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Harvest Energy Trust Announces Closing Of $30,000,000 Initial Public Offering

Dec 5, 2002 - 11:30 ET



CALGARY - Harvest Energy Trust ("Harvest") is pleased to
announce the closing of its Initial Public Offering. At closing, a total of
3,750,000 trust units were issued at a price of $8.00 per trust unit for gross
proceeds of $30,000,000. The underwriters have an option to purchase an
additional 562,500 units at $8.00 per unit. If exercised the total gross
proceeds will be $34,500,000.
The first distribution to Unitholders will be payable on January 15th,
2003 to Unitholders of record on December 31st, 2002. Harvest will pay monthly
distributions to Unitholders and anticipates the December distribution to be
$0.20 per unit. The Board of Directors of Harvest will confirm the December
distribution on or about December 17th, 2002.
The offering was made through a syndicate of underwriters led by
FirstEnergy Capital Corp. and including Haywood Securities Inc. The net
proceeds of the offering will be used to repay an interim loan provided to
Harvest, with the balance being used to reduce the debt outstanding under the
existing credit facility and to finance Harvest's ongoing development and
acquisition programs.
Harvest Energy Trust is a Calgary based oil and natural gas trust that
strives to deliver strong, stable and predictable monthly cash distributions
to its Unitholders through its strategy of acquiring, enhancing and producing
crude oil, natural gas and natural gas liquids. Harvest has successfully
employed a strategy of targeting mature, predictable, high quality medium and
heavy gravity crude oil properties in East Central Alberta and will endeavor
to deliver superior economic returns to Unitholders. Harvest currently
operates approximately 99% of its production, enabling it to pursue additional
asset growth through property optimization and enhancement. Current production
levels are approximately 8,900 BOE/day and established (proved plus 1/2
probable effective August 1, 2002) reserves are 12.7 million BOE (6:1).
Assuming the underwriters' option is exercised Harvest will have 9,462,500
units outstanding and net debt will be approximately $42 million or 1.0 times
annualized cash flow.
To maintain its unique "going concern" strategy, Harvest will utilize an
approach of retaining up to 50% of its cash flow for capital reinvestment in
the form of existing property enhancement and new property acquisitions.
Augmenting this active reinvestment program Harvest has implemented a risk
management strategy to mitigate distribution volatility caused by crude oil
price movements by utilizing a series of commodity hedges and physical sales
contracts with expiration dates extending to July 2005. For 2003, Harvest has
mitigated approximately 70% of its WTI oil price exposure and eliminated
approximately 60% of its heavy oil differential exposure.
Jacob Roorda, President of Harvest Operations Corp., the manager for
Harvest, stated: "We are pleased to have completed our Initial Public
Offering, and to have the opportunity of allowing our Unitholders to
participate in our "going-concern" strategy. We are confident that our strong
technical and operating team combined with our unique "going-concern" strategy
will enable us to deliver stable and predictable cash distributions, at
superior distribution yields."
The trust units offered have not and will not be registered under the
United States Securities Act of 1933, as amended (the "U.S. Securities Act")
or any state securities laws and may not be offered or sold in the United
States except in certain transactions exempt from the registration
requirements of the U.S. Securities Act and applicable states securities laws.
The offer was made in Canada only pursuant to a prospectus.

Certain information set forth in this document, including management's
assessment of Harvest's future plans and operations, contains forward-looking
statements. By their nature, forward-looking statements are subject to
numerous risks and uncertainties, some of which are beyond Harvest's control,
including the impact of general economic conditions, industry conditions,
volatility of commodity prices, currency fluctuations, imprecision of reserve
estimates, environmental risks, competition from other industry participants,
the lack of availability of qualified personnel or management, stock market
volatility and ability to access sufficient capital from internal and external
sources. Readers are cautioned that the assumptions used in the preparation of
such information, although considered reasonable at the time of preparation,
may prove to be imprecise and, as such, undue reliance should not be placed on
forward-looking statements. Harvest's actual results, performance or
achievement could differ materially from those expressed in, or implied by,
these forward-looking statements and, accordingly, no assurance can be given
that any of events anticipated by the forward-looking statements will
transpire or occur, or if any of them do so, what benefits that Harvest will
derive therefrom. Harvest disclaims any intention or obligation to update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.



Jacob Roorda,
President Harvest Energy Trust,
Telephone: (403) 265-1178,
Facsimile: (403) 265-3490,
Email address: