Dixie Energy -- summary under Trust liquidations

Overview

The Trust will sell all or substantially all its assets at the end of 2014, being oil and gas assets held indirectly by it, and distribute the remaining cash in at least two distributions in 2015 after settling liabilities.

The Trust

An Alberta unit trust trading on the TSXV which was established in June 2012 as a cross border energy trust (holding U.S. oil and gas assets through U.S. subsidiaries) and which has incurred losses.

Sale

An asset sale (apparently by U.S. subsidiaries although the Trust is party) is expected to close on 29 December 2014 for a sale price of U.S.$47.5M. Purchaser: Pine Energy Partners, LP. These gross proceeds will be reduced by U.S.$7.5M of U.S. dollar Trust liabilities including taxes, sales expenses and winding-up expenses, and applied next to Cdn$17.5M of Canadian dollar denominated liabilities (including loan repayments, taxes , sale transaction expenses and winding-up expenses.)

Distributions/Winding-up

After settlement of liabilities, the Trust will have distributable cash of between $0.46 and $52 per unit ($26.1M to $29.6M0. The initial distribution will be within 90 days of the closing of the sale and the remaining distribution(s) may occur within 12 months as part of the Trust winding-up.

Canadian tax consequences

The particular combination of capital and income paid on a particular distribution will be determined by the Trustee in its discretion. Description of flow-out of capital gains and income. Upon the disposition of Trust units in the course of the winding-up, the unitholder generally will be considered to have received proceeds of disposition equal to the amount distributed in excess of the amount which is distributed out of income or net capital gains of the Trust for that year.