(TSX: AVN.UN, NYSE: AAV)

    CALGARY, March 18 /CNW/ - Advantage Energy Income Fund ("Advantage" or
the "Fund") is pleased to announce that the Board of Directors of Advantage
Oil & Gas Ltd., on behalf of the Fund has unanimously approved a conversion of
the Fund to a growth oriented corporation which, subject to approval of
Advantage's unitholders as well as customary court and regulatory approvals,
is anticipated to be completed on or about June 30, 2009. The conversion will
enable Advantage to pursue a business plan that is focused on the development
and growth of our Montney natural gas resource play at Glacier, Alberta where
the Fund has demonstrated success in adding significant low cost natural gas
reserves. The conversion will have the added benefit of removing the
uncertainty surrounding the upcoming changes in Canadian tax law whereby the
government will begin imposing taxes on income trusts on January 1, 2011.
    Our independent reserve evaluator, Sproule Associates Limited
("Sproule"), was engaged to complete a Montney resource assessment on our 89
section land block at Glacier. The Sproule Resource Assessment Report
indicates that Advantage's Montney land holdings at Glacier are estimated to
have 3.4 TCF of original raw natural gas-in-place with Advantage's working
interest ownership of original raw natural gas-in-place at 2.9 TCF. The proven
and probable raw natural gas reserves assigned as of December 31, 2008 to
Advantage's working interest ownership at Glacier represents 8% of the
original raw natural gas-in-place in the Upper Montney and Lower Montney
zones.
    Drilling activity in 2008 at Glacier resulted in reserve additions of 29
million boe at a Finding and Development cost of $3.48 per proven and probable
boe before changes in future development capital ("FDC") and $13.14 per proven
and probable boe including changes in FDC. Our 2008 drilling and production
testing activity demonstrated horizontal well rates of 2.5 to 7.5 mmcfd (417
to 1,250 boe per day) which has reduced the future development risk. The Fund
has identified a drilling inventory in excess of 440 locations based on our
drilling results to date.
    The Fund also announces that it has retained Tristone Capital Inc. to
assist with the disposition of properties producing up to 11,300 boe per day
of light oil and natural gas properties. The net proceeds from these sales or
sales of other oil and gas properties will initially be used to reduce
outstanding bank debt to improve Advantage's financial flexibility. Advantage
may also draw down its credit facilities in the future to redeem certain of
the Fund's convertible debentures. Furthermore, as another step to increase
Advantage's financial flexibility and to focus on development and growth at
Glacier, Advantage will discontinue payment of cash distributions. Advantage
intends to direct future cash flow towards capital expenditures and debt
repayment. The conversion to a growth oriented corporation will not be
contingent on the magnitude of asset sales completed.Montney Growth Potential at Glacier Drives Conversion Plan

    -   The Fund's 2008 drilling program resulted in the replacement of 285%
        of annual production at a Finding and Development cost of $7.61 per
        proven and probable boe before consideration of changes in FDC and
        $16.95 per proven and probable boe including the change in FDC (refer
        to Advantage year-end 2008 reserves press release dated March 5, 2009
        for additional details).

    -   The majority of reserve additions in 2008 are attributed to our
        drilling program at Glacier where Advantage invested $101 million
        which resulted in proven and probable reserve additions of 29 million
        boe at a Finding and Development cost of $3.48 per boe before changes
        in FDC and $13.14 per boe including changes in FDC. Reserves were
        assigned to only 32 of our 89 sections of Montney acreage based on an
        average well density of 2.4 wells per section. Advantage currently
        has regulatory approval to drill 8 wells per section consisting of 4
        wells in each of the Upper Montney and Lower Montney zones. Future
        delineation drilling is required to evaluate the undeveloped land
        potential in the remaining 57 sections. Based on our 2008 activity,
        Advantage has identified 440 future drilling locations with the
        potential to exceed 800 locations depending on the density of
        horizontal wells that may be drilled per section of land. Advantage
        anticipates that in excess of $2.5 billion will be required for this
        440 well development which is estimated to be economic at less than
        $5 per mcf.

    -   Activity undertaken to date in 2008 and 2009 at Glacier includes the
        drilling of 10 gross (8.7 net) horizontal wells and 13 gross (12.3
        net) vertical wells. Horizontal wells have demonstrated production
        and test rates of 2.5 to 7.5 mmcfd (417 to 1,250 boe per day) from
        the Upper Montney and Lower Montney zones. Combined test results to
        date from the drilling program have demonstrated approximately
        40 mmcfd of initial productivity (9 gross horizontal wells and
        9 gross vertical wells have been tested).

    -   Advantage completed construction of a 22.5 kilometer pipeline in
        January 2009 with initial production of approximately 10 mmcfd of
        Montney natural gas. Additional compression facilities are scheduled
        for completion early in the second quarter of 2009 which will allow
        production to be increased to 20 to 25 mmcfd. Advantage plans to
        increase production capacity to 50 mmcfd in 2010 and to 100 mmcfd in
        2011 which will require additional vertical and horizontal drilling
        coupled with facilities expansion.

    -   Future development at Glacier will continue to focus on a balanced
        investment program directed at land retention and acquisition,
        vertical and horizontal drilling to prove up Montney reserves, and
        infrastructure expansion to increase production.

    Sproule Associates Limited Montney Resource Assessment

    -   An updated resource assessment completed by our independent reserve
        evaluator, Sproule Associates Limited ("Sproule") effective
        February 28, 2009 indicated that Advantage's Montney land holdings at
        Glacier are estimated to have 3.4 TCF of original raw natural gas-in-
        place. Advantage's working interest ownership of original raw natural
        gas-in-place is estimated to be 2.9 TCF in the Upper Montney and
        Lower Montney zones. The proven and probable raw natural gas reserves
        assigned as of December 31, 2008 to Advantage's working interest
        ownership at Glacier represents 8% of the original raw natural gas-
        in-place in the Upper Montney and Lower Montney zones.

    -   The ultimate raw recoverable gas volumes were estimated by Sproule
        based on the following range of recovery factors:

                         ----------------------------
                                            Recovery
                          Category           Factor
                         ----------------------------
                          Low Estimate         38%
                         ----------------------------
                          Best Estimate        52%
                         ----------------------------
                          High Estimate        66%
                         ----------------------------

    -   The following table sets out Sproule's estimate of Advantage's
        working interest sales gas volumes at Glacier:

        ---------------------------------------------------------------------
                     Ultimate Contingent Natural Gas Resource and Reserves
        ---------------------------------------------------------------------
                           Proven and       Additional   Ultimate Contingent
                        Probable Reserve    Contingent  Natural Gas Resources
                     at December 31, 2008   Resources        and Reserves
         Category            (TCF)             (TCF)             (TCF)
        ---------------------------------------------------------------------
         Low Estimate         .21                .8              1.01
        ---------------------------------------------------------------------
         Best Estimate        .21               1.1              1.31
        ---------------------------------------------------------------------
         High Estimate        .21               1.5              1.71
        ---------------------------------------------------------------------

    Asset Sales & Distributions Discontinued to Improve Financial Flexibility

    -   Advantage has initiated a process for the sale of certain assets
        located in Northeast British Columbia, West Central Alberta and
        Northern Alberta of up to 11,300 boe per day of production. Advantage
        has retained Tristone Capital Inc. to assist in this process and
        proposals are anticipated by mid May 2009.

    -   The selected assets will be available in four distinct packages
        varying in size from approximately 1,600 to 5,400 boe per day of
        production and contain both light oil and natural gas.

    -   The net proceeds from these sales or sales of other oil and gas
        properties will initially be used to reduce outstanding bank debt to
        improve Advantage's financial flexibility. Advantage may also draw
        down its credit facilities in the future to redeem certain of the
        Fund's convertible debentures.

    -   Advantage will discontinue cash distributions with the final cash
        distribution paid on March 16, 2009 to unitholders of record as of
        February 27, 2009.

    -   Going forward, Advantage does not anticipate paying dividends in the
        immediate future and will instead, direct cash flow to capital
        expenditures and debt repayment.

    Corporate Conversion

    -   The Board of Directors believes that conversion to a corporation
        combined with the asset disposition program and debt reduction
        initiative will position Advantage to pursue the significant
        development potential at Glacier and to continue development of our
        conventional assets. These changes will also allow Advantage to
        capitalize on future external opportunities that may materialize in
        the current environment.

    -   Assuming asset sales of approximately 10,000 to 11,300 boe per day of
        production are completed, Advantage will have the following
        attributes:

        -  Production of approximately 20,000 to 22,000 boe per day (60%
           natural gas, 40% oil and natural gas liquids) from a focused asset
           base.

        -  Annual cash flow estimate of approximately $145 to $155 million
           (based on $U.S. 45.00 WTI, $U.S. 4.25 per mcf Nymex, $0.78
           Cdn/U.S. and includes hedging contracts currently in place).

        -  A strong multi-year hedging program that will reduce cash flow
           volatility. It is expected that Advantage will continue to employ
           a systematic and disciplined hedging program into the future to
           ensure that a significant level of cash flow is available for
           capital program requirements. Advantage's current hedging program
           is summarized below:

           ------------------------------------------------------------------
                                            Natural gas         Crude Oil
           ------------------------------------------------------------------
           Year                          mmcfd   $Cdn/mcf   bbls/d  $Cdn/bbl
           ------------------------------------------------------------------
           2009                           58.2     $8.09     3,814    $69.38
           ------------------------------------------------------------------
           2010                           47.4     $7.46     2,000    $67.83
           ------------------------------------------------------------------

        -  A solid drilling inventory comprised of 440 Montney locations at
           Glacier and over 250 locations at other key conventional
           properties.

    -   Advantage will be in a stronger financial position to capitalize on
        the recently announced Alberta royalty incentive program which
        provides for a $200 per meter drilling royalty credit (subject to a
        ceiling based on company size) and a maximum 5% royalty rate for
        wells drilled or brought on-stream between April 1, 2009 and
        March 31, 2010.

    -   As at December 31, 2008, the Fund has approximately $1.8 billion of
        tax pools which can be used by Advantage to shelter future taxable
        income. In general, properties sold through the asset disposition
        program will reduce the pool balances in an amount equal to the sale
        proceeds.

    -   Under the planned conversion, Advantage unitholders will receive one
        share in the corporation for each Advantage trust unit they hold. The
        conversion is intended to be tax deferred for Canadian residents but
        will be a taxable event for a U.S. taxpayer. For a U.S. taxpayer, any
        gain or loss would be a capital gain or loss if Advantage units are
        held as capital assets; long term capital gains of non-corporate U.S.
        taxpayers are generally taxed at favorable rates and the
        deductibility of capital losses is subject to limitations.

    -   Following the completion of the conversion, Advantage will assume all
        the obligations of the Fund in respect of the Fund's outstanding
        convertible debentures.

    -   The planned conversion will be accomplished by plan of arrangement
        and requires the approval of Advantage unitholders, as well as
        customary court and regulatory approvals. A management information
        circular and proxy statement outlining the details of the conversion
        will be mailed to Advantage unitholders in connection with a
        unitholder meeting expected to be scheduled on or about June 29,
        2009. To be implemented, the conversion must be approved by not less
        than two-thirds of the votes cast by unitholders voting at the
        unitholder meeting. Closing of the conversion is anticipated to be on
        June 30, 2009.

    Financial Advisors

    -   RBC Capital Markets and Scotia Waterous Inc. are acting as financial
        advisors to Advantage.A conference call and webcast will be held on Thursday, March 19, 2009 at
9:00 a.m. MST (11:00 a.m. EST). The conference call can be accessed toll-free
at 1-800-595-8550. A replay of the call will be available from approximately
11:00 a.m. MST on March 19, until approximately midnight, April 2, 2009 and
can be accessed by dialing toll free 1-877-289-8525. The passcode required for
playback is 21301137 followed by the pound sign. A live web cast of the
conference call will be accessible via the Internet on Advantage's website at
www.advantageincome.com.

    Advisory

    The information in this press release contains certain forward-looking
statements, including within the meaning of the United States Private
Securities Litigation Reform Act of 1995. These statements relate to future
events or our future intentions or 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",
"demonstrate", "expect", "may", "will", "project", "predict", "potential",
"targeting", "intend", "could", "might", "should", "believe", "would" and
similar expressions and include statements relating to, among other things,
individual wells, regions, properties or projects. 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 decisions,
activities, 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. For additional risk factors in respect of
Advantage and its business, please refer to it Annual Information Form dated
March 28, 2008 which is available on SEDAR at www.sedar.com.
    References in this press release to initial test production rates,
initial "productivity", initial "flow" rates, "flush" production rates and
"behind pipe production" are useful in confirming the presence of
hydrocarbons, however such rates are not determinative of the rates at which
such wells will commence production and decline thereafter. While encouraging,
readers are cautioned not to place reliance on such rates in calculating the
aggregate production for the Fund.
    Barrels of oil equivalent (boe) or billion of cubic feet of gas
equivalent (BcfGE) may be misleading, particularly if used in isolation. A boe
conversion ratio has been calculated using a conversion rate of six thousand
cubic feet of natural gas to one barrel and a BcfGE conversion ratio has been
calculated using a conversion rate of 1 million barrels of oil to six billion
cubic feet of gas. "TCF" stands for trillion cubic feet of natural gas. Such
conversion rates are based on an energy equivalency conversion method
application at the burner tip and do not represent an economic value
equivalency at the wellhead.
    This news release contains references to estimates of natural gas
classified as discovered petroleum initially in place and contingent resources
which are not, and should not be confused with, estimates of oil and gas
reserves. "Discovered petroleum initially in place" is defined in the Canadian
Oil and Gas Evaluation Handbook (the "COGE Handbook") as the quantity of
hydrocarbons that are estimated to be in place within a known accumulation.
Discovered petroleum initially in place is divided into recoverable and
unrecoverable portions, with the estimated future recoverable portion
classified as reserves and contingent resources. "Contingent resources" is
defined in the COGE Handbook as the quantity of petroleum that is estimated to
be potentially recoverable from known accumulations using established
technology or technology under development which are not currently considered
to be commercially recoverable due to one or more contingencies. There is no
certainty that it will be commercially viable to produce any portion of the
discovered petroleum initially in place or contingent resources. There are a
number of contingencies associated with the development of the Montney
resources relating to performance from new and existing wells, future drilling
programs, the lack of infrastructure, well density per section, recovery
factors and development necessarily involves known and unknown risks and
uncertainties, including those risks identified in this press release. The
estimates of discovered petroleum initially in place and contingent resources
represents the best estimate, as defined in the COGE Handbook, of such
resources. The contingent resources estimated by Sproule have not been
adjusted for risk based on the chance of development. There is no certainty
that the resources will be developed and, if developed, there is no certainty
that it will be commercially viable to produce any portion of the reported
contingent resources for the Montney zones.
    Finding and development costs have been calculated in accordance with
section 5.15 of National Instrument 51-101 Standards of Disclosure for Oil and
Gas Activities which requires changes in FDC to be included in the calculation
of finding and development costs. Advantage has also provided the calculation
of future development costs excluding changes in FDC as indicated above. The
aggregate of the exploration and development costs incurred in the most recent
financial year and the change during that year in estimated FDC generally will
not reflect total finding and development costs related to reserve additions
for that year. The disclosure of finding and development costs does not
include comparative information of finding and development costs for the years
ended 2007 and 2006 as finding and development costs were not calculated for
the Glacier properties for the years ended 2007 and 2006.

    %CIK: 0001259995