(AVN.UN - TSX, AAV - NYSE)

    CALGARY, July 8 /CNW/ - Advantage Energy Income Fund ("Advantage" or "the
Fund") announces that the Board of Directors has approved a capital budget and
guidance for the twelve month period beginning July 2009 and ending June 2010.
Management will review the capital program on a regular basis in the context
of prevailing economic conditions and make adjustments as deemed necessary to
the program, subject to review by the Board of Directors.
    Advantage's corporate capital budget for the 12 month period ending June
2010 has been set at $207 million. The budget will focus on development of our
Montney natural gas resource play at Glacier, Alberta where Advantage will
continue to employ a phased development approach. Phase I of the development
plan was achieved during Q2 2009 where production capacity was increased to
approximately 25 mmcfd and included wells, compression facilities and
additional pipelines. Phase II of the development plan will be undertaken
during the next 12 months and will result in production capacity increasing to
approximately 50 mmcfd by mid-year 2010. Phase III of the development plan
will result in the attainment of 100 mmcfd by mid-year 2011.
    The Alberta Government's recently announced extension of the energy
incentive programs to March 31, 2011 will provide substantial benefits to all
three phases of our Glacier development plan. The energy incentive programs
will allow Advantage to capitalize on lower drilling costs (through a drilling
royalty credit of up to $200 per meter of drilled depth subject to a corporate
ceiling) and an initial five per cent royalty rate on the first 500 mmcf of
production for new wells based on our go-forward drilling plans for each of
the three phases of development.

    Glacier Phase II Development Plan

    Phase II of the Glacier development plan includes the drilling and
completion of 16 gross (16.0 net) horizontal operated wells, up to 16 gross
(6.1 net) joint interest horizontal wells and 1 gross (1.0 net) vertical well
during the next twelve months. Drilling plans will continue to balance
production and reserve growth and delineation of our extensive 89 section
gross (average 90% working interest) Montney land block. Drilling resumed in
early July at Glacier with the deployment of four drilling rigs on operated
and joint interest lands.
    Phase II also includes the expansion of the existing gas gathering
system, additional compression and a new Advantage operated gas plant to
complement the existing infrastructure and provide total processing and
production capacity of 50 mmcfd. The majority of the wells drilled during the
last half of 2009 will be tied-in during the second quarter of 2010 when the
facilities expansions are expected to be completed.
    Glacier capital expenditures are estimated to be approximately $84
million net for the remainder of 2009 and $81 million net for the first half
of 2010. Approximately $116 million will be allocated to drilling and
completions with $29 million for well equipping and tie-ins and $20 million
for facilities and plant expansion.Updated Guidance
                                  H2               H1             Total
                                 2009             2010          12 Months

    Production (boe/d)      22,700-23,300    24,200-25,200    23,450-24,300

    Royalty Rate (%)          15% - 18%        16% - 19%        15% - 19%

    Operating Costs
     ($/boe)               $12.75 - $13.30  $12.50 - $13.20  $12.60 - $13.25

    Capital Expenditures
     ($million)              $105 - $110      $100 - $105      $205 - $215(*)

    A full year 2010 capital budget and guidance will be provided at or about
year-end 2009.

    (*) Approximately 79% of the total capital expenditures for the 12 month
        period will be allocated to Glacier.Funds From Operations and Hedging Summary

    Funds from operations for the above 12 month period ending June 2010
which is based on the mid-range of guidance is estimated at $204 million using
an average Nymex natural gas price of $5.19 US/mmbtu (AECO $4.97 Cdn/mcf), WTI
oil price of $73.87 US/bbl and an $0.86 Cdn/$US exchange rate. Advantage's
current hedging positions have been included in the funds from operations
estimate.
    Advantage has a significant portion of our natural gas and crude oil
hedged through to the end of 2010. Our strategy will be to continue to employ
a multi-year hedging program to reduce the volatility in cash flow in support
of capital requirements.
    The following table summarizes our current hedging position based on
guidance provided:% of net
    Natural                   Production        Cdn $ Aeco        US $ Nymex
     Gas                        Hedged           (per mcf)        (per mmbtu)


    2009     Q3                   78%             $8.17             $8.57
             Q4                   84%             $8.17             $8.57

             H2 2009              81%             $8.17             $8.57

    2010     2010 Full Year       58%             $7.46             $7.86


                               % of net
    Crude                     Production         Cdn $WTI           US $WTI
     Oil                        Hedged           (per bbl)         (per bbl)

    2009     Q3                   56%       $62.40 - $69.40  $53.66 - $59.68
             Q4                   54%       $62.40 - $69.40  $53.66 - $59.68

             H2 2009              55%       $62.40 - $69.40  $53.66 - $59.68

    2010     2010 Full Year       31%            $67.83            $58.33Additional hedging details are available on our website at
www.advantageincome.com.

    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.

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