/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN
    THE U.S./CALGARY, July 7 /CNW/ - Advantage Energy Income Fund ("Advantage" or the
"Fund") (AVN.UN - TSX, AAV - NYSE) announces that it has closed its previously
announced bought deal financing (the "Financing") through a syndicate of
underwriters led by RBC Capital Markets and including Scotia Capital Inc., BMO
Nesbitt Burns Inc., CIBC World Markets Inc., National Bank Financial Inc.,
FirstEnergy Capital Corp., Tristone Capital Inc. and Thomas Weisel Partners
Canada Inc. Pursuant to the Financing, the Fund issued 17,000,000 trust units
at a price of $6.00 per trust unit for gross proceeds of $102 million.
    Advantage has granted the underwriters an over-allotment option on the
same terms as the Financing, exercisable in whole or in part within 30 days
from today, to purchase up to an additional 2,550,000 trust units at a price
of $6.00 per trust unit. If the over-allotment option is exercised following
completion of Advantage's proposed conversion to a corporation, the
underwriters will receive common shares of Advantage Oil & Gas Ltd. upon
exercise of the over-allotment option instead of trust units.
    All of the net proceeds of the Financing will initially be used by the
Fund to repay indebtedness under its credit facilities, which will be
available to be subsequently redrawn and applied as needed to fund Advantage's
capital expenditure program.

    This press release shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of the securities
in any jurisdiction in which such offer, solicitation or sale would be
unlawful.
    The Trust Units have not been and will not be registered under the U.S.
Securities Act of 1933 and may not be offered or sold in the United States
absent registration or an applicable exemption from the registration
requirements of such Act.

    Advisory

    The information in this press release contains certain forward-looking
statements. These statements relate to future events or our future
performance. All statements other than statements of historical fact may be
forward-looking statements. Forward-looking statements are often, but not
always, identified by the use of words such as "seek", "anticipate", "plan",
"continue", "estimate", "expect", "may", "will", "project", "predict",
"potential", "targeting", "intend", "could", "might", "should", "believe",
"would" and similar expressions. These statements involve substantial known
and unknown risks and uncertainties, certain of which are beyond Advantage's
control, including: the impact of general economic conditions; industry
conditions; changes in laws and regulations including the adoption of new
environmental laws and regulations and changes in how they are interpreted and
enforced; fluctuations in commodity prices and foreign exchange and interest
rates; stock market volatility and market valuations; volatility in market
prices for oil and natural gas; liabilities inherent in oil and natural gas
operations; uncertainties associated with estimating oil and natural gas
reserves; competition for, among other things, capital, acquisitions, of
reserves, undeveloped lands and skilled personnel; incorrect assessments of
the value of acquisitions; changes in income tax laws or changes in tax laws
and incentive programs relating to the oil and gas industry and income trusts;
geological, technical, drilling and processing problems and other difficulties
in producing petroleum reserves; and obtaining required approvals of
regulatory authorities. Advantage's actual results, performance or achievement
could differ materially from those expressed in, or implied by, such
forward-looking statements and, accordingly, no assurances can be given that
any of the events anticipated by the forward-looking statements will transpire
or occur or, if any of them do, what benefits that Advantage will derive from
them. Except as required by law, Advantage undertakes no obligation to
publicly update or revise any forward-looking statements.