Merger of Daylight Energy Trust and Sequoia Oil & Gas Trust

On September 21, 2006, Daylight Energy Trust and Sequoia Oil & Gas Trust completed their plan of arrangement whereby the two trusts merged to create an intermediate-sized energy trust, Daylight Resources Trust with an estimated enterprise value of approximately $1.5 billion. In connection with the arrangement, certain of Daylight Energy's oil and natural gas assets and undeveloped lands (Daylight Trafalgar Assets) were transferred to Trafalgar Energy Ltd., a new public growth oriented junior exploration company in exchange for common shares and arrangement warrants of Trafalgar, which were distributed to both Daylight Energy securityholders and Sequoia unitholders pursuant to the arrangement with Daylight Resources also acquiring and retaining, as partial consideration for the Daylight Trafalgar assets, a portion of the Trafalgar common shares.

Daylight Energy and Daylight Resources were represented by Burnet, Duckworth & Palmer LLP with a team that was led by Chris von Vegesack and included Shannon Gangl, Spencer Coupland, Grant MacKenzie, Corrine Fiesel, Lindsay Cox and Lisa Monteith (securities), David Ross (tax), Alicia Quesnel (competition), Mark Houston (oil & gas) and Richard Smith (employment). Sequoia was represented by Blake, Cassels & Graydon LLP with a team that was led by Pat Finnerty and included Cameron Proctor (securities), Ron Mar and Ed Gill (tax) and Brian Facey and Jason Gudofsky (competition). Trafalgar was represented by Macleod Dixon LLP with a team led by Neville Jugnauth and included Marcus Archer (securities), Chrysten Perry (oil & gas) and Darren Hueppelsheuser (tax). For US law matters, Daylight Energy and Daylight Resources were represented by Dorsey & Whitney LLP and Sequoia was represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP.

In connection with the merger, Daylight Energy Ltd., a wholly owned subsidiary of Daylight Resources, secured a new credit facility of $320 million. Daylight Energy Ltd. and Daylight Resources were represented by Burnet, Duckworth & Palmer LLP with a team led by John Wilmot and included Nancy Smith (banking). The syndicate of lenders were represented by the Calgary office of Blake, Cassels & Graydon LLP with a team led by Kevin Fougere and included Nick Tropak (banking).