----

| PROVIDENT ENERGY TRUST                                   |   |         |       |   |         |   |
|----------------------------------------------------------|--------|--------------|------------|--------|--------------|--------|
| CONSOLIDATED BALANCE SHEETS                              |   |         |       |   |         |   |
| Canadian dollars (000s)                                  |   |         |       |   |         |   |
|                                                     |   | As at        |       |   | As at        |   |
|                                                     |   | December 31, |       |   | December 31, |   |
|                                                     |   | 2010         |       |   | 2009         |   |
| Assets                                                   |   |         |       |   |         |   |
| Current assets                                           |   |         |       |   |         |   |
| Cash and cash equivalents                                |   | $            | 4,400      |   |         | $      | 7,187 |   |
| Accounts receivable                                      |   |         | 206,631    |   |         |   | 216,786 |   |
| Petroleum product inventory                              |   |         | 83,868     |   |         |   | 37,261 |   |
| Prepaid expenses and other current assets                |   |         | 2,539      |   |         |   | 4,803 |   |
| Financial derivative instruments (note 13)               |   |         | 487        |   |         |   | 5,314 |   |
|                                                     |   |         | 297,925    |   |         |   | 271,351 |   |
|                                                     |   |         |       |   |         |   |   |   |
| Investments                                              |   |         | -          |   |         |   | 18,733 |   |
| Property, plant and equipment (note 5)                   |   |         | 832,250    |   |         |   | 2,025,044 |   |
| Intangible assets (note 6)                               |   |         | 118,845    |   |         |   | 132,478 |   |
| Goodwill (note 7)                                        |   |         | 100,409    |   |         |   | 100,409 |   |
| Future income taxes (note 12)                            |   |         | 50,375     |   |         |   | - |   |
|                                                     |   | $            | 1,399,804  |   |         | $      | 2,548,015 |   |
| Liabilities                                              |   |         |       |   |         |   |   |   |
| Current liabilities                                      |   |         |       |   |         |   |   |   |
| Accounts payable and accrued liabilities                 |   | $            | 227,944    |   |         | $      | 221,417 |   |
| Cash distributions payable                               |   |         | 12,646     |   |         |   | 13,468 |   |
| Current portion of convertible debentures (note 8)       |   |         | 148,981    |   |         |   | - |   |
| Financial derivative instruments (note 13)               |   |         | 37,849     |   |         |   | 86,441 |   |
|                                                     |   |         | 427,420    |   |         |   | 321,326 |   |
|                                                     |   |         |       |   |         |   |   |   |
| Long-term debt - revolving term credit facility (note 8) |   |         | 72,882     |   |         |   | 264,776 |   |
| Long-term debt - convertible debentures (note 8)         |   |         | 251,891    |   |         |   | 240,486 |   |
| Asset retirement obligation (note 9)                     |   |         | 22,057     |   |         |   | 61,464 |   |
| Long-term financial derivative instruments (note 13)     |   |         | 19,601     |   |         |   | 103,403 |   |
| Other long-term liabilities (notes 9 and 11)             |   |         | 18,735     |   |         |   | 12,496 |   |
| Future income taxes (note 12)                            |   |         | -          |   |         |   | 162,665 |   |
| Commitments (note 18)                                    |   |         |       |   |         |   |   |   |
|                                                     |   |         |       |   |         |   |   |   |
|                                                     |   |         |       |   |         |   |   |   |
| Unitholders’ equity                                |   |         |       |   |         |   |   |   |
| Unitholders’ contributions (note 10)               |   |         | 2,866,268  |   |         |   | 2,834,177 |   |
| Convertible debentures equity component                  |   |         | 25,092     |   |         |   | 15,940 |   |
| Contributed surplus (note 10)                            |   |         | 2,953      |   |         |   | 2,953 |   |
| Accumulated income                                       |   |         | 1,919      |   |         |   | 337,014 |   |
| Accumulated distributions (note 17)                      |   |         | (2,309,014 | )      |         |   | (1,808,685 | ) |
|                                                     |   |         | 587,218    |   |         |   | 1,381,399 |   |
|                                                     |   | $            | 1,399,804  |   |         | $      | 2,548,015 |   |

| John B. Zaozirny, Q.C. | Grant D. Billing, CA |
|------------------------|----------------------|
| Director               | Director             |

----

|                                                                            |   | Year ended   |      |
|---------------------------------------------------------------------------------|--------|--------------|-----------|
|                                                                            |   | December 31, |      |
|                                                                            |   | 2010         |      |   | 2009 |   |
| Revenue                                                                         |   |         |      |   |   |   |
| Product sales and service revenue (note 15)                                     |   | $            | 1,746,557 |   |   | $ | 1,630,491 |   |
| Realized loss on buyout of financial derivative instruments (note 13)           |   |         | (199,059  | ) |   |   | - |   |
| Realized loss on financial derivative instruments                               |   |         | (50,865   | ) |   |   | (66,743 | ) |
| Unrealized gain offsetting buyout of financial derivative instruments (note 13) |   |         | 177,723   |   |   |   | - |   |
| Unrealized loss on financial derivative instruments                             |   |         | (52,599   | ) |   |   | (111,610 | ) |
|                                                                            |   |         | 1,621,757 |   |   |   | 1,452,138 |   |
| Expenses                                                                        |   |         |      |   |   |   |   |   |
| Cost of goods sold                                                              |   |         | 1,397,901 |   |   |   | 1,305,191 |   |
| Production, operating and maintenance                                           |   |         | 18,504    |   |   |   | 14,532 |   |
| Transportation                                                                  |   |         | 18,442    |   |   |   | 23,985 |   |
| Depreciation and accretion                                                      |   |         | 45,718    |   |   |   | 53,164 |   |
| General and administrative (note 11)                                            |   |         | 36,671    |   |   |   | 45,323 |   |
| Strategic review and restructuring (note 16)                                    |   |         | 13,782    |   |   |   | 9,255 |   |
| Interest on bank debt                                                           |   |         | 7,302     |   |   |   | 2,853 |   |
| Interest and accretion on convertible debentures                                |   |         | 22,421    |   |   |   | 21,957 |   |
| Gain on sale of assets, foreign exchange and other (note 4)                     |   |         | (3,826    | ) |   |   | 5,897 |   |
|                                                                            |   |         | 1,556,915 |   |   |   | 1,482,157 |   |
| Income (loss) from continuing operations before taxes                           |   |         | 64,842    |   |   |   | (30,019 | ) |
| Current tax (recovery) expense                                                  |   |         | (6,956    | ) |   |   | 225 |   |
| Future income tax recovery (note 12)                                            |   |         | (31,694   | ) |   |   | (35,412 | ) |
|                                                                            |   |         | (38,650   | ) |   |   | (35,187 | ) |
| Net income from continuing operations                                           |   |         | 103,492   |   |   |   | 5,168 |   |
| Net loss from discontinued operations (note 17)                                 |   |         | (438,587  | ) |   |   | (94,188 | ) |
| Net loss for the year                                                           |   | $            | (335,095  | ) |   | $ | (89,020 | ) |
| Accumulated income, beginning of year                                           |   | $            | 337,014   |   |   | $ | 426,034 |   |
| Accumulated income, end of year                                                 |   | $            | 1,919     |   |   | $ | 337,014 |   |
| Net income from continuing operations per unit                                  |   |         |      |   |   |   |   |   |
| - basic                                                                         |   | $            | 0.39      |   |   | $ | 0.02 |   |
| - diluted                                                                       |   | $            | 0.37      |   |   | $ | 0.02 |   |
| Net loss per unit                                                               |   |         |      |   |   |   |   |   |
| - basic                                                                         |   | $            | (1.26     | ) |   | $ | (0.34 | ) |
| - diluted                                                                       |   | $            | (1.18     | ) |   | $ | (0.34 | ) |

----

| PROVIDENT ENERGY TRUST                                                             |   |         |     |   |   |   |
|------------------------------------------------------------------------------------|--------|--------------|----------|--------|--------|--------|
| CONSOLIDATED STATEMENT OF CASH FLOWS                                               |   |         |     |   |   |   |
| Canadian dollars (000s)                                                            |   |         |     |   |   |   |
|                                                                               |   | Year ended   |     |
|                                                                               |   | December 31, |     |
|                                                                               |   | 2010         |     |   | 2009   |   |
| Cash (used for) provided by operating activities                                   |   |         |     |   |   |   |
| Net income for the period from continuing operations                               |   | $            | 103,492  |   |   | $      | 5,168 |   |
| Add (deduct) non-cash items:                                                       |   |         |     |   |   |   |   |   |
| Depreciation and accretion                                                         |   |         | 45,718   |   |   |   | 53,164 |   |
| Non-cash interest expense and other                                                |   |         | 5,429    |   |   |   | 4,660 |   |
| Non-cash unit based compensation expense (note 11)                                 |   |         | 1,280    |   |   |   | 4,569 |   |
| Unrealized gain offsetting buyout of financial derivative    instruments |   |         | (177,723 | )      |   |   | - |   |
| Unrealized loss on financial derivative instruments                                |   |         | 52,599   |   |   |   | 111,610 |   |
| Unrealized foreign exchange (gain) loss and other (note 4)                         |   |         | (3,786   | )      |   |   | 4,095 |   |
| Gain on sale of assets (note 4)                                                    |   |         | (3,300   | )      |   |   | - |   |
| Future income tax recovery                                                         |   |         | (31,694  | )      |   |   | (35,412 | ) |
| Continuing operations                                                              |   |         | (7,985   | )      |   |   | 147,854 |   |
| Discontinued operations                                                            |   |         | (2,436   | )      |   |   | 116,152 |   |
|                                                                               |   |         | (10,421  | )      |   |   | 264,006 |   |
| Site restoration expenditures related to discontinued operations                   |   |         | (2,041   | )      |   |   | (5,399 | ) |
| Change in non-cash operating working capital                                       |   |         | (27,207  | )      |   |   | 45,641 |   |
|                                                                               |   |         | (39,669  | )      |   |   | 304,248 |   |
| Cash used for financing activities                                                 |   |         |     |   |   |   |   |   |
| Issuance of convertible debentures, net of issue costs (note 8)                    |   |         | 164,654  |   |   |   | - |   |
| Decrease in long-term debt                                                         |   |         | (192,380 | )      |   |   | (265,245 | ) |
| Distributions to unitholders                                                       |   |         | (191,639 | )      |   |   | (196,217 | ) |
| Issue of trust units                                                               |   |         | 32,091   |   |   |   | 28,106 |   |
| Change in non-cash financing working capital                                       |   |         | (822     | )      |   |   | (6,620 | ) |
|                                                                               |   |         | (188,096 | )      |   |   | (439,976 | ) |
| Cash provided by investing activities                                              |   |         |     |   |   |   |   |   |
| Capital expenditures                                                               |   |         | (77,959  | )      |   |   | (127,369 | ) |
| Acquisitions                                                                       |   |         | (27,573  | )      |   |   | (18,833 | ) |
| Proceeds on sale of assets                                                         |   |         | 212,131  |   |   |   | 306,345 |   |
| Proceeds on sale of discontinued operations (note 17)                              |   |         | 106,779  |   |   |   | - |   |
| Change in non-cash investing working capital                                       |   |         | 11,600   |   |   |   | (21,857 | ) |
|                                                                               |   |         | 224,978  |   |   |   | 138,286 |   |
| (Decrease) increase in cash and cash equivalents                                   |   |         | (2,787   | )      |   |   | 2,558 |   |
| Cash and cash equivalents, beginning of year                                       |   |         | 7,187    |   |   |   | 4,629 |   |
| Cash and cash equivalents, end of year                                             |   | $            | 4,400    |   |   | $      | 7,187 |   |
|                                                                               |   |         |     |   |   |   |   |   |
| Supplemental disclosure of cash flow information                                   |   |         |     |   |   |   |   |   |
| Cash interest paid including debenture interest                                    |   | $            | 25,448   |   |   | $      | 27,826 |   |
| Cash taxes (received) paid                                                         |   | $            | (2,576   | )      |   | $      | 3,199 |   |

----

| PROVIDENT ENERGY TRUST                                                                             |   |         |       |   |   |   |
|----------------------------------------------------------------------------------------------------|--------|--------------|------------|--------|--------|--------|
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME                                                     |   |         |       |   |   |   |
| AND ACCUMULATED OTHER COMPREHENSIVE INCOME                                                         |   |         |       |   |   |   |
| Canadian dollars (000s)                                                                            |   |         |       |   |   |   |
|                                                                                               |   | Year ended   |       |
|                                                                                               |   | December 31, |       |
|                                                                                               |   | 2010         |       |   | 2009   |   |
| Net loss for the year                                                                              |   | $            | (335,095   | )      |   | $      | (89,020 | ) |
| Other comprehensive income, net of taxes                                                           |   |         |       |   |   |   |   |   |
| Reclassification adjustment of loss on available-for-sale   investment included in net income |   |         | -          |   |   |   | 2,111 |   |
| Unrealized gain on available-for-sale investments (net of taxes)                                   |   |         | -          |   |   |   | 72 |   |
|                                                                                               |   |         | -          |   |   |   | 2,183 |   |
|                                                                                               |   |         |       |   |   |   |   |   |
| Comprehensive loss                                                                                 |   | $            | (335,095   | )      |   | $      | (86,837 | ) |
|                                                                                               |   |         |       |   |   |   |   |   |
| Accumulated other comprehensive loss, beginning of year                                            |   |         | -          |   |   |   | (2,183 | ) |
| Other comprehensive income                                                                         |   |         | -          |   |   |   | 2,183 |   |
| Accumulated other comprehensive income, end of year                                                |   | $            | -          |   |   | $      | - |   |
| Accumulated income, end of year                                                                    |   |         | 1,919      |   |   |   | 337,014 |   |
| Accumulated distributions, end of year                                                             |   |         | (2,309,014 | )      |   |   | (1,808,685 | ) |
| Retained earnings (deficit), end of year                                                           |   |         | (2,307,095 | )      |   |   | (1,471,671 | ) |
| Accumulated other comprehensive income, end of year                                                |   |         | -          |   |   |   | - |   |
| Total retained earnings (deficit) and accumulated other   comprehensive income, end of year   |   | $            | (2,307,095 | )      |   | $      | (1,471,671 | ) |

----

| 1.   | Structure of the Trust |
|----------------|------------------------|

| 2.   | Significant accounting policies |
|----------------|---------------------------------|

| i)   | Principles of consolidation |
|----------------|-----------------------------|

| ii)   | Financial instruments |
|-----------------|-----------------------|

| iii)   | Cash and cash equivalents |
|------------------|---------------------------|

----

| iv)   | Inventory |
|-----------------|-----------|

| v)   | Property, plant & equipment and intangible assets |
|----------------|-------------------------------------------------------|

| a)   | Depletion, depreciation and accretion |
|----------------|---------------------------------------|

| b)   | Impairment |
|----------------|------------|

| vi)   | Joint venture |
|-----------------|---------------|

| vii)   | Goodwill |
|------------------|----------|

----

| viii)   | Asset retirement obligation |
|-------------------|-----------------------------|

| ix)   | Unit based compensation |
|-----------------|-------------------------|

| x)   | Trust unit calculations |
|----------------|-------------------------|

| xi)   | Income taxes |
|-----------------|--------------|

| xii)   | Revenue recognition |
|------------------|---------------------|

| xiii)   | Foreign currency translation |
|-------------------|------------------------------|

----

| xiv)   | Use of estimates |
|------------------|------------------|

| 3.   | Changes in accounting policies and practices |
|----------------|----------------------------------------------|

----

| 4.   | Gain on sale of assets, foreign exchange and other |
|----------------|----------------------------------------------------|

|                                               |   |                    |   |   |   |   |
|----------------------------------------------------|--------|-------------------------|--------|--------|--------|--------|
| Gain on sale of assets, foreign exchange and other |   | Year ended December 31, |   |
| ($ 000s)                                           |   | 2010                    |   |   | 2009   |   |
| Realized loss on foreign exchange                  |   | $                       | 3,425  |   |   | $      | 1,802 |   |
| Gain on sale of assets                             |   |                    | (3,300 | )      |   |   | - |   |
| Other                                              |   |                    | (165   | )      |   |   | - |   |
|                                               |   |                    | (40    | )      |   |   | 1,802 |   |
| Unrealized loss on foreign exchange                |   |                    | 808    |   |   |   | 4,095 |   |
| Gain on termination of agreement                   |   |                    | (4,900 | )      |   |   | - |   |
| Other                                              |   |                    | 306    |   |   |   | - |   |
|                                               |   |                    | (3,786 | )      |   |   | 4,095 |   |
| Total                                              |   | $                       | (3,826 | )      |   | $      | 5,897 |   |

| 5.   | Property, plant and equipment |
|----------------|-------------------------------|

| As at December 31, 2010        |   | Cost   |      |   | Accumulated depreciation               |   | Net book value |   |
|--------------------------------|--------|--------|-----------|--------|----------------------------------------|--------|---------------------|--------|
| Midstream assets               |   | $      | 959,604   |   |                                   | $      | 138,863             |   |   | $ | 820,741 |   |
| Office equipment               |   |   | 45,491    |   |                                   |   | 33,982              |   |   |   | 11,509 |   |
| Total                          |   | $      | 1,005,095 |   |                                   | $      | 172,845             |   |   | $ | 832,250 |   |
|                      |   |   |      |   |                                   |   |                |   |   |   |   |   |
| As at December 31, 2009        |   | Cost   |      |   | Accumulated depletion and depreciation |   | Net book value |   |
| Oil and natural gas properties |   | $      | 2,893,330 |   |                                   | $      | 1,657,694           |   |   | $ | 1,235,636 |   |
| Midstream assets               |   |   | 883,840   |   |                                   |   | 113,820             |   |   |   | 770,020 |   |
| Office equipment               |   |   | 47,174    |   |                                   |   | 27,786              |   |   |   | 19,388 |   |
| Total                          |   | $      | 3,824,344 |   |                                   | $      | 1,799,300           |   |   | $ | 2,025,044 |   |

----

| 6.   | Intangible assets |
|----------------|-------------------|

| As at December 31, 2010                        |   | Cost   |    |   | Accumulated amortization      |   | Net Book value |   |
|------------------------------------------------|--------|--------|---------|--------|-------------------------------|--------|---------------------|--------|
|                                           |   |   |    |   |                          |   |                |   |   |
| Midstream contracts and customer relationships |   | $      | 183,100 |   |                          |   | 75,062              |   |   | $ | 108,038 |   |
| Other intangible assets - Midstream            |   |   | 16,308  |   |                          |   | 5,501               |   |   |   | 10,807 |   |
| Total                                          |   | $      | 199,408 |   |                          | $      | 80,563              |   |   | $ | 118,845 |   |
|                                           |   |   |    |   |                          |   |           |   |   |   |   |   |
| As at December 31, 2009                        |   | Cost   |    |   | Accumulated amortization |   | Net Book value |   |
|                                           |   |   |    |   |                          |   |                |   |   |   |   |   |
| Midstream contracts and customer relationships |   | $      | 183,100 |   |                          |   | 61,862              |   |   | $ | 121,238 |   |
| Other intangible assets - Midstream            |   |   | 16,308  |   |                          |   | 5,068               |   |   |   | 11,240 |   |
| Total                                          |   | $      | 199,408 |   |                          | $      | 66,930              |   |   | $ | 132,478 |   |

| 7.   | Goodwill |
|----------------|----------|

| 8.   | Long-term debt  |
|----------------|----------------------|

|                                      |   | As at             |    |   | As at             |   |
|-------------------------------------------|--------|-------------------|---------|--------|-------------------|--------|
|                                      |   | December 31, 2010 |    |   | December 31, 2009 |   |
| Revolving term credit facility            |   | $                 | 72,882  |   |              | $      | 264,776 |   |
| Convertible debentures                    |   |              | 251,891 |   |              |   | 240,486 |   |
| Current portion of convertible debentures |   |              | 148,981 |   |              |   | - |   |
|                                      |   |              | 400,872 |   |              |   | 240,486 |   |
| Total                                     |   | $                 | 473,754 |   |              | $      | 505,262 |   |

| i)   | Revolving term credit facility |
|----------------|--------------------------------|

----

| ii)   | Convertible debentures |
|-----------------|------------------------|

|                                                                                                                                |   | As at              |    |       | As at             |               |    |       |          |   |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|---------|------------|-------------------|--------------------|---------|------------|---------------|--------|
| Convertible Debentures                                                                                                              |   | December 31, 2010  |    |       | December 31, 2009 |               |    |       |          |   |
| ($000s except conversion pricing)                                                                                                   |   | Carrying Value (1) |    | Face Value |              | Carrying Value (1) |    | Face Value | Maturity Date |   | Conversion Price per unit (2) |   |
| 6.5% Convertible Debentures                                                                                                         |   | $                  | 148,981 |       |              | $                  | 149,980 |       |          | $      | 146,028 |   |   | $ | 149,980 |   | April 30, 2011 |   | $ | 12.40 |   |
| 6.5% Convertible Debentures                                                                                                         |   |               | 96,084  |       |              |               | 98,999  |       |          |   | 94,458 |   |   |   | 98,999 |   | Aug. 31, 2012 |   |   | 11.56 |   |
| 5.75% Convertible Debentures                                                                                                        |   |               | 155,807 |       |              |               | 172,500 |       |          |   |   |   |   |   |   |   | Dec. 31, 2017 |   |   | 10.60 |   |
|                                                                                                                                |   | $                  | 400,872 |       |              | $                  | 421,479 |       |          | $      | 240,486 |   |   | $ | 248,979 |   |   |   |   |   |   |
| (1) Excluding equity component of convertible debentures.                                                                           |   |               |    |       |              |               |    |       |          |   |
| (2) The debentures may be converted into trust units at the option of the holder of the debenture at the conversion price per unit. |   |

----

| 9.   | Asset retirement obligation |
|----------------|-----------------------------|

|                                                                                                                                                                             |   | As at        |    |   | As at        |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|--------------|--------|
|                                                                                                                                                                             |   | December 31, |    |   | December 31, |   |
| ($ 000s)                                                                                                                                                                         |   | 2010         |    |   | 2009         |   |
| Carrying amount, beginning of year                                                                                                                                               |   | $            | 61,464  |   |         | $      | 59,432 |   |
| Acquisitions                                                                                                                                                                     |   |         | 1,442   |   |         |   | 875 |   |
| Dispositions                                                                                                                                                                     |   |         | (32,016 | )      |         |   | (9,550 | ) |
| Change in estimate                                                                                                                                                               |   |         | -       |   |         |   | 10,992 |   |
| Increase in liabilities incurred during the period                                                                                                                               |   |         | 220     |   |         |   | 856 |   |
| Settlement of liabilities during the period - discontinued operations                                                                                                            |   |         | (2,041  | )      |         |   | (5,399 | ) |
| Transfer to other long-term liabilities (1)                                                                                                                                      |   |         | (9,928  | )      |         |   | - |   |
| Accretion of liability - continuing operations                                                                                                                                   |   |         | 1,416   |   |         |   | 1,126 |   |
| Accretion of liability - discontinued operations                                                                                                                                 |   |         | 1,500   |   |         |   | 3,132 |   |
| Carrying amount, end of year                                                                                                                                                     |   | $            | 22,057  |   |         | $      | 61,464 |   |
| (1) Commencing on June 30, 2010, obligations associated with residual Upstream properties million have been classified as other long-term liabilities on the balance sheet. |   |

| 10.   | Unitholders’ contributions |
|-----------------|----------------------------------|

|                                                        |   | Year ended December 31, |        |
|-------------------------------------------------------------|--------|-------------------------|-------------|
|                                                        |   | 2010                    |        |   | 2009 |   |
| Trust Units                                                 |   | Number of units         |        | Amount (000s) |   | Number of units |   | Amount (000s) |   |
| Balance at beginning of year                                |   |                    | 264,336,636 |   |   | $ | 2,834,177 |   |   |   | 259,087,789 |   |   | $ | 2,806,071 |   |
| Issued pursuant to the distribution reinvestment plan       |   |                    | 4,002,565   |   |   |   | 28,635 |   |   |   | 4,913,799 |   |   |   | 25,732 |   |
| To be issued pursuant to the distribution reinvestment plan |   |                    | 426,291     |   |   |   | 3,456 |   |   |   | 335,048 |   |   |   | 2,374 |   |
| Balance at end of year                                      |   |                    | 268,765,492 |   |   | $ | 2,866,268 |   |   |   | 264,336,636 |   |   | $ | 2,834,177 |   |

----

|                                                                                                     | Year ended December 31, |   |
|----------------------------------------------------------------------------------------------------------|-------------------------|--------|
|                                                                                                     |                    | 2010   |   |   | 2009 |   |
| Contributed surplus, beginning of the year                                                               |                    | $      | 2,953 |   |   | $ | 1,695 |   |
| Transferred from convertible debentures equity component    on maturity (see note 8) |                    |   | - |   |   |   | 1,258 |   |
| Contributed surplus, end of year                                                                         |                    | $      | 2,953 |   |   | $ | 2,953 |   |

| 11.   | Unit based compensation |
|-----------------|-------------------------|

|                                                                      |   | Year ended December 31, |   |
|---------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                      |   | 2010                    |   |   | 2009 |   |
| Cash general and administrative                                           |   | $                       | 6,880  |   |   | $ | 5,047 |   |
| Non-cash unit based compensation (included in general and administrative) |   |                    | 1,280  |   |   |   | 4,569 |   |
| Production, operating and maintenance expense                             |   |                    | 288    |   |   |   | 790 |   |
|                                                                      |   | $                       | 8,448  |   |   | $ | 10,406 |   |

|                                      |   | RTUs   |      |   | PTUs   |   |
|-------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Opening balance January 1, 2009           |   |   | 1,139,835 |   |   |   | 3,400,330 |   |
| Grants                                    |   |   | 911,263   |   |   |   | 1,813,312 |   |
| Reinvested through notional distributions |   |   | 218,283   |   |   |   | 569,119 |   |
| Exercised                                 |   |   | (530,556  | )      |   |   | (1,602,482 | ) |
| Forfeited                                 |   |   | (162,702  | )      |   |   | (221,157 | ) |
| Ending balance December 31, 2009          |   |   | 1,576,123 |   |   |   | 3,959,122 |   |
| Grants                                    |   |   | 672,155   |   |   |   | 1,385,636 |   |
| Reinvested through notional distributions |   |   | 105,956   |   |   |   | 328,868 |   |
| Exercised                                 |   |   | (857,751  | )      |   |   | (2,873,270 | ) |
| Forfeited                                 |   |   | (321,475  | )      |   |   | (356,775 | ) |
| Ending balance December 31, 2010          |   |   | 1,175,008 |   |   |   | 2,443,581 |   |

----

| 12.   | Income taxes |
|-----------------|--------------|

|                                                 |   | As at        |     |   | As at        |   |
|------------------------------------------------------|--------|--------------|----------|--------|--------------|--------|
|                                                 |   | December 31, |     |   | December 31, |   |
|                                                 |   | 2010         |     |   | 2009         |   |
| Property, plant and equipment in excess of tax value |   | $            | (132,602 | )      |         | $      | (343,095 | ) |
| Asset retirement obligation                          |   |         | 7,696    |   |         |   | 15,502 |   |
| Financial derivative instruments                     |   |         | 18,454   |   |         |   | 55,240 |   |
| Non-capital losses                                   |   |         | 145,153  |   |         |   | 105,811 |   |
| Capital losses                                       |   |         | -        |   |         |   | 49,114 |   |
| Other                                                |   |         | 21,817   |   |         |   | 15,863 |   |
| Valuation allowance                                  |   |         | (10,143  | )      |         |   | (61,100 | ) |
|                                                 |   | $            | 50,375   |   |         | $      | (162,665 | ) |

|                                                               |   |                    |    |   |   |   |
|--------------------------------------------------------------------|--------|-------------------------|---------|--------|--------|--------|
|                                                               |   | Year ended December 31, |    |
|                                                               |   | 2010                    |    |   | 2009   |   |
| Expected income tax expense (recovery), from continuing operations |   | $                       | 18,175  |   |   | $      | (8,859 | ) |
| Increase (decrease) resulting from:                                |   |                    |    |   |   |   |   |   |
| Income of the Trust                                                |   |                    | (53,667 | )      |   |   | (37,278 | ) |
| Withholding tax                                                    |   |                    | -       |   |   |   | 1,172 |   |
| Change in future tax asset held in the Trust                       |   |                    | 1,668   |   |   |   | 2,734 |   |
| Other                                                              |   |                    | (4,826  | )      |   |   | 6,414 |   |
| Income tax recovery, from continuing operations                    |   | $                       | (38,650 | )      |   | $      | (35,817 | ) |

| 13.   | Financial instruments |
|-----------------|-----------------------|

----

| ·   | Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities; |
|--------------------|-------------------------------------------------------------------------------------------------|

| ·   | Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------|

| ·   | Level 3 – Inputs that are not based on observable market data. |
|--------------------|----------------------------------------------------------------------|

----

| As at December 31, 2010                                                         |   | Held for Trading |   |   | Loans and Receivables |   |    | Other Liabilities |   |   | Total Carrying Value |   |
|---------------------------------------------------------------------------------|--------|------------------|--------|--------|-----------------------|--------|---------|-------------------|--------|--------|----------------------|--------|
| Assets                                                                          |   |             |   |   |                  |   |    |              |   |   |                 |   |
| Cash and cash equivalents                                                       |   | $                | 4,400  |   |                  | $      | -       |              |   | $      | -                    |   |   | $ | 4,400 |   |
| Accounts receivable                                                             |   |             | -      |   |                  |   | 206,631 |              |   |   | -                    |   |   |   | 206,631 |   |
| Financial derivative instruments    - current assets        |   |             | 487    |   |                  |   | -       |              |   |   | -                    |   |   |   | 487 |   |
|                                                                            |   | $                | 4,887  |   |                  | $      | 206,631 |              |   | $      | -                    |   |   | $ | 211,518 |   |
|                                                                            |   |             |   |   |                  |   |    |              |   |   |                 |   |   |   |   |   |
| Liabilities                                                                     |   |             |   |   |                  |   |    |              |   |   |                 |   |   |   |   |   |
| Accounts payable and accrued liabilities                                        |   | $                | -      |   |                  | $      | -       |              |   | $      | 227,944              |   |   | $ | 227,944 |   |
| Cash distributions payable                                                      |   |             | -      |   |                  |   | -       |              |   |   | 12,646               |   |   |   | 12,646 |   |
| Current portion of convertible debentures                                       |   |             | -      |   |                  |   | -       |              |   |   | 148,981              |   |   |   | 148,981 |   |
| Financial derivative instruments    - current liabilities   |   |             | 37,849 |   |                  |   | -       |              |   |   | -                    |   |   |   | 37,849 |   |
| Long-term debt - revolving term credit facilities                               |   |             | -      |   |                  |   | -       |              |   |   | 72,882               |   |   |   | 72,882 |   |
| Long-term debt - convertible debentures                                         |   |             | -      |   |                  |   | -       |              |   |   | 251,891              |   |   |   | 251,891 |   |
| Financial derivative instruments    - long-term liabilities |   |             | 19,601 |   |                  |   | -       |              |   |   | -                    |   |   |   | 19,601 |   |
| Other long-term liabilities                                                     |   |             | -      |   |                  |   | -       |              |   |   | 18,735               |   |   |   | 18,735 |   |
|                                                                            |   | $                | 57,450 |   |                  | $      | -       |              |   | $      | 733,079              |   |   | $ | 790,529 |   |

| As at December 31, 2009                                                          |   | Held for Trading |    |   | Available for Sale |   |   | Loans and Receivables |   |   | Other Liabilities |   |   | Total Carrying Value |    |
|----------------------------------------------------------------------------------|--------|------------------|---------|--------|-------------------------|--------|--------|----------------------------|--------|--------|------------------------|--------|--------|---------------------------|---------|
| Assets                                                                           |   |             |    |   |                    |   |   |                       |   |   |                   |   |   |                      |    |
| Cash and cash equivalents                                                        |   | $                | 7,187   |   |                    | $      | -      |                       |   | $      | -                      |   |   | $                         | -       |   |   | $ | 7,187 |   |
| Accounts receivable                                                              |   |             | -       |   |                    |   | -      |                       |   |   | 216,786                |   |   |                      | -       |   |   |   | 216,786 |   |
| Financial derivative instruments    - current assets         |   |             | 5,314   |   |                    |   | -      |                       |   |   | -                      |   |   |                      | -       |   |   |   | 5,314 |   |
| Investments and other long-term assets                                           |   |             | -       |   |                    |   | 18,733 |                       |   |   | -                      |   |   |                      | -       |   |   |   | 18,733 |   |
|                                                                             |   | $                | 12,501  |   |                    | $      | 18,733 |                       |   | $      | 216,786                |   |   | $                         | -       |   |   | $ | 248,020 |   |
|                                                                             |   |             |    |   |                    |   |   |                       |   |   |                   |   |   |                      |    |   |   |   |   |   |
| Liabilities                                                                      |   |             |    |   |                    |   |   |                       |   |   |                   |   |   |                      |    |   |   |   |   |   |
| Accounts payable and accrued liabilities                                         |   | $                | -       |   |                    | $      | -      |                       |   | $      | -                      |   |   | $                         | 221,417 |   |   | $ | 221,417 |   |
| Cash distributions payable                                                       |   |             | -       |   |                    |   | -      |                       |   |   | -                      |   |   |                      | 13,468  |   |   |   | 13,468 |   |
| Financial derivative instruments    - current liabilities    |   |             | 86,441  |   |                    |   | -      |                       |   |   | -                      |   |   |                      | -       |   |   |   | 86,441 |   |
| Long-term debt - revolving term credit facilities                                |   |             | -       |   |                    |   | -      |                       |   |   | -                      |   |   |                      | 264,776 |   |   |   | 264,776 |   |
| Long-term debt - convertible debentures                                          |   |             | -       |   |                    |   | -      |                       |   |   | -                      |   |   |                      | 240,486 |   |   |   | 240,486 |   |
| Financial derivative instruments    - long -term liabilities |   |             | 103,403 |   |                    |   | -      |                       |   |   | -                      |   |   |                      | -       |   |   |   | 103,403 |   |
| Other long-term liabilities                                                      |   |             | -       |   |                    |   | -      |                       |   |   | -                      |   |   |                      | 12,496  |   |   |   | 12,496 |   |
|                                                                             |   | $                | 189,844 |   |                    | $      | -      |                       |   | $      | -                      |   |   | $                         | 752,643 |   |   | $ | 942,487 |   |

----

|                             |   | As at December 31, |   |   | As at December 31, |   |
|----------------------------------|--------|--------------------|--------|--------|--------------------|--------|
| ($ 000s)                         |   | 2010               |   |   | 2009               |   |
| Provident Upstream               |   | $                  | -      |   |               | $      | 2,438 |   |
| Provident Midstream              |   |               |   |   |               |   |   |   |
| Crude oil                        |   |               | 28,313 |   |               |   | 103,022 |   |
| Natural gas                      |   |               | 19,102 |   |               |   | 79,847 |   |
| NGL's (includes propane, butane) |   |               | 10,363 |   |               |   | (330 | ) |
| Foreign exchange                 |   |               | (28    | )      |               |   | (623 | ) |
| Electricity                      |   |               | (421   | )      |               |   | (26 | ) |
| Interest                         |   |               | (366   | )      |               |   | 202 |   |
| Total                            |   | $                  | 56,963 |   |               | $      | 184,530 |   |

| a)   | Price risk |
|----------------|------------|

| b)   | Currency risk |
|----------------|---------------|

----

| c)   | Interest rate risk |
|----------------|--------------------|

| ($ 000s) As at December 31, 2010                   |                           |   | + Change |   |   | - Change |   |
|----------------------------------------------------|--------------------------------|--------|----------|--------|--------|----------|--------|
|                                               |                           |   |     |   |   |     |   |
| Frac spread related                                |                           |   |     |   |   |     |   |
| Crude Oil                                          | (WTI +/- $5.00 per bbl)        |   | $        | (9,964 | )      |     | $      | 9,892 |   |
| Natural Gas                                        | (AECO +/- $1.00 per gj)        |   |     | 22,264 |   |     |   | (22,272 | ) |
| NGL's (includes propane, butane)                   | (Belvieu +/- US $0.10 per gal) |   |     | (9,160 | )      |     |   | 9,330 |   |
| Foreign Exchange ($U.S. vs $Cdn)                   | (FX rate +/- $ 0.05)           |   |     | (2,839 | )      |     |   | 2,840 |   |
|                                               |                           |   |     |   |   |     |   |   |   |
| Inventory, margin and other                        |                           |   |     |   |   |     |   |   |   |
| Crude Oil                                          | (WTI +/- $5.00 per bbl)        |   |     | (5,506 | )      |     |   | 5,509 |   |
| NGL's (includes propane, butane, natural gasoline) | (Belvieu +/- US $0.10 per gal) |   |     | 2,480  |   |     |   | (2,482 | ) |
| Electricity                                        | (AESO +/- $5.00 per MW/h)      |   |     | 435    |   |     |   | (435 | ) |
|                                               |                           |   |     |   |   |     |   |   |   |
| Interest Rate                                      | (Rate +/- 50 basis points)     |   | $        | 239    |   |     | $      | (239 | ) |
|                                               |                           |   |     |   |   |     |   |   |   |

| ($ 000s) As at December 31, 2009                   |                           |   | + Change |    |   | - Change |   |
|----------------------------------------------------|--------------------------------|--------|----------|---------|--------|----------|--------|
| Provident Upstream                                 |                           |   |     |    |   |     |   |
| Crude Oil                                          | (WTI +/- $10.00 per bbl)       |   | $        | (259    | )      |     | $      | 490 |   |
| Natural Gas                                        | (AECO +/- $1.00 per gj)        |   |     | (1,326  | )      |     |   | 2,915 |   |
| Foreign exchange                                   | (FX rate +/- $0.01)            |   |     | (202    | )      |     |   | 203 |   |
|                                               |                           |   |     |    |   |     |   |   |   |
| Provident Midstream                                |                           |   |     |    |   |     |   |   |   |
| Frac spread related                                |                           |   |     |    |   |     |   |   |   |
| Crude Oil                                          | (WTI +/- $10.00 per bbl)       |   | $        | (74,887 | )      |     | $      | 75,054 |   |
| Natural Gas                                        | (AECO +/- $1.00 per gj)        |   |     | 46,731  |   |     |   | (46,565 | ) |
| NGL's (includes propane, butane)                   | (Belvieu +/- US $0.15 per gal) |   |     | (1,488  | )      |     |   | 1,487 |   |
| Foreign Exchange ($U.S. vs $Cdn)                   | (FX rate +/- $ 0.01)           |   |     | (1,386  | )      |     |   | 1,385 |   |
|                                               |                           |   |     |    |   |     |   |   |   |
| Inventory, margin and other                        |                           |   |     |    |   |     |   |   |   |
| Crude Oil                                          | (WTI +/- $10.00 per bbl)       |   |     | (4,389  | )      |     |   | 4,388 |   |
| NGL's (includes propane, butane, natural gasoline) | (Belvieu +/- US $0.15 per gal) |   |     | 2,633   |   |     |   | (2,632 | ) |
| Electricity                                        | (AESO +/- $5.00 per MW/h       |   |     | 437     |   |     |   | (437 | ) |
|                                               |                           |   |     |    |   |     |   |   |   |
| Corporate                                          |                           |   |     |    |   |     |   |   |   |
| Interest Rate                                      | (Rate +/- 50 basis points)     |   | $        | 1,765   |   |     | $      | (1,765 | ) |

----

| As at December 31, 2010                                                                                          |   | Payment due by period |    |
|------------------------------------------------------------------------------------------------------------------|--------|-----------------------|---------|
| ($ 000s)                                                                                                         |   | Total                 |    |   | Less than1 year |   | 1 to 3 years |   |   | 3 to 5 years |   |   | More than 5 years |   |
| Accounts payable and accrued liabilities                                                                         |   | $                     | 227,944 |   |   | $ | 227,944 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Cash distributions payable                                                                                       |   |                  | 12,646  |   |   |   | 12,646 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Financial derivative instruments - current                                                                       |   |                  | 37,849  |   |   |   | 37,849 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Long-term debt - revolving term credit facilities (1) (3)                                                        |   |                  | 83,557  |   |   |   | 3,096 |   |   |   | 80,461 |   |   |   | - |   |   |   | - |   |
| Long-term debt - convertible debentures (2) (3)                                                                  |   |                  | 504,885 |   |   |   | 169,583 |   |   |   | 123,126 |   |   |   | 19,838 |   |   |   | 192,338 |   |
| Long-term financial derivative instruments                                                                       |   |                  | 19,601  |   |   |   | - |   |   |   | 19,601 |   |   |   | - |   |   |   | - |   |
| Other long-term liabilities (3)                                                                                  |   |                  | 21,136  |   |   |   | 1,736 |   |   |   | 13,541 |   |   |   | 2,433 |   |   |   | 3,426 |   |
| Total                                                                                                            |   | $                     | 907,618 |   |   | $ | 452,854 |   |   | $ | 236,729 |   |   | $ | 22,271 |   |   | $ | 195,764 |   |
| (1) The terms of the Canadian credit facility have a revolving three year period expiring on June 28, 2013. |   |                  |    |   |   |
| (2)  Includes current portion of convertible debentures.                                               |   |                  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (3) Includes associated interest or accretion and principal payments.                                       |   |                  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| Realized loss on financial derivative instruments                                                                                                                                                                       |   | Year ended December 31, |    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                                                                                                                                                                    |   | 2010                    |    |   |   |   |   | 2009 |   |   |   |   |
| ($ 000s except volumes)                                                                                                                                                                                                 |   |                    |    |   | Volume (1) |   |   |   |   |   | Volume (1) |   |
|                                                                                                                                                                                                                    |   |                    |    |   |   |   |   |   |   |   |   |   |
|   Crude oil                                                                                                                                                                                                   |   | $                       | (14,848 | ) |   |   | 2.2 |   |   | $ | 29,007 |   |   |   | 4.1 |   |
|   Natural gas                                                                                                                                                                                                 |   |                    | (29,849 | ) |   |   | 16.9 |   |   |   | (95,188 | ) |   |   | 23.0 |   |
|   NGL's (includes propane, butane)                                                                                                                                                                            |   |                    | (9,454  | ) |   |   | 1.8 |   |   |   | 5,072 |   |   |   | 0.8 |   |
|   Foreign exchange                                                                                                                                                                                            |   |                    | 3,766   |   |   |   |   |   |   |   | (3,505 | ) |   |   |   |   |
|   Electricity                                                                                                                                                                                                 |   |                    | 367     |   |   |   |   |   |   |   | (1,276 | ) |   |   |   |   |
|   Interest rate                                                                                                                                                                                               |   |                    | (847    | ) |   |   |   |   |   |   | (853 | ) |   |   |   |   |
| Realized loss on financial derivative instruments                                                                                                                                                                       |   | $                       | (50,865 | ) |   |   |   |   |   | $ | (66,743 | ) |   |   |   |   |
| (1) The above table represents aggregate net volumes that were bought/sold over the periods. Crude oil and NGL volumes are listed in millions of barrels and natural gas is listed in millions of gigajoules. |   |

| Provident Midstream |             |       |   |
|---------------------|------------------|------------|--------|
|                |             | Volume     |   |   |
| Year                | Product          | (Buy)/Sell | Terms  | Effective Period |
| 2011                | Crude Oil        | 1,000      |   | Bpd | US $84.57 per bbl (4) (11) | January 1 - March 31 |
|                |             | 701        |   | Bpd | US $76.40 per bbl (4) (11) | January 1 - March 31 |
|                |             | 1,944      |   | Bpd | US $83.25 per bbl (4) (12) | January 1 - March 31 |
|                |             | 1,151      |   | Bpd | US $83.18 per bbl (4) (10) | January 1 - December 31 |
|                |             | 1,833      |   | Bpd | US $81.83 per bbl (4) (11) | April 1 - December 31 |
|                |             | 815        |   | Bpd | US $87.13 per bbl (4) (11) | October 1 - December 31 |
|                |             | 1,005      |   | Bpd | Costless Collar US $60.64 floor, US $73.45 ceiling | January 1 - September 30 |
|                |             | 416        |   | Bpd | Participating Swap Cdn $84.38 per bbl (Average    Participation 25% above the floor price) | October 1 - December 31 |
|                |             | 250        |   | Bpd | Participating Swap US $63.00 per bbl (Average    Participation 64% above the floor price) | January 1 - December 31 |
|                | Natural Gas      | (62,630)   |   | Gjpd | Cdn $4.03 per gj (3) | January 1 - December 31 |
|                |             | (2,337)    |   | Gjpd | Participating Swap Cdn $8.28 per gj (Average    Participation 25% below the ceiling price) | October 1 - December 31 |
|                | Propane          | 5,507      |   | Bpd | US $1.0963 per gallon (5) (10) | January 1 - December 31 |
|                |             | 6,722      |   | Bpd | US $1.088 per gallon (5) (12) | January 1 - March 31 |
|                |             | (3,273)    |   | Bpd | US $1.009 per gallon (5) (11) | April 1 - December 31 |
|                | Normal Butane    | (536)      |   | Bpd | US $1.3975 per gallon (6) (11) | January 1 - March 31 |
|                |             | 2,389      |   | Bpd | US $1.39 per gallon (6) (12) | January 1 - March 31 |
|                |             | 2,500      |   | Bpd | US $1.43 per gallon (6) (10) | January 1 - March 31 |
|                | ISO Butane       | (288)      |   | Bpd | US $1.4375 per gallon (7) (11) | January 1 - March 31 |
|                | Natural Gasoline | (1,000)    |   | Bpd | US $1.83 per gallon (8) (11) | January 1 - March 31 |
|                | Electricity      | (10)       |   | MW/hpd | Cdn $45.45 per MW/h (9) | January 1 - December 31 |
|                | Foreign Exchange |       |   | Sell US $479,063 per month @ 0.9725 (13) | January 1 - December 31 |
|                |             |       |   |   | Sell US $980,417 per month @ 1.0805 (13) | January 1 - June 30 |
|                |             |       |   |   | Sell US $3,588,000 per month @ 1.0918 (13) | July 1 - September 30 |

----

| Provident Midstream continued |             |       |
|-------------------------------|------------------|------------|
|                          |             | Volume     |   |   |
| Year                          | Product          | (Buy)/Sell | Terms | Effective Period |
| 2012                          | Crude Oil        | 1,846      |   | Bpd | US $81.83 per bbl (4) (11) | January 1 - March 31 |
|                          |             | 815        |   | Bpd | US $87.60 per bbl (4) (11) | January 1 - March 31 |
|                          |             | 1,445      |   | Bpd | Participating Swap Cdn $85.19 per bbl (Average    Participation 27% above the floor price) | February 1 - December 31 |
|                          |             | 1,352      |   | Bpd | Participating Swap US $72.22 per bbl (Average    Participation 51% above the floor price) | March 1 - December 31 |
|                          | Natural Gas      | (9,578)    |   | Gjpd | Participating Swap Cdn $8.55 per gj (Average    Participation 28% below the ceiling price) | February 1 - December 31 |
|                          | Propane          | (3,297)    |   | Bpd | US $1.0094 per gallon (5) (11) | January 1 - March 31 |
|                          | Foreign Exchange |       |   | Sell US $2,016,783 per month @ 1.0119 (13) | March 1 - March 31 |
|                          |             |       |   |   | Sell US $1,041,721 per month @ 0.9413 (13) | April 1 - October 31 |
|                          |             |       |   |   | Sell US $681,260 per month @ 0.9850 (13) | May 1 - October 31 |
|                          |             |       |   |   | Sell US $1,437,986 per month @ 0.9659 (13) | July 1 - December 31 |
|                          |             |       |   |   | Sell US $1,634,227 per month @ 0.9829 (13) | October 1 - December 31 |
|                          |             |       |   |   | Sell US $1,420,538 per month @ 0.9995 (13) | November 1 - December 31 |
|                          |             |       |   |   |   |   |
| 2013                          | Crude Oil        | 1,250      |   | Bpd | Participating Swap Cdn $84.90 per bbl (Average    Participation 25% above the floor price) | January 1 - March 31 |
|                          |             | 758        |   | Bpd | Participating Swap Cdn $85.62 per bbl (Average    Participation 30% above the floor price) | January 1 - March 31 |
|                          | Natural Gas      | (9,524)    |   | Gjpd | Participating Swap Cdn $8.87 per gj (Average    Participation 22% below the ceiling price) | January 1 - March 31 |
|                          | Foreign Exchange |       |   | Sell US $1,651,990 per month @ 0.9829 (13) | January 1 - January 31 |
|                          |             |       |   |   | Sell US $1,397,250 per month @ 0.9995 (13) | January 1 - March 31 |

| Corporate                                                                                                                                                                                                                                                                             |          |                                            |                   |                                   |                       |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------|-------------------------------------------------|------------------------|----------------------------------------|----------------------------|
|                                                                                                                                                                                                                                                                                  |          | Volume                                          |                   |                                   |                       |
| Year                                                                                                                                                                                                                                                                                  | Product       | (Buy)/Sell                                      |                   | Terms                                  | Effective Period           |
|                                                                                                                                                                                                                                                                                  |          |                                            |                   |                                   |                       |
|                                                                                                                                                                                                                                                                                  | Interest Rate |  $   200,000,000            |   Notional (Cdn$) | Pay Average Fixed rate of 1.1885% (14) | Jan 1 2011 - May 31 2011   |
|                                                                                                                                                                                                                                                                                  |          |  $     50,000,000 |   Notional (Cdn$) | Pay Average Fixed rate of 1.1950% (15) | Jan 1 2011 - May 31 2011   |
|                                                                                                                                                                                                                                                                                  |          |  $   180,000,000            |   Notional (Cdn$) | Pay Average Fixed rate of 1.8770% (14) | June 1 2011 - June 30 2013 |
|                                                                                                                                                                                                                                                                                  |          |                                            |                   |                                   |                       |
| (1)    The above table represents a number of transactions entered into over an extended period of time.                                                                                                                                                          |
| (2)    The above table excludes transactions noted in the April 19, 2010 press release that were executed to buyout fixed price crude oil & natural gas swaps.                                                                                                |
| (3)    Natural gas contracts are settled against AECO monthly index.                                                                                                                                                                                              |          |
| (4)    Crude Oil contracts are settled against NYMEX WTI calendar average.                                                                                                                                                                                        |          |
| (5)    Propane contracts are settled against Belvieu C3 TET.                                                                                                                                                                                                      |          |
| (6)    Normal Butane contracts are settled against Belvieu NC4 NON-TET & Belvieu NC4 TET.                                                                                                                                                                     |
| (7)    ISO Butane contracts are settled against Belvieu IC4 NON-TET.                                                                                                                                                                                              |          |
| (8)    Natural Gasoline contracts are settled against Belevieu NON-TET Natural Gasoline.                                                                                                                                                                          |
| (9)    Electricity contracts are settled against the hourly price of electricity as published by the AESO in $/MWh.                                                                                                                                               |
| (10)  Midstream Frac Spread contracts.                                                                                                                                                                                                                                      |          |
| (11)  Midstream buy/sell contracts.                                                                                                                                                                                                                                         |          |                                            |
| (12)  Midstream inventory price stabilization contracts.                                                                                                                                                                                                                    |          |
| (13) US Dollar forward contracts are settled against the Bank of Canada noon rate average.  Selling notional US dollars for Canadian dollars at a fixed exchange      rate results in a fixed Canadian dollar price for the hedged commodity. |
| (14) Interest rate forward contract settles quarterly against 1M CAD BA CDOR interest rate.                                                                                                                                                                                           |          |
| (15) Interest rate forward contract settles quarterly against 3M CAD BA CDOR interest rate.                                                                                                                                                                                           |

----

| 14.   | Capital management |
|-----------------|--------------------|

|                                                                                                           |   | As at        |      |   | As at        |   |
|----------------------------------------------------------------------------------------------------------------|--------|--------------|-----------|--------|--------------|--------|
|                                                                                                           |   | December 31, |      |   | December 31, |   |
| ($000s)                                                                                                        |   | 2010         |      |   | 2009         |   |
| Working capital surplus (1)                                                                                    |   | $            | (56,848   | )      |         | $      | (31,152 | ) |
| Long-term debt (including current portion)                                                                     |   |         | 473,754   |   |         |   | 505,262 |   |
| Net debt                                                                                                       |   |         | 416,906   |   |         |   | 474,110 |   |
| Unitholders' equity                                                                                            |   |         | 587,218   |   |         |   | 1,381,399 |   |
| Total capitalization                                                                                           |   | $            | 1,004,124 |   |         | $      | 1,855,509 |   |
|                                                                                                           |   |         |      |   |         |   |   |   |
| Net debt to total capitalization                                                                               |   |         | 42        | %      |         |   | 26 | % |
| (1) The working capital surplus excludes balances for the current portion of financial derivative instruments. |   |

| ·   | providing an appropriate return to unitholders relative to the risk of Provident’s underlying assets; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------|

| ·   | ensuring financing capacity for Provident’s internal development opportunities and acquisitions of energy related assets that are expected to add value to our Unitholders. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 15.   | Product sales and service revenue |
|-----------------|-----------------------------------|

| 16.   | Strategic review and restructuring |
|-----------------|------------------------------------|

----

| 17.   | Discontinued operations (Provident Upstream) |
|-----------------|----------------------------------------------|

| Net loss from discontinued operations                                                                                                                                                                                                                                          | Year ended December 31, |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------|--------|
| Canadian dollars (000's)                                                                                                                                                                                                                                                       |                    | 2010   |   |   | 2009 |   |
| Revenue                                                                                                                                                                                                                                                                        |                    | $      | 77,114 |   |   | $ | 277,596 |   |
| Loss from discontinued operations before taxes    and impact of sale of discontinued operations (1)                                                                                                                                                        |                    |   | (144,774 | ) |   |   | (163,545 | ) |
| Loss on sale of discontinued operations                                                                                                                                                                                                                                        |                    |   | (475,335 | ) |   |   | - |   |
| Capital tax expense                                                                                                                                                                                                                                                            |                    |   | - |   |   |   | (2,313 | ) |
| Current tax expense                                                                                                                                                                                                                                                            |                    |   | (1 | ) |   |   | (12 | ) |
| Future income tax recovery                                                                                                                                                                                                                                                     |                    |   | 181,523 |   |   |   | 71,682 |   |
| Net loss from discontinued operations for the period                                                                                                                                                                                                                           |                    | $      | (438,587 | ) |   | $ | (94,188 | ) |
| Per unit                                                                                                                                                                                                                                                                       |                    |   |   |   |   |   |   |   |
|     - basic                                                                                                                                                                                                                                                |                    | $      | (1.65 | ) |   | $ | (0.36 | ) |
| - diluted                                                                                                                                                                                                                                                                      |                    | $      | (1.55 | ) |   | $ | (0.36 | ) |
| (1) In 2010, interest expense of $2.5 million (2009 - $7.0 million) was allocated to discontinued operations on a prorata basis calculated as the proportion of net assets of the Upstream business to the sum of total net assets of the Trust plus long-term debt. |                    |

----

| Canadian dollars (000s)       |   |   |    |
|-------------------------------|--------|--------|---------|
|                          |   |   |    |
| Property, plant and equipment |   | $      | 928,465 |   |
| Asset retirement obligation   |   |   | (29,224 | ) |
| Other                         |   |   | (8,340  | ) |
|                          |   | $      | 890,901 |   |

| 18.   | Commitments |
|-----------------|-------------|

| As at December 31, 2010 |   | Payment due by period |    |   |            |   |   |         |   |   |         |   |
|-------------------------|--------|-----------------------|---------|--------|-----------------|--------|--------|--------------|--------|--------|--------------|--------|
| ($ 000s)                |   | Total                 |    |   | Less than1 year |   |   | 1 to 3 years |   |   | 3 to 5 years |   |   | More than 5 years |   |
| Operating Leases        |   |                  |    |   |            |   |   |         |   |   |         |   |   |   |   |
| Office leases           |   | $                     | 58,432  |   |            | $      | 11,349 |         |   | $      | 23,484       |   |   | $ | 23,599 |   |   | $ | - |   |
| Sublease recovery       |   |                  | (42,490 | )      |            |   | (8,861 | )            |   |   | (18,985      | )      |   |   | (14,644 | ) |   |   | - |   |
|                    |   |                  | 15,942  |   |            |   | 2,488  |         |   |   | 4,499        |   |   |   | 8,955 |   |   |   | - |   |
| Rail tank cars          |   |                  | 15,195  |   |            |   | 7,711  |         |   |   | 6,405        |   |   |   | 1,079 |   |   |   | - |   |
| Younger plant           |   |                  | 22,639  |   |            |   | 5,036  |         |   |   | 9,211        |   |   |   | 8,392 |   |   |   | - |   |
| Total                   |   | $                     | 53,776  |   |            | $      | 15,235 |         |   | $      | 20,115       |   |   | $ | 18,426 |   |   | $ | - |   |

| 19.   | Subsequent events |
|-----------------|-------------------|

----

| 20.   | Reconciliation of financial statements to United States generally accepted accounting principles (U.S. GAAP) |
|-----------------|--------------------------------------------------------------------------------------------------------------|

| Consolidated Statements of Earnings - U.S. GAAP                                                    |   |   |     |   |   |   |
|----------------------------------------------------------------------------------------------------|--------|--------|----------|--------|--------|--------|
| For the year ended December 31, (Cdn $000s)                                                        |   | 2010   |     |   | 2009   |   |
|                                                                                               |   |   |     |   |   |   |
| Net loss as reported                                                                               |   | $      | (335,095 | )      |   | $      | (89,020 | ) |
| Adjustments                                                                                        |   |   |     |   |   |   |   |   |
|      Loss on sale of discontinued operations, net of tax (g)              |   |   | 291,005  |   |   |   | - |   |
|      Other adjustments to net income from discontinued operations (a) (b) |   |   | 118,633  |   |   |   | 118,875 |   |
| Net income – U.S. GAAP                                                                       |   | $      | 74,543   |   |   | $      | 29,855 |   |
| Other comprehensive income                                                                         |   |   | -        |   |   |   | 2,183 |   |
| Comprehensive income                                                                               |   | $      | 74,543   |   |   | $      | 32,038 |   |
| Net income from continuing operations per unit                                                     |   |   |     |   |   |   |   |   |
|     - basic                                                                    |   | $      | 0.39     |   |   | $      | 0.02 |   |
|     - diluted                                                                  |   | $      | 0.37     |   |   | $      | 0.02 |   |
| Net income per unit                                                                                |   |   |     |   |   |   |   |   |
|     - basic                                                                    |   | $      | 0.28     |   |   | $      | 0.11 |   |
|     - diluted                                                                  |   | $      | 0.27     |   |   | $      | 0.11 |   |

----

| Condensed Consolidated Balance Sheet                  |   |          |    |   |      |   |       |          |   |   |      |   |
|-------------------------------------------------------|--------|---------------|---------|--------|-----------|--------|------------|---------------|--------|--------|-----------|--------|
| As at December 31, (Cdn$ 000s)                        |   | 2010          |    |   | 2009      |   |
|                                                  |   | Canadian GAAP |    |   | U.S. GAAP |   |       | Canadian GAAP |   |   | U.S. GAAP |   |
| Assets                                                |   |          |    |   |      |   |       |          |   |   |      |   |
| Deferred financing charges (d)                        |   | $             | -       |   |      | $      | 11,385     |          |   | $      | -         |   |   | $ | 2,956 |   |
| Property, plant and equipment (a)                     |   |          | 832,250 |   |      |   | 832,250    |          |   |   | 2,025,044 |   |   |   | 916,683 |   |
| Goodwill (f)                                          |   |          | 100,409 |   |      |   | 100,409    |          |   |   | 100,409   |   |   |   | 517,299 |   |
| Liabilities and unitholders’ equity             |   |          |    |   |      |   |       |          |   |   |      |   |   |   |   |   |
| Current portion of convertible debentures (d)         |   |          | 148,981 |   |      |   | 149,358    |          |   |   | -         |   |   |   | - |   |
| Long-term debt - revolving term credit facilities (d) |   |          | 72,882  |   |      |   | 75,317     |          |   |   | 264,776   |   |   |   | 264,776 |   |
| Long-term debt - convertible debentures (d)           |   |          | 251,891 |   |      |   | 260,464    |          |   |   | 240,486   |   |   |   | 243,442 |   |
| Future income tax (asset) liability (a) (b)           |   |          | (50,375 | )      |      |   | (50,375    | )             |   |   | 162,665   |   |   |   | (119,168 | ) |
| Units subject to redemption (e)                       |   |          | -       |   |      |   | 1,965,831  |          |   |   | -         |   |   |   | 1,855,405 |   |
| Unitholders' equity (e) (f)                           |   |          | 587,218 |   |      |   | (1,378,613 | )             |   |   | 1,381,399 |   |   |   | (883,644 | ) |

| (a)   | Under the Canadian cost recovery ceiling test the recoverability of the oil and natural gas assets is tested by comparing the carrying value of the assets to the sum of the undiscounted proved reserve cash flows expected using future price estimates.  If the carrying value is not recoverable, the assets are written down to their fair value determined by comparing the future cash flows from the proved plus probable reserves discounted at Provident’s risk free interest rate.   Any excess carrying value of the assets on the balance sheet above fair value would be recorded in depletion, depreciation and accretion expense as a permanent impairment.  Under U.S. GAAP, companies utilizing the full cost method of accounting for oil and natural gas activities perform a ceiling test using discounted future net revenue from proved oil and natural gas reserves discounted at 10 percent.  Prices used in the U.S. GAAP ceiling tests are those that represent an average of the prices on the first day of each month in the calendar year.  The amounts recorded for depletion and depreciation have been adjusted in the periods as a result of differences in write down amounts recorded pursuant to U.S. GAAP compared to Canadian GAAP. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | The Canadian liability method of accounting for income taxes in CICA handbook Section 3465 “Income taxes” is similar to the requirements for U.S. GAAP, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in Provident’s financial statements or tax returns.  Pursuant to U.S. GAAP, enacted tax rates are used to calculate future taxes, whereas Canadian GAAP uses substantively enacted rates.  In addition, U.S. GAAP uses a single model to address uncertainty in tax positions and clarifies the accounting for income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements.  U.S. GAAP also provides guidance on de-recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosures and transitions as well as specifically scopes out accounting for contingencies. In 2010, the Upstream business was sold and therefore associated future income tax balances were removed from the balance sheet, thus eliminating any ongoing GAAP difference for future income taxes. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (c)   | The consolidated statements of cash flows and operations and accumulated income are prepared in accordance with Canadian GAAP and conform in all material respects with U.S. GAAP except for that U.S. GAAP requires disclosure on the consolidated statement of operations when depreciation, depletion and amortization are excluded from cost of goods sold.  This disclosure has not been noted on the face of the consolidated statement of operations. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | U.S. GAAP requires debt issue costs to be recorded as deferred charges.  Under Canadian GAAP, these costs are recorded against long-term debt. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e)   | Under U.S. GAAP, a redemption feature of equity instruments exercisable at the option of the holder requires that such equity be excluded from classification as permanent equity and be reported as temporary equity at the equity’s redemption value.  Changes in redemption value in the period (2010 - $78.3 million increase; 2009 - $445.9 million increase) are recorded to accumulated earnings.  Under Canadian GAAP, such equity instruments are considered to be permanent equity and are presented as unitholder’s equity.  Provident’s units have a redemption feature, which qualify them to be considered under this guidance. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (f)   | Under both Canadian and U.S. GAAP, goodwill is tested for impairment at least annually.  Both GAAPs require that the fair value of the reporting unit be determined and compared to the book value of the reporting unit.  Under Canadian GAAP, this resulted in impairment being recorded in 2008 relating to the Upstream business.  Under U.S. GAAP the book value of the reporting unit was lower than the Canadian GAAP book value, primarily due to ceiling test impairments.  Using the lower book value under U.S. GAAP resulted in no goodwill impairment in 2008. In 2010, the Upstream business was sold and therefore the associated goodwill was removed from the U.S. GAAP balance sheet, thus eliminating any ongoing GAAP difference for goodwill. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (g)   | On June 29, 2010, Provident completed a strategic transaction in which Provident combined the remaining Provident Upstream business with Midnight to form Pace Oil & Gas Ltd. (“Pace”) pursuant to a plan of arrangement under the Business Corporations Act (Alberta) (the “Arrangement”). Under the Arrangement, Midnight acquired all outstanding shares of Provident Energy Resources Inc., a wholly-owned subsidiary of Provident Energy Trust which held all of the producing oil and gas properties and reserves associated with Provident’s Upstream business. Effective in the second quarter of 2010, Provident’s Upstream business is accounted for as discontinued operations and comparative figures have been reclassified to conform with this presentation. Under Canadian GAAP, Provident recorded a loss on sale of discontinued operations of $317.7 million, net of tax. Due to differences in carrying values under U.S. GAAP for property, plant and equipment, goodwill, and future income taxes associated with the Upstream business, the loss on sale of discontinued operations under U.S. GAAP was $26.7 million, net of tax. This transaction completed the full sale of the Provident Upstream business in a series of transactions between September 2009 to June 2010. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|