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FOR: NUVISTA ENERGY LTD.

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

NuVista Energy Ltd. Announces Property Acquisitions

Dec 12, 2008 - 18:16 ET

CALGARY, ALBERTA--(Marketwire - Dec. 12, 2008) - NuVista Energy Ltd. ("NuVista") (TSX:NVA) is pleased to announce that it has entered into an agreement to acquire certain natural gas properties located in its Ferrier/Sunchild, Wapiti and Northwest Saskatchewan core areas. The acquisition cost, payable in cash, is estimated to be approximately $53 million after closing adjustments. The acquisition has an effective date of October 1, 2008, and an expected closing date of January 20, 2009. The completion of the acquisition is subject to customary conditions and rights of first refusal with third parties on a minor portion of the acquired assets.

The asset purchase will be part of NuVista's previously announced 2009 preliminary capital budget of $290 million of which approximately $75 million has been allocated to acquisitions. Current production from the acquired properties is approximately 1,600 boe/d, with a 78% natural gas weighting. These properties consolidate NuVista's interests in existing core areas at very attractive metrics, with more than half of the production being operated. At October 1, 2008, company interest proven plus probable reserves were estimated by a third-party reserves evaluator to be 4.8 million barrels of oil equivalent ("boe"). Proven reserves were estimated to be 3.5 million boe.

Financial and operating results from the acquired properties will be included in NuVista's results from the closing date onward. The properties are not forecast to have a material impact on operating costs, corporate decline rate or netbacks. This production is considered to be mature and therefore, corporate royalty rates are forecast to decline slightly with the New Royalty Framework in the current commodity price environment.

The acquisition will be financed with bank borrowings and cash flow from operations as part of NuVista's overall 2009 capital expenditure budget. During the first half of 2009, NuVista will reduce exploration and development capital expenditures in order to fund this acquisition and maintain its financial flexibility. Approximately 75% of NuVista's exploration and development program is now planned for the last half of 2009 which is expected to result in NuVista participating in 90 -100 wells. With the closing of the acquisition being earlier in the year than previously budgeted, forecast 2009 average production is expected to increase slightly to between 27,500 boe/d and 28,000 boe/d.

Given commodity price volatility and an uncertain economic environment, NuVista will continuously review its capital budget and the allocation of capital throughout 2009. NuVista will consider increasing the allocation of its 2009 capital budget to acquisitions and further reduce exploration and development spending, in order to accommodate acquisitions which meet our investment criteria without significantly impacting our financial flexibility.

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".

Advisory Regarding Forward-Looking Information and Statements

This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "will", "believe", "plans", "potential" and similar expressions are intended to identify forward-looking statements or information. More particularly and without limitation, this press release contains forward looking statements and information concerning: NuVista's business strategy, capital spending plans, future development and growth opportunities, prospects and asset base; the anticipated benefits from the transactions referred to in this press; and 2009 production.

The forward-looking statements and information in this press release are based on certain key expectations and assumptions made by NuVista, including expectations and assumptions concerning: closing of the transaction referred to in this press release, on January 20, 2009; no rights of first refusal being exercised; prevailing commodity prices and exchange rates; applicable royalty rates and tax laws; future well production rates; reserve and resource volumes; the performance of existing wells; the success obtained in drilling new wells; the sufficiency of budgeted capital expenditures in carrying out planned activities; the availability and cost of labour and services; and the receipt, in a timely manner of regulatory approvals. Although NuVista believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because NuVista can give no assurance that they will prove to be correct. There is no certainty that NuVista will achieve commercially viable production from its undeveloped lands and prospects.

Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to the risks associated with the oil and gas industry in general such as: operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to reserves, production, costs and expenses; health, safety and environmental risks; commodity price and exchange rate fluctuations; marketing and transportation or petroleum and natural gas and loss of markets; environmental risks; competition; incorrect assessment of the value of acquisitions; failure to realize the anticipated benefits of acquisitions; ability to access sufficient capital from internal and external sources; stock market volatility; and changes in legislation, including but not limited to tax laws, royalty rates and environmental regulations.

Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the operations or financial results of NuVista are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).

The forward-looking statements and information contained in this press release are made as of the date hereof and NuVista undertake no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Boe Advisory

The term "boe" or barrels of oil equivalent may be misleading, particularly if used in isolation. A Boe conversion ratio of six thousand cubic feet per barrel (6 Mcf: 1 Bbl) of natural gas to barrels of oil equivalence is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. 

FOR FURTHER INFORMATION PLEASE CONTACT:

NuVista Energy Ltd.
Alex G. Verge
President and Chief Executive Officer
(403) 538-8501

or

NuVista Energy Ltd.
Robert F. Froese
Vice President, Finance and Chief Financial Officer
(403) 538-8530