Microsoft word - enrf 2006 interim financial statements.doc

FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2006 EnerVest Natural Resource Fund Ltd. Statements of Net Assets Proceeds receivable for portfolio assets sold Subscriptions receivable for shares issued Accounts payable and accrued liabilities Approved by the Board of EnerVest Natural Resource Fund Ltd. EnerVest Natural Resource Fund Ltd. Statements of Operations for the Six Month Periods Ended June 30, 2006 and 2005 Net realized gains on sale of portfolio assets Net change in unrealized portfolio gains (DECREASE) INCREASE IN NET ASSETS FROM OPERATIONS WEIGHTED AVERAGE SHARES OUTSTANDING (Note 4) (DECREASE) INCREASE IN NET ASSETS FROM OPERATIONS EnerVest Natural Resource Fund Ltd. Statements of Changes in Net Assets for the Six Month Periods Ended June 30, 2006 and 2005 (DECREASE) INCREASE IN NET ASSETS FROM OPERATIONS Proceeds from issuance of shares (Note 4) Amounts paid on redemption of shares (Note 4) Shares issued on reinvestment of distributions (Note 4) EnerVest Natural Resource Fund Ltd. Statement of Investment Portfolio June 30, 2006 (Unaudited) EnerVest Natural Resource Fund Ltd. Statement of Investment Portfolio - Continued June 30, 2006 (Unaudited) 7,000 Pan-Ocean Energy Corporation Limited 26,000 Canadian Natural Resources Limited EnerVest Natural Resource Fund Ltd. Statement of Investment Portfolio - Continued June 30, 2006 (Unaudited) EnerVest Natural Resource Fund Ltd. Notes to the Financial Statements for the Six Month Period Ended June 30, 2006 (Unaudited) EnerVest Natural Resource Fund Ltd. (“EnerVest”) is a mutual fund corporation incorporated under the laws of Alberta on September 8, 2000. EnerVest was receipted under a simplified prospectus in all jurisdictions in Canada on November 23, 2000, with an initial contribution of $150,000 for 15,000 shares from EnerVest Funds Management Inc. EnerVest commenced operations on December 7, 2000, when the assets of certain limited partnerships were transferred into EnerVest in exchange for shares. EnerVest Funds Management Inc. (the “Manager”), a corporation incorporated under the laws of the Province of Alberta, is the manager of EnerVest. The investment manager is Cypress Capital Management Ltd. (the “Investment Manager”). SIGNIFICANT ACCOUNTING POLICIES These interim financial statements have been prepared in accordance with Canadian generally accepted accounting principles. They follow the same accounting policies and methods used in EnerVest’s most recent annual financial statements. The specific accounting principles used are described on pages 10 to 18 of the EnerVest Natural Resource Fund Ltd. 2005 Annual Report and should be read in conjunction with these interim financial statements. Valuation of investments Investments are valued at the closing price each day on the recognized stock exchange on which the investments are listed or principally traded. Investments not traded on the valuation date are valued at the average of the closing bid and ask prices. Market values for private companies are valued at cost until such time as there is a clear indication of an increase or decrease in value. Investment transactions and income recognition Investment transactions are accounted for as of the trade date and any realized or unrealized gains and losses from such transactions are calculated on an average cost basis. Distribution income is recorded on the ex-distribution date and interest income is accrued as earned. On March 30, 2006, the following assets were acquired in exchange for shares of EnerVest: EnerVest Natural Resource Fund Ltd. Notes to the Financial Statements for the Six Month Period Ended June 30, 2006 (Unaudited) 3. On March 30, 2006, the net assets of EnerVest FTS Limited Partnership 2004 were transferred into EnerVest in exchange for shares of EnerVest at a price of $19.90 per share, based on the net asset value of the partnership on that date. The general partner of EnerVest FTS Limited Partnership 2004 was owned by EnerVest Management Ltd., the owner of EnerVest’s management company. The transaction with EnerVest FTS Limited Partnership 2004 was recorded at fair value. EnerVest is authorized to issue an unlimited number of common shares and an unlimited number of voting, non-cumulative, redeemable, restrictive special shares (“Shares”). The Shares hold a proprietary right to the investments and the net assets acquired specifically for that class of shares. The Shares may be subscribed for or redeemed at the current net asset value per share. Changes in issued Shares are summarized below for the six month period ended June 30, 2006, and the year ended December 31, 2005. Brokerage commissions for portfolio transactions are included in the cost of portfolio investments purchased or as a reduction of the proceeds received upon the sale of portfolio investments. During the six month period ended June 30, 2006, EnerVest paid brokerage commissions of $75,841 (2005 - $62,531). Certain comparative figures have been reclassified to conform with the current year’s presentation.

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