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NuVista Energy Ltd. Announces $47.4 Million Acquisition

CALGARY, ALBERTA--(CCNMatthews - July 21, 2004) - NuVista Energy Ltd. ("NuVista") is pleased to announce it has entered into an agreement whereby, it will acquire all of the outstanding shares of a private company, and through a series of transactions will hold certain natural gas producing properties primarily concentrated north of NuVista's Eastern Alberta Core Region. The consideration for this acquisition consists of 3,000,000 common shares of NuVista, plus $23.7 million in cash and assumption of debt. The acquisition is expected to close on or about July 29, 2004, with completion of the transaction subject to customary closing conditions and receipt of regulatory approvals. The total purchase price at closing is estimated to be approximately $47.4 million, subject to certain final adjustments. Holders of 83% of the outstanding shares (on a fully diluted basis) have entered into "hard" lockup agreements, pursuant to which they have agreed to sell their shares to NuVista. The acquired assets are 92% natural gas weighted, with 77% of the production in the Provost region and 23% of the production in the Pembina area. The Provost property is a natural extension to NuVista's Eastern Alberta Core Region and is consistent with our desire to extend similar play types in a northerly direction, while the Pembina area represents a new core area for NuVista. Current production from the assets is approximately 1,280 barrels of oil equivalent per day (boe/d), including 7.1 million cubic feet per day (mmcf/d) of natural gas and 100 barrels per day (bbls/d) of oil and liquids. This transaction will increase NuVista's production by 25% to approximately 6,350 boe/d, proven reserves by 13.5 bcf of natural gas and 174 mbbls of oil and proven and probable reserves by 19.2 bcf of natural gas and 379 mbbls of oil. These reserve additions have been evaluated internally. The acquisition also includes approximately 45,000 net acres of highly prospective undeveloped land. The acquisition provides the following benefits to NuVista: - Accretive to NuVista's cash flow, reserves, production and net asset value, all on a per share basis; - Acquisition costs, net of undeveloped land value, are $34,200 per boe/d of production, $19.90 per boe of proved reserves and $16.25 per boe of proved plus probable reserves, including all future capital required to develop and bring reserves on stream; - Provides NuVista with an extension to its Eastern Region and a new core area, both of which are considered to be natural gas prone, multi zone areas; - Both properties are mostly operated with high working interests; - The infrastructure within the Provost area provides NuVista with a strategic, low cost advantage with respect to ongoing development of new and existing pools; - NuVista has identified over 50 opportunities, which includes; new drills, recompletions re-entries and tie-ins; - Approximately 45,000 net acres of undeveloped high working interest land, independently evaluated at $3.7 million, based primarily upon current prices paid at land sales for properties in the immediate vicinity; and - This acquisition will result in an expansion to NuVista's 2004 capital program to $95 million. This expansion will enable NuVista to increase 2004 exit production to 7,500 boe/d from 6,700 boe/d, while maintaining its focus on natural gas. NuVista's acquisition strategy is focused on establishing core areas in natural gas prone, multizone regions, where exploitation can be carried out with medium depth drilling. Ideally, new focus areas have a high working interest and operated production base, a prospective undeveloped land position, infrastructure and access to facilities. These attributes are included in this acquisition. NuVista plans upon utilizing concepts developed in our Eastern Alberta Core Region with respect to the integration of 3D seismic and geology to develop and exploit opportunities within Provost, as a logical northwestern extension to NuVista's Eastern Alberta Core Region. 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". Information provided herein contains forward-looking statements. 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. Boe may be misleading particularly if used in isolation. A boe conversion ratio of 6 mcf : 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. /T/NuVista Energy Ltd.1100, 321 - 6th Avenue S.WCalgary, AB T2P 3H3Ph: (403) 514-7300Email: inv_rel@nuvistaenergy.com/T/-30-
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