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Harvest Energy Trust Announces Closing of Bought Deal Equity and Convertible Debenture Financing

Aug 10, 2004 - 09:12 ET


CALGARY, ALBERTA--(CCNMatthews - Aug. 10, 2004) - Harvest Energy 
Trust (the "Trust" or "Harvest") today announced the closing of 
its previously announced bought deal financing. Upon closing, a 
total of 12,166,666 subscription receipts (the "Subscription 
Receipts") at a price of $14.40 per Subscription Receipt for 
gross proceeds of $179,199,990 and $100 million principal amount 
of 8% convertible unsecured subordinated debentures (the 
"Debentures") (which includes the full exercise by the 
underwriters of their option to purchase an additional aggregate 
$80 million of Subscription Receipts and Debentures) were issued. 
The Subscription Receipts and Debentures are listed for trading 
on the TSX under the symbols "HTE.R" and "HTE.DB.A", 
respectively. 

Each Subscription Receipt represents the right to receive one 
trust unit on the closing of the previously announced acquisition 
of properties from a subsidiary of EnCana Corporation (the 
"Acquisition"). The proceeds from the offering of Subscription 
Receipts have been deposited in escrow pending closing of the 
Acquisition. If the Acquisition closes on or before September 
30th, 2004, the net proceeds will be released to Harvest and used 
to pay part of the purchase price of the EnCana Acquisition, 
announced on July 15, 2004. Provided the Acquisition closes, 
holders of Subscription Receipts will receive a payment 
equivalent to the amount of any cash distributions to Unitholders 
for which record dates occur between August 10th, 2004 and the 
closing of the Acquisition. If the Acquisition fails to close by 
September 30th, 2004, or the Acquisition is terminated at an 
earlier time (the "Termination Time"), holders of Subscription 
Receipts shall be entitled to receive an amount equal to the full 
subscription price thereafter and their pro rata entitlement to 
escrow interest on such amount. 

The Debentures have a face value of $1,000 per Debenture, a 
coupon of 8%, a final maturity date of September 30th, 2009, and 
will be convertible into trust units of Harvest at a price of 
$16.25 per trust unit. If the Acquisition does not close on or 
before September 30th, 2004, or if the Acquisition is terminated 
at the Termination Time, holders of the Debentures will have the 
option (the "Holders' Right") to require Harvest to redeem all of 
the Debentures for a period of 10 business days following the 
Termination Time at a price of $1,000 per Debenture plus accrued 
and unpaid interest, if any. In addition, the Trust may redeem 
any outstanding Debentures following the exercise of the Holders' 
Right, for $1,000 per Debenture plus accrued and unpaid interest, 
provided that following such redemption, not more than $40 
million of Debentures are outstanding. The Debentures will pay 
interest semi-annually on March 31 and September 30th, with the 
initial interest payment on March 31st, 2005. 

Net proceeds of the offering will be used to pay a portion of the 
purchase price of the Acquisition. 

The offering was underwritten by an underwriting syndicate led by 
National Bank Financial Inc., which included TD Securities Inc., 
CIBC World Markets Inc., BMO Nesbitt Burns Inc., RBC Dominion 
Securities Inc., FirstEnergy Capital Corp., Canaccord Capital 
Corporation, Haywood Securities Inc. and GMP Securities Ltd. 

The securities of Harvest have not been registered under the U.S. 
Securities Act of 1933, as amended, and may not be offered or 
sold in the United States absent registration or applicable 
exemption from the registration requirements. This news release 
shall not constitute an offer to sell or the solicitation of an 
offer to buy securities in any jurisdiction. 

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR 
DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH 
THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES 
LAW. 

-30-


FOR FURTHER INFORMATION PLEASE CONTACT:

Harvest Energy Trust
Jacob Roorda
President
(403) 265-1178 or Toll Free: (866) 666-1178
(403) 265-3490 (FAX)
information@harvestenergy.ca

or

Harvest Energy Trust
Cindy Gray
Communications Advis
or

(403) 265-1178 or Toll Free: (866) 666-1178
(403) 265-3490 (FAX)
gray@harvestenergy.ca
Website: www.harvestenergy.ca