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Strategic Energy Fund (TSX: SEF.UN) announces offering of warranted units

Toronto/Calgary: Strategic Energy Management Corp., the manager of Strategic Energy Fund (the “Fund”), is pleased to announce that the Fund filed a preliminary short form prospectus in connection with an offering of warranted units of securities (the “Warranted Units”) of the Fund (the “Offering”). Each Warranted Unit consists of one trust unit of the Fund and one-half of one Fund unit purchase warrant, which will be separated upon the closing of the Offering.

Use of proceeds: The net proceeds of the Offering will be invested by the Fund in accordance with its investment objectives, subject to the investment restrictions of the Fund.

Commitment of Principal Unitholder: John F. Driscoll intends to participate, directly or indirectly, in the Offering by purchasing up to 5% of the number of Warranted Units sold pursuant to the Offering, to a maximum of $5,000,000.

Dealer manager: CIBC World Markets Inc. has been engaged as agent, on a best-effort basis, for the Offering.

Strategic Energy Fund: Strategic Energy Fund is an investment trust that seeks to provide unitholders with superior rates of return through a diversification strategy focused on investment opportunities within the Canadian energy sector. The Fund invests in established companies, early-stage energy companies and, to a lesser extent, special energy issuers, each with prospects for high growth in the near to medium term and the potential for long-term capital appreciation.The Fund’s investments in established companies, including energy royalty and income trusts, are made with a view to generate sufficient income to permit the Fund to make monthly cash distributions to unitholders. The Fund expects to continue to pay monthly distributions of $0.11 per unit during the remainder of 2006. However, if the make-up of the portfolio changes or if such portfolio holdings make distributions other than in accordance with their indicated guidance, distributions may differ.Investments in early-stage energy companies are focused on both private and public issuers with strong, experienced management teams that have proven track records of enhancing shareholder value and successfully executing exit strategies. As well, the Fund may invest in undervalued issuers where Sentry Select Capital Corp., investment advisor to the Fund, believes that capital appreciation can be realized.

Trading information and NAV: Strategic Energy Fund units trade on the Toronto Stock Exchange under the symbol SEF.UN. As of October 18, 2006, the Fund’s closing price on the TSX was $12.06 per unit and the net asset value was $12.46 per unit.

Sentry Select Capital Corp.: The investment advisor of the Fund is Sentry Select Capital Corp., a wealth management company providing investment, administrative and marketing services to 33 exchange-listed closed-end funds and corporations, including preferred securities and debentures, 17 principal-protected notes, 16 mutual funds and four flow-through limited partnerships. Sentry Select is one of the largest Canadian investment managers in the income trust sector. As of September 30, 2006, the firm had approximately $8.5 billion in gross assets under management

More information: Investor Services (broker/investor inquiries), Kinga Lam (media inquiries)Tel: 1-888-246-6656 Fax: 416 364-1197

Documents (including press releases) regarding the various investment funds that are managed or advised by Sentry are provided for information purposes only and cannot be relied on to be complete, exhaustive or error-free unless the complete set of documents for any given investment fund with respect to which information is being sought is reviewed and then only on SEDAR (