Dixie Energy Trust Releases Second Quarter 2013 Financial Results

CALGARY, Aug. 23, 2013 /CNW/ - Dixie Energy Trust ("Dixie" or the "Trust") is pleased to report its financial results for the quarter ended June 30, 2013. Dixie's unaudited interim condensed consolidated financial statements for the three months and six months ended June 30, 2013 and related management's discussion and analysis ("MD&A") have been filed with the applicable Canadian securities regulators and are available on the Trust's website at DixieEnergyTrust.com and on SEDAR at www.sedar.com.

Summary of Second Quarter Financial Results

For the quarter ended June 30, 2013, Dixie had oil and natural gas revenues, net of royalties of $483,639, a net loss of $1,400,963 and a basic and diluted net loss per trust unit of $0.08. The Trust's total comprehensive loss for the period, which included a foreign currency translation gain, was $1,125,286. The Trust declared no distributions during the period.

As of June 30, 2013 the cash position of the Trust was $13,043,194 with working capital of $14,068,428.

Highlights for Q2 2013

• On May 30, 2013 the Trust announced it had entered into an agreement with one of its joint venture partners whereby Dixie would acquire additional working interest in certain oil and gas leases in Mississippi and Alabama (the "Fletcher Acquisition") including an additional 20% working interest in certain oil and gas leases in the Maple Branch prospect (Mississippi) increasing Dixie's average working interest in the Maple Branch prospect to approximately 30%; an additional 15% working interest in certain oil and gas leases in the Strong Field prospect (Mississippi), increasing Dixie's its working interest in the Strong Field Prospect to approximately 50%; and a 25% working interest in certain oil and gas leases in the Queens prospect (Alabama). The Fletcher Acquisition was completed on July 3, 2013 with the purchase price of US$5,500,000. No reserves or production were acquired.
  
  
• On June 13, 2013 the Trust announced that it had entered into an engagement agreement for a brokered private placement financing, concurrent with a non-brokered private placement financing, to issue up to 15,000,000 trust units at a price of $0.80 per trust unit for total gross proceeds of up to $12,000,000. The Trust intends to use the net proceeds of the financings to fund Dixie's 2013 capital expenditure program and other working capital requirements. The first closing of the brokered and non-brokered private placements was completed on July 28, 2013 with the Trust issuing an aggregate of 15,166,980 Trust Units for gross proceeds of $12,133,584. A second closing of the brokered and non-brokered private placements was completed on July 17, 2013 with the Trust issuing an aggregate of 1,455,000 trust units at an issue price of $0.80 per trust unit for gross proceeds of $1,164,000. When combined with the trust units issued in connection with the first closing of the brokered and non-brokered private placements, Dixie issued an aggregate of 16,621,980 trust units for aggregate gross proceeds of $13,297,584.
  
  
• During the second quarter of 2013, Dixie's average oil and gas production was 89 boepd (79% oil) and its netback per boe was US$71.21. With its production located in Mississippi and Alabama, Dixie currently receives premium pricing for its oil compared to typical pricing received by other companies in the Western Canadian Sedimentary Basin. During the second quarter Dixie's average oil sale price was US$112.85.
  
  
• Dixie's first two wells drilled and completed in 2013, the Holliman 7-13H No.1 (15% working interest) and Holliman 7-13H No.2 (20% working interest), continued to perform within acceptable parameters averaging 136 boepd (20 boepd net) and 283 boepd (57 boepd net) respectively. Gas production is currently being flared, however Dixie anticipates gas production being tied in before the end of the year.
  
  
• The Godwin 31-3 well (5% working interest) in Alabama, averaged 231 boepd (12 boepd net) during the quarter.
  
  
• Dixie and its joint venture partners spud the Forest Homes No. 1 well (9.9% working interest) in the White Castle Dome prospect (Louisiana) on June 1, 2013. Upon completing and testing the well it was deemed commercially successful and is currently being tied-in.
  
  
• Dixie and its joint venture partners spud the Holliman 18-4H No.1 well (40% working interest) on June 22, 2013 and encountered drilling problems prior to reaching total depth. On July 20, 2013 the decision was made to abandon the well and sidetrack to a new bottom hole location. The operator applied for and was granted a new well permit and the Holliman 7-12H No.1 well (40% working interest) was spud on July 22, 2013. At this time, drilling operations for the Holliman 7-12H No.1 well are ongoing.

About Dixie Energy Trust

Dixie is an energy trust created to provide investors with an oil and gas exploration focused investment. The strategy of Dixie is to acquire, exploit and develop, indirectly through its subsidiaries, long-life crude oil and gas prospects and reserves in the United States gulf coast states, primarily in Mississippi and Alabama. Additional information is available on DixieEnergyTrust.com.

Note regarding non-IFRS financial measures

This press release makes reference to the term "netback" which is a non-IFRS financial measure that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other issuers. Management believes that "netback" provides useful information to investors and management since such measures reflect the quality of production and the level of profitability of Dixie's oil and gas operations. Netback is calculated by subtracting royalties, production taxes, transportation and operating costs from gross revenues. Other financial data has been prepared in accordance with IFRS.

Forward Looking Statement Disclaimer
Certain statements included in this news release constitute forward looking statements or forward looking information under applicable securities legislation. Such forward looking statements or information are provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes. Forward looking statements or information typically contain statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project" or similar words suggesting future outcomes or statements regarding an outlook. Forward looking statements or information in this news release include, but are not limited to, the intended use of proceeds from Dixie's private placement financings and Dixie's plan to tie-in gas production before the end of the year.

Forward looking statements or information are based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although Dixie believes that the expectations reflected in such forward looking statements or information are reasonable, undue reliance should not be placed on forward looking statements because Dixie can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this news release, assumptions have been made regarding, among other things: the ability of Dixie to obtain qualified staff, equipment and services in a timely and cost efficient manner; the ability of the operator of the projects which Dixie has an interest in to operate the field in a safe, efficient and effective manner; the ability of Dixie (or the operator) to secure the necessary infrastructure, facilities and permits to tie in its gas production; that the use of proceeds from the financings completed by Dixie described herein will be used as set forth herein. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used.

Forward looking statements or information are based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by Dixie and described in the forward looking statements or information. These risks and uncertainties which may cause actual results to differ materially from the forward looking statements or information include, among other things: the risks of the oil and natural gas industry, such as operational risks in exploring for, developing and producing crude oil and natural gas and market demand; the risk that Dixie (or the operator) may not be able to tie in the gas production on the time periods currently anticipated (or at all); risks and uncertainties involving geology of oil and natural gas deposits; and the risk that Dixie may re-allocate the net proceeds from its private placement financing to expenditures that are different from those set forth herein. Readers are cautioned that the foregoing list is not exhaustive of all possible risks and uncertainties. The forward looking statements or information contained in this news release are made as of the date hereof and Dixie undertakes 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 required by applicable securities laws. The forward looking statements or information contained in this news release are expressly qualified by this cautionary statement.

Oil and Gas Disclaimers

"boepd" means barrels of oil equivalent per day.

Boes 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. As the value ratio between natural gas and crude oil based on the current prices of natural gas and crude oil is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

© 2013 Dixie Energy Trust
All rights reserved.

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SOURCE: Dixie Energy Trust

David G. Anderson
T: 403 232 1010