Bonterra Energy raises cash distributions for March by nearly nine per cent

By The Canadian Press

CALGARY - Bonterra Energy Income Trust (TSX: BNE-UN.TO), a Calgary-based oil and natural gas producer, says it has raised its March distribution to unitholders to 25 cents a unit from 23 cents, nearly nine per cent higher.

The company said Tuesday the increase comes after Bonterra managed to increase production last year and is benefiting from higher commodity prices.

The payment to unitholders will be made April 30, the company said.

"The increase is necessary because of higher production volumes and higher commodity prices," the trust said in a release. "Bonterra's objective is to distribute between 75 and 80 per cent of its annual adjusted distribution base (formally funds flow from operations)."

Bonterra said the 25 cent a unit monthly distribution can be sustained as long as oil prices average C$85 a barrel and natural gas prices are C$7.50 per thousand cubic feet or higher and production stays at 4,450 oil equivalent barrels a day.

"Bonterra's wells have a low production decline rate of approximately nine per cent and the trust is therefore able to distribute a larger percentage of its adjusted distribution base and still be able to modestly increase its reserves and production rates on a per unit basis. This can be accomplished while still maintaining a debt to annual adjusted distribution base of less than one year."

Bonterra is a conventional oil and gas royalty trust with operations in Alberta and Saskatchewan.