Exhibit
99.1







ANNUAL
INFORMATION FORM



For
the year ended December 31, 2011



March
15, 2012











Table
of Contents





|                                                                                               |  |   
|---------------------------------------------------------------------------------------------- |  | --
|GLOSSARY
    OF TERMS                                                                          |  |   
|ABBREVIATIONS,
    TERMS AND CONVERSIONS                                                       |  | 4 
|NON-GAAP
    MEASURES                                                                          |  | 4 
|NOTE REGARDING
    FORWARD-LOOKING INFORMATION                                                 |  | 5 
|INCORPORATION
    AND STRUCTURE                                                                |  | 7 
|Provident
    Energy Ltd.                                                                      |  | 7 
|Provident
    Midstream Holdings LP                                                            |  | 8 
|Provident
    Midstream LP                                                                     |  | 8 
|Provident
    Midstream Inc.                                                                   |  | 8 
|Pro
    Holding Company                                                                        |  | 8 
|Provident
    Midstream USA Inc.                                                               |  | 8 
|INTERCORPORATE
    RELATIONSHIPS                                                               |  | 9 
|INFORMATION
    CONCERNING PEL AND ITS BUSINESS                                                |  | 9 
|General                                                                                        |  | 9 
|Cash
    Dividends                                                                             |  | 10
|Common
    Shares                                                                              |  | 10
|Initial
    6.5 Percent Debentures                                                             |  | 10
|Supplemental
    6.5 Percent Debentures                                                        |  | 11
|5.75
    Percent Debentures (E Series)                                                         |  | 11
|5.75
    Percent Debentures (F Series)                                                         |  | 12
|Debt
    Financing                                                                             |  | 12
|Shareholder
    Rights Plan                                                                    |  | 13
|GENERAL
    DEVELOPMENT OF THE BUSINESS OF PROVIDENT                                           |  | 14
|Three
    Year History                                                                         |  | 14
|Pembina
    Arrangement                                                                        |  | 17
|RISK MANAGEMENT                                                                                |  | 19
|NATURAL
    GAS LIQUIDS MIDSTREAM PROCESSING AND MARKETING OPERATIONS                          |  | 19
|The
    Midstream Business                                                                     |  | 19
|Long
    term contracts                                                                        |  | 21
|MARKET
    FOR SECURITIES                                                                      |  | 22
|Toronto
    Stock Exchange                                                                     |  | 22
|New
    York Stock Exchange                                                                    |  | 23
|RECORD
    OF CASH DIVIDENDS                                                                   |  | 23
|PREMIUM
    DIVIDEND AND DIVIDEND REINVESTMENT SHARE PURCHASE PLAN                             |  | 24
|DIRECTORS
    AND OFFICERS                                                                     |  | 26
|Committees
    of the Provident Board                                                          |  | 29
|Conflicts
    of Interest                                                                      |  | 30
|AUDIT COMMITTEE
    INFORMATION                                                                |  | 30
|Composition
    of the Audit Committee                                                         |  | 30
|Audit
    Committee Charter                                                                    |  | 31
|Relevant
    Education and Experience of Each Audit Committee Member                           |  | 31
|External
    Auditor Service Fees                                                              |  | 32
|INFORMATION
    CONCERNING THE NATURAL GAS LIQUIDS MIDSTREAM PROCESSING AND MARKETING INDUSTRY |  | 33
|General                                                                                        |  | 33
|NGL
    Extraction                                                                             |  | 33
|NGL
    Fractionation                                                                          |  | 33
|NGL
    Transportation                                                                         |  | 33
|NGL
    Storage                                                                                |  | 34
|NGL
    Marketing                                                                              |  | 34
|Commercial
    Arrangements                                                                    |  | 34
|RISK FACTORS                                                                                   |  | 35
|Natural
    Gas Liquids Midstream Infrastructure and Logistics Business Risk Factors           |  | 35
|General
    Risk Factors                                                                       |  | 37
|INTERESTS
    OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS                                |  | 39
|TRANSFER
    AGENT AND REGISTRAR                                                               |  | 39
|MATERIAL
    CONTRACTS                                                                         |  | 39
|DOCUMENTS
    INCORPORATED BY REFERENCE                                                        |  | 39
|PRINCIPAL
    HOLDERS OF COMMON SHARES                                                         |  | 40
|ADDITIONAL
    INFORMATION                                                                     |  | 40





SCHEDULE
A - AUDIT COMMITTEE INFORMATION











GLOSSARY
OF TERMS



"5.75
Percent Debentures (E Series)" means the 5.75 percent convertible unsecured subordinated debentures of Provident due
December 31, 2017;



"5.75
Percent Debentures (F Series)" means the 5.75 percent convertible unsecured subordinated debentures of Provident due
December 31, 2018;



"ABCA"
means the Business Corporations Act (Alberta), as amended, including the regulations promulgated thereunder;



"affiliate"
or "associate" when used to indicate a relationship with a person or company, means the same as set forth in
the Securities Act (Alberta);



"Common
Shares" means the common shares in the capital of PEL;



"Computershare"
means Computershare Trust Company of Canada;



"Conversion"
means the conversion of the Trust from a trust structure to a corporate structure effective January 1, 2011 pursuant to a plan
of arrangement under section 193 of the ABCA involving the Trust, PEL, Newco and the Unitholders;



"Founders"
means Founders Energy Ltd., a predecessor of PEL;



"Initial
6.5 Percent Debentures" means the 6.5 percent convertible unsecured subordinated debentures of Provident issued in March
2005;



"Midnight"
means Midnight Oil Exploration Ltd.;



"Midnight
Arrangement" means the plan of arrangement under section 193 of the ABCA involving the Trust, Midnight, certain subsidiaries
of the Trust, the Unitholders and the shareholders of Midnight pursuant to which Midnight acquired Provident's oil and natural
gas business effective June 29, 2010;



"Midstream
Business" means the midstream business of Provident including the Midstream NGL Business and the business carried on
with the Redwater Midstream NGL Assets;



"Midstream
NGL Acquisition" means the acquisition by Provident of certain assets, shares and partnership interests which comprised
the natural gas liquids business of EnCana Corporation and certain of its subsidiaries which closed on December 13, 2005;



"Midstream
NGL Business" means the natural gas liquids midstream infrastructure and logistics business acquired by Provident from
EnCana Corporation and certain of its subsidiaries;



"Newco"
means 1564911 Alberta ULC, an unlimited liability corporation incorporated under the ABCA for purposes of participating in the
Conversion;



"NYSE"
means the New York Stock Exchange;



"Pace"
means Pace Oil & Gas Ltd.;



"PEL"
means Provident Energy Ltd.;



"Pembina"
means Pembina Pipeline Corporation;











"Pembina
Arrangement" has the meaning set forth under "General Development of the Business of Provident - Pembina Arrangement";



"Pembina
Arrangement Agreement" means the arrangement agreement dated January 15, 2012 between PEL and Pembina providing for the
acquisition of all of the Common Shares by Pembina by way of a plan of arrangement under the ABCA;



"Pembina
Shares" means the common shares in the capital of Pembina;



"PHC"
means Pro Holding Company;



"PMHLP"
means Provident Midstream Holdings LP;



"PMI"
means Provident Midstream Inc.;



"PMLP"
means Provident Midstream LP;



"PMUSAI"
means Provident Midstream USA Inc.;



"Provident"
means PEL and, where the context requires, includes the direct and indirect subsidiaries and affiliates of PEL, and where the
context requires, includes the Trust and its direct and indirect subsidiaries and affiliates prior to the Conversion;



"Provident
Board" means the board of directors of PEL;



"Redwater
Midstream NGL Assets" means the assets acquired by Provident pursuant to the acquisition of the Redwater natural gas
liquids processing business from Williams Energy (Canada) Inc., consisting of a natural gas gathering system and processing plant,
as well as an NGL extraction plant, fractionation facilities, transportation systems and storage assets;



"Shareholder
Rights Plan" means the shareholder rights plan of PEL adopted January 1, 2011;



"Shareholders"
means the holders from time to time of the Common Shares;



"subsidiary"
means, when used to indicate a relationship with another body corporate:



| | (a) | a
                                                                                                       body corporate which is
                                                                                                       controlled by (i) that
                                                                                                       other, or (ii) that other
                                                                                                       and one or more bodies
                                                                                                       corporate, each of which
                                                                                                       is controlled by that other,
                                                                                                       or (iii) two or more bodies
                                                                                                       corporate each of which
                                                                                                       is controlled by that other,
                                                                                                       or
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | a
                                                                                                       subsidiary of a body corporate
                                                                                                       that is the other's subsidiary;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



"Supplemental
6.5 Percent Debentures" means the 6.5 percent convertible unsecured subordinated debentures of Provident issued in November
2005;



"Trust"
means Provident Energy Trust, a trust settled pursuant to the laws of Alberta which existed prior to the Conversion;



"Trust
Unit" means a unit of the Trust, each unit representing an equal undivided beneficial interest therein;



"TSX"
means the Toronto Stock Exchange;



"United
States" and "U.S." mean the United States of America, it territories and possessions, any state of the
United States, and the District of Columbia; and



2







"Unitholders"
means the former holders from time to time of the Trust Units.



Words
importing the singular number only include the plural and vice versa and words importing any gender include all genders. All dollar
amounts set forth in this Annual Information Form are in Canadian dollars, except where otherwise indicated.



3







ABBREVIATIONS,
TERMS AND CONVERSIONS



In
this Annual Information Form, the abbreviations and terms set forth below have the meanings indicated.



|Oil
    and Natural Gas Liquids |  | Natural
    Gas                  
|------------------------------- |  | ---------------------------------
|                                |  |                                  
|bbls                            |  | barrels                          
|bpd                             |  | barrels of oil per day           
|mmbbls                          |  | million barrels                  
|mmboe                           |  | million barrels of oil equivalent
|NGLs                            |  | natural gas liquids              
|                                |  |                                  



|Other |  |                                                                                                                                                                                                                                                                                                                    
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |  |                                                                                                                                                                                                                                                                                                                    
|boe   |  | means barrel
    of oil equivalent, using the conversion factor of 6 mcf of natural gas being equivalent to one bbl of oil, unless otherwise
    specified.  The conversion factor used to convert natural gas to oil equivalent is not necessarily based upon either
    energy or price equivalents at this time.



The
following table sets forth certain conversions between Standard Imperial Units and the International System of Units (or metric
units).



|To Convert From |  | To           |  | Multiply By
|--------------- |  | ------------ |  | -----------
|mcf             |  | cubic metres |  | 0.0282     
|cubic metres    |  | cubic feet   |  | 35.494     
|bbls            |  | cubic metres |  | 0.159      
|cubic metres    |  | bbls         |  | 6.289      
|feet            |  | metres       |  | 0.305      
|metres          |  | feet         |  | 3.281      
|miles           |  | kilometres   |  | 1.609      
|kilometres      |  | miles        |  | 0.621      
|acres           |  | hectares     |  | 0.405      
|hectares        |  | acres        |  | 2.471      
|gigajoules      |  | mmbtu        |  | 0.950      
|bbls            |  | U.S. gallons |  | 42         



NON-GAAP
MEASURES



In
this Annual Information Form and the documents incorporated by reference herein, Provident uses the terms "funds flow from
operations" and "adjusted funds flow from continuing operations", which excludes realized loss on buyout of financial
derivative instruments and strategic review and restructuring costs, to refer to the cash available for debt repayments, capital
programs and dividends. Both these measures are indicators of the financial performance of Provident. "Funds flow from operations"
and "adjusted funds flow from continuing operations" are not measures recognized by Canadian generally accepted accounting
principles ("Canadian GAAP") and do not have standardized meanings prescribed by Canadian GAAP. Therefore, "funds
flow from operations" and "adjusted funds flow from continuing operations" may not be comparable to similar measures
presented by other issuers, and investors are cautioned that "funds flow from operations" and "adjusted funds flow
from continuing operations" should not be construed as alternatives to net earnings, cash flow from operating activities
or other measures of financial performance calculated in accordance with Canadian GAAP. All references to "funds flow from
operations" are based on cash provided by operating activities before changes in non-cash working capital related to operating
activities and site restoration expenditures, as presented in the consolidated financial statements of Provident. All references
to "adjusted funds flow from continuing operations" are based on funds flow from continuing operations excluding buyout
of financial derivative instruments and strategic review and restructuring costs. The actual amount of cash that is distributed
cannot be assured and future dividends may vary.



4







Management
also uses "adjusted EBITDA" (as defined below) and "adjusted EBITDA excluding buyout of financial derivative instruments
and strategic review and restructuring costs" to analyze the operating performance of the business. "Adjusted EBITDA"
and "adjusted EBITDA excluding buyout of financial derivative instruments and strategic review and restructuring costs"
as presented do not have any standardized meaning prescribed by Canadian GAAP and therefore they may not be comparable with the
calculation of similar measures for other entities. The adjusted EBITDA measures as presented are not intended to represent operating
cash flow or operating profits for the period nor should the measures be viewed as an alternative to cash flow from operating
activities, net earnings or other measures of financial performance calculated in accordance with Canadian GAAP. All references
to "adjusted EBITDA" and "adjusted EBITDA excluding buyout of financial derivative instruments and strategic review
and restructuring costs" throughout this Annual Information Form and the documents incorporated by reference herein are based
on earnings before interest, taxes, depreciation, amortization, and other non-cash items ("adjusted EBITDA"). Provident
uses such terms as an indicator of financial performance because such terms are commonly utilized by investors to evaluate companies
in the energy sector. Provident believes that such terms are useful supplemental measures as they provide investors with information
of what cash is available for distribution in such periods.



NOTE
REGARDING FORWARD-LOOKING INFORMATION



This
Annual Information Form and the documents incorporated by reference herein contain forward-looking information under applicable
securities legislation. This information relates to future events or Provident's future performance. Such forward-looking information
is provided for the purpose of providing information about management's current expectations and plans relating to the future.
Readers are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions.
All statements other than statements of historical fact are forward-looking information. In some cases, forward-looking information
can be identified by terminology such as "may", "will", "should", "expect", "plan",
"anticipate", "believe", "estimate", "predict", "potential", "continue",
or the negative of these terms or other comparable terminology.



Forward-looking
information in this Annual Information Form includes, but is not limited to, business strategy and objectives, capital expenditures,
development plans, acquisition and disposition plans and the timing thereof, operating and other costs, budgeted levels of cash
dividends and the performance associated with Provident's business. Forward-looking information is based on current expectations,
estimates and projections that involve a number of risks and uncertainties which could cause actual events or results to differ
materially from those anticipated by Provident and described in the forward-looking information. In addition, this Annual Information
Form and the documents incorporated by reference herein may contain forward-looking information attributed to third party industry
sources. Undue reliance should not be placed on forward-looking information, as there can be no assurance that the plans, intentions
or expectations upon which they are based will occur. By its nature, forward-looking information involves numerous assumptions,
known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions,
forecasts, projections and other forward-looking information will not occur. Forward-looking information in this Annual Information
Form and the documents incorporated by reference herein may include, but is not limited to, information with respect to:



| | — | Provident's
                                                                                                            ability to benefit
                                                                                                            from the combination
                                                                                                            of growth opportunities
                                                                                                            and the ability to
                                                                                                            grow through the capital
                                                                                                            markets;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | — | Provident's
                                                                                                            acquisition strategy,
                                                                                                            the criteria to be
                                                                                                            considered in connection
                                                                                                            therewith and the
                                                                                                            benefits to be derived
                                                                                                            therefrom;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





5









| | · | the emergence of accretive growth opportunities;
| | - | ------------------------------------------------

| | · | the ability to achieve an appropriate level of monthly cash dividends;
| | - | ----------------------------------------------------------------------

| | · | the impact of Canadian and U.S. governmental regulation on Provident;
| | - | ---------------------------------------------------------------------

| | · | the existence, operation and strategy of the commodity price risk management program;
| | - | -------------------------------------------------------------------------------------

| | · | the approximate and maximum amount of forward sales and hedging to be employed;
| | - | -------------------------------------------------------------------------------

| | · | changes in oil, natural gas and natural gas liquids prices and the impact of such changes on cash
flow after financial derivative instruments;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------

| | · | the level of capital expenditures;
| | - | ----------------------------------

| | · | currency, exchange and interest rates;
| | - | --------------------------------------

| | · | the performance characteristics of Provident's business;
| | - | --------------------------------------------------------

| | · | the growth opportunities associated with Provident's business
| | - | -------------------------------------------------------------

| | · | the availability and amount of tax pools available to offset Provident's cash taxes;
| | - | ------------------------------------------------------------------------------------

| | · | the nature of contractual arrangements with third parties in respect of Provident's business;
| | - | ---------------------------------------------------------------------------------------------

| | · | the anticipated closing date of the Pembina Arrangement; and
| | - | ------------------------------------------------------------



| | · | the satisfaction of regulatory and other conditions relating to the Pembina Arrangement.
| | - | ----------------------------------------------------------------------------------------





Although
Provident believes that the expectations reflected in the forward-looking information are reasonable, there can be no assurance
that such expectations will prove to be correct. Provident can not guarantee future results, levels of activity, performance,
or achievements. Moreover, neither Provident nor any other person assumes responsibility for the accuracy and completeness of
the forward-looking information. Some of the risks and other factors, some of which are beyond the Provident's control, which
could cause results to differ materially from those expressed in the forward-looking information contained in this Annual Information
Form and the documents incorporated by reference herein include, but are not limited to:





| | · | general economic and credit conditions in Canada, the United States and globally;
| | - | ---------------------------------------------------------------------------------

| | · | industry conditions associated with Provident's business;
| | - | ---------------------------------------------------------

| | · | fluctuations in the price of crude oil, natural gas and natural gas liquids;
| | - | ----------------------------------------------------------------------------

| | · | interest payable on notes issued in connection with acquisitions;
| | - | -----------------------------------------------------------------

| | · | governmental regulation in North America of the energy industry, including income tax and environmental
regulation;
| | - | -------------------------------------------------------------------------------------------------------------------

| | · | fluctuation in foreign exchange or interest rates;
| | - | --------------------------------------------------

| | · | stock market volatility and market valuations;
| | - | ----------------------------------------------

| | · | the impact of environmental events;
| | - | -----------------------------------

| | · | the need to obtain required approvals from regulatory authorities;
| | - | ------------------------------------------------------------------

| | · | unanticipated operating events;
| | - | -------------------------------

| | · | failure to realize the anticipated benefits of acquisitions;
| | - | ------------------------------------------------------------

| | · | competition for, among other things, capital reserves and skilled personnel;
| | - | ----------------------------------------------------------------------------

| | · | failure to obtain industry partner and other third party consents and approvals, when required;
| | - | -----------------------------------------------------------------------------------------------

| | · | risks associated with foreign ownership;
| | - | ----------------------------------------

| | · | third party performance of obligations under contractual arrangements; and
| | - | --------------------------------------------------------------------------

| | · | failure to complete the Pembina Arrangement;
| | - | --------------------------------------------

| | · | unforeseen difficulties integrating the assets of Provident into Pembina's operations; and
| | - | ------------------------------------------------------------------------------------------

| | · | the other factors set forth under "Risk Factors" in this Annual Information Form.
| | - | ---------------------------------------------------------------------------------



Readers
are cautioned that the foregoing list is not exhaustive of all possible risks and uncertainties. With respect to forward-looking
information contained in this Annual Information Form, Provident has made assumptions regarding, among other things:





| | · | future natural gas, crude oil and NGL prices;
| | - | ---------------------------------------------

| | · | the ability of Provident to obtain qualified staff and equipment in a timely and cost-efficient
manner to meet demand;
| | - | ----------------------------------------------------------------------------------------------------------------------





6







| | · | the regulatory framework regarding taxes and environmental matters in which Provident conducts
its business;
| | - | ------------------------------------------------------------------------------------------------------------

| | · | the impact of increasing competition;
| | - | -------------------------------------

| | · | Provident's ability to obtain financing on acceptable terms;
| | - | ------------------------------------------------------------

| | · | the general stability of the economic and political environment in which Provident operates;
| | - | --------------------------------------------------------------------------------------------

| | · | the timely receipt of any required regulatory approvals;
| | - | --------------------------------------------------------

| | · | the timing and costs of pipeline, storage and facility construction and expansion and the ability
of Provident to secure adequate product transportation;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | currency, exchange and interest rates;
| | - | --------------------------------------

| | · | matters relating to the Pembina Arrangement;
| | - | --------------------------------------------

| | · | the timely receipt of all required shareholder, regulatory and court approvals and the satisfaction
of other closing conditions in respect of the Pembina Arrangement; and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | the ability of Provident to successfully market its products.
| | - | -------------------------------------------------------------





Readers
are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used. The forward-looking
information contained or incorporated by reference in this Annual Information Form is made as of the date hereof and Provident
undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information,
future events or otherwise, unless required by applicable securities laws. The forward-looking information contained or incorporated
by reference in this Annual Information Form is expressly qualified by this cautionary statement.



INCORPORATION
AND STRUCTURE



Provident
Energy Ltd.



Provident
Energy Ltd. is a corporation incorporated under the ABCA. All of the issued and outstanding Common Shares are held by the Shareholders.
Prior to the Conversion, the Trust indirectly held interests in a natural gas liquids midstream infrastructure and logistics business
through its various subsidiaries and PEL managed and administered the operating activities associated with the business held by
the Trust's various subsidiaries.



Pursuant
to the Conversion, PEL acquired, directly and indirectly, the same assets and business that the Trust owned immediately prior
to the effective time of the Conversion and assumed all of the obligations of the Trust. In accordance with the Conversion, the
Trust was dissolved effective January 1, 2011 and thereafter ceased to exist. PEL continues to carry on the business carried on
by the Trust prior to the Conversion. See "General Development of the Business of Provident - Conversion of the Trust".



PEL
was incorporated under the ABCA on January 19, 2001 and was amalgamated with Founders pursuant to a plan of arrangement involving
the Trust, PEL and Founders effective March 6, 2001. PEL subsequently amalgamated with Maxx Petroleum Ltd. ("Maxx")
effective May 25, 2001 pursuant to a plan of arrangement involving the Trust, PEL and Maxx. PEL was also amalgamated with Richland
Petroleum Corporation ("Richland") effective January 16, 2002 pursuant to a plan of arrangement involving the Trust,
PEL and Richland. PEL was amalgamated with Provident Management Corporation pursuant to a management internalization transaction
involving the Trust, PEL, Provident Management Corporation and its shareholders effective January 17, 2003. PEL was also amalgamated
with Olympia Energy Inc. and Viracocha Energy Inc. on June 1, 2004 pursuant to plans of arrangement involving the Trust, PEL,
Viracocha Energy Inc. and Olympia Energy Inc. PEL also amalgamated with Provident Acquisitions Inc. on January 1, 2010 pursuant
to an internal reorganization carried out to segregate and consolidate the Trust's subsidiaries along business units. Effective
January 1, 2011, PEL amalgamated with Newco pursuant to the Conversion.



The
head and principal offices of PEL are located at 2100, 250 - 2nd Street S.W., Calgary, Alberta T2P 0C1. The registered
office of PEL is located at 3700, 400 - 3rd Avenue S.W., Calgary, Alberta T2P 4H2.



7







Provident
Midstream Holdings LP



Provident
Midstream Holdings LP is a limited partnership registered in the Province of Alberta. PMHLP was formed pursuant to a limited partnership
agreement dated September 30, 2008. PMHLP directly and indirectly holds substantially all of the equity interests in the subsidiaries
of PEL, including PMLP and PMI. The general partner of PMHLP is Provident Midstream Holdings GP ULC, a wholly-owned subsidiary
of PEL, which holds a 0.1% interest in PMHLP. PEL is the limited partner of PMHLP with a 99.9% interest in the limited partnership.



The
head and principal offices of PMHLP are located at 2100, 250 - 2nd Street S.W., Calgary, Alberta T2P 0C1. The registered
office of the general partner of PMHLP is located at 3700, 400 - 3rd Avenue S.W., Calgary, Alberta T2P 4H2.



Provident
Midstream LP



Provident
Midstream LP is a limited partnership registered in the Province of Alberta. PMLP was formed pursuant to a limited partnership
agreement dated December 8, 2005. PMLP directly and indirectly holds the Canadian partnership interests acquired pursuant to the
Midstream NGL Acquisition. The general partner of PMLP is Provident GP Inc. which holds a 0.1 percent interest in PMLP. PMHLP
and PMI are the limited partners of PMLP with a 99.9 percent total interest in the partnership. PMLP also holds a 98.53 percent
partnership interest in Empress NGL Partnership, a general partnership formed under the laws of Alberta, which in turn holds a
99 percent partnership interest in Kinetic Resources LPG, a general partnership formed under the laws of Alberta. 1195714 Alberta
Ltd., a wholly-owned subsidiary of Provident GP Inc., holds a 1.47 percent interest in and is the managing partner of Empress
NGL Partnership and also holds a 1 percent interest in and is the managing partner of Kinetic Resources LPG.



The
head and principal offices of PMLP, Empress NGL Partnership and Kinetic Resources LPG are located at 2100, 250 - 2nd
Street S.W., Calgary, Alberta T2P 0C1. The registered office of the general partner of PMLP, and the managing partner of Empress
NGL Partnership and Kinetic Resources LPG, is located at 3700, 400 3rd Avenue S.W., Calgary, Alberta T2P 4H2.



Provident
Midstream Inc.



Provident
Midstream Inc. is a corporation wholly-owned by PHC. PMI was incorporated under the ABCA on June 6, 2005 and holds limited partnership
interests in PMLP.



The
head and principal offices of PMI are located at 2100, 250 - 2nd Street S.W., Calgary, Alberta T2P 0C1. The registered
office of PMI is located at 3700, 400 - 3rd Avenue S.W., Calgary, Alberta T2P 4H3.



Pro
Holding Company



Pro
Holding Company is a corporation owned by PMHLP (common shares) and PEL (preferred shares). PHC was incorporated in the State
of Delaware on June 7, 2004. PHC directly holds a 25 percent partnership interest in the Kinetic Resources U.S.A. partnership.
PHC owns all of the shares of Pro Midstream Company, a Delaware company, which holds the remaining 75 percent partnership interest
in the Kinetic Resources U.S.A. partnership. PHC also owns all of the outstanding shares of PMI.



The
head and principal offices of PHC and Pro Midstream Company are located at 654 N Sam Houston Pkwy E. Houston, Texas 77060-5919.
The registered office of PHC and Pro Midstream Company is located at 2711 Centerville Road, Suite 400, Wilmington, New Castle
County, Delaware 19808.



Provident
Midstream USA Inc.



Provident
Midstream USA Inc. is a corporation wholly owned by PEL. PMUSAI was incorporated in the State of Delaware on September 13, 2008
and owns all of the shares of Pro US LLC, a Delaware company. PMUSAI and Pro US LLC hold certain assets located in the U.S. acquired
as a result of the Midstream NGL Acquisition.





8









The
head and principal offices of PMUSAI and Pro US LLC are located at 654 N. Sam Houston Pkwy E. Houston, Texas 77060-5919. The registered
office of PMUSAI and Pro US LLC is located at 271 Centerville Road, Suite 400, Wilmington, New Castle Court, Delaware 19808.



INTERCORPORATE
RELATIONSHIPS



The
following diagram describes the inter-corporate relationships among PEL and its material subsidiaries as of March 15, 2012.







INFORMATION
CONCERNING PEL AND ITS BUSINESS



General



Provident
Energy Ltd. is a corporation incorporated under the ABCA. All of the issued and outstanding Common Shares are held by the Shareholders.



PEL
holds interests in the natural gas liquids midstream infrastructure and logistics business through PMHLP and various other subsidiaries.
Revenue from the business flows to PEL from PMHLP and PEL's other subsidiaries by way of interest payments and principal repayments
on notes and by way of dividends and partnership distributions from the subsidiaries. See "Natural Gas Liquids Midstream
Processing and Marketing Operations".





9







The
principal business of PEL is to manage and administer the operating activities associated with the natural gas liquids midstream
infrastructure and logistics business held by Provident. PEL currently has 286 employees, consultants and contract operators at
its head office location and in several field offices within the operating areas of the midstream facilities in Redwater and Empress,
Alberta, Sarnia and Corunna, Ontario, Lynchburg, Virginia and Houston, Texas. Provident also carries on business in Alida, Saskatchewan
through its subsidiary, Three Star Trucking Ltd., a Saskatchewan based oilfield hauling company serving Bakken-area crude oil
producers.



Cash
Dividends



As
of March 15, 2012, Provident's dividend level was $0.045 per Common Share per month. However, all decisions with respect to the
declaration of dividends on the Common Shares will be made by the Provident Board on the basis of Provident's earnings, financial
requirements and other conditions existing at such future time, planned acquisitions, income tax payable by Provident, commodity
prices and access to capital markets, as well as the satisfaction of liquidity and solvency tests imposed by the ABCA on corporations
for the declaration and payment of dividends.



It
is anticipated that the dividends will be "eligible dividends" for Canadian income tax purposes and thus qualify for
the enhanced gross-up and dividend tax credit regime for certain shareholders of Provident. However, no assurance can be given
that all distributions will be designated as eligible dividends. Provident will continue to be treated as a corporation for U.S.
federal income tax purposes. As a corporation, Provident's dividends to U.S. Shareholders may be "qualified dividends"
as determined under the U.S. Internal Revenue Code.



Common
Shares



All
of the issued and outstanding Common Shares are held by the Shareholders. Each Common Share entitles its holder to receive notice
of and to attend all meetings of the Shareholders and to one vote at such meetings. The Shareholders are, at the discretion of
the Provident Board and subject to applicable legal restrictions, entitled to receive any dividends declared by the Provident
Board on the Common Shares. All such Common Shares are entitled to share equally in any distribution of the assets of PEL upon
the liquidation, dissolution, bankruptcy or winding-up of PEL or other distribution of its assets among its Shareholders for the
purpose of winding-up its affairs. Such participation is subject to the rights, privileges, restrictions and conditions attaching
to any instruments having priority over the Common Shares.



PEL
has no other class of shares authorized for issuance other than the Common Shares.



Initial
6.5 Percent Debentures



In
March 2005, Provident issued $100.0 million aggregate principal amount of convertible unsecured subordinated debentures. The Initial
6.5 Percent Debentures had a maturity date of August 31, 2012.



The
Conversion constituted a "change of control" under the debenture indenture governing the Initial 6.5 Percent Debentures.
As a result, Provident was required to deliver to each holder of the Initial 6.5 Percent Debentures a notice stating that there
had been a change of control and specifying the circumstances surrounding such event, together with an offer in writing to purchase
all of the outstanding Initial 6.5 Percent Debentures at a price equal to 101% of the principal amount thereof, plus accrued and
unpaid interest on such Initial 6.5 Percent Debentures up to, but excluding, the date of acquisition by Provident. The offer to
purchase the Initial 6.5 Percent Debentures expired on February 21, 2011. Approximately $4.1 million principal amount of Initial
6.5 Percent Debentures were validly deposited in acceptance of the offer.



10







On
May 25, 2011, Provident redeemed all of the outstanding Initial 6.5 Percent Debentures at a redemption price of $1,000 in cash
per $1,000 principal amount of Initial 6.5 Percent Debentures, plus accrued interest, for an aggregate purchase price of approximately
$95 million.



Supplemental
6.5 Percent Debentures



In
November 2005, Provident issued $150.0 million aggregate principal amount of convertible unsecured subordinated debentures. The
Supplemental 6.5 Percent Debentures matured on April 30, 2011 and Provident repaid the outstanding principal amount of Supplemental
6.5 Percent Debentures on the maturity date of approximately $68.6 million.



5.75
Percent Debentures (E Series)



In
November 2010, Provident issued $172.5 million aggregate principal amount of convertible unsecured subordinated debentures. The
5.75 Percent Debentures (E Series) mature on December 31, 2017 and bear interest at a rate of 5.75 percent per annum, payable
semi-annually in arrears on June 30 and December 31 in each year. The 5.75 Percent Debentures (E Series) are convertible at the
option of the holder into Common Shares at any time prior to the earlier of December 31, 2017 and the business day immediately
preceding any date specified by Provident for redemption at a conversion price of $10.60 per Common Share, subject to adjustment
in certain circumstances.



The
5.75 Percent Debentures (E Series) are not redeemable by Provident before December 31, 2013. On and after December 31, 2013 and
prior to December 31, 2015, the 5.75 Percent Debentures (E Series) may be redeemed in whole or in part from time to time at the
option of Provident on not more than 60 days and not less than 30 days prior notice at a price equal to their principal amount
plus accrued and unpaid interest, provided that the volume weighted average trading price of the Common Shares on the TSX during
the 20 consecutive trading days ending on the fifth trading day preceding the date on which the notice of redemption is given
is not less than 125% of the conversion price. On and after December 31, 2015, the 5.75 Percent Debentures (E Series) may be redeemed
in whole or in part from time to time at the option of Provident on not more than 60 days and not less than 30 days prior notice
at a price equal to their principal amount plus accrued and unpaid interest.



On
redemption or maturity of the 5.75 Percent Debentures (E Series), Provident may, subject to regulatory approval, elect to satisfy
the redemption price or principal amount by issuing Common Shares to the holder of 5.75 Percent Debentures (E Series).



Upon
conversion of the 5.75 Percent Debentures (E Series), in lieu of delivering Common Shares, Provident may elect to pay the holder
cash at the option of Provident. If Provident elects, in its sole discretion, to settle the conversion obligation in cash, Provident
will deliver to the holder an amount in cash based on the daily volume weighted average price of the Common Shares on the TSX
as measured over a period of 10 consecutive trading days commencing on the third day following the conversion date. Notwithstanding
any election by Provident to invoke or suspend the cash conversion option or any election by a holder of 5.75 Percent Debentures
(E Series) to convert 5.75 Percent Debentures (E Series) into Common Shares, this cash conversion option will be immediately suspended
if and for so long as any default, event of default or acceleration has occurred and is continuing under any of Provident's senior
indebtedness or if the payment of such cash conversion option would reasonably be expected to result in such a default or event
of default.



Upon
completion of the Conversion, PEL assumed all of the covenants and obligations in respect of the 5.75 Percent Debentures (E Series)
from the Trust and entered into a supplemental debenture indenture with Computershare, as debenture trustee.



As
of March 15, 2012, there was $172.5 million aggregate principal amount of 5.75 Percent Debentures (E Series) outstanding.



11







5.75
Percent Debentures (F Series)



In
May 2011, Provident issued $172.5 million aggregate principal amount of convertible unsecured subordinated debentures. The 5.75
Percent Debentures (F Series) mature on December 31, 2018 and bear interest at a rate of 5.75 percent per annum, payable semi-annually
in arrears on June 30 and December 31 in each year. The 5.75 Percent Debentures (F Series) are convertible at the option of the
holder into Common Shares at any time prior to the earlier of December 31, 2018 and the business day immediately preceding any
date specified by Provident for redemption at a conversion price of $12.55 per Common Share, subject to adjustment in certain
circumstances.



The
5.75 Percent Debentures (F Series) are not redeemable by Provident before December 31, 2014. On and after December 31, 2014 and
prior to December 31, 2016, the 5.75 Percent Debentures (F Series) may be redeemed in whole or in part from time to time at the
option of Provident on not more than 60 days and not less than 30 days prior notice at a price equal to their principal amount
plus accrued and unpaid interest, provided that the volume weighted average trading price of the Common Shares on the TSX during
the 20 consecutive trading days ending on the fifth trading day preceding the date on which the notice of redemption is given
is not less than 125% of the conversion price. On and after December 31, 2016, the 5.75 Percent Debentures (F Series) may be redeemed
in whole or in part from time to time at the option of Provident on not more than 60 days and not less than 30 days prior notice
at a price equal to their principal amount plus accrued and unpaid interest.



On
redemption or maturity of the 5.75 Percent Debentures (F Series), Provident may, subject to regulatory approval, elect to satisfy
the redemption price or principal amount by issuing Common Shares to the holder of 5.75 Percent Debentures (F Series).



Upon
conversion of the 5.75 Percent Debentures (F Series), in lieu of delivering Common Shares, Provident may elect to pay the holder
cash at the option of Provident. If Provident elects, in its sole discretion, to settle the conversion obligation in cash, Provident
will deliver to the holder an amount in cash based on the daily volume weighted average price of the Common Shares on the TSX
as measured over a period of 10 consecutive trading days commencing on the third day following the conversion date. Notwithstanding
any election by Provident to invoke or suspend the cash conversion option or any election by a holder of 5.75 Percent Debentures
(F Series) to convert 5.75 Percent Debentures (F Series) into Common Shares, this cash conversion option will be immediately suspended
if and for so long as any default, event of default or acceleration has occurred and is continuing under any of Provident's senior
indebtedness or if the payment of such cash conversion option would reasonably be expected to result in such a default or event
of default.



As
of March 15, 2012, there was $172.5 million aggregate principal amount of 5.75 Percent Debentures (F Series) outstanding.



Debt
Financing



Provident
entered into a restated credit agreement (the "Credit Facility") as of October 14, 2011, among Provident, National Bank
of Canada, as administrative agent, and a syndicate of Canadian chartered banks and other Canadian and foreign financial institutions
(the "Lenders").



The
Credit Facility is secured by all of the assets of Provident and its restricted subsidiaries, including the Midstream Business
assets. Pursuant to the Credit Facility, the Lenders have agreed to provide Provident with a credit facility of $500 million which,
under an accordion feature, can be increased up to $750 million at the option of Provident, subject to obtaining additional commitments.
The Credit Facility also provides for a separate $75 million letter of credit facility.



12







The
terms of the Credit Facility provide for a revolving three year period expiring on October 14, 2014 (subject to customary extension
provisions). Provident may draw on the facility by way of Canadian prime rate loans, U.S. base rate loans, banker's acceptances,
LIBOR loans or letters of credit. As at March 15, 2012, Provident had drawn $170.0 million or 34 percent of its Credit Facility.
At March 15, 2012, the effective interest rate for outstanding direct borrowings under the Credit Facility was 3.10 percent. At
March 15, 2012, Provident had $47.4 million in letters of credit outstanding, representing 63 percent of the letter of credit
facility capacity, that guarantee Provident's or its subsidiaries' performance under certain commercial and other contracts.



In
accordance with the Credit Facility, Provident must maintain certain financial covenants and will not assume or create any mortgage,
charge or encumbrance on the assets of Provident or its restricted subsidiaries other than permitted encumbrances. In addition,
the Credit Facility contains other standard covenants restricting Provident's and its restricted subsidiaries' ability to incur
indebtedness, dispose of assets, enter into hedging arrangements, provide financial assistance, change their business or enter
into reorganizations with third parties. The Credit Facility also prohibits dividends to the Shareholders if a default or event
of default exists or would reasonably be expected to result therefrom.



The
events of default under the Credit Facility include a default in payment of any principal or interest when due, failure to comply
with any covenants or conditions, failure to observe or comply with any financial covenant, a change of control of Provident and
other standard events which are typical of credit facilities of this nature. Provident has also agreed to indemnify the Lenders
in certain circumstances.



A
copy of the Credit Facility has been filed on SEDAR and is available under Provident's issuer profile on SEDAR at www.sedar.com.



Shareholder
Rights Plan



Provident
has adopted a Shareholder Rights Plan which was approved at the special meeting of Unitholders held on December 1, 2010. The Shareholder
Rights Plan was not recommended or approved in response to or in contemplation of any known take-over bid or other similar transaction.



The
objectives of the Shareholder Rights Plan are to ensure, to the extent possible, that all Shareholders are treated equally and
fairly in connection with any takeover bid for Provident. Takeover bids may be structured to be coercive or may be initiated at
a time when the Provident Board will have a difficult time preparing an adequate response to the offer. Accordingly, such offers
do not always result in Shareholders receiving equal or fair treatment or full or maximum value for their investment. Under current
Canadian securities legislation, a takeover bid is required to remain open for 35 days, a period of time which may be insufficient
for the directors to: (i) evaluate a takeover bid (particularly if it includes share or trust unit consideration); (ii) explore,
develop and pursue alternatives which are superior to the takeover bid and which could maximize Shareholder value; and (iii) make
reasoned recommendations to the Shareholders.



The
Shareholder Rights Plan discourages discriminatory, coercive or unfair takeovers of Provident and gives the Provident Board time
if, in the circumstances, the Provident Board determines it is appropriate to take such time, to pursue alternatives to maximize
Shareholder value in the event an unsolicited takeover bid is made for all or a portion of the outstanding Common Shares. The
Shareholder Rights Plan discourages coercive hostile takeover bids by creating the potential that any Common Shares which may
be acquired or held by such a bidder will be significantly diluted. The potential for significant dilution to the holdings of
such a bidder can occur as the Shareholder Rights Plan provides that all holders of Common Shares who are not related to the bidder
will be entitled to exercise rights issued to them under the Shareholder Rights Plan and to acquire Common Shares at a substantial
discount to prevailing market prices. The bidder or the persons related to the bidder will not be entitled to exercise any rights
under the Shareholder Rights Plan. Accordingly, the Shareholder Rights Plan will encourage potential bidders to make takeover
bids by means of a permitted bid or to approach the Provident Board to negotiate a mutually acceptable transaction. The permitted
bid provisions of the Shareholder Rights Plan are designed to ensure that in any takeover bid for outstanding Common Shares, all
Shareholders are treated equally and are given adequate time to properly assess such takeover bid on a fully-informed basis.



13







The
Shareholder Rights Plan was not proposed to prevent a takeover of Provident, to secure the continuance of management or the directors
of Provident in their respective offices or to deter fair offers for the Common Shares.



A
complete copy of the Shareholder Rights Plan is available on SEDAR under Provident's issuer profile at www.sedar.com.



GENERAL
DEVELOPMENT OF THE BUSINESS OF PROVIDENT



Three
Year History



The
following information describes the development of the business of Provident over the last three completed financial years.



On
August 1, 2009, Provident entered into an agreement with BP Canada to purchase an additional 6.15 percent interest in the Sarnia
fractionation facility operated by BP Canada for an immediate payment of $14.8 million and a deferred payment of $3.7 million
for a facility enhancement. The acquisition increased Provident's ownership in the Sarnia fractionator to approximately 16.5 percent,
enhancing propane-plus fractionation capacity in the Empress East System by approximately 7,400 bpd to approximately 20,000 bpd
in total.



On
August 24, 2009, PEL and certain of Provident's other subsidiaries entered into an agreement with Crescent Point Energy Corp.
("Crescent Point") to sell certain oil and natural gas production assets located primarily in Southeast and Southwest
Saskatchewan, including interests, royalties and all associated assets, equipment, production facilities, gathering systems, seismic
and contractual arrangements, to Crescent Point for a purchase price of $225 million in cash, subject to normal closing adjustments.



On
September 30, 2009, Provident announced that it had closed the sale of its oil and natural gas assets in Southeast and Southwest
Saskatchewan to Crescent Point for cash consideration of $226 million including closing adjustments. Effective September 30, 2009,
Provident also completed the sale of a minor property in the Lloydminster area of Alberta (Dolcy) for $13 million. Proceeds from
both dispositions were initially applied to Provident's credit facility.



On
October 28, 2009, Provident announced it had entered into an agreement with Emerge Oil & Gas Inc. ("Emerge"), a
private oil and gas company, to sell Provident's oil and natural gas assets in the Lloydminster area for total consideration of
$85 million, consisting of $68 million in cash and $17 million in equity of Emerge. Provident completed the sale of these assets
on November 30, 2009. Proceeds from the sale were initially applied to Provident's credit facility.



On
November 25, 2009, Provident announced that it had entered into an agreement with Dow Chemical Canada to purchase a commercial
storage facility in Corunna, Ontario. Located in close proximity to Provident's Sarnia operations, the 1,000 acre site has an
active cavern storage capacity of 12.1 mmbbls, consisting of 5.0 mmbbls of hydrocarbon storage and 7.1 mmbbls currently used for
brine storage. In addition, the facility has 13 pipeline connections and a small rail offloading facility. The acquisition closed
on March 31, 2010.



On
December 23, 2009, Provident entered into an agreement with Storm Ventures International Inc., a private oil and gas company,
to sell oil and natural gas assets in West Central Alberta for cash consideration of $190 million, prior to normal closing adjustments.
This transaction closed March 1, 2010, with an October 1, 2009 effective date. Net proceeds from this disposition in the amount
of $176 million were used to reduce outstanding debt under Provident's credit facility.



14







Effective
January 1, 2010, Provident completed an internal reorganization intended to further segregate and consolidate Provident's subsidiaries
along business units. As a result of the internal reorganization transactions, Provident's oil and natural gas production business
was consolidated in Provident Energy Resources Inc., a subsidiary of the Trust.



On
April 19, 2010, Provident and Midnight entered into an arrangement agreement pursuant to which Midnight agreed to acquire Provident's
Canadian crude oil and natural gas production business by way of a plan of arrangement under the ABCA. The Midnight Arrangement
was completed on June 29, 2010 and resulted in the acquisition of Provident's oil and natural gas production business by Midnight
for total consideration valued at approximately $424 million, consisting of cash and common shares of Midnight. The cash proceeds
of approximately $107 million, net of transaction costs, were retained by Provident and directed towards repayment of long-term
debt under the Credit Facility. As part of the Midnight Arrangement, the Midnight common shares were also consolidated on the
basis of one post-consolidation Midnight share for every ten pre-consolidation Midnight shares and Midnight and Provident Energy
Resources Inc., a subsidiary of the Trust, were amalgamated to form Pace. Pursuant to the Midnight Arrangement, Unitholders received
0.12225 shares of Pace for every Trust Unit held. Following the Midnight Arrangement, Unitholders continued to hold the same number
of Trust Units as previously held immediately prior to the Midnight Arrangement and the Trust Units continued to be listed on
both the TSX and the NYSE.



On
April 20, 2010, Provident announced the appointment of Mr. Douglas Haughey to the position of President and Chief Executive Officer
and Director. Mr. Haughey succeeded Mr. Tom Buchanan who stepped down from his position as President, Chief Executive Officer
and Director effective April 30, 2010.



The
Trust entered into the Credit Facility as of June 29, 2010, as amended and extended as of October 14, 2011, among the Trust, National
Bank of Canada, as administrative agent, and a syndicate of Canadian chartered banks and other Canadian and foreign financial
institutions. The Credit Facility is secured by all of the assets of Provident and its restricted subsidiaries, including the
Midstream Business assets. Pursuant to the Credit Facility, the Lenders have agreed to provide Provident with a credit facility
of $500 million which, under an accordion feature, can be increased to $750 million at the option of Provident, subject to obtaining
additional commitments. The Credit Facility also provides for a separate $75 million letter of credit facility. See "Information
Concerning PEL and its Business - Debt Financing".



On
July 15, 2010, Provident announced that the Provident Board had approved the adoption of a unitholder rights plan. The unitholder
rights plan helped ensure the fair treatment of Unitholders in the event of any transaction involving a change of control of the
Trust. The unitholder rights plan became effective immediately and continued in effect until it was replaced with the Shareholder
Rights Plan as of January 1, 2011.



Effective
September 30, 2010, Mark Walker, Senior Vice-President, Finance & Chief Financial Officer stepped down from his position with
Provident. On September 8, 2010, Provident announced the appointment of Brent Heagy as Provident's new Senior Vice-President,
Finance & Chief Financial Officer, effective October 1, 2010.



On
October 6, 2010, Provident announced that it intended to proceed with a proposed arrangement under the ABCA involving the Trust,
PEL, Newco and Unitholders which would result in the conversion of the Trust from a trust structure to a corporate structure,
subject to Unitholder, court and regulatory approval. The Conversion was approved at a meeting of Unitholders held on December
1, 2010. At the meeting, Unitholders also approved the adoption of the Shareholder Rights Plan which came into effect upon completion
of the Conversion.



On
October 19, 2010, Provident announced it had entered into a bought-deal agreement with a syndicate of underwriters to issue up
to $172.5 million principal amount of 5.75 Percent Debentures (E Series). Proceeds from this offering were used to repay existing
indebtedness under the Credit Facility. The offering of the 5.75 Percent Debentures (E Series) was made by way of a short form
prospectus filed with the securities regulatory authorities in each of the provinces of Canada and was completed in November 2010.
Total gross proceeds from the offering of the 5.75 Percent Debentures (E Series) were $172.5 million, after exercise of the over-allotment
option in connection with the offering.



15







Effective
January 1, 2011, Provident completed the Conversion. Pursuant to the Conversion, Unitholders exchanged all of their Trust Units
for Common Shares on a one-for-one basis. PEL became a reporting issuer in each of the provinces of Canada as a result of the
Conversion and the Common Shares became listed on the TSX and NYSE. The Trust was terminated pursuant to the Conversion and has
ceased to be a reporting issuer in each of the provinces of Canada following the Conversion. The Trust Units were subsequently
de-listed from the TSX and NYSE.



The
Conversion resulted in the reorganization of the Trust into a publicly traded, dividend-paying corporation under the name "Provident
Energy Ltd.". The Conversion did not involve the acquisition of any additional interests in any operating assets or the disposition
of any of the Trust's interests in operating assets. PEL owns, directly or indirectly, the same assets and business that the Trust
owned immediately prior to the effective time of the Conversion and PEL has assumed all of the obligations of the Trust. PEL retained
the same management team and members of the Provident Board following the Conversion.



Following
the completion of the Conversion, holders of the Initial 6.5 Percent Debentures, Supplemental 6.5 Percent Debentures and 5.75
Percent Debentures (E Series) were thereafter entitled to receive Common Shares, rather than Trust Units, on the basis of one
Common Share in lieu of each Trust Unit which they were previously entitled to receive, on conversion of such debentures.



The
Conversion also constituted a "change of control" under the debenture indenture governing the Initial 6.5 Percent Debentures
and Supplemental 6.5% Debentures. As a result, Provident was required to deliver to each holder of the Initial 6.5 Percent Debentures
and Supplemental 6.5% Debentures a notice stating that there had been a change of control and specifying the circumstances surrounding
such event, together with an offer in writing to purchase all of the outstanding Initial 6.5 Percent Debentures and Supplemental
6.5% Debentures at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest on such Initial 6.5
Percent Debentures and Supplemental 6.5% Debentures up to but excluding the date of acquisition by Provident.



The
offer for the Initial 6.5 Percent Debentures and Supplemental 6.5% Debentures expired on February 21, 2011. Approximately $4.1
million principal amount of Initial 6.5 Percent Debentures and approximately $81.3 million principal amount of Supplemental 6.5
Percent Debentures were validly deposited in acceptance of the offer. Provident acquired and accepted for payment all Initial
6.5 Percent Debentures and Supplemental 6.5 Percent Debentures validly deposited and not withdrawn pursuant to the offer up to
the expiry time. The total purchase price in respect of the acquisition of the Initial 6.5 Percent Debentures and Supplemental
6.5 Percent Debentures, including accrued interest owing up to, but excluding, the expiry date of February 21, 2011, was approximately
$88 million.



Completion
of the Conversion did not constitute a change of control under the debenture indenture governing the 5.75 Percent Debentures (E
Series). As a result, Provident was not required to make an offer to purchase the 5.75 Percent Debentures (E Series) as a result
of the Conversion.



On
April 18, 2011, Provident announced it had entered into a bought-deal agreement with a syndicate of underwriters to issue up to
$172.5 million principal amount of 5.75 Percent Debentures (F Series). Proceeds from this offering were used to initially repay
existing indebtedness under the Credit Facility, which was then re-drawn to fund the redemption of all of the outstanding Initial
6.5% Debentures. The offering of the 5.75 Percent Debentures (F Series) was made by way of a short form prospectus filed with
the securities regulatory authorities in each of the provinces of Canada and was completed in May 2011. Total gross proceeds from
the offering of the 5.75 Percent Debentures (F Series) were $172.5 million, after exercise of the over-allotment option in connection
with the offering.



16







On
April 30, 2011, the Supplemental 6.5 Percent Debentures matured and Provident repaid the outstanding principal amount of Supplemental
6.5 Percent Debentures on the maturity date of approximately $68.6 million.



On
May 25, 2011, Provident redeemed all of the outstanding Initial 6.5 Percent Debentures at a redemption price of $1,000 in cash
per $1,000 principal amount of Initial 6.5 Percent Debentures, plus accrued interest, for an aggregate purchase price of approximately
$95 million.



On
July 11, 2011, Provident announced the acquisition of a two-thirds interest in Three Star Trucking Ltd. ("Three Star"),
a Saskatchewan based oilfield hauling company serving Bakken-area crude oil producers. The consideration was comprised of approximately
$7.9 million in cash and 944,828 Common Shares with an ascribed value of $7.6 million. The acquisition was completed on October
3, 2011. Provident retained the option to purchase the remaining minority interest in Three Star after three years from the closing
date of October 3, 2011.



On
September 8, 2011, Provident announced the construction of a truck unloading terminal located at Cromer, Manitoba. The terminal,
plus associated storage, will have an initial capacity of approximately 2,000 barrels per day of NGL production from the Bakken
area. The NGLs from this terminal will be injected into the Enbridge mainline for transport to Sarnia, Ontario. Provident anticipates
the project will cost approximately $10 million to complete and is scheduled to begin receiving volumes on April 1, 2012.



On
September 15, 2011, Provident announced it had entered into agreements with NOVA Chemicals Corporation to provide approximately
one million barrels of product storage and other services at the Provident Redwater facility, with staged on-stream dates of the
third quarter of 2012 and the first quarter of 2013. The total capital cost associated with this project is anticipated to be
approximately $100 million.



On
September 30, 2011, Provident announced it had entered into a 10 year agreement with a major industrial company in the Sarnia
area for the contracting of 525,000 barrels of product storage at Provident's Corunna facility located near Sarnia, Ontario. The
storage services are anticipated to commence in the first half of 2012.



On
October 6, 2011, Provident announced it had entered into a ten year storage agreement at its Redwater facility with a major producer
and will be providing approximately one million barrels of storage capacity on a fee-for-service basis. The storage services are
expected to commence on a staged basis with 50 percent beginning in the second quarter of 2012 and the remainder in the second
quarter of 2013.



Pembina
Arrangement



Details
of the Pembina Arrangement



On
January 15, 2012, Provident and Pembina entered into the Pembina Arrangement Agreement which provides for the acquisition by Pembina
of all of the issued and outstanding Common Shares by way of a plan of arrangement under the ABCA (the "Pembina Arrangement").
Under the terms of the Pembina Arrangement Agreement, Shareholders will receive 0.425 of a Pembina Share for each Common Share
held (the "Provident Exchange Ratio").



Under
the Pembina Arrangement Agreement, Pembina will also assume all of the rights and obligations of Provident relating to the 5.75
Percent Debentures (E Series) and the 5.75 Percent Debentures (F Series). The conversion price of each of the 5.75 Percent Debentures
(E Series) and the 5.75 Percent Debentures (F Series) will be adjusted pursuant to the terms of the trust indenture governing
the 5.75 Percent Debentures (E Series) and the 5.75 Percent Debentures (F Series) based on the Provident Exchange Ratio.



17







Following
closing of the Pembina Arrangement, Pembina will be required to make an offer for the 5.75 Percent Debentures (E Series) and the
5.75 Percent Debentures (F Series) at 100 percent of their principal values plus accrued and unpaid interest. The repurchase offer
will be made within 30 days of closing of the Pembina Arrangement. Should a holder of the 5.75 Percent Debentures (E Series) or
the 5.75 Percent Debentures (F Series) elect not to accept the repurchase offer, the debentures will mature as originally set
out in the trust indenture which governs them. Holders who convert their 5.75 Percent Debentures (E Series) or the 5.75 Percent
Debentures (F Series) following completion of the Pembina Arrangement will receive Pembina Shares, based on the adjusted conversion
price.



Completion
of the Pembina Arrangement will require the satisfaction of several conditions contemplated in the Pembina Arrangement Agreement,
including the approval of Shareholders, compliance with the Competition Act (Canada), and satisfaction of other customary approvals
including regulatory, stock exchange, and Court of Queen's Bench of Alberta approvals. The required Shareholder approval will
be two-thirds of the votes cast by holders of Common Shares at a special meeting of Shareholders to be held on March 27, 2012
to consider the Pembina Arrangement.



In
addition, the TSX requires shareholder approval in circumstances where an issuance of securities will result in the issuance of
25% or more of the issuer's outstanding securities on a non-diluted basis in connection with an acquisition. As the Pembina Arrangement
will result in greater than 25% of Pembina's common shares being issued on a non-diluted basis, the issuance of the Pembina Shares
thereunder must be approved by a majority of the votes cast by shareholders of Pembina present in person or by proxy at the special
meeting of Pembina shareholders to be held on March 27, 2012.



Closing
of the Pembina Arrangement is expected to occur on or about April 2, 2012, subject to regulatory approval.



Additional
information concerning the Pembina Arrangement is set out in the joint information circular of Provident and Pembina dated February
17, 2012 which has been filed on SEDAR and is available under Provident's issuer profile at www.sedar.com.



The
Pembina Arrangement is being effected pursuant to the Pembina Arrangement Agreement. The Pembina Arrangement Agreement contains
covenants, representations and warranties of and from each of Provident and Pembina and various conditions precedent, both mutual
and with respect to each entity. A copy of the Pembina Arrangement Agreement has been filed on SEDAR and is available under Provident's
issuer profile at www.sedar.com. See "Material Contracts".



Management
and Staff



After
the completion of the Pembina Arrangement, the combined assets and employees of Provident and Pembina will operate under the Pembina
name. The combined entity will be led by Bob Michaleski, President and Chief Executive Officer of Pembina, and a combination of
Pembina's and Provident's executive teams.



Board
of Directors



Subject
to a successful completion of the proposed transaction, each of Mr. Grant D. Billing and Mr. Jeffrey T. Smith, current members
of the Provident Board, have advised that they will accept positions on the Pembina board of directors. Mr. Randy Findlay, currently
a director of both Pembina and Provident, will continue as a director of Pembina.



Board
Approvals



The
Provident Board has approved the Pembina Arrangement Agreement, has determined, based in part upon fairness opinions received
from its financial advisors, that the Pembina Arrangement is fair from a financial point of view to the Shareholders, the holders
of the 5.75 Percent Debentures (E Series) and the holders of the 5.75 Percent Debentures (F Series), that the Pembina Arrangement
and the entering into of the Pembina Arrangement Agreement are in the best interests of Provident and has determined that it will
recommend that the Shareholders vote in favour of the Pembina Arrangement.



18







The
board of directors of Pembina has also approved the Pembina Arrangement Agreement, has determined, based in part upon verbal fairness
opinions received from its financial advisors, that the Pembina Arrangement is fair to the Pembina shareholders, that the Pembina
Arrangement and the entering into of the Pembina Arrangement Agreement are in the best interests of Pembina and has determined
that it will recommend that the Pembina shareholders vote in favour of the issuance of Pembina Shares in connection with the Pembina
Arrangement.



RISK
MANAGEMENT



Details
of Provident's commodity price risk management program and the financial instruments in place at December 31, 2011 are available
in Note 16 to Provident's audited consolidated financial statements incorporated by reference herein. Provident's audited consolidated
financial statements and management's discussion and analysis for the year ended December 31, 2011 have been filed on SEDAR and
are available under Provident's issuer profile at www.sedar.com.



The
market risk management program is designed to protect a base level of operating cash flow in order to support cash dividends and
capital programs. The market risk management program manages commodity price volatility, as well as fluctuating interest and foreign
exchange rates. Provident utilizes a variety of financial instruments to protect margins on a portion of its frac spread production
and sales, and to manage physical contract exposure for periods of up to two years. As well, the Provident market risk management
strategy reduces foreign exchange risk due to the exposure arising from the conversion of U.S. dollars into Canadian dollars.



Provident
manages risks associated with the operation of our assets by purchasing property, business interruption and liability/pollution
insurance. Provident also protects both its directors and officers, as well as the organization, by obtaining insurance for its
directors and officers.



NATURAL
GAS LIQUIDS MIDSTREAM PROCESSING AND MARKETING OPERATIONS



The
Midstream Business



Provident's
Midstream business extracts, processes, stores, transports and markets NGLs and offers these services to third party customers.
The following provides information about the associated business activities of the Midstream operation comprising Redwater West,
Empress East and Commercial Services. The assets are integrated across Canada and the U.S., and are also used to generate fee-for-service
income. The business is supported by an integrated supply, marketing and distribution function that contributes to the overall
operating margin of the Company.



Redwater
West is comprised of the following core assets:



| | · | 100
                                                                                                              percent ownership
                                                                                                              of the Redwater
                                                                                                              NGL facility, incorporating
                                                                                                              a 65,000 bpd fractionation,
                                                                                                              storage and transportation
                                                                                                              facility that includes
                                                                                                              12 pipeline receipt
                                                                                                              and delivery points,
                                                                                                              railcar loading
                                                                                                              facilities with
                                                                                                              direct access to
                                                                                                              CN rail and indirect
                                                                                                              access to CP rail,
                                                                                                              multi-product truck
                                                                                                              loading facilities,
                                                                                                              7.8 million gross
                                                                                                              barrels of salt
                                                                                                              cavern storage,
                                                                                                              and a 80,000 bpd
                                                                                                              condensate rail
                                                                                                              offloading facility
                                                                                                              with a 500 railcar
                                                                                                              storage yard. The
                                                                                                              Redwater facility
                                                                                                              is the only facility
                                                                                                              in western Canada
                                                                                                              that can fractionate
                                                                                                              a high-sulphur ethane-plus
                                                                                                              mix.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Approximately
                                                                                                              7,000 bpd of contracted
                                                                                                              fractionation capacity
                                                                                                              at other facilities.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | 43.3
                                                                                                              percent direct ownership
                                                                                                              and 100 percent
                                                                                                              control of all products
                                                                                                              from the nameplate
                                                                                                              capacity 750 mmcfd
                                                                                                              Younger NGL extraction
                                                                                                              plant located at
                                                                                                              Taylor in northeastern
                                                                                                              British Columbia.
                                                                                                              The Younger plant
                                                                                                              supplies local markets
                                                                                                              as well as Provident's
                                                                                                              Redwater facility
                                                                                                              near Edmonton.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



19







| | · | 100
                                                                                                              percent ownership
                                                                                                              of the 565 kilometer
                                                                                                              proprietary Liquids
                                                                                                              Gathering System
                                                                                                              ("LGS")
                                                                                                              that runs along
                                                                                                              the Alberta-British
                                                                                                              Columbia border
                                                                                                              providing access
                                                                                                              to a highly active
                                                                                                              basin for liquids-rich
                                                                                                              natural gas exploration
                                                                                                              and exploitation.
                                                                                                              Provident also has
                                                                                                              long-term shipping
                                                                                                              rights on the Pembina
                                                                                                              pipeline system
                                                                                                              that extends the
                                                                                                              product delivery
                                                                                                              transportation network
                                                                                                              through to the Redwater
                                                                                                              facility.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | A
                                                                                                              rail car fleet of
                                                                                                              approximately 500
                                                                                                              rail cars under
                                                                                                              long-term lease
                                                                                                              agreement.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Provident
purchases NGL mix from various natural gas producers and fractionates it into finished products at the Redwater fractionation
facility near Edmonton, Alberta. Redwater West also includes natural gas supply volumes from the Younger NGL extraction plant
located at Taylor in northeastern British Columbia. The Younger plant supplies specification NGLs to local markets as well as
NGL mix supply to the Fort Saskatchewan area for fractionation and sale. The feedstock for Redwater West has a significant portion
of NGL mix rather than natural gas, therefore frac spreads have a smaller impact on operating margin than in Empress East.



Also
located at the Redwater facility is Provident's industry leading rail-based condensate terminal, which serves the heavy oil industry
and its need for diluent. Provident's condensate terminal is the largest of its size in western Canada.



Empress
East is comprised of the following core assets:



| | · | Approximately
                                                                                                              2.0 Bcfd in extraction
                                                                                                              capacity at Empress,
                                                                                                              Alberta. This is
                                                                                                              the combination
                                                                                                              of 67.5 percent
                                                                                                              ownership of the
                                                                                                              1.2 Bcfd capacity
                                                                                                              Provident Empress
                                                                                                              NGL extraction plant,
                                                                                                              33.0 percent ownership
                                                                                                              in the 2.7 Bcfd
                                                                                                              capacity BP Empress
                                                                                                              1 Plant, 12.4 percent
                                                                                                              ownership in the
                                                                                                              1.1 Bcfd capacity
                                                                                                              ATCO Plant and 8.3
                                                                                                              percent ownership
                                                                                                              in the 2.4 Bcfd
                                                                                                              capacity Spectra
                                                                                                              Plant.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | 100
                                                                                                              percent ownership
                                                                                                              of a 55,000 bpd
                                                                                                              debutanizer at Empress,
                                                                                                              Alberta.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | 50
                                                                                                              percent ownership
                                                                                                              in both the 150,000
                                                                                                              bpd Kerrobert pipeline
                                                                                                              and 1.6 mmbbl underground
                                                                                                              storage facility
                                                                                                              near Kerrobert,
                                                                                                              Saskatchewan which
                                                                                                              facilitates injection
                                                                                                              of NGLs into the
                                                                                                              Enbridge pipeline
                                                                                                              system. Along the
                                                                                                              Enbridge pipeline
                                                                                                              system in Superior,
                                                                                                              Wisconsin, Provident
                                                                                                              holds an 18.3 percent
                                                                                                              ownership of a 300,000
                                                                                                              barrel storage staging
                                                                                                              facility and 18.3
                                                                                                              percent ownership
                                                                                                              of a 10,000 bpd
                                                                                                              depropanizer.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | In
                                                                                                              Sarnia, Ontario,
                                                                                                              16.5 percent ownership
                                                                                                              of a nameplate capacity
                                                                                                              150,000 bpd fractionators
                                                                                                              and 1.7 mmbbl of
                                                                                                              raw product storage
                                                                                                              capacity, as well
                                                                                                              as 18.0 percent
                                                                                                              of 5.7 mmbbl of
                                                                                                              finished product
                                                                                                              storage and a rail,
                                                                                                              truck and pipeline
                                                                                                              terminalling facility.
                                                                                                              An additional 150,000
                                                                                                              bbls of specification
                                                                                                              product storage
                                                                                                              capacity is also
                                                                                                              contracted in the
                                                                                                              Sarnia area.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | 100
                                                                                                              percent ownership
                                                                                                              of the Provident
                                                                                                              Corunna storage
                                                                                                              facility. The 1,000
                                                                                                              acre site has an
                                                                                                              active cavern storage
                                                                                                              capacity of 12.8
                                                                                                              million barrels,
                                                                                                              consisting of 4.8
                                                                                                              million barrels
                                                                                                              of hydrocarbon storage
                                                                                                              and 8.0 million
                                                                                                              barrels currently
                                                                                                              used for brine storage.
                                                                                                              The facility also
                                                                                                              includes 13 pipeline
                                                                                                              connections and
                                                                                                              a rail offloading
                                                                                                              facility.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | A
                                                                                                              propane distribution
                                                                                                              terminal at Lynchburg,
                                                                                                              Virginia.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | A
                                                                                                              rail car fleet of
                                                                                                              approximately 400
                                                                                                              rail cars under
                                                                                                              long-term lease
                                                                                                              agreement.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Provident
extracts NGLs from natural gas at the Empress straddle plants and sells ethane and condensate in the western Canadian marketplace
while transporting propane and butane to Sarnia, Ontario for fractionation and sale into markets in central Canada and the eastern
United States. The margin in the business is determined primarily by frac spreads. Demand for propane is seasonal and results
in inventory that generally builds over the second and third quarters of the year and is sold in the fourth quarter and the first
quarter of the following year.



20







Commercial
Services includes services such as fractionation, storage, NGL terminalling, loading and offloading that are provided to third
parties on a cost of service or a fee basis utilizing assets at Provident's Redwater facility. In addition, pipeline tariff income
is generated from Provident's ownership of the LGS in northwest Alberta which flows into Pembina's pipeline from LaGlace to Redwater.
Provident also collects tariff income from its 50 percent ownership in the Kerrobert Pipeline which transports NGLs from Empress
to Kerrobert for injection into the Enbridge pipeline for delivery to Sarnia. Provident owns a debutanizer at its Empress facility,
which removes condensate from the NGL mix for sale as a diluent to blend with heavy oil. This service is provided to a major energy
company on a long-term cost of service basis. Earnings from these activities have little direct exposure to market price volatility
and are thus relatively stable. The assets used to generate this fee-for-service income are also employed to generate proprietary
income in Redwater West and Empress East. Commercial Services also includes operating results from Three Star Trucking Ltd., a
Saskatchewan based oilfield hauling company serving Bakken area crude oil producers, of which a two-thirds interest was acquired
in October 2011.



Provident's
integrated marketing and distribution arm has offices in Calgary, Alberta, Sarnia, Ontario, and Houston, Texas and operates under
the brand name Kinetic. Rather than selling NGLs produced by the Redwater West and Empress East facilities at the plant gate,
the marketing and logistics group utilizes Provident's integrated suite of transportation, storage and logistics assets to access
markets across North America. Due to its broad marketing scope, Provident's NGL products are priced based on multiple pricing
indices. These indices generally correspond with the four major NGL trading hubs in North America which are located in Mont Belvieu,
Texas, Conway, Kansas, Edmonton, Alberta, and Sarnia, Ontario. Mont Belvieu, the largest NGL trading center, serves as the reference
point for NGL pricing in North America. By strategically building inventories of specification products during lower priced periods
which can then be distributed into premium-priced markets across North America during periods of high seasonal demand, Provident
is able to optimize the margins it earns from its extraction and fractionation operations. Provident's marketing group also generates
arbitrage trading margins by taking advantage of trading opportunities created by locational price differentials.



Long
term contracts



Provident
has several long-term contracts in place to help ensure product availability and to secure long-term revenue streams. These contracts
include:





| | · | A long-term purchase agreement for NGL mix at the Younger NGL extraction plant.
| | - | -------------------------------------------------------------------------------



| | · | A significant portion of the available propane, butane and condensate ("propane-plus")
fractionation capacity at the Redwater fractionation facility is contracted through a long term fee-for-service arrangement with
third parties.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | The ethane produced from Provident's facilities at Empress and Redwater is largely sold under long-term
contracts.
| | - | ------------------------------------------------------------------------------------------------------------------



| | · | A portion of Provident's 80,000 bpd capacity of condensate rail off-loading is under long-term
contracts.
| | - | ---------------------------------------------------------------------------------------------------------



| | · | A significant portion of the condensate storage capacity of 500,000 barrels at the Provident Redwater
facility is sold under long-term contracts to various third parties.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | A long-term significant propane sales contract at the Provident Redwater facility.
| | - | ----------------------------------------------------------------------------------



| | · | A long-term contract on a cost of service basis for the majority of its 50,000 bbl/d Empress debutanizer
facility with a major energy producer.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------



| | · | Agreements with Nova Chemicals Corporation for storage at the Provident Redwater facility.
| | - | ------------------------------------------------------------------------------------------





21











| | · | A 10-year crude oil storage agreement, totaling approximately one million barrels of storage capacity,
at the Provident Redwater facility with a major producer on a fee-for-service basis.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | A 10-year agreement with a major industrial company in the Sarnia area for storage and the use
of associated pipeline and drying facilities at the Provident Corunna facility on a fee-for-service basis.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



MARKET
FOR SECURITIES



The
outstanding Common Shares are listed and posted for trading on the TSX under the symbol PVE and the NYSE under the symbol PVX.



The
5.75 Percent Debentures (E Series) and 5.75 Percent Debentures (F Series) are listed and posted for trading on the TSX under the
symbols PVE.DB.E and PVE.DB.F.



The
following table summarizes the high and low trading prices and volume of trading in respect of the Common Shares, 5.75 Percent
Debentures (E Series) and 5.75 Percent Debentures (F Series) for the periods indicated on both the TSX and the NYSE, as applicable,
during the period from January 1, 2011 to December 31, 2011.



Toronto
Stock Exchange



Common
Shares (PVE)



|Period    |  | High
    ($) |       |  | Low
    ($) |  |      | Volume
    (000's) | 
|--------- |  | ------------ | ----- |  | ----------- |  | ---- | ------------------ | 
|2011      |  |              |       |  |             |  |      |                    | 
|January   |  |              | 8.32  |  |             |  | 7.81 |                    | 
|February  |  |              | 8.38  |  |             |  | 8.01 |                    | 
|March     |  |              | 9.03  |  |             |  | 7.62 |                    | 
|April     |  |              | 9.06  |  |             |  | 8.58 |                    | 
|May       |  |              | 9.00  |  |             |  | 8.48 |                    | 
|June      |  |              | 8.94  |  |             |  | 7.70 |                    | 
|July      |  |              | 8.84  |  |             |  | 8.28 |                    | 
|August    |  |              | 8.64  |  |             |  | 6.84 |                    | 
|September |  |              | 8.74  |  |             |  | 7.95 |                    | 
|October   |  |              | 9.36  |  |             |  | 7.92 |                    | 
|November  |  |              | 9.79  |  |             |  | 8.76 |                    | 
|December  |  |              | 10.03 |  |             |  | 9.32 |                    | 



5.75
Percent Debentures (E Series) (PVE.DB.E)



|Period    |  | High
    ($) |        |  | Low
    ($) |  |        | Volume
    (000's) | 
|--------- |  | ------------ | ------ |  | ----------- |  | ------ | ------------------ | 
|2011      |  |              |        |  |             |  |        |                    | 
|January   |  |              | 101.00 |  |             |  | 99.69  |                    | 
|February  |  |              | 102.00 |  |             |  | 100.60 |                    | 
|March     |  |              | 103.80 |  |             |  | 101.00 |                    | 
|April     |  |              | 104.00 |  |             |  | 102.00 |                    | 
|May       |  |              | 103.49 |  |             |  | 101.00 |                    | 
|June      |  |              | 103.60 |  |             |  | 96.00  |                    | 
|July      |  |              | 101.78 |  |             |  | 100.06 |                    | 
|August    |  |              | 102.25 |  |             |  | 96.00  |                    | 
|September |  |              | 101.00 |  |             |  | 99.00  |                    | 
|October   |  |              | 102.25 |  |             |  | 97.00  |                    | 
|November  |  |              | 103.55 |  |             |  | 100.50 |                    | 
|December  |  |              | 104.75 |  |             |  | 102.36 |                    | 



22







5.75
Percent Debentures (F Series) (PVE.DB.F)



|Period    |  | High
    ($) |        |  | Low
    ($) |  |       | Volume
    (000's) | 
|--------- |  | ------------ | ------ |  | ----------- |  | ----- | ------------------ | 
|2011      |  |              |        |  |             |  |       |                    | 
|May       |  |              | 101.00 |  |             |  | 99.50 |                    | 
|June      |  |              | 100.69 |  |             |  | 99.50 |                    | 
|July      |  |              | 100.35 |  |             |  | 99.65 |                    | 
|August    |  |              | 100.00 |  |             |  | 95.00 |                    | 
|September |  |              | 99.79  |  |             |  | 98.00 |                    | 
|October   |  |              | 99.49  |  |             |  | 92.33 |                    | 
|November  |  |              | 100.90 |  |             |  | 98.50 |                    | 
|December  |  |              | 101.99 |  |             |  | 99.50 |                    | 



Note:



(1)	The
5.75 Percent Debentures (F Series) began trading on the TSX on May 10, 2011.



New
York Stock Exchange



Common
Shares (PVX)



|Period    |  | High
    (U.S.$) |      |  | Low
    (U.S.$) |  |      | Volume
    (000's) | 
|--------- |  | ---------------- | ---- |  | --------------- |  | ---- | ------------------ | 
|2011      |  |                  |      |  |                 |  |      |                    | 
|January   |  |                  | 8.40 |  |                 |  | 7.78 |                    | 
|February  |  |                  | 8.49 |  |                 |  | 8.06 |                    | 
|March     |  |                  | 9.30 |  |                 |  | 7.81 |                    | 
|April     |  |                  | 9.48 |  |                 |  | 8.94 |                    | 
|May       |  |                  | 9.48 |  |                 |  | 8.67 |                    | 
|June      |  |                  | 9.21 |  |                 |  | 7.85 |                    | 
|July      |  |                  | 9.19 |  |                 |  | 8.64 |                    | 
|August    |  |                  | 9.05 |  |                 |  | 6.90 |                    | 
|September |  |                  | 8.78 |  |                 |  | 7.90 |                    | 
|October   |  |                  | 9.42 |  |                 |  | 7.42 |                    | 
|November  |  |                  | 9.60 |  |                 |  | 8.64 |                    | 
|December  |  |                  | 9.88 |  |                 |  | 9.01 |                    | 



RECORD
OF CASH DIVIDENDS



The
following table sets forth the per Common Share amount of monthly cash dividends declared and paid or payable by Provident since
the beginning of the most recently completed financial year.





|         |  | Dividend Amount
    (Cdn$) |       |  | Dividend Amount
    (US$)(1) |  
|-------- |  | -------------------------- | ----- |  | ---------------------------- | -
|2011     |  |                            |       |  |                              |  
|January  |  | $                          | 0.045 |  |                              | $
|February |  | $                          | 0.045 |  |                              | $
|March    |  | $                          | 0.045 |  |                              | $
|April    |  | $                          | 0.045 |  |                              | $





23







|                   |  | Dividend
    Amount (Cdn$) |       |  | Dividend
                                              Amount
                                              (US$)(1) |  
|------------------ |  | -------------------------- | ----- |  | -------------------------------------------------------------------------------------------------------------------- | -
|2011               |  |                            |       |  |                                                                                                                      |  
|May                |  | $                          | 0.045 |  |                                                                                                                      | $
|June               |  | $                          | 0.045 |  |                                                                                                                      | $
|July               |  | $                          | 0.045 |  |                                                                                                                      | $
|August             |  | $                          | 0.045 |  |                                                                                                                      | $
|September          |  | $                          | 0.045 |  |                                                                                                                      | $
|October            |  | $                          | 0.045 |  |                                                                                                                      | $
|November           |  | $                          | 0.045 |  |                                                                                                                      | $
|December           |  | $                          | 0.045 |  |                                                                                                                      | $
|Total
    for 2011 |  | $                          | 0.54  |  |                                                                                                                      | $
|2012               |  |                            |       |  |                                                                                                                      |  
|January            |  | $                          | 0.045 |  |                                                                                                                      | $
|February           |  | $                          | 0.045 |  |                                                                                                                      | $
|March              |  | $                          | 0.045 |  |                                                                                                                      | $
|Total
    for 2012 |  | $                          | 0.135 |  |                                                                                                                      | $



Notes:

| | (1) | The
                                                                                                   exchange rate is based on the
                                                                                                   Bank of Canada noon rate on
                                                                                                   the payment date.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | The
                                                                                                   actual U.S. dollar dividend
                                                                                                   will depend on the exchange
                                                                                                   rate on the payment date.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Prior
to the Conversion, the Trust paid monthly cash distributions to Unitholders. From the Trust's inception to the completion of the
Conversion effective January 1, 2011, the Trust paid an aggregate of $15.24 (U.S.$11.99) in cash distributions to Unitholders.



In
addition to cash distributions, Provident completed the sale of its oil and natural gas production business to Midnight pursuant
to the Midnight Arrangement in the second quarter of 2010. Pursuant to the Midnight Arrangement, Unitholders received 0.12225
shares of Pace for every Trust Unit held. This issuance of the Pace shares was valued at $308.7 million, or $1.16 per unit (US$1.10
per unit).



PREMIUM
DIVIDEND AND DIVIDEND REINVESTMENT SHARE PURCHASE PLAN



Provident
implemented a premium dividend and dividend reinvestment share purchase plan (the "DRIP") to provide holders of Common
Shares with a means to automatically reinvest sums received on account of dividends on Common Shares. Provident reserves the right
to prorate the participation in the DRIP to manage the amount of cash reinvested in the company and the number of Common Shares
issued under the DRIP. A participant may elect to have Computershare, as plan agent (a) purchase Common Shares, on behalf of a
participant, with the cash distributions at 95 percent of the market value of the Common Shares, or (b) elect to purchase additional
Common Shares, on behalf of a participant, with the cash dividends and deliver such Common Shares to a broker in exchange for
a premium cash dividend equal to an amount up to 102 percent of the monthly cash dividend. If a participant has elected either
(a) or (b), Computershare, as plan agent, may, on behalf of such participant, purchase additional Common Shares with the cash
dividends at the market value of such Common Shares. Residents of Canada are eligible to elect options (a) or (b). Due to regulatory
restrictions, residents of the United States are eligible to elect option (a) only at this time. Employees of Provident, including
the executive officers, are entitled to participate in the DRIP.



On
January 16, 2012, Provident announced the suspension of the DRIP as a result of the Pembina Arrangement.



24







The
following table provides the details of the DRIP (including the Trust DRIP where applicable) since January 2010.



|                 |  |                                       |       |  | Premium
     Distribution or  Dividend                   |   |        | 5
    percent Discounted Unit or Share  Price for Distribution or Dividend Reinvestment Purchase Plans | 
|---------------- |  | ------------------------------------- | ----- |  | -------------------------------------------------------- | - | ------ | ------------------------------------------------------------------------------------------------------ | 
|Payable
    Date |  | Regular
    Distribution or  Dividend |       |  | 102
    percent of  Regular Distribution or  Dividend(1) |   |        | 15
    Day Weighted Average Unit or Share Price(2)                                                     | 
|13-Jan-12        |  | $                                     | 0.045 |  |                                                          | $ | 0.0459 |                                                                                                        | 
|15-Dec-11        |  | $                                     | 0.045 |  |                                                          | $ | 0.0459 |                                                                                                        | 
|15-Nov-11        |  | $                                     | 0.045 |  |                                                          | $ | 0.0459 |                                                                                                        | 
|14-Oct-11        |  | $                                     | 0.045 |  |                                                          | $ | 0.0459 |                                                                                                        | 
|15-Sept-11       |  | $                                     | 0.045 |  |                                                          | $ | 0.0459 |                                                                                                        | 
|15-Aug-11        |  | $                                     | 0.045 |  |                                                          | $ | 0.0459 |                                                                                                        | 
|15-July-11       |  | $                                     | 0.045 |  |                                                          | $ | 0.0459 |                                                                                                        | 
|15-June-11       |  | $                                     | 0.045 |  |                                                          | $ | 0.0459 |                                                                                                        | 
|13-May-11        |  | $                                     | 0.045 |  |                                                          | $ | 0.0459 |                                                                                                        | 
|15-Apr-11        |  | $                                     | 0.045 |  |                                                          | $ | 0.0459 |                                                                                                        | 
|15-Mar-11        |  | $                                     | 0.045 |  |                                                          | $ | 0.0459 |                                                                                                        | 
|12-Feb-11        |  | $                                     | 0.045 |  |                                                          | $ | 0.0459 |                                                                                                        | 
|14-Jan-11        |  | $                                     | 0.045 |  |                                                          | $ | 0.0459 |                                                                                                        | 
|15-Dec-10        |  | $                                     | 0.06  |  |                                                          | $ | 0.0612 |                                                                                                        | 
|13-Nov-10        |  | $                                     | 0.06  |  |                                                          | $ | 0.0612 |                                                                                                        | 
|15-Oct-10        |  | $                                     | 0.06  |  |                                                          | $ | 0.0612 |                                                                                                        | 
|15-Sept-10       |  | $                                     | 0.06  |  |                                                          | $ | 0.0612 |                                                                                                        | 
|13-Aug-10        |  | $                                     | 0.06  |  |                                                          | $ | 0.0612 |                                                                                                        | 
|15-July-10       |  | $                                     | 0.06  |  |                                                          | $ | 0.0612 |                                                                                                        | 
|15-June-10       |  | $                                     | 0.06  |  |                                                          | $ | 0.0612 |                                                                                                        | 
|14-May-10        |  | $                                     | 0.06  |  |                                                          | $ | 0.0612 |                                                                                                        | 
|15-Apr-10        |  | $                                     | 0.06  |  |                                                          | $ | 0.0612 |                                                                                                        | 
|15-Mar-10        |  | $                                     | 0.06  |  |                                                          | $ | 0.0612 |                                                                                                        | 
|12-Feb-10        |  | $                                     | 0.06  |  |                                                          | $ | 0.0612 |                                                                                                        | 
|15-Jan-10        |  | $                                     | 0.06  |  |                                                          | $ | 0.0612 |                                                                                                        | 



Notes:



| | (1) | If,
                                                                                                   in respect of any dividend
                                                                                                   payment date, fulfilling all
                                                                                                   of the elections under the
                                                                                                   DRIP would result in Provident
                                                                                                   exceeding either the limit
                                                                                                   on new equity set by Provident
                                                                                                   or the aggregate annual limit
                                                                                                   on new Common Shares issuable
                                                                                                   pursuant to optional cash payments,
                                                                                                   then elections for the purchase
                                                                                                   of new Common Shares on that
                                                                                                   dividend payment date will
                                                                                                   be accepted: (i) first, from
                                                                                                   participants electing to reinvest
                                                                                                   their cash dividends in new
                                                                                                   Common Shares under the dividend
                                                                                                   reinvestment component of the
                                                                                                   DRIP; and (ii) second, from
                                                                                                   participants electing to receive
                                                                                                   the premium dividends. If Provident
                                                                                                   is not able to accept all elections
                                                                                                   in a particular category, then
                                                                                                   purchases of Common Shares
                                                                                                   in that category on the applicable
                                                                                                   dividend payment date will
                                                                                                   be prorated among all participants
                                                                                                   in that category according
                                                                                                   to the number of additional
                                                                                                   Common Shares sought to be
                                                                                                   purchased. Therefore, amounts
                                                                                                   shown in the table represent
                                                                                                   maximum amounts payable and
                                                                                                   actual amounts paid may be
                                                                                                   less due to proration.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Represents
                                                                                                   the price used for purchases
                                                                                                   made under the DRIP.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Materials
relating to the DRIP are available under Provident's issuer profile on SEDAR at www.sedar.com and on Provident's website
at www.providentenergy.com or by contacting Provident by phone at (403) 296 2233 or by mail at 2100, 250 - 2nd
Street S.W., Calgary, Alberta T2P 0C1.



25







DIRECTORS
AND OFFICERS



The
following are the names and municipality of residence of the current directors and officers of PEL, their principal position with
PEL and their principal occupations, as of March 12, 2012. All of the persons listed below have been engaged for more than five
years in their present principal occupation or executive position with the same or associated companies except as indicated below.
Each of the directors below will remain in office until the next annual meeting of Shareholders.



|Name
    and Background                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  | Number
    of Common Shares  Beneficially Owned or  Controlled or Directed |        
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------- | -------
|John
                                             B. Zaozirny(2) of Calgary, Alberta is Chairman of the Board and a
                                             Corporate Director. He also serves as vice-chairman of Canaccord Genuity Corp. Mr.
                                             Zaozirny was the Alberta Minister of Energy and Natural Resources from 1982 to 1986.
                                             He has been a director of PEL since 2001 and is also a director of Bankers Petroleum
                                             Ltd., Canadian Oil Sands Limited, Coastal Energy Company, Computer Modelling Group
                                             Ltd., Pacific Rubiales Energy Corp., Pengrowth Corporation and Petroamerica Oil Corporation. |  |                                                                            | 93,669 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                            |        
|Grant
                                 D. Billing(1) of Calgary, Alberta is the Chairman and Chief Executive Officer
                                 of Superior Plus Corp. since July 2006. On November 14, 2011, Mr. Billing retired as Chief Executive
                                 Officer and continues to serve as non-executive Chairman of the Board of Directors. Prior to
                                 that, Mr. Billing was the Executive Chairman of Superior since 1995. He has been a director of
                                 PEL since 2001 and currently serves as Chairman of the Audit Committee.                                                                                                                                                                 |  |                                                                            | 69,700 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                            |        
|Douglas
                                 J. Haughey of Calgary, Alberta has been the President and Chief Executive Officer and a director
                                 of PEL since April 29, 2010. Prior thereto from 1999 through 2008, Mr. Haughey was with Spectra
                                 Energy Corp. and predecessor companies. He was President of Spectra Energy's western Canadian
                                 natural gas midstream business and President and CEO of Spectra Energy Income Fund. Mr. Haughey
                                 is also a director of Fortis Inc.                                                                                                                                                                                     |  |                                                                            | 44,598 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                            |        
|Hugh
                                 A. Fergusson(3) of Calgary, Alberta is a Corporate Director and a private businessman
                                 and has been a director of PEL since 2005. Mr. Fergusson is a former Vice President and Director
                                 with Dow Chemical Canada Inc. and is also a director of Altagas Ltd. and Canexus Income Fund.
                                 Mr. Ferguson serves as Chairman of the Environmental, Health and Safety Committee.                                                                                                                                                                                                                                                                                  |  |                                                                            | 12,450 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                            |        
|Randall
                                 J. Findlay(3)(7) of Calgary, Alberta is a Corporate Director and has been a director
                                 of PEL since March 2001. Mr. Findlay was also the President of PEL from March 2001 until June
                                 30, 2006. Prior thereto he was Executive Vice President and Chief Operating Officer of Founders
                                 from December 1999 to March 2001. He is also chair and a director of Canadian Helicopters Group
                                 Inc., and a director of Charger Energy Corp., Compton Petroleum Corporation, Pembina Pipeline
                                 Corporation and Superior Plus Corp.                                                                |  |                                                                            | 165,589



26







|Name and Background                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  | Number
    of Common Shares
    Beneficially Owned or  Controlled or Directed |        
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------- | -------
|Norman
                                             R. Gish(2)(5) of Calgary, Alberta is an independent businessman and
                                             a Corporate Director. He is also a director of Superior Plus Corp. and Chairman and
                                             director of Quadrise Canada Corporation. Previously, he was president of Gish Consulting
                                             Inc. (energy consulting) from 2001 to 2007. Mr. Gish serves as the Chair of the Governance,
                                             Human Resources and Compensation Committee.                                                                                                                                                  |  |                                                                               | 20,000 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                               |        
|Bruce
                                 R. Libin(1) of Calgary, Alberta is an independent businessman. From December 2000
                                 to March 2010, he was Executive Chairman and Chief Executive Officer of Destiny Resources Services
                                 Corp. From March 2010 to December 2010, he was President of Logan International Inc. He has also
                                 been President of B.R. Libin Capital Corp., an investment, merchant banking and investment banking
                                 advisory services company since 1995. He has been a director of PEL since 2001, is Chairman of
                                 Winstar Resources Ltd. and is a director of a number of private corporations. |  |                                                                               | 212,292
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                               |        
|M.H.
                                 (Mike) Shaikh(2)(6) of Calgary, Alberta is a Corporate Director and an independent
                                 businessman and is the President of M.H. Shaikh Professional Corporation. He has been a director
                                 of PEL since 2001 and is also a director of Amica Mature Lifestyles, Charger Energy Corp., Hawk
                                 Exploration Ltd. and Pace Oil and Gas Ltd.                                                                                                                                                                                                                                                                                                           |  |                                                                               | 192,231
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                               |        
|Jeffrey
                                 T. Smith(1) of Calgary, Alberta is an independent businessman. He has been a director
                                 of PEL since 2001 and is also a director of Pace Oil and Gas Ltd.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |                                                                               | 10,400 



Notes:



| | (1) | Member
                                                                                                   of the Audit Committee.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------



| | (2) | Member
                                                                                                   of the Governance, Human Resources
                                                                                                   and Compensation Committee.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Member
                                                                                                   of the Environment, Health
                                                                                                   and Safety Committee.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | Mr.
                                                                                                   Billing also holds $2 million
                                                                                                   principal amount of the 5.75%
                                                                                                   Percent Debentures. Mr. Shaikh
                                                                                                   also holds $500,000 principal
                                                                                                   amount of the 5.75% debentures.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | Mr.
                                                                                                   Gish was until August 20, 2009
                                                                                                   a director of 4504020 Canada
                                                                                                   Inc. (formerly Railpower Technologies
                                                                                                   Corp. ("Railpower"),
                                                                                                   a reporting issuer in all provinces
                                                                                                   and territories of Canada that
                                                                                                   filed for court protection
                                                                                                   under the Companies' Creditors
                                                                                                   Arrangement Act (Canada) in
                                                                                                   Canada and under Chapter 15
                                                                                                   of the U.S. Bankruptcy Code
                                                                                                   with the United States Bankruptcy
                                                                                                   Court for the Western District
                                                                                                   of Pennsylvania on February
                                                                                                   4, 2009 and February 6, 2009,
                                                                                                   respectively. On May 29, 2009,
                                                                                                   Railpower concluded the sale
                                                                                                   of all of its assets, except
                                                                                                   cash on hand and on deposit
                                                                                                   in financial institution, the
                                                                                                   land and property located in
                                                                                                   St.-Jean-sur-Richelieu (Quebec)
                                                                                                   and two road switching locomotives,
                                                                                                   to R.J. Corman Railroad Group
                                                                                                   LLC, a Kentucky limited liability
                                                                                                   company. The largest creditor,
                                                                                                   Ontario Teacher's Pension Plan,
                                                                                                   subsequently filed a Petition
                                                                                                   in Bankruptcy against Railpower
                                                                                                   which was granted on March
                                                                                                   8, 2010.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (6) | Mr.
                                                                                                   Shaikh was a director of Mystique
                                                                                                   Energy Inc. ("Mystique")
                                                                                                   from November 11, 2004 until
                                                                                                   his resignation on April 24,
                                                                                                   2007. On April 25, 2007 the
                                                                                                   Court of Queen's Bench of Alberta
                                                                                                   (the "Court") granted
                                                                                                   an initial order to Mystique
                                                                                                   for creditor protection under
                                                                                                   the Companies' Creditors Arrangement
                                                                                                   Act ("CCAA"). The
                                                                                                   initial order grants CCAA protection
                                                                                                   for an initial period of 30
                                                                                                   days, expiring May 24, 2007,
                                                                                                   to be extended thereafter as
                                                                                                   the Court deems appropriate.
                                                                                                   The CCAA proceedings have been
                                                                                                   completed and Mystique has
                                                                                                   settled with its creditors.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (7) | Mr.
                                                                                                   Findlay was a director of Wellpoint
                                                                                                   Systems from July 23, 2008
                                                                                                   to January 31, 2011. On January
                                                                                                   31, 2011, Wellpoint Systems
                                                                                                   Inc. was placed into receivership
                                                                                                   by two of its lenders.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



27







Murray
N. Buchanan



Executive
Vice President



Mr.
Buchanan received his masters of business administration from Queen's University, as well as an honours bachelor of administration
degree from Queen's University. Mr. Buchanan is responsible for commercial activities associated with Provident's midstream services
business unit including natural gas liquids fractionation, storage, processing, marketing and transportation services. Mr. Buchanan
joined Provident in 2005 following Provident's acquisition of the Empress midstream assets and related marketing entity, Kinetic
Resources, where he held the position of President for eight years. Mr. Buchanan has over 25 years of NGL marketing and petroleum
industry experience.



Andrew
G. Gruszecki



Executive
Vice President



Mr.
Gruszecki received his honours bachelor of science in science from the University of Western Ontario and did his co-op master's
of business administration at McMaster University and joined Provident in 2003. He brings over 25 years of experience and expertise
in oil and NGL marketing, business development, and planning. From 2000 to 2003, he was senior manager of commercial operations
at Williams Energy (Canada). Prior to joining Williams, Mr. Gruszecki was vice president of NGL Marketing for Coast Energy Canada.
From 1997 to 1998, he was director of commercial operations at TransCanada Midstream and the former Novagas Canada. While at Novagas,
Mr. Gruszecki oversaw commercial issues related to the planning, construction and implementation of the NGL business which included
the construction of the Redwater fractionation facilities. Mr. Gruszecki began his career in the energy business in 1981 and held
positions of increasing responsibility before joining Novagas in 1997.



Brent
C. Heagy



Senior
Vice President, Finance and Chief Financial Officer



Mr.
Heagy received his bachelor of commerce degree from the University of Saskatchewan and received his Chartered Accountant designation
in 1985. Mr. Heagy is responsible for all finance, financial reporting, treasury, risk and compliance activities. Prior to the
appointment to his current position in October 2010, Mr. Heagy was Executive Vice President and Chief Financial Officer for Zargon
Energy Trust, Chief Risk Officer for Encana Corporation and Chief Financial Officer for PanCanadian Energy Corporation's US operations
based in Houston, Texas. Prior thereto he worked in public accounting practice with Coopers & Lybrand in Calgary.



Robert
(Bob) Lock



Vice
President, NGL Supply and Extraction



Mr.
Lock is responsible for Provident’s natural gas and NGL feedstock supply, joint ventures and commercial activities for Provident’s
raw NGL asset infrastructure. Mr. Lock joined Provident in 2005, following Provident’s acquistion of the Empress midstream
assets. He brings 20 years of experience in natural gas and NGL operations and commerce. From 2000 to 2005 Mr. Lock was Director
of Commercial Operations for Encana’s natural gas liquids business and was responsbile for Encana’s operated and non-operated
NGL assets. From 1998 to 2000, he was Manager, Gathering and Processing North for TransCanada Midstream (formerly Novagas Canada)
where he oversaw the commercial operations of several naturals gas gathering processing facilities. Mr. Lock received his Bachelor
of Science in Engineering from the University of Alberta and his Masters of Business Administration from the University of Calgary.



28







Lynn
M. Rannelli



Assistant
Corporate Secretary



Ms.
Rannelli received her Business Management Certificate from the University of Calgary. Ms. Rannelli joined Provident in 2001, following
the acquisition of Maxx Petroleum Ltd. and has over 20 years of experience in Corporate Administration, Human Resources, Records
Management, Investor Relations and Communications. Ms. Rannelli is a member of the Canadian Society of Corporate Secretaries.



Committees
of the Provident Board



During
the year ended December 31, 2011, the Provident Board had three standing committees – the Audit Committee, the Environmental,
Health and Safety Committee and the Governance, Human Resources and Compensation Committee.



In
addition, Provident has a Disclosure Committee which is comprised entirely of members of management. The Disclosure Committee's
primary responsibilities are to oversee Provident's disclosure practices and to ensure the company meets all Canadian and U.S.
regulatory disclosure requirements.



Membership
in each of the Provident Board committees is set forth below.



Audit
Committee



The
Audit Committee consists of Mr. Grant D. Billing (Chairman), Mr. Bruce R. Libin and Mr. Jeffrey T. Smith. All members of the Audit
Committee are independent and financially literate, as determined by applicable securities legislation, and at least one member
of the Committee is an "audit committee financial expert" as required by U.S. securities laws. The Audit Committee reviews
Provident's interim unaudited consolidated financial statements and annual audited consolidated financial statements and certain
corporate disclosure documents including management's discussion and analysis and annual and interim earnings press releases before
they are approved by the Provident Board. The Committee also reviews and makes a recommendation to the Provident Board in respect
of the appointment and compensation of the external auditor and it monitors accounting, financial reporting, control and audit
functions.



The
Audit Committee meets to discuss and review the audit plans of external auditors and is directly responsible for overseeing the
work of the external auditor with respect to preparing or issuing the auditor's report or the performance of other audit, review
or attest services, including the resolution of disagreements between management and the external auditor regarding financial
reporting. The Committee questions the external auditor independently of management and reviews a written statement of its independence
based on the criteria found in the recommendations of the Canadian Institute of Chartered Accountants.



The
Committee must be satisfied that adequate procedures are in place for the review of Provident's public disclosure of financial
information extracted or derived from its financial statements and it periodically assesses the adequacy of those procedures.
The Audit Committee also must approve or pre-approve, as applicable, any non-audit services to be provided to Provident by the
external auditor. In addition, it reviews Provident's internal control procedures to determine their effectiveness and to ensure
compliance with Provident's policies and avoidance of conflicts of interest.



In
conjunction with Provident's whistleblower policy, the Committee has established procedures for dealing with complaints or confidential
submissions which come to its attention with respect to accounting, internal accounting controls or auditing matters. See "Audit
Committee Information" and Schedule A of this Annual Information Form for additional information relating to the Audit Committee.



29







Governance,
Human Resources and Compensation Committee



The
Governance, Human Resources and Compensation Committee consists of Mr. Norman Gish, (Chairman), Mr. M.H. (Mike) Shaikh, and Mr.
John B. Zaozirny, all of whom are considered independent directors within the meaning of applicable securities legislation. The
Committee is responsible for recommending to the Provident Board suitable candidates for director positions. The selection assessment
includes a wide array of factors deemed appropriate, all in the context of an assessment of the perceived needs of the Provident
Board and Provident at the time. In addition, the Committee assists the Provident Board on corporate governance matters and in
assessing the functioning and effectiveness of the Provident Board.



The
Governance, Human Resources and Compensation Committee's mandate also includes reviewing Provident's human resources policies
and procedures and compensation and incentive programs. The Committee is responsible for assessing senior management's performance
and recommending senior management compensation to the Provident Board. The Committee reviews the adequacy and form of directors'
compensation and makes recommendations designed to ensure that directors' compensation adequately reflects the responsibilities
of the Provident Board. The Committee also administers the incentive plans of Provident and makes recommendations to the Provident
Board respecting grants of awards thereunder.



Environment,
Health and Safety Committee



The
Environmental, Health and Safety Committee consists of Mr. Hugh A. Fergusson (Chairman), Mr. Grant D. Billing and Mr. Randall
J. Findlay, all of whom are considered independent directors, within the meaning of applicable securities legislation. The Committee
assists the Provident Board in its oversight of the operations of Provident, including operating activities, operating expenses
and capital expenditure budget; and the environmental, health and safety issues, including the evaluation of Provident's programs,
controls and reporting systems, and compliance with applicable laws, rules and regulations. Prior to the completion of the Midnight
Arrangement, the Committee assisted the Provident Board in its oversight of the oil and natural gas reserves evaluation process
and the public disclosure of reserves data and related information as required by National Instrument 51-101.



Conflicts
of Interest



The
directors and officers of PEL are engaged in and will continue to engage in other activities in the energy industry and, as a
result of these and other activities, the directors and officers of PEL may become subject to conflicts of interest. The ABCA
provides that in the event that a director has an interest in a contract or proposed contract or agreement, the director shall
disclose his interest in such contract or agreement and shall refrain from voting on any matter in respect of such contract or
agreement unless otherwise provided under the ABCA. To the extent that conflicts of interest arise, such conflicts will be resolved
in accordance with the provisions of the ABCA.



As
at the date hereof, PEL is not aware of any existing or potential material conflicts of interest between PEL and a director or
officer of PEL.



AUDIT
COMMITTEE INFORMATION



Composition
of the Audit Committee



The
Audit Committee consists of three members, all of whom are independent and financially literate, as defined by National Instrument
52-110 Audit Committees.



30







Audit
Committee Charter



The
full text of Provident's Audit Committee Charter is set forth in Schedule A of this Annual Information Form.



Relevant
Education and Experience of Each Audit Committee Member



The
following table sets out the relevant education and experience of each of the members of the Audit Committee:



|Name                      |  | Independent |  | Financially
    Literate |  | Relevant
    Education and Experience                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------------------------- |  | ----------- |  | ------------------------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Grant D. Billing, CA      |  | Yes         |  | Yes                      |  | Mr. Billing holds the degree of Bachelor
    of Science and is a Chartered Accountant.  As a Chartered Accountant, Mr. Billing attained experience in preparing, auditing,
    analyzing and evaluating financial statements.  Mr. Billing has an understanding of the accounting principles used by
    Provident as well as the implications of those accounting principles on Provident's financial results.  Mr. Billing has
    also obtained significant financial experience and exposure to accounting and financial issues through various executive positions,
    most currently as Chairman and CEO of Superior Plus Corp. and also through his role as a chairman and a director of a number
    of public companies.                                                                   
|                          |  |             |  |                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Bruce R. Libin, Q.C.      |  | Yes         |  | Yes                      |  | Mr. Libin holds the degree of Bachelor
    of Commerce (Honours), Master of Business Administration and Juris Doctoris.  Mr. Libin has obtained significant financial
    experience and exposure to accounting, disclosure, internal controls and financial issues during his legal practice, his business
    experience (including as Chief Executive Officer of Beau Canada Exploration Ltd. and as Executive Chairman and Chief Executive
    Officer of Destiny Resource Services Corp.) and his service on the audit committee of several boards of directors, including
    Amoco Canada Petroleum Company Limited, Maxx Petroleum Ltd., Mark's Work Warehouse Ltd., Calgary Health Region, Southern Alberta
    Institute to Technology, NQL Drilling Tools Ltd., and Winstar Resources Ltd.
|                          |  |             |  |                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Jeffrey T. Smith, P.Geol. |  | Yes         |  | Yes                      |  | Mr. Smith holds the degree of Bachelor
    of Science Geology.  Mr. Smith has obtained significant financial experience and exposure to accounting, disclosure,
    internal controls and financial issues during his experience as a director of a number of public companies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      



31







External
Auditor Service Fees



The
following table sets forth information about the fees billed to Provident and its subsidiaries for professional services provided
by PricewaterhouseCoopers LLP during fiscal 2011 and 2010. PricewaterhouseCoopers LLP is independent in accordance with the auditor's
rules of professional conduct in Canada.



|(CDN$)             |  | 2011 |         |  | 2010 |  
|------------------ |  | ---- | ------- |  | ---- | -
|Audit Fees         |  |      | 606,000 |  |      | $
|Audit-Related Fees |  |      | 155,200 |  |      |  
|Tax Fees           |  |      | 35,000  |  |      |  
|Total              |  | $    | 796,200 |  |      | $



Audit
Fees



Fees
for audit services totalled approximately $0.6 million in 2011 and approximately $0.6 million in 2010, including fees associated
with the annual audit, the reviews of Provident's quarterly reports, statutory audits and regulatory filings.



Audit-Related
Fees



Fees
for audit-related services totalled approximately $0.2 million in 2011 and approximately $0.5 million in 2010. Audit related services
include services in connection with various transactions, the transition to International Financial Reporting Standards, the prospectuses
in connection with the 5.75 Percent Debentures (E Series) and 5.75 Percent Debentures (F Series) and French translation services.



Tax
Fees



Fees
for tax services totalled $35,000 in 2011 and approximately $0.1 million in 2010. Fees for tax services include assistance with
tax return preparation, tax planning and tax advice services.



In
accordance with Provident's procedures for the approval of audit and non-audit services by PricewaterhouseCoopers LLP (the "Procedures"),
the Audit Committee has pre-approved the services of external auditors listed in the Procedures. This general pre-approval of
services set forth in the Procedures is brought to the Audit Committee for review and renewal on an annual basis. Management has
agreed to seek the guidance of the Chairman of the Audit Committee if there is any ambiguity about whether a particular service
is pre-approved.



In
the case of proposed engagements of PricewaterhouseCoopers LLP involving services set forth in the Procedures in which the fees
for such services are expected to exceed $100,000, specific pre-approval must be obtained from the Audit Committee. In these circumstances
in which specific pre-approval is required, the Audit Committee has delegated the authority to effect such pre-approval to the
Chairman of the Audit Committee.



In
respect of services set forth in the Procedures in which the fees for a particular engagement are expected to be less than or
equal to $100,000, the Chairman of the Audit Committee must be notified expeditiously of any such services commenced by the auditors.



If
an engagement with PricewaterhouseCoopers LLP for a particular service is contemplated, and is neither prohibited under the terms
of the Procedures nor covered under the range of services set forth in the Procedures, the engagement is subject to the pre-approval
of the Chairman of the Audit Committee.



All
pre-approvals granted by the Chairman of the Audit Committee must be presented to the full Audit Committee at its next meeting.



32







Prohibited
services may not be pre-approved by the Audit Committee or pursuant to the delegated authority granted to the Chairman of the
Audit Committee. Provident has complied with applicable rules regulating the provision of non-audit services to Provident by its
external auditor.



INFORMATION
CONCERNING THE NATURAL GAS LIQUIDS MIDSTREAM PROCESSING AND MARKETING INDUSTRY



General



The
NGL industry involves the production, storage, transportation and marketing of products that are extracted from natural gas prior
to its sale to end use customers. The profitability of the industry is based on the products extracted being of greater economic
value as separate commodities than as components of natural gas.



Natural
gas is a mixture of various hydrocarbon components, the most abundant of which is methane. The higher value hydrocarbons, which
include ethane (C2), propane (C3), butane (C4) and pentanes-plus (C5+), are generally in gaseous form at the pressures and temperatures
under which natural gas is gathered and transported. The basis of the NGL industry is the recovery of these higher value hydrocarbons
from natural gas for sale in a liquid form.



The
NGL value chain begins with the gathering of gas that is produced. The gas then gets processed through field processing plants,
mainline extraction facilities and fractionation facilities in order to remove high value NGLs, as well as water, sulphur and
other impurities. The value chain culminates with the transportation and eventual sale of NGLs to the final customer.



NGL
Extraction



A
primary component of the NGL value chain is in the extraction of NGLs from natural gas, which takes place in a number of steps
at extraction facilities. NGLs are recovered primarily at three types of extraction facilities: natural gas field plants, natural
gas straddle plants and oil refineries. Field plants process raw natural gas, which is produced from wells in the immediate vicinity,
to remove impurities such as water, sulphur and carbon dioxide prior to the delivery of natural gas to the major natural gas pipeline
systems. Field plants also remove almost all pentanes-plus and as much as 65 percent of propane and 80 percent of butane in order
to meet pipeline specifications. Pipeline quality gas may then be transported and sold to end users or processed at straddle plants
to recover additional NGLs, including ethane. The NGLs extracted are generally removed in mixes (either ethane-plus or propane-plus
), which must be further processed in subsequent steps to separate out the individual products.



NGL
Fractionation



NGL
mix extracted at field plants and straddle plants is transported to fractionation facilities, which enhances its value by separating
the mix into its components: ethane, propane, butane and pentanes-plus. Fractionation generally does not occur at field plants,
but rather at a central location. The NGL mixes are moved by truck or pipeline to fractionation facilities. Once fractionated,
the products are then transported to markets by pipeline, truck or rail.



NGL
Transportation



The
efficient movement of NGL products in Canada requires significant infrastructure, including transportation assets (pipelines,
trucks, rail cars), storage facilities and terminals (rail and truck). The most efficient and the lowest cost means for moving
NGL products to markets is by pipeline. The Canadian NGL sector has an extensive pipeline network for the transportation of natural
gas to field plants and extraction facilities, and NGLs to fractionation facilities, petrochemical complexes, underground storage
facilities and the final customer. Truck and rail account for a significant amount of the NGLs transported, with pipelines serving
as the main mode of transport.



33







NGL
Storage



Storage
assets offer a number of key strategic advantages, which include: (i) providing the necessary buffer between production of NGLs
(which varies daily depending on gas flows and composition) and their consumption (which can vary from day to day and season to
season depending on market needs); (ii) allowing NGL sellers to store inventory to accommodate outages in NGL fractionation plants;
and (iii) exploiting seasonal price differentials that may develop over the course of a year (particularly for propane and butane).



NGL
Marketing



The
markets for NGLs are North American in scope with end uses varying substantially by product. NGLs are used directly as heating
and transportation fuels and also as a feedstock for the petrochemical and crude oil refining industries.



Ethane
is used primarily as feedstock for the petrochemical industry.



Propane
is the most versatile of the NGL products from a marketing perspective. Uses for propane include home and commercial heating,
crop drying, cooking and motor fuel.



Butane
is used primarily in gasoline blending, either directly or in the production of iso-octane and as a diluent for heavy oil.



Pentanes-plus
is used primarily as a diluent to blend with heavy crudes to decrease the viscosity and density of these crudes, allowing them
to be transported in pipelines. In addition, pentanes-plus are used as a refinery feedstock in the production of gasolines.



Commercial
Arrangements



An
extraction facility's fees may be based on a cost-of-service arrangement (reimbursement for operating expenses plus a return on
capital employed), a fixed charge per unit of throughput, or some combination of these fee structures. In order to produce NGLs,
the owner of the facility must purchase natural gas (referred to as shrinkage gas) to replace the energy removed from the natural
gas stream in the form of NGLs as part of the extraction process. For the right to extract NGLs from the gas stream, extraction
facility owners generally pay the owners of the gas a premium over the shrinkage gas price, which effectively amounts to sharing
with owners of the gas a portion of the value that is added through the recovery and sale of NGLs. Other costs of extraction include
electrical power, labour, maintenance, property taxes, insurance and other overhead.



For
ethane, market prices usually consist of a shrinkage gas cost which flows through to ethane buyers, a flow through of a portion
of plant operating costs and an additional fixed fee to cover capital employed. As a result, the ethane operations of an extraction
facility generally generate a relatively predictable cash flow stream.



The
extraction facility's other revenues are often tied to the market prices of propane, butane and pentanes-plus which in turn are
typically correlated as a percentage of the price of crude oil.



A
fractionation facility provides a package of services, which may include transportation of the NGL mix to the facility; fractionation
of an incoming ethane-plus or propane-plus mixture into specification ethane, propane, butane and pentanes-plus; storage of NGLs
at the facility; distribution and terminalling of the specification products; and marketing of the products. The fees charged
vary depending upon the package of services provided. Facility expenses include operating costs associated with gathering, transporting,
fractionating, storing and distributing the NGL mix. Hence, profit is determined by the difference between the fees charged and
the costs incurred for the service provided rather than on the spread between natural gas and NGL prices as in the case of an
extraction plant. The owner of a fractionator may also purchase NGL streams in the field for its own account, transport and process
the stream, then sell the resulting products in the market. In this case, its profit will be the difference between the sales
prices it receives and the sum of its purchase price for the NGL stream and its costs of production (transportation, fractionation,
storage).



34







RISK
FACTORS



Provident's
business is susceptible to the risks and uncertainties associated with the natural gas liquids midstream infrastructure and logistics
business generally. Prospective purchasers of securities of Provident should carefully consider the information set forth below
and the other information set forth herein before deciding to invest. Shareholders should consider carefully the information contained
herein and, in particular, the following risk factors:



Natural
Gas Liquids Midstream Infrastructure and Logistics Business Risk Factors



Frac
Spread and Commodity Prices



The
Midstream Business is exposed to possible price declines between the time Provident purchases NGL feedstock and sells NGL products,
and to narrowing frac spreads. Frac spread is the difference between the selling prices for NGL products and the input cost of
the natural gas required to produce the respective NGL products. The frac spread can change significantly from period to period
depending on the relationship between crude oil and natural gas prices (the "frac spread ratio"), absolute commodity
prices, and changes in the Canadian to U.S. dollar foreign exchange rate. There is also a differential between NGL product prices
and crude oil prices which can change prices received and margins realized for midstream products separate from frac spread ratio
changes. The amount of profit or loss made on the extraction portion of the Midstream Business will generally increase or decrease
with the frac spread. This exposure could result in material variability of cash flow generated by the Midstream Business, which
could negatively affect Provident and the cash dividends of Provident.



Facilities
Throughput and Product Demand



The
volumes of natural gas processed through Provident's natural gas liquids midstream infrastructure and logistics business and of
NGLs and other products transported in the pipelines depend on production of natural gas in the areas serviced by the business
and pipelines. Without reserve additions, production will decline over time as reserves are depleted and production costs may
rise. Producers may shut in production at lower product prices or higher production costs. Producers in the areas serviced by
the business may not be successful in exploring for and developing additional reserves, and the gas plants and the pipelines may
not be able to maintain existing volumes of throughput. Commodity prices may not remain at a level which encourages producers
to explore for and develop additional reserves or produce existing marginal reserves. Lower production volumes will also increase
the competition for natural gas supply at gas processing plants which could result in higher shrinkage premiums being paid to
natural gas producers.



The
rate and timing of production from proven natural gas reserves tied into the gas plants is at the discretion of the producers
and is subject to regulatory constraints. The producers have no obligation to produce natural gas from these lands.



Provident's
natural gas liquids midstream infrastructure and logistics business is connected to various third party trunkline systems. Operational
disruptions or apportionment on those third party systems may prevent the full utilization of the business.



Over
the long term, business will depend, in part, on the level of demand for NGLs and natural gas in the geographic areas in which
deliveries are made by pipelines and the ability and willingness of shippers having access or rights to utilize the pipelines
to supply such demand. Provident cannot predict the impact of future economic conditions, fuel conservation measures, alternative
fuel requirements, governmental regulation or technological advances in fuel economy and energy generation devices, all of which
could reduce the demand for natural gas and NGLs.



35







Operating
and Capital Costs



Operating
and capital costs of Provident's natural gas liquids midstream infrastructure and logistics business may vary considerably from
current and forecast values and rates and represent significant components of the cost of providing service. In general, as equipment
ages, maintenance capital expenditures and maintenance expenses with respect to such equipment may increase over time. Dividends
may be reduced if significant increases in operating or capital costs are incurred.



Although
operating costs are to be recaptured through the tariffs charged on natural gas volumes processed and oil and NGLs transported,
respectively, to the extent such charges escalate, producers may seek lower cost alternatives or stop production of their natural
gas.



Reliance
on Principal Customers and Operators



Provident
will rely on several significant customers to purchase product from the Midstream Business. Ethane is predominately purchased
by Nova Chemicals Corporation and Dow Chemicals Canada Inc. Cenovus Energy and its affiliates will purchase the majority of the
condensate from the Empress debutanizer. BP Canada operates the BP E1 Plant at Empress, Alberta and the west to east system described
herein. If for any reason these parties were unable to perform their obligations under the various agreements with Provident,
the revenue and dividends of Provident, and the operations of the Midstream Business could be negatively impacted.



Operational
Matters and Hazards



Provident's
operations will be subject to common hazards of the natural gas processing and pipeline transportation business. The operation
of Provident's natural gas liquids midstream infrastructure and logistics business could be disrupted by natural disasters or
other events beyond the control of Provident. A casualty occurrence could result in the loss of equipment or life, as well as
injury and property damage. Provident carries insurance coverage with respect to some, but not all, casualty occurrences in amounts
customary for similar business operations, which coverage may not be sufficient to compensate for all casualty occurrences.



The
operation of Provident's natural gas liquids midstream infrastructure and logistics business will involve many risks, including
the breakdown or failure of equipment, information systems or processes, the performance of equipment at levels below those originally
intended (whether due to misuse, unexpected degradation or design, construction or manufacturing defects), failure to maintain
an adequate inventory of supplies or spare parts, operator error, labour disputes, disputes with owners of interconnected facilities
and carriers and catastrophic events such as natural disasters, fires, explosions, fractures, acts of eco-terrorists and saboteurs,
and other similar events, many of which are beyond the control of Provident. The occurrence or continuance of any of these events
could increase the cost of operating facilities and/or reduce its processing or throughput capacity, thereby reducing cash flow.



Competition



Provident's
natural gas liquids midstream infrastructure and logistics business is subject to competition from other gas processing plants
which are either in the general vicinity of the gas plants or have gathering systems that are or could potentially extend into
areas served by the gas plants. The pipelines and storage, terminalling and processing facilities are also subject to competition
from other pipelines and storage, terminalling and processing facilities in the areas they serve, and the gas products marketing
business is subject to competition from other marketing firms.



Producers
in Western Canada compete with producers in other regions to supply natural gas and gas products to customers in North America
and the natural gas and gas products industry also competes with other industries to supply the fuel, feedstock and other needs
of consumers. Such competition may have an adverse effect on the production of natural gas and gas products in Western Canada
and, as a result, on the demand for Provident's services.



36







Regulatory
Intervention



Pipelines
and facilities can be subject to common carrier and common processor applications and to rate setting by regulatory authorities
in the event agreement on fees or tariffs cannot be reached with producers. To the extent that producers believe processing fees
or tariffs respecting pipelines and facilities are too high, they may seek rate relief through regulatory means.



Environmental
Considerations



Major
equipment failure, release of toxic substances or pipeline rupture could result in damage to the environment and Provident's natural
gas liquids midstream infrastructure and logistics business, death or injury and substantial costs and liabilities to third parties.
Provident may not be able to insure against these events or may elect not to insure because of high premium costs or for other
reasons. If, at any time, appropriate regulatory authorities deem any one of the gas plants unsafe, they may order it to be shut
down.



The
gas processing and gathering industry is regulated by federal and provincial environmental legislation. Activities that do not
meet regulatory standards or that breach such legislation may result in the imposition of fines, penalties and suspension of operations.
It is possible that increasingly strict environmental and safety laws will be implemented, which could result in substantial costs
of compliance.



Abandonment



Provident
will be responsible for compliance with all laws and regulations regarding abandonment of Provident's natural gas liquids midstream
infrastructure and logistics business at the end of their economic life, which abandonment costs may be substantial. It is not
possible to estimate the abandonment costs at this time as they will be a function of regulatory requirements at the time of abandonment.



General
Risk Factors



Availability
of Credit and Debt Service



As
of March 15, 2012, Provident had drawn $170.0 million against its Credit Facility, representing 34 percent of the credit capacity.
In addition, as of March 15, 2012, Provident has issued $47.4 million of letters of credit representing 63 percent of the letter
of credit facility capacity. Variations in interest rates and scheduled principal repayments or the need to refinance the Credit
Facility upon expiration could result in significant changes in the amount required to be applied to debt service before payment
of any amounts to Provident or its Shareholders. Although it is believed that the credit facilities are sufficient, there can
be no assurance that the amounts will be adequate for the financial obligations of Provident, that additional funds can be obtained
or that, upon expiration, the Credit Facility can be refinanced on terms acceptable to Provident or the Lenders.



The
Lenders have been provided with security over substantially all of the assets of Provident. If Provident becomes unable to pay
its debt service charges or otherwise commits an event of default such as bankruptcy, the Lenders may foreclose on or sell Provident's
assets.



The
weakened global economic situation in 2008 and 2009 restricted Provident's access to capital, bank debt and equity, and resulted
in increased borrowing costs. Provident's ability to finance future capital expenditures out of funds generated from operations,
borrowings and possible future equity sales is dependent on, among other factors, the overall state of capital markets and investor
appetite for investments in the energy industry and Provident's securities in particular. Although a gradual recovery from the
global recession beginning in 2009 has led to improved economic conditions, continued uncertainty has created ongoing fiscal challenges
for the global economy which may alter Provident's spending and operating plans and may continue to increase Provident's borrowing
costs. There may be unexpected business impacts from this market uncertainty, including volatile changes in currency exchange
rates, inflation, interest rates, and general levels of investing and consuming activity.



37







To
the extent that external sources of capital become limited or unavailable or available on onerous terms, Provident's ability to
make capital investments, maintain existing assets and pay dividends may be impaired, and its assets, liabilities, business, financial
condition and results of operations may be materially and adversely affected as a result.



Based
on current funds available and expected funds generated from operations, Provident believes it has sufficient funds available
to fund its projected capital expenditures. However, if funds generated from operations are lower than expected or capital costs
for these projects exceed current estimates, or if Provident incurs major unanticipated expenses related to maintenance of its
existing assets, it may be required to seek additional capital to maintain its capital expenditures at planned levels. Failure
to obtain any financing necessary for Provident's capital expenditure plans may negatively impact Provident's business.



Litigation



Provident
and its various subsidiaries and affiliates are, in the course of their business, subject to lawsuits and other claims. Defence
and settlement costs associated with such lawsuits and claims can be substantial, even with respect to lawsuits and claims that
have no merit. Due to the inherent uncertainty of the litigation process, the resolution of any particular legal proceeding could
have a material adverse effect on the financial position or operating results of Provident.



Changes
in Legislation



There
is no assurance that Canadian or U.S. federal income tax laws will not be changed in a manner that affects Shareholders in a material
adverse way.



Regulatory
Matters



Provident's
operations are subject to a variety of federal, provincial laws and regulations, including laws and regulations relating to the
protection of the environment.



Conflicts
of Interest



The
directors and officers of PEL are engaged in and will continue to engage in other activities in the natural gas liquids midstream
infrastructure and logistics business and, as a result of these activities, the directors and officers of PEL may become subject
to conflicts of interest. The ABCA provides that in the event that a director has an interest in a contract or proposed contract
or agreement, the director shall disclose his interest in such contract or agreement and shall refrain from voting on any matter
in respect of such contract or agreement unless otherwise provided under the ABCA. To the extent that conflicts of interest arise,
such conflicts will be resolved in accordance with the provisions of the ABCA. The business of Provident is subject to other risks
and matters, which are outside of their control.



Dependence
on Key Personnel



The
success of the operations of Provident will be largely dependent on the skills and expertise of key personnel to manage the overall
business and to achieve positive margins. The continued success of Provident will be dependent on its ability to retain or recruit
such personnel.



Variations
in Interest Rates and Foreign Exchange Rates



Variations
in interest rates could result in a significant change in the amount Provident pays to service debt, potentially impacting dividends
to Shareholders. Variations in the exchange rate for the Canadian dollar versus the U.S. dollar could affect future dividends.



38







INTERESTS
OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS



No
director or executive officer of Provident, no person or company that beneficially owns, or controls or directs, directly or indirectly,
more than 10 percent of the outstanding Common Shares and no associate or affiliate of any of the foregoing persons or companies,
has or has had any material interest, direct or indirect, in any transaction within the three most recently completed financial
years or during the current financial year that has materially affected or is reasonably expected to materially affect Provident,
other than as described in this Annual Information Form.



TRANSFER
AGENT AND REGISTRAR



The
transfer agent and registrar for the Common Shares, the 5.75 Percent Debentures (E Series) and the 5.75 Percent Debentures (F
Series) is Computershare at its principal offices in Toronto, Ontario and Calgary, Alberta.



MATERIAL
CONTRACTS



There
are no material contracts entered into by Provident during the most recently completed financial year or since January 1, 2002
and which are still in effect, other than contracts entered into in the ordinary course of business and other than (a) the Credit
Facility described herein under the heading "Information Concerning the PEL and its Business - Debt Financing"; (b)
the Shareholder Rights Plan described herein under the heading "Information Concerning the PEL and its Business - Shareholder
Rights Plan"; and (c) the Pembina Arrangement Agreement described herein under the heading "General Development of the
Business of Provident - Pembina Arrangement".



Each
of the Credit Facility, the Shareholder Rights Plan and the Pembina Arrangement Agreement has been filed on SEDAR and is available
under Provident's issuer profile at www.sedar.com.



DOCUMENTS
INCORPORATED BY REFERENCE



Any
statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for the purposes of this Annual Information Form to the extent that a statement contained herein, or any other subsequently
filed document which also is or is deemed to be incorporated by reference herein, modifies or supersedes that statement. The modifying
or superseding statement need not state that it has modified or superseded a prior statement or include any other information
set forth in the document that is modified or superseded. The making of a modifying or superseding statement shall not be deemed
an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation, an untrue
statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make
a statement not misleading in light of the circumstances in which it was made. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this Annual Information Form.



Provident
will provide without charge to each security holder upon the written or oral request of such person (and to each person who is
not a security holder of Provident upon payment of a reasonable charge), a copy of any or all of the documents incorporated herein
by reference, other than exhibits to such documents (unless such exhibits are specifically incorporated by reference into such
documents).



Requests
for such documents should be directed to the office of Investor Relations, Provident Energy Ltd., 2100, 250 - 2nd Street
S.W., Calgary, Alberta T2P 0C1, telephone: (403) 231-6710. Documents incorporated by reference in this Annual Information Form
are also available on SEDAR at www.sedar.com.



39







PRINCIPAL
HOLDERS OF COMMON SHARES



As
at the date hereof, to the knowledge of Provident, no person or company owned of record or beneficially, directly or indirectly,
more than 10 percent of the issued and outstanding Common Shares. As at March 15, 2012, the directors and senior officers of Provident,
as a group, beneficially owned, directly or indirectly, less than 1 percent of the issued and outstanding Common Shares.



ADDITIONAL
INFORMATION



Additional
information related to the remuneration of the directors and officers of Provident, the indebtedness of the directors and officers
of Provident, the principal holders of Common Shares and securities authorized for issuance under equity compensation plans, where
applicable, is contained in the Management Proxy Statement and Information Circular of Provident for its most recent annual meeting
of Shareholders that involved the election of directors. Additional financial information is provided in Provident's audited consolidated
financial statements and management's discussion and analysis for the year ended December 31, 2011.



Additional
copies of this Annual Information Form are available on SEDAR at www.sedar.com or may be obtained from Provident. Please
contact:

Lynn
Rannelli, Assistant Corporate Secretary

Provident
Energy Ltd.

2100,
250 – 2nd Street S.W.

Calgary,
Alberta T2P 0C1

Telephone:       (403)
296-2233

Fax:                 (403)
294-0111



Additional
information relating to Provident may also be found on SEDAR at www.sedar.com.



40







SCHEDULE
A











Audit
Committee Terms of Reference



Responsibilities
and Purpose



The
purpose of the Audit Committee (the "Committee") of the Board of Directors (the "Board") of Provident Energy
Ltd. (the "Corporation") is to assist the Board in fulfilling its oversight responsibilities in relation to the review
and approval of the financial statements and financial reporting of the Corporation and its subsidiaries, including management's
assessment of internal control over financial reporting, and assessing other internal controls, management information, and the
risk management systems and procedures of the Corporation.



The
role of the Committee is one of stewardship and oversight. Management is responsible for preparing the financial statements and
financial reporting of the Corporation and for maintaining internal control and management information and risk management systems
and procedures. The external auditors are responsible for the integrated audit or review of the financial statements and the internal
controls over financial reporting and other services they provide.



The
Committee, in its capacity as a committee of the Board and subject to the rights of shareholders and applicable law, shall be
directly responsible for overseeing the relationship of the external auditor with the Corporation, including the appointment,
compensation, retention and oversight of the work of any external auditor engaged (including resolution of disagreements between
management of the Corporation and the external auditor regarding financial reporting) for the purpose of preparing or issuing
an audit report or performing other audit, review or attest services for the Corporation. The external auditor shall report directly
to the Committee.



Composition
of the Committee



The
Committee will consist of three or more directors as determined by the Board. The members of the Committee shall be appointed
by the Board. The Governance, Human Resources and Compensation Committee shall recommend to the Board eligible directors to fill
vacancies on the Committee. Each member shall serve until his successor is appointed, unless he shall resign or be removed by
the Board or he shall otherwise cease to be a director of the Corporation. The Board shall fill any vacancy if the membership
of the Committee is less than three directors. The Chair of the Committee may be designated by the Board or, if it does not do
so, the members of the Committee may elect a Chair by vote of a majority of the full Committee membership.



All
members of the Committee must satisfy the independence, financial literacy and experience requirements of applicable Canadian
and United States securities laws, rules and guidelines, any applicable stock exchange requirements or guidelines and any other
applicable regulatory rules. In particular: (i) each member shall be "independent" and "financially literate"
within the meaning of Multilateral Instrument 52-110 Audit Committees ("MI 52 110"), (ii) each member shall be
"independent" and "financially literate" within the meaning of the rules of the New York Stock Exchange, (iii)
each member shall be "independent" within the meaning of Rule 10A-3 under the United States Securities Exchange Act
of 1934, as amended, and (iv) at least one member must be an "audit committee financial expert" within the meaning
of that term under the United States Securities Exchange Act of 1934, as amended, and the rules and forms adopted by the
United States Securities and Exchange Commission thereunder (collectively, the "U.S. Rules"), and at least one member
must have accounting or related financial management expertise.











Members
of the Committee may not, other than in their respective capacities as members of the Committee, the Board or any other committee
of the Board, accept directly or indirectly any consulting, advisory or other compensatory fee from Provident, or be an "affiliated
person" (as such term is defined in the U.S. Rules) of Provident. For greater certainty, director's fees, options and similar
compensation arrangements and fixed amounts of compensation under a retirement plan (including deferred compensation) for prior
service with Provident that are not contingent on continued service should be the only compensation a Committee member receives
from Provident.



Communication,
Authority to Engage Advisors and Expenses



The
Committee shall have access to such officers and employees of Provident, the external auditor and to such other information respecting
Provident, as it considers to be necessary or advisable in order to perform its duties and responsibilities.



The
Committee has the authority to engage independent counsel and other advisors as it determines necessary to carry out its duties
and to set the compensation for any such counsel and advisors. Any engagement of independent counsel or other advisors is to be
at Provident's expense.



Provident
shall be responsible for all expenses of the Committee that are deemed necessary or appropriate by the Committee in carrying out
its duties including the compensation of the external auditor for issuing an audit report or performing other audit, review or
attest services.



Meetings
and Record Keeping



Meetings
of the Committee shall be conducted as follows:



| | 1 | the
                                                                                                 Committee shall meet at least
                                                                                                 quarterly at such times and at
                                                                                                 such locations as the Chair of
                                                                                                 the Committee shall determine,
                                                                                                 provided that meetings shall
                                                                                                 be scheduled so as to permit
                                                                                                 timely review of the Corporation's
                                                                                                 quarterly and annual financial
                                                                                                 statements and related management's
                                                                                                 discussion and analysis and earnings
                                                                                                 press releases. The external
                                                                                                 auditor, Chair or any two members
                                                                                                 of the Committee may also request
                                                                                                 a meeting of the Committee. The
                                                                                                 Committee shall also meet separately
                                                                                                 with management, the external
                                                                                                 auditor and, if applicable, the
                                                                                                 internal auditor periodically
                                                                                                 as the Committee may deem appropriate.
                                                                                                 The Chair of the Committee shall
                                                                                                 hold in camera sessions
                                                                                                 of the Committee, without management
                                                                                                 present, at every meeting;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2 | the
                                                                                                 Chair of the Committee shall
                                                                                                 preside as chair at each Committee
                                                                                                 meeting and lead Committee discussion
                                                                                                 on meeting agenda items;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3 | the
                                                                                                 quorum for meetings shall be
                                                                                                 a majority of the members of
                                                                                                 the Committee, present in person
                                                                                                 or by telephone or by other telecommunication
                                                                                                 device that permits all persons
                                                                                                 participating in the meeting
                                                                                                 to hear each other;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4 | if
                                                                                                 the Chair of the Committee is
                                                                                                 not present at any meeting of
                                                                                                 the Committee, one of the other
                                                                                                 members of the Committee who
                                                                                                 is present at the meeting shall
                                                                                                 be chosen by the Committee to
                                                                                                 preside at the meeting;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5 | every
                                                                                                 question at a Committee meeting
                                                                                                 shall be decided by a majority
                                                                                                 of the votes cast;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 6 | the
                                                                                                 President and Chief Executive
                                                                                                 Officer (the "CEO")
                                                                                                 and the Chief Financial Officer
                                                                                                 ("CFO") shall be available
                                                                                                 to advise the Committee, shall
                                                                                                 receive notice of meetings and
                                                                                                 may attend meetings of the Committee
                                                                                                 at the invitation of the Chair
                                                                                                 of the Committee. Other management
                                                                                                 representatives, other Board
                                                                                                 members, officers or employees
                                                                                                 of Provident, the external auditor,
                                                                                                 outside counsel and other experts
                                                                                                 or consultants may be invited
                                                                                                 to attend as necessary; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



A-2







| | 7 | a
                                                                                                 Committee member, or any other
                                                                                                 person selected by the Committee,
                                                                                                 shall be appointed at each meeting
                                                                                                 to act as secretary for the purpose
                                                                                                 of recording the minutes of each
                                                                                                 meeting.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
Committee shall provide the Board with a summary of all meetings together with a copy of the minutes from such meetings. Where
minutes have not yet been prepared, the Chair shall provide the Board with oral reports on the activities of the Committee. Information
reviewed and discussed by the Committee at any meeting shall be referred to in the minutes and made available for examination
by the Board upon request to the Chair of the Committee.



Specific
Duties



In
carrying out its role, the Committee has the following specific authorities and responsibilities:



| | 1 | Financial
                                                                                                 Information and Reporting
| | - | ------------------------------------------------------------------------------------------------------------------------------------



| | (a) | to
                                                                                                       review with management
                                                                                                       and the external auditor,
                                                                                                       discuss and recommend to
                                                                                                       the Board for approval,
                                                                                                       the annual and interim
                                                                                                       financial statements of
                                                                                                       the Corporation and related
                                                                                                       financial reporting, including
                                                                                                       management's discussion
                                                                                                       and analysis and earnings
                                                                                                       press releases;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | to
                                                                                                       review and discuss with
                                                                                                       management the type and
                                                                                                       presentation of information
                                                                                                       to be included in press
                                                                                                       releases which contain
                                                                                                       financial information taken
                                                                                                       from Provident's financial
                                                                                                       statements prior to the
                                                                                                       release of such press release
                                                                                                       to the public; paying particular
                                                                                                       attention to any use of
                                                                                                       information which is not
                                                                                                       prepared in accordance
                                                                                                       with Canadian generally
                                                                                                       accepted accounting principles
                                                                                                       ("GAAP"), such
                                                                                                       as "pro forma"
                                                                                                       or "adjusted"
                                                                                                       non GAAP information, as
                                                                                                       well as financial information
                                                                                                       and earnings guidance provided
                                                                                                       by Provident to analysts
                                                                                                       and rating agencies;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | to
                                                                                                       review with management
                                                                                                       and recommend to the Board
                                                                                                       for approval, any financial
                                                                                                       statements of the Corporation
                                                                                                       which have not previously
                                                                                                       been approved by the Board
                                                                                                       and which are to be included
                                                                                                       in a prospectus or other
                                                                                                       public disclosure document
                                                                                                       of the Corporation;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | to
                                                                                                       consider and be satisfied
                                                                                                       that adequate policies
                                                                                                       and procedures are in place
                                                                                                       for the review of the Corporation's
                                                                                                       disclosure of financial
                                                                                                       information extracted or
                                                                                                       derived from the Corporation's
                                                                                                       financial statements (other
                                                                                                       than disclosure referred
                                                                                                       to in clause (1)(a) above),
                                                                                                       and periodically assess
                                                                                                       the adequacy of such procedures;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (e) | to
                                                                                                       review such accounting,
                                                                                                       tax and financial aspects
                                                                                                       of the operations of the
                                                                                                       Corporation as the Committee
                                                                                                       considers appropriate;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (f) | to
                                                                                                       review major issues regarding
                                                                                                       accounting principles and
                                                                                                       financial statement presentations,
                                                                                                       including any significant
                                                                                                       changes in Provident's
                                                                                                       selection or application
                                                                                                       of accounting principles;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (g) | to
                                                                                                       review analyses prepared
                                                                                                       by management and/or the
                                                                                                       external auditor setting
                                                                                                       forth any significant financial
                                                                                                       reporting issues and judgments
                                                                                                       made in connections with
                                                                                                       the preparation of Provident's
                                                                                                       financial statements, including
                                                                                                       analyses of the effects
                                                                                                       of alternative GAAP methods
                                                                                                       on the financial statements;
                                                                                                       and
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (h) | to
                                                                                                       review the effect of regulatory
                                                                                                       and accounting initiatives,
                                                                                                       as well as off balance
                                                                                                       sheet structures, on Provident's
                                                                                                       financial statements.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



A-3







| | 2 | Internal
                                                                                                 Controls
| | - | ------------------------------------------------------------------------------------------------------------------



| | (a) | review
                                                                                                       with management and the
                                                                                                       external auditors, the
                                                                                                       adequacy and effectiveness
                                                                                                       of the internal controls
                                                                                                       and management information
                                                                                                       systems and procedures
                                                                                                       of the Corporation (with
                                                                                                       particular attention given
                                                                                                       to accounting, financial
                                                                                                       statements and financial
                                                                                                       reporting matters) and
                                                                                                       determine whether the Corporation
                                                                                                       is in compliance with applicable
                                                                                                       legal and regulatory requirements
                                                                                                       and with the Corporation's
                                                                                                       policies;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | review
                                                                                                       the external auditors'
                                                                                                       recommendations regarding
                                                                                                       any matters, including
                                                                                                       internal control and management
                                                                                                       information systems and
                                                                                                       procedures, and management's
                                                                                                       responses thereto;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | to
                                                                                                       review major issues regarding
                                                                                                       the adequacy of Provident's
                                                                                                       internal controls and any
                                                                                                       special audit steps adopted
                                                                                                       in light of material control
                                                                                                       deficiencies; and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | to
                                                                                                       establish procedures for:
| | --- | -----------------------------------------------------------------------------------------------------------------------------------



| | (i) | the
                                                                                                     receipt, retention and treatment
                                                                                                     of any complaint regarding
                                                                                                     accounting, internal accounting
                                                                                                     controls or auditing matters,
                                                                                                     and
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | the
                                                                                                      confidential, anonymous
                                                                                                      submissions by employees
                                                                                                      of concerns regarding questionable
                                                                                                      accounting or auditing matters.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3 | External
                                                                                                 Audit
| | - | ---------------------------------------------------------------------------------------------------------------



| | (a) | to
                                                                                                       recommend to the Board
                                                                                                       the external auditor to
                                                                                                       be nominated for the purpose
                                                                                                       of preparing or issuing
                                                                                                       an auditor's report or
                                                                                                       performing other audit,
                                                                                                       review or attest services
                                                                                                       and the compensation of
                                                                                                       such auditor;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | to
                                                                                                       review, evaluate and oversee
                                                                                                       the services provided by
                                                                                                       the external auditor and
                                                                                                       recommend to the Board,
                                                                                                       if necessary, the replacement
                                                                                                       of the external auditor;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| | (c)          (i) | to
                                                                                                                                                                                      pre-approve
                                                                                                                                                                                      or
                                                                                                                                                                                      approve
                                                                                                                                                                                      (if
                                                                                                                                                                                      pre-approval
                                                                                                                                                                                      is
                                                                                                                                                                                      not
                                                                                                                                                                                      required
                                                                                                                                                                                      by
                                                                                                                                                                                      law)
                                                                                                                                                                                      the
                                                                                                                                                                                      fees
                                                                                                                                                                                      related
                                                                                                                                                                                      to,
                                                                                                                                                                                      any
                                                                                                                                                                                      audit
                                                                                                                                                                                      service
                                                                                                                                                                                      or
                                                                                                                                                                                      non-prohibited
                                                                                                                                                                                      non-audit
                                                                                                                                                                                      service
                                                                                                                                                                                      and,
                                                                                                                                                                                      if
                                                                                                                                                                                      desired,
                                                                                                                                                                                      establish
                                                                                                                                                                                      detailed
                                                                                                                                                                                      policies
                                                                                                                                                                                      and
                                                                                                                                                                                      procedures
                                                                                                                                                                                      for
                                                                                                                                                                                      the
                                                                                                                                                                                      pre-approval
                                                                                                                                                                                      of
                                                                                                                                                                                      audit
                                                                                                                                                                                      services
                                                                                                                                                                                      and
                                                                                                                                                                                      non-prohibited
                                                                                                                                                                                      non-audit
                                                                                                                                                                                      services
                                                                                                                                                                                      by
                                                                                                                                                                                      an
                                                                                                                                                                                      external
                                                                                                                                                                                      auditor.
                                                                                                                                                                                      The
                                                                                                                                                                                      Committee
                                                                                                                                                                                      may
                                                                                                                                                                                      delegate
                                                                                                                                                                                      this
                                                                                                                                                                                      ability
                                                                                                                                                                                      to
                                                                                                                                                                                      one
                                                                                                                                                                                      or
                                                                                                                                                                                      more
                                                                                                                                                                                      members
                                                                                                                                                                                      of
                                                                                                                                                                                      the
                                                                                                                                                                                      Committee
                                                                                                                                                                                      to
                                                                                                                                                                                      the
                                                                                                                                                                                      extent
                                                                                                                                                                                      permitted
                                                                                                                                                                                      by
                                                                                                                                                                                      applicable
                                                                                                                                                                                      law,
                                                                                                                                                                                      provided
                                                                                                                                                                                      that
                                                                                                                                                                                      any
                                                                                                                                                                                      pre-approvals
                                                                                                                                                                                      granted
                                                                                                                                                                                      pursuant
                                                                                                                                                                                      to
                                                                                                                                                                                      such
                                                                                                                                                                                      delegation
                                                                                                                                                                                      must
                                                                                                                                                                                      be
                                                                                                                                                                                      detailed
                                                                                                                                                                                      as
                                                                                                                                                                                      to
                                                                                                                                                                                      the
                                                                                                                                                                                      particular
                                                                                                                                                                                      service
                                                                                                                                                                                      to
                                                                                                                                                                                      be
                                                                                                                                                                                      provided,
                                                                                                                                                                                      may
                                                                                                                                                                                      not
                                                                                                                                                                                      delegate
                                                                                                                                                                                      Committee
                                                                                                                                                                                      responsibilities
                                                                                                                                                                                      to
                                                                                                                                                                                      management
                                                                                                                                                                                      of
                                                                                                                                                                                      Provident
                                                                                                                                                                                      and
                                                                                                                                                                                      must
                                                                                                                                                                                      be
                                                                                                                                                                                      reported
                                                                                                                                                                                      to
                                                                                                                                                                                      the
                                                                                                                                                                                      full
                                                                                                                                                                                      Committee
                                                                                                                                                                                      at
                                                                                                                                                                                      its
                                                                                                                                                                                      next
                                                                                                                                                                                      scheduled
                                                                                                                                                                                      meeting,
                                                                                                                                                                                      or
| | ---------------- | 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---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| | (ii) | adopt
                                                                                                      specific policies and procedures
                                                                                                      for the engagement of the
                                                                                                      external auditor for the
                                                                                                      purposes of the provision
                                                                                                      of non-audit services;
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | to
                                                                                                       obtain and review at least
                                                                                                       annually a written report
                                                                                                       by the external auditor
                                                                                                       setting out the auditor's
                                                                                                       internal quality control
                                                                                                       procedures, any material
                                                                                                       issues raised by the auditor's
                                                                                                       most recent internal quality
                                                                                                       control reviews (or peer
                                                                                                       reviews), or by inquiry
                                                                                                       or investigation by governmental
                                                                                                       or professional authorities
                                                                                                       within the preceding five
                                                                                                       years, respecting one or
                                                                                                       more independent audits
                                                                                                       carried out by the firm
                                                                                                       and the steps taken to
                                                                                                       resolve those issues;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (e) | to
                                                                                                       obtain at least annually,
                                                                                                       review and discuss a written
                                                                                                       report by the external
                                                                                                       auditor setting out all
                                                                                                       relationships that the
                                                                                                       external auditor and its
                                                                                                       affiliates have with Provident
                                                                                                       in order to determine the
                                                                                                       external auditor's independence;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



A-4







| | (f) | to
                                                                                                       review the audit plan of
                                                                                                       the external auditor prior
                                                                                                       to the commencement of
                                                                                                       the audit;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (g) | to
                                                                                                       set clear hiring policies
                                                                                                       for Provident regarding
                                                                                                       partners and employees
                                                                                                       and former partners and
                                                                                                       employees of the present
                                                                                                       and former external auditor
                                                                                                       of the Corporation;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (h) | to
                                                                                                       obtain assurance from the
                                                                                                       external auditor that disclosure
                                                                                                       to the Committee is not
                                                                                                       required pursuant to the
                                                                                                       provisions of the United
                                                                                                       States Securities Exchange
                                                                                                       Act of 1934, as amended,
                                                                                                       regarding the discovery
                                                                                                       of any illegal acts by
                                                                                                       the external auditor;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (i) | to
                                                                                                       review with the external
                                                                                                       auditor any audit problems
                                                                                                       or difficulties, including
                                                                                                       any restrictions on the
                                                                                                       scope of the external auditor's
                                                                                                       activities or on access
                                                                                                       to requested information,
                                                                                                       any significant disagreements
                                                                                                       with management, and management's
                                                                                                       response (such review should
                                                                                                       also include discussion
                                                                                                       of the responsibilities,
                                                                                                       budget and staffing of
                                                                                                       Provident's internal audit
                                                                                                       function, if any);
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (j) | to
                                                                                                       review and discuss a report
                                                                                                       from the external auditor
                                                                                                       at least quarterly regarding:
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (i) | all
                                                                                                     critical accounting policies
                                                                                                     and practices to be used;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | all
                                                                                                      alternative treatments within
                                                                                                      generally accepted accounting
                                                                                                      principles for policies
                                                                                                      and practices related to
                                                                                                      material items that have
                                                                                                      been discussed with management,
                                                                                                      including the ramifications
                                                                                                      of the use of such alternative
                                                                                                      disclosure and treatments,
                                                                                                      and the treatment preferred
                                                                                                      by the external auditor;
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | other
                                                                                                       material written communications
                                                                                                       between the external auditor
                                                                                                       and management, such as
                                                                                                       any management letter or
                                                                                                       schedule of unadjusted
                                                                                                       differences; and
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iv) | to
                                                                                                      present its conclusions
                                                                                                      with respect to the external
                                                                                                      auditors to the full Board.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (k) | the
                                                                                                       Committee will ensure the
                                                                                                       rotation of partners on
                                                                                                       the audit engagement team
                                                                                                       of the external auditor
                                                                                                       in accordance with applicable
                                                                                                       law. The Committee will
                                                                                                       also periodically consider
                                                                                                       whether, in order to assure
                                                                                                       continuing external auditor
                                                                                                       independence, it is appropriate
                                                                                                       to adopt a policy of rotating
                                                                                                       the external auditing firm
                                                                                                       on a regular basis; and
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (l) | the
                                                                                                       Committee will review and
                                                                                                       evaluate the lead partner
                                                                                                       of the external auditor.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4 | Risk
                                                                                                 Management
| | - | ----------------------------------------------------------------------------------------------------------------



| | (a) | to
                                                                                                       review, discuss and monitor
                                                                                                       Provident's major financial
                                                                                                       risks and risk management
                                                                                                       policies and the steps
                                                                                                       taken by management to
                                                                                                       monitor, assess and control
                                                                                                       those risks; and
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | the
                                                                                                       Committee shall, at least
                                                                                                       annually, report to the
                                                                                                       Board the results of such
                                                                                                       reviews for the purpose
                                                                                                       of assisting the Board
                                                                                                       in identifying the principal
                                                                                                       business risks associated
                                                                                                       with the Corporation's
                                                                                                       business.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5 | Compliance
                                                                                                 and Review of CEO and CFO Certification
                                                                                                 Process
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) | to
                                                                                                       review Provident's financial
                                                                                                       reporting procedures and
                                                                                                       policies to ensure compliance
                                                                                                       with all legal and regulatory
                                                                                                       requirements and to investigate
                                                                                                       any non-adherence to those
                                                                                                       procedures and policies;
                                                                                                       and
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



A-5







| | (b) | in
                                                                                                       connection with its review
                                                                                                       of the annual audited financial
                                                                                                       statements and interim
                                                                                                       financial statements, the
                                                                                                       Committee will also review
                                                                                                       the process for the CEO
                                                                                                       and CFO certifications
                                                                                                       with respect to the financial
                                                                                                       statements and Provident's
                                                                                                       disclosure and internal
                                                                                                       controls, including any
                                                                                                       material deficiencies or
                                                                                                       changes in those controls.
                                                                                                       The Committee will review
                                                                                                       with the CEO, the CFO and
                                                                                                       the external auditor: (i)
                                                                                                       all significant deficiencies
                                                                                                       and material weaknesses
                                                                                                       in the design or operation
                                                                                                       of Provident's internal
                                                                                                       control over financial
                                                                                                       reporting which could adversely
                                                                                                       affect Provident's ability
                                                                                                       to record, process, summarize
                                                                                                       and report financial information
                                                                                                       required to be disclosed
                                                                                                       by the Corporation in the
                                                                                                       reports that it files or
                                                                                                       submits under the United
                                                                                                       States Securities Exchange
                                                                                                       Act of 1934, as amended,
                                                                                                       within the required time
                                                                                                       periods, and (ii) any fraud,
                                                                                                       whether or not material,
                                                                                                       that involves management
                                                                                                       of Provident or other employees
                                                                                                       who have a significant
                                                                                                       role in Provident's internal
                                                                                                       control over financial
                                                                                                       reporting.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Other
Matters



| | 1 | The
                                                                                                 Committee shall review and reassess
                                                                                                 the adequacy of this mandate
                                                                                                 at least annually and otherwise
                                                                                                 as it deems appropriate and recommend
                                                                                                 changes to the Board.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2 | The
                                                                                                 performance of the Committee
                                                                                                 shall be evaluated annually by
                                                                                                 the Board against criteria defined
                                                                                                 in the Committee and Board mandates.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3 | The
                                                                                                 Committee may, at the request
                                                                                                 of the Board or on its own initiative,
                                                                                                 investigate such other matters
                                                                                                 as it considers necessary or
                                                                                                 appropriate in the circumstances,
                                                                                                 including, without limitation,
                                                                                                 matters relating to corporate
                                                                                                 governance, compensation and
                                                                                                 director nominations.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4 | The
                                                                                                 Committee may delegate its responsibilities
                                                                                                 to sub-committees of the Committee.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





A-6