CALGARY- August 13, 2003

NCE Petrofund announces its second quarter 2003 results.

Key items include:

The Trust's results for the three and six month periods ended June 30^th are as follows:

The following discussion and analysis of financial results should be read in conjunction with the unaudited consolidated financial statements for the three and six months ended June 30, 2003 included herein and the December 31, 2002 annual financial statements and management's discussion and analysis included in NCE Petrofund's ("Petrofund" or the "Trust"), 2002 annual report.

Where amounts and volumes are expressed on a barrel of oil equivalent basis, gas volumes have been converted to barrels of oil at 6,000 cubic feet per barrel (6 mcf/bbl).

Management uses cash flow before changes in non-cash working capital to analyze operating performance and leverage. Cash flow as presented does not have any standardized meaning prescribed by Canadian GAAP and therefore, it may not be comparable with the calculation of similar measures for other entities. Cash flow as presented is not intended to represent operating cash flows or operating profits for the period, nor should it be viewed as an alternative to cash flow from operating activities, net earnings or other measures of financial performance calculated in accordance with Canadian GAAP. All references to cash flow throughout this report are based on cash flow before changes in non-cash working capital.

This discussion may include statements about expected future events and/or financial results that are forward-looking in nature and subject to risks and uncertainties. For those statements, Petrofund claims the protection of the safe harbor for forward-looking statements provisions contained in the U.S. Private Securities Litigation Reform Act of 1995. Petrofund cautions that actual performance will be affected by a number of factors, many of which are beyond its control. Future events and results may vary substantially from what Petrofund currently foresees. Discussion of the various factors that may affect future results is contained in Petrofund's recent filings with the Securities and Exchange Commission and Canadian securities regulatory authorities. Petrofund undertakes no obligation to update publication of or revise any forward-looking statements contained herein and such statements are expressly qualified by this cautionary statement.

We are pleased to present the results for Petrofund for the three and six months ended June 30, 2003.

The results were favourable in the three and six month periods as compared to the prior year due to production increases and strong commodity prices.

The West Texas Intermediate (WTI) crude oil price averaged US$28.91 in the second quarter of 2003 as compared to US$26.25 in the second quarter of 2002. This resulted in Canadian wellhead prices of $35.75/bbl in 2003 as compared to $34.60/bbl in 2002. The average gas price increased 59% from $3.97/mcf in 2002 to $6.33/mcf in 2003.

The net income for the three and six month periods ended June 30, 2003 of $15.1 million and $47.3 million, respectively, was impacted by one-time adjustments for costs of the internalization of the management contract and the reduction of income taxes for the decrease in future tax rates. The net income was reduced by $29.1 million and $30.8 million for the three and six month periods for management internalization costs and increased by $26.0 million and $29.3 million, respectively, for future tax rate reductions.

The Canadian dollar averaged $0.663 per U.S. dollar in the first quarter; however, it significantly strengthened to average $0.716 per U.S. dollar in the second quarter, which negatively affected the Canadian oil price received for the second quarter.

SIGNIFICANT FINANCIAL TRANSACTIONS

In addition, Petrofund's governance structure has been revised to reflect current "best practices", with unitholders having the right to designate all of the nominees to be elected directors of NCEP. The Board has established Audit, Human Resources and Compensation, Governance and Reserve Committees. All committees are composed solely of directors that are unrelated to management.

In the second quarter of 2003, NCEP closed the acquisition of a diverse group of oil and gas properties for $61.7 million after adjustment. The purchase was accretive to distributable cash flow, production per unit and reserves per unit. The properties added established reserves of 9.7 million boe as estimated by independent engineering firm, Gilbert Laustsen Jung. At the time of acquisition, production from the properties was approximately 2,300 boe/d of which 42% was gas. Production and cash flow for the month of June have been included in this report. Net revenue of $4.3 million from the effective date to May 31, 2003 was applied against the purchase price. The properties contain a large percentage of unit production, and have an RLI of 11.6 years. This purchase, when combined with the acquisitions completed in the first quarter, replaces over 100% of Petrofund's 2002 annual production.

Development drilling is a key component of Petrofund's strategy to generate sustainable cash flow.

A total of eighteen wells were drilled on Petrofund lands during the quarter; four working interest wells (2.1 net wells) and fourteen farmout wells. This drilling activity resulted in two oil wells, fourteen gas wells and two dry holes, for an overall success rate of 89%. Year-to-date Petrofund participated in 69 wells (13.1 net) and farmed out 14 wells for an overall success rate of 95%.

CAPITAL EXPENDITURES

Petrofund acquired Solaris Oil and Gas Inc. in the first quarter and oil and gas properties from a major Canadian oil and gas company in the second quarter. These acquisitions, along with some minor property purchases, have resulted in total year-to-date expenditures of $77.2 million.

During the three and six months ended June 30, 2003, $12.8 and $29.5 million, respectively, has been incurred for development drilling and the other production enhancement activity discussed under Operational Highlights. These activities are very instrumental in offsetting part of the decline on existing production. Total capital expenditures for these activities in 2003 are expected to be in the $60 million range.

A summary of expenditures for the periods appear below:

CASH DISTRIBUTIONS

NCE Petrofund unitholders who held their units throughout the second quarter of 2003 received distributions of $0.53 per unit in cash as compared to $0.41 in the second quarter of 2002. A cash distribution of $0.18 per unit was paid in July and $0.18 per unit has been announced for August and indicated for September.

Petrofund generated cash flow available for distribution in the second quarter of $43.9 million, or $0.74 per unit before deducting $7.5 million or $0.12 per unit for reinvestment in capital projects. Of the $43.9 million, $30.4 million was paid out in distributions representing a payout ratio of 69% (see Note 6).

For the 12 months ended June 30, 2003, the Trust generated cash flow available for distribution of $165.4 million, withheld $25.0 million for reinvestment in development drilling and other projects, and paid out distributions of $103.5 million, resulting in a payout ratio of 63%. The Trust is continuing its policy of stabilizing monthly distributions and reinvesting a portion of its cash flow for the long-term benefit of the Trust.

During the six month period ended June 30, 2003, crude oil sales increased 41% to $85.4 million in 2003 from $60.5 million in 2002. Oil production rose to 11,817 bbl/d for the period, compared to 10,404 bbl/d for the same period in 2002. The average price increased from $32.12 per bbl in 2002 to $39.94 per bbl in 2003.

Natural gas sales increased 83% from $27.2 million in the second quarter of 2002 to $49.7 million in the second quarter of 2003. Gas production increased 15% from 75.3 mmcf/d to 86.2 mmcf/d and the average gas price was up 59% from $3.97 per mcf to $6.33 per mcf. These prices are net of negative gas hedging adjustments of $0.19 per mcf in 2003, and $0.03 per mcf in 2002. The AECO monthly spot gas prices increased from $4.42 per mcf in the second quarter of 2002 to $6.91 per mcf in the second quarter of 2003.

During the six month period ended June 30, 2003, natural gas sales increased 123% to $106.2 million from $47.7 million in 2002. Gas production was up 15% to 84.1 mmcf/d from 73.0 mmcf/d for the same period in 2002. The average gas price increased 93% from $3.61 per mcf in 2002 to $6.98 per mcf in 2003.

Sales of natural gas liquids increased 17% to $5.8 million in the second quarter of 2003, from $5.0 million in the second quarter of 2002. Production was down 2% to 1,971 bbl/d from 2,015 bbl/d. The average price was $32.54 per bbl in the second quarter of 2003, as compared to $27.12 in the same period in the prior year.

For the six month period ended June 30, 2003, sales of natural gas liquids increased 66% from $8.0 million in 2002 to $13.2 million in 2003. Production volumes increased 8% from 1,831 bbl/d to 1,983 bbl/d, while the average price received rose from $24.12 per bbl to $36.87 per bbl in 2003.

ROYALTIES

Royalties for the six month period averaged 22.1% of revenue in 2003 compared to 18% for the corresponding period in 2002.

Operating expenses were $22.4 million in the second quarter of 2003 compared to $17.8 million in the second quarter of 2002. Operating costs on a boe basis increased to $8.58 in 2003 from $7.76 for the same period in the prior year.

General and administrative costs were $3.3 million in the second quarter of 2003, as compared to $4.0 million for the same period in 2002. Costs were down significantly on a boe basis to $1.27 in 2003 from $1.73 in 2002 due to reduced costs and an increase in production.

No management fees were payable in the first half of 2003 and no future fees will be paid due to the internalization of management. Fees of $2.0 million were paid in the first half of 2002 to the Manager.

PRICE RISK MANAGEMENT

Crude oil hedged volumes for the balance of 2003 are 4,000 bbl/d, down from 4,900 bbl/d at the end of the first quarter due to expiring second quarter hedges. The gas volumes under hedges for the balance of 2003 were also down slightly, decreasing from 38.5 mmcf/d to 35.7 mmcf/d.

DEPLETION, RECLAMATION AND ABANDONMENT

As at June 30, 2003, the amount outstanding on the credit facility was $160 million with $105 million available to finance future activities.

The revolving period on the syndicated facility was scheduled to end on May 30, 2003; however, it has been extended for an additional 364-day period ending May 28, 2004. The borrowing base was increased to $265 million, in conjunction with the closing of the recent acquisition.

Accounts receivable decreased by $19.0 million as amounts due on the sale of properties as at December 31, 2002 were received in the first half of 2003.

Current liabilities increased by $30.0 million from December 31, 2002, due to the increase in distributions payable to unitholders.

LIQUIDITY AND CAPITAL RESOURCES

The accompanying notes to consolidated financial statements are an integral part of these consolidated statements.

The accompanying notes to consolidated financial statements are an integral part of these consolidated statements.

These unaudited interim consolidated financial statements follow the same accounting policies and methods of their application as the most recent annual financial statements. The note disclosure requirements for annual statements provide additional disclosures to that required for interim statements. Accordingly, these statements should be read in conjunction with the audited consolidated financial statements of NCE Petrofund (the "Trust") as at December 31, 2002 and 2001 and for each of the years in the three-year period ended December 31, 2002.

On February 7, 2003, NCE Petrofund Corp. ("NCEP") acquired 100% of the outstanding common shares of Solaris Oil & Gas Inc. for $7.4 million in cash and assumed $1.2 million of debt including negative working capital and outstanding bank loan. The acquisition was accounted for using the purchase method. A summary of the net assets acquired is as follows:

Authorized: unlimited number of trust units

Units/exchangeable shares, at end of period:

On April 29, 2003, NCE Petrofund Corp. ("NCEP") purchased 100% of NCE Petrofund Management Corp. (the "Manager"), the manager of the Trust and NCE Management Services Inc., which employed all of the Calgary based personnel who provide services to the Trust. As a result of these transactions, all management acquisition and disposition fees payable to the Manager were eliminated retroactive to January 1, 2003. In addition, all of the Trust's operations are now consolidated in NCEP's Calgary offices.

The total consideration paid was $30.8 million as detailed below.

To ensure an orderly transition of the services that were provided by the Manager through its offices in Toronto, NCEP entered into an agreement with Sentry Select Capital Corp. ("Sentry") to provide certain services to the Trust and NCEP until December 31, 2003 for a maximum cost of $2 million. The amount incurred decreased from $1 million in the first quarter to $500,000 in the second quarter, and will decrease further to $250,000 in the third and fourth quarters, after which Sentry will no longer provide such services. Sentry is a company in which John Driscoll, the Chairman of the Board of Directors of NCEP, owns a controlling interest.

Prior to the acquisition, the Manager was paid a management fee equal to 3.25% of net operating income plus Alberta Royalty Credit, an investment fee equal to 1.50% of the purchase price of all properties purchased by NCEP and a disposition fee of 1.25% of properties sold, except replacement properties.

The number of exchangeable shares to be issued in connection with the internalization of the management contract was determined based on a negotiated value of $12.17 per share as set out in the Information Circular dated March 10, 2003. For accounting purposes, the 1,939,147 exchangeable shares were deemed to be issued at the value of $11.20 per share being the average trading value of the trust units for the last ten days prior to the closing date. Initially, each Exchangeable Share was exchangeable into one Trust Unit. The exchange ratio is adjusted from time to time to reflect the per unit distributions paid to unitholders after the closing date. Under the terms of the Exchangeable Share Agreement, the holder of the Exchangeable Shares is entitled to redeem for cash the number of shares equal to the cash distributions that would have been received had the Exchangeable Shares been converted to trust units. As a result of the redemption feature, the number of trust units issuable upon conversion is expected to remain constant over time. As the substance of this feature is to allow the holder of the Exchangeable Shares to receive cash distributions, the redemption has been accounted for as a distribution of earnings rather than a return of capital. At June 30, 2003, 1,881,263 Exchangeable Shares were outstanding, at an exchange ratio of 1.03077 per Trust Unit.

The Trust enters into various pricing mechanisms to reduce price volatility and establish minimum prices for a portion of its oil and gas production. These include fixed price contracts and the use of derivative financial instruments. The outstanding derivative financial instruments and physical contracts as at June 30, 2003, all of which constitute effective hedges, and the related unrealized gains or losses, are summarized separately below:

The gains or losses are recognized on a monthly basis over the terms of the contracts and adjust the prices received.

Derivative financial instruments and physical hedge contracts involve a degree of credit risk, which the Trust controls through the use of financially sound counter parties. Market risk relating to changes in value or settlement cost of the Trust's derivative financial instruments is essentially offset by gains or losses on the underlying physical sales.

The revolving period on the syndicated facility was scheduled to end on May 30, 2003, however, it has been extended for an additional 364-day period ending May 28, 2004. In addition, the borrowing base on the facility was increased to $265 million from $250 million in conjunction with the closing of the most recent acquisition.

The future income tax recovery for the three months and six months ended June 30, 2003, has been increased by $26.0 million and $29.3 million, respectively, due to the substantively enacted reduction in federal and Alberta income tax rates. The changes, to be phased in over five years, reduce the applicable rate on resource income from 28% to 21%.

As at July 31, 2003, based on the information provided by our transfer agent, NCE Petrofund estimates that Canadian ownership of the trust was approximately 59%. Management will continue to monitor ownership levels closely in conjunction with an active program to encourage and promote Canadian ownership.

NCE Petrofund is a royalty trust that acquires and manages producing oil and gas properties in Western Canada. The Trust derives its income from these properties and distributes the resulting cash flow monthly to unitholders. NCE Petrofund is one of the oldest and most experienced oil and gas royalty trusts in Canada. The Trust began its first full year of operations in 1989. It trades on the Toronto Stock Exchange under the symbol NCF.UN. It trades on the American Stock Exchange under the symbol NCN.

Disclaimer

This news release shall not constitute an offer to sell, or the solicitation of an offer to buy NCE Petrofund trust units in the United States, or any province or territory of Canada, nor shall there be any sale of NCE Petrofund trust units in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

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