Harvest Energy Trust Acquires North Atlantic Refining

On October 19, 2006 Harvest Energy Trust completed its acquisition of all of the issued and outstanding shares of North Atlantic Refining Limited and related assets from Vitol Refining Group B.V. for approximately $1.6 billion, plus certain working capital and other adjustments. Harvest is one of Canada's largest energy royalty trusts. In conjunction with this transaction, Harvest expanded its credit facilities to $2.2 billion, including bridge financing, to initially fund the purchase. Vitol is one of the world's largest physical traders and marketers of crude oil and petroleum products.

The principal asset of North Atlantic is a medium-gravity, sour crude hydrocracking refinery (the “refinery”) located in Come by Chance, Newfoundland with current crude capacity of 115,000 barrels per stream day. The refinery's gasoline, ultra-low sulphur diesel and jet fuel meet the most stringent specifications required within North America, Europe and Asia and the majority of products are sold into premium markets on the east coast of the United States. The refinery has the second leading utilization rate for oil refineries in Canada, transforming lower-cost medium sour crude into some of the cleanest fuels in the world, and more than $2 billion in clean fuels is exported annually. In addition to an experienced workforce, the acquisition also included a marketing division in Newfoundland with 69 gas stations, a home heating business that services 20,000 residential and commercial customers, the supply of refined products to commercial and wholesale customers and the bunkering of refined petroleum products. Also included was a marine logistics business that supports the refinery's marine logistics needs and supports the requirements of incoming vessels. Harvest will continue to operate the refinery as a stand-alone business.

The refinery feedstock is predominantly medium-gravity, sour crude oil. This transaction positions Harvest as the only integrated Canadian energy royalty trust.

In conjunction with the transaction, Harvest also negotiated an agreement with a division of Vitol whereby Vitol will continue to supply the crude oil feedstock for the refinery and will provide for the marketing of its refined products outside Newfoundland. Vitol is one of the world's largest physical traders and marketers of crude oil and petroleum products. The supply and marketing arrangement provides a reliable and economic source of crude oil feed stocks, and ensures the competitive marketing of the refined products.

The transaction was financed from an expanded three-year Revolving Secured Credit Facility, a Secured Bridge Facility and a Senior Unsecured Bridge Facility. These credit facilities were syndicated among a broad group of financial institutions, including Canada's six chartered banks and seven other global financial institutions (the “banking syndicate”).

Harvest was represented in Canada by Blake, Cassels & Graydon LLP with a team that included Craig Spurn, Cheryl Kelly, Lisa Clarke, Edward Rowe, Greg Kanargelidis, Chad Schneider, Brian Thiessen, Paul Dimitriadis, Cal Goldman, Rob Kwinter, Jason Gudofsky, Greg Frenette, Dan Fournier, Steve Ashbourne and Dalton McGrath and by McInnes Cooper with a team that included James Thistle, Q.C. and Dennis Clarke. Harvest was represented in the US by McGuireWoods LLP with a team that included Craig Culbertson and Donald Ensing and by Jaqueline Grise of Howrey LLP. Harvest was represented in The Netherlands by Freshfields Bruckhaus Deringer with a team that included Robert ten Have and Henriette van Overklift.

Vitol was represented in the US by Akin Gump Strauss Hauer & Feld LLP with a team that included Jim Rice, Robert Bell and Rebecca Tyler and in Canada by Stewart McKelvey with a team that included Bruce Grant, Q.C. and by Davies Ward Phillips & Vineberg LLP with a team that included Nathan Boidman, Fred Purkey and Sylvain Cossette.

Harvest was represented, in respect of the bank financing, by Burnet, Duckworth & Palmer LLP with a team that included Cal Johnson, Q.C., John Wilmot, David Grout and Danielle Graham, and in Newfoundland and Labrador by Stewart McKelvey with a team that included Maureen Ryan and Steve Winter. The banking syndicate, led by Canadian Imperial Bank of Commerce and The Toronto-Dominion Bank, was represented by Macleod Dixon LLP with a team that included Rick Borden, Ryan Rovere and Kirsty Sklar, and in Newfoundland by Cox & Palmer with a team that included Stephanie Hickman and Doug Wright.

Financial advice was provided to Harvest by CIBC World Markets. Vitol was advised by Deutsche Bank Securities Inc.