $20.0 million of natural gas and 
$4.6 million of oil and liquids for the three months ended December 31, 
2004. The increase in revenues for the three months ended December 31, 
2004 versus the same period of 2003 results from a 55% increase in 
production and a 21% increase in commodity prices. The increase in 
commodity prices, net of transportation costs, is made up of a 21% 
increase in the natural gas price to $6.83 per mcf from $5.64 per mcf 
and a 23% increase in the oil and liquids price to $32.59 per bbl from 
$26.56 per bbl. Revenues for the twelve months ended December 31, 2004 
were $79.4 million.

Commodity hedging - As part of our financial management strategy, 
NuVista has adopted a disciplined commodity-hedging program. The purpose 
of the hedging program is to reduce volatility in the financial results, 
protect acquisition economics and stabilize cash flow against the 
unpredictable commodity price environment. At any given period of time 
our hedging strategy is restricted to a maximum hedge of 50% of forecast 
production, net of royalties and primarily utilizes costless collars. 
This strategy limits NuVista's exposure to downturns in commodity prices 
while allowing for participation in commodity price increases. In the 
fourth quarter of 2004, our hedging program was virtually neutral and 
resulted in a net loss of only $5,000 and for the twelve months ended 
December 31, 2004 a net loss of $735,000 was experienced due to the 
stronger than expected commodity prices realized throughout the period. 
A summary of hedging contracts in place as at December 31, 2004 is 
outlined in note 10 of the Notes to the Consolidated Financial 
Statements.

Royalties - Royalties of $5.4 million for the three months ended 
December 31, 2004 were 83% higher than the $3.0 million for the same 
period of 2003. The increase in royalties in the fourth quarter resulted 
from higher revenues compared to the same period of 2003, largely 
generated by higher production volumes and higher commodity prices. As a 
percentage of revenue, the average royalty rate for the fourth quarter 
of 2004 was 21.9% compared to 22.6% for the comparative period of 2003. 
Royalties by product for the fourth quarter of 2004 were 22.8% for 
natural gas and 18.2% for oil and liquids versus 26.6% for natural gas 
and 16.1% for oil and liquids for the similar period in 2003. The 
decrease in natural gas royalties results from gas cost allowance 
credits received during the fourth quarter of 2004. Royalties for the 
twelve months ended December 31, 2004 were $17.7 million or 22.3% of 
revenues, 23.8% for natural gas and 16.7% for oil and liquids.

Transportation costs - Transportation costs were $496,000 ($0.80 per 
boe) for the three months ended December 31, 2004 as compared to 
$326,000 ($0.82 per boe). The 52% increase in transportation costs 
results from higher production rates in the fourth quarter of 2004 
versus 2003. For the year ended December 31, 2004 transportation costs 
were $1.6 million ($0.80 per boe).

Operating - Operating expenses were $2.7 million for the three months 
ended December 31, 2004 versus $1.5 million for the same period of 2003, 
a 78% increase. This increase resulted primarily from the higher 
production volumes and higher per unit natural gas operating costs 
associated with the private company acquisition. In the fourth quarter 
of 2004, natural gas operating expenses averaged $0.73 per mcf and oil 
and liquids operating expenses were $4.19 per bbl as compared to $0.60 
per mcf and $4.38 per bbl respectively for the same period of 2003. On a 
boe basis, operating costs increased 15% to $4.34 per boe in the fourth 
quarter of 2004 as compared to $3.79 per boe for the same period of 
2003, primarily due to higher per unit costs of the newly acquired 
natural gas assets and increasing cost pressures facing the entire 
industry. Despite these increases, NuVista still remains in the top 
decile for oil and natural gas companies in its peer group. Operating 
expenses for the twelve months ended December 31, 2004 were $8.4 million 
or $4.13 per boe. By commodity, operating expenses were $0.69 per mcf 
for natural gas and $4.04 per boe for oil and liquids for the twelve 
months ended December 31, 2004. Overall, NuVista's cash costs, which 
include operating, general and administrative, interest expenses and 
Large Corporations Tax, were $5.66 per boe in the fourth quarter of 2004 
compared to $4.38 per boe for the same period of 2003 and $5.02 for the 
twelve months ended December 31, 2004. This too, places us among the top 
in our peer group in this performance criteria.

General and administrative - General and administrative expenses, net of 
overhead recoveries for the fourth quarter of 2004, were $326,000 ($0.53 
per boe), an increase of 131% over the $141,000 ($0.35 per boe) for the 
three months ended December 31, 2003, and is directly attributable to 
the higher production base in NuVista and the allocation of overhead 
costs and bonuses in accordance with the Technical Services Agreement 
with Bonavista. General and administrative expenses, net of overhead 
recoveries were $834,000 ($0.41 per boe) for the twelve months ended 
December 31, 2004. Included in these expenses is an allocation of 
$508,000 for the three months ended and $1.3 million for the twelve 
months ended December 31, 2004, charged pursuant to the Technical 
Services Agreement with Bonavista. For the three months ended December 
31, 2003, $197,000 was allocated to NuVista under the Technical Services 
Agreement. The Technical Services Agreement, entered into as part of the 
Plan of Arrangement, has allowed NuVista to initiate and continue with 
its successful and active capital 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. As a result 
of adopting the new accounting rules, NuVista recorded a stock-based 
compensation charge of $302,000 for the three months and $1.0 million 
for the year ended December 31, 2004, in connection with the issuance of 
both the Class B Performance Shares and stock options. The stock-based 
non-cash compensation charge to net income for the three months ended 
December 31, 2003 was $231,000.

Interest - Interest expense during the fourth quarter of 2004 was 
$244,000 ($0.40 per boe) versus $38,000 ($0.10 per boe) for the same 
period of 2003 because of higher average debt levels, offset by higher 
production volumes in the fourth quarter of 2004. For the twelve months 
ended December 31, 2004, financing charges were $574,000 ($0.28 per 
boe). Currently, NuVista's average borrowing rate is approximately 4.0%.

Depreciation, depletion and accretion - Depreciation, depletion and 
accretion expenses were $6.3 million for the fourth quarter of 2004 
compared to $2.9 million for the same period in 2003. The average cost 
per unit was $10.28 per boe in the fourth quarter of 2004 versus $7.28 
per boe for the same period in 2003, due to higher costs of adding 
reserves, primarily from the acquisition of the private company, in the 
third quarter as compared to historic levels. Depreciation, depletion 
and accretion expenses were $19.7 million for the twelve months ended 
December 31, 2004, or $9.71 per boe.

Income and other taxes - For the fourth quarter of 2004, the provision 
for income and other taxes was $3.1 million for an effective tax rate of 
35.2%, as compared to $2.1 million with an effective tax rate of 41.7% 
for the same period in 2003, resulting primarily from lower statutory 
income tax rates in 2004. For the twelve months ended December 31, 2004, 
the provision for income and other taxes was $11.2 million for an 
effective tax rate of 37.9%.

Capital expenditures - Capital expenditures were $13.8 million during 
the fourth quarter of 2004 consisting of exploration and development 
spending of $12.8 million and $1.0 million of net acquisitions. For the 
twelve months ended December 31, 2004, capital expenditures were $89.7 
million.

Cash flow and net income - In the fourth quarter of 2004, cash flow was 
$15.2 million ($0.38 per share, basic), an 89% increase over the $8.1 
million ($0.22 per share, basic) for the same period in 2003. For the 
twelve months ended December 31, 2004, NuVista's cash flow was $49.9 
million ($1.29 per share, basic). Net income also increased 99% during 
the fourth quarter of 2004 to $5.7 million ($0.14 per share, basic) from 
the $2.9 million ($0.08 per share, basic) for the same period in 2003. 
For the twelve months ended December 31, 2004 net income was $18.3 
million ($0.47 per share, basic). All of these increases resulted from 
stronger commodity prices and increased production rates as NuVista 
continues to maintain a strong net income to cash flow ratio of 37.6% 
for the fourth quarter ending December 31, 2004 and 36.7% for the twelve 
months ended December 31, 2004.

Liquidity and capital resources - As at December 31, 2004, total bank 
debt (net of working capital) was $33.8 million, resulting in a debt to 
running cash flow ratio of approximately 0.5 to 1. NuVista has 
approximately $21.2 million of unused bank borrowing capability based on 
the current line of credit of $55 million, which provides substantial 
flexibility to fund expanded capital programs into the future. As at 
February 24, 2005, there were 40,560,049 common shares and 880,503 Class 
B Performance Shares outstanding. In addition, there were 1,944,312 
stock options outstanding, with an average exercise price of $7.29 per 
share.

Quarterly financial information - The following table highlights 
NuVista's performance for the quarterly reporting periods from September 
30, 2003 to December 31, 2004. NuVista commenced operations on July 2, 
2003 through the Plan of Arrangement involving Bonavista:

/T/

------------------------------------------------------------------------
                                 2004                      2003
------------------------------------------------------------------------
              December  September    June    March  December  September
                    31         30      30       31        31         30
------------------------------------------------------------------------
(thousands,
 except per
 share amounts)                                    (restated) (restated)

Production
 revenue       $24,601    $22,020 $16,982  $15,795   $13,061    $12,697

Net income       5,715      4,335   4,540    3,732     2,878      2,746

Net income
 per share:
  Basic        $ 0.14     $  0.11 $  0.12  $  0.10   $  0.08    $  0.08
  Diluted        0.14        0.11    0.12     0.10      0.08       0.07
------------------------------------------------------------------------

/T/

BUSINESS RISKS AND OUTLOOK

NuVista's management remains committed to the same principles and 
disciplined growth strategy that has led to it's considerable success 
over the first year and a half and the tremendous success of Bonavista 
as a high growth exploration and production company. In the first 
quarter of 2005, NuVista increased its employee base with the 
establishment of separate technical teams in each of its Core Regions. 
These personnel were a combination of Bonavista employees who had 
previously worked on the development of NuVista's Core Regions as well 
as several new hires. With the undeveloped land base now exceeding 
310,000 net acres, an increased drilling inventory, coupled with our 
strong balance sheet, NuVista is well positioned to continue posting 
strong operational and financial results for the first quarter of 2005 
and beyond. NuVista will continue to focus on its core strategy of 
applying the expertise of its own technical staff 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. Furthermore, our solid financial 
position will enable us to execute our 2005 capital program and remain 
positioned to pursue additional strategic opportunities as they arise. 
We remain unwavering in our commitment to enhance shareholder value over 
the long-term by accessing the broad depth and expertise of our team in 
a diligent and prudent manner.

For 2005 NuVista's Board of Directors has approved a capital program of 
$100 million, which is expected to result in production averaging 
between 8,200 and 8,600 boe per day for the year. Using commodity price 
estimates of $6.53 per gj at AECO for natural gas and US $47.75 per bbl 
WTI for oil, this production forecast should result in cash flow in the 
range of $70 million to $75 million ($1.70 per share to $1.85 per share) 
for 2005.

/T/

Consolidated Balance Sheets
                                                      December 31,
                                                    2004        2003
---------------------------------------------------------------------
(thousands)                                                (restated)

Assets

Accounts receivable                            $  12,071    $  6,251
Oil and natural gas properties and
 equipment (notes 3, 4 and 5)                    152,021      79,959
Goodwill (note 3)                                  9,439           -
Future tax asset (note 9)                              -       8,164
---------------------------------------------------------------------
                                               $ 173,531    $ 94,374
---------------------------------------------------------------------
---------------------------------------------------------------------

Liabilities and Shareholders' Equity

Accounts payable and accrued liabilities       $  17,524    $ 12,402
Bank loan (note 7)                                     -       6,928
---------------------------------------------------------------------
                                                  17,524      19,330

Bank loan (note 7)                                28,352           -
Asset retirement obligations (note 6)              5,990       3,027
Future income taxes (note 9)                       6,555           -

Shareholders' equity:
 Share capital (note 8)                           89,876      65,932
 Contributed surplus (note 8)                      1,288         461
 Retained earnings                                23,946       5,624
---------------------------------------------------------------------
                                                 115,110      72,017
---------------------------------------------------------------------
                                               $ 173,531    $ 94,374
---------------------------------------------------------------------
---------------------------------------------------------------------


Consolidated Statement of Operations and Retained Earnings

                                Three Months         Year      Period(1)
                                       ended        ended         ended
                                 December 31, December 31,  December 31,
                             2004       2003         2004          2003
------------------------------------------------------------------------
(thousands, except per             (restated)                 (restated)
 share amounts)

Revenues:
 Production              $ 24,601   $ 13,061     $ 79,398      $ 25,758
 Royalties, net            (5,391)    (2,950)     (17,701)       (6,079)
 Transportation costs        (496)      (326)      (1,630)         (624)
------------------------------------------------------------------------
                           18,714      9,785       60,067        19,055
------------------------------------------------------------------------
Expenses:
 Operating                  2,677      1,505        8,392         2,792
 General and
  administrative              326        141          834           268
 Interest                     244         38          574           282
 Stock-based compensation     302        231        1,035           461
 Depreciation, depletion
  and accretion             6,339      2,936       19,727         5,963
------------------------------------------------------------------------
                            9,888      4,851       30,562         9,766
------------------------------------------------------------------------
Income before income and
 other taxes                8,826      4,934       29,505         9,289
 Income and other taxes
  (note 9)                  3,111      2,056       11,183         3,665
------------------------------------------------------------------------
Net income                  5,715      2,878       18,322         5,624
Retained earnings,
 beginning of period       18,231      2,746        5,668             -
Retroactive application
 of changes in accounting
 policies (note 2)              -          -          (44)            -
------------------------------------------------------------------------
Retained earnings,
 end of period           $ 23,946   $  5,624     $ 23,946      $  5,624
------------------------------------------------------------------------
------------------------------------------------------------------------
Net income per share
 - basic                 $   0.14   $   0.08     $   0.47      $   0.15
------------------------------------------------------------------------
------------------------------------------------------------------------
Net income per share
 - diluted               $   0.14   $   0.08     $   0.46      $   0.15
------------------------------------------------------------------------
------------------------------------------------------------------------

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



Consolidated Statement of Cash Flows
(thousands)
                                Three Months         Year      Period(1)
                                       ended        ended         ended
                                 December 31, December 31,  December 31,
                             2004       2003         2004          2003
------------------------------------------------------------------------
                                   (restated)                 (restated)
Cash provided by
 (used in):

Operating Activities:
 Net income               $ 5,715    $ 2,878     $ 18,322       $ 5,624
  Items not requiring
   cash from operations:
   Depreciation,
    depletion and
    accretion               6,339      2,936       19,727         5,963
   Stock-based
    compensation              302        231        1,035           461
   Future income taxes      2,866      2,007       10,787         3,558
------------------------------------------------------------------------
 Funds flow from
  operations               15,222      8,052       49,871        15,606
 Asset retirement
  expenditures               (112)      (109)        (131)         (110)
 Decrease (Increase)
  in non-cash working
  capital items              (366)       134       (6,801)          106
------------------------------------------------------------------------
                           14,744      8,077       42,939        15,602
------------------------------------------------------------------------
Financing Activities:
 Issue (Repurchase)
  of share capital             13        (48)         (24)       17,478
 Increase (Decrease)
  in bank loan             (4,952)     2,940       21,424       (18,163)
------------------------------------------------------------------------
                           (4,939)     2,892       21,400          (685)
------------------------------------------------------------------------
Investing Activities:
 Business acquisition
  (note 3)                      -          -      (22,882)            -
 Oil and natural gas
  properties and
  equipment additions     (13,823)   (13,437)     (45,368)      (20,960)
 Proceeds on disposal of
  oil and natural gas
  properties and equipment      -          -          102             -
 Decrease in non-cash
  working capital items     4,018      2,468        3,809         6,043
------------------------------------------------------------------------
                           (9,805)   (10,969)     (64,339)      (14,917)
------------------------------------------------------------------------
Decrease in cash                -          -            -             -
Cash, beginning of period       -          -            -             -
------------------------------------------------------------------------
Cash, end of period       $     -    $     -     $      -       $     -
------------------------------------------------------------------------
------------------------------------------------------------------------

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

/T/

NUVISTA ENERGY LTD.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2004.

1. Significant accounting policies:

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 of certain producing and exploration assets were transferred 
to NuVista. The comparative consolidated financial statements reflect 
the results of operations for the period from July 2, 2003 to December 
31, 2003.

The amounts recorded for depreciation and depletion of oil and natural 
gas properties and equipment and the provision for asset retirement 
obligations are based on estimates. The ceiling test is based on 
estimates of proved reserves, production rates, oil and natural gas 
prices, future costs and other relevant assumptions. By their nature, 
these estimates are subject to measurement uncertainty and the effect on 
the financial statements of changes in such estimates in future periods 
could be significant.

(a) Oil and natural gas properties and equipment:

Oil and natural gas properties and equipment 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.

(b) Joint venture accounting:

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

(c) Goodwill:

Goodwill is tested for impairment on an annual basis in the fourth 
quarter. If indications of impairment are present, a loss would be 
charged to earnings for the amount that the carrying value of goodwill 
exceeds its fair value.

(d) Asset retirement obligation:

NuVista records a liability for the fair value of legal obligations 
associated with the retirement of long-lived tangible assets in the 
period in which they are incurred, normally when the asset is purchased 
or developed. On recognition of the liability there is a corresponding 
increase in the carrying amount of the related asset known as the asset 
retirement cost, which is depleted on a unit-of-production basis over 
the life of the reserves. The liability is adjusted each reporting 
period to reflect the passage of time, with the accretion charged to 
earnings, and for revisions to the estimated future cash flows. Actual 
costs incurred upon settlement of the obligations are charged against 
the liability. The impact of the adoption of the new standard is 
described in note 2.

(e) Revenue recognition:

Revenues from the sale of petroleum and natural gas are recorded when 
title passes to an external party.

(f) Financial instruments:

(i) Hedge relationships:

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. The 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. NuVista 
formally assesses, both at the hedge's inception and on an ongoing 
basis, whether the derivatives that are used in the hedging transactions 
are highly effective in offsetting changes in fair value or cash flows 
of the hedged item. These derivative contracts, accounted for as hedges, 
are not recognized on the balance sheet. Realized gains and losses on 
these contracts are recognized in petroleum and natural gas revenue and 
cash flows in the same period in which the revenues associated with the 
hedged transaction are recognized. Premiums paid or received are 
deferred and amortized to earnings over the term of the contract.

(ii) Credit risk:

NuVista accounts receivable are with customers and joint venture 
partners in the petroleum and natural gas business and are subject to 
normal credit risks. Concentration of credit risk is mitigated by 
marketing production to numerous purchasers under normal industry sale 
and payment terms. NuVista routinely assesses the financial strength of 
its customers. NuVista may be exposed to certain losses in the event of 
non-performance by counterparties to commodity price contracts. NuVista 
mitigates this risk by entering into transactions with highly rated 
major financial institutions.

(g) Stock-based compensation:

NuVista has equity incentive plans, which are described in note 8. 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. Upon 
the exercise of stock options, consideration received together with the 
amount previously recognized in contributed surplus is recorded as an 
increase to share capital. Compensation costs are recognized in the 
financial statements for the performance shares. NuVista uses 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.

(h) Income taxes:

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

(i) 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. Changes in accounting policies:

a) Asset retirement obligations:

On January 1, 2004, NuVista adopted the new accounting policies on 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 in accounting policy, net income increased by 
$313,000 ($481,000, net of a future tax expense of $168,000) or $0.01 
per share on a basic and diluted basis for the period from inception on 
July 2, 2003 to December 31, 2003. The Asset Retirement Obligations 
increased by $1.7 million, oil and natural gas properties and equipment, 
net of accumulated depreciation and depletion increased by $3.2 million, 
future tax asset decreased by $509,000, share capital increased by 
$642,000 and retained earnings increased by $313,000 as at December 31, 
2003.

b) 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.

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

3. Acquisition of Grid Resources Ltd.:

On July 29, 2004, NuVista acquired all of the issued and outstanding 
shares of Grid Resources Ltd. ("Grid"), a private oil and natural gas 
company. NuVista purchased Grid through a series of transactions, which 
included the disposition of certain non-core assets to a private company 
and the residual assets being acquired in an existing partnership, owned 
approximately 76% by NuVista and 24% by Bonavista Petroleum. The 
acquisition has been accounted for using the purchase method, with 
results of operations included from the date of acquisition. The 
purchase equation, which reflects the NuVista portion of the 
acquisition, is as follows:

/T/

------------------------------------------------------------------------
                                                                 Amount
------------------------------------------------------------------------
(thousands)
Net assets acquired:

 Oil and natural gas properties                                $ 44,420
 Goodwill                                                         9,439
 Natural gas hedge liability                                       (915)
 Asset retirement obligations                                      (991)
 Future income taxes                                             (3,931)
------------------------------------------------------------------------

Net assets acquired                                            $ 48,022
------------------------------------------------------------------------
------------------------------------------------------------------------

(thousands)
Purchase consideration:

 Issue of common shares                                        $ 23,760
 Cash and assumption of bank loan                                22,882
 Assumption of working capital deficiency                         1,380
------------------------------------------------------------------------

Total purchase consideration                                   $ 48,022
------------------------------------------------------------------------
------------------------------------------------------------------------

/T/

4. Formation and related party transactions:

Under the Plan of Arrangement in July 2003, 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 was 70% 
owned by NuVista and 30% owned by Bonavista. As this was a related party 
transaction, assets and liabilities were transferred at their book 
value. Details are as follows:

/T/

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

Oil and natural gas assets and equipment                       $ 64,671
Future income tax asset                                          11,410
------------------------------------------------------------------------
Total assets transferred                                         76,081
Bank loan                                                       (29,103)
Asset retirement obligations                                     (2,846)
------------------------------------------------------------------------
Net assets received and common shares issued                   $ 44,132
------------------------------------------------------------------------
------------------------------------------------------------------------

/T/

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 were fees of $1,348,000 charged relating to general and 
administrative activities and $750,000 of fees were charged relating to 
capital expenditure activities for the year ended December 31, 2004 
(period from July 2, 2003 to December 31, 2003 - $372,000 and $317,000, 
respectively). As at December 31, 2004, amounts payable to Bonavista 
were $3.5 million (2003 - $1.7 million).

/T/

5. Oil and natural gas properties and equipment:

------------------------------------------------------------------------
                                                 Accumulated
                                                depreciation   Net book
December 31, 2004                      Cost    and depletion      value
------------------------------------------------------------------------
(thousands)

Oil and natural gas
  properties                      $ 145,616         $ 23,170  $ 122,446
Facilities and well equipment        31,714            2,139     29,575
------------------------------------------------------------------------
                                  $ 177,330         $ 25,309  $ 152,021
------------------------------------------------------------------------
------------------------------------------------------------------------


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

 Oil and natural gas properties    $ 68,359          $ 5,363   $ 62,996
 Facilities and well equipment       17,478              515     16,963
------------------------------------------------------------------------
                                   $ 85,837          $ 5,878   $ 79,959
------------------------------------------------------------------------
------------------------------------------------------------------------

/T/

Unproved property costs of $15.9 million were excluded from the 
depreciation and depletion calculation for the year ended December 31, 
2004 (period from July 2 to December 31, 2003 - $10.7 million).

NuVista has performed the ceiling test under AcG-16 as of December 31, 
2004. The impairment test was calculated using the benchmark reference 
prices at January 1 for the years 2005 to 2009 and adjusted for 
commodity differentials specific to NuVista:

/T/

Benchmark Reference Price Forecasts:               Year
------------------------------------------------------------------------
                                   2005    2006    2007    2008    2009
------------------------------------------------------------------------
WTI ($U.S./bbl)                   42.00   40.00   38.00   36.00   34.00
------------------------------------------------------------------------
AECO ($Cdn/mcf)                    6.60    6.35    6.15    6.00    6.00
------------------------------------------------------------------------

/T/

6. 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 $31.0 million, which will be 
incurred over the next 51 years. The majority of the costs will be 
incurred between 2010 and 2034. A credit-adjusted risk-free rate of 8% 
was used to calculate the fair value of the asset retirement obligations.

A reconciliation of the asset retirement obligations is provided below:

/T/

------------------------------------------------------------------------
                                                            Period from
                                        Year ended            July 2 to
                                 December 31, 2004    December 31, 2003
------------------------------------------------------------------------
(thousands)

Balance, beginning of period               $ 3,027              $ 2,846

 Accretion expense                             295                   85
 Liabilities incurred                        1,808                  206
 Liabilities acquired                          991                    -
 Liabilities settled                          (131)                (110)
------------------------------------------------------------------------
Balance, end of period                     $ 5,990              $ 3,027
------------------------------------------------------------------------
------------------------------------------------------------------------

/T/

7. Bank loan:

In October 2004, NuVista and its lenders agreed to amend the Company's 
revolving bank loan facility to increase the maximum borrowing to $55 
million. The bank loan facility provides that borrowing may be made by 
prime loans, bankers' acceptances and/or US libor advances. These 
advances bear interest at the bank's prime rate and/or at money market 
rates plus a stamping fee. The loan 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, at which time a lender can request 
conversion to a term loan for one year. Under the term period, no 
principal payments would be required until June 30, 2006 or later, after 
the annual review. As such, this loan facility is classified as a 
long-term liability. Cash paid for the interest expense was $248,000 for 
the three months and $560,000 for the year ended December 31, 2004 (for 
the period from July 2 to December 31, 2003 - $282,000).

8. 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 4)   32,839    44,132
 Issued for cash                                        2,500    18,375
 Reacquired and cancelled                                  (1)       (2)
 Costs associated with shares issued, net of
  future tax benefit                                        -      (585)
------------------------------------------------------------------------

Outstanding as at December 31, 2003 (restated)         37,338    65,920

 Issued on acquisition of Grid Resources Ltd.
  (note 3)                                              3,000    23,760
 Conversion of Class B Performance Shares                 223         3
 Stock-based compensation                                    -       208
 Exercise of stock options                                  4        25
 Reacquired and cancelled                                  (6)      (15)
 Cost associated with shares issued, net of
  future tax benefit                                        -       (34)
------------------------------------------------------------------------

Outstanding as at December 31, 2004                    40,559  $ 89,867
------------------------------------------------------------------------
------------------------------------------------------------------------

(ii) Contributed Surplus
------------------------------------------------------------------------
                                                                 Amount
------------------------------------------------------------------------
(thousands)

Balance as at July 2, 2003                                            -

 Stock-based compensation                                           461
------------------------------------------------------------------------
Balance as at December 31, 2003 (restated)                          461

 Stock-based compensation                                         1,035
 Conversion of Class B Performance shares                          (208)
------------------------------------------------------------------------
Balance as at December 31, 2004                                 $ 1,288
------------------------------------------------------------------------
------------------------------------------------------------------------

/T/

(iii) Class B Performance Shares

Each Class B Performance Share was issued 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 8(e). This amount is amortized over the life of the Class B 
Performance Shares and is included in stock-based compensation expense. 
Upon conversion or exercise the related charge to stock-based 
compensation is re-classed into equity.

/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

 Converted to Common Shares                              (297)       (3)
 Reacquired and cancelled                                 (15)        -
------------------------------------------------------------------------
 Outstanding as at December 31, 2004                      884      $  9
------------------------------------------------------------------------
------------------------------------------------------------------------

/T/

(c) Per share amounts:

During the year ended December 31, 2004, there were 38,725,401 (period 
from July 2, 2003 to December 31, 2003 - 36,359,841) weighted average 
shares outstanding. On a diluted basis, there were 39,897,355 (period 
from July 2 to December 31, 2003 - 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.

The summary of stock options transactions for the year ended December 
31, 2004 and for the period from July 2, 2003 to December 31, 2003 is as 
follows:

/T/

------------------------------------------------------------------------
                                      2004                  2003
------------------------------------------------------------------------
                                          Weighted             Weighted
                                           average              average
                                          exercise             exercise
                                  Number     price     Number     price
------------------------------------------------------------------------

Outstanding as at
 beginning of period           1,365,300    $ 6.35          -         -
 Granted                         381,100    $ 8.49  1,369,800    $ 6.35
 Exercised                        (4,013)   $ 6.36          -         -
 Cancelled                       (32,350)   $ 6.30     (4,500)   $ 6.30
------------------------------------------------------------------------

Outstanding as at
 December 31                   1,710,037    $ 6.82  1,365,300    $ 6.35
------------------------------------------------------------------------
------------------------------------------------------------------------

The following table summarizes stock options outstanding and exercisable
under the plan at December 31, 2004:

------------------------------------------------------------------------
                      Options outstanding         Options exercisable
------------------------------------------------------------------------
                            Weighted
                             average  Weighted                 Weighted
Range of        Number     remaining   average        Number    average
exercise   outstanding   contractual  exercise   exercisable   exercise
prices     at year-end          life     price   at year-end      price
------------------------------------------------------------------------

$ 6.30
 to $ 7.42   1,337,037           4.5    $ 6.35       345,812     $ 6.35

$ 7.70
 to $ 9.91     373,000           5.0    $ 8.49         1,000     $ 7.88
             ----------                             ---------
             1,710,037                  $ 6.82       346,812     $ 6.35
------------------------------------------------------------------------
------------------------------------------------------------------------

/T/

(e) Stock-based compensation:

The Company uses the fair value based method for the determination of 
the stock-based compensation costs.

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 
risk free interest rate was 3.5%; volatility of 25%; and an expected 
life of 4.5 years.

9. 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 ended         Year ended
                                  December 31, 2004  December 31, 2004
-----------------------------------------------------------------------
(thousands)

Expected tax expense at 39%                 $ 3,442           $ 11,507

Non deductible crown payments, net            1,123              3,753
Resource allowance                           (1,281)            (4,197)
Effect of change in tax rate                   (536)              (680)
Other                                           118                404
Capital taxes                                   245                396
-----------------------------------------------------------------------

Provision for income taxes                  $ 3,111           $ 11,183
-----------------------------------------------------------------------
The provision for income
 taxes consists of:
  Current                                   $   245           $    396
  Future                                      2,866             10,787
-----------------------------------------------------------------------

 Provision for income taxes                 $ 3,111           $ 11,183
-----------------------------------------------------------------------
-----------------------------------------------------------------------

The significant components of the future income taxes (asset) as at
December 31, 2004 and 2003 are:

-----------------------------------------------------------------------

                                               2004               2003
-----------------------------------------------------------------------
(thousands)                                                  (restated)

Oil and natural gas properties              $ 8,196           $ (5,948)
Facilities and well equipment                   789             (1,073)
Asset retirement obligations                 (2,157)            (1,047)
Share issue costs                              (198)              (239)
Other                                           (75)               143
-----------------------------------------------------------------------

Future income taxes (asset)                 $ 6,555           $ (8,164)
-----------------------------------------------------------------------
-----------------------------------------------------------------------

Cash income taxes paid for the year ended December 31, 2004 was
 $125,000 (for the period from July 2 to December 31, 2003 - Nil).

/T/

10. Hedging activities:

a) Financial instruments:

As at December 31, 2004, NuVista has hedged by way of costless collars 
the following crude oil:

/T/

------------------------------------------------------------------------
                     Average Price
WTI                    (U.S. $/bbl)                                Term
------------------------------------------------------------------------
250 bbls per day   $ 40.00-$ 65.00     January 1, 2005 - March 31, 2005
250 bbls per day   $ 40.00-$ 60.00        April 1, 2005 - June 30, 2005
250 bbls per day   $ 40.00-$ 55.00      July 1, 2005 - October 31, 2005
250 bbls per day   $ 35.00-$ 57.25  October 1, 2005 - December 31, 2005
------------------------------------------------------------------------

/T/

As at December 31, 2004, the market value of these financial instruments 
was approximately $171,000.

b) Physical purchase contracts:

As at December 31, 2004, NuVista has entered into direct sale costless 
collars to sell natural gas as follows:

/T/

------------------------------------------------------------------------
                     Average Price
AECO                     (Cdn $/gj)                                Term
------------------------------------------------------------------------
8,300 gj's per day   $ 5.78-$ 9.75     January 1, 2005 - March 31, 2005
10,000 gj's per day  $ 6.13-$ 9.06     April 1, 2005 - October 31, 2005
------------------------------------------------------------------------

/T/

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) 538-8501

or

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