Peyto Energy Trust Completes Internal Reorganization
Peyto Energy Trust has completed its previously announced internal reorganization. The reorganization was approved by Peyto's unitholders at a special meeting held on December 14, 2007 and was completed on January 1, 2008. Pursuant to the Reorganization the Trust's business operations were simplified and consolidated, such that all assets and all exploration and development activities will now be conducted entirely through the new limited partnership, indirectly held by the Trust.
Pursuant to the reorganization and certain related post-reorganization transactions, all Unitholders of record on January 1, 2008, will receive a special distribution in the form of securities of the Trust and its affiliates. The composition of this "distribution in kind" will depend on the residency status of each Unitholder.
The securities issued will then be automatically redeemed and consolidated pursuant to the reorganization such that Unitholders' interest will be represented by the same number of Units as the Unitholder had prior to the reorganization. The securities issued pursuant to the special distribution will not be reflected in any confirmations or statements received by a Unitholder from such Unitholder's broker.
A withholding tax on the special distribution is required by the Income Tax Act (Canada) to be remitted to the Receiver General on behalf of non-resident Unitholders. Canadian Unitholders will receive a special cash distribution that will be equivalent to the withholding tax being remitted on behalf of non-resident Unitholders. This special cash distribution will equate to approximately $0.0035 per trust unit, will be paid concurrently with the January 15, 2008 distribution and will be classified as a return of capital for tax purposes. Canadian Unitholders will be required to reduce the adjusted cost base of the Unitholder's units by the fair market value of the special cash distribution.
For Unitholders, the reorganization has not resulted in a change to the number, type and ownership of the outstanding units of the Trust.
In addition, there has been no impact on the daily operations of the Trust.
Peyto is a natural gas weighted energy trust. Peyto currently has 105.7 million trust units outstanding and is committed to maintaining its emphasis on building value through the exploration and development of high quality gas properties.