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U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 40-F

ANNUAL REPORT
PURSUANT TO SECTION 13(a) OF THE SECURITIES EXCHANGE ACT OF
1934


|                                             |  |                                
|-------------------------------------------- |  | -------------------------------
|For the fiscal year ended: December 31, 2002 |  | Commission File Number: 1-31253

PENGROWTH ENERGY TRUST

(Exact name of Registrant as specified in its charter)


|                                                                  |  |                                             
|----------------------------------------------------------------- |  | --------------------------------------------
|Alberta, Canada                                                  
|(Province or other jurisdiction of incorporation or organization)
|1311
(Primary Standard Industrial
Classification Code Number)     |  | None
(I.R.S. Employer
Identification Number)

2900, 111-5th Avenue S.W., Calgary, Alberta T2P 3Y6
(403) 233-0224
(Address and telephone number of Registrants principal executive offices)

Carter Ledyard & Milburn LLP
2 Wall Street
New York, New York 10005-2072
(212) 732-3200
(Name, address (including zip code) and telephone number (including area code)
of agent for service in the United States)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

|                    |  |                                          
|------------------- |  | -----------------------------------------
|Title of each class |  | Name of each exchange on which registered
|                    |  |                                          
|Trust Units         |  | New York Stock Exchange                  

Securities registered or to be registered pursuant to Section 12(g) of the Act.

|                
|----------------
|None            
|                
|(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the
Act.

|                
|----------------
|None            
|                
|(Title of Class)





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|                                                                                          |  |  |  |  |  |  |  | 
|----------------------------------------------------------------------------------------- |  |  |  |  |  |  |  | 
|CONSOLIDATED AUDITED ANNUAL FINANCIAL STATEMENTS AND MANAGEMENTS DISCUSSION AND ANALYSIS
|CONTROLS AND PROCEDURES                                                                  
|UNDERTAKING                                                                              
|SIGNATURES                                                                               
|CERTIFICATIONS                                                                           
|APPENDICES                                                                               
|EXHIBITS                                                                                 
|Consent of Independent Chartered Accountants                                             
|Consent of Gilbert Laustsen Jung                                                         



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For Annual Reports indicate by check mark the information filed with this Form:

|                            |  |                                                      
|--------------------------- |  | -----------------------------------------------------
|[ü] Annual information form |  | [ü] Audited annual financial               statements

Indicate the number of outstanding shares of each of the issuers
classes of capital or common stock as of the close of the period covered by
the annual report:

There were 110,562,327 Trust Units, no par value, outstanding as of December
31, 2002.

Indicate by check mark whether the Registrant filing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934 (the Exchange Act). If Yes is marked, please indicate the filing
number assigned to the Registrant in connection with such Rule.

Yes
  [   ]   No  [ü]

Indicate by check mark whether the Registrant (1) has filed all reports
to be filed by Section 13 or 15(d) of the Exchange Act during the preceding
12 months (or for such shorter period that the Registrant was required to
file such reports) and (2) has been subject to filing requirements for the
past 90 days.

|                   
|-------------------
|Yes  [ü]  No  [   ]




CONSOLIDATED AUDITED ANNUAL FINANCIAL STATEMENTS AND
MANAGEMENTS DISCUSSION AND ANALYSIS

Attached hereto as Appendix B is a copy of the Registrants 2002 Annual
Report. For the purposes of this Annual Report on Form 40-F, only pages 40
through 53 and 58 through 80 of such 2002 Annual Report shall be deemed filed
with the Securities and Exchange Commission (the Commission), and the balance
of such 2002 Annual Report, except as it may be otherwise specifically
incorporated by reference in the Registrants Annual Information Form, shall be
deemed not filed with the Commission as part of this Annual Report on Form 40-F
under the Securities Exchange Act of 1934, as amended (the Exchange Act).

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|A. |  | Audited Annual Financial Statements
|-- |  | -----------------------------------

The consolidated audited financial statements, including the report of
independent chartered accountants with respect thereto on pages 59 through 80
of the Registrants 2002 Annual Report attached hereto as Appendix B are
included herein. Note 16  Reconciliation of Financial Statements to United
States Generally Accepted Accounting
Principles to such financial statements, beginning on page 76 of such 2002
Annual Report, contains a reconciliation of such financial statements to U.S.
GAAP.



|B. |  | Managements Discussion and Analysis
|-- |  | ------------------------------------

Managements Discussion and Analysis, see pages 40 to 53 of the
Registrants 2002 Annual Report, which pages are attached hereto and included
herein.




CONTROLS AND PROCEDURES

Within the 90-day period prior to the filing of this report, an evaluation
was carried out under the supervision of and with the participation of the
Registrants management, including the Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the Registrants disclosure controls
and procedures (as defined in Rule 13a-14(c) under the Exchange Act). Based on
that evaluation, the Chief Executive Officer and Chief Financial Officer
concluded that the design and operation of these disclosure controls and
procedures were effective to ensure that material information required to be
disclosed by the Registrant in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Commissions rules and forms.

No significant changes were made in the Registrants internal controls or
in other factors that could significantly affect these controls subsequent to
the date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

It should be noted that any system of controls, however well designed and
operated, can provide only reasonable, and not absolute, assurance that the
objectives of the system are met. In addition, the design of any control system
is based in part upon certain assumptions about the likelihood of future
events. Because of these and other inherent limitations of control systems,
there can be no assurance that any design will succeed in achieving its stated
goals under all potential future conditions, regardless of how remote.




UNDERTAKING

Registrant undertakes to make available, in person or by telephone,
representatives to respond to inquiries made by the Commission staff, and to
furnish promptly, when requested to do so by the Commission staff, information
relating to: the

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securities registered pursuant to Form 40-F; the securities in
relation to which the obligation to file an annual report on Form 40-F arises;
or transactions in said securities.




SIGNATURES

Pursuant to the requirements of the Exchange Act, the Registrant certifies
that it meets all of the requirements for filing on Form 40-F and has duly
caused this Annual Report to be signed on its behalf by the undersigned,
thereunto duly authorized.

|                   |  |                                                                   |                                                                             
|------------------ |  | ----------------------------------------------------------------- | ----------------------------------------------------------------------------
|Date: May 15, 2003 |  | PENGROWTH ENERGY TRUST
by its Administrator PENGROWTH CORPORATION
|                   |  |                                                                   |                                                                             
|                   |  | By:                                                               | /s/ James S. Kinnear

James S. Kinnear
President and Chief Executive Officer

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CERTIFICATIONS

I, James S. Kinnear, President and Chief Executive Officer, certify that:

1.     I have reviewed this annual report on Form 40-F of Pengrowth Energy Trust

2.     Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:



| | a) |  | designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this annual report is being prepared;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this annual report (the Evaluation
Date); and                                                                                                  
|
| | c) |  | presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date.                                                                                                                        

5.     The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (and persons performing the
equivalent function):



| | a) |  | all significant deficiencies in the design or operation
of internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data
and have identified for the registrants auditors any material
weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrants internal controls.                                                                                                                                            

6.     The registrants other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could





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significantly affect internal controls subsequent to the date of our most
recent evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.

|                   |  |     |  |                                                                             
|------------------ |  | --- |  | ----------------------------------------------------------------------------
|Date: May 15, 2003 |  | By: |  | /s/ James S. Kinnear

James S. Kinnear
President and Chief Executive Officer

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I, Robert B. Hodgins, Chief Financial Officer, certify that:

1.     I have reviewed this annual report on Form 40-F of Pengrowth Energy Trust;

2.     Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:



| | a) |  | designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this annual report is being prepared;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this annual report (the Evaluation
Date); and                                                                                                  
|
| | c) |  | presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date.                                                                                                                        

5.     The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (and persons performing the
equivalent function):



| | a) |  | all significant deficiencies in the design or operation
of internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data
and have identified for the registrants auditors any material
weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrants internal controls.                                                                                                                                            

6.     The registrants other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation,





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including any corrective actions with regard to significant deficiencies and
material weaknesses.

|                   |  |     |  |                                                                 
|------------------ |  | --- |  | ----------------------------------------------------------------
|Date: May 15, 2003 |  | By: |  | /s/ Robert B. Hodgins

Robert B. Hodgins
Chief Financial Officer

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APPENDICES



|A. |  | Annual Information Form of the Registrant for the year ended December
31, 2002.
|-- |  | -------------------------------------------------------------------------------
|  
|B. |  | 2002 Annual Report of the Registrant.                                          




EXHIBITS

|        |  |                                                                                      | 
|------- |  | ------------------------------------------------------------------------------------ | 
|Exhibit |  |                                                                                      | 
|No.     |  | Description                                                                          | 
|        |  |                                                                                      | 
|       
|1.      |  | Consent of KPMG LLP, independent chartered accountants.                              | 
|        |  |                                                                                      | 
|2.      |  | Consent of Gilbert Laustsen Jung Associates Ltd., independent
petroleum consultants. | 





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APPENDIX A

ANNUAL INFORMATION FORM





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PENGROWTH ENERGY TRUST

RENEWAL ANNUAL INFORMATION FORM

May 15, 2003

Pengrowth Energy Trust is an energy investment trust formed under the laws of
the Province of Alberta which offers and sells its Trust Units to the public.
The Trust Units are not deposits within the meaning of the Canadian Deposit
Insurance Corporation Act (Canada) and are not insured under the provisions of
that Act or any other legislation. Furthermore, Pengrowth Energy Trust is not
a trust company and, accordingly, is not registered under any trust and loan
company legislation as it does not carry on or intend to carry on the business
of a trust company.





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TABLE OF CONTENTS

|                                                |                                             |                             |    |    |    | 
|----------------------------------------------- | ------------------------------------------- | --------------------------- | -- | -- | -- | 
|TABLE OF CONTENTS                               |                                             |                             | 2  |   
|GLOSSARY OF TERMS                               |                                             |                             | 4  |   
|PRESENTATION OF OUR FINANCIAL INFORMATION       |                                             |                             | 6  |   
|PRESENTATION OF OUR RESERVE INFORMATION         |                                             |                             | 6  |   
|FORWARD-LOOKING STATEMENTS                      |                                             |                             | 6  |   
|PENGROWTH ENERGY TRUST                          |                                             |                             | 8  |   
|GENERAL DEVELOPMENT OF PENGROWTH ENERGY TRUST   |                                             |                             | 8  |   
|                                                | Organization and Structure                  |                             |    | 8  |   
|                                                | Business Strategy and Strengths             |                             |    | 9  |   
|                                                | Historical Development                      |                             |    | 10 |   
|                                                | Recent Acquisitions                         |                             |    | 12 |   
|PENGROWTH MANAGEMENT LIMITED                    |                                             |                             | 13 |   
|                                                | Business                                    |                             |    | 13 |   
|                                                | Management Agreement                        |                             |    | 13 |   
|PENGROWTH CORPORATION  OPERATIONAL INFORMATION |                                             |                             | 14 |   
|                                                | Principal Properties                        |                             |    | 14 |   
|                                                | Production                                  |                             |    | 20 |   
|                                                |                                             | Production History          |    |    | 20 | 
|                                                |                                             | Producing Wells             |    |    | 20 | 
|                                                |                                             | Drilling Activity           |    |    | 21 | 
|                                                |                                             | Capital Expenditures        |    |    | 21 | 
|                                                |                                             | Reconciliation of Reserves  |    |    | 21 | 
|                                                | Reserves                                    |                             |    | 22 |   
|                                                | Selected Historical Quarterly Information   |                             |    | 26 |   
|                                                |                                             | Average Daily Production    |    |    | 26 | 
|                                                |                                             | Crude Oil and NGLs Netbacks |    |    | 26 | 
|                                                |                                             | Natural Gas Netbacks        |    |    | 27 | 
|                                                |                                             | Capital Expenditures        |    |    | 27 | 
|                                                | Replacement of Properties                   |                             |    | 28 |   
|                                                | Borrowing                                   |                             |    | 28 |   
|                                                | Marketing Arrangements                      |                             |    | 28 |   
|                                                | Interest Rate Swaps                         |                             |    | 28 |   
|TRUST UNITS                                     |                                             |                             | 29 |   
|                                                | The Trust Indenture                         |                             |    | 29 |   
|                                                | The Trustee                                 |                             |    | 29 |   
|                                                | Redemption Right                            |                             |    | 29 |   
|                                                | Voting at Meetings of Pengrowth Trust       |                             |    | 30 |   
|                                                | Voting at Meetings of Pengrowth Corporation |                             |    | 30 |   
|                                                | Termination of Pengrowth Trust              |                             |    | 30 |   
|                                                | Unitholder Limited Liability                |                             |    | 30 |   
|THE ROYALTY INDENTURE                           |                                             |                             | 31 |   
|                                                | Royalty Units                               |                             |    | 31 |   
|                                                | The Royalty                                 |                             |    | 31 |   
|                                                | The Trustee                                 |                             |    | 32 |   
|DISTRIBUTABLE INCOME PER UNIT                   |                                             |                             | 32 |   

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|                                                                                  |                                                                                                   |  |    |    |  | 
|--------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------- |  | -- | -- |  | 
|INDUSTRY CONDITIONS                                                               |                                                                                                   |  | 32 |   
|                                                                                  | Government Regulation                                                                             |  |    | 32 | 
|                                                                                  | Pricing and Marketing  Oil                                                                       |  |    | 33 | 
|                                                                                  | Pricing and Marketing  Natural Gas                                                               |  |    | 33 | 
|                                                                                  | The North American Free Trade Agreement                                                           |  |    | 33 | 
|                                                                                  | Provincial Royalties and Incentives                                                               |  |    | 33 | 
|                                                                                  | Environmental Regulation                                                                          |  |    | 35 | 
|SELECTED FINANCIAL INFORMATION                                                    |                                                                                                   |  | 36 |   
|MANAGEMENTS DISCUSSION AND ANALYSIS OF OPERATING RESULTS AND FINANCIAL CONDITION |                                                                                                   |  | 36 |   
|MARKET FOR SECURITIES                                                             |                                                                                                   |  | 36 |   
|DIRECTORS AND OFFICERS                                                            |                                                                                                   |  | 37 |   
|                                                                                  | Directors and Officers of Pengrowth Management                                                    |  |    | 37 | 
|                                                                                  | Principal Holders of Shares of Pengrowth Management                                               |  |    | 37 | 
|                                                                                  | Directors and Officers of Pengrowth Corporation                                                   |  |    | 37 | 
|DIRECTORS AND OFFICERS LIABILITY INSURANCE                                      |                                                                                                   |  | 39 |   
|INDEBTEDNESS OF DIRECTORS AND OFFICERS                                            |                                                                                                   |  | 39 |   
|LONG TERM INCENTIVE PLANS                                                         |                                                                                                   |  | 39 |   
|                                                                                  | Trust Unit Option Plan of Pengrowth Trust                                                         |  |    | 39 | 
|                                                                                  | Trust Unit Purchase Plan                                                                          |  |    | 40 | 
|                                                                                  | Employee Trust Unit Rights Incentive Plan                                                         |  |    | 41 | 
|                                                                                  | Trust Unit Margin Purchase Plan                                                                   |  |    | 41 | 
|                                                                                  | Principal Holders of Shares and Royalty Units of Pengrowth Corporation                            |  |    | 41 | 
|CORPORATE GOVERNANCE                                                              |                                                                                                   |  | 41 |   
|                                                                                  | Mandates of the Trustee, Pengrowth Management and the Board of Directors of Pengrowth Corporation |  |    | 41 | 
|                                                                                  | Board Independence                                                                                |  |    | 42 | 
|                                                                                  | Board Approvals and Structure                                                                     |  |    | 42 | 
|                                                                                  | Board Committees                                                                                  |  |    | 43 | 
|                                                                                  | Statement of Corporate Governance Practices                                                       |  |    | 43 | 
|RISK FACTORS                                                                      |                                                                                                   |  | 48 |   
|CONFLICTS OF INTEREST                                                             |                                                                                                   |  | 56 |   
|ADDITIONAL INFORMATION                                                            |                                                                                                   |  | 57 |   

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GLOSSARY OF TERMS

Certain terms used in this Annual Information Form are defined below:

|                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ARC                       |  | Alberta Royalty Credits;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|bbl                       |  | barrel, bpdmeans barrels per day, mbblsmeans thousands of barrels and mmbblsmeans
millions of barrels;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|B.C. Properties           |  | refers to the northern British Columbia properties acquired from Calpine Natural Gas
Partnership, net of the interests therein sold to Progress Energy Ltd.;                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|boe                       |  | barrels of oil equivalent determined approximately on the basis that 6 mcf of gas are
equivalent to one bbl of oil. The factor used to convert gas to oil equivalent is not based
upon either energy content or prices. A corresponding adjustment is made for natural gas
liquids; boepd means barrels of oil equivalent per day, mboemeans thousands of barrels of
oil equivalent and mmboemeans millions of barrels of oil equivalent;                                                                                                                                                                      
|                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Board of Directors        |  | the board of directors of Pengrowth Corporation;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Computershare             |  | Computershare Trust Company of Canada (formerly Montreal Trust Company of Canada);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Emera                     |  | Emera Offshore Incorporated, a wholly owned subsidiary of Emera Inc.;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Established Reserves      |  | Proved Reserves plus Probable Reserves risked at 50% as described in the GLJ Report;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Extraordinary Resolution  |  | a resolution passed by a majority of not less than 66 2/3% of the votes cast, either in person
or by proxy, at a meeting of Trust Unitholders or Royalty Unitholders, or both, as the case may
be, called for the purpose of approving such resolution, or approved in writing by not less
than 66 2/3% of the Unitholders entitled to vote on such resolution. A quorum for the passage
of an Extraordinary Resolution is two persons representing at least 5% of the votes attached to
all outstanding Units entitled to vote on such resolution;                                                                  
|                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|GLJ                       |  | Gilbert Laustsen Jung Associates Ltd., independent petroleum consultants, Calgary, Alberta;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|GLJ Report                |  | the report prepared by Gilbert Laustsen Jung Associates Ltd. dated February 7, 2003, having an
effective date of December 31, 2002;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Gross                     |  | with respect to land and wells, refers
to the total number of acres or wells, as the case may be, in which Pengrowth has a working
interest or a royalty interest;                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|mmbtu                     |  | million british thermal units and mmbtupdmeans million british thermal units per day;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|mmcf                      |  | millions of cubic feet, mcfmeans thousands of cubic feet, bcfmeans billions of cubic
feet, mcf/dmeans thousands of cubic feet per day and mmcf/dmeans millions of cubic feet
per day;                                                                                                                                                                                                                                                                                                                                                                                                                        
|                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Net                       |  | unless otherwise indicated, refers to Pengrowths working interest share of production or reserves, as the case may be,
before the deduction of royalties, and, with respect to land and wells, refers to Pengrowths
working interest share therein;                                                                                                                                                                                                                                                                                                                                                                
|                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|NGLs                      |  | means natural gas liquids;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Pengrowth, we, us and our |  | refer to Pengrowth Trust and Pengrowth Corporation on a consolidated basis;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Pengrowth Corporation     |  | Pengrowth Corporation, the administrator of Pengrowth Trust;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Pengrowth Management      |  | Pengrowth Management Limited, the manager of Pengrowth Trust and Pengrowth Corporation;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Pengrowth Trust           |  | Pengrowth Energy Trust;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Probable Reserves         |  | those reserves which an analysis of drilling, geological, geophysical and engineering data does
not demonstrate to be proved under current technology and existing economic conditions, but
where such analysis suggests the likelihood of their existence and future recovery. Probable
reserves to be obtained by the application of enhanced recovery processes will be the increased
recovery over and above that estimated in the proved category which can be realistically
estimated for the pool on the basis of enhanced recovery processes which can be reasonably
expected to be instituted in the future;
|                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Proved Reserves           |  | those reserves estimated as recoverable under current technology and existing economic
conditions, in the case of constant pricing, and anticipated economic conditions, in the case
of escalated pricing, from that portion of a reservoir which can be reasonably evaluated as
economically productive on the basis of analysis of drilling, geological, geophysical and
engineering data, including the reserves to be obtained by enhanced recovery processes
demonstrated to be economic and technically successful in the subject reservoir;                                                                   

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|                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Reserve Life Index              |  | the number of years determined by dividing the Established Reserves of a property by the
estimated production per year from such property using year 2002 production as a reference;                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Royalty                         |  | 99% of Royalty Income as defined in the Royalty Indenture relating to the working interests and
royalty interests held by Pengrowth Corporation in petroleum and natural gas properties. Under
the terms of the Royalty Indenture, although Pengrowth Corporation is entitled to retain a 1%
share of Royalty Income and all miscellaneous income to the extent this amount exceeds the
aggregate of debt service charges, general and administrative expenses and management fees, the
result of the computation is that the Royalty is effectively 100% of Royalty Income. (See
note 1 to the audited financial statements of Pengrowth Trust.);
|                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Royalty Indenture               |  | the Amended and Restated Royalty Indenture dated April 23, 2002 (replacing the Royalty
Indenture dated December 2, 1988, as amended) pursuant to which Pengrowth Corporation granted
the Royalty to Pengrowth Trust;                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Royalty Interest                |  | refers to an interest in an oil and gas property consisting of a royalty granted in respect of
production from the property;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Royalty Unit                    |  | a fractional undivided interest in the Royalty;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|SOEP                            |  | Sable Offshore Energy Project;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|stb                             |  | means stock tank barrel, mstbmeans thousands of stock tank barrels and mmstbmeans
millions of stock tank barrels;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Trust Indenture                 |  | the Amended and Restated Trust Indenture dated April 23, 2002 (replacing the Trust Indenture
dated December 2, 1988, as amended) pursuant to which Pengrowth Trust was established and is
governed;                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Trust Unit                      |  | a fractional undivided interest in Pengrowth Trust;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Unanimous Shareholder Agreement |  | the Amended and Restated Unanimous Shareholder Agreement dated April 23, 2002 (replacing the
unanimous Shareholder Agreement dated December 2, 1988, as amended);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Unitization                     |  | means a process whereby owners of adjoining properties pool reserves into a single unit
operated by one of the owners, typically in order to conduct secondary recovery projects in a
manner that promotes improved recovery of reserves from a pool or field;                                                                                                                                                                                                                                                                                                                                                                                        
|                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Unitholder                      |  | refers to a holder of Trust Units and Royalty
Unitholder refers to or a holder of Royalty Units;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Units                           |  | Trust Units or Royalty Units; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Working Interest                |  | refers to the percentage of undivided interest held by a party in an oil and gas property.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

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In this Annual Information Form measurements are given in standard Imperial or
metric units only. The following table sets forth certain standard
conversions.

|                |             |    |             |             |  |        | 
|--------------- | ----------- | -- | ----------- | ----------- |  | ------ | 
|To Convert From |             | To |             | Multiply By
|                | mcf         |    | cubic metre |             |  | 28.174 | 
|                | cubic metre |    | cubic feet  |             |  | 35.494 | 
|                | bbls        |    | cubic metre |             |  | 0.159  | 
|                | cubic metre |    | bbls        |             |  | 6.290  | 
|                | feet        |    | metre       |             |  | 0.305  | 
|                | metre       |    | feet        |             |  | 3.281  | 
|                | miles       |    | kilometre   |             |  | 1.609  | 
|                | kilometre   |    | miles       |             |  | 0.621  | 
|                | acres       |    | hectares    |             |  | 0.405  | 
|                | hectares    |    | acres       |             |  | 2.471  | 

Unless otherwise stated, all sums of money referred to in this Annual
Information Form are expressed in Canadian dollars.

PRESENTATION OF OUR FINANCIAL INFORMATION

Unless we indicate otherwise, financial information in this Annual
Information Form has been prepared in accordance with Canadian generally
accepted accounting principles (GAAP). Canadian GAAP differs in some
significant respects from U.S. GAAP and thus our financial statements may not
be comparable to the financial statements of U.S. companies. The principal
differences as they apply to us are summarized in note 16 to the audited annual
consolidated financial statements of Pengrowth Trust beginning on page 76 of
Pengrowth Trusts 2002 Annual Report.

We present our financial information in Canadian dollars.

PRESENTATION OF OUR RESERVE INFORMATION

The United States Securities and Exchange Commission (the SEC) generally
permits oil and gas companies, in their filings with the SEC, to disclose only
proved reserves after the deduction of royalties and interests of others which
are those reserves that a company has demonstrated by actual production or
conclusive formation tests to be economically producible under existing
economic and operating conditions. Canadian securities laws permit oil and gas
companies, in their filings with Canadian securities regulators, to disclose
not only proved reserves but also probable reserves, and to disclose reserves
and production on a gross basis before deducting royalties. Probable reserves
are of a higher risk and are generally believed to be less likely to be
accurately estimated or recovered than proved reserves. Because we are
permitted to prepare this annual information form in accordance with Canadian
disclosure requirements, we have disclosed in this annual information form and
in the documents incorporated by reference reserves designated as probable
and established. The SECs guidelines strictly prohibit reserves in these
categories from being included in filings with the SEC that are required to be
prepared in accordance with U.S. disclosure requirements. Moreover, we have
determined and disclosed estimated future net cash flow from our reserves using
both constant and escalated prices and costs, whereas the SEC generally
requires that prices and costs be held constant at levels in effect at the date
of the reserve report. In addition, the estimates of reserves included in this
annual information form based on constant prices and costs, as reflected in the
GLJ Report, were prepared using prices in effect as of December 31, 2002, held
constant for the economic life of the reserves. For a description of these and
additional differences between Canadian and U.S. standards of reporting
reserves, see Risk Factors  Canadian and United States practices differ in
reporting reserves and production.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this Annual Information Form, including
certain documents incorporated by reference, constitute forward-looking
statements. The use of any of the words anticipate, continue, estimate,
expect, may, will, project, should, believe and similar expressions
are intended to identify forward-looking statements. These statements involve
known and unknown risks, uncertainties and other factors that may cause actual
results or events to differ materially from those anticipated in our
forward-looking statements. We believe the expectations reflected in those
forward-looking statements are reasonable. However, we cannot assure you that
these expectations will

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prove to be correct. You should not unduly rely on forward-looking
statements included, or incorporated by reference, in this Annual Information
Form. These statements speak only as of the date of this Annual Information
Form or as of the date specified in the documents incorporated by reference in
this Annual Information Form, as the case may be.

In particular, this Annual Information Form, including the documents
incorporated by reference, contains forward-looking statements pertaining to
the following:



| |  | the size of our reserves;                                                                                                                           
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | projections of market prices and costs;                                                                                                             
| 
| |  | supply and demand for oil and natural gas;                                                                                                          
| 
| |  | expectations regarding the ability to raise capital and to continually
add to our reserves through acquisitions and exploration and
development; and
| 
| |  | treatment under governmental regulatory regimes.                                                                                                    

Our actual results could differ materially from those anticipated in these
forward-looking statements as a result of the risk factors set forth below and
elsewhere in this Annual Information Form, including under Risk Factors:



| |  | volatility in market prices for oil and natural gas;                                            
|- |  | ------------------------------------------------------------------------------------------------
| 
| |  | liabilities inherent in our oil and gas operations;                                             
| 
| |  | uncertainties associated with estimating reserves;                                              
| 
| |  | competition for, among other things, capital, reserves, undeveloped lands and skilled personnel;
| 
| |  | incorrect assessments of the value of our acquisitions; and                                     
| 
| |  | geological, technical, drilling and processing problems.                                        

These factors should not be construed as exhaustive. We undertake no
obligation to publicly update or revise any forward-looking statements.

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PENGROWTH ENERGY TRUST

Pengrowth Trust is an oil and gas royalty trust that was created under the
laws of the Province of Alberta on December 2, 1988. Pengrowth Trust is
governed by a trust indenture between Pengrowth Corporation and Computershare,
as trustee. In 1996, Pengrowth Trusts original name, Pengrowth Gas Income
Fund, was changed to Pengrowth Energy Trust. The purpose of Pengrowth Trust
is to purchase and hold royalty units issued by Pengrowth Corporation, its
majority owned subsidiary, and to issue trust units to members of the public.
Pengrowth Corporation acquires, owns and manages working interests and royalty
interests in oil and natural gas properties. The beneficiaries of Pengrowth
Trust are the trust unitholders.

Pengrowth Corporation was created under the laws of the Province of
Alberta on December 30, 1987. The name of Pengrowth Corporation was changed
from Pengrowth Gas Corporation to Pengrowth Corporation in 1998. Pengrowth
Corporation has 1,100 common shares outstanding, 1,000 of which are owned by
Pengrowth Trust and 100 of which are owned by Pengrowth Management.

Pengrowth Management was created under the laws of the Province of Alberta
on December 16, 1982. Pengrowth Management serves as the manager of Pengrowth
Trust and as the manager of Pengrowth Corporation. Pengrowth Management
attends to the acquisition, development, operation and disposition of oil and
natural gas properties and other related assets.

GENERAL DEVELOPMENT OF PENGROWTH ENERGY TRUST

Organization and Structure

Under a royalty indenture between Pengrowth Corporation and Computershare,
as trustee, Pengrowth Corporation has granted a royalty consisting of a 99%
share of royalty income to the holders of royalty units. The royalty units
represent fractional undivided interests in the royalty.

Under the trust indenture, Pengrowth Trust has issued trust units to the
unitholders. Each trust unit represents a fractional undivided beneficial
interest in Pengrowth Trust. Our unitholders are entitled to receive monthly
distributions in respect of the royalty and in respect of investments that are
held directly by us.

Pengrowth Trust presently holds approximately 99.98% of the royalty units
issued by Pengrowth Corporation. In addition, Pengrowth Trust holds other
permitted investments, such as oil and gas processing facilities and cash.
Included in these permitted investments are the interests we acquired in 1998
in certain Judy Creek and Swan Hills facilities for $106 million under a
transaction where the facilities were leased back to Pengrowth Corporation in
consideration for lease payments which are distributed to our unitholders.

Pursuant to a unanimous shareholder agreement among Pengrowth Management,
Pengrowth Trust, Pengrowth Corporation and Computershare, our unitholders and
the holders of royalty units of Pengrowth Corporation (other than
Computershare) are entitled to notice of, and to attend, all meetings of
shareholders of Pengrowth Corporation and vote as shareholders at all meetings
of the shareholders of Pengrowth Corporation to the same extent as if they were
holders of common shares of Pengrowth Corporation, including voting on the
election of the directors of Pengrowth Corporation (other than the two
directors to be appointed by Pengrowth Management), approving its financial
statements, appointing its auditors and appointing the auditor of Pengrowth
Trust. In addition, our unitholders are entitled to vote on any proposed
amendment to the unanimous shareholders agreement. Pengrowth Management
refrains from exercising its rights as a shareholder except in respect of the
election of two directors, or except as otherwise may be permitted by the
provisions of the Business Corporations Act(Alberta) (and then as directed by
the votes of the unitholders and the holders of royalty units of Pengrowth
Corporation (other than Computershare)).

The principal business of Pengrowth Management is that of a specialty fund
manager. Pengrowth Management currently provides advisory, management, and
administrative services to Pengrowth Trust and to Pengrowth Corporation.
Pengrowth Management also previously provided investment advisory and
management services in relation to investments by several Canadian pension
funds in the energy sector. These investments were later acquired by Pengrowth
Corporation for royalty units and cash.

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James S. Kinnear, President and a director of Pengrowth Management and
Chairman, President, Chief Executive Officer and a director of Pengrowth
Corporation, owns, directly or indirectly, all of the issued and outstanding
voting securities of Pengrowth Management.

The following chart illustrates the organization and structure of
Pengrowth.

ORGANIZATION CHART

Business Strategy and Strengths

Our goal is to maximize cash distributions to our unitholders while
maintaining the value of the trust units. Pengrowth does not explore for oil
and natural gas. Instead, we focus on making effective acquisitions and
maximizing the value of our mature property base by reducing operating costs,
implementing new development technologies, including three dimensional seismic
and tertiary recovery operations, and implementing other operational
efficiencies.

Our business model is designed to increase distributions to our
unitholders. Our ability to pay out distributions while enhancing unitholder
value over time is dependent upon effective operations and our ability to make
acquisitions which yield returns that exceed our cost of capital. We evaluate
acquisition opportunities based upon the following acquisition criteria:

Financial



| |  |  | Acquisitions should increase distributions on a per trust unit basis based upon current economics.                                                                                                                                  
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | The aggregate purchase price of all properties acquired in a
single transaction should not exceed the undiscounted aggregate
projected net cash flow from the properties from the date of purchase
plus a reasonable rate of return.
|
| |  |  | The oil and gas producing properties to be acquired should, in
the context of the market, have an attractive rate of return and a
low reserve cost.                                                                                 

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Operational



| |  |  | Properties to be acquired should be high quality, long life,
proven producing properties primarily in unitized areas. Pengrowth
Corporation gives priority to properties with:
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|

| |  |  |  | low anticipated capital expenditures relative to the cash generation potential of the properties;    
| |  | - |  | -----------------------------------------------------------------------------------------------------
|
| |  |  |  | low operating costs or high margins;                                                                 
|
| |  |  |  | experienced, well regarded operators or where operatorship may be assumed by Pengrowth;              
|
| |  |  |  | favourable production history;                                                                       
|
| |  |  |  | upside potential through infill drilling, improved
field operations and other development activities;
|
| |  |  |  | long reserve life; and                                                                               
|
| |  |  |  | low environmental and site remediation risk.                                                         

Independent Verification



| |  |  | Each purchase of new properties will be based on an independent
engineering report except for properties where the purchase price is
less than $5 million.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------

Our structure, tax effectiveness and cost of capital allow us to bid
competitively for oil and natural gas properties against taxable corporations
and other taxable entities. Opportunities to acquire oil and gas properties
generally arise from sellers looking to reduce indebtedness, seeking funds for
higher risk exploration and development activities, exiting the business, or
fulfilling other strategic objectives.

Historical Development

Pengrowth Corporations first acquisition, in December of 1988, was the
purchase of a 2.6507% interest in the Dunvegan Gas Unit No. 1 located near
Fairview, Alberta (the Dunvegan Unit). Pengrowth Corporation financed the
acquisition by issuing 1,250,000 Royalty Units at a price of $10.00 per Royalty
Unit, substantially all of which were issued to Pengrowth Trust. Pengrowth
Trust issued 1,243,500 Trust Units to the public at a price of $10.00 per Trust
Unit for gross proceeds of $12,435,000 which were used to pay for the Royalty
Units.

Commencing in 1991, Pengrowth Management adopted a plan, and established
criteria, to build Unitholder value by making accretive acquisitions and
financing those acquisitions. In 1991, 760,218 Trust Units were issued by
Pengrowth Trust upon the exercise of rights to acquire Trust Units, at a price
of $5.00 per Trust Unit for gross proceeds of $3,801,090. The proceeds were
applied by Pengrowth Corporation to acquire a 0.9789% working interest in the
Nipisi Gilwood Unit No. 1 oil producing property in North Central Alberta (the
Nipisi Unit).

During 1992 Pengrowth Trust completed private placements for a total of
500,000 Trust Units at a price of $5.00 per Trust Unit for gross proceeds of
$2,500,000. The proceeds were applied by Pengrowth Corporation to repay bank
debt incurred to acquire various interests in the Dunvegan Unit, Nipisi Unit,
Sylvan Lake Gas Unit No. 2, Sundre Unit No. 2, Harmattan East Viking Unit No. 1
and Olds Gas Unit No. 1 thereby broadening the base of oil and natural gas unit
interests held by Pengrowth Corporation. A distribution reinvestment plan was
created for Pengrowth Trust in 1992 which provides holders of Trust Units with
the option of directing Computershare to reinvest any Trust Unit distributions
in new Trust Units of Pengrowth Trust.

Two rights offerings were completed by Pengrowth Trust during 1993. On
February 3, 1993, Pengrowth Trust issued 1,524,318 Trust Units upon the
exercise of rights to acquire Trust Units at a price of $5.50 per Trust Unit
for gross proceeds of $8,383,749 and on October 22, 1993, 2,968,700 Trust
Units were issued by Pengrowth Trust upon the exercise

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of rights to acquire Trust Units at a price of $7.75 per Trust Unit for
gross proceeds of $23,007,425. The proceeds were applied by Pengrowth
Corporation to repay bank debt incurred to acquire various additional unitized
oil and gas producing interests.

Pengrowth Trust commenced a series of fully marketed equity offerings in
1994 to fund various property acquisitions. On June 2, 1994, Pengrowth Trust
issued 4,190,476 Trust Units at a price of $10.50 per Trust Unit for gross
proceeds of $43,999,998. The proceeds were used primarily by Pengrowth
Corporation to finance the purchase of producing properties from Acquifund
Resources Limited and Dunbar Oil Ltd. During 1995 gross proceeds of
$65,686,500 were raised through two public offerings of an additional 5,060,000
Trust Units. The first offering of 3,310,000 Trust Units, at a price of $11.65
per Trust Unit, was completed on May 19, 1995 and the second offering of
1,750,000 Trust Units, at a price of $15.50 per Trust Unit, was completed on
December 28, 1995. During 1996 gross proceeds of $82,555,000 were raised
through a public offering of 5,225,000 Trust Units at a price of $15.80.

Effective July 1, 1997, Pengrowth Corporation acquired a 98.11% working
interest in the Judy Creek Beaverhill Lake Unit, a 94.58% working interest in
the Judy Creek West Beaverhill Lake Unit, and a 9.58% working interest in the
Swan Hills Unit No. 1 for $496.1 million. In November 1997, Pengrowth
Corporation increased its working interest in the Judy Creek Beaverhill Lake
Unit to 100%. On October 15, 1997, Pengrowth Trust completed an offering of
23,928,572 Trust Units on an installment receipt basis with $12.50 per Trust
Unit paid on closing and the balance of $8.75 per unit due on or before October
15, 1998. Gross proceeds raised amounted to $508 million comprised of cash of
$299 million and an installment receivable of $209 million. On April 15, 1998,
Pengrowth Corporation assumed operatorship of the Judy Creek Units from
Imperial Oil Resources. Effective October 15, 1998, Pengrowth Trust acquired
certain facilities interests related to operations in the Judy Creek and Swan
Hills areas from Pengrowth Corporation for consideration of $106,000,000.
Pengrowth Trust entered into an agreement to lease the facilities back to
Pengrowth Corporation.

Oil and natural gas prices declined in 1998 and there was an associated
decline in the market trading price of Trust Units and the number of
acquisitions completed by Pengrowth Corporation. In 1999 and 2000, in
conjunction with the recovery of commodity markets, Pengrowth Corporation
resumed acquisition activities.

On May 18, 1999, Pengrowth Trust issued 6,120,000 Trust Units to raise
gross proceeds of $79,254,000. Pengrowth Corporation acquired interests in
certain properties from Gulf Canada Resources Ltd., Colin Partnership, Talisman
Energy Inc., Suncor Energy Inc. and Renaissance Energy Ltd. An acquisition by
Pengrowth Corporation in October 1999 from Renaissance Energy Ltd., which
included interests in 46 producing wells and three gas plants in the McLeod
River area of Alberta, was completed for a cash consideration of $51,800,000.

On November 10, 2000, Pengrowth Trust issued 8,165,000 Trust Units to
raise gross proceeds of $155,135,000 which were applied to acquire interests in
Goose River, House Mountain, Minnehik Buck Lake, Mitsue and Weyburn from
Canadian Natural Resources Limited for cash consideration of $128,000,000 and
the transfer of certain properties. The balance of the net proceeds were
applied to the purchase of an average 95% working interest in 32 producing oil
wells in the Nipisi area of Alberta in October 2000.

On May 31, 2001, Pengrowth Trust issued 10,895,000 Trust Units to raise
gross proceeds of $225,526,500. Net proceeds of the issue were used to repay
existing indebtedness of Pengrowth Corporation incurred to fund earlier
acquisitions of petroleum and natural gas properties.

Effective June 15, 2001, Pengrowth Corporation acquired a royalty
representing substantially all of the beneficial interest in the natural gas
and liquids production from an 8.4% working interest in the Sable Offshore
Energy Project (SOEP) from Nova Scotia Resources (Ventures) Limited
(NSRVL), for $265 million (net adjusted price of $228.4 million).

On December 18, 2001, Pengrowth Trust issued 5,850,000 Trust Units to
raise gross proceeds of $75,172,500. On December 24, 2001, Pengrowth Trust
issued 877,500 Trust Units for additional gross proceeds of $11,275,875,
representing the full underwriters overallotment option from the equity issue
which closed on December 18, 2001 (for a total of $86,448,375 in issue
proceeds). Net proceeds of the issue were used to repay existing indebtedness
of Pengrowth Corporation incurred to fund capital requirements associated with
Pengrowth Corporations Western Canadian oil and gas properties.

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On December 24, 2001 Pengrowth Corporation acquired certain additional
petroleum and natural gas rights and other assets from NSRVL for a gross
purchase price of $27.5 million including $22.5 million cash and forgiveness of
debt associated with the West Eagle property previously sold to NSRVL in June
2001.

On June 4, 2002, Pengrowth Trust issued 8,000,000 Trust Units at a price
of $15.40 per Trust Unit for total gross proceeds of $123.2 million.

On October 1, 2002, with an effective date of July 1, 2002, Pengrowth
Corporation acquired the B.C. Properties for $387.5 million prior to
adjustments. On October 4, 2002, Pengrowth Corporation sold certain of these
properties to Progress Energy Ltd. for $25.4 million.

In November 2002, Pengrowth Trust completed a cross-border equity offering
of 20,125,000 Trust Units at $14.00 per Trust Unit for gross proceeds of $281.8
million. In total two public Trust Unit offerings completed during 2002 raised
$380 million in net equity proceeds.

Recent Acquisitions

B.C. Properties

On October 1, 2002, with an effective date of July 1, 2002, we acquired
substantially all of the oil and natural gas assets held by Calpine Canada
Natural Gas Partnership in northern British Columbia for $387.5 million, before
adjustments, with the consideration consisting of cash and the tendering of
debt securities of Calpine Corporation and its subsidiaries purchased by us on
the open market. On October 4, 2002, we sold to Progress Energy Ltd. for $25.4
million, before adjustments, seven producing properties and a 50% interest in
61,000 acres (30,500 acres net) of undeveloped oil and natural gas rights from
these assets, which properties are located outside of our core areas in the
B.C. Properties.

The B.C. Properties constitute a new focus area for us that complements
our current interests in the Alberta and Saskatchewan sector of the Western
Canadian Sedimentary Basin and in the Sable Offshore Energy Project located
offshore Nova Scotia. This acquisition provides us with a significant property
base in British Columbia, with 144,700 net developed acres and 247,700 net
undeveloped acres. We also expect that Pengrowth will have additional upside
through development opportunities on the acquired properties pursuant to
farmouts of exploration prospects on the undeveloped acreage.

We operate substantially all of the B.C. Properties, which include 10 oil
batteries, 17 gas compressors and approximately 186 net producing wells.
Calpine Canada Natural Gas Partnership has retained ownership of certain
properties in the Province of British Columbia totaling approximately 40,000
net undeveloped acres. Pengrowth was granted a 2% royalty on these acres, and
Calpine retained a 2% royalty over a similar amount of selected acreage
acquired by us which has deep natural gas potential. Pengrowth has entered
into a marketing agreement with Calpine whereby Pengrowth has granted Calpine
the right to purchase the oil and gas production from the B.C. Properties on
market terms.

We expect that this acquisition will provide us with several significant
benefits. The B.C. Properties allow us to expand our operations into northern
British Columbia with a significant number of proved producing properties that
will provide us additional development opportunities. The relatively high
production rates and shorter reserve lives associated with these properties
provide a balance to our existing portfolio of properties that are
characterized by relatively lower production rates and longer reserve lives.

The undeveloped lands included in these assets of approximately 247,700
net undeveloped acres will provide us with significant farmout potential. As a
first step in developing this farmout potential, we have entered into a farmout
agreement with Progress Energy Ltd. in respect of a one-half interest in 61,000
net undeveloped acres that we share in these assets. Under this agreement,
Progress Energy Ltd. is required to incur all of the exploration expenses
in respect of 100% of the shared acreage to earn an interest in our share of
this acreage. Progress Energy Ltd. is required to spend a minimum of $10
million on exploration on this acreage before April 1, 2004 to drill
approximately 15 wells. On that portion of our acreage in which Progress
Energy Ltd. earns an interest by drilling, we retained a 10% overriding
royalty which will not require us to make additional capital expenditures.
This farmout provides Pengrowth with upside exposure to high impact prospects
without the associated exploration risk.

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We do not typically conduct exploration activities. Therefore, our
ability to enhance the value of undeveloped acreage will depend in part on our
ability to enter into effective farmout arrangements with industry partners.
Our agreement with Progress Energy Ltd. is the first example of this type of
agreement.

We have assumed operatorship of most of the fields comprising the B.C.
Properties, allowing Pengrowth to control operating costs and general and
administrative costs, and to enhance productivity from the properties acquired.
We have hired former Calpine Canada Natural Gas Partnership operating
personnel to conduct field operations and have retained additional technical
personnel from Calpines office staff to enable us to manage the assets and to
identify new opportunities.

SOEP Processing Facilities Acquisition

On May 8, 2003 Pengrowth Corporation acquired an 8.4% working interest in
all of the SOEP production facilities downstream of the Thebaud Central
Processing Platform in conjunction with the adjustment of various operating and

processing expenses with Emera Offshore Inc. for a net consideration of
approximately $57 million. As a result of this acquisition Pengrowth
Corporation will no longer be paying transportation and processing fees in
respect to the downstream facilities (not including the off shore platforms)
and the economic interests of Pengrowth Corporation will be better aligned with
those of the other SOEP co-venturers. Pengrowth Corporation will continue to
pay Emera processing fees for the use of Emeras 8.4% interest in the SOEP
platform facilities upstream of and including the Thebaud Central Processing
Platform.

The SOEP
production facilities are comprised of:



| |  |  | sub-sea pipeline from the Thebaud Platform to shore;                                                
| | - |  | ----------------------------------------------------------------------------------------------------
|
| |  |  | Goldboro Gas Plant;                                                                                 
|
| |  |  | natural gas liquids line between the Goldboro Gas Plant and Point Tupper Fractionation Facility; and
|
| |  |  | Point Tupper Fractionation Facility.                                                                

PENGROWTH MANAGEMENT LIMITED

Business

The principal business of Pengrowth Management is that of a specialty fund
manager. Pengrowth Management currently provides advisory, management, and
administrative services primarily to Pengrowth Trust and Pengrowth Corporation.
Pengrowth Management also previously provided investment advisory and
management services in relation to investments by several Canadian pension
funds in the energy sector. These investments were subsequently acquired by
Pengrowth Corporation for Royalty Units and cash. Pengrowth Management
utilizes its extensive experience and employs prudent oil and gas business
practices to increase the value of the assets of Pengrowth Corporation.
Pengrowth Management has focused upon high quality, long life proven producing
properties located in Canada. Pengrowth Corporation is unique among Canadian
energy trusts in holding a substantial interest in eastern Canada through its
royalty interest in the SOEP. Pengrowth Management will continue to focus upon
acquisitions which are strategic and which add value to Pengrowth Corporation
and Pengrowth Trust.

Management Agreement

Pengrowth Corporation and Pengrowth Trust entered into a management
agreement (the Management Agreement) with Pengrowth Management and
Computershare effective April 23, 2002 (replacing a management agreement dated
December 2, 1988 as amended). The primary duties of Pengrowth Management under
the Management Agreement are to: (i) advise Pengrowth Corporation with respect
to its oil and natural gas properties, including the acquisition, development
and disposition of such properties; (ii) manage the oil and gas properties of
Pengrowth Corporation and Pengrowth Trust; (iii) administer all matters
relating to the Royalty Units and the Trust Units; and (iv) provide Pengrowth
Corporation and Pengrowth Trust with office space and equipment and all
necessary clerical, administrative and accounting services necessary to carry
out their business and affairs (which costs are flowed through
to

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Pengrowth Corporation and Pengrowth Trust). The services performed by
Pengrowth Management also include strategic planning, conduct of oil and gas
economics, conduct of financings, and the provision of specialized advice in
the areas of geology, engineering, production operations, land administration,
oil and gas accounting and risk management. The Board of Directors reviews, on
an ongoing basis, both the nature and extent of the services provided by
Pengrowth Management and the cost of those services. All amendments to the
Management Agreement will be reviewed by the Board of Directors and by
Computershare and presented to the Unitholders for approval by a Unitholders
resolution. The Management Agreement has a minimum notice of termination of
three years and must be considered by Unitholders at the annual general meeting
in 2003. Amendments to the Management Agreement have been proposed by the
Board of Directors and Pengrowth Management for consideration at the annual and
special meeting of Trust Unitholders and Royalty Unitholders scheduled for June
17, 2003. The following describes the terms of remuneration of Pengrowth
Management under the current form of Management Agreement.

Management Fee

The management fee is based upon an Income Amount which is the aggregate
of the net production revenue of Pengrowth Corporation and income earned by
Pengrowth Trust from certain other categories of permitted investments, other
than Royalty Units. The Management Fee is calculated with reference to the
Income Amount on a sliding scale for each 3.5% of the first $50,000,000, 3.0%
of the next $50,000,000 and 2.5% of any Income Amount in excess of
$100,000,000.

Bonus Pool

As an incentive to officers, employees and special consultants of
Pengrowth Management (including employees of Pengrowth Corporation but
excluding the President, James S. Kinnear), a bonus pool has been established
which is carved out from the management fee paid to Pengrowth Management,
determined as a minimum of 0.25% of the Income Amount. Bonuses are paid from
time to time in accordance with criteria to be set at the discretion of
Pengrowth Management as a further incentive for performance.

Acquisition Fee

An acquisition fee is also paid to Pengrowth Management which is 1% of a
Base Amount of the acquisitions in each year and 0.5% in respect of any
acquisitions in excess of the Base Amount. The Base Amount is defined as a
minimum of $100 million, or the purchase price of Established reserves acquired
to replace production from the preceding calendar year. If the reserve
replacement amount is greater than $100 million, then it becomes the Base
Amount for subsequent years. The acquisition fee will be 0.5% of the purchase
price of acquisitions beyond the Base Amount. There is no fee in respect to
the disposition of properties.

PENGROWTH CORPORATION  OPERATIONAL INFORMATION

As at December 31, 2002, Pengrowth Corporation had 206 permanent
employees. Pengrowth Corporation has invested more than $1.9 billion in the
energy sector primarily to purchase mature, proven producing oil and natural
gas properties in Canada.

Principal Properties

The portfolio of properties acquired and held by Pengrowth Corporation
primarily includes long life, oil and gas producing properties with established
production profiles. In 2002, Pengrowth Corporations remaining recoverable
Established Reserves increased from 211 million boe to 215 million boe. During
the year, 37.7 mmboe of new Established Reserves were acquired at a cost of
$10.33 per boe and 9.7 mmboe of non-core established reserves were sold.
Pengrowth Corporation raised its average production from 33,581 boepd in 2000
to 40,320 boepd in 2001, and to 43,785 boepd in 2002.

Pengrowth Corporation obtained the GLJ Report dated February 7, 2003 in
respect to the oil and gas properties of Pengrowth Corporation effective
December 31, 2002. All reserve data presented under this sub-heading is based
on the GLJ Report. The term net when used to describe Pengrowth
Corporations share of production under this sub-heading means the total of
Pengrowth Corporations working interest share before deducting royalties owned
by others.

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Pengrowth Corporations major producing properties are summarized in the
following table:

Summary of the Major Property Interests Held by Pengrowth Corporation as at
December 31, 2002

|                            |  |              |    |            |  |          |    |              |  |               |         |  |  |  |           |  |  |                 |        | 
|--------------------------- |  | ------------ | -- | ---------- |  | -------- | -- | ------------ |  | ------------- | ------- |  |  |  | --------- |  |  | --------------- | ------ | 
|                            |  |              |    |            |  |          |    |              |  |               |         |  |  |  |           |  |  | 2002 Actual Oil
|                            |  | Remaining    |    | Reserve    |  | Gross(3) |    | Value at 12% |  | Equivalent   
|                            |  | Reserve Life |    | Life Index |  | Reserves |    | Discount     |  | Production(4)
|                            |  | (Years)      |    | (Years)    |  | (Mboe)   |    | ($000)       |  | (boepd)      
|                            |  |              |    |            |  |          |    |              |  |              
|Judy Creek BHL Unit         |  |              | 50 |            |  |          | 14 |              |  |               | 45,062  |  |  |  | 270,099   |  |  |                 | 10,272 | 
|Judy Creek West BHL Unit    |  |              | 50 |            |  |          | 12 |              |  |               | 10,287  |  |  |  | 47,022    |  |  |                 | 2,225  | 
|Weyburn Unit                |  |              | 48 |            |  |          | 19 |              |  |               | 14,516  |  |  |  | 46,410    |  |  |                 | 2,059  | 
|Swan Hills Unit No.1        |  |              | 50 |            |  |          | 26 |              |  |               | 13,482  |  |  |  | 48,478    |  |  |                 | 1,674  | 
|Dunvegan Gas Unit           |  |              | 50 |            |  |          | 17 |              |  |               | 6,746   |  |  |  | 33,467    |  |  |                 | 1,008  | 
|Oak                         |  |              | 48 |            |  |          | 13 |              |  |               | 6,039   |  |  |  | 43,678    |  |  |                 | 363    | 
|Rigel                       |  |              | 25 |            |  |          | 5  |              |  |               | 5,912   |  |  |  | 72,494    |  |  |                 | 891    | 
|Monogram Gas Unit           |  |              | 40 |            |  |          | 11 |              |  |               | 5,716   |  |  |  | 53,184    |  |  |                 | 1,579  | 
|Enchant                     |  |              | 42 |            |  |          | 16 |              |  |               | 5,371   |  |  |  | 26,807    |  |  |                 | 937    | 
|McLeod River                |  |              | 28 |            |  |          | 7  |              |  |               | 5,155   |  |  |  | 38,713    |  |  |                 | 1,755  | 
|Squirrel                    |  |              | 24 |            |  |          | 6  |              |  |               | 5,128   |  |  |  | 62,478    |  |  |                 | 651    | 
|Kaybob Notikewin Unit No. 1 |  |              | 43 |            |  |          | 12 |              |  |               | 3,573   |  |  |  | 27,526    |  |  |                 | 922    | 
|Quirk Creek                 |  |              | 40 |            |  |          | 10 |              |  |               | 3,491   |  |  |  | 32,624    |  |  |                 | 711    | 
|Other B.C.(1)               |  |              | 50 |            |  |          | 8  |              |  |               | 15,302  |  |  |  | 122,113   |  |  |                 | 1,304  | 
|Other (2)                   |  |              | 50 |            |  |          | 8  |              |  |               | 69,034  |  |  |  | 444,675   |  |  |                 | 17,434 | 
|                            |  |              |    |            |  |          |    |              |  |               |         |  |  |  |           |  |  |                 |        | 
|Total                       |  |              | 50 |            |  |          | 12 |              |  |               | 214,814 |  |  |  | 1,369,768 |  |  |                 | 43,785 | 
|                            |  |              |    |            |  |          |    |              |  |               |         |  |  |  |           |  |  |                 |        | 

Source: GLJ Report



|(1) |  | Other B.C. includes the B.C. assets recently acquired from Calpine.                                                                                                                                                                                                                                                                                                                         
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Other includes Pengrowth Corporations royalty interest in Emeras 8.4%
working interest in the Sable Offshore Energy Project and 28 other
properties. In accordance with the confidentiality agreement between
Pengrowth Corporation, Emera and the other SOEP owners, Pengrowth
Corporation is unable to present certain information with respect thereto

except on a consolidated basis.
|   
|(3) |  | Remaining recoverable Established Reserves.                                                                                                                                                                                                                                                                                                                                                   
|   
|(4) |  | Natural gas has been converted to equivalent barrels of oil at 6:1.                                                                                                                                                                                                                                                                                                                           

Judy Creek Beaverhill Lake Unit and Judy Creek West Beaverhill Lake Unit

Pengrowth Corporation holds a 100% working interest in the Judy Creek
Beaverhill Lake Unit (the Judy Creek A Pool) and a 94.6% working interest in
the Judy Creek Beaverhill West Lake Unit (the Judy Creek B Pool), (together
Judy Creek). Judy Creek is located approximately 200 kilometres northwest of
Edmonton in North-Central Alberta and covers an area of approximately 155
square kilometres (60 sections). Judy Creek was discovered in 1959, placed on
waterflood (secondary recovery) in 1962 and miscible flood (tertiary recovery)
in 1985. Original oil in place totalled 815 mmbbls of oil in the Judy Creek A
Pool, making it one of the largest oil pools discovered in Western Canada. To
December 31, 2002, 344.1 mmbbls have been produced from the Judy Creek A Pool.
Remaining Established Reserves at December 31, 2002 are estimated at 45.1
mmboe. Original oil in place at the Judy Creek B Pool totalled 262 mmbbls and,
as at December 31, 2002, 113.5 mmbbls have been produced. Original oil in
place at the Judy Creek A and B Pools combined totals 1,077 mmbbls, with an
aggregate of 457.6 mmbbls produced as at December 31, 2002. GLJ estimates the
net remaining Established Reserves at December 31, 2002 for the Judy Creek B
Pool are 10.3 mmboe. Average production for Judy Creek in 2002 was 12,497
boepd and the remaining producing reserve life is 50 years and the Reserve Life
Index is 13 years.

Development Activity

Pengrowth Corporation operates both the Judy Creek A and B Pools. Pengrowth
Corporation has continued the enhanced oil recovery program that was initiated
at Judy Creek in 1985. In the Judy Creek hydrocarbon miscible flood program,
oil production is increased by injecting a light, hydrocarbon-based solvent
(ethane and methane) into the reservoir. In 2002, solvent was injected at 13
solvent injection wells and Pengrowth Corporation is anticipating increased oil
production from up to 37 offsetting production wells.

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New development continued in 2002 with the drilling of four oil wells and three
water/solvent injection wells in the Judy Creek A Pool.

There may be other methods of enhancing future production in Judy Creek
including the use of CO2 as a solvent, potentially reducing solvent costs, or
developing the coal bed methane potential on Pengrowth Corporations acreage.
Coal bed methane technology in Canada is still in the developmental stage, but
is being researched by a number of major oil and gas companies. The technology
is more advanced in the United States where coal bed methane resources have
been successfully harnessed for economic gas production.

During 2002, Pengrowth Corporation continued to focus on reducing operating
costs at Judy Creek. A significant proactive program was initiated to test
pipeline coating integrity. Pengrowth Corporation also optimized the use of
onsite solvent to minimize the cost of solvent purchases.

Development plans in 2003 include drilling at least three oil wells and two
vertical and three horizontal injection wells. Pengrowth Corporation will also
carry out additional stimulations following a successful 2001 acid fracture in
a lower deliverability oil well.

Weyburn Unit

Pengrowth Corporation holds a 9.75% working interest in the Weyburn Unit
located approximately 120 kilometres southeast of Regina in southeast
Saskatchewan. The unit encompasses approximately 216 square kilometres.
Production commenced from the Midale formation, in
1955 under primary depletion (solution gas expansion). The Weyburn Unit was
formed in 1963 for the purpose of implementing an inverted nine-spot waterflood
pressure maintenance scheme. Commencing in 1985, the operator, PanCanadian
Petroleum Limited (now Encana Corporation), embarked on an extensive infill
drilling and waterflood reconfiguration program. In recent years horizontal
wells have been extensively used to arrest production declines. Produced oil
averages 31° API and contains approximately 2% sulphur. GLJ estimates
remaining Established Reserves at December 31, 2002 at 147 (14.5 net) mmbbls of
oil with a remaining producing life of 48 years and a Reserve Life Index of
19.4 years. In 2002, production from the Weyburn Unit averaged 21,118 (2,059
net) boepd from 630 (61.4 net) oil wells.

Development Activity

A carbon dioxide (CO2) miscible flood project was initiated in the fall of
2000. CO2 injection has been initiated in seventeen of nineteen patterns in
phase 1A of the flood with injection rates reaching the targeted 90 to 95 mmcf
per day in September 2001. Recent development activity includes a 5 well
vertical infill program in 2000, 23 horizontal infill wells in 2001 and 5
horizontal wells and various waterflood enhancement programs in 2002.
Incremental oil production to year-end 2002 from the CO2 project has averaged
5,005 (488 net) bopd and the incremental rates are expected to increase to
7,500 bpd by 2008 (731 net).

Swan Hills Unit No. 1

Pengrowth Corporation holds a 10.45% working interest in the Swan Hills Unit
No. 1 located approximately 180 kilometres northwest of Edmonton in
North-Central Alberta. The Swan Hills Beaverhill Lake A and B pools were
discovered and placed on production in 1957. The pools were unitized in 1963
to facilitate the implementation of a line drive waterflood project. Swan
Hills Unit No. 1 is the second largest producing crude oil unit in Canada,
producing an average of 16,019 (1,674 net) boepd in 2002 and is operated by
Devon Canada Ltd. GLJ estimates that the remaining Established Reserves at
December 31, 2002 are 95.8 (10.0 net) mmbbls of oil and 73.8 (7.7 net) bcf of
natural gas with a remaining producing life of 50 years and a Reserve Life
Index of 26 years.

Development Activity

Development activities in the Swan Hills Unit No. 1 during 2002 were minimal.
The operator, Devon Canada Corporation, is currently reviewing its development
plan for the Unit. No drilling is anticipated for 2003.

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Dunvegan Gas Unit No. 1

Pengrowth Corporation holds a 7.97% working interest in the Dunvegan Unit
located near Fairview, Alberta, approximately 430 kilometres northwest of
Edmonton. The Dunvegan natural gas field is operated by Devon Canada
Corporation, has 118 (9.4 net) producing natural gas wells and covers an area
of approximately 213 square kilometres. Approximately 95% of the Dunvegan
Units identified natural gas reserves are contained in the Mississippian
Debolt formation at a depth of approximately 1,465 meters. A natural gas
processing plant, a gathering system and satellite facilities were built in
1973. A deep cut facility was completed in 1987 for the purpose of extracting
propane, butane and heavier natural gas liquids from the raw natural gas
stream. Sour gas processing facilities were added in 1996. A natural gas
storage project has also been implemented in the Dunvegan Unit.

GLJ estimates that Established Reserves of 375 (29.9 net) bcf of natural gas
and 22.1 (1.8 net) mmbbls of natural gas liquids remain to be produced from the
Dunvegan Unit as at December 31, 2002 and that it has a remaining life of 50
years and a Reserve Life Index of 17.3 years. Current production from the
Dunvegan Unit is obtained from five zones. In 2002, Pengrowth Corporations
share of production averaged 1,008 boepd. The majority of unit gas is
currently being sold under contract to Progas Limited with the remainder going
to Pan-Alberta Gas Ltd. and other direct markets.

Development Activity

Development activities in 2002 were minimal.

Oak

The Oak area consists of 29 operated oil and natural gas wells, 6 injection
wells and 7 water source wells surrounding two batteries and three natural gas
compressors, and a 20.6% working interest in a non-operated oil unit.
Production is obtained from the Halfway, Cecil, Baldonnel, Cadomin and Bluesky
formations. Two horizontal wells (one injector and one producer) were drilled
in 2001 to optimize the waterflood and enhance Cecil oil production and
reserves recovery within the area.

Production averaged 1,440 boepd for the fourth quarter of 2002.

Development Activity

Oak C unitization is essentially complete with gas injection commencing in
February, 2003 and water injection in April, 2003. One new injection well may
be drilled in 2003. It is estimated an incremental two million barrels of oil
is recoverable with the waterflood.

Rigel

The Rigel area consists of four Cecil oil pools containing 39 oil wells, 19
injection wells, a central battery, and a solution gas compressor. Two oil
wells, four injection wells and two dry exploration wells were drilled in 2002
resulting in better pool delineation and water flood response to the Rigel
Cecil oil pools.

Optimization of pumping equipment is ongoing and an injector in the south end
of I pool was successfully stimulated. Production averaged 3,535 boepd for
the fourth quarter of 2002.

Development Activity

Several new well locations are currently under technical review. One or two
wells are expected to be drilled in 2003. In addition, other injection wells
may be stimulated or injector conversions initiated.

Monogram Gas Unit

Pengrowth Corporations working interest in the Monogram Gas Unit, located in
southern Alberta, is 53.82 percent. The Unit produces sweet, dry natural gas
from the Medicine Hat, Milk River and Second White Specks formations.
Pengrowth Corporations share of current production is approximately 9 mmcf/d
from 366 wells (197 net). Pengrowth Corporations share of Established
Reserves is estimated to be 34.3 billion cubic feet.

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Following a successful 40-well infill drilling program completed in 2001, the
operator is evaluating another infill program for 2003.

Enchant

The Enchant property is located approximately 120 miles southeast of Calgary.
The property consists of four operated oil pools in which Pengrowth Corporation
holds an average 88% working interest. These pools produce 32° API oil from
the Nisku formation. The Enchant property averaged 937 boepd for 2002.

Pengrowth Corporation holds a 100% working interest in the largest pool (the J
and VV pool) which consists of 33 producing and 9 injection wells with
treating, water handling and gas conservation handled at a central battery.
Primary production commenced in 1992 and a waterflood project was implemented
in 1995. GLJ estimates that the Enchant property has a Reserve Life Index of
16.3 years.

In the Enchant Arcs Unit No. 2, where Pengrowth Corporation converted a well to
injection in mid-2000, pressure support is now apparent and consequently
production has increased over the year.

Development Activity

Pengrowth Corporation expects to drill one potential oil well in the Arcs unit
in 2003.

McLeod River

The McLeod River property is located approximately 70 miles from Edmonton.
Production is obtained from the Rock Creek, Notikewin, Gething and Cardium
formations. Pengrowth Corporation drilled five gas wells during 2002, with
working interests between 50 and 100 percent. Four wells are tied-in and are
on production. The fifth well is in the process of being tied-in. McLeod
River production averaged 1,755 boepd for 2002.

Development Activity

To date in 2003, four wells have been drilled and cased. One well is on
production, one well is being evaluated and two wells are waiting on
completion. Two or three additional wells should be drilled prior to year-end.

Squirrel

The Squirrel area consists of 12 producing oil wells, four water injection
wells, a gas injection well, a central battery and a compressor station. The
oil wells were either drilled or acquired in 2000 to obtain production from the
Triassic North Pine formation. A gas re-injection project was implemented
during November 2000 to maintain pool pressure and increase oil production.
With the commencement of water injection, gas injection has been reduced to two
weeks per month. During 2001, a waterflood was implemented to maximize reserve
recovery. One oil well was fracture stimulated with positive results. We are
currently assessing other fracture candidates. Production averaged 2,583 boepd
for the fourth quarter of 2002.

Development Activity

In 2003, Pengrowth will evaluate the conversion of two oil wells to water
injection to improve the waterflood and reduce the need for gas injection. We
will continue to optimize the existing pumping equipment to improve oil
production.

Kaybob Notikewin Unit No. 1

Pengrowth Corporations working interest in the Kaybob Notikewin Unit No. 1 is
64.5 percent. The property produces natural gas and natural gas liquids, with
20 producing wells (12.9 net) in the Unit. The estimated Reserve Life Index of
the property is 11.7 years.

In 2002, Pengrowths production averaged about 5.3 mmcf/d of natural gas and 38 bpd of
NGLs. GLJ estimates Pengrowths remaining established reserves to be 3.6 mmboe.

Plans for 2003 include the installation of a new wellsite screw compressor.

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Quirk Creek

On March 1, 2002 Pengrowth Corporation significantly expanded its ownership in
the Quirk Creek area of southern Alberta by acquiring an additional 55.9
percent working interest in three producing gas wells, a 26.4 percent working
interest in 10 other producing gas wells and a 25.9 percent working interest in
the Quirk Creek natural gas plant for $34 million after adjustments. This
compares to Pengrowth Corporations previous 5.5 percent interest in 13
producing gas wells in the area and a 4.6 percent in the gas plant. Rated at
80 million cubic feet per day of raw inlet gas, the Quirk Creek gas plant
currently operates at about 90 percent of capacity.

Pengrowth Corporations total working interest share of production for 2003 is
estimated to be approximately 4.5 mmcf/d of natural gas and 220 bpd of natural
gas liquids. Pengrowths remaining Established Reserves are estimated at 3.5 mmboe,
consisting of 16 billion cubic feet of natural gas and 0.8 mmbbls of natural
gas liquids. Pengrowth Corporation also expects that its share of processing
revenue from the gas plant will be similar to the operating revenue from the
acquired interest.

Pengrowth Corporation believes significant upside potential exists for future
gas development and processing revenue in the area.

Sable Offshore Energy Project (SOEP)

SOEP is located offshore the Province of Nova Scotia. On June 15, 2001
Pengrowth Corporation acquired a 99.9% royalty interest in the reserves and
production associated with Emeras 8.4% working interest (the SOEP Royalty)
and is responsible for its royalty share of associated capital and operating
costs. As of December 31, 2002 the total SOEP remaining established reserves
are estimated by Pengrowth Corporation to be in the range of 2.0 tcf and 83
mmbbls of natural gas liquids, with Pengrowth Corporations SOEP Royalty share
estimated at 165 bcf of natural gas and 7.0 million barrels of natural gas
liquids. SOEP production averaged 519 mmcf/d of raw gas during the fourth
quarter of 2002 (43.6 mmcf/d net to Pengrowth Corporation).

On May 8, 2003 Pengrowth Corporation acquired an 8.4% working interest in all
of the SOEP production facilities downstream of the Thebaud Central Processing
Platform in conjunction with the adjustment of various operating and processing
expenses with Emera Offshore Inc. for a net consideration of approximately $57
million. As a result of the acquisition Pengrowth Corporation will no longer
be paying processing fees in respect to the downstream facilities (not
including the off shore platforms) and the economic interests of Pengrowth
Corporation will be better aligned with those of the other SOEP co-venturers.

The SOEP gas reserves were discovered in the early 1970s and commercial gas
production began in December 1999. SOEP currently produces gas and NGLs from
three fields in the vicinity of Sable Island, Nova Scotia: Venture, North
Triumph and Thebaud. The SOEP project consists of two tiers. The first tier,
completed in December 1999, included the construction of the main gas
processing plant at Goldboro, a natural gas liquids fractionation plant at
Point Tupper, offshore platforms at Thebaud, North Triumph and Venture and the
offshore pipeline system.

The operator drilled, cased and completed one well in the Venture field during
2002. The Venture 6 well was placed on production in October, 2002.

One well was drilled in the South Venture field in late 2002 and three more are
planned after the platform is installed. The South Venture field is expected
to come on-stream in late 2004.

The first development well in the Glenelg field was drilled and abandoned in
the first quarter of 2003.

Subject to owner approval, Tier II is expected to be developed over the 2002 
2007 timeframe and will add three platforms and production from wells in Alma,
Glenelg and South Venture. The first Tier II platform will be installed in the
Alma Field. Fabrication and construction began in 2002, followed by
installation, commissioning and start up in 2003. Two wells will be drilled in
the Alma field in 2003. Development of the Tier II fields will be managed in a
staged approach over the next several years.

Sales gas from SOEP is delivered to the onshore gas plant facility at Goldboro,
and the liquids are processed at the fractionation plant in Point Tupper. The
refined gas is transported to market via the Maritimes & Northeast Pipeline.

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Production

Production History

The natural gas, natural gas liquids and oil production of Pengrowth
Corporation is set out in the following table:

|                  |  |             |        |                     |  |               |         |     |  |            |       |               |  |          |       |            |  |               |       |       |  |  |        |  |  |               |        | 
|----------------- |  | ----------- | ------ | ------------------- |  | ------------- | ------- | --- |  | ---------- | ----- | ------------- |  | -------- | ----- | ---------- |  | ------------- | ----- | ----- |  |  | ------ |  |  | ------------- | ------ | 
|                  |  | Natural Gas |        | Natural Gas Liquids |  | Crude Oil     |         |     |  |           
|                  |  |             |        |                     |  |               |         |     |  |           
|                  |  |             |        |                     |  |               |         |     |  |            |       |               |  |          |       |            |  |               |       |       |  |  |        |  |  | Average Daily
|                  |  |             |        |                     |  | Average Daily |         |     |  |            |       | Average Daily |  |          |       |            |  | Average Daily |       | Total
|                  |  | Gas         |        | Production          |  |               |         |     |  | Production |       |               |  |          |       | Production |  | Production   
|12 Months To      |  | mmcf        |        | mcf/d               |  | mstb          |         | bpd |  | mstb       |       | bpd           |  | boepd(1)
|                  |  |             |        |                     |  |               |         |     |  |            |       |               |  |         
|December 31, 1997 |  |             | 18,744 |                     |  |               | 51,355  |     |  |            | 677   |               |  |          | 1,856 |            |  |               | 2,792 |       |  |  | 7,650  |  |  |               | 18,140 | 
|December 31, 1998 |  |             | 21,063 |                     |  |               | 57,707  |     |  |            | 1,220 |               |  |          | 3,342 |            |  |               | 6,094 |       |  |  | 16,695 |  |  |               | 29,741 | 
|December 31, 1999 |  |             | 22,445 |                     |  |               | 61,494  |     |  |            | 1,433 |               |  |          | 3,927 |            |  |               | 6,413 |       |  |  | 17,570 |  |  |               | 31,821 | 
|December 31, 2000 |  |             | 25,656 |                     |  |               | 70,098  |     |  |            | 1,539 |               |  |          | 4,205 |            |  |               | 6,441 |       |  |  | 17,599 |  |  |               | 33,581 | 
|December 31, 2001 |  |             | 33,494 |                     |  |               | 91,764  |     |  |            | 1,919 |               |  |          | 5,258 |            |  |               | 7,200 |       |  |  | 19,726 |  |  |               | 40,320 | 
|December 31, 2002 |  |             | 40,775 |                     |  |               | 111,713 |     |  |            | 1,917 |               |  |          | 5,252 |            |  |               | 7,269 |       |  |  | 19,914 |  |  |               | 43,785 | 

Note :



|(1) |  | 6:1 gas to oil conversion.
|--- |  | --------------------------

Producing Wells

The producing wells of Pengrowth Corporation are summarized in the following
table:

|                                     |  |       |      |     |  |       |       |     |  |       |      |     |  |  |       |  |  |  |      |  |  |  |        | 
|------------------------------------ |  | ----- | ---- | --- |  | ----- | ----- | --- |  | ----- | ---- | --- |  |  | ----- |  |  |  | ---- |  |  |  | ------ | 
|                                     |  | Gas   |      | Oil |  | Total
|                                     |  |       |      |     |  |      
|Property                             |  | Gross |      | Net |  | Gross |       | Net |  | Gross |      | Net
|                                     |  |       |      |     |  |       |       |     |  |       |      |    
|Judy Creek BHL Unit                  |  |       |     |     |  |       |      |     |  |       | 118  |     |  |  | 118.0 |  |  |  | 118  |  |  |  | 118.0  | 
|Weyburn Unit                         |  |       |     |     |  |       |      |     |  |       | 621  |     |  |  | 60.5  |  |  |  | 621  |  |  |  | 60.5   | 
|Swan Hills Unit No.1                 |  |       |     |     |  |       |      |     |  |       | 193  |     |  |  | 20.2  |  |  |  | 193  |  |  |  | 20.2   | 
|Judy Creek West BHL Unit             |  |       |     |     |  |       |      |     |  |       | 32   |     |  |  | 30.3  |  |  |  | 32   |  |  |  | 30.3   | 
|Enchant                              |  |       |     |     |  |       |      |     |  |       | 62   |     |  |  | 60.7  |  |  |  | 62   |  |  |  | 60.7   | 
|Nipisi Non-Unit                      |  |       |     |     |  |       |      |     |  |       | 47   |     |  |  | 44.7  |  |  |  | 47   |  |  |  | 44.7   | 
|Goose River BHL Unit No.1            |  |       |     |     |  |       |      |     |  |       | 31   |     |  |  | 13.1  |  |  |  | 31   |  |  |  | 13.1   | 
|Dunvegan Gas Unit No.1               |  |       | 108  |     |  |       | 8.6   |     |  |       |     |     |  |  |      |  |  |  | 108  |  |  |  | 8.6    | 
|McLeod River                         |  |       | 68   |     |  |       | 35.3  |     |  |       | 3    |     |  |  | 1.3   |  |  |  | 71   |  |  |  | 36.6   | 
|Monogram Gas Unit                    |  |       | 411  |     |  |       | 221.2 |     |  |       |     |     |  |  |      |  |  |  | 411  |  |  |  | 221.2  | 
|Hanlan Swan Hills Pool Gas Unit No.1 |  |       | 9    |     |  |       | 0.7   |     |  |       |     |     |  |  |      |  |  |  | 9    |  |  |  | 0.7    | 
|Kaybob Notikewin Unit No.1           |  |       | 20   |     |  |       | 12.9  |     |  |       |     |     |  |  |      |  |  |  | 20   |  |  |  | 12.9   | 
|House Mountain Unit No.1             |  |       |     |     |  |       |      |     |  |       | 91   |     |  |  | 11.4  |  |  |  | 91   |  |  |  | 11.4   | 
|House Mountain Unit No.2             |  |       |     |     |  |       |      |     |  |       | 18   |     |  |  | 1.3   |  |  |  | 18   |  |  |  | 1.3    | 
|Minnehik Buck Lake Unit No.1         |  |       | 21   |     |  |       | 3.8   |     |  |       |     |     |  |  |      |  |  |  | 21   |  |  |  | 3.8    | 
|Rigel                                |  |       | 1    |     |  |       | 0.5   |     |  |       | 46   |     |  |  | 33.7  |  |  |  | 47   |  |  |  | 34.2   | 
|Redeye                               |  |       | 54   |     |  |       | 36.0  |     |  |       | 3    |     |  |  | 2.0   |  |  |  | 57   |  |  |  | 38.0   | 
|Oak                                  |  |       | 27   |     |  |       | 20.9  |     |  |       | 43   |     |  |  | 28.4  |  |  |  | 70   |  |  |  | 49.3   | 
|Montney                              |  |       | 9    |     |  |       | 8.0   |     |  |       |     |     |  |  |      |  |  |  | 9    |  |  |  | 8.0    | 
|Beatton River                        |  |       | 5    |     |  |       | 4.3   |     |  |       | 16   |     |  |  | 15.3  |  |  |  | 21   |  |  |  | 19.6   | 
|Bulrush                              |  |       | 15   |     |  |       | 10.4  |     |  |       | 1    |     |  |  | 0.3   |  |  |  | 16   |  |  |  | 10.7   | 
|Squirrel                             |  |       |     |     |  |       |      |     |  |       | 31   |     |  |  | 13.1  |  |  |  | 31   |  |  |  | 13.1   | 
|Weasel                               |  |       |     |     |  |       |      |     |  |       | 6    |     |  |  | 5.5   |  |  |  | 6    |  |  |  | 5.5    | 
|Elm                                  |  |       | 2    |     |  |       | 1.5   |     |  |       | 17   |     |  |  | 17.0  |  |  |  | 19   |  |  |  | 18.5   | 
|Tupper                               |  |       | 8    |     |  |       | 4.3   |     |  |       |     |     |  |  |      |  |  |  | 8    |  |  |  | 4.3    | 
|Other                                |  |       | 1001 |     |  |       | 192.5 |     |  |       | 488  |     |  |  | 82.6  |  |  |  | 1489 |  |  |  | 239.0  | 
|                                     |  |       |      |     |  |       |       |     |  |       |      |     |  |  |       |  |  |  |      |  |  |  |        | 
|Total                                |  |       | 1759 |     |  |       | 560.8 |     |  |       | 1867 |     |  |  | 558.2 |  |  |  | 3626 |  |  |  | 1083.9 | 
|                                     |  |       |      |     |  |       |       |     |  |       |      |     |  |  |       |  |  |  |      |  |  |  |        | 

20



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##### Table of Contents



Drilling Activity

The number of wells drilled by Pengrowth Corporation over the past 5 years is
set out in the following table:

|       |  |       |    |     |  |         |      |                 |  |       |    |     |  |       |      |     |  |       |    |     |  |  |     |  |  |  |    |  |  |  |     |  |  |  |     |  |  |  |      | 
|------ |  | ----- | -- | --- |  | ------- | ---- | --------------- |  | ----- | -- | --- |  | ----- | ---- | --- |  | ----- | -- | --- |  |  | --- |  |  |  | -- |  |  |  | --- |  |  |  | --- |  |  |  | ---- | 
|       |  | Gas   |    | Oil |  | Service |      | Dry & Abandoned |  | Total
|       |  |       |    |     |  |         |      |                 |  |      
|Period |  | Gross |    | Net |  | Gross   |      | Net             |  | Gross |    | Net |  | Gross |      | Net |  | Gross |    | Net
|       |  |       |    |     |  |         |      |                 |  |       |    |     |  |       |      |     |  |       |    |    
|1998   |  |       | 60 |     |  |         | 27.7 |                 |  |       | 62 |     |  |       | 4.8  |     |  |       | 11 |     |  |  | 6.5 |  |  |  | 18 |  |  |  | 3.0 |  |  |  | 151 |  |  |  | 42.0 | 
|1999   |  |       | 5  |     |  |         | 0.5  |                 |  |       | 21 |     |  |       | 3.5  |     |  |       |   |     |  |  |    |  |  |  | 3  |  |  |  | 1.2 |  |  |  | 29  |  |  |  | 5.2  | 
|2000   |  |       | 8  |     |  |         | 1.2  |                 |  |       | 61 |     |  |       | 21.4 |     |  |       | 19 |     |  |  | 3.0 |  |  |  | 3  |  |  |  | 0.8 |  |  |  | 91  |  |  |  | 26.4 | 
|2001   |  |       | 62 |     |  |         | 32.4 |                 |  |       | 75 |     |  |       | 13.8 |     |  |       | 9  |     |  |  | 3.8 |  |  |  | 2  |  |  |  | 1.1 |  |  |  | 148 |  |  |  | 51.1 | 
|2002   |  |       | 12 |     |  |         | 5.1  |                 |  |       | 22 |     |  |       | 7.7  |     |  |       | 4  |     |  |  | 3.2 |  |  |  | 1  |  |  |  | 0.5 |  |  |  | 39  |  |  |  | 16.5 | 

Capital Expenditures

The capital expenditures, excluding property acquisitions, made by Pengrowth
Corporation are set out in the following table:

|                  |  |                          |        |                       |  |       |        |  |  |  |        | 
|----------------- |  | ------------------------ | ------ | --------------------- |  | ----- | ------ |  |  |  | ------ | 
|                  |  | Capital Expenditures    
|                  |  | ($000s)                
|                  |  |                         
|12 Months to      |  | Drilling and Exploration |        | Production Facilities |  | Total
|                  |  |                          |        |                       |  |      
|December 31, 1998 |  |                          | 25,330 |                       |  |       | 9,595  |  |  |  | 34,925 | 
|December 31, 1999 |  |                          | 11,712 |                       |  |       | 6,030  |  |  |  | 17,742 | 
|December 31, 2000 |  |                          | 45,351 |                       |  |       | 14,408 |  |  |  | 59,759 | 
|December 31, 2001 |  |                          | 59,516 |                       |  |       | 14,510 |  |  |  | 74,026 | 
|December 31, 2002 |  |                          | 48,233 |                       |  |       | 7,398  |  |  |  | 55,631 | 

Reconciliation of Reserves

The following table summarizes the changes in our crude oil, NGLs and natural
gas reserves, before the deduction of royalties, from December 31, 2000 to
December 31, 2002.

|                        |  |              |        |                   |        |              |        |        |        |        |         |          |        |       |        |  |        |        |       |  |       |   |        |  |        |  
|----------------------- |  | ------------ | ------ | ----------------- | ------ | ------------ | ------ | ------ | ------ | ------ | ------- | -------- | ------ | ----- | ------ |  | ------ | ------ | ----- |  | ----- | - | ------ |  | ------ | -
|                        |  |              |        | Crude Oil (mbbls) |        | NGLs (mbbls)
|                        |  |              |        |                   |        |             
|                        |  |              |        |                   |        |              |        | Risked |        |        |         |          |        |       |        |  |        | Risked |       |  |       |  
|                        |  |              |        | Proved            |        | Probable     |        | Total  |        | Proved |         | Probable |        | Total
|                        |  |              |        |                   |        |              |        |        |        |        |         |          |        |      
|As at December 31, 2000 |  |              | 98,168 |                   |        |              | 19,351 |        |        |        | 117,519 |          |        |       | 15,625 |  |        |        | 2,664 |  |       |   | 18,289 | 
|                        |  | Acquisitions |        |                   | 0      |              |        |        | 0      |        |         |          | 0      |       |        |  | 7,726  |        |       |  | 1,778 |   |        |  | 9,504  |  
|                        |  | Dispositions |        |                   | (2,107 | )            |        |        | (581   | )      |         |          | (2,688 | )     |        |  | (154   | )      |       |  | (29   | ) |        |  | (183   | )
|                        |  | Discoveries  |        |                   | 238    |              |        |        | 20     |        |         |          | 258    |       |        |  | 1,806  |        |       |  | (315  | ) |        |  | 1,491  |  
|                        |  | Production   |        |                   | (7,200 | )            |        |        | 0      |        |         |          | (7,200 | )     |        |  | (1,919 | )      |       |  | 0     |   |        |  | (1,919 | )
|                        |  | Revisions    |        |                   | (1,711 | )            |        |        | (994   | )      |         |          | (2,705 | )     |        |  | (1,226 | )      |       |  | 7     |   |        |  | (1,219 | )
|                        |  |              |        |                   |        |              |        |        |        |        |         |          |        |       |        |  |        |        |       |  |       |   |        |  |       
|As at December 31, 2001 |  |              | 87,388 |                   |        |              | 17,796 |        |        |        | 105,184 |          |        |       | 21,858 |  |        |        | 4,105 |  |       |   | 25,963 | 
|                        |  | Acquisitions |        |                   | 14,635 |              |        |        | 2,274  |        |         |          | 16,909 |       |        |  | 1,979  |        |       |  | 309   |   |        |  | 2,289  |  
|                        |  | Dispositions |        |                   | (3,998 | )            |        |        | (367   | )      |         |          | (4,635 | )     |        |  | (1,193 | )      |       |  | (187  | ) |        |  | (1,380 | )
|                        |  | Discoveries  |        |                   | 0      |              |        |        | 0      |        |         |          | 0      |       |        |  | 128    |        |       |  | 0     |   |        |  | 128    |  
|                        |  | Production   |        |                   | (7,269 | )            |        |        | 0      |        |         |          | (7,269 | )     |        |  | (1,917 | )      |       |  | 0     |   |        |  | (1,917 | )
|                        |  | Revisions    |        |                   | (639   | )            |        |        | (3,082 | )      |         |          | (3,721 | )     |        |  | (273   | )      |       |  | (462  | ) |        |  | (735   | )
|                        |  |              |        |                   |        |              |        |        |        |        |         |          |        |       |        |  |        |        |       |  |       |   |        |  |       
|As at December 31, 2002 |  |              | 90,117 |                   |        |              | 16,621 |        |        |        | 106,738 |          |        |       | 20,582 |  |        |        | 3,767 |  |       |   | 24,349 | 
|                        |  |              |        |                   |        |              |        |        |        |        |         |          |        |       |        |  |        |        |       |  |       |   |        |  |       

21



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##### Table of Contents



|                        |              |  |                   |       |                                  |  |        |       |        |  |          |       |       |  |         |         |        |  |        |        |   |  |         |         |  
|----------------------- | ------------ |  | ----------------- | ----- | -------------------------------- |  | ------ | ----- | ------ |  | -------- | ----- | ----- |  | ------- | ------- | ------ |  | ------ | ------ | - |  | ------- | ------- | -
|                        |              |  | Natural Gas (bcf) |       | Barrels of Oil Equivalent (mboe)
|                        |              |  |                   |       |                                 
|                        |              |  |                   |       |                                  |  | Risked |       |        |  |          |       |       |  |         |         | Risked |  |        |        |  
|                        |              |  | Proved            |       | Probable                         |  | Total  |       | Proved |  | Probable |       | Total
|                        |              |  |                   |       |                                  |  |        |       |        |  |          |       |      
|As at December 31, 2000 |              |  | 241.5             |       |                                  |  | 41.7   |       |        |  | 283.2    |       |       |  | 154,043 |         |        |  | 28,959 |        |   |  | 183,002 |        
|                        | Acquisitions |  |                   | 198.5 |                                  |  |        | 35.0  |        |  |          | 233.5 |       |  |         | 40,808  |        |  |        | 7,608  |   |  |         | 48,416  |  
|                        | Dispositions |  |                   | (10.3 | )                                |  |        | (2.7  | )      |  |          | (13.0 | )     |  |         | (3,983  | )      |  |        | (1,023 | ) |  |         | (5,006  | )
|                        | Discoveries  |  |                   | 7.2   |                                  |  |        | (0.4  | )      |  |          | 6.8   |       |  |         | 3,173   |        |  |        | (355   | ) |  |         | 2,818   |  
|                        | Production   |  |                   | (33.5 | )                                |  |        | 0     |        |  |          | (33.5 | )     |  |         | (14,717 | )      |  |        | 0      |   |  |         | (14,717 | )
|                        | Revisions    |  |                   | 7.9   |                                  |  |        | (8.3  | )      |  |          | (0.4  | )     |  |         | (1,619  | )      |  |        | (2,372 | ) |  |         | (3,991  | )
|                        |              |  |                   |       |                                  |  |        |       |        |  |          |       |       |  |         |         |        |  |        |        |   |  |         |        
|As at December 31, 2001 |              |  | 410.8             |       |                                  |  | 65.3   |       |        |  | 476.2    |       |       |  | 177,705 |         |        |  | 32,817 |        |   |  | 210,522 |        
|                        | Acquisitions |  |                   | 92.9  |                                  |  |        | 18.4  |        |  |          | 111.3 |       |  |         | 32,086  |        |  |        | 5,654  |   |  |         | 37,740  |  
|                        | Dispositions |  |                   | (21.0 | )                                |  |        | (3.0  | )      |  |          | (24.0 | )     |  |         | (8,616  | )      |  |        | (1,125 | ) |  |         | (9,741  | )
|                        | Discoveries  |  |                   | 4.1   |                                  |  |        | 0.15  |        |  |          | 4.3   |       |  |         | 803     |        |  |        | 31     |   |  |         | 834     |  
|                        | Production   |  |                   | (40.8 | )                                |  |        | 0     |        |  |          | (40.8 | )     |  |         | (15,892 | )      |  |        | 0      |   |  |         | (15,982 | )
|                        | Revisions    |  |                   | (22.0 | )                                |  |        | (2.73 | )      |  |          | (24.7 | )     |  |         | (4,615  | )      |  |        | (3,944 | ) |  |         | (8,559  | )
|                        |              |  |                   |       |                                  |  |        |       |        |  |          |       |       |  |         |         |        |  |        |        |   |  |         |        
|As at December 31, 2002 |              |  | 424.0             |       |                                  |  | 78.3   |       |        |  | 502.3    |       |       |  | 181,381 |         |        |  | 33,433 |        |   |  | 214,814 |        
|                        |              |  |                   |       |                                  |  |        |       |        |  |          |       |       |  |         |         |        |  |        |        |   |  |         |        

Reserves

The following summary of reserves includes those working interests and
gross overriding royalty interests held by Pengrowth Corporation as at December
31, 2002. Both the escalated and constant price cases are based on the GLJ
Report. Assumptions and qualifications contained in the GLJ Report relating to
prices, costs and inflation are set forth in the notes to the tables. All
evaluations have been stated prior to any provision for income taxes, interest
costs or general and administrative costs. It should not be assumed that the
estimated present worth values represent the fair market value of the reserves
of Pengrowth Corporation. Probable reserves and cash flows have been reduced
by 50% to reflect the risk of recovery. Pengrowth Corporation is not aware of
any material adverse changes in the information contained in the GLJ Report.

RESERVES
Pengrowth CorporationEscalated Prices and Costs



|                               |  |                |         |              |  |         |        |        |  |         |       |         |  |       |         |         |  |  |        |         |  |  |        |  |  |  |       |  |  |  |         | 
|------------------------------ |  | -------------- | ------- | ------------ |  | ------- | ------ | ------ |  | ------- | ----- | ------- |  | ----- | ------- | ------- |  |  | ------ | ------- |  |  | ------ |  |  |  | ----- |  |  |  | ------- | 
|                               |  | Gross Reserves |         | Net Reserves
|                               |  |                |         |             
|                               |  |                |         |              |  | Natural |        |        |  |         |       |         |  |       |         |         |  |  |        | Natural |  |  |        |  |  |  |       | 
|                               |  | Crude          |         | Gas          |  | Natural |        |        |  |         |       | Crude   |  | Gas   |         | Natural |  |  |        |        
|                               |  | Oil            |         | Liquids      |  | Gas     |        | BOE    |  | Oil     |       | Liquids |  | Gas   |         | BOE    
|                               |  | (mbbls)        |         | (mbbls)      |  | (bcf)   |        | (mboe) |  | (mbbls) |       | (mbbls) |  | (bcf) |         | (mboe) 
|                               |  |                |         |              |  |         |        |        |  |         |       |         |  |       |         |        
|Proved Producing               |  |                | 67,478  |              |  |         | 14,219 |        |  |         | 295.0 |         |  |       | 130,868 |         |  |  | 56,677 |         |  |  | 10,085 |  |  |  | 233.1 |  |  |  | 105,604 | 
|Proved Non-Producing           |  |                | 22,639  |              |  |         | 6,373  |        |  |         | 129.0 |         |  |       | 50,513  |         |  |  | 19,452 |         |  |  | 5,065  |  |  |  | 107.8 |  |  |  | 42,492  | 
|                               |  |                |         |              |  |         |        |        |  |         |       |         |  |       |         |         |  |  |        |         |  |  |        |  |  |  |       |  |  |  |         | 
|Total Proved                   |  |                | 90,117  |              |  |         | 20,592 |        |  |         | 424.0 |         |  |       | 181,381 |         |  |  | 76,129 |         |  |  | 15,150 |  |  |  | 340.9 |  |  |  | 148,096 | 
|                               |  |                |         |              |  |         |        |        |  |         |       |         |  |       |         |         |  |  |        |         |  |  |        |  |  |  |       |  |  |  |         | 
|Risked Probable                |  |                | 16,621  |              |  |         | 3,762  |        |  |         | 78.3  |         |  |       | 33,433  |         |  |  | 13,846 |         |  |  | 2,708  |  |  |  | 58.8  |  |  |  | 26,351  | 
|                               |  |                |         |              |  |         |        |        |  |         |       |         |  |       |         |         |  |  |        |         |  |  |        |  |  |  |       |  |  |  |         | 
|Total Proved +
Risked Probable |  |                | 106,738 |              |  |         | 24,354 |        |  |         | 502.3 |         |  |       | 214,814 |         |  |  | 89,975 |         |  |  | 17,858 |  |  |  | 399.7 |  |  |  | 174,447 | 
|                               |  |                |         |              |  |         |        |        |  |         |       |         |  |       |         |         |  |  |        |         |  |  |        |  |  |  |       |  |  |  |         | 

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                               |  |                                |       |     |  |               |       |     |  |  |       |  |  |  |       | 
|------------------------------ |  | ------------------------------ | ----- | --- |  | ------------- | ----- | --- |  |  | ----- |  |  |  | ----- | 
|                               |  | Estimated Future Net Cash Flow
|                               |  | Before Income Tax ($million)  
|                               |  |                               
|                               |  |                                |       |     |  | Discounted at
|                               |  | Undis-                         |       |    
|                               |  | counted                        |       | 10% |  | 12%           |       | 15%
|                               |  |                                |       |     |  |               |       |    
|Proved Producing               |  |                                | 1,777 |     |  |               | 1,101 |     |  |  | 1,032 |  |  |  | 947   | 
|Proved Non-Producing           |  |                                | 538   |     |  |               | 222   |     |  |  | 190   |  |  |  | 151   | 
|                               |  |                                |       |     |  |               |       |     |  |  |       |  |  |  |       | 
|Total Proved                   |  |                                | 2,316 |     |  |               | 1,323 |     |  |  | 1,222 |  |  |  | 1,098 | 
|                               |  |                                |       |     |  |               |       |     |  |  |       |  |  |  |       | 
|Risked Probable                |  |                                | 509   |     |  |               | 172   |     |  |  | 148   |  |  |  | 121   | 
|                               |  |                                |       |     |  |               |       |     |  |  |       |  |  |  |       | 
|Total Proved +
Risked Probable |  |                                | 2,824 |     |  |               | 1,495 |     |  |  | 1,370 |  |  |  | 1,219 | 
|                               |  |                                |       |     |  |               |       |     |  |  |       |  |  |  |       | 

Based on Gilbert Laustsen Jung Associated Ltd. (GLJ) reserve report (the GLJ
Report) effective December 31, 2002. Natural gas is converted to equivalent
barrels of oil based on 6:1. Natural gas liquids are converted based on 1:1.

22



---



##### Table of Contents



RESERVES
Pengrowth CorporationConstant Prices and Costs



|                               |  |                |         |              |  |         |        |        |  |         |       |         |  |       |         |         |  |  |        |         |  |  |        |  |  |  |       |  |  |  |         | 
|------------------------------ |  | -------------- | ------- | ------------ |  | ------- | ------ | ------ |  | ------- | ----- | ------- |  | ----- | ------- | ------- |  |  | ------ | ------- |  |  | ------ |  |  |  | ----- |  |  |  | ------- | 
|                               |  | Gross Reserves |         | Net Reserves
|                               |  |                |         |             
|                               |  |                |         |              |  | Natural |        |        |  |         |       |         |  |       |         |         |  |  |        | Natural |  |  |        |  |  |  |       | 
|                               |  | Crude          |         | Gas          |  | Natural |        |        |  |         |       | Crude   |  | Gas   |         | Natural |  |  |        |        
|                               |  | Oil            |         | Liquids      |  | Gas     |        | BOE    |  | Oil     |       | Liquids |  | Gas   |         | BOE    
|                               |  | (mbbls)        |         | (mbbls)      |  | (bcf)   |        | (mboe) |  | (mbbls) |       | (mbbls) |  | (bcf) |         | (mboe) 
|                               |  |                |         |              |  |         |        |        |  |         |       |         |  |       |         |        
|Proved Producing               |  |                | 68,178  |              |  |         | 14,319 |        |  |         | 297.4 |         |  |       | 132,072 |         |  |  | 56,545 |         |  |  | 10,074 |  |  |  | 233.3 |  |  |  | 105,496 | 
|Proved Non-Producing           |  |                | 22,647  |              |  |         | 6,379  |        |  |         | 129.0 |         |  |       | 50,531  |         |  |  | 18,389 |         |  |  | 4,850  |  |  |  | 102.6 |  |  |  | 40,342  | 
|                               |  |                |         |              |  |         |        |        |  |         |       |         |  |       |         |         |  |  |        |         |  |  |        |  |  |  |       |  |  |  |         | 
|Total Proved                   |  |                | 90,825  |              |  |         | 20,698 |        |  |         | 426.5 |         |  |       | 182,603 |         |  |  | 74,934 |         |  |  | 14,924 |  |  |  | 335.9 |  |  |  | 145,838 | 
|                               |  |                |         |              |  |         |        |        |  |         |       |         |  |       |         |         |  |  |        |         |  |  |        |  |  |  |       |  |  |  |         | 
|Risked Probable                |  |                | 16,599  |              |  |         | 3,781  |        |  |         | 78.6  |         |  |       | 33,479  |         |  |  | 13,476 |         |  |  | 2,693  |  |  |  | 58.6  |  |  |  | 25,941  | 
|                               |  |                |         |              |  |         |        |        |  |         |       |         |  |       |         |         |  |  |        |         |  |  |        |  |  |  |       |  |  |  |         | 
|Total Proved +
Risked Probable |  |                | 107,424 |              |  |         | 24,479 |        |  |         | 505.1 |         |  |       | 216,082 |         |  |  | 88,410 |         |  |  | 17,617 |  |  |  | 394.5 |  |  |  | 171,779 | 
|                               |  |                |         |              |  |         |        |        |  |         |       |         |  |       |         |         |  |  |        |         |  |  |        |  |  |  |       |  |  |  |         | 

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                               |  |                                |       |     |  |               |       |     |  |  |       |  |  |  |       | 
|------------------------------ |  | ------------------------------ | ----- | --- |  | ------------- | ----- | --- |  |  | ----- |  |  |  | ----- | 
|                               |  | Estimated Future Net Cash Flow
|                               |  | Before Income Tax ($million)  
|                               |  |                               
|                               |  |                                |       |     |  | Discounted at
|                               |  | Undis-                         |       |    
|                               |  | counted                        |       | 10% |  | 12%           |       | 15%
|                               |  |                                |       |     |  |               |       |    
|Proved Producing               |  |                                | 2,627 |     |  |               | 1,531 |     |  |  | 1,424 |  |  |  | 1,292 | 
|Proved Non-Producing           |  |                                | 885   |     |  |               | 411   |     |  |  | 360   |  |  |  | 299   | 
|                               |  |                                |       |     |  |               |       |     |  |  |       |  |  |  |       | 
|Total Proved                   |  |                                | 3,513 |     |  |               | 1,942 |     |  |  | 1,784 |  |  |  | 1,591 | 
|                               |  |                                |       |     |  |               |       |     |  |  |       |  |  |  |       | 
|Risked Probable                |  |                                | 687   |     |  |               | 246   |     |  |  | 213   |  |  |  | 176   | 
|                               |  |                                |       |     |  |               |       |     |  |  |       |  |  |  |       | 
|Total Proved +
Risked Probable |  |                                | 4,200 |     |  |               | 2,188 |     |  |  | 1,997 |  |  |  | 1,767 | 
|                               |  |                                |       |     |  |               |       |     |  |  |       |  |  |  |       | 

Based on Gilbert Laustsen Jung Associated Ltd. (GLJ) reserve report (the GLJ
Report) effective December 31, 2002. Natural gas is converted to equivalent
barrels of oil based on 6:1. Natural gas liquids are converted based on 1:1.

ESTIMATED NET CASH FLOWS
Pengrowth Corporation
Established ReservesEscalated Prices and Costs($ millions)

|                            |          |         |         |         |          |         |         |          |         |          |           |         |         |     |            |         |  |           |      |      |       |       |          |         |         |  |        |      |  |  |       |       |   |  |         |      |        |  |       |       |      |  |          |         |  |  | 
|--------------------------- | -------- | ------- | ------- | ------- | -------- | ------- | ------- | -------- | ------- | -------- | --------- | ------- | ------- | --- | ---------- | ------- |  | --------- | ---- | ---- | ----- | ----- | -------- | ------- | ------- |  | ------ | ---- |  |  | ----- | ----- | - |  | ------- | ---- | ------ |  | ----- | ----- | ---- |  | -------- | ------- |  |  | 
|                            |          |         |         |         |          |         |         |          |         |          |           |         | Net     |     |            |         |  |           |      |      |       |       |          |         |         |  |        |      |  |  |       |       |   |  |         |      |        |  |       |       |      |  | Net Cash
|                            |          |         |         |         |          |         |         |          |         |          |           |         | Revenue |     |            |         |  |           |      |      |       |       |          |         |         |  |        |      |  |  |       |       |   |  |         |      |        |  | Net   |       | Flow
|                            |          |         |         |         | Company  |         |         |          |         |          | After     |         |         |     |            |         |  |           |      |      | Net   |       |          |         |         |  |        |      |  |  |       |       |   |  | Capital |      | Before
|                            |          |         |         |         | Interest |         | Royalty |          | Royalty |          | Operating |         | Other   |     | Production |         |  |           |      |      | Other |       | Abandon- |         | Invest- |  | Income
|Year                        |          | Revenue |         | Burdens |          | Burdens |         | Expenses |         | Expenses |           | Revenue |         | ARC |            | Income  |  | ment Cost |      | ment |       | Taxes
|                            |          |         |         |         |          |         |         |          |         |          |           |         |         |     |            |         |  |           |      |      |       |      
|2003                        |          |         | 617.2   |         |          |         | 115.1   |          |         |          | 502.1     |         |         |     | 123.9      |         |  |           | 3.8  |      |       |       | 374.4    |         |         |  | 0.5    |      |  |  | 16.7  |       |   |  | 2.5     |      |        |  | 117.3 |       |      |  | 271.7    |        
|2004                        |          |         | 531.0   |         |          |         | 90.2    |          |         |          | 440.8     |         |         |     | 131.2      |         |  |           | 3.2  |      |       |       | 306.4    |         |         |  | 0.5    |      |  |  | 16.4  |       |   |  | 2.5     |      |        |  | 74.8  |       |      |  | 246.1    |        
|2005                        |          |         | 480.4   |         |          |         | 77.1    |          |         |          | 403.3     |         |         |     | 124.1      |         |  |           | 3.1  |      |       |       | 276.1    |         |         |  | 0.5    |      |  |  | (6.8  | )     |   |  | 2.5     |      |        |  | 64.1  |       |      |  | 203.1    |        
|2006                        |          |         | 464.0   |         |          |         | 76.1    |          |         |          | 387.9     |         |         |     | 119.3      |         |  |           | 2.9  |      |       |       | 265.7    |         |         |  | 0.5    |      |  |  | (10.1 | )     |   |  | 3.2     |      |        |  | 21.6  |       |      |  | 231.3    |        
|2007                        |          |         | 438.8   |         |          |         | 84.6    |          |         |          | 354.2     |         |         |     | 113.2      |         |  |           | 2.8  |      |       |       | 238.2    |         |         |  | 0.5    |      |  |  | (10.8 | )     |   |  | 2.6     |      |        |  | 19.2  |       |      |  | 206.1    |        
|2008                        |          |         | 391.0   |         |          |         | 80.5    |          |         |          | 310.4     |         |         |     | 106.6      |         |  |           | 2.6  |      |       |       | 201.3    |         |         |  | 0.5    |      |  |  | (9.8  | )     |   |  | 1.2     |      |        |  | 17.1  |       |      |  | 173.7    |        
|2009                        |          |         | 354.5   |         |          |         | 70.4    |          |         |          | 284.1     |         |         |     | 106.0      |         |  |           | 2.4  |      |       |       | 175.7    |         |         |  | 0.5    |      |  |  | (8.7  | )     |   |  | 1.3     |      |        |  | 8.9   |       |      |  | 157.2    |        
|2010                        |          |         | 318.8   |         |          |         | 63.5    |          |         |          | 255.3     |         |         |     | 98.3       |         |  |           | 2.3  |      |       |       | 154.7    |         |         |  | 0.5    |      |  |  | (5.6  | )     |   |  | 1.5     |      |        |  | 7.5   |       |      |  | 140.6    |        
|2011                        |          |         | 287.1   |         |          |         | 57.3    |          |         |          | 229.8     |         |         |     | 92.7       |         |  |           | 2.2  |      |       |       | 135.0    |         |         |  | 0.5    |      |  |  | (2.9  | )     |   |  | 1.2     |      |        |  | 6.9   |       |      |  | 124.5    |        
|2012                        |          |         | 268.5   |         |          |         | 54.8    |          |         |          | 213.7     |         |         |     | 82.0       |         |  |           | 2.0  |      |       |       | 129.7    |         |         |  | 0.5    |      |  |  | (4.1  | )     |   |  | 1.0     |      |        |  | 5.8   |       |      |  | 119.3    |        
|2013                        |          |         | 244.7   |         |          |         | 50.3    |          |         |          | 194.4     |         |         |     | 71.6       |         |  |           | 1.9  |      |       |       | 121.0    |         |         |  | 0.5    |      |  |  | (4.8  | )     |   |  | 1.5     |      |        |  | 5.4   |       |      |  | 109.8    |        
|2014                        |          |         | 216.3   |         |          |         | 43.3    |          |         |          | 173.0     |         |         |     | 66.4       |         |  |           | 1.7  |      |       |       | 105.0    |         |         |  | 0.5    |      |  |  | (3.6  | )     |   |  | 0.7     |      |        |  | 4.4   |       |      |  | 96.7     |        
|                            |          |         |         |         |          |         |         |          |         |          |           |         |         |     |            |         |  |           |      |      |       |       |          |         |         |  |        |      |  |  |       |       |   |  |         |      |        |  |       |       |      |  |          |         |  |  | 
|                            | Subtotal |         |         | 4,612.3 |          |         |         | 863.2    |         |          |           | 3,749.1 |         |     |            | 1,235.4 |  |           |      | 30.7 |       |       |          | 2,483.0 |         |  |        | 6.0  |  |  |       | (34.2 | ) |  |         | 21.6 |        |  |       | 353.1 |      |  |          | 2,080.2 | 
|Remaining                   |          |         | 2,052.6 |         |          |         | 310.9   |          |         |          | 1,741.7   |         |         |     | 930.5      |         |  |           | 15.9 |      |       |       | 795.3    |         |         |  | 13.7   |      |  |  | (0.5  | )     |   |  | 44.8    |      |        |  | 19.5  |       |      |  | 744.2    |        
|                            |          |         |         |         |          |         |         |          |         |          |           |         |         |     |            |         |  |           |      |      |       |       |          |         |         |  |        |      |  |  |       |       |   |  |         |      |        |  |       |       |      |  |          |         |  |  | 
|                            | TOTAL    |         |         | 6,664.9 |          |         |         | 1,174.2  |         |          |           | 5,490.8 |         |     |            | 2,165.9 |  |           |      | 46.6 |       |       |          | 3,278.3 |         |  |        | 19.7 |  |  |       | (34.7 | ) |  |         | 66.4 |        |  |       | 372.5 |      |  |          | 2,824.3 | 
|Discounted
Value at
12% DCF |          |         | 3,061.9 |         |          |         | 557.7   |          |         |          | 2,504.2   |         |         |     | 819.8      |         |  |           | 20.2 |      |       |       | 1,664.2  |         |         |  | 4.3    |      |  |  | (7.6  | )     |   |  | 16.0    |      |        |  | 275.2 |       |      |  | 1,369.8  |        

23



---



##### Table of Contents



ESTIMATED NET CASH FLOWS
Pengrowth Corporation
Established ReservesConstant Prices and Costs($ millions)

|                            |  |         |         |          |  |         |         |          |  |           |         |         |  |            |         |        |  |           |      |       |  |          |         |         |  |        |      |  |  |  |       |   |  |         |      |        |  |     |       |      |  |          |         |  |  | 
|--------------------------- |  | ------- | ------- | -------- |  | ------- | ------- | -------- |  | --------- | ------- | ------- |  | ---------- | ------- | ------ |  | --------- | ---- | ----- |  | -------- | ------- | ------- |  | ------ | ---- |  |  |  | ----- | - |  | ------- | ---- | ------ |  | --- | ----- | ---- |  | -------- | ------- |  |  | 
|                            |  |         |         |          |  |         |         |          |  |           |         | Net     |  |            |         |        |  |           |      |       |  |          |         |         |  |        |      |  |  |  |       |   |  |         |      |        |  |     |       |      |  | Net Cash
|                            |  |         |         |          |  |         |         |          |  |           |         | Revenue |  |            |         |        |  |           |      |       |  |          |         |         |  |        |      |  |  |  |       |   |  |         |      |        |  | Net |       | Flow
|                            |  |         |         | Company  |  |         |         |          |  | After     |         |         |  |            |         |        |  |           |      | Net   |  |          |         |         |  |        |      |  |  |  |       |   |  | Capital |      | Before
|                            |  |         |         | Interest |  | Royalty |         | Royalty  |  | Operating |         | Other   |  | Production |         |        |  |           |      | Other |  | Abandon- |         | Invest- |  | Income
|Year                        |  | Revenue |         | Burdens  |  | Burdens |         | Expenses |  | Expenses  |         | Revenue |  | ARC        |         | Income |  | ment Cost |      | ment  |  | Taxes   
|                            |  |         |         |          |  |         |         |          |  |           |         |         |  |            |         |        |  |           |      |       |  |         
|2003                        |  |         | 696.9   |          |  |         | 131.3   |          |  |           | 565.6   |         |  |            | 123.8   |        |  |           | 4.3  |       |  |          | 437.4   |         |  |        | 0.5  |  |  |  | (7.3  | ) |  |         | 2.3  |        |  |     | 117.3 |      |  |          | 310.9   | 
|2004                        |  |         | 693.4   |          |  |         | 126.1   |          |  |           | 567.3   |         |  |            | 132.2   |        |  |           | 4.3  |       |  |          | 430.8   |         |  |        | 0.5  |  |  |  | (14.1 | ) |  |         | 2.4  |        |  |     | 73.7  |      |  |          | 241.2   | 
|2005                        |  |         | 669.6   |          |  |         | 120.9   |          |  |           | 548.7   |         |  |            | 124.0   |        |  |           | 4.4  |       |  |          | 420.3   |         |  |        | 0.5  |  |  |  | (6.6  | ) |  |         | 2.5  |        |  |     | 62.2  |      |  |          | 349.5   | 
|2006                        |  |         | 639.6   |          |  |         | 135.5   |          |  |           | 504.1   |         |  |            | 116.1   |        |  |           | 4.2  |       |  |          | 383.8   |         |  |        | 0.5  |  |  |  | (10.1 | ) |  |         | 3.1  |        |  |     | 20.7  |      |  |          | 350.4   | 
|2007                        |  |         | 598.4   |          |  |         | 136.9   |          |  |           | 461.5   |         |  |            | 108.1   |        |  |           | 4.0  |       |  |          | 349.4   |         |  |        | 0.5  |  |  |  | (10.1 | ) |  |         | 2.4  |        |  |     | 18.1  |      |  |          | 319.2   | 
|2008                        |  |         | 526.1   |          |  |         | 119.1   |          |  |           | 407.0   |         |  |            | 100.6   |        |  |           | 3.6  |       |  |          | 302.7   |         |  |        | 0.5  |  |  |  | (9.2  | ) |  |         | 1.2  |        |  |     | 15.8  |      |  |          | 277.0   | 
|2009                        |  |         | 470.7   |          |  |         | 106.9   |          |  |           | 363.8   |         |  |            | 99.3    |        |  |           | 3.4  |       |  |          | 261.1   |         |  |        | 0.5  |  |  |  | (8.1  | ) |  |         | 1.2  |        |  |     | 8.1   |      |  |          | 244.2   | 
|2010                        |  |         | 416.1   |          |  |         | 94.1    |          |  |           | 321.9   |         |  |            | 89.7    |        |  |           | 3.1  |       |  |          | 229.1   |         |  |        | 0.5  |  |  |  | (5.3  | ) |  |         | 1.3  |        |  |     | 6.8   |      |  |          | 216.2   | 
|2011                        |  |         | 369.9   |          |  |         | 81.4    |          |  |           | 288.6   |         |  |            | 83.7    |        |  |           | 2.9  |       |  |          | 202.0   |         |  |        | 0.5  |  |  |  | (2.7  | ) |  |         | 1.1  |        |  |     | 6.1   |      |  |          | 192.6   | 
|2012                        |  |         | 339.8   |          |  |         | 74.9    |          |  |           | 264.9   |         |  |            | 72.4    |        |  |           | 2.6  |       |  |          | 189.9   |         |  |        | 0.5  |  |  |  | (4.0  | ) |  |         | 0.8  |        |  |     | 5.1   |      |  |          | 180.4   | 
|2013                        |  |         | 305.3   |          |  |         | 67.3    |          |  |           | 237.9   |         |  |            | 62.4    |        |  |           | 2.3  |       |  |          | 173.2   |         |  |        | 0.5  |  |  |  | (4.8  | ) |  |         | 1.3  |        |  |     | 4.6   |      |  |          | 163.0   | 
|2014                        |  |         | 266.5   |          |  |         | 57.0    |          |  |           | 209.5   |         |  |            | 57.0    |        |  |           | 2.1  |       |  |          | 150.3   |         |  |        | 0.5  |  |  |  | (3.6  | ) |  |         | 0.5  |        |  |     | 3.7   |      |  |          | 142.9   | 
|                            |  |         |         |          |  |         |         |          |  |           |         |         |  |            |         |        |  |           |      |       |  |          |         |         |  |        |      |  |  |  |       |   |  |         |      |        |  |     |       |      |  |          |         |  |  | 
|Subtotal                    |  |         | 5,992.4 |          |  |         | 1,251.7 |          |  |           | 4,740.7 |         |  |            | 1,169.5 |        |  |           | 41.3 |       |  |          | 3,530.0 |         |  |        | 6.0  |  |  |  | (86.0 | ) |  |         | 20.1 |        |  |     | 342.4 |      |  |          | 3,087.5 | 
|Remaining                   |  |         | 2,220.5 |          |  |         | 358.9   |          |  |           | 1,861.7 |         |  |            | 697.5   |        |  |           | 17.0 |       |  |          | 1,147.1 |         |  |        | 13.2 |  |  |  | (3.4  | ) |  |         | 29.3 |        |  |     | 14.8  |      |  |          | 1,112.8 | 
|                            |  |         |         |          |  |         |         |          |  |           |         |         |  |            |         |        |  |           |      |       |  |          |         |         |  |        |      |  |  |  |       |   |  |         |      |        |  |     |       |      |  |          |         |  |  | 
|TOTAL                       |  |         | 8,212.9 |          |  |         | 1,610.5 |          |  |           | 6,602.4 |         |  |            | 1,867.0 |        |  |           | 58.3 |       |  |          | 4,677.2 |         |  |        | 19.2 |  |  |  | (89.5 | ) |  |         | 49.4 |        |  |     | 357.2 |      |  |          | 4,200.3 | 
|Discounted Value at
12% DCF |  |         | 3,924.9 |          |  |         | 793.3   |          |  |           | 3,131.6 |         |  |            | 773.9   |        |  |           | 26.6 |       |  |          | 2,331.1 |         |  |        | 4.3  |  |  |  | (54.9 | ) |  |         | 14.5 |        |  |     | 268.7 |      |  |          | 1,997.4 | 

General Notes:



|(1) |  | Gross reserves are defined as the total Pengrowth Corporation share of
reserves. Net reserves are defined as Pengrowth Corporations gross
reserves less all royalties payable to the Crown and others.                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | GLJ has used its best engineering judgement in estimating production
rates and product pricing in evaluating the properties. It should be
recognized, however, that uncertainties in the oil and gas industry may
result in production rates and product prices being different from those
used in the GLJ Report.                                                                                                                                                                                                                                                                                                                      
|   
|(3) |  | Proved Reserves: Those reserves estimated as recoverable under current
technology and existing economic conditions, in the case of constant
pricing, and anticipated economic conditions, in the case of escalated
pricing, from that portion of a reservoir which can be reasonably
evaluated as economically productive on the basis of analysis of drilling,
geological, geophysical and engineering data, including the reserves to be
obtained by enhanced recovery processes demonstrated to be economic and
technically successful in the subject reservoir.                                                                     
|   
|    |  | Proved Producing Reserves: Those proved reserves that are actually on
production or, if not producing, that could be recovered from existing
wells or facilities and where the reason for the current non-producing
status is the choice of the owner rather than the lack of markets or some
other reason. An illustration of such a situation is where a well or zone
is capable but is shut-in because its deliverability is not required to
meet contract commitments.                                                                                                                                                              
|   
|    |  | Proved Non-Producing Reserves: Those proved reserves that are not
currently producing either due to lack of facilities and/or markets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|    |  | Probable Reserves: Those reserves which an analysis of drilling,
geological, geophysical and engineering data does not demonstrate to be
proved under current technology and existing economic conditions, but
where such analysis suggests the likelihood of their existence and future
recovery. Probable reserves to be obtained by the application of enhanced
recovery processes will be the increased recovery over and above that
estimated in the proved category which can be realistically estimated for
the pool on the basis of enhanced recovery processes which can be
reasonably expected to be instituted in the future.
|   
|(4) |  | Net cash flow is income derived from the sale of net reserves of oil, gas
and gas by-products, gas processing and other revenue, less all capital
costs, production taxes and operation costs and before provision for
income taxes and administrative overhead costs.                                                                                                                                                                                                                                                                                                                                                                  
|   
|(5) |  | All values are shown in Canadian dollars.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

24



---



##### Table of Contents





|(6) |  | Pengrowth Corporation is entitled to claim Alberta Royalty Credits
(ARC). The ARC program is based on a price-sensitive formula linked to
crude oil prices. Credits vary from a high of 75% of the eligible Alberta
Crown Royalties for a taxation year to a maximum of $1,500,000 (75% of
$2,000,000) when the price of oil falls below U.S. $15 per barrel, to a
low of 25% (maximum $500,000) when the price of oil rises above U.S. $30
per barrel. In the GLJ Report, the ARC program is assumed to continue
indefinitely.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(7) |  | The escalating price assumptions assume the continuance of current laws
and regulations and any forecast changes in wellhead selling prices and
takes into account inflation with respect to future operating and capital
costs. In the escalating price assumptions evaluation contained in the
GLJ Report, operating and capital costs have been escalated in accordance
with GLJs estimate thereof. GLJs oil and gas base case price forecasts
effective January 1, 2003 are as shown below.                                

|                                       |  |            |       |              |  |               |       |                                        |  |            |      |         |  |        |     |  |  |  |       |  |  |  |       |  |  |  |       | 
|-------------------------------------- |  | ---------- | ----- | ------------ |  | ------------- | ----- | -------------------------------------- |  | ---------- | ---- | ------- |  | ------ | --- |  |  |  | ----- |  |  |  | ----- |  |  |  | ----- | 
|GLJ Oil,
Gas and NGLs Price Forecasts
|                                      
|                                       |  | Oil Prices |       |              |  |               |       | Capital and                            |  |            |      |         |  |        |     |  |  |  |       | 
|                                       |  |            |       | Gas Prices   |  | Operating     |       | Natural Gas Liquid Prices FOB Edmonton
|                                       |  | Edmonton   |       | West Texas   |  | Average       |       | Cost                                   |  |           
|                                       |  | FOB        |       | Intermediate |  | Alberta Price |       | Escalation                             |  | Condensate |      | Propane |  | Butane
|                                       |  | CDN        |       | US           |  | CDN           |       | Factors                                |  | CDN        |      | CDN     |  | CDN   
|Year                                   |  | $/bbl      |       | $/bbl        |  | $/mcf         |       | %/yr                                   |  | $/bbl      |      | $/bbl   |  | $/bbl 
|                                       |  |            |       |              |  |               |       |                                        |  |            |      |         |  |       
|2003                                   |  |            | 38.50 |              |  |               | 25.50 |                                        |  |            | 5.35 |         |  |        | 1.5 |  |  |  | 39.50 |  |  |  | 24.75 |  |  |  | 27.25 | 
|2004                                   |  |            | 32.50 |              |  |               | 22.00 |                                        |  |            | 4.75 |         |  |        | 1.5 |  |  |  | 33.00 |  |  |  | 19.75 |  |  |  | 21.50 | 
|2005                                   |  |            | 30.50 |              |  |               | 21.00 |                                        |  |            | 4.50 |         |  |        | 1.5 |  |  |  | 31.00 |  |  |  | 19.50 |  |  |  | 20.50 | 
|2006                                   |  |            | 30.50 |              |  |               | 21.00 |                                        |  |            | 4.65 |         |  |        | 1.5 |  |  |  | 31.00 |  |  |  | 19.50 |  |  |  | 20.50 | 
|2007                                   |  |            | 30.50 |              |  |               | 21.25 |                                        |  |            | 4.65 |         |  |        | 1.5 |  |  |  | 31.00 |  |  |  | 19.50 |  |  |  | 20.50 | 
|2008                                   |  |            | 31.00 |              |  |               | 21.75 |                                        |  |            | 4.65 |         |  |        | 1.5 |  |  |  | 31.50 |  |  |  | 19.75 |  |  |  | 21.00 | 
|2009                                   |  |            | 31.50 |              |  |               | 22.00 |                                        |  |            | 4.65 |         |  |        | 1.5 |  |  |  | 32.00 |  |  |  | 20.25 |  |  |  | 21.50 | 
|2010                                   |  |            | 32.00 |              |  |               | 22.25 |                                        |  |            | 4.70 |         |  |        | 1.5 |  |  |  | 32.50 |  |  |  | 20.50 |  |  |  | 22.00 | 
|2011                                   |  |            | 32.50 |              |  |               | 22.50 |                                        |  |            | 4.75 |         |  |        | 1.5 |  |  |  | 33.00 |  |  |  | 20.75 |  |  |  | 22.50 | 
|2012                                   |  |            | 33.00 |              |  |               | 23.00 |                                        |  |            | 4.85 |         |  |        | 1.5 |  |  |  | 33.50 |  |  |  | 21.00 |  |  |  | 23.00 | 
|2013                                   |  |            | 33.50 |              |  |               | 23.25 |                                        |  |            | 4.90 |         |  |        | 1.5 |  |  |  | 34.00 |  |  |  | 21.50 |  |  |  | 23.50 | 



|    |  | and thereafter escalate at 1.5% per annum                                                                                                                                   
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(8) |  | The net cash flows estimated in the GLJ Report will not correspond
directly to distributable income reported by Pengrowth Trust for several
reasons including the following:



| | (a) |  | net cash flow before income tax from the GLJ Report is stated
prior to general and administrative expenses, interest, management
fees and holdbacks;                                                                                                                                                                                                                                                                   
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | for purposes of calculating distributable income, Pengrowth
Trust amortizes the cost of miscible flood injection fluids purchased
from third parties over the period of expected future economic
benefit arising from the injection of those fluids, which is
currently 30 months. The GLJ Report includes the full cost of
purchased injection fluids ($21.2 million in 2003) in operating costs
in the year incurred.



|(9)  |  | The US/Canadian dollar exchange rate is assumed to be $0.65 for 2003,
$0.66 for 2004, $0.67 for 2005, $0.67 for 2006, $0.68 for 2007 and beyond.                                                                                                                                                                                                                 
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|(10) |  | The constant price assumptions assume that the prices set out above for
2003 adjusted to the wellhead and for oil quality, will remain constant
for the economic life of the reserves.                                                                                                                                                                           
|    
|(11) |  | Operating costs are based on historical costs determined from a review of
operating statements. Capital costs have been included to drill,
complete, equip and tie-in wells where applicable. Capital costs have
been escalated similarly to operating costs. All operating costs and
capital cost figures quoted in the GLJ Report are in terms of 2003
dollars.
|    
|(12) |  | GLJ estimates the total capital costs net to Pengrowth Corporation
necessary to achieve the estimated future production revenues to be as
follows:                                                                                                                                                                                                               

|                         |  |                         |       |      |  |      |      |      |  |           |      |       |  |  |      |  |  |  |      |  |  |  |       | 
|------------------------ |  | ----------------------- | ----- | ---- |  | ---- | ---- | ---- |  | --------- | ---- | ----- |  |  | ---- |  |  |  | ---- |  |  |  | ----- | 
|                         |  | Projected Capital Costs
|                         |  | ($ millions)           
|                         |  |                        
|                         |  | 2003                    |       | 2004 |  | 2005 |      | 2006 |  | Remainder |      | Total
|                         |  |                         |       |      |  |      |      |      |  |           |      |      
|Escalated Prices & Costs |  |                         | 117.3 |      |  |      | 74.8 |      |  |           | 64.1 |       |  |  | 21.6 |  |  |  | 94.7 |  |  |  | 372.5 | 
|Constant Pricing         |  |                         | 117.3 |      |  |      | 73.7 |      |  |           | 62.2 |       |  |  | 20.7 |  |  |  | 83.3 |  |  |  | 357.2 | 



|(13) |  | Well abandonment has been considered in evaluating the reserves. Site
Restoration and facilities abandonment costs have not been included.
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------

25



---



##### Table of Contents



Selected Historical Quarterly Information

Average Daily Production

The following table shows Pengrowths average daily production volumes,
before the deduction of royalties, for each of the fiscal quarters of 2001 and
2002.



|                    |  |              |        |              |  |               |        |              |  |  |         |  |  |  |         | 
|------------------- |  | ------------ | ------ | ------------ |  | ------------- | ------ | ------------ |  |  | ------- |  |  |  | ------- | 
|                    |  | 2001        
|                    |  |             
|                    |  | (unaudited) 
|                    |  | Three Months |        | Three Months |  | Three Months  |        | Three Months
|                    |  | Ended        |        | Ended        |  | Ended         |        | Ended       
|                    |  | March 31,    |        | June 30,     |  | September 30, |        | December 31,
|                    |  |              |        |              |  |               |        |             
|Crude oil (bpd)     |  |              | 20,433 |              |  |               | 19,650 |              |  |  | 19,352  |  |  |  | 19,482  | 
|NGLs (bpd)          |  |              | 4,352  |              |  |               | 4,418  |              |  |  | 5,969   |  |  |  | 6,155   | 
|                    |  |              |        |              |  |               |        |              |  |  |         |  |  |  |         | 
|Total
liquids (bpd) |  |              | 24,785 |              |  |               | 24,068 |              |  |  | 25,321  |  |  |  | 25,637  | 
|Natural gas (mcf/d) |  |              | 73,654 |              |  |               | 75,753 |              |  |  | 106,579 |  |  |  | 110,503 | 
|                    |  |              |        |              |  |               |        |              |  |  |         |  |  |  |         | 
|Total (boepd)       |  |              | 37,026 |              |  |               | 36,840 |              |  |  | 43,083  |  |  |  | 44,222  | 
|                    |  |              |        |              |  |               |        |              |  |  |         |  |  |  |         | 

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                      |  |              |         |              |  |               |         |              |  |  |         |  |  |  |         | 
|--------------------- |  | ------------ | ------- | ------------ |  | ------------- | ------- | ------------ |  |  | ------- |  |  |  | ------- | 
|                      |  | 2002        
|                      |  |             
|                      |  | (unaudited) 
|                      |  | Three Months |         | Three Months |  | Three Months  |         | Three Months
|                      |  | Ended        |         | Ended        |  | Ended         |         | Ended       
|                      |  | March 31,    |         | June 30,     |  | September
30, |         | December 31,
|                      |  |              |         |              |  |               |         |             
|Crude oil (bblpd)     |  |              | 18,510  |              |  |               | 18,096  |              |  |  | 17,640  |  |  |  | 25,358  | 
|NGLs (bblpd)          |  |              | 5,001   |              |  |               | 5,350   |              |  |  | 4,991   |  |  |  | 5,664   | 
|                      |  |              |         |              |  |               |         |              |  |  |         |  |  |  |         | 
|Total liquids (bblpd) |  |              | 23,511  |              |  |               | 23,446  |              |  |  | 22,631  |  |  |  | 31,022  | 
|Natural gas (mcfpd)   |  |              | 110,050 |              |  |               | 103,856 |              |  |  | 105,434 |  |  |  | 127,391 | 
|                      |  |              |         |              |  |               |         |              |  |  |         |  |  |  |         | 
|Total (boepd)         |  |              | 41,859  |              |  |               | 40,771  |              |  |  | 40,203  |  |  |  | 52,253  | 
|                      |  |              |         |              |  |               |         |              |  |  |         |  |  |  |         | 

Crude Oil and NGLs Netbacks

The following table shows Pengrowths average netbacks received for crude
oil and NGLs for each of the fiscal quarters of 2001 and 2002.

|                                        |  |                |       |              |  |               |       |              |  |              |       |              |  |               |       |              |  |  |       |   |  |  |       |   |  |  |       |   |  |  |       |  
|--------------------------------------- |  | -------------- | ----- | ------------ |  | ------------- | ----- | ------------ |  | ------------ | ----- | ------------ |  | ------------- | ----- | ------------ |  |  | ----- | - |  |  | ----- | - |  |  | ----- | - |  |  | ----- | -
|                                        |  | 2001           |       | 2002        
|                                        |  |                |       |             
|                                        |  | (unaudited)    |       | (unaudited) 
|                                        |  | Three Months   |       | Three Months |  | Three Months  |       | Three Months |  | Three Months |       | Three Months |  | Three Months  |       | Three Months
|                                        |  | Ended          |       | Ended        |  | Ended         |       | Ended        |  | Ended        |       | Ended        |  | Ended         |       | Ended       
|                                        |  | March 31,      |       | June 30,     |  | September 30, |       | December 31, |  | March 31,    |       | June 30,     |  | September 30, |       | December 31,
|                                        |  |                |       |              |  |               |       |              |  |              |       |              |  |               |       |             
|                                        |  | (in $ per bbl)
|Sales price (net of hedging
gains/loss) |  |                | 40.45 |              |  |               | 38.52 |              |  |              | 36.74 |              |  |               | 28.40 |              |  |  | 30.52 |   |  |  | 36.22 |   |  |  | 38.20 |   |  |  | 38.24 |  
|Processing and other income             |  |                | 0.49  |              |  |               | 0.50  |              |  |              | 0.59  |              |  |               | 0.35  |              |  |  | 0.63  |   |  |  | (0.01 | ) |  |  | 0.67  |   |  |  | 0.54  |  
|Royalties                               |  |                | (6.38 | )            |  |               | (3.49 | )            |  |              | (7.10 | )            |  |               | (3.73 | )            |  |  | (4.97 | ) |  |  | (4.56 | ) |  |  | (7.64 | ) |  |  | (9.67 | )
|Operating costs(1)                      |  |                | (7.33 | )            |  |               | (7.54 | )            |  |              | (9.09 | )            |  |               | (6.33 | )            |  |  | (7.32 | ) |  |  | (9.20 | ) |  |  | (8.23 | ) |  |  | (9.42 | )
|Amortization of
injectants(2)           |  |                | (4.79 | )            |  |               | (5.40 | )            |  |              | (5.39 | )            |  |               | (5.25 | )            |  |  | (5.76 | ) |  |  | (5.28 | ) |  |  | (5.14 | ) |  |  | (3.56 | )
|                                        |  |                |       |              |  |               |       |              |  |              |       |              |  |               |       |              |  |  |       |   |  |  |       |   |  |  |       |   |  |  |       |  
|Netback                                 |  |                | 22.44 |              |  |               | 22.59 |              |  |              | 15.75 |              |  |               | 13.44 |              |  |  | 13.10 |   |  |  | 17.17 |   |  |  | 17.86 |   |  |  | 16.13 |  
|                                        |  |                |       |              |  |               |       |              |  |              |       |              |  |               |       |              |  |  |       |   |  |  |       |   |  |  |       |   |  |  |       |  
|Average selling price:                  |  |                |       |              |  |               |       |              |  |              |       |              |  |               |       |              |  |  |       |   |  |  |       |   |  |  |       |   |  |  |       |  
|Light and medium
conventional
crude oil |  |                | 40.35 |              |  |               | 39.44 |              |  |              | 39.28 |              |  |               | 29.92 |              |  |  | 32.62 |   |  |  | 38.63 |   |  |  | 40.40 |   |  |  | 39.91 |  
|NGLs                                    |  |                | 40.94 |              |  |               | 34.42 |              |  |              | 27.98 |              |  |               | 23.60 |              |  |  | 22.71 |   |  |  | 28.04 |   |  |  | 30.42 |   |  |  | 30.78 |  

Notes:



|1. |  | Operating costs are expenses incurred to operate producing properties
including such items as field and Calgary based operations staff costs,
power, fuel, chemicals, repairs and maintenance, lease rentals, property
taxes, processing and treating fees, overhead charges from other
operators, and the cost of carbon dioxide injected in the Weyburn carbon
dioxide flood.
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Injectants (mostly ethane and methane) are used in miscible flood
programs to stimulate incremental oil recovery. The cost of injectants
purchased from third parties for miscible flood projects is deferred and
amortized over the period of expected future economic benefit which is
estimated as 30 months.                                                               

26



---



##### Table of Contents



Natural Gas Netbacks

The following table shows Pengrowths average netbacks received for
natural gas for each of the fiscal quarters of 2001 and 2002.

|                                        |  |                |       |              |  |               |       |              |  |              |       |              |  |               |       |              |  |  |       |   |  |  |       |   |  |  |       |   |  |  |       |  
|--------------------------------------- |  | -------------- | ----- | ------------ |  | ------------- | ----- | ------------ |  | ------------ | ----- | ------------ |  | ------------- | ----- | ------------ |  |  | ----- | - |  |  | ----- | - |  |  | ----- | - |  |  | ----- | -
|                                        |  | 2001           |       | 2002        
|                                        |  |                |       |             
|                                        |  | (unaudited)    |       | (unaudited) 
|                                        |  | Three Months   |       | Three Months |  | Three Months  |       | Three Months |  | Three Months |       | Three Months |  | Three Months  |       | Three Months
|                                        |  | Ended          |       | Ended        |  | Ended         |       | Ended        |  | Ended        |       | Ended        |  | Ended         |       | Ended       
|                                        |  | March 31,      |       | June 30,     |  | September 30, |       | December 31, |  | March 31,    |       | June 30,     |  | September 30, |       | December 31,
|                                        |  |                |       |              |  |               |       |              |  |              |       |              |  |               |       |             
|                                        |  | (in $ per mcf)
|Sales price (net of
hedging
gains/loss) |  |                | 8.30  |              |  |               | 5.72  |              |  |              | 3.20  |              |  |               | 2.40  |              |  |  | 2.84  |   |  |  | 3.75  |   |  |  | 3.38  |   |  |  | 5.16  |  
|Processing and
other income             |  |                | 0.20  |              |  |               | 0.19  |              |  |              | 0.17  |              |  |               | 0.13  |              |  |  | 0.14  |   |  |  | 0.12  |   |  |  | 0.20  |   |  |  | 0.14  |  
|Royalties                               |  |                | (2.95 | )            |  |               | (1.60 | )            |  |              | (0.14 | )            |  |               | (0.32 | )            |  |  | (0.44 | ) |  |  | (0.68 | ) |  |  | (0.56 | ) |  |  | (0.75 | )
|Operating costs(1)                      |  |                | (0.80 | )            |  |               | (0.82 | )            |  |              | (1.15 | )            |  |               | (1.35 | )            |  |  | (1.22 | ) |  |  | (1.15 | ) |  |  | (1.30 | ) |  |  | (1.29 | )
|                                        |  |                |       |              |  |               |       |              |  |              |       |              |  |               |       |              |  |  |       |   |  |  |       |   |  |  |       |   |  |  |       |  
|Netback                                 |  |                | 4.75  |              |  |               | 3.49  |              |  |              | 2.08  |              |  |               | 0.86  |              |  |  | 1.32  |   |  |  | 2.04  |   |  |  | 1.72  |   |  |  | 3.26  |  
|                                        |  |                |       |              |  |               |       |              |  |              |       |              |  |               |       |              |  |  |       |   |  |  |       |   |  |  |       |   |  |  |       |  

Note:



|(1) |  | Operating costs are expenses incurred to operate producing properties
including such items as field and Calgary based operations staff costs,
power, fuel, chemicals, repairs and maintenance, lease rentals, property
taxes, processing and treating fees, overhead charges from other
operators, and the cost of carbon dioxide injected in the Weyburn carbon
dioxide flood.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Capital Expenditures

The following table summarizes Pengrowths capital expenditures in the
categories indicated for each of the fiscal quarters of 2001 and 2002.



|                                     |  |                           |        |              |  |               |         |              |  |  |        |   |  |  |        |  
|------------------------------------ |  | ------------------------- | ------ | ------------ |  | ------------- | ------- | ------------ |  |  | ------ | - |  |  | ------ | -
|                                     |  | 2001                     
|                                     |  |                          
|                                     |  | (unaudited)              
|                                     |  | Three Months              |        | Three Months |  | Three Months  |         | Three Months
|                                     |  | Ended                     |        | Ended        |  | Ended         |         | Ended       
|                                     |  | March 31,                 |        | June 30,     |  | September 30, |         | December 31,
|                                     |  |                           |        |              |  |               |         |             
|                                     |  | (in thousands of dollars)
|Development drilling and
completions |  |                           | 11,378 |              |  |               | 15,669  |              |  |  | 18,018 |   |  |  | 14,451 |  
|Plants and facilities                |  |                           | 2,538  |              |  |               | 4,180   |              |  |  | 2,805  |   |  |  | 4,987  |  
|                                     |  |                           |        |              |  |               |         |              |  |  |        |   |  |  |        |  
|                                     |  |                           | 13,916 |              |  |               | 19,849  |              |  |  | 20,823 |   |  |  | 19,438 |  
|Producing property
acquisitions      |  |                           | 22,027 |              |  |               | 227,682 |              |  |  | 1,611  |   |  |  | 28,738 |  
|                                     |  |                           |        |              |  |               |         |              |  |  |        |   |  |  |        |  
|Total capital expenditures           |  |                           | 35,943 |              |  |               | 247,531 |              |  |  | 22,434 |   |  |  | 48,176 |  
|Property dispositions                |  |                           |       |              |  |               | (22,046 | )            |  |  | (1,520 | ) |  |  | (1     | )
|                                     |  |                           |        |              |  |               |         |              |  |  |        |   |  |  |        |  
|Net capital expenditures             |  |                           | 35,943 |              |  |               | 225,485 |              |  |  | 20,914 |   |  |  | 48,175 |  
|                                     |  |                           |        |              |  |               |         |              |  |  |        |   |  |  |        |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                     |  |                           |        |              |  |               |         |              |  |  |        |  |  |  |         | 
|------------------------------------ |  | ------------------------- | ------ | ------------ |  | ------------- | ------- | ------------ |  |  | ------ |  |  |  | ------- | 
|                                     |  | 2002                     
|                                     |  |                          
|                                     |  | (unaudited)              
|                                     |  | Three Months              |        | Three Months |  | Three Months  |         | Three Months
|                                     |  | Ended                     |        | Ended        |  | Ended         |         | Ended       
|                                     |  | March 31,                 |        | June 30,     |  | September 30, |         | December 31,
|                                     |  |                           |        |              |  |               |         |             
|                                     |  | (in thousands of dollars)
|Development drilling and
completions |  |                           | 8,448  |              |  |               | 10,757  |              |  |  | 14,700 |  |  |  | 14,328  | 
|Plants and facilities                |  |                           | 2,942  |              |  |               | 3,285   |              |  |  | 83     |  |  |  | 1,088   | 
|                                     |  |                           |        |              |  |               |         |              |  |  |        |  |  |  |         | 
|                                     |  |                           | 11,390 |              |  |               | 14,042  |              |  |  | 14,783 |  |  |  | 15,416  | 
|Producing property
acquisitions      |  |                           |       |              |  |               | 33,955  |              |  |  | 1,681  |  |  |  | 356,125 | 
|                                     |  |                           |        |              |  |               |         |              |  |  |        |  |  |  |         | 
|Total capital expenditures           |  |                           | 11,390 |              |  |               | 47,997  |              |  |  | 16,464 |  |  |  | 371,541 | 
|Property dispositions                |  |                           | (4,954 | )            |  |               | (39,641 | )            |  |  | 72     |  |  |  | 1,370   | 
|                                     |  |                           |        |              |  |               |         |              |  |  |        |  |  |  |         | 
|Net capital expenditures             |  |                           | 6,436  |              |  |               | 8,356   |              |  |  | 16,536 |  |  |  | 372,911 | 
|                                     |  |                           |        |              |  |               |         |              |  |  |        |  |  |  |         | 

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Replacement of Properties

In the event that Pengrowth Corporation determines that the sale of any of
its interests in properties, and the release of the Royalty therefrom, would be
in the best interest of the Unitholders, the Royalty Indenture permits it to
make sales without the requirement of approval of the Unitholders, provided
that the aggregate properties sold in any given year total less than 25% of the
assets of Pengrowth Corporation, determined as at the date of disposition of
the properties based upon an independent engineering appraisal. Any sale
exceeding this threshold must be approved by a Special Resolution of the
Unitholders.

In connection with any sale of properties, the management of Pengrowth
Corporation will also be required to consider whether the net proceeds of the
sale should be distributed or reinvested to purchase replacement properties
(the Replacement Properties). If the proceeds of disposition are not
reinvested in the purchase of Replacement Properties within the same calendar
year then these proceeds are allocated to the Royalty Unitholders.

Borrowing

Pursuant to the Royalty Indenture, Pengrowth Corporation is permitted to
borrow funds to finance the purchase of properties or for capital expenditures,
to incur take or pay obligations and other burdens and encumbrances in respect
of the properties, and to grant security on the properties in priority to the
Royalty to secure the borrowing of such funds. Repayment of debt shall be
scheduled so as to minimize, to the extent possible, income tax payable by
Pengrowth Corporation. Debt service charges (to the extent that they exceed
certain revenues of Pengrowth Corporation) and taxes payable by Pengrowth
Corporation will be deducted in computing Royalty Income.

In April 2003, Pengrowth closed a US$200 million private placement of
senior unsecured notes to a group of U.S. institutional investors. The notes
are in two tranches, one of US$150 million 4.93% senior notes due April 23,
2010 and one of US$50 million 5.47% senior notes due 2013. In addition,
Pengrowth has a $260 million revolving credit facility syndicated among eight
financial institutions that is extendible on June 20, 2004 for a 364 day
revolving period or a two year amortization term. These arrangements replace a
single $575 million revolving credit facility that had been in place on
December 31, 2002.

Marketing Arrangements

Pengrowth sells forward a portion of its future production through a
combination of fixed price sales contracts with customers and commodity swap
agreements with financial counterparties. Pengrowth has hedged a total of
17,000 mmbtu/d of SOEP natural gas using financial swaps for the remainder of
2003 at an average Goldboro netback price of $5.11/mmbtu and 12,000 mmbtu/d of
SOEP gas for 2004 at an average Goldboro netback price of $4.54/mmbtu. We have
also hedged 14,218 mcf/d of western Canada natural gas for the remainder of
2003 at an average plantgate price of $6.07/mcf.

Pengrowth has currently hedged 11,000 bopd of crude oil for the remainder
of 2003 at an average price of $41.48/bbl and 8,500 bopd for 2004 at a price of
$38.09, including foreign exchange risk.

Interest Rate Swaps

Pengrowth Corporation has fixed the interest rate on $125 million of its
debt for periods of three years ending November 30, 2004 ($75 million),
December 31, 2004 ($25 million) and March 4, 2005 ($25 million) at an average
interest rate of 4.09% before stamping fees.

The estimated fair value of the interest rate swaps has been determined
based on the amount that Pengrowth would receive or pay to terminate the
contracts at period end. On December 31, 2002 the amount that Pengrowth would
pay to terminate the interest rate swaps was $2.1 million, and as at March 31,
2003, the amount that Pengrowth would pay to terminate the interest rate swaps
is $481,000.

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TRUST UNITS

The Trust Indenture

Trust units are issued under the terms of the trust indenture between
Pengrowth Corporation and Computershare, as trustee. A maximum of 500,000,000
trust units may be created and issued pursuant to the trust indenture, of which
110,562,327 trust units were outstanding on December 31, 2002. Each trust unit
represents a fractional undivided beneficial interest in Pengrowth Trust.

The trust indenture, among other things, provides for the establishment of
Pengrowth Trust, the issue of trust units, the permitted investments of
Pengrowth Trust, the procedures respecting distributions to unitholders, the
appointment and removal of Computershare as trustee, Computershares rights and
restrictions, the calling of meetings of unitholders, the conduct of business
at such meetings, notice provisions, the form of trust unit certificates and
the termination of Pengrowth Trust. The trust indenture may be amended from
time to time. Most amendments to the trust indenture, including the early
termination of Pengrowth Trust and the sale or transfer of the property of
Pengrowth Trust as an entirety or substantially as an entirety, require
approval by an extraordinary resolution of the unitholders. An extraordinary
resolution of the unitholders requires the approval of not less than 66 2/3% of
the votes cast by unitholders at a meeting of unitholders held in accordance
with the trust indenture at which two or more holders of at least 5% of the
aggregate number of trust units then outstanding are represented.
Computershare, as trustee, is permitted to amend the trust indenture without
the consent or approval of the unitholders for certain purposes, including: (i)
ensuring that Pengrowth Trust complies with applicable laws or government
requirements, including satisfaction of certain provisions of the Income Tax
Act (Canada); (ii) ensuring that additional protection is provided for the
interests of unitholders as Computershare may consider expedient; and (iii)
making typographical or other non-substantive changes that are not adverse to
the interests of Computershare or unitholders.

The Trustee

Computershare, as trustee, is generally empowered by the trust indenture
to exercise any and all rights and powers that could be exercised by the owner
of the assets of Pengrowth Trust. Computershares specific responsibilities
include, but are not limited to, the following: (i) reviewing and accepting
subscriptions for trust units and issuing trust units subscribed for; (ii)
subscribing for royalty units; (iii) issuing trust units in exchange for
royalty units tendered to it for exchange; and (iv) maintaining records and
providing timely reports to unitholders. Computershare is authorized to
delegate its powers and duties as trustee except as prohibited by law.

Computershare, as trustee, must exercise its powers and carry out its
functions under the trust indenture honestly, in good faith and in the best
interests of Pengrowth Trust and the unitholders, and must exercise that degree
of care, diligence and skill that a reasonably prudent person would exercise in
comparable circumstances. Computershare is not required to devote its entire
time to the business and affairs of Pengrowth Trust.

Computershare, as trustee, shall be reappointed or replaced every two
years as may be determined by a majority of the votes cast at an annual meeting
of the unitholders. Computershare may resign upon 60 days notice to Pengrowth
Corporation. Computershare may be removed by extraordinary resolution of the
unitholders or by Pengrowth Corporation in certain specific circumstances.
Such resignation or removal shall become effective upon the acceptance of
appointment by a successor.

Redemption Right

Trust units are redeemable by Computershare, as trustee, at the request of
a unitholder when properly endorsed for transfer and when accompanied by a duly
completed and properly executed notice requesting redemption. The redemption
right permits unitholders in the aggregate to redeem trust units for maximum
proceeds of $25,000 in any calendar month; provided that such limitation may be
waived at the discretion of the board of directors of Pengrowth Corporation.
The redemption price is the lesser of: (i) 95% of the market price of the trust
units on the principal market on which the trust units are quoted for trading
during the 10 day trading period commencing immediately after the date on which
the trust units are surrendered for redemption; and (ii) the closing market
price on the principal market on which the trust units are quoted for trading
on the date that the trust units are surrendered for redemption.

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Voting at Meetings of Pengrowth Trust

Meetings of unitholders may be called on 21 days notice and may be called
at any time by Computershare, as trustee, or upon written request of
unitholders holding in the aggregate not less than 5% of the trust units, and
shall be called by Computershare and held annually. All activities necessary
to organize any such meeting will be undertaken by Pengrowth Corporation on
behalf of Computershare. At all meetings of the unitholders, each holder is
entitled to one vote in respect of each trust unit held. Unitholders may
attend and vote at all meetings of the unitholders either in person or by proxy
and a proxy holder need not be a unitholder. Two persons present in person
either holding personally or representing as proxies at least 5% of the
outstanding trust units constitute a quorum for the transaction of business at
all such meetings. Except as otherwise provided in the trust indenture,
matters requiring the approval of the unitholders must be approved by
extraordinary resolution.

Unitholders are entitled to pass resolutions that will bind Computershare,
as trustee, with respect to a limited list of matters, including but, not
limited to, the following: (i) the removal or appointment of Computershare as
trustee; (ii) the removal or appointment of the auditor of Pengrowth Trust;
(iii) the amendment of the trust indenture; (iv) the approval of subdivisions
or consolidations of trust units; (v) the sale of the assets of Pengrowth Trust
as an entirety or substantially as an entirety; and (vi) termination of
Pengrowth Trust.

Unitholders can also consider the appointment of an inspector to
investigate whether Computershare has performed its duties arising under the
trust indenture. Such an inspector shall be appointed if a resolution
approving the appointment of such inspector is passed by a majority of the
votes duly cast at a meeting held for that purpose.

Voting at Meetings of Pengrowth Corporation

The unitholders, along with holders of royalty units other than
Computershare, as trustee, are entitled to voting rights at meetings of
shareholders of Pengrowth Corporation on the basis of one vote for each trust
unit (or royalty unit) held.

Termination of Pengrowth Trust

The unitholders may vote to terminate Pengrowth Trust at any meeting of
the unitholders, subject to the following:



| | (i)   |  | a vote may be held only if requested in writing by the holders
of not less than 25% of the trust units, or if the trust units have
become ineligible for investment by RRSPs, RRIFs, RESPs and DPSPs;
| | ----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (ii)  |  | the termination must be approved by extraordinary resolution of the
unitholders; and                                                                                                                 
|
| | (iii) |  | a quorum representing 5% of the issued and outstanding trust
units must be present or represented by proxy at the meeting at which
the vote is taken.                                                

If the unitholders approve termination, Computershare, as trustee, will
sell the assets of Pengrowth Trust, discharge all known liabilities and
obligations, and distribute the remaining assets to the unitholders.
Computershare will distribute directly to the unitholders any royalty units
which Computershare is unable to sell by the date set for termination.

Unitholder Limited Liability

The trust indenture between Pengrowth Corporation and Computershare, as
trustee, provides that no unitholder will be subject to any personal liability
in connection with Pengrowth Trust or its obligations and affairs, and the
satisfaction of claims of any nature arising out of or in connection therewith
is only to be made out of Pengrowth Trusts assets. Additionally, the trust
indenture states that no unitholder is liable to indemnify or reimburse
Computershare for any liabilities incurred by Computershare with respect to any
taxes payable by or liabilities incurred by Pengrowth Trust or Computershare,
and all such liabilities will be enforceable only against, and will be
satisfied only out of, Pengrowth Trusts assets. It is intended that the
operations of Pengrowth Trust will be conducted, upon the advice of counsel, in
such a way and in such jurisdictions as to avoid as far as possible any
material risk of liability on the unitholders for claims against Pengrowth
Trust. Notwithstanding the foregoing, because of uncertainties in the law
relating to trusts such as Pengrowth

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Trust, there is a risk that a unitholder could be held personally liable
for obligations of Pengrowth Trust to the extent that claims are not satisfied
by Pengrowth Trust.

THE ROYALTY INDENTURE

Royalty Units

Royalty units are issued under the terms of the royalty indenture between
Pengrowth Corporation and Computershare, as trustee. A maximum of 500,000,000
royalty units can be created and issued pursuant to the royalty indenture. The
royalty units represent fractional undivided interests in the royalty,
consisting of a 99% share of royalty income.

The royalty indenture, among other things, provides for the grant of the
royalty, the issue of royalty units, the imposition on and acceptance by
Pengrowth Corporation of certain obligations and business restrictions, the
calling of meetings of unitholders, the conduct of business thereat, notice
provisions, the appointment and removal of the trustee, and the establishment
and use of the reserve as discussed below.

The royalty indenture may be amended or varied only by extraordinary
resolution of the unitholders and the holders of royalty units, or by Pengrowth
Corporation and Computershare, as trustee, for certain specifically defined
purposes so long as, in the opinion of Computershare, the unitholders and the
holders of royalty units are not prejudiced as a result.

The holders of royalty units other than the trustee are currently entitled
to vote at shareholder meetings of Pengrowth Corporation on the basis of one
vote for each royalty unit held.

The Royalty

The royalty consists of a 99% share of royalty income. Under the terms
of the royalty indenture, Pengrowth Corporation is entitled to retain a 1%
share of royalty income. The royalty indenture provides that royalty
income means the aggregate of any special distributions and gross revenue
less, without duplication, the aggregate of the following amounts:



| | (a) |  | operating costs;                                            
| | --- |  | ------------------------------------------------------------
|
| | (b) |  | general and administrative costs;                           
|
| | (c) |  | management fees and debt service charges;                   
|
| | (d) |  | taxes or other charges payable by Pengrowth Corporation; and
|
| | (e) |  | any amounts paid into the reserve.                        

Gross revenues essentially consist of cash proceeds from the sale of
petroleum substances produced from the properties of Pengrowth Corporation and
all other money and things of value received by or incurring to Pengrowth
Corporation by virtue of its legal and beneficial ownership of the properties,
but not including processing or transportation revenues or proceeds from the
sale of properties. Special distributions essentially consist of proceeds from
the sale of properties that Pengrowth Corporation is unable to reinvest in
suitable replacement properties.

The reserve is established by Pengrowth Corporation with miscellaneous
revenues (such as processing and transportation revenues) and allowable
portions of gross revenue, and must be used to fund the payment of operating
costs, future abandonments, environmental and reclamation costs, general and
administrative costs, management fees and debt service charges. Any amounts
remaining in the reserve when there are no longer any properties that are
subject to the royalty, and all of the above obligations have been satisfied,
are to be paid to Pengrowth Trust so long as there are no adverse income tax
consequences for Pengrowth Corporation or Pengrowth Trust, failing which such
amounts shall be distributed to shareholders of Pengrowth Corporation as a
dividend.

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Pengrowth Corporation is required to pay to the holders of royalty units,
on each cash distribution date, 99% of royalty income received by Pengrowth
Corporation from the properties for the period ending on the last day of the
second month immediately preceding that cash distribution date. The holders of
royalty units, including Pengrowth Trust, will reimburse Pengrowth Corporation
for 99% of the Crown royalties and other Crown charges payable by Pengrowth
Corporation in respect of production from, or ownership of, the properties.
Pengrowth Corporation will at all times be entitled to set off its right to be
so reimbursed against its obligation to pay the royalty.

To date, Pengrowth Corporation has not incurred income taxes but is
subject to the federal large corporations tax and the Saskatchewan resource
surcharge. Any taxes payable by Pengrowth Corporation will reduce royalty
income, and thus the distributions received by holders of royalty units and
trust units.

The Trustee

Computershare Trust Company of Canada is the trustee for the holders of
royalty units under the royalty indenture. It will remain the trustee
thereunder unless it resigns or is removed by unitholders. Computershare or
its successor may resign on 60 days prior notice to the unitholders, and may be
removed by extraordinary resolution of the unitholders. Computershares
successor must be approved in the same manner.

Computershare, in accordance with its power to delegate under the trust
indenture, has appointed Pengrowth Corporation as the administrator of
Pengrowth Trust to assume those functions of the trustee which are largely
discretionary pursuant to the royalty indenture, subject to the powers and
duties of Pengrowth Management pursuant to its management agreement.

DISTRIBUTABLE INCOME PER UNIT

The following Distributable Income per Unit has been reported in respect
of the quarters indicated since January 1, 1990:



|             |  |      |         |      |  |      |         |      |  |      |         |      |  |      |         |      |  |   |         |  |  |   |         |  |  |   |        |  |  |   |        | 
|------------ |  | ---- | ------- | ---- |  | ---- | ------- | ---- |  | ---- | ------- | ---- |  | ---- | ------- | ---- |  | - | ------- |  |  | - | ------- |  |  | - | ------ |  |  | - | ------ | 
|Quarter      |  | 2002 |         | 2001 |  | 2000 |         | 1999 |  | 1998 |         | 1997 |  | 1996 |         | 1995
|             |  |      |         |      |  |      |         |      |  |      |         |      |  |      |         |     
|First        |  | $    | 0.4100  |      |  | $    | 1.1400  |      |  | $    | 0.8900  |      |  | $    | 0.4670  |      |  | $ | 0.4300  |  |  | $ | 0.5500  |  |  | $ | 0.3400 |  |  | $ | 0.2900 | 
|Second       |  |      | 0.5400  |      |  |      | 0.8300  |      |  |      | 0.8250  |      |  |      | 0.5990  |      |  |   | 0.3550  |  |  |   | 0.5730  |  |  |   | 0.6210 |  |  |   | 0.3944 | 
|Third        |  |      | 0.5200  |      |  |      | 0.6300  |      |  |      | 0.9600  |      |  |      | 0.6800  |      |  |   | 0.3300  |  |  |   | 0.3900  |  |  |   | 0.3600 |  |  |   | 0.2950 | 
|Fourth       |  |      | 0.6000  |      |  |      | 0.4100  |      |  |      | 1.1100  |      |  |      | 0.7400  |      |  |   | 0.4100  |  |  |   | 0.5040  |  |  |   | 0.5990 |  |  |   | 0.3310 | 
|             |  |      |         |      |  |      |         |      |  |      |         |      |  |      |         |      |  |   |         |  |  |   |         |  |  |   |        |  |  |   |        | 
|Total Annual |  | $    | 2.0700  |      |  | $    | 3.0100  |      |  | $    | 3.7850  |      |  | $    | 2.4860  |      |  | $ | 1.5250  |  |  | $ | 2.0170  |  |  | $ | 1.9200 |  |  | $ | 1.3104 | 
|             |  |      |         |      |  |      |         |      |  |      |         |      |  |      |         |      |  |   |         |  |  |   |         |  |  |   |        |  |  |   |        | 
|Cumulative   |  | $    | 23.4013 |      |  | $    | 21.3313 |      |  | $    | 18.3213 |      |  | $    | 14.5363 |      |  | $ | 12.0503 |  |  | $ | 10.5253 |  |  | $ | 8.5083 |  |  | $ | 6.5883 | 
|             |  |      |         |      |  |      |         |      |  |      |         |      |  |      |         |      |  |   |         |  |  |   |         |  |  |   |        |  |  |   |        | 

[Additional columns below]

[Continued from above table, first column(s) repeated]

|             |  |      |        |      |  |      |        |      |  |      |        |  |  |   |        |  |  |   |        | 
|------------ |  | ---- | ------ | ---- |  | ---- | ------ | ---- |  | ---- | ------ |  |  | - | ------ |  |  | - | ------ | 
|Quarter      |  | 1994 |        | 1993 |  | 1992 |        | 1991 |  | 1990
|             |  |      |        |      |  |      |        |      |  |     
|First        |  | $    | 0.2774 |      |  | $    | 0.2792 |      |  | $    | 0.2588 |  |  | $ | 0.4784 |  |  | $ | 0.4472 | 
|Second       |  |      | 0.2600 |      |  |      | 0.3400 |      |  |      | 0.1200 |  |  |   | 0.1174 |  |  |   | 0.1395 | 
|Third        |  |      | 0.2750 |      |  |      | 0.1700 |      |  |      | 0.1300 |  |  |   | 0.0302 |  |  |   | 0.0602 | 
|Fourth       |  |      | 0.3969 |      |  |      | 0.2202 |      |  |      | 0.3788 |  |  |   | 0.1236 |  |  |   | 0.2126 | 
|             |  |      |        |      |  |      |        |      |  |      |        |  |  |   |        |  |  |   |        | 
|Total Annual |  | $    | 1.2093 |      |  | $    | 1.0094 |      |  | $    | 0.8876 |  |  | $ | 0.7496 |  |  | $ | 0.8595 | 
|             |  |      |        |      |  |      |        |      |  |      |        |  |  |   |        |  |  |   |        | 
|Cumulative   |  | $    | 5.2779 |      |  | $    | 4.0686 |      |  | $    | 3.0592 |  |  | $ | 2.1716 |  |  | $ | 1.4220 | 
|             |  |      |        |      |  |      |        |      |  |      |        |  |  |   |        |  |  |   |        | 

Distributable income is typically paid in the form of distributions in the
second month following the month in which they are earned. From time to time, the
Board of Directors of Pengrowth Corporation may determine, on behalf of
Pengrowth Trust, to cause Pengrowth Trust to withhold a portion of the
distributable income in periods of high commodity prices in order to reduce the
variability of distributions payable to Trust Unitholders resulting from
commodity price fluctuations.

At the special meeting of the Royalty Unitholders of Pengrowth Corporation
held on April 23, 2002, the Royalty Unitholders amended the royalty indenture
to permit the Board of Directors of Pengrowth Corporation to establish a
reserve, within Pengrowth Corporation, of up to 20% of its gross revenue if the
Board of Directors of Pengrowth Corporation determines that it would be
advisable to do so in accordance with prudent business practices to provide for
the payment of future capital expenditures or for the payment of royalty income
in any future period. Subsequent to this Unitholder action, the Board of
Directors of Pengrowth Corporation authorized the establishment of a reserve to
fund future capital obligations and future payments of royalty income to
Pengrowth Trust. The reserve will be comprised of funds retained within
Pengrowth Corporation in an amount equivalent to approximately 10% of the
distributable income of Pengrowth Trust calculated as if the reserve had not
been established.

INDUSTRY CONDITIONS

Government Regulation

The oil and natural gas industry is subject to extensive controls and
regulation imposed by various levels of government. Although we do not expect
that these controls and regulation will affect the operations of Pengrowth in a

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manner materially different than they would affect other oil and gas
companies of similar size, the controls and regulations should be considered
carefully by investors in the oil and gas industry. All current legislation is
a matter of public record and Pengrowth is unable to predict what additional
legislation or amendments may be enacted.

Pricing and Marketing  Oil

In Canada, producers of oil negotiate sales contracts directly with oil
purchasers, with the result that the market determines the price of oil. Such
price depends, in part, on oil type and quality, prices of competing fuels,
distance to market, the value of refined products and the supply/demand balance
and other contractual terms. Oil exports may be made pursuant to export
contracts with terms not exceeding one year, in the case of light crude, and
not exceeding two years, in the case of heavy crude, provided that an order
approving any such export has been obtained from the National Energy Board.
Any oil export to be made pursuant to a contract of longer duration (to a
maximum of 25 years) requires an exporter to obtain an export licence from the
National Energy Board and the issue of such a licence requires the approval of
the Governor in Council.

Pricing and Marketing  Natural Gas

In Canada, the price of natural gas sold in intraprovincial,
interprovincial and international trade is determined by negotiation between
buyers and sellers. Such price depends, in part, on natural gas quality,
prices of competing natural gas and other fuels, distance to market, access to
downstream transportation, length of contract term, weather conditions, the
supply/demand balance and other contractual terms. Natural gas exported from
Canada is subject to regulation by the National Energy Board and the government
of Canada. Exporters are free to negotiate prices and other terms with
purchasers, provided that the export contracts must continue to meet certain
criteria prescribed by the National Energy Board and the government of Canada.
Natural gas exports for a term of less than two years or for a term of 2 to 20
years (in quantities of not more than 30,000 m3/day), must be made pursuant to
an order of the National Energy Board. Any natural gas export to be made
pursuant to a contract of longer duration (to a maximum of 25 years) or a
larger quantity, requires an exporter to obtain an export licence from the
National Energy Board and the issue of such a licence requires the approval of
the Governor in Council.

The governments of Alberta, British Columbia and Saskatchewan also
regulate the volume of natural gas which may be removed from those provinces
for consumption elsewhere, based on such factors as reserve availability,
transportation arrangements and market considerations.

The North American Free Trade Agreement

On January 1, 1994, the North American Free Trade Agreement among the
governments of Canada, the U.S. and Mexico became effective. The North
American Free Trade Agreement carries forward most of the material energy terms
contained in the Canada-United States Free Trade Agreement. In the context of
energy resources, Canada continues to remain free to determine whether exports
to the United States or Mexico will be allowed, provided that any export
restrictions do not: (i) reduce the proportion of energy resource exported
relative to domestic use (based upon the proportion prevailing in the most
recent 36 month period); (ii) impose an export price higher than the domestic
price; or (iii) disrupt normal channels of supply. All three countries are
prohibited from imposing minimum export or import price requirements and,
except as permitted in enforcement of countervailing and antidumping orders and
undertakings, minimum or maximum import price requirements.

The North American Free Trade Agreement contemplates the reduction of
Mexican restrictive trade practices in the energy sector and prohibits
discriminatory border restrictions and export taxes. The North American Free
Trade Agreement also contemplates clearer disciplines on regulators to ensure
fair implementation of any regulatory changes and to minimize disruption of
contractual arrangements, which is important for Canadian natural gas exports.

Provincial Royalties and Incentives

In addition to federal regulations, each province in Canada has
legislation and regulations which govern land tenure, royalties, production
rates, environmental protection and other matters. The royalty regime is a
significant factor in the profitability of oil and natural gas production.
Royalties payable on production from lands other than Crown lands are
determined by negotiations between the freehold mineral owner and the lessee,
although production from such lands is also

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subject to certain provincial taxes and royalties. Crown royalties are
determined by governmental regulation and are generally calculated as a
percentage of the value of the gross production, and the rate of royalties
payable generally depends in part on prescribed reference prices, well
productivity, geographical location and field discovery date.

From time to time, the federal and provincial governments in Canada have
established incentive programs which have included royalty rate reductions,
royalty holidays and tax credits for the purpose of encouraging oil and natural
gas exploration or enhanced planning projects although the trend is toward
eliminating these types of programs in favour of long term programs which
enhance predictability for producers. Oil and natural gas royalty holidays and
reductions for specific wells will reduce the amount of Crown royalties paid by
Pengrowth to the provincial governments.

On October 13, 1992, the government of Alberta implemented major changes
to its royalty structure and created incentives for exploring and developing
oil and natural gas reserves. The incentives created include: (i) a one year
royalty holiday on new oil discovered on or after October 1, 1992; (ii)
incentives by way of royalty holidays and reduced royalties on reactivated, low
productivity, vertical re-entry and horizontal wells; (iii) introduction of
separate par pricing for light/medium and heavy oil; and (iv) a modification of
the royalty formula structure through the implementation of a the third tier
royalty with a base rate of 10% and a rate cap of 25% for oil pools discovered
after September 30, 1992. The new oil royalty reserved to the Crown has a base
rate of 10% and a rate cap of 30%. The old oil royalty reserved to the Crown
has a base rate of 10% and a rate cap of 35%.

In Alberta, the royalty reserved to the Crown in respect of natural gas
production, subject to various incentives, is between 15% and 30%, in the case
of new gas, and between 15% and 35%, in the case of old gas, depending upon a
prescribed or corporate average reference price. Natural gas produced from
qualifying exploratory gas wells spudded or deepened after July 31, 1985 and
before June 1, 1988 is eligible for a royalty exemption for a period of 12
months, up to a prescribed maximum amount. Natural gas produced from
qualifying intervals in eligible gas wells spudded or deepened to a depth below
2,500 meters is also subject to a royalty exemption, the amount of which
depends on the depth of the wells.

In Alberta, certain producers of oil or natural gas are also entitled to a
credit against the royalties payable to the Alberta Crown by virtue of the
Alberta royalty tax credit program. The Alberta royalty tax credit program is
based on a price-sensitive formula, and the Alberta royalty tax credit program
rate varies between 75%, at prices for oil below $100 per cubic meter, and 25%,
at prices above $210 per cubic meter. The Alberta royalty tax credit program
rate is applied to a maximum of $2,000,000 of Alberta Crown royalties payable
for each producer or associated group of producers. Crown royalties on
production from producing properties acquired from companies claiming maximum
entitlement to Alberta royalty tax credit program will generally not be
eligible for Alberta royalty tax credit program. The Alberta royalty tax
credit program rate is established quarterly based on the average par price,
as determined by the Alberta Resource Development Department for the previous
quarterly period.

In British Columbia, the amount payable as a royalty in respect of oil
depends on the vintage of the oil (whether it was produced from a pool
discovered before or after October 31, 1975), the quantity of oil produced in a
month and the value of the oil. Oil produced from newly discovered pools may
be exempt from the payment of a royalty for the first 36 months of production.
The royalty payable on natural gas is determined by a sliding scale based on a
reference price which is the greater of the amount obtained by the producer and
a prescribed minimum price. Natural gas produced in association with oil has a
minimum royalty of 8% while the royalty in respect of other natural gas may not
be less than 15%.

Effective October 1, 2002, the government of Saskatchewan revised its
fiscal regime for the oil and gas industry. Some royalties on wells existing
as of that date will remain unchanged and will therefore be subject to various
periods of royalty/tax deduction. The changes include new lower royalty and
tax structures applicable to both oil, natural gas and associated natural gas
(natural gas produced from oil wells), a new system of volume incentives and a
reduced corporation capital tax surcharge rate.

The new fiscal regime for the Saskatchewan oil and gas industry provides
an incentive to encourage exploration and development through a revised
royalty/tax structure for oil and natural gas wells with a finished drilling
date on or after October 1, 2002 or incremental oil production due to a new or
expanded waterflood project with a commencement date on or after October 1,
2002. This fourth tier Crown royalty rate, applicable to both oil and
natural gas, is price sensitive and ranges from a minimum 5% at a base price to
a maximum of 30% at a price above the base price. A fourth tier freehold tax
structure, calculated by subtracting a production tax factor of 12.5 percentage
points from the corresponding Crown royalty rates, has also been created which
is applicable to conventional oil, incremental oil from new or expanded
waterfloods and

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natural gas. The fourth tier royalty/tax structure is also applicable in
respect of associated natural gas that is gathered for use or sale which is
produced either from oil wells with a finished drilling date on or after
October 1, 2002 and oil wells with a finished drilling date prior to October 1,
2002, where the individual oil well has a gas-oil production ratio in any month
of more than 3,500 m3 of natural gas per 1 m3 of oil. In addition,
volume-based royalty/tax reduction incentives have been changed such that a
maximum royalty of 2.5% now applies to various volumes of both oil and natural
gas, depending on the depth and nature of the well (up to 16,000 m3 of oil in
the case of deep exploratory wells and 25,000 m3 of natural gas produced from
exploratory wells). The royalty/tax category with respect to re-entry and
short sectional horizontal oil wells has been eliminated such that all
horizontal oil wells with a finished drilling date on or after October 1, 2002
will receive fourth tier royalty/tax rates and incentive volumes. Further
changes include the reduction of the corporation capital tax surcharge rate
from 3.6% to 2.0% and the expansion of the deep oil well definition to
include oil wells producing from a zone deeper than 1,700 meters provided that
the zone is within a geological system deposited during the Mississippian
Period or earlier or from a zone that was deposited before the Bakken zone
regardless of depth.

The government of Nova Scotia has established a generic royalty regime in
respect of oil and gas produced from offshore Nova Scotia. Such regime
contemplates a multi-tier royalty in which the royalty rate fluctuates when
certain threshold levels of rates of return on capital have been reached.
Notwithstanding the generic royalty regime, royalties in respect of offshore
Nova Scotia oil and gas production may be determined contractually between the
participant and the government of Nova Scotia.

Oil and natural gas royalty holidays and reductions for specific wells
reduce the amount of Crown royalties paid by Pengrowth to the provincial
governments. The Alberta royalty tax credit program provides a rebate on
Alberta Crown royalties paid in respect of eligible producing properties.
These incentives result in increased net income and funds from the operations
of Pengrowth.

Environmental Regulation

The oil and natural gas industry is currently subject to environmental
regulation pursuant to provincial and federal legislation. Environmental
legislation provides for restrictions and prohibitions on releases or emissions
of various substances produced or utilized in association with certain oil and
gas industry operations. In addition, legislation requires that well and
facility sites be abandoned and reclaimed to the satisfaction of provincial
authorities. Compliance with such legislation can require significant
expenditures. A breach of such legislation may result in the imposition of
material fines and penalties, the revocation of necessary licenses and
authorizations and civil liability for pollution damage.

In Alberta, environmental compliance is governed by the Alberta
Environmental Protection and Enhancement Act. In addition to replacing a
variety of older statutes which related to environmental matters, the Alberta
Environmental Protection and Enhancement Actimposes certain new environmental
responsibilities on oil and natural gas operators in Alberta and in certain
instances also imposes greater penalties for violations.

In Saskatchewan, environmental compliance is governed by the Environmental
Management and Protection Act.

In British Columbia, energy projects may be subject to review pursuant to
the provisions of the Environmental Assessment Act(British Columbia). The
Environmental Assessment Act(British Columbia) rolls the previous processes
for the review of major energy projects into a single environmental assessment
process which contemplates public participation in the environmental review.

In offshore Nova Scotia, the Canada-Nova Scotia Offshore Petroleum Board
created by reciprocal legislation by the governments of Canada and Nova Scotia,
is responsible for environmental protection during all phases of offshore
petroleum activities. All offshore projects must undergo an environmental
assessment prior to approval by the Canada-Nova Scotia Offshore Petroleum
Board.

In 1994, the United Nations Framework Convention on Climate Change came
into force and three years later led to the Kyoto Protocol which will require,
upon ratification, nations to reduce their emissions of carbon dioxide and
other greenhouse gases. Canada has not ratified the Kyoto Protocol, but should
it do so reductions in greenhouse gases from Pengrowths operations may be
required which could result in increased capital expenditures and reductions in
production of oil and gas.

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Pengrowth is committed to meeting its responsibilities to protect the
environment wherever it operates and anticipates making increased expenditures
of both a capital and expense nature as a result of increasingly stringent laws
relating to the protection of the environment. Pengrowth Corporation will be
taking such steps as required to ensure compliance with the Alberta
Environmental Protection and Enhancement Act, the Environmental Assessment Act
(British Columbia) and similar legislation or requirements in other
jurisdictions in which it operates. Pengrowth believes that it is in material
compliance with applicable environmental laws and regulations. Pengrowth also
believes that it is reasonably likely that the trend in environmental
legislation and regulation will continue toward stricter standards.

SELECTED FINANCIAL INFORMATION

Summary of Annual Financial Information(Stated in thousands of dollars except per unit amounts)Year ended December 31
(Audited)

|                     |  |      |           |      |  |      |           |      |  |      |           |  |  |   |         |  |  |   |         |  
|-------------------- |  | ---- | --------- | ---- |  | ---- | --------- | ---- |  | ---- | --------- |  |  | - | ------- |  |  | - | ------- | -
|                     |  | 2002 |           | 2001 |  | 2000 |           | 1999 |  | 1998
|                     |  |      |           |      |  |      |           |      |  |     
|Oil and gas revenue  |  | $    | 482,301   |      |  | $    | 469,929   |      |  | $    | 416,228   |  |  | $ | 252,408 |  |  | $ | 168,782 |  
|Net Income (Loss)    |  |      | 49,067    |      |  |      | 85,150    |      |  |      | 123,215   |  |  |   | 50,223  |  |  |   | (767    | )
|Per Unit - basic     |  |      | 0.546     |      |  |      | 1.201     |      |  |      | 2.213     |  |  |   | 0.98    |  |  |   | (0.02   | )
|Total Assets         |  |      | 1,504,272 |      |  |      | 1,249,339 |      |  |      | 1,090,483 |  |  |   | 857,914 |  |  |   | 765,162 |  
|Long Term Debt       |  |      | 316,501   |      |  |      | 345,456   |      |  |      | 286,823   |  |  |   | 230,333 |  |  |   | 157,662 |  
|Distributable Income |  |      | 194,458   |      |  |      | 215,787   |      |  |      | 218,340   |  |  |   | 128,172 |  |  |   | 72,117  |  
|Per Unit             |  |      | 2.07      |      |  |      | 3.01      |      |  |      | 3.79      |  |  |   | 2.49    |  |  |   | 1.53    |  

Summary of Quarterly Financial Information(Stated in thousands of dollars except per unit amounts)Three months ended
(Unaudited)

|                     |  |          |        |         |  |              |         |             |  |   |         |  |  |   |         | 
|-------------------- |  | -------- | ------ | ------- |  | ------------ | ------- | ----------- |  | - | ------- |  |  | - | ------- | 
|2002                 |  | March 31 |        | June 30 |  | September 30 |         | December 31
|                     |  |          |        |         |  |              |         |            
|Oil and gas revenue  |  | $        | 91,634 |         |  | $            | 111,544 |             |  | $ | 111,205 |  |  | $ | 167,918 | 
|Distributable Income |  |          | 33,118 |         |  |              | 48,141  |             |  |   | 46,139  |  |  |   | 67,060  | 
|Per Unit             |  |          | 0.410  |         |  |              | 0.540   |             |  |   | 0.520   |  |  |   | 0.600   | 

|                     |  |          |         |         |  |              |         |             |  |   |         |  |  |   |        | 
|-------------------- |  | -------- | ------- | ------- |  | ------------ | ------- | ----------- |  | - | ------- |  |  | - | ------ | 
|2001                 |  | March 31 |         | June 30 |  | September 30 |         | December 31
|                     |  |          |         |         |  |              |         |            
|Oil and gas revenue  |  | $        | 142,961 |         |  | $            | 121,043 |             |  | $ | 115,847 |  |  | $ | 90,078 | 
|Distributable Income |  |          | 72,071  |         |  |              | 63,395  |             |  |   | 48,324  |  |  |   | 31,997 | 
|Per Unit             |  |          | 1.140   |         |  |              | 0.830   |             |  |   | 0.630   |  |  |   | 0.410  | 

Notes:



|(1) |  | The per unit amount for net income is based on weighted average units
outstanding calculated on a quarterly basis. The per unit amounts for
distributable income reflect actual distributions paid or declared.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Certain comparative figures have been restated to conform to the
presentation adopted in the current year.                                                                                                     

MANAGEMENTS DISCUSSION AND ANALYSIS OF
OPERATING RESULTS AND FINANCIAL CONDITION

Managements Discussion and Analysis relating to Pengrowth Trusts
financial statements for the fiscal years ended December 31, 2002 and 2001,
which are contained on pages 40 to 53 of Pengrowth Trusts 2002 Annual Report,
are incorporated herein by reference and form an integral part of this Annual
Information Form.

MARKET FOR SECURITIES

The Trust Units of Pengrowth Trust were listed on the NYSE on April 10,
2002. The outstanding Trust Units of Pengrowth Trust are now listed and posted
for trading on The Toronto Stock Exchange (TSX) and the New York Stock
Exchange (NYSE). The trading symbol for the Trust Units on the TSX is
PGF.UN and on the NYSE is PGH.

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DIRECTORS AND OFFICERS

Pengrowth Trust does not have any directors or officers. The following is
a summary of information relating to the directors and officers respectively of
Pengrowth Management, the manager of Pengrowth Corporation and Pengrowth Trust,
and of Pengrowth Corporation, the administrator of Pengrowth Trust together
with share information for Pengrowth Management.

Directors and Officers of Pengrowth Management

The name, municipality of residence, position held and principal
occupation of each director and officer of Pengrowth Management are set out
below:

|                          |  |                                                 |  |                                   
|------------------------- |  | ----------------------------------------------- |  | ----------------------------------
|Name and                  |  |                                                 |  |                                   
|Municipality of Residence |  | Position with Pengrowth Management              |  | Principal Occupation              
|                          |  |                                                 |  |                                   
|James S. Kinnear          |  | President and Director                          |  | President,                        
|Calgary, Alberta          |  | (since 1982)                                    |  | Pengrowth Management Limited      
|                          |  |                                                 |  |                                   
|Gregory S. Fletcher       |  | Director                                        |  | President,                        
|Calgary, Alberta          |  | (since 1988)                                    |  | Sierra Energy Inc.                
|                          |  |                                                 |  |                                   
|Gordon M. Anderson        |  | Vice President, Financial Services (since 2001) |  | Vice President, Financial Services
|Calgary, Alberta          |  | Vice President, Treasurer (1998-2001)           |  | Pengrowth Management Limited      
|                          |  | Treasurer (1995-1998)                           |  |                                   
|                          |  |                                                 |  |                                   
|Charles V. Selby          |  | Corporate Secretary                             |  | Lawyer, Selby Solicitors          
|Calgary, Alberta          |  | (since 1993)                                    |  | Principal, Ikon Strategies Inc.   

Each of the foregoing directors and officers has had the same principal
occupation for the previous five years except for: Mr. Fletcher who was
President, Canadian Conquest Exploration Inc. (1998-1999), President, Sierra
Energy Inc. (1997-1998) and President, Aztec Resources Ltd. (1985-1997); and
Mr. Anderson who was Vice President, Treasurer (1998-2001) and Treasurer
(1995-1998).

Principal Holders of Shares of Pengrowth Management

James S. Kinnear, Kinnear Financial Consulting Limited and 585687 Alberta
Ltd. (both wholly owned companies of James S. Kinnear) respectively hold
142,501 common shares (40%), 115,000 common shares (32%) and 102,500 common
shares (28%) of the issued and outstanding voting securities of Pengrowth
Management. No other shareholder holds in excess of 10% of the issued and
outstanding shares of Pengrowth Management. The directors and senior officers
of Pengrowth Management hold, directly or indirectly, 100% of the issued and
outstanding common shares of Pengrowth Management.

Directors and Officers of Pengrowth Corporation

The name, municipality of residence, position held and principal
occupation of each director and officer of Pengrowth Corporation are set out
below:

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|                        |  |                                        |  |                                      |  |                                |           |     |  |                            |  | 
|----------------------- |  | -------------------------------------- |  | ------------------------------------ |  | ------------------------------ | --------- | --- |  | -------------------------- |  | 
|Name and                |  |                                        |  |                                      |  |                                |           |     |  | Trust Units of EnergyTrust
|Municipality of         |  |                                        |  |                                      |  |                                |           |     |  | Controlled or Beneficially
|Residence               |  | Position with Pengrowth Corporation    |  | Principal Occupation                 |  | Owned(1)                      
|                        |  |                                        |  |                                      |  |                               
|James S. Kinnear        |  | President, Chairman, Director and      |  | President,                           |  |                                | 3,100,778 | (4)
|Calgary, Alberta        |  | Chief Executive Officer                |  | Pengrowth Management Limited         |  |                                |           |    
|                        |  | (since 1988)                           |  |                                      |  |                                |           |    
|                        |  |                                        |  |                                      |  |                                |           |     |  |                            |  | 
|Francis G. Vetsch(2)(3) |  | Director                               |  | President,                           |  |                                | 26,500    |    
|Calgary, Alberta        |  | (since 1988)                           |  | Quantex Resources Ltd.               |  |                                |           |    
|                        |  |                                        |  |                                      |  |                                |           |     |  |                            |  | 
|Stanley H. Wong(3)      |  | Director                               |  | President,                           |  |                                | 36,476    | (5)
|Calgary, Alberta        |  | (since 1988)                           |  | Carbine Resources Ltd. a private     |  |                                |           |    
|                        |  |                                        |  |                                      |  | oil and gas producing and      |           |     |  |                           
|                        |  |                                        |  |                                      |  | engineering consulting company |           |     |  |                           
|                        |  |                                        |  |                                      |  |                                |           |     |  |                            |  | 
|John B. Zaozirny(2)     |  | Director                               |  | Counsel,                             |  |                                | 22,652    |    
|Calgary, Alberta        |  | (since 1988)                           |  | McCarthy Tétrault, Barristers and    |  |                                |           |    
|                        |  |                                        |  |                                      |  | Solicitors                     |           |     |  |                           
|                        |  |                                        |  |                                      |  |                                |           |     |  |                            |  | 
|Thomas A. Cumming(2)    |  | Director                               |  | Business Consultant                  |  |                                | 1,500     |    
|Calgary, Alberta        |  | (since 2000)                           |  |                                      |  |                                |           |     |  |                           
|                        |  |                                        |  |                                      |  |                                |           |     |  |                            |  | 
|Michael Grandin(2)(6)   |  | Director (since 2002)                  |  | Chairman and Chief
Executive Officer |  |                                | 3,000     |    
|Calgary, Alberta        |  |                                        |  |                                      |  | Fording Canadian Coal
Trust    |           |     |  |                           
|                        |  |                                        |  |                                      |  |                                |           |     |  |                            |  | 
|Robert B. Hodgins       |  | Chief Financial Officer                |  | Chief Financial Officer              |  |                                | 3,022     |    
|Calgary, Alberta        |  | (since 2002)                           |  | Pengrowth Corporation                |  |                                |           |    
|                        |  |                                        |  |                                      |  |                                |           |     |  |                            |  | 
|Gordon M. Anderson      |  | Vice President (since 2001)            |  | Vice President, Financial Services,  |  |                                | 48,372    |    
|Calgary, Alberta        |  | Vice President, Treasurer (1997-2001), |  | Pengrowth Management Limited         |  |                                |           |    
|                        |  | Treasurer (1995-1997)                  |  |                                      |  |                                |           |     |  |                           
|                        |  | Chief Financial Officer (1991-1998)    |  |                                      |  |                                |           |     |  |                           
|                        |  |                                        |  |                                      |  |                                |           |     |  |                            |  | 
|Henry D. McKinnon       |  | Vice President, Operations             |  | Vice President, Operations           |  |                                | 8,595     |    
|Calgary, Alberta        |  | (since 2000)                           |  | Pengrowth Corporation                |  |                                |           |    
|                        |  |                                        |  |                                      |  |                                |           |     |  |                            |  | 
|Lynn Kis                |  | Vice President, Engineering            |  | Vice President, Engineering          |  |                                | 18,578    |    
|Calgary, Alberta        |  | (since 2001)                           |  | Pengrowth Corporation                |  |                                |           |    
|                        |  |                                        |  |                                      |  |                                |           |     |  |                            |  | 
|Charles V. Selby        |  | Corporate Secretary                    |  | Lawyer, Selby Solicitors             |  |                                | 120,921   |    
|Calgary, Alberta        |  | (since 1993)                           |  | Principal, Ikon Strategies Inc       |  |                                |           |    
|                        |  |                                        |  |                                      |  |                                |           |     |  |                            |  | 
|Chris Webster           |  | Treasurer                              |  | Treasurer                            |  |                                | 2,506     |    
|Calgary, Alberta        |  | (since 2001)                           |  | Pengrowth Corporation                |  |                                |           |    
|                        |  |                                        |  |                                      |  |                                |           |     |  |                            |  | 
|Lianne Bigham           |  | Controller                             |  | Controller                           |  |                                | 103,627   |    
|Calgary, Alberta        |  | (since 1996)                           |  | Pengrowth Corporation                |  |                                |           |    

Note:



|(1) |  | Does not include Trust Units issuable upon the exercise of outstanding
Trust Unit Options.                                                                                                                                                                                                               
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Member of Audit Committee (other than Michael A. Grandin) and Corporate
Governance/Compensation Committee.                                                                                                                                                                                               
|   
|(3) |  | Member of Reserves Committee.                                                                                                                                                                                                                                                                            
|   
|(4) |  | Comprised of 1,109,949 Trust Units held personally, 437,755 Trust Units
held by Pengrowth Management Limited and 1,553,074 Trust Units held by
Kinnear Financial Consulting Limited. In addition, Mr. Kinnear exercises
control over 13,152 Royalty Units which are held by Pengrowth Management
Limited.
|   
|(5) |  | In addition, Mr. Wong exercises control over 3,288 Royalty Units held by
Carbine Resources Ltd.                                                                                                                                                                                                          
|   
|(6) |  | Mr. Grandin was a director of Pegasus Gold Inc. in 1988 when that company
filed voluntarily to reorganize under Chapter 11 of the Bankruptcy Code
(United States). A liquidation plan for that company received court
confirmation later that year.                                                      

Each of the foregoing directors and officers has had the same principal
occupation for the previous five years except for Mr. Cumming who was President
of the Alberta Stock Exchange from 1988 to 1999; Lynn Kis who was General
Manager, Engineering from 1998 to 2001 and Engineering Manager for Jordan
Petroleum from 1994 to 1998; Chris Webster who was Manager, Operations
Accounting from 2000 to 2001 and Team Leader, Marketing Accounting and
Treasury, Union Pacific Resources Inc. from 1996 to 2000; and Michael Grandin
who was Vice Chairman and Director, Midland Walwyn from 1996 to 1998; Executive
Vice-President and Chief Financial Officer, Canadian Pacific Limited in 2000
and President, PanCanadian Energy Corporation in 2001.

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DIRECTORS AND OFFICERS LIABILITY INSURANCE

Pengrowth Corporation provides directors and officers liability
insurance to its directors and officers, to pay on behalf of each insured
person all loss, subject to the limits of the policy, for which they become
legally obligated, and for which the insured person is not indemnified by
Pengrowth Corporation. The insurance shall also pay, on behalf of Pengrowth
Corporation, all loss, subject to the limits of the policy, for which Pengrowth
Corporation grants indemnification to the directors and officers as permitted
or required by law. The cost of the insurance is borne entirely by Pengrowth
Corporation.

INDEBTEDNESS OF DIRECTORS AND OFFICERS

Since the incorporation of Pengrowth Corporation and the creation of
Pengrowth Trust, none of the directors or officers of Pengrowth Corporation has
been indebted to Pengrowth Corporation or Pengrowth Trust. However, Pengrowth
Corporation has delivered a guarantee to a specified Canadian investment dealer
to support margin loans by certain directors, officers, employees and special
consultants under the terms of the Trust Unit Margin Purchase Plan (discussed
below). To the extent that the market value of the Trust Units plus
accumulated distributions less interest charges held within the Plan is less
than the amount of the margin loan to any participant at maturity, the
specified Canadian investment dealer shall be entitled to realize on the
guarantee and the participant shall be required to repay the Corporation his or
her pro rata share of such amount.

LONG TERM INCENTIVE PLANS

Trust Unit Option Plan of Pengrowth Trust

In 1992, a Trust Unit Option Plan was created authorizing the issuance of
options to acquire Trust Units less than 5% of the issued and outstanding
capitalization of Pengrowth Trust at the permitted discount from the trading
price of the Trust Units on the TSX. Options to purchase 100,000 Trust Units
at a price of $5.00 per Trust Unit expiring on March 23, 1997; options to
purchase 100,000 Trust Units at a price of $5.50 per Trust Unit expiring on
February 21, 1998; options to purchase 144,000 Trust Units at a price of $8.55
per Trust Unit expiring on October 21, 1998; and options to purchase 169,000
Trust Units at a price of $10.875 per Trust Unit expiring on June 3, 1999, were
issued to the directors, officers and special consultants of Pengrowth
Corporation.

In March 1994, the TSX amended its policy in respect to the issuance of
options to provide that an issuer must stipulate the maximum number of
securities which may be issued under an option plan and that options may only
be issued at the market price of the securities at the date of issuance of the
options.

On January 25, 1995, Pengrowth Trust authorized the issuance of an
additional 278,400 Trust Unit Options at a price of $9.79 per Trust Unit
expiring on January 24, 2000, to directors, officers and special consultants.
At the Special and General Meeting of Unitholders of Pengrowth Trust held on
April 18, 1995, the Unitholders also approved an amended Trust Unit Option Plan
provided in accordance with amended requirements of the TSX which stipulated
that the maximum number of Trust Units which may be issued under the plan is
1,181,010 corresponding to approximately 10% of the issued and outstanding
Trust Units of Pengrowth Trust as at March 1, 1995. Effective October 6, 1995,
Pengrowth Trust authorized the issuance of 517,000 Trust Unit Options at
$13.875 per Trust Unit expiring on October 6, 2000. Effective December 29,
1995, Pengrowth Trust authorized the issuance of 388,000 Trust Unit Options at
$15.375 per Trust Unit expiring on December 29, 2000. At the Special and
Annual General Meeting of Trust Unit Holders held on April 26, 1996, the
Unitholders approved an amendment to the Trust Unit Option Plan to increase the
number of options to 1,722,488 representing approximately 10% of the issued and
outstanding Trust Unit Options. Effective August 9, 1996, Pengrowth Trust
authorized the issuance of 570,800 Trust Unit options at $15.85 per Trust Unit
expiring on August 9, 2001. Effective December 16, 1996, Pengrowth Trust
authorized the issuance of 12,000 Trust Unit Options at $17.15 per Trust Unit
expiring on December 16, 2001.

At the Special and General Meeting of Trust Unitholders conducted on April
29, 1997, the Unitholders approved an amendment to the Trust Unit Option Plan
to increase the number of options to 2,304,366 representing approximately 10%
of the issued and outstanding Trust Units as of the date of the meeting. At
the Special Meeting of Trust Unitholders held on September 23, 1997, the
Unitholders approved a further amendment to the Trust Unit Option Plan to
increase the number of Trust Unit Options from a total 2,304,366 Trust Unit
Options (inclusive of options which have been exercised under the Trust Unit
Option (Option Plan) to that number which represents 10% of the issued and
outstanding Trust Units

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immediately following closing of the acquisition of properties from Imperial
Oil Resources. On October 16, 1997, Pengrowth Trust authorized the issuance of
594,666 Trust Unit Options at $20.50 per Trust Unit expiring on October 16,
2002. Effective December 2, 1997, Pengrowth Trust authorized the issuance of
1,945,600 Trust Unit Options at $17.50 per Trust Unit expiring on December 2,
2002.

On April 28, 1999, at the Special and Annual Meeting of Trust Unitholders,
the Unitholders approved an amendment to the Trust Unit Option Plan to permit
the creation of additional Trust Unit Options, at the discretion of the Board
of Directors, to a maximum of 6,000,000 Trust Unit Options provided that the
Board of Directors permitted to create Trust Unit Options such that the total
number of Trust Unit Options that have been created under the Option Plan do
not exceed 10% of the number of issued and outstanding Trust Units of Pengrowth
Trust (Unitholders previously authorized the creation of the lesser of
5,000,000 Trust Unit Options or 10% of the Trust Units outstanding following
the acquisition of property from Imperial Oil Resources). On May 18, 1999,
Pengrowth Corporation notified the TSX of its intention to cause the issuance
of an additional 580,000 Trust Unit Options at a price of $12.75 subject to
ratification by the Board of Directors of Pengrowth Corporation. On November
24, 2000, Pengrowth Corporation notified the TSX of its intention to cause the
issuance of an additional 732,000 Trust Unit Options at a price of $18.90
subject to ratification by the Board of Directors of Pengrowth Corporation.

On April 26, 2000, at the Special and Annual Meeting of Trust Unitholders,
the Unitholders approved an ordinary resolution to permit the creation of
additional Trust Options, at the discretion of the Board of Directors, to a
maximum of 7,000,000, subject to the restriction on that number of Trust Unit
Options created under the Option Plan does not exceed 10% of the issued and
outstanding Trust Units.

On June 29, 2001, Pengrowth Corporation notified the TSX of its intention
to cause the issuance of 801,237 Trust Unit Options at a price of $17.48
subject to the ratification by the Board of Directors.

During 2002, a total of 1,895,603 Trust Units Options were granted at a
weighted average exercise price of $15.14.

As at December 31, 2002, options to purchase 4,451,131 Trust Units were
outstanding. These options were held by directors, officers, employees and
special consultants of Pengrowth Corporation and Pengrowth Management and are
exercisable at the prices of $12.00 to $20.50 per Trust Unit. The options have
a weighted average exercise price of $16.78 and expire at various dates to June
28, 2009. As at December 31, 2002 officers of Pengrowth Corporation held
options to purchase 2,292,335 Trust Units and the directors of Pengrowth
Corporation who were not also officers of Pengrowth Corporation held options to
purchase 381,440 Trust Units.

At the Special and Annual General Meeting of Trust Unitholders held on
April 23, 2002 (the 2002 Meeting), the holders of Trust Units approved an
Extraordinary Resolution authorizing the issuance of up to 10 million Trust
Units pursuant to the Trust Unit Option Plan subject to the restriction that
the total number of Trust Unit Options authorized for issuance under the option
plan and the Rights Incentive Plan shall not extend 10% of the total issued and
outstanding Trust Units.

Trust Unit Purchase Plan

At the Special and Annual General Meeting of Trust Unitholders conducted
on April 16, 1995, Trust Unitholders authorized the terms of a Trust Unit
Purchase Plan (the Original Plan). Under the Original Plan, all salaried
persons of Pengrowth Management and Pengrowth Corporation (the Permitted
Participants) may contribute a minimum of 1% and up to 10% of their income
derived from Pengrowth Management and Pengrowth Corporation each year to
purchase Trust Units. Pengrowth Corporation will match the Trust Units
purchased at prevailing market prices through the purchase of Trust Units on
the market or through the issuance of Trust Units from treasury and the
additional Trust Units will vest in the names of the employees one year from
the date of purchase.

At the Special and Annual Meeting of Trust Unitholders conducted on April
29, 1998, Trust Unitholders approved an amendment to the Trust Unit Purchase
Plan (the Amended Plan). Under the Amended Plan, a Permitted Participant
must have completed 12 months of service to be eligible. Pengrowth
Corporations contribution vests immediately under the Amended Plan, but there
is a 12 month restriction on resale of any Trust Units acquired under the
Amended Plan.

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Employee Trust Unit Rights Incentive Plan

On April 23, 2002, a special resolution was passed to approve the adoption
of an Employee Trust Unit Rights Incentive Plan (Rights Incentive Plan),
pursuant to which rights to acquire Pengrowth trust units may be granted to the
directors, officers, employees, and special consultants of the Corporation and
the Manager. Under the Rights Incentive Plan, distributions per trust unit to
trust unitholders in a calendar quarter which represent a return of more than
2.5 percent of the net property, plant and equipment at the end of such
calendar quarter result in a reduction in the exercise price. One third of the
rights granted under the Rights Incentive Plan vest on the grant date, one
third on the first anniversary date of the grant and the remaining on the
second anniversary. The rights have an expiry date of five years from the date
of grant.

In 2002, a total of 1,964,100 rights were granted at a weighted-average
initial exercise price of $13.61. Of the rights granted, 654,700 rights have
vested. None of the rights were exercised or cancelled during 2002. The
rights expire at various dates to November 7, 2007. As at December 31, 2002,
the weighted-average exercise price of the rights is $13.29.

Trust Unit Margin Purchase Plan

Pengrowth has a plan whereby Pengrowth Management, and employees,
directors, and certain consultants of Pengrowth Corporation can purchase trust
units and finance up to 75 percent of the purchase price through an investment
dealer, subject to certain participation limits and restrictions. Participants
maintain personal margin accounts with the investment dealer and are
responsible for all interest costs and obligations with respect to their margin
loans. Pengrowth Corporation has provided a $5 million letter of credit to the
investment dealer to guarantee amounts owing with respect to the plan. The
amount of the letter of credit may fluctuate depending on the amounts financed
pursuant to the plan. At December 31, 2002, 2,529,698 trust units were
deposited under the plan with a market value of $37.3 million and a
corresponding margin loan of $11.3 million.

The United States Congress passed the Sarbanes-Oxley Act of 2002 (SOX)
in response to corporate failures in the United States and other concerns with
respect to corporate governance. Among other things, SOX contains broad
restrictions upon permitted future financial assistance to directors and
officers. The Corporation has suspended future availability of the Margin
Purchase Plan to directors and officers pending clarification of the
application of SOX.

Principal Holders of Shares and Royalty Units of Pengrowth Corporation

The common shares of Pengrowth Corporation are held as to 100 shares by
Pengrowth Management and as to 1000 shares by Pengrowth Trust. As at December
31, 2002, 99.9% of the issued and outstanding Royalty Units of Pengrowth
Corporation were held by Pengrowth Trust.

CORPORATE GOVERNANCE

Mandates of the Trustee, Pengrowth Management and the Board of Directors of
Pengrowth Corporation

Pengrowth Corporation holds petroleum and natural gas rights and other
assets. Under the Royalty Indenture, a royalty was created representing 99% of
the Royalty Income, which is payable to Royalty Unitholders. Pengrowth Trust
was created for the purpose of issuing Trust Units to the public, facilitating
an indirect investment in Royalty Units and other permitted investments under
the Trust Indenture. Pengrowth Trust holds Royalty Units, interests in certain
petroleum and natural gas facilities, cash and other assets. The Trust Units
of Pengrowth Trust are listed on the Toronto Stock Exchange and on the New York
Stock Exchange.

Under the terms of the Trust Indenture, the Trustee is empowered to
exercise those rights and privileges that could be exercised by a beneficial
owner of the assets of Pengrowth Trust in respect of the administration and
management of Pengrowth Trust. The Trustee is permitted to delegate certain of
the powers and duties of the Trustee to any one or more agents,
representatives, officers, employees, independent contractors or other persons.
However, specific powers are delegated to Pengrowth Corporation as
Administrator under the Trust Indenture and the Trustee has granted broad
discretion to Pengrowth Management to administer and regulate the day to day
operations of Pengrowth Trust. The powers of the Trustee are also limited
through the voting rights of Trust Unitholders.

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Under the Management Agreement, Pengrowth Management is empowered to act
as agent for Pengrowth Trust in respect of various matters, to execute
documents on behalf of the Trustee and to make executive decisions which
conform to general policies and general principles previously established by
the Trustee. Pengrowth Management is empowered to undertake, on behalf of
Pengrowth Corporation and Pengrowth Trust, subject to the Royalty Indenture,
all matters pertaining to the properties of Pengrowth Corporation. These
matters include a requirement to keep Pengrowth Corporation fully informed with
respect to the acquisition, development, operation and disposition of, and
other dealings with, the properties held by Pengrowth Corporation, a review of
opportunities to acquire properties, the conduct of negotiations for the
acquisition of properties and the operation, administration and retention of
consultants, legal and accounting advisors in respect of the foregoing.
Pengrowth Management is also given broad responsibility for Unitholder services
including the collection and keeping of accounts in respect of cash
distributions to Royalty Unitholders and Trust Unitholders.

Under the Royalty Indenture, Pengrowth Corporation makes all operating
decisions with respect to the properties of Pengrowth Corporation. Under the
Trust Indenture, general powers have been delegated to Pengrowth Corporation as
the Administrator of Pengrowth Trust to perform those functions of the
Trustee which are largely discretionary, subject to the powers and duties of
Pengrowth Management. Additionally, specific powers have been delegated to
Pengrowth Corporation in relation to the offering of securities, the
acquisition of facilities and other assets, the incurring of indebtedness, the
granting of security and the determination of distributable income.

In accordance with the terms of the Unanimous Shareholder Agreement, all
Royalty Unitholders other than the Trustee, and all Trust Unitholders are
entitled to attend at, and vote upon, all resolutions brought before meetings
of the shareholders of Pengrowth Corporation on the basis of one vote for each
Unit held. Currently, the Unanimous Shareholder Agreement also provides that
the Board of Directors shall consist of two nominees of Pengrowth Management
and up to five independent directors who are elected by the Trust Unitholders
of Pengrowth Trust. The Board of Directors meets a minimum of four times each
year, once in each fiscal quarter. In addition, the Board of Directors meets
at other times when matters requiring its approval are raised and the timing is
such that it is not prudent or possible to await a regularly scheduled
quarterly meeting. During 2002, thirteen regularly constituted Board of
Directors meetings were held.

Board Independence

Four of the six directors elected to the Board of Directors are independent
directors. An independent director is defined as one who is independent of
Pengrowth Management and is free from any interest or any business or other
relationship which could, or could reasonably be perceived to, materially
interfere with the directors ability to act with a view to the best interests
of Pengrowth Corporation, other than interests and relationships arising from
shareholdings.

Mr. James S. Kinnear, who is Chairman, President and Chief Executive Officer of
Pengrowth Corporation as well as President and Chief Executive Officer of
Pengrowth Management, is a related director. Mr. Stanley H. Wong may be
considered to be a related director as he is Pengrowth Managements additional
appointee to the Board of Directors pursuant to the terms of the Unanimous
Shareholder Agreement. However, Mr. Wong is neither engaged by Pengrowth
Management nor by Pengrowth Corporation and receives remuneration solely in his
capacity as a director of Pengrowth Corporation. The remainder of the
directors are independent in that they have not worked for Pengrowth
Corporation (or Pengrowth Management) nor do they have material contracts with
Pengrowth Corporation (or Pengrowth Management) or receive remuneration from
Pengrowth Corporation (or Pengrowth Management), other than Trust Unit Options
and Trust Unit Rights, in excess of directors fees payable by Pengrowth
Corporation.

Board Approvals and Structure

Pengrowth Management makes recommendations to the Board of Directors as to the
strategic direction of Pengrowth Corporation and Pengrowth Trust. The Board of
Directors considers those recommendations and assumes overall responsibility
for the strategic direction of Pengrowth Corporation and Pengrowth Trust
through the annual consideration of a strategic plan and budget. Criteria are
approved by the Board of Directors for the acquisition and disposition of oil
and natural gas properties and other permitted investments.

Pengrowth Management has general power under the Management Agreement to
conduct acquisitions and dispositions and the operation of properties. Because
of the structure created by the Trust Indenture, the Royalty Indenture and the
Unanimous Shareholder Agreement, neither Pengrowth Management nor the Board of
Directors has plenary authority over

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the businesses and affairs of Pengrowth Trust and Pengrowth Corporation. The
trustee responds to directions from Pengrowth Management and from the Board of
Directors (with respect to Pengrowth Corporation as administrator of Pengrowth
Trust) within the scope of the authority of the trustee and the trustees power
to delegate.

The Board of Directors responds to recommendations brought forward by Pengrowth
Managements representatives to the Board of Directors on material matters
impacting Pengrowth Corporation and Trust Unitholders. Practically, Pengrowth
Management defers to the Board of Directors in respect of all matters which may
have a material impact upon the business and undertaking of Pengrowth
Corporation, the Royalty Unitholders or the Trust Unitholders. Reliance is
placed upon independent engineering, legal and accounting consultants where
appropriate.

The Board of Directors represents a cross-section of experience in matters of
oil and gas, finance and directors responsibilities. Four of the six nominated
members of the Board of Directors have been directors since the formation of
Pengrowth Corporation and Pengrowth Trust. Thomas A. Cumming has been a
director since April 2000 and Michael A. Grandin has been a director since
April 2002.

Board Committees

The Audit Committee of the Board of Directors is comprised of three of the
independent directors. The Board of Directors has formed a Corporate
Governance/Compensation Committee which is comprised of the four independent
directors. The Board of Directors has also formed a Reserves Committee
comprised of two directors, one of whom is an independent director, to review
the assumptions and practices and results in respect to the preparation of
independent reserve reports for the oil and gas assets of Pengrowth Corporation
and the reporting thereof. There are no other committees of the Board of
Directors.

In respect of matters such as discussions concerning the Management Agreement
or related party transactions, representatives of Pengrowth Management disclose
their conflict of interest and absent themselves from discussions and voting.

Statement of Corporate Governance Practices

The Board of Directors and Pengrowth Management support the Guidelines for
Corporate Governance (the TSX Guidelines) adopted by the Toronto Stock
Exchange (TSX) in 1995. The TSX published proposed amendments to the TSX
Guidelines in April 2002 and November 2002 which have not, at the date of this
Circular, been adopted. In addition, the New York Stock Exchange (NYSE) in
August 2002 proposed a number of changes to the standards for companies listed
on the NYSE, such as Pengrowth Trust. As proposed, the changes to the NYSE
listing standards would not be mandatory for Pengrowth Trust, but any
differences in Pengrowth Trusts corporate governance practices and the NYSE
rules would be required to be disclosed. Certain provisions of SOX and certain
rules adopted and proposed by the United States Securities and Exchanges
Commission (SEC) pursuant to the requirements of SOX, which would be
applicable to Pengrowth Trust, will also influence Pengrowth Trusts approach
to corporate governance. The TSX proposed amendments, the proposed rules of
the NYSE and the rules being adopted by the SEC as a result of the passage of
SOX in the United States may be modified prior to the final adoption. The
Corporate Governance/Compensation Committee of the Board continues to monitor
the proposed amendments to the TSX Guidelines, the proposed changes to the NYSE
listing standards and other changes, in applicable laws (including those
adopted and proposed under SOX) and will take appropriate action is response to
any new standards which are established.

The Board of Directors, Pengrowth Management and senior management consider
good corporate governance to be central to the effective and efficient
operation of Pengrowth Trust and Pengrowth Corporation. The Board of Directors
has general corporate authority over the business and affairs of Pengrowth
Corporation and derives its authority in respect to Pengrowth Trust by virtue
of the delegation of powers by the Trustee to Pengrowth Corporation as
Administrator in accordance with the Trust Indenture. In accordance with the
Royalty Indenture, Trust Indenture and Unanimous Shareholders Agreement, the
Trust Unitholders and Royalty Unitholders empowered the trustee and Pengrowth
Corporation to delegate authority to Pengrowth Management. Pengrowth
Management derives its authority from the Management Agreement with both
Pengrowth Corporation and Pengrowth Trust. As a result neither Pengrowth
Management nor the Board of Directors has plenary authority over the business
and affairs of Pengrowth Trust or the Corporation. In practice, Pengrowth
Management defers to the Board of Directors on all matters material to
Pengrowth Corporation and Pengrowth Trust. Amendments to the Management
Agreement have been proposed and will be considered at the annual and special
meetings of Trust

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Unitholders and Royalty Unitholders on June 17, 2003 which will set out more
specifically those duties of Pengrowth Management that are subject to the
approval of the Board of Directors.

The following is a statement of Pengrowth Corporations existing corporate
governance practices with specific reference to the proposed TSX Guidelines as
released by the TSX in November, 2002.



|1. |  | The board of directors of every corporation should explicitly assume
responsibility for the stewardship of the corporation and, as part of the
overall stewardship responsibility, should assume responsibility for the
following matters:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | The Board of Directors is responsible for the overall stewardship of
Pengrowth Corporation and Pengrowth Trust and in setting corporate
strategy and direction. The Board of Directors has overall responsibility
for the management and supervision of the affairs of Pengrowth Corporation
and Pengrowth Trust. The Board of Directors has established
administrative procedures which prescribe the rules governing the approval
of transactions carried out in the course of Pengrowth Corporations
operations, the delegation of authority and the execution of documents on
behalf of Pengrowth Corporation. The Board of Directors reviews and
approves various matters, including the appointment of corporate officers,
as well as the annual capital and operating budgets and authorization of
unbudgeted investments and divestitures above a specified dollar
threshold. The Board of Directors expectations of management of
Pengrowth Corporation are communicated directly to management and through
committees of the Board of Directors. More specifically, the Board of
Directors assumes the following principal responsibilities:



| | (a) |  | adoption of a strategic planning process;
| | --- |  | -----------------------------------------



| |  | The Board of Directors considers management development and succession
programs, strategic business developments such as significant
acquisitions, and financing proposals including the issuance of trust
units and other securities, as well as those matters requiring the
approval of the Board of Directors. The Board of Directors conducts an
annual strategic planning process.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) |  | the identification of the principal risks of the corporations
business and ensuring the implementation of appropriate systems to
manage these risks;
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The Board of Directors ensures that a system is in place to identify the
principal risks to Pengrowth Corporation and to monitor the process to
manage such risks. The Audit Committee reviews and approves Managements
identification of principal financial risks and monitors the process to
manage such risks.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) |  | succession planning, including appointing, training and
monitoring senior management;
| | --- |  | -------------------------------------------------------------------------------------



| |  | The Corporate Governance/Compensation Committee, in conjunction with
Pengrowth Management, is responsible for appointing officers and other key
employees on behalf of Pengrowth Corporation, planning for the succession
of the directors, officers and key employees; and reviewing the
performance of senior management.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) |  | a communications policy for the corporation; and
| | --- |  | ------------------------------------------------



| |  | The Board of Directors has approved a Corporate Disclosure Policy to
ensure timely, accurate, credible and balanced disclosure of material
information in respect of Pengrowth Trust and Pengrowth Corporation. The
Policy in place outlines the procedures and practical guidelines for the
consistent, transparent, regular and timely public disclosure and
dissemination of material and non-material information about Pengrowth
Corporation and Pengrowth Trust. Under the Policy, a Disclosure Policy
Committee has been established that includes the Chief Executive Officer,
Chief Financial Officer, Manager Investor Relations, Lead Director and
Corporate Secretary. It is the committees responsibility to monitor the
effectiveness of and compliance with the Disclosure Policy and educate
directors, officers and employees as to disclosure issues.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (e) |  | the integrity of the corporations internal control and
management information systems;
| | --- |  | ---------------------------------------------------------------------------------------

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|   |  | The Audit Committee: (a) monitors the integrity of the companys financial
reporting process and systems of internal controls regarding finance,
accounting, and legal compliance, (b) monitors the independence and
performance of the companys independent auditors, and (c) provides an
avenue of communication among the independent auditors, management and the
Board of Directors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | The Audit Committee has approved a process that will be used to review
managements internal controls and procedures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|  
|2. |  | The board of directors of every corporation should be constituted with a
majority of individuals who qualify as unrelated directors. An unrelated
director is a director who is independent of management and is free from
any interest and any business or other relationship which could, or could
reasonably be perceived to, materially interfere with the directors
ability to act with a view to the best interests of the corporation, other
than interests and relationships arising from shareholding. A related
director is a director who is not an unrelated director. If the
corporation has a significant shareholder, in addition to a majority of
unrelated directors, the board should include a number of directors who do
not have interests in or relationships with either the corporation or the
significant shareholder and which fairly reflects the investment in the
corporation by shareholders other than the significant shareholder. A
significant shareholder is a shareholder with the ability to exercise a
majority of the votes for the election of the board of directors.
|  
|   |  | The Board of Directors is presently comprised of six members, of whom four
are independent and unrelated and two are appointments of Pengrowth
Management, one of whom is the President, Chairman and Chief Executive
Officer of Pengrowth Corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|   |  | Pengrowth Management is entitled to appoint two members to the Board of
Directors in accordance with the Management Agreement. The balance are to
be appointed by the Trust Unitholders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  
|3. |  | The application of the definition of unrelated director to the
circumstances of each individual director should be the responsibility of
the board which will be required to disclose on an annual basis whether
the board has a majority of unrelated directors, in the case of a
corporation with a significant shareholder, whether the board is
constituted with the appropriate number of directors which are not related
to either the corporation or the significant shareholder. Management
directors are related directors. The board will also be required to
disclose on an annual basis the analysis of the application of the
principles supporting this conclusion.                                                                                                                                                                                                                                                                                                                                                                                                                            
|  
|   |  | The Board of Directors is composed of a majority of unrelated directors:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

| | Thomas A. Cumming  unrelated director                                                                                                                                                      
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Michael A. Grandin  unrelated director                                                                                                                                                     
| | James S. Kinnear  related director (Chairman, President and Chief
Executive Officer)                                                                                                       
| | Francis G. Vetsch  unrelated director                                                                                                                                                      
| | Stanley H. Wong  related director (appointed by Pengrowth Management*)                                                                                                                     
| | John B. Zaozirny  unrelated director (Lead Director)                                                                                                                                       
|
| | * Although Mr. Wong is appointed by Pengrowth Management, he holds no
position with Pengrowth Management and has had no financial connection to
Pengrowth Management for more than 10 years.



|4. |  | The board of directors of every corporation should appoint a committee of
directors composed exclusively of outside, i.e., non-management,
directors, a majority of whom are unrelated directors, with the
responsibility for proposing to the full board new nominees to the board
and for assessing directors on an ongoing basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | The Corporate Governance/Compensation Committee is composed of four
directors, all of whom are independent directors. This committees
responsibilities include proposing to the Board of Directors new nominees
to the Board of Directors and assessing each directors performance on an
ongoing basis. In assessing new nominees, Pengrowth Corporation
Governance/Compensation Committee seeks to ensure that there is a
sufficient range of skills, expertise and experience to ensure that the
Board of Directors can carry out its mandate and functions effectively.
Pengrowth Corporation Governance/Compensation Committee receives and
evaluates suggestions for candidates from individual directors, the
President and Chief Executive Officer and from professional search
organizations.

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|5. |  | Every board of directors should implement a process to be carried out by
the nominating committee or other appropriate committee for assessing the
effectiveness of the board as a whole, the committees of the board and the
contribution of individual directors.                                                                                                                                                                                                            
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | The Corporate Governance/Compensation Committee is responsible for
assessing the effectiveness of the Board of Directors, its committees and
individual directors. The Corporate Governance/Compensation Committee is
also responsible for evaluating the performance of Pengrowth Management
and, if necessary, negotiating the Management Agreement and making
recommendations to the Trust Unitholders as to Pengrowth Management and
the terms of the Management Agreement.
|  
|6. |  | Every corporation, as an integral element of the process for appointing
new directors, should provide an orientation and education program for new
recruits to the board.                                                                                                                                                                                                                                                                                                      
|  
|   |  | The Corporate Governance/Compensation Committee is responsible for
procedures for the orientation and education of new board members
concerning their role and responsibilities and for the continued
development of existing members of the Board of Directors.                                                                                                                                                                                                               
|  
|7. |  | Every board of directors should examine its size and, with a view to
determining the impact of the number upon effectiveness, undertake where
appropriate, a program to reduce the number of directors to a number which
facilitates more effective decision making.                                                                                                                                                                                                           
|  
|   |  | A board of directors must have enough directors to carry out its duties
efficiently while presenting a diversity of views and experiences. The
Board of Directors currently has six members. The size of the Board of
Directors and criteria for new directors are reviewed by the Corporate
Governance/Compensation Committee and suitable candidates are identified.                                                                                                         
|  
|8. |  | The board of directors should review the adequacy and form of the
compensation of directors and ensure the compensation realistically
reflects the responsibilities and risk involved in being an effective
director.                                                                                                                                                                                                                                                          
|  
|   |  | The Corporate Governance/Compensation Committee reviews and makes
recommendations to the Board of Directors on the adequacy and form of the
compensation of directors and the compensation to be paid to committee
members and to the Lead Director.                                                                                                                                                                                                                           
|  
|9. |  | Committees of the board of directors should generally be composed of
outside directors, a majority of whom are unrelated directors, although
some board committees, such as the executive committee, may include one or
more inside directors.                                                                                                                                                                                                                                 
|  
|   |  | The Board of Directors annually appoints members to its committees. The
committees presently established by the Board of Directors are composed as
follows:                                                                                                                                                                                                                                                                                                                    

|                        |  |                             |  |                   
|----------------------- |  | --------------------------- |  | ------------------
|Audit Committee         |  | Thomas A. Cumming, Chairman |  | unrelated director
|                        |  | John B. Zaozirny            |  | unrelated director
|                        |  | Francis G. Vetsch           |  | unrelated director
|                        |  |                             |  |                   
|Corporation Governance/ |  | John B. Zaozirny, Chairman  |  | unrelated director
|Compensation Committee  |  | Michael A. Grandin          |  | unrelated director
|                        |  | Thomas A. Cumming           |  | unrelated director
|                        |  | Francis G. Vetsch           |  | unrelated director
|                        |  |                             |  |                   
|Reserves Committee      |  | Francis G. Vetsch           |  | unrelated director
|                        |  | Stanley H. Wong             |  | related director  



| |  | In addition, the Board of Directors has established a Disclosure Policy
Committee that includes: the Lead Director  John B. Zaozirny
 unrelated
director, the Chief Executive Officer  James S. Kinnear  related
director and officer, Chief Financial Officer  Robert B. Hodgins,
Corporate Secretary  Charles V. Selby and Manager Investor Relations 
Daniel G. Belot.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|10. |  | Every board of directors should expressly assume responsibly for, or
assign to a committee of directors the general responsibility for,
developing the corporations approach to governance issues. This
committee would, amongst other things, be responsible for the
corporations response to these governance guidelines.                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | The Corporate Governance/Compensation Committee is responsible for
corporate governance issues and the implementation of the guidelines set
forth in the TSX Report. The Corporate Governance/Compensation Committee
is responsible for reviewing and providing recommendations for improvement
to the Board of Directors with respect to all aspects of corporate
governance. Pengrowth Corporation has in place a Code of Business Conduct
and Code of Ethics for all employees and agents of Pengrowth Corporation;
Terms of Reference for the Corporate Governance/Compensation Committee; a
Corporate Governance Policy for the Board of Directors; Terms of Reference
for the Chairman of the Board of Directors and the Lead Director; and a
Charter for the Audit Committee.
|   
|11. |  | The board of directors, together with the CEO, should develop position
descriptions for the board and for the CEO, involving the definition of
the limits to managements responsibilities. In addition, the board
should approve or develop the corporate objectives which the CEO is
responsible for meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|    |  | The Board of Directors has adopted guidelines for the responsibilities of
the Board of Directors and has in place Terms of Reference for the
positions of Lead Director and Chairman of the Board of Directors. The
responsibilities of Pengrowth Management are set out in the Management
Agreement. The Corporate Governance/Compensation Committee will set
annual performance objectives in discussions with Pengrowth Management in
conjunction with the Board of Directors strategic planning and budgeting
processes.                                                                                                                                                                                                                                                       
|   
|12. |  | Every board of directors should have in place appropriate structures and
procedures to ensure that the board can function independently of
management. An appropriate structure would be to (i) appoint a chair of
the board who is not a member of management with responsibility to ensure
the board discharges its responsibilities or (ii) adopt alternate means
such as assigning this responsibility to a committee of the board or to a
director, sometimes referred to as the lead director. Appropriate
procedures may involve the board meeting on a regular basis without
management present or may involve expressly assigning the responsibility
for administering the boards relationship to management to a committee of
the board.                               
|   
|    |  | The Board of Directors derives its authority with respect to Pengrowth
Trust from the duties delegated to Pengrowth Corporation as
Administrator by the Trustee in accordance with the Trust Indenture.
The Trustee also delegates certain powers to Pengrowth Management in
accordance with the terms of the Management Agreement. In practice,
Pengrowth Management defers to the Board of Directors on all material
matters. The Board of Directors is composed of a majority of independent
directors. In matters that require independence of the Board of
Directors, only the independent directors participate in the decision
making and evaluation.                                                                                                                      
|   
|    |  | The Board of Directors have appointed a Lead Director who is not a member
of management. The Directors meet independently of management at each
board meeting. Committees of the Board of Directors also meet
independently of management, when necessary.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|13. |  | The audit committee of every board of directors should be composed only
of outside directors. The roles and responsibilities of the audit
committee should be specifically defined so as to provide appropriate
guidance to audit committee members as to their duties. The audit
committee should have direct communication channels with the internal and
external auditors to discuss and review specific issues as appropriate.
The audit committee duties should include oversight responsibility for
management reporting on internal control. While it is managements
responsibility to design and implement an effective system of internal
control, it is the responsibility of the audit committee to ensure that
management has done so.                                
|   
|    |  | The Audit Committee is composed of three directors, all of whom are
independent directors. The mandate of the Audit Committee is to: (a)
monitor the integrity of the companys financial reporting process and
systems of internal controls regarding finance, accounting, and legal
compliance, (b) monitor the independence and performance of the companys
independent auditors, and (c) provide an avenue of communication among the
independent auditors, management and the Board of Directors                                                                                                                                                                                                                                                                              

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|14. |  | The board of directors should implement a system which enables an
individual director to engage an outside adviser at the expense of the
corporation in appropriate circumstances. The engagement of the outside
advisor should be subject to the approval of an appropriate committee of
the board.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | The Corporate Governance Policy of the Board of Directors permits
directors to engage outside advisors at Pengrowth Corporations expense
with the approval of the Board of Directors.                                                                                                              
|   
|    |  | The Board of Directors has recently approved the following charters and
policies in respect to corporate governance:                                                                                                                                                                                

|   |  |                                                                  |  |                     |                  
|-- |  | ---------------------------------------------------------------- |  | ------------------- | -----------------
|   |  |                                                                  |  | DATE OF APPROVAL BY
|   |  |                                                                  |  | THE BOARD OF       
|   |  | CHARTER/POLICY                                                   |  | DIRECTORS          
|   |  |                                                                  |  |                    
|1. |  | Corporate Disclosure Policy                                      |  |                     | March 3, 2003    
|   |  |                                                                  |  |                     |                  
|2. |  | Code of Business Conduct                                         |  |                     | November 19, 2002
|   |  |                                                                  |  |                     |                  
|3. |  | Authority Levels                                                 |  |                     | November 19, 2002
|   |  |                                                                  |  |                     |                  
|4. |  | Terms of Reference  Corporate
Governance/Compensation Committee |  |                     | July 30, 2002    
|   |  |                                                                  |  |                     |                  
|5. |  | Corporate Governance Policy                                      |  |                     | July 30, 2002    
|   |  |                                                                  |  |                     |                  
|6. |  | Terms of Reference Chairman of the Board of
Directors            |  |                     | July 30, 2002    
|   |  | Terms of Reference Lead Director                                 |  |                     |                  
|   |  |                                                                  |  |                     |                  
|7. |  | Audit Committee Charter                                          |  |                     | July 30, 2001    
|   |  |                                                                  |  |                     |                  
|8. |  | Internet Policy                                                  |  |                     | July 21, 1999    

RISK FACTORS

If any of the following risks occur, our production, revenues and
financial condition could be materially harmed, with a resulting decrease in
distributions on, and the market price of, our trust units. As a result, the
trading price of our trust units could decline, and you could lose all or part
of your investment.

Our distributions are sensitive to the volatility of crude oil and natural gas
prices.

The monthly distributions we pay to our unitholders depend, in part, on
the prices we receive for our oil and natural gas production. Oil and natural
gas prices can fluctuate widely on a month-to-month basis in response to a
variety of factors that are beyond our control. These factors include, among
others:



| |  |  | political conditions in the Middle East;            
| | - |  | ----------------------------------------------------
|
| |  |  | worldwide economic conditions;                      
|
| |  |  | weather conditions;                                 
|
| |  |  | the supply and price of foreign oil and natural gas;
|
| |  |  | the level of consumer demand;                       
|
| |  |  | the price and availability of alternative fuels;    

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|
|
|
|
|
|
|

Declines in oil or natural gas prices could have an adverse effect on our
operations, financial condition and proved reserves and ultimately on our
ability to pay distributions to our unitholders.

Our distributions are affected by production and development costs and capital
expenditures.

Production and development costs incurred with respect to properties,
including power costs and the costs of injection fluids associated with
tertiary recovery operations, reduce the royalty income that Pengrowth Trust
receives and, consequently, the amounts we can distribute to our unitholders.

The timing and amount of capital expenditures will directly affect the
amount of income available for distribution to our unitholders. Distributions
may be reduced, or even eliminated, at times when significant capital or other
expenditures are made. To the extent that external sources of capital,
including the issuance of additional trust units, become limited or
unavailable, Pengrowth Corporations ability to make the necessary capital
investments to maintain or expand oil and gas reserves and to invest in assets,
as the case may be, will be impaired. To the extent that Pengrowth Corporation
is required to use cash flow to finance capital expenditures or property
acquisitions, the cash we receive from Pengrowth Corporation on the royalty
units of Pengrowth Corporation will be reduced, resulting in reductions to the
amount of cash we are able to distribute to our unitholders.

Our actual results will vary from our reserve estimates, and those variations
could be material.

The value of the trust units will depend upon, among other things,
Pengrowth Corporations reserves. In making strategic decisions, we generally
rely upon reports prepared by our independent reserve engineers. Estimating
reserves is inherently uncertain. Ultimately, actual production, revenues and
expenditures for the underlying properties will vary from estimates and those
variations could be material. Changes in the prices of, and markets for, oil
and natural gas from those anticipated at the time of making such assessments
will affect the return on, and value of, our trust units. The reserve and cash
flow information contained in this Annual Information Form or contained in the
documents incorporated by reference represent estimates only. Petroleum
engineers consider many factors and make assumptions in estimating reserves.
Those factors and assumptions include:



| |  |  | historical production from the area compared with production rates from similar producing areas;                                                                                                
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | the assumed effect of government regulation;                                                                                                                                                    
|
| |  |  | assumptions about future commodity prices, exchange rates,
production and development costs, capital expenditures, abandonment
costs, environmental liabilities, and applicable royalty regimes;
|
| |  |  | initial production rates;                                                                                                                                                                       
|
| |  |  | production decline rates;                                                                                                                                                                       
|
| |  |  | ultimate recovery of reserves;                                                                                                                                                                  
|
| |  |  | marketability of production; and                                                                                                                                                                
|
| |  |  | other government levies that may be imposed over the producing life of reserves.                                                                                                                

If these factors and assumptions prove to be inaccurate, our actual
results may vary materially from our reserve estimates. Many of these factors
are subject to change and are beyond our control. In particular, changes in the
prices of, and markets for, oil and natural gas from those anticipated at the
time of making such assessments will affect the return on,
and value of, our trust units. In addition, all such assessments involve a
measure of geological and engineering uncertainty that could result in lower
production and reserves than anticipated.

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In accordance with normal industry practices, we engage independent
petroleum engineers to conduct a detailed engineering evaluation of our oil and
gas properties for the purpose of estimating our reserves as part of our
year-end reporting process. As a result of that evaluation, we may increase or
decrease the estimates of our reserves. We do not consider an increase or
decrease in the estimates of our reserves in the range of one to five percent
to be material or inconsistent with normal industry practice. Any significant
reduction to the estimates of our reserves resulting from any such evaluation
could have a material adverse effect on the value of our trust units.

Our reserves will be depleted over time and our level of distributable income
and the value of our trust units could be reduced if reserves are not replaced.

Our future oil and natural gas reserves and production, and therefore the
cash flows of Pengrowth Trust, will depend upon our success in acquiring
additional reserves. If we fail to add reserves by acquiring or developing
them, our reserves and production will decline over time as they are produced.
When reserves from our properties can no longer be economically produced and
marketed, our trust units will have no value unless additional reserves have
been acquired or developed. If we are not able to raise capital on favourable
terms, we may not be able to add to or maintain our reserves. If we use our
cash flow to acquire or develop reserves, we will reduce our distributable
income. There is strong competition in all aspects of the oil and gas industry
including reserve acquisitions. We will actively compete for reserve
acquisitions and skilled industry personnel with a substantial number of other
oil and gas companies and energy trusts. However, many of our competitors have
greater resources than we do and we cannot assure you that we will be
successful in acquiring additional reserves on terms that meet our objectives.

Our operation of oil and natural gas wells could subject us to environmental
claims and liability.

The oil and natural gas industry is subject to extensive environmental
regulation, which imposes restrictions and prohibitions on releases or
emissions of various substances produced in association with certain oil and
gas industry operations. In addition, Canadian legislation requires that well
and facility sites be abandoned and reclaimed to the satisfaction of provincial
authorities. A breach of this or other legislation may result in fines or the
issuance of a clean-up order. Ongoing environmental obligations will be funded
out of our cash flow and could therefore reduce distributable income payable to
our unitholders.

We may be unable to successfully compete with other companies in our industry.

There is strong competition in all aspects of the oil and gas industry.
Pengrowth will actively compete for capital, skilled personnel, undeveloped
lands, reserve acquisitions, access to drilling rigs, service rigs and other
equipment, access to processing facilities and pipeline and refining capacity
and in all other aspects of its operations with a substantial number of other
organizations, many of which may have greater technical and financial resources
than Pengrowth. Some of those organizations not only explore for, develop and
produce oil and natural gas but also carry on refining operations and market
oil and other products on a world-wide basis and, as such, have greater and
more diverse resources on which to draw.

Incorrect assessments of value at the time of acquisitions could adversely
affect the value of our trust units and our distributions.

Acquisitions of oil and gas properties or companies will be based in large
part on engineering and economic assessments made by independent engineers.
These assessments include a series of assumptions regarding such factors as
recoverability and marketability of oil and gas, future prices of oil and gas
and operating costs, future capital expenditures and royalties and other
government levies which will be imposed over the producing life of the
reserves. Many of these factors are subject to change and are beyond our
control. All such assessments involve a measure of geologic and engineering
uncertainty which could result in lower production and reserves than
anticipated.

Our level of debt could have a material adverse effect on our ability to pay
distributions to our unitholders.

Pengrowth Corporation has issued US$200 million in term debt due in two
tranches, the first tranche of US$150 million is due in April 2010 and the
second tranche of US$50 million is due in April 2013. Pengrowth also has a
$260
million revolving credit facility syndicated among eight financial
institutions in place until June 20, 2004. The $260 million facility has a 364
day revolving period and should it not be renewed on June 20, 204, it will be
repayable over a two year period. We draw upon these credit facilities from
time to time to make acquisitions of oil and natural gas properties

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and to fund
capital investments in our properties. We pay interest at fluctuating rates
with respect to a portion of our outstanding debt under our existing credit
facilities. Variations in interest rates and scheduled principal repayments
could result in significant changes in the amount Pengrowth is required to
apply to service its debt. Certain covenants in the agreements with our
lenders may also limit the amount of the royalty paid by Pengrowth Corporation
to Pengrowth Trust and the distributions paid by us to our unitholders. We
cannot assure you that the amount of our credit facility will be adequate for
our future financial obligations or that we will be able to obtain additional
funds. If we become unable to pay our debt service charges or otherwise cause
an event of default to occur, our lenders may foreclose on or sell the
properties. The net proceeds of any such sale will be allocated firstly, to
the repayment of our lenders and other creditors and only the remainder, if
any, would be payable to Pengrowth Trust by Pengrowth Corporation in respect of
the royalty.

Loss of our key management and other personnel could impact our business.

Our unitholders are entirely dependent on the management of Pengrowth
Management and Pengrowth Corporation with respect to the acquisition of oil and
gas properties and assets, the development and acquisition of additional
reserves, the management and administration of all matters relating to
properties and the administration of Pengrowth Trust. The loss of the services
of key individuals who currently comprise the management team of Pengrowth
Management and Pengrowth Corporation could have a detrimental effect on
Pengrowth Trust. In addition, increased activity within the oil and gas sector
can increase the cost of goods and services and make it more difficult to have
and retain qualified professional staff.

Trust distributions are affected by marketability of production.

The marketability of our production depends in part upon the availability,
proximity and capacity of gas gathering systems, pipelines and processing
facilities. United States federal and state and Canadian federal and provincial
regulation of oil and gas production and transportation, general economic
conditions, and changes in supply and demand could adversely affect our ability
to produce and market oil and natural gas. If market factors dramatically
change, the financial impact on us could be substantial. The availability of
markets is beyond our control.

The operation of a significant portion of our properties is largely dependent
on the ability of third party operators, and harm to their business could cause
delays and additional expenses in our receiving revenues.

The continuing production from a property, and to some extent the
marketing of production, is dependent upon the ability of the operators of our
properties. Currently 42% of our properties are operated by third parties,
based on daily production. If, in situations where we are not the operator, the
operator fails to perform these functions properly or becomes insolvent, then
revenues may be reduced. Revenues from production generally flow through the
operator and, where we are not the operator, there is a risk of delay and
additional expense in receiving such revenues.

The operation of the wells located on properties not operated by us are
generally governed by operating agreements which typically require the operator
to conduct operations in a good and workmanlike manner. Operating agreements
generally provide, however, that the operator will have no liability to the
other non-operating working interest owners for losses sustained or liabilities
incurred, except such as may result from gross negligence or wilful misconduct.
In addition, third-party operators are generally not fiduciaries with respect
to Pengrowth Corporation, Pengrowth Trust or the unitholders. Pengrowth
Corporation, as owner of working interests in properties not operated by it,
will generally have a cause of action for damages arising from a breach of the
operators duty. Although not established by definitive legal precedent, it is
unlikely that the Pengrowth Trust or our unitholders would be entitled to bring
suit against third-party operators to enforce the terms of the operating
agreements. Therefore, our unitholders will be dependent upon Pengrowth
Corporation, as owner of the working interest, to enforce such rights.

Our distributions could be adversely affected by unforeseen title defects.

Although title reviews are conducted prior to any purchase of resource
assets, such reviews cannot guarantee that an unforeseen defect in the chain of
title will not arise to defeat our title to certain assets. Such defects could
reduce the amounts distributable to our unitholders, and could result in a
reduction of capital.

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Fluctuations in foreign currency exchange rates could adversely affect our
business.

World oil prices are quoted in United States dollars and the price
received by Canadian producers is therefore affected by the Canadian/United
States dollar exchange rate which fluctuates over time. A material increase in
the value of the Canadian dollar may negatively impact our net production
revenue. To the extent that we have engaged, or in the future engage, in risk
management activities related to commodity prices and foreign exchange rates,
through entry into oil or natural gas price hedges and forward foreign exchange
contracts or otherwise, we may be subject to unfavourable price changes and
credit risks associated with the counterparties with which we contract.

A decline in the value of the Canadian dollar relative to the United
States dollar provides a competitive advantage to United States companies in
acquiring Canadian oil and gas properties and may make it more difficult for us
to replace reserves through acquisitions.

Our insurance coverage could be inadequate.

We are exposed to a number of risks and maintain liability insurance,
where available, in amounts consistent with industry standards. However, we may
become liable for damages arising from events against which we cannot insure,
or against which we may elect not to insure because of high premium costs or
other reasons. The costs to repair such damage or pay such liabilities could
reduce distributable income. Our operations are subject to all of the risks
normally associated with drilling for, and the production and transportation of
oil and natural gas. Such risks and hazards include encountering unexpected
formations or pressures, blow-outs, craterings and fires, all of which could
result in personal injury, loss of life, property damage and environmental
damage. Although we have safety and environmental policies in place to protect
operators and employees, as well as to meet regulatory requirements, and
although we have liability insurance policies in place, we cannot fully insure
against all such risks. Costs incurred to repair such damage or pay such
liabilities will reduce payments made by Pengrowth Corporation to Pengrowth
Trust.

Being a limited purpose trust makes Pengrowth Trust largely dependent upon the
operations and assets of Pengrowth Corporation.

Pengrowth Trust is a limited purpose trust which is dependent upon the
operations and assets of Pengrowth Corporation. Pengrowth Corporations income
will be received from the production of crude oil and natural gas from its
properties and will be susceptible to the risks and uncertainties associated
with the oil and natural gas industry generally. Since the primary focus is to
pursue growth opportunities through the development of existing reserves and
the acquisition of new properties, Pengrowth Corporations involvement in the
exploration for oil and natural gas is minimal. As a result, if the oil and
natural gas reserves associated with Pengrowth Corporations resource
properties are not supplemented through additional development or the
acquisition of oil and natural gas properties, the ability of Pengrowth
Corporation to continue to generate cash flow for distribution to unitholders
may be adversely affected.

The Sable Offshore Energy Project properties may present challenges and risks
that we have not faced in the past.

The Sable Offshore Energy Project properties are offshore and we have had
no other experience with offshore projects. Moreover, they are in an earlier
stage of development than most of our previous acquisitions have been and have
not been on production for an extended period of time. As a result, the Sable
Offshore Energy Project properties may present challenges and risks that
Pengrowth has not faced in the past. Furthermore, because of the early stage of
development and relatively brief production history of these properties, events
which could materially adversely affect our interests are more likely to occur.

Management may have conflicts of interest.

Pengrowth Management provides advisory, management and administrative
needs of Pengrowth Trust and Pengrowth Corporation in consideration for a
management fee which is currently based in part on net production revenue of
Pengrowth Corporation. This arrangement may create an incentive for Pengrowth
Management to maximize the net production revenue of Pengrowth Corporation,
rather than maximizing its distributable income, which is the primary basis for
calculating distributions available to unitholders. Pengrowth Management also
receives an acquisition fee which is based, in part, upon the aggregate dollar
amount of the completed acquisitions in each year. This arrangement may create

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an incentive for Pengrowth Management to maximize the number of completed
acquisitions notwithstanding that such acquisitions may be contrary to the
interests of unitholders.

Pengrowth Management may manage and administer such additional acquired
properties, as well as enter into other types of energy related management and
advisory activities and may not devote full time and attention to the business
of Pengrowth Corporation and therefore act in contradiction to or competition
with the interests of our unitholders.

Any expenses which Pengrowth Management incurs in relation to the business
of Pengrowth Corporation and Pengrowth Trust are required to be paid by
Pengrowth Corporation. These expenses are not subject to a limit other than as
may be provided under a periodic review by the board of directors of Pengrowth
Corporation and, as a result, there may not be an incentive for Pengrowth
Management to minimize these expenses.

We may incur material costs to comply with, or as a result of, health, safety
and environmental laws and regulations.

Compliance with environmental laws and regulations could materially
increase our costs. We may incur substantial capital and operating costs to
comply with increasingly complex laws and regulations covering the protection
of the environment and human health and safety. In particular, we may be
required to incur significant costs to comply with the 1997 Kyoto Protocol to
the United Nations Framework Convention on Climate Change, known as the Kyoto
Protocol that is intended to reduce emissions of pollutants into the air.

Lower oil and gas prices increase the risk of write-downs of our oil and gas
property investments.

Under Canadian accounting rules, the net capitalized cost of oil and gas
properties may not exceed a ceiling limit which is based, in part, upon
estimated future net cash flows from reserves. If the net capitalized costs
exceed this limit, we must charge the amount of the excess against earnings. As
oil and gas prices decline, our net capitalized cost may approach and, in
certain circumstances, exceed this cost ceiling, resulting in a charge against
earnings. Under United States accounting rules, the cost ceiling is generally
lower than under Canadian rules because the future net cash flows used in the
United States ceiling test are discounted to a present value. Accordingly, we
would have more risk of a ceiling test write-down in a declining price
environment if we reported under United States generally accepted accounting
principles. While these write-downs would not affect cash flow, the charge to
earnings could be viewed unfavourably in the market or could limit our ability
to borrow funds or comply with covenants contained in our current or future
credit agreements or other debt instruments.

Changes in Canadian legislation could adversely affect the value of our trust
units.

The value of the trust units is largely related to our income tax
treatment. We cannot assure you that income tax laws and government incentive
programs relating to the oil and natural gas industry generally, the status of
royalty trusts having our structure, the Alberta royalty tax credit and the
resource allowance will remain favourable and not change in a manner that
adversely affects your investment.

The investment eligibility of our trust units could be adversely affected if
Pengrowth Trust ceases to qualify as a mutual fund trust.

If Pengrowth Trust ceases to qualify as a mutual fund trust under Canadian
tax legislation, the trust units will cease to be qualified investments for
trusts governed by RRSPs, RRIFs, RESPs and DPSPs. Where at the end of any month
a RRSP, RRIF, RESP or DPSP holds trust units that are not qualified
investments, the RRSP, RRIF, RESP or DPSP must, in respect of that month, pay a
tax under Part XI.1 of the Tax Act (Canada) equal to 1% of the fair market
value of the trust units at the time those trust units were acquired by the
RRSP, RRIF, RESP or DPSP. In addition, trusts governed by a RRSP and a RRIF
will be subject to tax on the income attributable to the holding of
non-qualified investments and on full capital gains, if any, realized on the
disposition of trust units. Where a trust governed by a RRSP or a RRIF acquires
trust units that are not qualified investments, the value of the investment
will be included in the income of the annuitant for the year of the
acquisition. Trusts governed by a RESP which hold trust units that are not
qualified investments may have their registration revoked by the Canada Customs
and Revenue Agency.

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If Pengrowth Trust ceases to qualify as a mutual fund trust, it will be
required to pay a tax under Part XII.2 of the Income Tax Act(Canada). The
payment of Part XII.2 tax by Pengrowth Trust may have adverse income tax
consequences for certain unitholders including non-resident persons and RRSPs,
RRIFs, RESPs or DPSPs that acquire an interest in Pengrowth Trust directly or
indirectly from another unitholder.

If, at any particular time, Pengrowth Trust may reasonably be considered
to be established or maintained primarily for the benefit of non-residents of
Canada, or any of the conditions described under the heading Certain Income
Tax Considerations  Certain Canadian Federal Income Tax Considerations cease
to be met, it will lose its status as a mutual fund trust. There can be no
assurance that Pengrowth Trust will always be able to satisfy these
requirements and will not lose its status as a mutual fund trust.

The ability of investors resident in the United States to enforce civil
remedies may be affected for a number of reasons.

Pengrowth Trust is an Alberta trust and Pengrowth Management and Pengrowth
Corporation are both Alberta corporations. All of these entities have their
principal places of business in Canada. A majority of the directors and
officers of Pengrowth Management and Pengrowth Corporation, certain of the
underwriters and certain experts named herein are residents of Canada and all
or a substantial portion of the assets of such persons and of Pengrowth Trust
are located outside of the United States. Consequently, it may be difficult for
United States investors to effect service of process within the United States
upon Pengrowth Trust or such persons or to realize in the United States upon
judgments of courts of the United States predicated upon civil remedies under
the Securities Act of 1933(United States), as amended. Investors should not
assume that Canadian courts:



| | (a) |  | will enforce judgments of United States courts obtained in
actions against Pengrowth Trust or such persons predicated upon the
civil liability provisions of the United States federal securities
laws or the securities or blue sky laws of any state within the
United States; or
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | will enforce, in original actions, liabilities against
Pengrowth Trust or such persons predicated upon the United States
federal securities laws or any such state securities or blue sky
laws.                                                                                      

The trust units are not equivalent to shares.

The trust units should not be viewed by investors as shares in Pengrowth
Corporation. The trust units are also dissimilar to conventional debt
instruments in that there is no principal amount owing to our unitholders. The
trust units represent a fractional interest in Pengrowth Trust. Unitholders
will not have the statutory rights normally associated with ownership of shares
of a corporation including, for example, the right to bring oppression or
derivative actions. Pengrowth Trusts assets are royalty units and common
shares of Pengrowth Corporation and certain facilities interests, and may also
include certain other investments permitted under the trust indenture. The
price per trust unit is a function of anticipated distributable income, the oil
and natural gas properties acquired by Pengrowth Corporation and the ability to
effect long-term growth in the value of Pengrowth Corporation. The market price
of the trust units will be sensitive to a variety of market conditions
including, but not limited to, interest rates and the ability of Pengrowth
Corporation to acquire suitable oil and natural gas properties. Changes in
market conditions may adversely affect the trading price of our trust units.

Trust units will have no value when reserves from the properties can no
longer be economically produced or marketed and, as a result, cash
distributions do not represent a yield in the traditional sense as they
represent both return of capital and return on investment. Subscribers for
trust units will have to obtain the return of capital invested out of cash flow
derived from their investments in the trust units during the period when
reserves can be economically recovered. Accordingly, we give no assurances that
the distributions you receive over the life of your investment will meet or
exceed your initial capital investment.

You may experience substantial future dilution given that the success of the
trust is dependent upon raising capital.

One of our objectives is to continually add to our reserves through
acquisitions and through development. Our success is, in part, dependent on our
ability to raise capital from time to time. Our unitholders may also suffer
dilution in connection with future issuance of trust units.

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The limited liability of unitholders is uncertain.

The trust indenture between Pengrowth Corporation and Computershare Trust
Company of Canada, as trustee, provides that no unitholder will be subject to
any personal liability in connection with Pengrowth Trust or its obligations
and affairs, and the satisfaction of claims of any nature arising out of or in
connection therewith is only to be made out of Pengrowth Trusts assets.
Additionally, the trust indenture states that no unitholder is liable to
indemnify or reimburse Computershare for any liabilities incurred by
Computershare with respect to any taxes payable by or liabilities incurred by
Pengrowth Trust or Computershare, and all such liabilities will be enforceable
only against, and will be satisfied only out of, Pengrowth Trusts assets. It
is intended that the operations of Pengrowth Trust will be conducted, upon the
advice of counsel, in such a way and in such jurisdictions as to avoid as far
as possible any material risk of liability on the unitholders for claims
against Pengrowth Trust. Notwithstanding the foregoing, because of
uncertainties in the law relating to trusts such as Pengrowth Trust, there is a
risk that a unitholder could be held personally liable for obligations of
Pengrowth Trust to the extent that claims are not satisfied by Pengrowth Trust.

Canadian and United States practices differ in reporting reserves and
production.

We report our production and reserve quantities in accordance with
Canadian practices. These practices are different from the practices used to
report production and to estimate reserves in reports and other materials filed
with the SEC by companies in the United States.

We incorporate additional information with respect to production and
reserves which is either not generally included or prohibited under rules of
the United States Securities and Exchange Commission and practices in the
United States. We follow the Canadian practice of reporting gross production
and reserve volumes; however, we also follow the United States practice of
separately reporting these volumes on a net basis (after the deduction of
royalties and similar payments). We also follow the Canadian practice of using
forecast prices and costs when we estimate our reserves; however, we separately
estimate our reserves using prices and costs held constant at the date of the
reserve report in accordance with the Canadian reserve reporting requirements.
These requirements are similar to the constant pricing reserve methodology
utilized in the United States.

We include in this annual information form estimates of probable reserves
along with estimates of proved reserves. The United States Securities and
Exchange Commission generally prohibits the inclusion of estimates of probable
reserves in filings made with it. This prohibition does not apply to Pengrowth
Trust because it is a Canadian foreign private issuer.

You may be required to pay taxes even if you do not receive any cash
distributions.

You may be required to pay federal income taxes and, in some cases, state,
provincial and local income taxes on your share of our taxable income even if
you do not receive any cash distributions from us. You may not receive cash
distributions from us equal to your share of our taxable income or even equal
to the actual tax liability that results from your share of our taxable income.

Unitholders who are United States persons face income tax risks.

The United States federal income tax risks related to owning and disposing
of our trust units, include the following:



| |  |  | Because the trust units will be publicly traded, Pengrowth
Trust will not be treated as a corporation for U.S. federal income
tax purposes only if 90% or more of its gross income consists of
qualifying income. Although Pengrowth Trust expects to satisfy the
90% requirement at all times, if it fails to satisfy this
requirement, it will be treated as a foreign corporation. If
Pengrowth Trust were treated as a corporation, it could be a passive
foreign investment company or PFIC. Treatment of Pengrowth Trust as
a PFIC could result in a material reduction in the after-tax return
to the unitholders, likely causing a substantial reduction in the
value of the trust units.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | A successful U.S. Internal Revenue Service (IRS) contest of
the federal income tax positions we take or have taken may adversely
affect the market for our trust units. For example, the IRS could
challenge our position that the royalty from Pengrowth Corporation
should be treated as a non-operating, non-working                                                                                                                                                                                                                                                                                                                                                                          

55



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| |   |  | interest. We have not requested a ruling from the IRS with respect
to this or any other matter affecting us other than relating to the
timeliness of our election to be treated as a partnership. The IRS
may adopt positions that differ from the conclusions of our counsel
or from the positions we take or have taken. It may be necessary to
resort to administrative or court proceedings to sustain our
counsels conclusions or those positions. A court may not concur
with our counsels conclusions or the positions we take or have
taken. Any contest with the IRS may materially and adversely impact
the U.S. federal income tax consequences to unitholders and,
therefore, the market for our trust units and the price at which
they trade. In addition, the costs of any contest with the IRS,
principally legal, accounting and related fees, will be borne by us
and indirectly by the unitholders.                                                                                                                              
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Tax gain or loss on disposition of trust units could be
different from expected. If you sell your trust units, you will
recognize gain or loss equal to the difference between the amount
realized and your tax basis in the trust units. Prior distributions
in excess of the total net taxable income you were allocated, which
decreased your tax basis in the trust units, will, in effect, become
taxable income to you if the trust units are sold at a price greater
than your tax basis in those trust units, even if the price you
receive is less than your original cost. A substantial portion of the
amount realized, whether or not representing gain, may be ordinary
income to you. Should the IRS successfully contest some positions we
take, you could recognize more gain on the sale of trust units than
would be the case under those positions, without the benefit of
decreased income in prior years. Also, if you sell trust units, you
may incur a tax liability in excess of the amount of cash you receive
from the sale.
|
| |  |  | We have registered with the IRS as a tax shelter. This may
increase the risk of an IRS audit of us or a unitholder. The tax laws
require that some types of entities register as tax shelters in
response to the perception that they claim tax benefits that may be
unwarranted. As a result, we may be audited by the IRS and tax
adjustments could be made. Any unitholder owning less than a 1%
profits interest in us has very limited rights to participate in the
income tax audit process. Further, any adjustments in our tax returns
will lead to adjustments in our unitholders tax returns and may lead
to audits of unitholders tax returns and adjustments of items
unrelated to us. You will bear the cost of any expense incurred in
connection with an examination of your personal tax return.                                                                                                                                                                                                                                
|
| |  |  | We will treat each owner of trust units as having the same tax
benefits without regard to the specific trust units purchased. The
IRS may challenge this treatment, which could adversely affect the
value of our trust units. Because we cannot match transferors and
transferees of our trust units, we will adopt depletion, depreciation
and amortization positions that do not conform with all aspects of
final Treasury regulations. A successful IRS challenge to those
positions could adversely affect the amount of tax benefits available
to you. It also could affect the timing of these tax benefits or the
amount of gain from your sale of trust units and could have a
negative impact on the value of our trust units or result in audit
adjustments to your tax returns.                                                                                                                                                                                                                                                          
|
| |  |  | Pengrowth Trust may not be an appropriate investment for
certain types of entities. For example, there is a risk that some of
Pengrowth Trusts income could be unrelated business taxable income
with respect to tax-exempt organizations. Furthermore, we anticipate
that substantially all of Pengrowth Trusts gross income will not be
qualifying income for purposes of the rules relating to regulated
investment companies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

CONFLICTS OF INTEREST

There may be situations in which the interests of Pengrowth Management
will conflict with those of our unitholders. Pengrowth Management may acquire
oil and natural gas properties on behalf of persons other than the unitholders.
Pengrowth Management may manage and administer such additional properties, as
well as enter into other types of energy-related management and advisory
activities. Accordingly, neither Pengrowth Management nor its management will
carry on their full-time activities on behalf of unitholders and, when acting
on behalf of others, may at times act in contradiction to or competition with
the interests of unitholders. In the event that the interests of Pengrowth
Management are in conflict with those of our unitholders, Pengrowth Management
is obliged to make decisions acting in good faith, having regard to the best
interests of unitholders and in a manner that would not contravene its
fiduciary obligations to unitholders.

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Oil and natural gas properties may occasionally be made available for
purchase in areas where Pengrowth Managements clients hold interests. In such
circumstances, Pengrowth Management shall provide each of its clients,
including Pengrowth Corporation, with the opportunity to participate in the
acquisition of such properties.

Although Pengrowth Management provides advisory and management services to
Pengrowth Corporation and Pengrowth Trust, the board of directors of Pengrowth
Corporation supervises the management of the business and affairs of Pengrowth
Corporation and Pengrowth Trust. The board of directors of Pengrowth
Corporation makes significant operational decisions and all decisions relating
to:



| | (i)   |  | the issuance of additional trust units;              
| | ----- |  | -----------------------------------------------------
|
| | (ii)  |  | material acquisitions and dispositions of properties;
|
| | (iii) |  | material capital expenditures;                       
|
| | (iv)  |  | borrowing; and                                       
|
| | (v)   |  | the payment of distributable income.                 

Properties may not be acquired from officers or directors of Pengrowth
Management or persons not at arms length with such persons at prices which are
greater than fair market value and properties may not be sold to officers or
directors of Pengrowth Management or persons not at arms length with such
persons at prices which are less than fair market value, in each case as
established by an opinion of an independent financial advisor and approved by
the independent members of the board of directors of Pengrowth Corporation.
There may be circumstances where certain transactions may also require the
preparation of a formal valuation and the affirmative vote of unitholders in
accordance with the requirements of Ontario Securities Commission Rule 61-501
 Insider Bids, Issuer Bids, Going Private Transactions and Related Party
Transactions.

Circumstances may arise where members of the board of directors of Pengrowth
Corporation serve as directors or officers of corporations which are in
competition to the interests of Pengrowth Corporation and Pengrowth Trust. No
assurances can be given that opportunities identified by such board members
will be provided to Pengrowth Corporation and Pengrowth Trust.

ADDITIONAL INFORMATION

Additional information, including Pengrowth Managements remuneration and
the principal holders of Pengrowth Trust Units, is contained in the Information
Circular  Proxy Statement of Pengrowth Corporation and Pengrowth Trust dated
May 12, 2003, which relates to the Annual and Special Meeting of Trust
Unitholders, and the Annual and Special General Meeting of Shareholders of
Pengrowth Corporation and the Special Meeting of Pengrowth Corporation to be
held on June 17, 2003. Additional financial information is contained in
Pengrowth Trusts comparative financial statements for the years ended December
31, 2002 and 2001 which are included in Pengrowth Trusts 2002 Annual Report.

Pengrowth Trust will provide to any person or company upon request:



| | (a) |  | when the securities of Pengrowth Trust are in the course of a
distribution pursuant to a short form prospectus or a preliminary
short form prospectus has been filed in respect of a proposed
distribution of its securities;
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|

| | (i)  |  | one copy of Pengrowth Trusts latest annual
information form, together with one copy of any document, or
the pertinent pages of any document, incorporated therein by
reference;                                                                                                                                                                                                                         
| | ---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (ii) |  | one copy of the consolidated financial statements
of Pengrowth Trust for the most recently completed financial
year in respect of which such financial statements have been
issued together with the report of the auditor thereon, and one
copy of any unaudited interim consolidated financial statements
of Pengrowth Trust subsequent to the financial statements for
its most recent financial year;

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| | (iii) |  | one copy of the information circular of Pengrowth
Trust in respect of the most recent annual meeting of
Unitholders of Pengrowth Trust which involved the election of
directors of Pengrowth Corporation; and
| | ----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (iv)  |  | one copy of any other documents which are
incorporated by reference into the preliminary short form
prospectus or the short form prospectus; or                                                              
|

| | (b) |  | at any other time, a copy of the documents referred to in
clauses (a) (i), (ii) and (iii) above, provided that Pengrowth Trust
or Pengrowth Corporation may require a payment of a reasonable charge
from such a person or company who is not a security holder of
Pengrowth Trust where the documents are furnished under this clause
(b).
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

For additional copies of the Annual Information Form and the materials
listed in the preceding paragraphs please contact:

|                                |  |                |                         |                            |  |  |  |            |  |               
|------------------------------- |  | -------------- | ----------------------- | -------------------------- |  |  |  | ---------- |  | --------------
|Calgary Head Office             |  |                |                         | Toronto Investor Relations
|Suite 2900, 111-5th Avenue S.W. |  |                |                         | 2315, 200 Bay Street      
|Calgary, Alberta T2P 3Y6        |  |                |                         | Toronto, Ontario M5J 2J2  
|Telephone:                      |  | (403) 233-0224 |                         |                            |  |  |  | Telephone: |  | (416) 362-1748
|                                |  | 1-800-223-4122 |                         |                            |  |  |  |            |  | 1-888-744-1111
|Fax:                            |  | (403) 294-0051 |                         |                            |  |  |  | Fax:       |  | (403) 362-8191
|                               
|                                |  | Website:       | www.pengrowth.com      
|                                |  | email:         | pengrowth@pengrowth.com

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APPENDIX B

2002 ANNUAL REPORT





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(PENGROWTH ENERGY TRUST)



---



##### Table of Contents



WERE ABOUT PERFORMANCE

Corporate Profile

PENGROWTH ENERGY TRUST IS ONE OF NORTH AMERICAS LARGEST ENERGY TRUSTS,
WITH A MARKET CAPITALIZATION OF $1.6 BILLION AT DECEMBER 31,2002 AND AN
ENTERPRISE VALUE OF APPROXIMATELY $2.0 BILLION.

PENGROWTH PAYS MONTHLY DISTRIBUTIONS TO UNITHOLDERS BASED ON THE NET
CASH FLOW (AFTER FEES AND EXPENSES) GENERATED FROM A PORTFOLIO OF HIGH
QUALITY CRUDE OIL AND NATURAL GAS PROPERTIES IN THE WESTERN CANADIAN
SEDIMENTARY BASIN AND OFF THE EAST COAST OF CANADA.

UNITS OF PENGROWTH ENERGY TRUST TRADE ON THE TORONTO STOCK EXCHANGE
UNDER THE SYMBOL PGF.UN AND ON THE NEW YORK STOCK EXCHANGE UNDER
THE SYMBOL PGH.

CONTENTS



|1.   |  | 14 Years of Superior Returns              
|---- |  | ------------------------------------------
|    
|2.   |  | Were About Performance                   
|    
|4.   |  | Financial Highlights                      
|    
|5.   |  | Operating Highlights                      
|    
|7.   |  | Presidents Message to Unitholders        
|    
|16.  |  | Operations Review                         
|    
|35.  |  | Operations Statistical Review             
|    
|38.  |  | Health, Safety, Environment and Community 
|    
|40.  |  | Managements Discussion and Analysis      
|    
|54.  |  | Board of Directors                        
|    
|56.  |  | Corporate Governance                      
|    
|58.  |  | Managements Report                       
|    
|59.  |  | Auditors Report                          
|    
|60.  |  | Consolidated Financial Statements         
|    
|64.  |  | Notes to Consolidated Financial Statements
|    
|81.  |  | Five-year Review                          
|    
|83.  |  | Pengrowth Team                            
|    
|85.  |  | Historical Distributions                  
|    
|86.  |  | A Note to U.S. Unitholders                
|    
|IBC. |  | Corporate Information                     

ANNUAL GENERAL MEETING

The annual meeting of the unitholders
of Pengrowth Energy Trust will be held on Tuesday, May 27, 2003 at 3:00 p.m.
MST, in the Crystal Ballroom, Fairmount Palliser Hotel, 133 - 9th
Avenue S.W., Calgary, Alberta.
Unitholders who are unable to attend are urged to complete, sign and mail their proxies to ensure their units
will be voted at the meeting.

Note: All figures in this annual report are in Canadian dollars,
unless otherwise indicated.





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PENGROWTH ENERGY TRUST

14 YEARS      of
Superior
Returns

From
well managed, high quality      crude
oil and natural gas assets.

RELATIVE TOTAL RETURN PERFORMANCE

Since inception in 1988, Pengrowth has provided its unitholders with total
returns generally exceeding that of the TSX 300 and the S&P 500. This
superior performance is due to the effective management of a diverse
portfolio
of high quality natural gas and crude oil properties.

1



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2002 ANNUAL REPORT

Were About

PERFORMANCE


There are many characteristics which define a high quality royalty
trust. With the
popularity of the income fund structure in Canada and a growing interest
in the
United States, investors enjoy a choice between many royalty trust and
income fund investments.

Pengrowth is about performance.Every aspect of our business is managed
to ensure that we maximize value to our unitholders. The following
are just some of the reasons why an investor should consider
Pengrowth for their portfolio.

AVERAGE DAILY PRODUCTION
14 YEARS OF SUPERIOR PERFORMANCE

Pengrowth completed its Canadian initial public offering in 1988
and since that time has grown into a trust with a market capitalization
of $1.6 billion and an enterprise value of approximately $2.0 billion.
Pengrowth is now one of North Americas largest oil and gas royalty
trusts and is listed on the TSX and the NYSE. Since inception,
Pengrowth has outperformed the S&P/TSX Oil and Gas Producers
Index by over 300 percent and has provided an average annual cash-on-cash yield exceeding 14 percent. As prices of oil and natural gas continue
to
remain high, Pengrowth is well positioned for continued superior
performance.

HIGH QUALITY AND DIVERSIFIED ASSET BASE

Pengrowth owns a diversified portfolio of approximately 70 high quality
oil and natural gas
properties. Pengrowths core operated and non-operated properties are
located across Canada in the
provinces of British Columbia, Alberta, Saskatchewan and offshore Nova
Scotia. This makes Pengrowth
the most geographically diversified energy trust in the Canadian royalty
trust sector. The portfolio of
properties held by Pengrowth are primarily long life, oil and natural gas
properties with established
production profiles. These assets provide relatively steady production with
manageable capital
investment requirements.

Through high quality and well timed acquisitions, Pengrowths properties
generate a reserve life index of
11.6 years on an Established basis compared to an average of 10.5 years in
the Canadian royalty trust sector.
A long reserve life ensures that Pengrowth unitholders will continue to
receive distributions for many years.

EXPERIENCED AND PROVEN MANAGEMENT TEAM

Formed in 1988, Pengrowth is one of the longest operating oil and gas
royalty trusts in Canada. Over
our 14 year history, Pengrowths management team has demonstrated the
ability to provide superior
performance for the benefit of our unitholders. Our management team has
compiled a distinguished

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PENGROWTH ENERGY TRUST

record of growth and return while maintaining one of the most efficient
cost structures in the royalty trust sector. Pengrowth has one of the
lowest combined general and administrative expenses and management
fees per barrel of oil equivalent production among its peers.

The nine members of Pengrowths senior management team have
an average of more than 19 years experience each in the oil and
gas industry. As we grow, Pengrowth will continue to attract the
best and most qualified people available. We encourage all of
Pengrowths team members to own units in the Trust. Our
employees, management and directors own approximately
3.5 percent of the outstanding Pengrowth Energy Trust units,
aligning our interests with the unitholders.

(RESERVE LIFE INDEX)

PRUDENT CAPITAL STRUCTURE

A key measure of quality for an oil and gas royalty trust is a strong
balance sheet. At Pengrowth we have actively managed our capital
structure to ensure that we maintain sufficient credit capacity to make
accretive acquisitions. At December 31, 2002 Pengrowths long-term debt was $317
million, representing 23 percent of our total book capitalization and 1.6 times
12 month trailing
distributable income. This is Pengrowths most favourable debt position in the
last five years, positioning
us well for future growth. Pengrowth has one of the most conservative capital
structures within its
peer group.

ACCESS TO NORTH AMERICAN CAPITAL MARKETS

Pengrowth successfully listed on the New York Stock Exchange on April
10, 2002, which has provided
superior access to the large U.S.capital markets. Our listing has increased the
volume of trading on both the
TSX and the NYSE. Average trading volumes on the TSX and
NYSE exceed 230,000 and 79,000 units per day
respectively, reflecting significant liquidity in
Pengrowth Energy Trust units.

(ESTABLISHED RESERVES)

In November 2002, Pengrowth completed
the first cross-border trust unit offering
within the Canadian royalty trust
sector. Pengrowth successfully raised
gross proceeds of $281.2 million,
of which approximately 43 percent
or $120 million was sold into the
U.S. market. Pengrowth will
continue to utilize the exposure
gained through the NYSE listing
to increase our access to
international capital markets.

3





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2002 ANNUAL REPORT

Financial Highlights

(thousands, except per unit amounts)

|                                                     |                                                                |                                  |  |  |      |        |           |         |      |          |           |         |      |   |     |     |   | 
|---------------------------------------------------- | -------------------------------------------------------------- | -------------------------------- |  |  | ---- | ------ | --------- | ------- | ---- | -------- | --------- | ------- | ---- | - | --- | --- | - | 
|Year ended December 31                               |                                                                |                                  |  |  |      | 2002   |           | 2001    |      | % Change
|                                                     |                                                                |                                  |  |  |      |        |           |         |      |         
|INCOME STATEMENT                                     |                                                                |                                  |  |  |      |        |           |         |      |          |           |         |      |   |     |    
|Oil and gas sales                                    |                                                                |                                  |  |  |      | $      | 482,301   |         |      | $        | 469,929   |         |      |   | 3   |    
|Net income                                           |                                                                |                                  |  |  |      | $      | 49,067    |         |      | $        | 85,150    |         |      |   | (42 | )  
|                                                     | Per unit                                                       |                                  |  |  |      |        | $         | 0.546   |      |          | $         | 1.201   |      |   |     | (55 | )
|Distributable income                                 |                                                                |                                  |  |  |      | $      | 194,458   |         |      | $        | 215,787   |         |      |   | (10 | )  
|                                                     | Actual distributions paid or declared per unit                 |                                  |  |  |      |        | $         | 2.07    |      |          | $         | 3.01    |      |   |     | (31 | )
|Weighted average number of units outstanding         |                                                                |                                  |  |  |      |        | 89,923    |         |      |          | 70,911    |         |      |   | 27  |    
|UNITS OUTSTANDING AT YEAR-END                        |                                                                |                                  |  |  |      |        | 110,562   |         |      |          | 82,240    |         |      |   | 34  |    
|                                                     |                                                                |                                  |  |  |      |        |           |         |      |          |           |         |      |   |     |    
|BALANCE SHEET                                        |                                                                |                                  |  |  |      |        |           |         |      |          |           |         |      |   |     |    
|Working capital                                      |                                                                |                                  |  |  |      | $      | (36,568   | )       |      | $        | (19,746   | )       |      |   | 85  |    
|Property, plant and equipment and other assets       |                                                                |                                  |  |  |      | $      | 1,444,668 |         |      | $        | 1,208,526 |         |      |   | 20  |    
|Long-term debt                                       |                                                                |                                  |  |  |      | $      | 316,501   |         |      | $        | 345,456   |         |      |   | (8  | )  
|Unitholders equity                                  |                                                                |                                  |  |  |      | $      | 1,053,939 |         |      | $        | 817,203   |         |      |   | 29  |    
|                                                     |                                                                |                                  |  |  |      |        |           |         |      |          |           |         |      |   |     |    
|Debt plus equity, at book                            |                                                                |                                  |  |  |      | $      | 1,370,440 |         |      | $        | 1,162,659 |         |      |   | 18  |    
|                                                     |                                                                |                                  |  |  |      |        |           |         |      |          |           |         |      |   |     |    
|EQUITY CAPITALIZATION, AT MARKET                     |                                                                |                                  |  |  |      | $      | 1,628,583 |         |      | $        | 1,169,454 |         |      |   | 39  |    
|ENTERPRISE VALUE *                                   |                                                                |                                  |  |  |      | $      | 1,945,084 |         |      | $        | 1,514,910 |         |      |   | 28  |    
|NET ASSET VALUE @ 12%                                |                                                                |                                  |  |  |      | $      | 1,113,550 |         |      | $        | 799,327   |         |      |   | 39  |    
|NET ASSET VALUE PER UNIT                             |                                                                |                                  |  |  |      | $      | 10.08     |         |      | $        | 9.72      |         |      |   | 4   |    
|                                                     |                                                                |                                  |  |  |      |        |           |         |      |          |           |         |      |   |     |    
|TRUST UNIT TRADING (TSX)                             |                                                                |                                  |  |  |      |        |           |         |      |          |           |         |      |   |     |    
|                                                     | High                                                           |                                  |  |  |      |        | $         | 17.00   |      |          | $         | 21.95   |      |   |     | (23 | )
|                                                     | Low                                                            |                                  |  |  |      |        | $         | 13.01   |      |          | $         | 12.80   |      |   |     | 2   |  
|                                                     | Close                                                          |                                  |  |  |      |        | $         | 14.73   |      |          | $         | 14.22   |      |   |     | 4   |  
|                                                     | Value                                                          |                                  |  |  |      |        | $         | 753,684 |      |          | $         | 734,382 |      |   |     | 3   |  
|                                                     | Volume (thousands of units)                                    |                                  |  |  |      |        |           | 51,110  |      |          |           | 41,249  |      |   |     | 24  |  
|                                                     | Year-end closing price as a multiple
of net asset value at 12% |                                  |  |  |      |        |           | 1.5     | x    |          |           | 1.5     | x    |   |     | 0   |  
|                                                     |                                                                |                                  |  |  |      |        |           |         |      |          |           |         |      |   |     |    
|TRUST
UNIT TRADING (NYSE)  LISTED ON APRIL 10, 2002 |                                                                |                                  |  |  |      |        |           |         |      |          |           |         |      |   |     |    
|                                                     | High                                                           |                                  |  |  | US $ | 10.90  |           |         |      |         |           |         |      |   |    
|                                                     | Low                                                            |                                  |  |  | US $ | 8.40   |           |         |      |         |           |         |      |   |    
|                                                     | Close                                                          |                                  |  |  | US $ | 9.27   |           |         |      |         |           |         |      |   |    
|                                                     | Value                                                          |                                  |  |  | US $ | 89,680 |           |         |      |         |           |         |      |   |    
|                                                     | Volume (thousands of units)                                    |                                  |  |  |      |        |           | 9, 672  |      |          |           |        |      |   |     |     |  
|                                                     |                                                                |                                  |  |  |      |        |           |         |      |          |           |         |      |   |     |    
|LONG-TERM DEBT AS A RATIO OF:                        |                                                                |                                  |  |  |      |        |           |         |      |          |           |         |      |   |     |    
|                                                     | Current years distributable income                            |                                  |  |  |      |        |           | 1.6     | x    |          |           | 1.6     | x    |   |     |     |  
|                                                     | Total capitalization:                                          |                                  |  |  |      |        |           |         |      |          |           |         |      |   |     |     |  
|                                                     |                                                                | Debt plus equity at book value   |  |  |      |        |           |         | 23.1 | %        |           |         | 29.7 | % |     |     |   | 
|                                                     |                                                                | Debt plus equity at market value |  |  |      |        |           |         | 16.3 | %        |           |         | 22.8 | % |     |     |   | 
|                                                     |                                                                |                                  |  |  |      |        |           |         |      |          |           |         |      |   |     |    

* Enterprise value equals market value of equity plus long-term debt.

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PENGROWTH ENERGY TRUST

Operating Highlights

|                                         |                |      |         |       |  |          |         |       |  |  |     |     |  
|---------------------------------------- | -------------- | ---- | ------- | ----- |  | -------- | ------- | ----- |  |  | --- | --- | -
|Year ended December 31                   |                | 2002 |         | 2001  |  | % Change
|                                         |                |      |         |       |  |         
|AVERAGE DAILY PRODUCTION                 |                |      |         |       |  |          |         |       |  |  |     |    
|Crude oil (barrels)                      |                |      | 19,914  |       |  |          | 19,726  |       |  |  | 1   |    
|Natural gas (thousands of cubic feet)    |                |      | 111,713 |       |  |          | 91,764  |       |  |  | 22  |    
|Natural gas liquids (barrels)            |                |      | 5,252   |       |  |          | 5,258   |       |  |  | 0   |    
|Total production (boe)                   |                |      | 43,785  |       |  |          | 40,320  |       |  |  | 9   |    
|TOTAL ANNUAL PRODUCTION (mboe)           |                |      | 15,982  |       |  |          | 14,717  |       |  |  | 9   |    
|Production per trust unit (boe/unit)     |                |      | 0.18    |       |  |          | 0.20    |       |  |  | (10 | )  
|                                         |                |      |         |       |  |          |         |       |  |  |     |    
|PRODUCTION PROFILE                       |                |      |         |       |  |          |         |       |  |  |     |    
|Crude oil                                |                |      | 45      | %     |  |          | 49      | %     |  |  |     |    
|Natural gas                              |                |      | 43      | %     |  |          | 38      | %     |  |  |     |    
|Natural gas liquids                      |                |      | 12      | %     |  |          | 13      | %     |  |  |     |    
|                                         |                |      |         |       |  |          |         |       |  |  |     |    
|AVERAGE PRICES                           |                |      |         |       |  |          |         |       |  |  |     |    
|Crude oil (per barrel)                   |                | $    | 38.06   |       |  | $        | 37.26   |       |  |  | 2   |    
|Natural gas (per mcf)                    |                | $    | 3.85    |       |  | $        | 4.48    |       |  |  | (14 | )  
|Natural gas liquids (per barrel)         |                | $    | 28.11   |       |  | $        | 30.68   |       |  |  | (8  | )  
|Average price per boe                    |                | $    | 30.18   |       |  | $        | 31.93   |       |  |  | (5  | )  
|                                         |                |      |         |       |  |          |         |       |  |  |     |    
|ESTABLISHED RESERVES                     |                |      |         |       |  |          |         |       |  |  |     |    
|Crude oil (mbbls)                        |                |      | 106,738 |       |  |          | 105,184 |       |  |  | 1   |    
|Natural gas (bcf)                        |                |      | 502.3   |       |  |          | 476.2   |       |  |  | 5   |    
|Natural gas liquids (mbbls)              |                |      | 24,354  |       |  |          | 25,964  |       |  |  | (6  | )  
|Total oil equivalent (mboe)              |                |      | 214,814 |       |  |          | 210,522 |       |  |  | 2   |    
|Established reserves per unit (boe/unit) |                |      | 1.94    |       |  |          | 2.56    |       |  |  | (24 | )  
|                                         |                |      |         |       |  |          |         |       |  |  |     |    
|OPERATING
COSTS                          |                |      |         |       |  |          |         |       |  |  |     |    
|                                         | Millions       |      | $       | 129.8 |  |          | $       | 104.9 |  |  |     | 24  |  
|                                         | Per boe        |      | $       | 8.12  |  |          | $       | 7.13  |  |  |     | 14  |  
|                                         |                |      |         |       |  |          |         |       |  |  |     |    
|GENERAL AND ADMINISTRATIVE COSTS         |                |      |         |       |  |          |         |       |  |  |     |    
|                                         | Millions       |      | $       | 11.0  |  |          | $       | 7.5   |  |  |     | 47  |  
|                                         | Per boe        |      | $       | 0.69  |  |          | $       | 0.51  |  |  |     | 35  |  
|                                         |                |      |         |       |  |          |         |       |  |  |     |    
|MANAGEMENT FEES                          |                |      |         |       |  |          |         |       |  |  |     |    
|                                         | Millions       |      | $       | 6.6   |  |          | $       | 7.1   |  |  |     | (7  | )
|                                         | Per boe        |      | $       | 0.41  |  |          | $       | 0.48  |  |  |     | (15 | )
|                                         |                |      |         |       |  |          |         |       |  |  |     |    
|ACQUISITION COSTS*                       |                |      |         |       |  |          |         |       |  |  |     |    
|                                         | Millions       |      | $       | 389.3 |  |          | $       | 277.1 |  |  |     | 40  |  
|                                         | Mmboe acquired |      |         | 37.7  |  |          |         | 48.4  |  |  |     | (22 | )
|                                         | Per boe        |      | $       | 10.33 |  |          | $       | 5.72  |  |  |     | 81  |  
|                                         |                |      |         |       |  |          |         |       |  |  |     |    

* Before acquisition fees.Natural gas has been converted to equivalent barrels of oil at 6:1 unless otherwise stated.

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2002 ANNUAL REPORT

PENGROWTH'S SENIOR MANAGEMENT TEAM

Pengrowths Senior Management Team

Left to right:
Robert B. Hodgins, Chief Financial Officer
Lianne Bigham, Controller
Gordon M. Anderson, Vice President
Charles V. Selby, Corporate Secretary
James S. Kinnear, Chairman, President & C.E.O.
Chris Webster, Treasurer
Lynn Kis, Vice President, Engineering
Jim MacDonald, General Manager, East Coast Operations
Henry D. McKinnon, Vice President, Operations

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PENGROWTH ENERGY TRUST

Presidents Message to Unitholders

PENGROWTH ENERGY TRUST POSTED
MIXED RESULTS IN 2002 AS LOWER
COMMODITY PRICES YEAR OVER YEAR
RESULTED IN REDUCED DISTRIBUTIONS.
DESPITE THIS, THE MARKET PRESENTED
OPPORTUNITIES FOR HIGH QUALITY
ACQUISITIONS WHICH HELPED TO
EXPAND PRODUCTION, RESERVES AND
GEOGRAPHICAL DIVERSIFICATION.

(PHOTO OF PRESIDENT)

Cash flow from operations increased from $207.8 million in
2001 to $228.7 million in 2002, an increase of 10 percent.
Actual distributions to unitholders during the calendar year declined from
$241.6 million in 2001 to
$171.4 million in 2002, reflecting a 75 percent payout of cash flow in
2002. Distributable income in
2002 declined by approximately 10 percent to $194.5 million from $215.8 million
in 2001. More
important for unitholders, distributable income per trust unit declined 31
percent to $2.07 from $3.01

(DISTRIBUTABLE INCOME AND RELATIVE PERFORMANCE GRAPH)

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2002 ANNUAL REPORT

in 2001. Despite this decline, the Trusts overall
performance in 2002 exceeded the market averages
by a wide margin, achieving a total return of 19
percent, based on yield plus capital appreciation and
assuming reinvestment of distributions. This
compared with minus 12 percent for the TSX
Composite Index and plus 12 percent for the TSX
Oil and Gas Producers Index.

HOW DID PENGROWTH FARE IN 2002?

Frankly, 2002 was an average year for performance
of the trust units. The decline in distributable
income per trust unit in 2002 was the result of
lower average commodity prices and two equity
offerings during the year. The distributable income
of $194.5 million in 2002 followed record
distributable income of $218.3 million in 2000
and $215.8 million in 2001. The first equity issue
closed in June 2002 and raised gross proceeds of
$123.2 million through the issue of 8.0 million
trust units at $15.40 per trust unit. This bought-deal offering was well received by the market and
included a full 15 percent over-allotment or
green shoe provision. The issue combined with
non-core asset sales significantly improved
Pengrowths overall financial strength, reducing the
debt/total capitalization ratio significantly from 28
percent at the end of the first quarter to 20
percent at the end of the second quarter.

SIGNIFICANT ACQUISITIONS

The Trusts strengthened financial position
during 2002 allowed Pengrowth Corporation to
successfully negotiate and close the acquisition
of producing crude oil and natural gas properties in
northeastern British Columbia from Calpine
Canada Natural Gas Partnership for total net
consideration of $352 million, after closing
adjustments. This purchase, which closed on
October 1, 2002 added 34 million barrels of oil
equivalent of Established reserves to Pengrowths
asset base, and approximately 12,000 barrels of oil
equivalent to our year-end daily production volumes.

In conjunction with the Calpine acquisition,
Pengrowth successfully conducted a second equity
offering which closed in November 2002, issuing
20.1 million new trust units at Cdn$14.00 or

(NEW EQUITY RAISED VS. ACQUISITION, EQUITY MARKET CAPITALIZATION AND TOTAL CAPITALIZATION WITH PERCENTAGE OF DEBT)

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PENGROWTH ENERGY TRUST

U.S.$8.93 per trust unit for gross proceeds of
$281.2 million. This was the first cross-border
financing for a Canadian royalty trust and was
very well received by Canadian and U.S. investors.
The 15 percent over-allotment option was
exercised by the underwriters, and approximately
43 percent of the issue was purchased by U.S. investors. The U.S. issue was facilitated in part by
Pengrowths listing on the New York Stock
Exchange, which occurred on April 10th, 2002.

ENERGY SECTOR LEADER IN NEW EQUITY

During 2002, Pengrowth raised total gross proceeds
of $404 million of new equity, issuing 28.1 million
trust units at a weighted average price of $14.38
per trust unit. This represented the third straight
year that Pengrowth has raised the largest amount
of new equity in the Canadian oil and gas trust
sector. Our future growth depends on our ability
to access new equity and debt capital.

At year-end, Pengrowths financial position was
solid, with debt amounting to 23 percent of total
capitalization at book, and 16 percent assuming
market value of the Trusts outstanding trust units.

In addition to the two public offerings, Pengrowth
also disposed of five non-core properties, for
proceeds of $43.1 million, effectively rationalizing
our holdings while also reducing debt and
improving the balance sheet.

TRUST UNIT PERFORMANCE

While the Trusts balance sheet at year-end was
arguably stronger than at any point in the past five
years, our unitholders faced some dilution. For
example, total annual production increased from
14.7 million barrels of oil equivalent in 2001 to
16.0 million barrels of oil equivalent in 2002.
However, there was a decline in both production
and reserves per trust unit. Production per trust
unit declined from 0.20 barrels of oil equivalent in
2001 to 0.18 barrels of oil equivalent in 2002
based on weighted average units outstanding.
Similarly, total Established reserves increased from
210.5 million barrels of oil equivalent to 214.8
million barrels of oil equivalent on a year-over-year basis, but reserves per trust unit fell from 2.56
barrels of oil equivalent at the beginning of 2002
to 1.94 barrels of oil equivalent at year-end.

(GRAPH SHOWING DEBT ISTRIBUTABLE INCOME AND CAPITAL EXPENDITURES AS A PERCENT OF DISTRIBUTABLE INCOME)

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2002 ANNUAL REPORT

The decline in reserves per trust unit reflected the
two equity offerings during 2002 plus the year-end downward adjustment of reserves of the Sable
Offshore Energy Project (SOEP) and a shorter
reserve life associated with the Calpine assets,
which reduced the Trusts reserve life index to
11.6 years at year-end 2002. Our reserve life index
remains above the average of the Canadian royalty
trust sector.

SABLE OFFSHORE ENERGY PROJECT

Pengrowth acquired a 99.99 percent royalty interest
in the natural gas reserves and production associated
with the 8.4 percent working interest held by
Emera Inc. in June 2001 for a net purchase price
of $256 million. Our co-venturers in the project
include ExxonMobil Canada, the operator, with
50.8 percent, Shell Canada with 31.3 percent,
Imperial Oil with 9.0 percent and Mosbacher
with 0.5 percent.

We regard SOEP as a long-term call on the natural
gas markets, due to its long Established reserve life
which at year-end 2002 was 12.1 years. However,
we have experienced some short-term challenges
in terms of operating costs, fluctuating production
and natural gas prices.

Pengrowth is paying processing fees to the co-venturers and Emera that are higher than our
original forecasts. The acquisition has been less
accretive than anticipated due to lower natural gas
prices in the second half of 2001. Natural gas
prices declined from approximately $6.00 per mcf
at the time of acquisition to lows in the range of
$2.00 per mcf later in the year, contributing to
lower cash flows from SOEP. During 2002, natural
gas and oil prices recovered and SOEP generated
a respectable level of cash flow to Pengrowth.

We have faced further operating challenges with
this project. During the first quarter of 2003,
increased water production was encountered in
the Venture field. Successful recompletions of
several wells were required to replace lost
production. A well intended to evaluate upside
potential from a new fault block in the Glenelg
area  a field scheduled to be placed on production
in the 2004-2005 timeframe  was abandoned.

On the positive side, a successful well was drilled
at the South Venture field, but has not yet been
tested. SOEP production has again achieved a rate
in excess of 500 million cubic feet per day and
natural gas prices are higher than US$5.00 per
mmbtu, providing a high expected level of cash
flow from the SOEP project in the near future.

B.C. PROPERTIES ACQUISITION

Pengrowths new British Columbia assets were
previously owned by a Canadian affiliate of
Calpine Inc. and are located north of the Fort St.
John area in the northern part of the province.

While the Calpine assets have a shorter reserve life
index (RLI) than the average of Pengrowths
properties, they are characterized by good quality
reservoirs that produce medium and light gravity
crude oil and liquids-rich sweet natural gas. In
addition, the properties feature relatively low
operating costs which provide higher netbacks.
At the time of acquisition, the Calpine properties
were generating cash flow before capital
expenditures of approximately $100 million on an
annualized basis. To the end of February 2003, the
fields have generated approximately $48 million of
cash flow net to Pengrowth since the closing on
October 1, 2002.

Production from our British Columbia properties
has been lower than originally forecast by
independent reserve engineers, Gilbert Laustsen
Jung Associates Ltd. (GLJ), in their report dated
July 2002. It is possible that the vendor reduced

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PENGROWTH ENERGY TRUST

(PICTURE OF PENGROWTH ENERGY TRUST MEMBER)

On April 10, 2002 Pengrowth Energy Trust was
listed on the New York Stock Exchange (NYSE).

capital expenditures and development on these
properties prior to their sale, resulting in lower
production at year-end 2002. During the second
half of 2002, the British Columbia assets produced
12, 900 barrels of oil equivalent per day, compared
to an anticipated production rate of 15,785 barrels
of oil equivalent per day during the second half
of 2002.

We are not overly concerned with the higher
production declines. The lower production rate
has been more than offset by significantly higher
crude oil and natural gas prices in the short-term
and an increased hedging program to lock in
crude oil and natural gas at prices higher than
those used in the GLJ appraisal at the time of
acquisition. We also anticipate that a significant
capital expenditure and development program on
these properties in 2003 will help stabilize the
production decline. All issues considered, the
British Columbia properties have been a positive
addition to Pengrowths portfolio.

FUNDING CAPITAL EXPENDITURES

Pengrowth faces higher capital expenditures in
the near-term to develop the British Columbia
properties and over the next three years to develop
the Alma, Glenelg, and South Venture fields of the
Sable Offshore Energy Project.

Our decision in 2002 to withhold approximately
10 percent of distributable income plays an
important role in funding capital expenditures.
This holdback at current oil and natural gas prices
and production levels is significant and may be
applied to debt reduction, to reduce volatility in
monthly distributions, or to fund capital
expenditures. The holdback took effect starting
with the distributions paid on December 15, 2002.

Pengrowth enhanced its distribution reinvestment
program effective January 2003. Proceeds from the
enhanced program will also contribute to funding
capital expenditures.

NEW YORK STOCK EXCHANGE LISTING

On April 10, 2002 Pengrowth Energy Trust was
listed on the New York Stock Exchange (NYSE)
under the ticker symbol PGH. The rationale for
the New York listing was to achieve broader
exposure in the United States and world
capital markets.

Since April, we have witnessed increased trading
activity in our trust units, both in the United
States and in Canada, which has improved the
market liquidity for investors. The NYSE listing
also enhanced the response to our November
cross-border MJDS financing when approximately
43 percent of the issue was purchased by residents
in the United States.

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2002 ANNUAL REPORT

The NYSE listing forms part of our longer-term
strategy to attract additional investment in the Trust
by seeking new investors from North America
and worldwide. It is essential that we continue to
enhance our access to capital markets and to
maintain a relatively low cost of capital as
Pengrowth continues to grow.

OUTLOOK

Conventional oil and gas reserves deplete over time.
In order for Pengrowth to continue to grow, we
must make acquisitions that more than replace the
reserves we produce each year. Over the past five
years, Pengrowth has acquired reserves that average
more than twice annual production, resulting in
net increases in reserves. However, as discussed
earlier, successive equity issues over the past two
years have resulted in some dilution of reserves
on a per trust unit basis.

While it is becoming increasingly difficult to
enhance value on behalf of Pengrowth Energy
Trust unitholders, we intend to work hard to add
value through a combination of acquisitions,
internal development of our properties and by
farming-out the higher risk exploration potential
on our lands.

ENERGY SECTOR DEVELOPMENT

It is interesting to note that despite the record
level of cash flow generated by the oil and gas
sector worldwide, exploration and development
activity has been unable to replace depleting
reserves and provide the required new supplies for
economic growth. This would suggest that oil and
gas prices may remain well above historical
averages for the foreseeable future, to provide
sufficient incentive for the industry to explore for
and develop new reserves.

(GRAPH)

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PENGROWTH ENERGY TRUST

Although international exploration and
development has led to the discovery of major
fields over the last two to three decades, they are
all reaching maturity. Significant discoveries are
becoming much harder to find and the last two
years have been disappointing as the accompanying
graph indicates. This scenario applies equally to
the shrinking inventory of discovered but
undeveloped reserves.

There is considerable pressure on management
within the energy sector to find new oil and
natural gas reserves. For Pengrowth, the answer may
lie in accessing assets that have a shorter reserve life
but offer higher development upside. Pengrowth
will develop these assets cost effectively in order to
maximize netbacks. We are already seeing several
of the largest international companies change
focus to bottom line profitability rather than
production growth.

To offset the challenge of acquiring new oil and
natural gas reserves, Pengrowth will also seek
investment opportunities in areas related to our
business. This may include processing facilities,
pipelines and gas plants that can provide steady
income, moderate the volatility of our returns, and
provide growing distributions per trust unit for
Pengrowth unitholders.

MANAGEMENT AGREEMENT

The existing management agreement must be
considered by the unitholders every three years.
The next review will occur at the upcoming
annual general meeting.

Most royalty trusts have now internalized their
management contracts. What this generally means
is that the manager has sold the management
contract back to the fund for a combination of
cash and trust units.

A special committee of the Board of Directors of
Pengrowth Corporation has been formed to
examine alternatives which address the interests of
unitholders and recognize entitlements under the
existing management agreement.

GRAPH

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2002 ANNUAL REPORT

The energy trust business requires appropriate
incentives and entrepreneurial spirit to more than
replace reserves and continue to grow and add value
for unitholders. Pengrowth is an entrepreneurial
organization fostered in part by our structure and
flexibility to attract people who perform at a high
level in the environment. Pengrowth has initiated
a number of firsts in the energy trust business,
including:



| |  | 1991  First to conclude a rights offering
($3.8 million);                                                                                     
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | 1992  First to offer monthly distributions;                                                                                                   
|
| |  | 1992  First to offer trust unit options to team
members and Board of Directors;                                                               
|
| |  | 1993  First to offer a Distribution
Reinvestment Plan;                                                                                        
|
| |  | 1994  First bought deal  $44 million  in the
trust sector;                                                                                  
|
| |  | 1994  First to offer optional distributions in
U.S. funds;                                                                                    
|
| |  | 1996  First to provide Direct Deposit service for
unitholders distributions;                                                                 
|
| |  | 1997  First to offer Entitlements for Equity
Participation allowing existing unitholders
to participate in equity issues on a
preferred basis;
|
| |  | 2001  First to invest in the Nova Scotia offshore;                                                                                            
|
| |  | 2002  First Canadian royalty trust to operate in
north-eastern British Columbia;                                                              
|
| |  | 2002  First royalty trust to offer units through
MJDS cross-border financing in both
Canadian and United States markets.                     

Pengrowth Management has delivered returns for
unitholders of Energy Trust  over long periods of
time  that includes 16 percent per year compound
return since inception of the trust over 14 years
ago. Pengrowth has achieved a significant
milestone having distributed over $1 billion in
cash to unitholders from inception to March 15,
2003. During 2002, Pengrowth had the lowest
combined general and administrative and
management fee structure in the royalty trust
sector. Pengrowth Management believes that the
independent management structure, as it has been
applied to Pengrowth, has stood the test of time.
The structure has been consistently fair, has
provided above-average returns, and remains in the
best long-term interest of the unitholders.

PENGROWTH TRUST UNIT PRICE Vs. WTI OIL PRICE GRAPH

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PENGROWTH ENERGY TRUST

INCENTIVE-BASED COMPENSATION

A challenge for any enterprise is attracting,
incentivizing and retaining key people within the
organization. At Pengrowth, we have implemented
significant incentives over the years that have
provided potential remuneration well in excess of
normal base salaries. Programs such as annual
performance bonuses; trust unit options; a trust
unit purchase plan in which Pengrowth matches
team member contributions up to 10  percent of
salary; a long-term trust unit incentive plan; and
a trust unit margin purchase plan, have all been
introduced to provide significant individual and
overall group incentives, and to encourage
ownership by Pengrowth team members in
the business. Some 2.7 million trust units or
approximately 2.5 percent of the total outstanding
units are presently held within these incentive
plans, ensuring that the interests of Pengrowth
team members are aligned with those of
the unitholders.

ACKNOWLEDGEMENTS

We are particularly fortunate that Michael
Grandin joined the Board of Directors of
Pengrowth Corporation at last years annual
general meeting. Michael has held many senior
corporate and board positions. He is a former
Senior Vice President and Director of Midland
Walwyn Capital Inc., a former Chief Financial
Officer of the Canadian Pacific Group and a
former President of PanCanadian Petroleum, a
major Canadian independent oil and gas producer
that is now part of EnCana Corporation. His
involvement with Pengrowth extends to the
inception of the fund when Michael was a senior
partner with one of the lead underwriters of
Pengrowths initial public offering in December
1988 which raised $12.5 million in equity at
$10.00 per trust unit.

It is also a pleasure to welcome
Robert B. Hodgins
to the Pengrowth team as Chief Financial Officer
effective August 2002. Bob was the former Chief
Financial Officer at TransCanada PipeLines and
Vice President and Treasurer of Canadian Pacific
Limited in Calgary. Bob brings a wealth of
experience to his new position at Pengrowth and
has already made significant contributions on
behalf of the Trust.

We also welcome Jim MacDonald, General
Manager, East Coast Operations, who is managing
our interests in SOEP. Jim has considerable prior
experience with SOEP and is a member of
Pengrowths leadership team.

A hearty vote of thanks to all the hardworking
and dedicated Pengrowth team members for their
invaluable contribution to our endeavours in
2002, and to the Board of Directors of Pengrowth
Corporation for their wise counsel and guidance
over the years.

Sincerely,

Signed

James S. Kinnear
Chairman, President and Chief Executive Officer

March 20, 2003

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2002 ANNUAL REPORT

Operations Review

NATURAL GAS PRODUCTION GRAPH

Petroleum and natural gas reservoirs naturally deplete as they are
produced. In an
effort to offset this natural decline, Pengrowth replenishes its reserve
base through
the acquisition of new reserves and the development of existing properties
using the best available technology. Pengrowth does not explore for oil
and natural gas.

Pengrowths properties are characterized by high working interests,
stable production and long-life reserves. Pengrowth has varying
working interests in 70 properties and operates approximately
58 percent of its average daily oil and gas production, which
reached a record 43,785 boe per day in 2002. The Trust has
approximately 215 million boe of quality Established reserves
comprised of 39 percent natural gas, 50 percent crude oil and
11 percent natural gas liquids. At the current rate of production,
Pengrowths reserves generate a reserve life index (RLI) of 11.6
years, which is one of the longest in the Canadian oil and gas industry.

HIGH RETURN ACQUISITIONS

Since inception in 1988, Pengrowth has purchased over $1.8 billion of
oil and natural gas interests in Canada through 50 separate transactions.
During 2002 alone, Pengrowth completed $392 million of oil and natural gas
acquisitions, replacing its annual production by over two times.

The Trust acquired 37.7 million boe of new Established reserves in 2002 at
an average cost of $10.33 per
boe resulting in overall finding and development costs of $11.53 per boe.

Pengrowth will continue to pursue an active acquisition program to acquire
properties which demonstrate
stable long-life production and potential for additional development, or
farm-out to industry partners.

EFFECTIVE DEVELOPMENT AND OPTIMIZATION

Approximately 80 percent of our total gross production in 2002 was derived
from 14 core areas located
in British Columbia, Alberta, Saskatchewan and offshore the Province of Nova
Scotia. During 2002,
Pengrowth spent $55.6 million on development and optimization
activities. Development drilling
accounted for $48.2 million of total expenditures, while $7.4 million was
spent on facilities.

Pengrowth has an active development program planned for 2003 with more
than $87 million
committed to development opportunities on existing properties. The Trusts
operations personnel are
continually seeking further initiatives to enhance production, reduce costs
and maximize returns from
existing properties.

16



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##### Table of Contents





PENGROWTH ENERGY TRUST

(ESTABLISHED RESERVES GRAPH)

Pengrowths ongoing business strategy is to build a diversified portfolio
that consists primarily of oil and gas properties with:



| |  | Established production profiles;                                              
|- |  | ------------------------------------------------------------------------------
| 
| |  | low operating costs;                                                          
| 
| |  | a favourable production history;                                              
| 
| |  | long-life reserves;                                                           
| 
| |  | upside potential through infill drilling and
other development activities; and
| 
| |  | the ability to increase distributions on a per-trust-unit basis.              

The majority of Pengrowths reserves are in the Sable Offshore Energy
Project (SOEP) and in miscible floods such as Judy Creek, Goose River, Swan
Hills and Weyburn. Approximately 72 percent of Pengrowths total proved
reserves are classified by Gilbert Laustsen Jung Associates Ltd. (GLJ) as
proved
producing, while the remaining 28 percent are classified as proved
non-producing reserves.
SOEP accounts for 35 percent of Pengrowths proved non-producing
reserves, most of which are associated
with the Tier II development, scheduled to begin production in late 2003, as
discussed later in this report.

In 2002, SOEP and the miscible flood projects accounted for approximately
80 percent of Pengrowths
total capital expenditures of $55.6 million. It should be noted that most
of the reserves associated with
this proved non-producing category had already been included by GLJ in
our year-end 2001 corporate reserve update and resulted in reserves
being moved from the non-producing to proved producing
category in the Judy Creek and Weyburn units.

Based on a December 31, 2002 report by GLJ,
Pengrowths Established reserves are approximately 215
million boe, consisting of 502 billion cubic feet of
natural gas and 131 million barrels of crude oil and
natural gas liquids.

(CRUDE OIL PRODUCTION GRAPH)

17





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PENGROWTH PROPERTY GLOBE





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##### Table of Contents



PENGROWTH ENERGY TRUST

Pengrowths Major Holdings

2002 OPERATIONS SUMMARY

|                           |  |             |         |          |  |            |       |               |  |          |    |                |  |            |           |              |  |  |       |  |  |      |        |  |  |  |       |  |  |  |       | 
|-------------------------- |  | ----------- | ------- | -------- |  | ---------- | ----- | ------------- |  | -------- | -- | -------------- |  | ---------- | --------- | ------------ |  |  | ----- |  |  | ---- | ------ |  |  |  | ----- |  |  |  | ----- | 
|                           |  |             |         |          |  |            |       |               |  |          |    |                |  |            |           |              |  |  |       |  |  | 2002 |        |  |  |  |       |  |  | 
|                           |  | Established |         | Percent  |  | Reserve    |       | Value at      |  | Percent  |    | Oil Equivalent |  | Percent    |           | 2002 Capital
|                           |  | Reserves    |         | of Total |  | Life Index |       | 12% Discount  |  | of Total |    | Production*    |  | of Total   |           | Expenditures
|                           |  | (mboe)      |         | Reserves |  | (years)    |       | ($ thousands) |  | Assets   |    | (boe/d)        |  | Production |           | ($ millions)
|                           |  |             |         |          |  |            |       |               |  |          |    |                |  |            |           |             
|Judy Creek BHL Unit        |  |             | 45,062  |          |  |            | 21.0  |               |  |          | 14 |                |  |            | 270,099   |              |  |  | 19.7  |  |  |      | 10,272 |  |  |  | 23.5  |  |  |  | 15.57 | 
|Judy Creek West BHL Unit   |  |             | 10,287  |          |  |            | 4.8   |               |  |          | 12 |                |  |            | 47,022    |              |  |  | 3.4   |  |  |      | 2,225  |  |  |  | 5.1   |  |  |  | 2.15  | 
|Weyburn Unit               |  |             | 14,516  |          |  |            | 6.8   |               |  |          | 19 |                |  |            | 46,410    |              |  |  | 3.4   |  |  |      | 2,059  |  |  |  | 4.7   |  |  |  | 2.22  | 
|Swan Hills Unit No.1       |  |             | 13,482  |          |  |            | 6.3   |               |  |          | 26 |                |  |            | 48,478    |              |  |  | 3.5   |  |  |      | 1,674  |  |  |  | 3.9   |  |  |  | 1.37  | 
|Dunvegan Gas Unit          |  |             | 6,746   |          |  |            | 3.1   |               |  |          | 17 |                |  |            | 33,467    |              |  |  | 2.4   |  |  |      | 1,008  |  |  |  | 2.3   |  |  |  | 0.36  | 
|Oak                        |  |             | 6,039   |          |  |            | 2.8   |               |  |          | 13 |                |  |            | 43,678    |              |  |  | 3.2   |  |  |      | 363    |  |  |  | 0.8   |  |  |  | 0.07  | 
|Rigel                      |  |             | 5,912   |          |  |            | 2.8   |               |  |          | 5  |                |  |            | 72,494    |              |  |  | 5.3   |  |  |      | 891    |  |  |  | 2.0   |  |  |  |      | 
|Monogram Gas Unit          |  |             | 5,716   |          |  |            | 2.7   |               |  |          | 11 |                |  |            | 53,184    |              |  |  | 3.9   |  |  |      | 1,579  |  |  |  | 3.6   |  |  |  | 0.13  | 
|Enchant                    |  |             | 5,371   |          |  |            | 2.5   |               |  |          | 16 |                |  |            | 26,807    |              |  |  | 2.0   |  |  |      | 937    |  |  |  | 2.1   |  |  |  | 0.44  | 
|McLeod River               |  |             | 5,155   |          |  |            | 2.4   |               |  |          | 7  |                |  |            | 38,713    |              |  |  | 2.8   |  |  |      | 1,755  |  |  |  | 4.0   |  |  |  | 5.13  | 
|Squirrel                   |  |             | 5,128   |          |  |            | 2.4   |               |  |          | 6  |                |  |            | 62,478    |              |  |  | 4.6   |  |  |      | 651    |  |  |  | 1.5   |  |  |  | 0.03  | 
|Kaybob Notikewin Unit No.1 |  |             | 3,573   |          |  |            | 1.7   |               |  |          | 12 |                |  |            | 27,526    |              |  |  | 2.0   |  |  |      | 922    |  |  |  | 2.1   |  |  |  | 0.20  | 
|Quirk Creek                |  |             | 3,491   |          |  |            | 1.6   |               |  |          | 10 |                |  |            | 32,624    |              |  |  | 2.4   |  |  |      | 711    |  |  |  | 1.6   |  |  |  | 0.10  | 
|Other British Columbia**   |  |             | 15,302  |          |  |            | 7.1   |               |  |          | 8  |                |  |            | 122,113   |              |  |  | 8.9   |  |  |      | 1,304  |  |  |  | 2.9   |  |  |  | 0.14  | 
|Other***                   |  |             | 69,034  |          |  |            | 32.1  |               |  |          | 8  |                |  |            | 444,675   |              |  |  | 32.5  |  |  |      | 17,434 |  |  |  | 39.9  |  |  |  | 27.72 | 
|                           |  |             |         |          |  |            |       |               |  |          |    |                |  |            |           |              |  |  |       |  |  |      |        |  |  |  |       |  |  |  |       | 
|Total                      |  |             | 214,814 |          |  |            | 100.0 |               |  |          | 12 |                |  |            | 1,369,768 |              |  |  | 100.0 |  |  |      | 43,785 |  |  |  | 100.0 |  |  |  | 55.63 | 
|                           |  |             |         |          |  |            |       |               |  |          |    |                |  |            |           |              |  |  |       |  |  |      |        |  |  |  |       |  |  |  |       | 

Crude oil properties designated in green.

Natural gas properties designated in black.



|* Natural gas has been converted to equivalent barrels of oil at 6:1.                                                                                                                                                                                                                                                                                               
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                    
|** Other British
Columbia includes the British Columbia assets recently acquired
from Calpine, effective October 1, 2002.                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                    
|*** Other includes Pengrowths royalty interest in Emeras 8.4 percent working interest in the Sable Offshore Energy Project and 28 other
properties. In accordance with the confidentiality agreement between
Pengrowth, Emera and the other SOEP owners, Pengrowth is
unable to present certain information with respect to SOEP except on
a consolidated basis.
|                                                                                                                                                                                                                                                                                                                                                                    
|PENGROWTH ENERGY TRUST ESTIMATE OF SOEP ESTABLISHED GRAPH                                                                                                                                                                                                                                                                                                           

19





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2002 ANNUAL REPORT

Northeastern British Columbia 
Pengrowths Newest Core Area

PENGROWTH LAND

MAJOR PROPERTIES Rigel



| |  | 4 producing oil pools with
39 oil wells, 19 injection wells,
a central battery and a solution
gas compressor.                                                                                         
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | 2.8 percent of the
Trusts reserves. Current working interest
production averages about 3,344
barrels per day of crude oil and
natural gas liquids, and 1.1 million
cubic feet per day of natural gas.

2002: Two oil wells and four
injection wells, enhanced pool
delineation and improved waterflood
response in Cecil Formation.

2003: Four wells are planned.

Squirrel

     12
producing wells, four water injection wells, one gas injection well, a central battery and a
compressor station.



     2.4 percent
of the Trusts reserves.
Working interest production
approximately 2,296 barrels per
day of crude oil and natural gas
liquids, and 1.7 million cubic
feet per day of natural gas.


2002/2003: Re-injection of
solution gas to increase the reservoir
pressure and production levels.
Continue optimizing the existing
pumping equipment to improve
oil production.

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PENGROWTH ENERGY TRUST

Oak



| |  | 29 operated oil and gas wells, six
injection wells and seven water
source wells surrounding two
batteries and three compressors.                                                                                  
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | 2.8 percent of the Trusts
Established reserves. Current
working interest production is
approximately 993 barrels per
day of crude oil and natural gas
liquids, and 2.7 million cubic
feet per day of natural gas.

2003: One new well and several
producer-to-injector conversions
in waterflood project.

Pengrowth plans to inject water
and solution gas into the Cecil
Formation to build pressure in
the pool.

THE BRITISH COLUMBIA
PROPERTIES

In July 2002 Pengrowth acquired 392, 400 net acres of
producing and undeveloped crude oil and natural gas properties
in the Fort St. John area for a gross purchase price of $387.5
million. Subsequently, Pengrowth sold interests in seven of the
new producing properties for $25.4 million, making its net
investment $352 million after closing adjustments.

The relatively high production rates and lower unit operating
costs of the new properties add balance to Pengrowths western
Canadian portfolio by increasing short-term cash flow. During the
fourth quarter of 2002, production from the northeastern British
Columbia properties was 12,730 boe per day, consisting of 29.0
million cubic feet per day of natural gas and 7,896 barrels per
day of light crude oil and natural gas liquids.

The acquisition added Established reserves of 34.4 million boe,
including 16.6 million barrels of crude oil, 1.6 million barrels of
natural gas liquids and 97 billion cubic feet of natural gas, based
on an evaluation conducted by Gilbert Laustsen Jung Associates
Ltd. (GLJ). The average cost of the Established reserves addition
was $10.23 per boe. The properties have an Established reserve life
index of approximately seven years.

A key factor in Pengrowths decision to acquire the British
Columbia properties was their crude oil production efficiency,
particularly from the Rigel, Squirrel and Oak properties. For
2003, Pengrowth projects that base operating costs of the British
Columbia properties will be $4.98 per boe, an amount that
further enhances the attractiveness of this investment.

The purchase included 247,700 net undeveloped acres with
farm-out potential. On October 4, 2002 Pengrowth farmed out
30,500 acres to Progress Energy Ltd. , which has committed to
$10 million in exploration expenditures by April, 2004. The
farm-out provides Pengrowth with upside exposure to high-impact prospects without the associated exploration risk.

21





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JUDDEY CREEK OPERATION AREA

22



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##### Table of Contents



Judy Creek Process Overview

JUDY CREEK PROCESS OVERVIEW

JUDY CREEK 'A' POOL - OIL RESPONSE TO DEVELOPMENT

23





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BACKGROUND

The Judy Creek field was discovered in 1959.
Until 1962, operators relied on the natural pressure
of the reservoir to push oil to the surface.

In 1962, a secondary recovery process called
waterflooding was initiated to increase the amount
of oil recovered.

Waterflooding involves pumping water into the
oil-bearing formation through dedicated injection
wells. By replacing the volume of the produced oil,
the injected water maintains the reservoir pressure
and displaces additional oil to the production wells.

Miscible flooding is a tertiary, or enhanced oil
recovery (EOR) process that increases recoverable
oil by injecting a hydrocarbon mixture known as
solvent into the reservoir. A combination of water
and hydrocarbon solvent is a more effective
method of recovering oil from suitable reservoirs
than waterflooding alone.

SOLVENT FLOOD INJECTION PROCESS

MANAGING DEVELOPMENT OF THE ASSET

Pengrowth acquired the Judy Creek property in
October 1997. This property represents 26.2
percent of our total Established reserves. Since
1997, Pengrowth has pursued new development in
four key areas:

Horizontal Injectors in Mature Areas
Portions of the Judy Creek field have undergone
miscible flooding using conventional vertical
injection wells. In areas that contain the highest
quality reservoir, the hydrocarbon solvent will not
effectively sweep the reservoir from vertical wells.

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##### Table of Contents



Pengrowth uses horizontal drilling technology to
selectively target this type of reservoir and improve
the effectiveness of the injected solvent. To date,
Pengrowth has drilled 10 horizontal injection
wells and has successfully increased the amount of
oil recovered.

New Pattern Development
Through a combination of drilling new wells,
reactivating inactive wells and converting old
producers to injectors, Pengrowth has expanded
both the waterflood and miscible flood into areas
of A Pool not previously developed. To date,
Pengrowth has drilled 17 new oil producing wells
and five vertical water/solvent injection wells.

Edge Wells and 3D Seismic
Program

In 1999 Pengrowth shot a 3D seismic survey over the
northeast portion of A Pool to identify potential oil
well drilling locations along the edge of the Pool. To
date, Pengrowth has drilled three edge wells, resulting
in one oil producer. Pengrowth is currently evaluating
two additional edge well locations.

GRAPH

Other Productive Reservoirs in the Area
In addition to the Swan Hills Formation, the
primary oil reservoir in the Judy Creek area, there
are other productive reservoirs on Pengrowths
Judy Creek land base. Pengrowth has been
successful in developing natural gas reserves in the
Judy Creek area through joint ventures and 100
percent Pengrowth developments.

Pengrowth has and will continue to pursue this
multi-pronged approach to the ongoing
development of the reservoir, thereby reducing
development risks and increasing the ultimate
value of the field.

2002 PROGRESS

In 2002 Pengrowth drilled four production wells
and three vertical injection wells at Judy Creek,

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PENGROWTH ENERGY TRUST

and continued taking steps to reduce operating
costs. In a key 2002 activity, operations staff
reviewed the Judy Creek infrastructure, focusing
on the integrity of the produced water pipeline
system. A combination of diagnostic technologies
was utilized to identify potential corrosion
problem areas in old pipelines. Many of the new pipelines are constructed of fiberglass, eliminating
corrosion failures.

Judy Creek Performance
1998 to 2002

Judy Creek has provided a
netback of $15.78 per boe over
the past five years, based on a
yearly average sales price of
$31.77 per boe, less amortized
injection costs, operating costs,
and royalties.

FIVE YEAR WEIGHTED AVERAGE SALES PRICE GRAPH

Field staff have also optimized the scheduling and
sourcing of the hydrocarbon components used to
blend solvent for the Judy Creek miscible flood,
thereby reducing solvent purchase costs.

2003 OUTLOOK

Miscible flooding and other Pengrowth initiated
development projects currently account for
nearly one-half of Judy Creeks oil production.
Opportunities for further development exist in
several areas.

On the east side of 
A Pool, Pengrowth plans to
drill three new horizontal miscible injectors in
2003. In the northwest quadrant of A Pool,
Pengrowth will add two new water injection wells
to support the oil producers that have been drilled
to date. Two oil producers will be drilled in the
Southwest quadrant of A Pool as a first step
in developing new waterflood and
miscible flood patterns in this area. Based on the
results of this drilling, the program may be
expanded to four or more producers in 2003.

In 2003, work will continue on longer-term
opportunities for Judy Creek. These include:



| |  | An ongoing evaluation of the
potential for CO2
injection to replace hydrocarbon solvent and
sequester greenhouse gases; and
|- |  | ---------------------------------------------------------------------------------------------------------------------------
| 
| |  | Evaluation of coalbed methane development
potential in the Judy Creek area.                                                

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2002 ANNUAL REPORT

Judy Creek, Alberta

THE JEWEL IN THE CROWN

Judy Creek is Pengrowths flagship property.
Located 160 kilometres northwest of Edmonton,
Alberta, it covers an area of about 155 square
kilometres and contributes approximately 29
percent of Pengrowths 2002 total production on
a boe basis. In 2002, sales volumes from Judy
Creek averaged 11,915 barrels per day of crude
oil and natural gas liquids and 5.4 million cubic
feet per day of natural gas.

The property consists of the Judy Creek
Beaverhill Lake Unit (the Judy Creek A Pool), in
which Pengrowth has a 100 percent working
interest, and the Judy Creek West Beaverhill Lake
Unit (the Judy Creek BPool) in which it has a
94.6 percent working interest. A Pool is roughly
four times the size of B Pool. Estimated combined
remaining reserves are 56.4 million boe, consisting
of 44.7 million barrels of crude oil, 27 billion
cubic feet of natural gas and 7.2 million barrels of
natural gas liquids.

Since acquiring the Judy Creek property in
October 1997 Pengrowth has pursued enhanced
oil recovery, drilling and well optimization
programs that have stabilized oil production at
about 10,000 barrels per day, offsetting previous
decline rates of up to 20 percent per year.

PICTURE

JUDY CREEK MORE THAN 40YEARS PRODUCTION HISTORY

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2002 ANNUAL REPORT

Sable Offshore Energy Project (SOEP)

WORLD-CLASS OFFSHORE
NATURAL GAS ASSET

SOEP located 340 kilometres east of Halifax,
Nova Scotia, accounts for approximately 15
percent of Pengrowths estimated 2003
production, using GLJs Established reserves case.

GRAPH

Pengrowths investment in SOEP was the
Trusts first venture outside the Western Canadian
Sedimentary Basin. Pengrowths view is that the
project, which is expected to ultimately produce
natural gas from six fields, has very good leverage
to rising natural gas prices and strong potential to
provide significant returns for unitholders.

BACKGROUND

The SOEP natural gas reserves were discovered in
the early 1970s, with first commercial production
in December 1999. The project currently produces
natural gas and liquids from three offshore fields:
Venture, North Triumph and Thebaud.

Pengrowth acquired a 99.9 percent royalty interest
in the reserves and production related to Emera
Offshore Inc.s 8.4 percent working interest in
SOEP on June 15,2001. As part of the acquisition
agreement, Pengrowth assumed responsibility
for its royalty share of associated capital and
operating costs.

GRAPH

Pengrowths estimate of total gross SOEP
remaining Established reserves are approximately
2.0 trillion cubic feet of natural gas and 83
million barrels of natural gas liquids, which makes
Pengrowths royalty interest in Emeras share
approximately 165 billion cubic feet of natural gas
and 7.0 million barrels of natural gas liquids.

During the fourth quarter of 2002, SOEPs raw
gas production averaged 519 million cubic feet
per day (43.6 million cubic feet per day net
to Pengrowth).

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PENGROWTH ENERGY TRUST

The project consists of two tiers.
Tier I, completed
in December 1999, included construction of the
main gas processing plant at Goldboro, Nova
Scotia, a natural gas liquids fractionation plant at
Point Tupper, Nova Scotia, offshore platforms in
the Venture, North Triumph and Thebaud fields
and an offshore pipeline system.

The primary markets for natural gas from SOEP
are the Canadian provinces of Nova Scotia,
New Brunswick and the U.S. states of Maine,
New Hampshire and Massachusetts. Natural gas is
transported to these markets via the Maritimes &
Northeast (M&NE) Pipeline.

MAP

PROGRESS IN 2002 AND
OUTLOOK FOR 2003

Tier I
The project operator drilled, cased and completed
one well in the Venture field during 2002. The
Venture 6 well was placed on production in
October 2002.

Tier II
Tier II consists of the three remaining fields: Alma, South Venture and Glenelg. Development
of Tier II, which began in 2002 and is expected
to continue through 2007, is being managed on a
phased basis.

Fabrication and construction of the platform for
the Alma field began in 2002, with commissioning
and start-up scheduled for 2003. The platform will
be located in 67 metres of water and connected
to the Thebaud central processing platform via a
50-kilometre sub-sea pipeline. The platform
currently under construction is similar in design,
size and function to Sables North Triumph
platform that has been operating successfully
since 1999. Two wells will be drilled in the Alma
field during 2003.

A concept for a four-legged platform in the
South Venture field was approved in 2002. This
platform, to be located five kilometres from the
current Venture field satellite platform, will stand
in about 23 metres of water and will contain six
drilling slots and minimal processing facilities.

The SOEP operator began drilling one well in
the South Venture field in late 2002 and three
more are planned after the platform is installed.
The South Venture facilities are expected to come
on stream in late 2004.

The first development well in the Glenelg field
was drilled and abandoned in the first quarter
of 2003.

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2002 ANNUAL REPORT

Other Operated Properties
in Western Canada

McLeod River, Alberta
Pengrowth holds an average 47 percent working
interest in the McLeod River property, which
produced an average of 8.6 million cubic feet per
day of natural gas in 2002. McLeod River has an
estimated Established reserve life of 28.0 years
and a reserve life index of 7.3 years and represents
2.4 percent of the Trusts Established reserves.

Pengrowth operates 39 wells in the McLeod River
field, with one well awaiting tie-in. The Trust also
has an interest in 22 active non-operated wells. The production is mainly natural gas from the
Gething, Cardium, Rock Creek and Notikewin
formations. There is also some crude oil production
from the Gething Formation.

MCLEOD RIVER

Pengrowth operates a gas plant and two compressor
stations on the property.

Pengrowth drilled five gas wells at McLeod River
in 2002 and plans to drill six new wells in
operated locations during 2003. Three additional
wells are planned for non-operated locations, in
which Pengrowths working interests range from
10 to 50 percent.

In 2002 Pengrowth farmed out eight high-risk
sections, which resulted in two wells being drilled.

Deer Mountain Unit No.2
Pengrowth has a 77.9 percent working interest in
the Deer Mountain Unit No.2 property, which
includes 17 producing oil wells and two water
injection wells.

Production averaged 195 barrels of oil
per day in 2002.

DEER MOUNTAIN UNIT NO. 2

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PENGROWTH ENERGY TRUST

Kaybob Notikewin, Alberta
Pengrowths working interest in the Kaybob
Notikewin Unit No. 1 is 64.5 percent. The
property produces natural gas and natural gas
liquids, with 14 producing wells in the Unit. The
estimated Established reserve life index of the
property is 11.7 years.

In 2002, production averaged about 5.3 million
cubic feet per day of natural gas and 38 barrels of
natural gas liquids per day.

Plans for 2003 include the installation of a new
wellsite screw compressor.

KAYBOB NOTIKEWIN UNIT NO. 1

PICTURE

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2002 ANNUAL REPORT

Nipisi, Alberta
Pengrowths average working interest in the
Nipisi field is 95 percent. Pengrowth operates 31
oil wells and 12 water injection wells in this field
located 75 kilometres north of Slave Lake, Alberta. Oil is produced from the Gilwood
Formation using a waterflood recovery process. Pengrowth also
operates the battery, water
injection facility and gas plant on the property.

Average production during 2002 was 1,062
barrels of crude oil per day. The property has an
Established reserve life index of 9.1 years.

Pengrowth will continue to optimize the oil
production and water handling facilities at Nipisi
in the coming year and carry out workovers on
select wells.

NIPISI

Enchant, Alberta
The Enchant property located in southern
Alberta includes four oil pools in which Pengrowth
holds an average 88 percent working interest. In
2002, the Enchant property produced an average
of 845 barrels per day of oil, 39 barrels per day of
natural gas liquids and 0.3 million cubic feet per
day of natural gas. Production is predominately
from the Nisku Formation.

The Enchant property has an Established reserve
life index of 16.3 years.

Plans for 2003 include drilling one well in the
Enchant Arcs Unit No. 2, where a water injection
program initiated in 2000 is successfully
supporting pressure in the Nisku Formation,
resulting in increased oil production.

ENCHANT

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PENGROWTH ENERGY TRUST

Major Non-operated Properties
in Western Canada

PICTURE

Weyburn, Saskatchewan
Pengrowth holds a 9.75 percent working interest
in this crude oil property operated by EnCana
Corporation. It is located about 120 kilometres
southeast of Regina, Saskatchewan. This
interest represents 6.8 percent of the Trusts
Established reserves.

A carbon dioxide (CO2) miscible flood project
began at Weyburn in the fall of 2000 with the
objective of recovering an additional 120 million
barrels of oil by 2020. A CO2 miscible flood is an
enhanced recovery technique that involves
injecting CO2 into the reservoir. The Weyburn
project will be one of the largest of its kind in
the world.

By 2008, CO2 miscible flooding is expected to
increase overall crude oil production in the
Weyburn Unit from its current level of 20,000
barrels per day to 30,000 barrels per day.

By year-end 2002, 39 producing wells had
responded to the CO2 flood and the incremental
oil attributable to CO2 injection is approximately
488 barrels per day net to Pengrowth.

Phase 1C of the 2003 program includes eight additional CO2 injection patterns.

Pengrowths working interest production from
the property is approximately 2,000 boe per day. The Trusts remaining Established reserves in the
Weyburn property are estimated at 14.5 million
barrels of oil and natural gas liquids.

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2002 ANNUAL REPORT

Monogram, Alberta

Pengrowths working interest in the Monogram
Gas Unit is 53.82 percent. Operated by EnCana
Corporation, the Unit produces sweet, dry
natural gas. Pengrowths share of current
production is approximately 9 million cubic feet
per day and Pengrowths share of Established
reserves is estimated to be 34.3 billion cubic feet.

Following a successful 40-well infill drilling
program completed in 2001, the operator is
evaluating another infill program for 2003.

Quirk Creek, Alberta

On March 1, 2002 Pengrowth significantly
expanded its ownership in the Quirk Creek area
of southern Alberta by acquiring an additional
55.9 percent working interest in three producing
gas wells, a 26.4 percent working interest in 10
other producing gas wells and a 25.9 percent
working interest in the Quirk Creek natural gas
plant for $34 million after adjustments. This
compares to Pengrowths previous 5.5 percent
interest in 13 producing gas wells in the area and
a 4.6 percent interest in the gas plant. Rated at
80 million cubic feet per day of raw inlet gas, the
Quirk Creek gas plant currently operates at about
90 percent of capacity.

QUIRK CREEK

QUIRK CREEK NATURAL GAS PLANT

Pengrowths total working interest share of
production for 2003 is estimated to be approximately
4.5 million cubic feet per day of natural gas and
220 barrels per day of natural gas liquids. Remaining Established reserves are estimated at
3.5 million boe, consisting of 16 billion cubic

feet of natural gas and 0.8 million barrels of
natural gas liquids. Pengrowth also expects that its
share of processing revenue from the gas plant is
similar to the operating revenue from the
acquired interest.

Pengrowth believes significant upside potential
exists for future gas development and processing
revenue in the area.

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PENGROWTH ENERGY TRUST

Operations Statistical Review

UNDEVELOPED LAND

During 2002, Pengrowths
undeveloped land position increased to approximately 324,000 net
acres from approximately 76,000 net acres in 2001. The increase of approximately 248,000 net acres is due to our
acquisition of assets held by Calpine Canada Natural Gas Partnership
in northern British Columbia. This undeveloped land base provides us
with significant farm-out potential. As a first step in developing
this farm-out potential, we have entered into a farm-out agreement
with Progress Energy Ltd. in respect
of 30,500 net undeveloped acres in the Fort St. John, B.C. area. Progress has committed to spending a
minimum of $10 million on exploration on this acreage over
18 months to drill approximately 15 wells. We are aggressively pursuing other farm-out opportunities on our undeveloped lands.

|                 |  |       |         |       |  |          |         |  |  |         |      |  
|---------------- |  | ----- | ------- | ----- |  | -------- | ------- |  |  | ------- | ---- | -
|                 |  |       |         |       |  |          |         |  |  | Average
|                 |  | Acres |         | Acres |  | Working 
|                 |  | Gross |         | Net   |  | Interest
|                 |  |       |         |       |  |         
|Alberta          |  |       | 95,024  |       |  |          | 40,813  |  |  |         | 42.9 | %
|British Columbia |  |       | 550,907 |       |  |          | 283,353 |  |  |         | 51.4 | %

OIL AND GAS RESERVES

RESERVES RECONCILIATION BY BARREL OF OIL EQUIVALENT
(mboe)

|                            |  |                  |         |        |  |          |         |             |  |          |         |   |  |  |         |  
|--------------------------- |  | ---------------- | ------- | ------ |  | -------- | ------- | ----------- |  | -------- | ------- | - |  |  | ------- | -
|                            |  |                  |         |        |  |          |         |             |  | Proved & |         |   |  | 
|                            |  | Proved Producing |         | Proved |  | Probable |         | Established
|                            |  |                  |         |        |  |          |         |            
|December 31, 2001           |  |                  | 127,911 |        |  |          | 177,705 |             |  |          | 243,339 |   |  |  | 210,522 |  
|Exploration and development |  |                  | 570     |        |  |          | 803     |             |  |          | 865     |   |  |  | 834     |  
|Revisions                   |  |                  | 2,298   |        |  |          | (4,615  | )           |  |          | (12,503 | ) |  |  | (8,559  | )
|Acquisitions                |  |                  | 24,147  |        |  |          | 32,086  |             |  |          | 43,394  |   |  |  | 37,740  |  
|Dispositions                |  |                  | (8,076  | )      |  |          | (8,616  | )           |  |          | (10,866 | ) |  |  | (9,741  | )
|Production                  |  |                  | (15,982 | )      |  |          | (15,982 | )           |  |          | (15,982 | ) |  |  | (15,982 | )
|                            |  |                  |         |        |  |          |         |             |  |          |         |   |  |  |         |  
|December 31, 2002           |  |                  | 130,868 |        |  |          | 181,381 |             |  |          | 248,247 |   |  |  | 214,814 |  
|                            |  |                  |         |        |  |          |         |             |  |          |         |   |  |  |         |  
|Life Index (years)          |  |                  | 7.4     |        |  |          | 10.0    |             |  |          | 13.2    |   |  |  | 11.6    |  

The positive reserve revisions in the proved producing category are mainly attributable to the Weyburn
and Judy Creek properties. Reserves were moved from the total proved
to proved producing category. The negative reserve revisions are mainly attributable to SOEP and in particular the recent performance
of the Venture field.

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2002 ANNUAL REPORT

RESERVE PRICING FORECAST

Price Assumptions*

|      |  |          |      |           |  |             |       |              |         |                             |       |            |  |            |         |            |  |         |       |  |         |  |       |         |  |  |       |  |  |  |       | 
|----- |  | -------- | ---- | --------- |  | ----------- | ----- | ------------ | ------- | --------------------------- | ----- | ---------- |  | ---------- | ------- | ---------- |  | ------- | ----- |  | ------- |  | ----- | ------- |  |  | ----- |  |  |  | ----- | 
|      |  |          |      |           |  | Crude Oil   |       | Natural Gas  |         | Alberta Natural Gas Liquids
|      |  |          |      |           |  |             |       |              |         |                            
|      |  | US$/Cdn$ |      | WTI@      |  | Light Sweet |       | Alberta      |         | Spec                        |       | Edmonton   |  | Edmonton   |         | Edmonton  
|      |  | Exchange |      | Cushing   |  | @Edmonton   |       | Average      |         | Ethane                      |       | Condensate |  | Propane    |         | Butane    
|      |  | Rate     |      | (US$/bbl) |  | (Cdn$/bbl)  |       | (Cdn$/mmbtu) |         | (Cdn$/bbl)                  |       | (Cdn$/bbl) |  | (Cdn$/bbl) |         | (Cdn$/bbl)
|      |  |          |      |           |  |             |       |              |         |                             |       |            |  |            |         |           
|2003  |  |          | 0.65 |           |  |             | 25.50 |              |         |                             | 38.50 |            |  |            | 5.35    |            |  |         | 18.75 |  |         |  | 39.50 |         |  |  | 24.75 |  |  |  | 27.25 | 
|2004  |  |          | 0.66 |           |  |             | 22.00 |              |         |                             | 32.50 |            |  |            | 4.75    |            |  |         | 16.75 |  |         |  | 33.00 |         |  |  | 19.75 |  |  |  | 21.50 | 
|2005  |  |          | 0.67 |           |  |             | 21.00 |              |         |                             | 30.50 |            |  |            | 4.50    |            |  |         | 15.75 |  |         |  | 31.00 |         |  |  | 19.50 |  |  |  | 20.50 | 
|2006  |  |          | 0.67 |           |  |             | 21.00 |              |         |                             | 30.50 |            |  |            | 4.65    |            |  |         | 16.25 |  |         |  | 31.00 |         |  |  | 19.50 |  |  |  | 20.50 | 
|2007  |  |          | 0.68 |           |  |             | 21.25 |              |         |                             | 30.50 |            |  |            | 4.65    |            |  |         | 16.25 |  |         |  | 31.00 |         |  |  | 19.50 |  |  |  | 20.50 | 
|2008  |  |          | 0.68 |           |  |             | 21.75 |              |         |                             | 31.00 |            |  |            | 4.65    |            |  |         | 16.25 |  |         |  | 31.50 |         |  |  | 19.75 |  |  |  | 21.00 | 
|2009  |  |          | 0.68 |           |  |             | 22.00 |              |         |                             | 31.50 |            |  |            | 4.65    |            |  |         | 16.25 |  |         |  | 32.00 |         |  |  | 20.25 |  |  |  | 21.50 | 
|2010  |  |          | 0.68 |           |  |             | 22.25 |              |         |                             | 32.00 |            |  |            | 4.70    |            |  |         | 16.25 |  |         |  | 32.50 |         |  |  | 20.50 |  |  |  | 22.00 | 
|2011  |  |          | 0.68 |           |  |             | 22.50 |              |         |                             | 32.50 |            |  |            | 4.75    |            |  |         | 16.50 |  |         |  | 33.00 |         |  |  | 20.75 |  |  |  | 22.50 | 
|2012  |  |          | 0.68 |           |  |             | 23.00 |              |         |                             | 33.00 |            |  |            | 4.85    |            |  |         | 17.00 |  |         |  | 33.50 |         |  |  | 21.00 |  |  |  | 23.00 | 
|2013  |  |          | 0.68 |           |  |             | 23.25 |              |         |                             | 33.50 |            |  |            | 4.90    |            |  |         | 17.00 |  |         |  | 34.00 |         |  |  | 21.50 |  |  |  | 23.50 | 
|2014+ |  |          | 0.68 |           |  | 1.5%/yr     |       |              | 1.5%/yr |                             |       | 1.5%/yr    |  |            | 1.5%/yr |            |  | 1.5%/yr |       |  | 1.5%/yr |  |       | 1.5%/yr | 

* Gilbert Laustsen Jung Associates
Ltd. price assumptions effective January 1, 2003.

RECYCLE RATIO

|                           |  |      |       |      |  |      |       |      |  |      |       |      |  |   |       |  |  |   |      |  |  |   |       | 
|-------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- | ---- |  | - | ----- |  |  | - | ---- |  |  | - | ----- | 
|(6:1)                      |  | 2002 |       | 2001 |  | 2000 |       | 1999 |  | 1998 |       | 1997
|                           |  |      |       |      |  |      |       |      |  |      |       |     
|Operating netback per boe* |  | $    | 14.69 |      |  | $    | 17.17 |      |  | $    | 20.21 |      |  | $ | 13.14 |  |  | $ | 8.30 |  |  | $ | 10.80 | 
|F&D costs per boe**        |  | $    | 11.53 |      |  | $    | 6.85  |      |  | $    | 9.28  |      |  | $ | 5.70  |  |  | $ | 8.97 |  |  | $ | 4.71  | 
|Recycle ratio***           |  |      | 1.3   |      |  |      | 2.5   |      |  |      | 2.2   |      |  |   | 2.3   |  |  |   | 0.9  |  |  |   | 2.3   | 



|*   |  | The operating netback is
calculated by subtracting royalties, operating costs, and injectant amortization from revenue generated
by oil and gas sales.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|**  |  | Finding and development (F&D) costs represent the cost of acquiring and developing Established reserves.                                              
|   
|*** |  | The recycle ratio is a measure of
the efficiency in which new reserves are added. It is defined as the operating netback divided
by the F&D cost.     

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PENGROWTH ENERGY TRUST

SUMMARY OF RESERVES AT DECEMBER 31, 2002 *

|                  |               |  |                         |       |                               |  |         |        |        |  |        |        |               |  |         |         |  |   |                                |         |  |   |         |         |  |   |         |       | 
|----------------- | ------------- |  | ----------------------- | ----- | ----------------------------- |  | ------- | ------ | ------ |  | ------ | ------ | ------------- |  | ------- | ------- |  | - | ------------------------------ | ------- |  | - | ------- | ------- |  | - | ------- | ----- | 
|                  |               |  |                         |       |                               |  |         |        |        |  |        |        |               |  |         |         |  |   | Estimated Future Net Cash Flow
|                  |               |  | Gross Interest Reserves |       | Before Income Tax ($ million)
|                  |               |  |                         |       |                              
|                  |               |  | Natural                 |       | Crude                         |  | Gas     |        |        |  |        |        | Discounted at
|                  |               |  | Gas                     |       | Oil                           |  | Liquids |        | BOE    |  |       
|                  |               |  | (bcf)                   |       | (mbbls)                       |  | (mbbls) |        | (mboe) |  | 10%    |        | 12%           |  | 15%    
|                  |               |  |                         |       |                               |  |         |        |        |  |        |        |               |  |        
|Proved            |               |  |                         |       |                               |  |         |        |        |  |        |        |               |  |         |         |  |   |                                |         |  |   |         |         |  |   |         |      
|                  | Producing     |  |                         | 295.0 |                               |  |         | 67,478 |        |  |        | 14,219 |               |  |         | 130,868 |  |   | $                              | 1,101.0 |  |   | $       | 1,032.0 |  |   | $       | 946.8 | 
|                  | Non-producing |  |                         | 129.0 |                               |  |         | 22,639 |        |  |        | 6,373  |               |  |         | 50,513  |  |   | $                              | 221.9   |  |   | $       | 189.6   |  |   | $       | 150.8 | 
|                  |               |  |                         |       |                               |  |         |        |        |  |        |        |               |  |         |         |  |   |                                |         |  |   |         |         |  |   |         |      
|Total proved      |               |  | 424.0                   |       |                               |  | 90,117  |        |        |  | 20,592 |        |               |  | 181,381 |         |  | $ | 1,322.9                        |         |  | $ | 1,221.6 |         |  | $ | 1,097.6 |      
|Probable (50%)    |               |  | 78.3                    |       |                               |  | 16,621  |        |        |  | 3,762  |        |               |  | 33,433  |         |  | $ | 172.2                          |         |  | $ | 148.2   |         |  | $ | 121.0   |      
|                  |               |  |                         |       |                               |  |         |        |        |  |        |        |               |  |         |         |  |   |                                |         |  |   |         |         |  |   |         |      
|Total Established |               |  | 502.3                   |       |                               |  | 106,738 |        |        |  | 24,354 |        |               |  | 214,814 |         |  | $ | 1,495.1                        |         |  | $ | 1,369.8 |         |  | $ | 1,218.6 |      
|                  |               |  |                         |       |                               |  |         |        |        |  |        |        |               |  |         |         |  |   |                                |         |  |   |         |         |  |   |         |      

|                  |               |  |                          |       |         |  |         |        |        |  |        |       |  |  |         |        | 
|----------------- | ------------- |  | ------------------------ | ----- | ------- |  | ------- | ------ | ------ |  | ------ | ----- |  |  | ------- | ------ | 
|                  |               |  | Net Interest Reserves **
|                  |               |  |                         
|                  |               |  | Natural                  |       | Crude   |  | Gas     |        |        |  |       
|                  |               |  | Gas                      |       | Oil     |  | Liquids |        | BOE   
|                  |               |  | (bcf)                    |       | (mbbls) |  | (mbbls) |        | (mboe)
|                  |               |  |                          |       |         |  |         |        |       
|Proved            |               |  |                          |       |         |  |         |        |        |  |        |       |  |  |         |       
|                  | Producing     |  | 233.1                    |       |         |  | 56,677  |        |        |  | 10,085 |       |  |  | 105,604 |       
|                  | Non-producing |  |                          | 107.8 |         |  |         | 19,452 |        |  |        | 5,065 |  |  |         | 42,492 | 
|                  |               |  |                          |       |         |  |         |        |        |  |        |       |  |  |         |       
|Total proved      |               |  | 340.9                    |       |         |  | 76,129  |        |        |  | 15,150 |       |  |  | 148,096 |       
|Probable (50%)    |               |  | 58.8                     |       |         |  | 13,846  |        |        |  | 2,708  |       |  |  | 26,351  |       
|                  |               |  |                          |       |         |  |         |        |        |  |        |       |  |  |         |       
|Total Established |               |  | 399.7                    |       |         |  | 89,975  |        |        |  | 17,858 |       |  |  | 174,447 |       
|                  |               |  |                          |       |         |  |         |        |        |  |        |       |  |  |         |       



|*  |  | Based on Gilbert Laustsen Jung
Associates Ltd. (GLJ) reserve report (the GLJ Report)
effective December 31, 2002.
Natural gas is converted to equivalent barrels of oil based on 6:1. Natural gas liquids are converted based on 1:1.
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|** |  | Gross interest reserves net of royalties.                                                                                                                                                                                              

ESTABLISHED RESERVES (MMBOE)

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2002 ANNUAL REPORT

Health, Safety, Environment and Community

Pengrowth is committed to protecting the health and safety of its employees and
the public, preserving
the quality of the environment and supporting the community.

ENVIRONMENTAL

Pengrowth is committed to meeting its responsibilities to protect the
environment wherever it operates.
Pengrowth engages in activities to ensure compliance with the Alberta
Environmental Protection and
Enhancement Act, the Environmental Assessment Act (British Columbia) and similar
legislation or
requirements in other jurisdictions in which it operates.

Pengrowth is an active participant in
the Environment, Health and Stewardship
Program initiated by the
Canadian Association of Petroleum Producers. This program is a commitment to
industry and individual
company excellence in health, safety and environmental performance and will
facilitate communication
to all stakeholders.

In 2002, Pengrowth declared its support for the Voluntary Challenge & Registry
program. This program
tracks Canadas progress in reducing green-house gas emissions. Pengrowths
involvement in this
program will allow us to register our baselineemissions inventory and track
our reductions of overall
green-house gas emissions. Pengrowths 2001 submission received gold level
recognition.

Pengrowths goal is to reduce emissions by improving the efficiency of our
operations. Currently 100 percent
of Pengrowths operated dehydrators are in compliance with the CAPP voluntary
emissions targets. A
new program was implemented to ensure that new gas flaring requirements are
effectively managed.

During 2002, Pengrowth had an active well abandonment and site restoration
program. Pengrowth continued
to assess and remediate sites impacted by historic operations, with a primary
focus on flare pit removal.

Comprehensive inspection and upgrading programs targeted at improving the
integrity of our surface
piping, storage tanks and underground pipelines continued in 2002.

HEALTH AND SAFETY

Pengrowth achieved a Certificate of Recognition in the Partnership Program with
Alberta Human
Resources and the Workers Compensation Board in 2000. Each year thereafter we
have demonstrated
continuous improvement in our Health and Safety Program. This is an excellent
accomplishment given
the continuous growth of the Trust.

Corporate Emergency Response plans are in place and have government approvals
with site exercises
being completed on a regular basis.

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PENGROWTH ENERGY TRUST

COMMUNITY

Pengrowth believes in enhancing the community where employees live and
work. Pengrowth
Management supports causes and institutions both financially and through
volunteer efforts. We are very
proud of these associations and partnerships with many not-for-profit
organizations.

For the past 11 years, Pengrowth Management
has been the host sponsor of the Rockyview
General Hospital Invitational Golf Tournament. Since inception, the tournament has raised $2.3
million to support excellence in programs and
services at the Rockyview General Hospital in
Calgary. Some of the areas supported include the
Gastro-Intestinal Department, Cardiovascular
Services, the Emergency Department and the
Neo-Natal Intensive Care Unit.

PICTURE

The 12th annual Rockyview Tournament
is set for Monday, June 23 2003 at the
Glencoe Golf and
Country Club in Calgary. This year, net proceeds from the golf tournament will be
utilized at the
Rockyview to establish the first Smart Operating Room in the Province of
Alberta. The Smart
Operating Room incorporates laparoscopic technology and utilizes voice control
systems to enable a
surgeon to control any piece of equipment through voice command. Laparoscopic
surgical techniques
minimize patient discomfort, speed up recovery, free up hospital beds and reduce
hospital waiting times.

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2002 ANNUAL REPORT

Managements Discussion and Analysis

The following discussion and analysis of financial results should be read in
conjunction with the audited
consolidated financial statements for the year ended
December 31, 2002 and is
based on information
available to March 3, 2003.

NOTE REGARDING
FORWARD-LOOKING STATEMENTS

This discussion and analysis contains forward-
looking statements. These statements relate to
future events or our future performance. In some
cases, you can identify forward-looking statements
by terminology such as may, will,
should, expect, plan,
anticipate, believe, estimate,
predict, potential, continue, or the negative
of these terms or other comparable terminology. These statements are
only predictions. A number
of factors, including the business risks discussed in
this Managements Discussion and Analysis, may
cause actual events or results to vary materially
from these estimates. In addition, this discussion
contains forward-looking statements attributed to
third party industry sources. Readers should not
place undue reliance on these forward-looking
statements.

When converting natural gas to equivalent barrels
of oil within this discussion, Pengrowth has
adopted the international standard of six thousand
cubic feet (mcf) to one barrel of oil equivalent
(boe). All amounts are stated in Canadian dollars
unless otherwise specified.

2002 OVERVIEW



| |  | Distributable income of $194.5 million was paid
to unitholders compared to $215.8 million in
2001. The decrease is attributable mainly to
lower natural gas prices and higher operating
expenses in 2002.                                                                                                                                                                                                               
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Distributable income per unit was $2.07
compared to $3.01 per unit in the prior year. An additional $0.05 per unit earned in 2002
was withheld to fund capital expenditures.                                                                                                                                                                                                                                            
| 
| |  | Net income decreased to $49.1 million
($0.55 per unit) compared to $85.2 million
($1.20 per unit) in 2001, due mainly to lower
natural gas prices, higher operating costs and
higher depletion.                                                                                                                                                                                                                         
| 
| |  | Average production increased by 9 percent over
the prior year to 43,785 boe per day.                                                                                                                                                                                                                                                                                                                                    
| 
| |  | Pengrowth obtained a listing on the New York
Stock Exchange in April, and in November
completed a cross-border public equity offering
of 20.1 million units at $14.00 per unit. In
total, two public trust unit offerings completed
during 2002 raised $380 million in net equity
proceeds. For the second consecutive year, this
was the largest amount of new equity raised by
any Canadian oil and gas royalty trust.
| 
| |  | Pengrowth diversified its property portfolio
through the acquisition of substantially all of
Calpine Canadas British Columbia properties. In total, Pengrowth acquired 37.7 million boe
of Established reserves in 2002 at a price of
$10.33 per boe, and sold non-core properties
with reserves of 9.7 million boe.                                                                                                   
| 
| |  | Year-end Established reserves increased by
2 percent to 214.8 million boe.                                                                                                                                                                                                                                                                                                                                              
| 
| |  | Pengrowth finished the year with a strong
balance sheet: long-term debt was reduced to
$317 million, while committed loan facilities
were expanded to $575 million at year-end. The debt-to-debt-plus-equity ratio was reduced
to 23 percent from 30 percent in the prior year.                                                                                                                                         

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PENGROWTH ENERGY TRUST

RESULTS OF OPERATIONS

Production

Average daily production increased by 9 percent to 43,785 boe per day in 2002 compared to 40,320
boe per day in 2001. This increase is attributable mainly to the acquisition of Calpine Canadas British
Columbia properties on October 1, 2002 and a full years production from the Sable Offshore Energy
Project (SOEP) interest which was acquired in June 2001.

DAILY PRODUCTION VOLUMES

|                                  |  |      |         |      |  |          |        |  |  |  |      |  
|--------------------------------- |  | ---- | ------- | ---- |  | -------- | ------ |  |  |  | ---- | -
|                                  |  | 2002 |         | 2001 |  | % Change
|                                  |  |      |         |      |  |         
|Crude oil (bbls/d)                |  |      | 19,914  |      |  |          | 19,726 |  |  |  | + 1  | %
|Natural gas (mcf/d)               |  |      | 111,713 |      |  |          | 91,764 |  |  |  | + 22 | %
|Natural gas liquids (bbls/d)      |  |      | 5,252   |      |  |          | 5,258  |  |  |  |     |  
|                                  |  |      |         |      |  |          |        |  |  |  |      |  
|Total daily sales volumes (boe/d) |  |      | 43,785  |      |  |          | 40,320 |  |  |  | + 9  | %
|                                  |  |      |         |      |  |          |        |  |  |  |      |  

The exit production rate for December
was approximately 52,000 boe per day, comprised of 48 percent
crude oil, 41 percent natural gas and 11 percent natural gas liquids.

Pricing and Commodity Price Hedging

PENGROWTHS AVERAGE REALIZED PRICES

|                                |  |      |       |      |  |          |       |  |  |  |      |  
|------------------------------- |  | ---- | ----- | ---- |  | -------- | ----- |  |  |  | ---- | -
|(Adjusted for Hedging)          |  | 2002 |       | 2001 |  | % Change
|                                |  |      |       |      |  |         
|Crude oil ($/bbl)               |  | $    | 38.06 |      |  | $        | 37.26 |  |  |  | +  2 | %
|Natural gas ($/mcf)             |  | $    | 3.85  |      |  | $        | 4.48  |  |  |  | - 14 | %
|Natural gas liquids ($/bbl)     |  | $    | 28.11 |      |  | $        | 30.68 |  |  |  | - 8  | %
|                                |  |      |       |      |  |          |       |  |  |  |      |  
|Total oil and gas sales ($/boe) |  | $    | 30.18 |      |  | $        | 31.93 |  |  |  | - 5  | %
|                                |  |      |       |      |  |          |       |  |  |  |      |  

BENCHMARK PRICING

|                                         |  |      |        |      |  |          |        |  |  |  |      |  
|---------------------------------------- |  | ---- | ------ | ---- |  | -------- | ------ |  |  |  | ---- | -
|                                         |  | 2002 |        | 2001 |  | % Change
|                                         |  |      |        |      |  |         
|WTI crude oil (US$/bbl)                  |  | $    | 26.08  |      |  | $        | 25.90  |  |  |  | + 1  | %
|AECO (monthly) natural gas ($/mcf)       |  | $    | 4.07   |      |  | $        | 6.30   |  |  |  | - 35 | %
|NYMEX (HH close) natural gas (US$/mmbtu) |  | $    | 3.22   |      |  | $        | 4.27   |  |  |  | - 25 | %
|Currency (Cdn$/US$)                      |  |      | 1.5703 |      |  |          | 1.5489 |  |  |  | + 1  | %

Pengrowths average realized crude oil price increased by 2 percent in 2002 to $38.06 per barrel from
$37.26 in 2001. This price difference reflects a similar increase in
the WTI benchmark crude price, adjusted for the Cdn$/US$ exchange
rate. The impact of increased hedging losses in 2002 was largely
offset by lower differentials on heavier streams of crude oil in
2002.

In 2002 Pengrowth had 4,430 barrels per day, or 22 percent, of crude oil production hedged at an
average price of Cdn$38.66 per barrel. Pengrowths hedging program resulted in a total hedging loss on
crude oil for the year of $6.1 million or $0.83 per barrel, compared to a loss of $0.6 million or $0.09
per barrel in 2001. Hedging losses are recorded as a component of oil and gas sales.

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2002 ANNUAL REPORT

Pengrowths average realized natural gas price declined by 14 percent from
$4.48 per mcf in 2001 to
$3.85 per mcf in 2002. In comparison, the average AECO and NYMEX benchmark gas
prices fell by
35 percent and 25 percent respectively. The lower decline in Pengrowths average
price compared to
these indices is due to the impact of Pengrowths hedging program for 2002.

During 2002 Pengrowth sold 2.7 billion cubic feet of natural gas at an average
price of $2.97 per mcf
under fixed-price contracts. These contracts were entered into in 1999 and
expired in the fourth quarter
of 2002. As the average spot price exceeded this hedged position, an opportunity
cost of $1.9 million or
$0.05 per mcf (relative to the monthly AECO index) is included in Pengrowths
gas sales for 2002. In
addition, Pengrowth had 2.6 billion cubic feet hedged with financial swap
contracts at an average price
of US$3.90 (before transportation), resulting in a hedging gain of $0.1
million. In total, Pengrowth
realized a net hedging loss on natural gas of $1.8 million ($0.04 per mcf)
compared to a loss of $16.1
million ($0.48 per mcf) in 2001.

Pengrowths average price for natural gas liquids (NGLs) fell by 8 percent to
$28.11 per barrel in 2002,
reflecting the impact of lower natural gas prices on natural gas liquids.

Oil and Natural Gas Sales

OIL AND NATURAL GAS SALES

|                                   |  |      |       |      |  |          |       |   |  |  |      |  
|---------------------------------- |  | ---- | ----- | ---- |  | -------- | ----- | - |  |  | ---- | -
|($ millions)                       |  | 2002 |       | 2001 |  | % Change
|                                   |  |      |       |      |  |         
|Crude oil                          |  | $    | 276.6 |      |  | $        | 268.3 |   |  |  | + 3  | %
|Natural gas                        |  |      | 156.9 |      |  |          | 150.2 |   |  |  | + 4  | %
|Natural gas liquids                |  |      | 53.9  |      |  |          | 58.9  |   |  |  | - 8  | %
|Less: gross overriding royalties   |  |      | (8.2  | )    |  |          | (9.9  | ) |  |  | - 17 | %
|Gas marketing and brokering income |  |      | 3.1   |      |  |          | 2.4   |   |  |  | +29  | %
|                                   |  |      |       |      |  |          |       |   |  |  |      |  
|Total oil and natural gas sales    |  | $    | 482.3 |      |  | $        | 469.9 |   |  |  | + 3  | %
|                                   |  |      |       |      |  |          |       |   |  |  |      |  

Pengrowths oil and natural gas sales increased 3 percent to $482.3 million in
2002. This increase in
revenue is attributable to acquisitions over the last year, offset by lower
average commodity prices. The following table illustrates the effect of changes in prices and volumes on
oil and natural gas sales.

OIL AND NATURAL GAS SALES  PRICE
AND VOLUME ANALYSIS

|                                               |  |     |       |             |  |     |       |      |  |       |      |       |  |   |      |   |  |   |     |  |  |   |       |  
|---------------------------------------------- |  | --- | ----- | ----------- |  | --- | ----- | ---- |  | ----- | ---- | ----- |  | - | ---- | - |  | - | --- |  |  | - | ----- | -
|($ millions)                                   |  | Oil |       | Natural Gas |  | NGL |       | GORR |  | Other |      | Total
|                                               |  |     |       |             |  |     |       |      |  |       |      |      
|Year ended December 31, 2001                   |  | $   | 268.3 |             |  | $   | 150.2 |      |  | $     | 58.9 |       |  | $ | (9.9 | ) |  | $ | 2.4 |  |  | $ | 469.9 |  
|Effect of change in sales volumes              |  |     | 2.5   |             |  |     | 32.7  |      |  |       |     |       |  |   |     |   |  |   |    |  |  |   | 35.2  |  
|Effect of increase (decrease) in product price |  |     | 5.8   |             |  |     | (26.0 | )    |  |       | (5.0 | )     |  |   |     |   |  |   |    |  |  |   | (25.2 | )
|Other                                          |  |     |      |             |  |     |      |      |  |       |     |       |  |   | 1.7  |   |  |   | 0.7 |  |  |   | 2.4   |  
|                                               |  |     |       |             |  |     |       |      |  |       |      |       |  |   |      |   |  |   |     |  |  |   |       |  
|Year ended December 31, 2002                   |  | $   | 276.6 |             |  | $   | 156.9 |      |  | $     | 53.9 |       |  | $ | (8.2 | ) |  | $ | 3.1 |  |  | $ | 482.3 |  
|                                               |  |     |       |             |  |     |       |      |  |       |      |       |  |   |      |   |  |   |     |  |  |   |       |  

Royalties

Crown royalties, freehold royalties and mineral taxes increased to $80.6 million
or 17 percent of oil and
natural gas sales from $72.0 million or 15 percent of oil and natural gas sales
in 2001. The increase in the

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PENGROWTH ENERGY TRUST

royalty rate as a percentage of oil and natural gas sales is due to lower
injection credits received in 2002
with the reduction of miscible flood injection costs, and a slightly higher
effective royalty rate for the
newly acquired British Columbia properties, offset in part by the impact of a
lower natural gas Crown
royalty reference price in Alberta and a full years contribution from the SOEP
interest, which had an
effective royalty rate of approximately 1 percent in 2002 (this is expected to
increase to approximately
2 percent in 2003).

Operating Expenses

Operating expenses increased to $129.8 million in 2002 from $104.9 million in
2001, mainly as a result
of additional properties acquired in the past year and the SOEP interest
acquired in June 2001. Operating
costs per unit of production increased by 14 percent to $8.12 per boe from
$7.13 per boe in 2001.
The increase in operating costs per boe is attributable to a number of
factors, including higher average
operating costs at the SOEP interest, offset in part by lower per boe costs for
the newly acquired British
Columbia properties.

Pengrowths operating expenses are expected to increase in 2003 with the full
years impact of the
British Columbia properties acquired in the fourth quarter of 2002, and an
expected increase in the
Emera Inc. (Emera) processing fee due to Emeras additional capital
expenditure requirements for
Tier II development, which will increase the processing fee base. Other capital
expenditures paid by
Emera will also be included in the rate base.

At this time, a moderate increase in Pengrowths average operating expenses per
boe is anticipated for
2003. If current commodity price levels are sustained, further increases could
result from higher
electricity rates and general cost increases in the industry.

Amortization of Injectants for Miscible Floods

The cost of injectants (primarily ethane and methane) purchased for injection
in miscible flood programs
is amortized over the period of expected future economic benefit, which is
currently 30 months. In
2002, the total cost of purchased injectants was $15.1 million
(2001  $56.4
million), with $44.3 million
amortized and deducted from distributable income (2001 
$47.4 million). As at
December 31, 2002,
Pengrowth had deferred injectant costs of $33.8 million which will be amortized
and charged against
distributable income of future periods.

The value of Pengrowths proprietary injectants is not recorded until
reproduced from the flood and
sold, although the cost of producing these injectants is included in operating
costs. Total injectant costs
are expected to increase in 2003, due mainly to higher forecast prices for
ethane and methane; however,
the amount of injectants amortized against distributable income is expected to
decline as the deferred
portion of prior years costs has declined.

Interest

Interest expense declined to $15.4 million in 2002 from $18.8 million in 2001
mainly as a result of
lower interest rates in 2002. Pengrowths average interest rate for 2002 was 4.6
percent compared to
5.2 percent in 2001.

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2002 ANNUAL REPORT

Pengrowth has locked in the interest rate on $125 million of long-term debt by
entering into interest
rate swaps for three-year terms ending in November 2004 to March
2005, at an
average borrowing cost
of 4.09 percent, before stamping fees.

Many variables will affect interest
expense in 2003, including future
acquisitions and capital spending,
the relative amount of debt and equity financing, as well as prevailing interest
rates on the portion of
debt for which the interest rate has not been fixed.

Pengrowth is considering replacing a portion of its existing bank debt with
longer-term debt, which
will diversify Pengrowths sources of debt and provide longer-term certainty on
Pengrowths interest
costs, but may have a higher interest rate compared to prevailing rates on the
existing facility.

General and Administrative Expenses

General and administrative expenses increased to $11.0 million ($0.69 per boe)
in 2002 from $7.5 million
($0.51 per boe) in 2001. This increase is due to additional costs of managing a
larger property portfolio
and an expansion of the Trust unitholder base, as well as general cost and
salary increases over the period.

As a result of recent staff additions and the move to larger and higher-rent
office premises in the fourth
quarter of 2002, Pengrowth anticipates general and administrative costs will
increase by approximately
20 percent in 2003, based on current staffing levels. Pengrowth includes the
general and administrative
costs associated with its Calgary-based operations team in operating expense.

EMPLOYEES

|                                     |  |      |     |      |  |  |     | 
|------------------------------------ |  | ---- | --- | ---- |  |  | --- | 
|Pengrowth Employees (at December 31) |  | 2002 |     | 2001
|                                     |  |      |     |     
|Calgary office                       |  |      | 50  |      |  |  | 38  | 
|Calgary operations                   |  |      | 33  |      |  |  | 23  | 
|Field                                |  |      | 123 |      |  |  | 108 | 
|                                     |  |      |     |      |  |  |     | 
|Total                                |  |      | 206 |      |  |  | 169 | 
|                                     |  |      |     |      |  |  |     | 

Management Fees

Management fees paid to Pengrowth Management Limited (the Manager) were $6.6 million in 2002
compared to $7.1 million in 2001. On a unit-of-production basis, management fees decreased to $0.41
per boe compared to $0.48 per boe in 2001. Management fees are based on a sliding scale percentage of
net operating income as follows:

|                              |  |                |     |  
|----------------------------- |  | -------------- | --- | -
|Level of Net Operating Income |  | Management Fee
|                              |  |               
|First $50 million             |  |                | 3.5 | %
|Next $50 million              |  |                | 3.0 | %
|All amounts over $100 million |  |                | 2.5 | %

In addition, the Manager earns a fee on the acquisition of oil and gas properties by Pengrowth based on
the following sliding scale:

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PENGROWTH ENERGY TRUST



| |  | 1 percent on the Base
Amount. The Base Amount is defined as a minimum of
$100 million, or the
purchase price of Established reserves acquired to replace production from
the preceding calendar
year. If the reserve replacement amount is greater than $100 million in any
year, then it becomes the
Base Amount for the next year.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | 0.5 percent of the purchase price of any amount above the Base Amount.                                                                                                                                                                                                                                                                

The Manager is reimbursed for general and administrative costs incurred on
behalf of Pengrowth
Corporation and Pengrowth Energy Trust.

In 2002, $2.5 million (2001  $2.2 million) was paid to the Manager for
acquisition fees. Acquisition fees
paid to the Manager are capitalized as part of the cost of the acquired
properties.

A special committee of the Board of Directors of Pengrowth Corporation has been formed to consider
alternatives to the existing management agreement. The management agreement must be considered by the
unitholders of Pengrowth Energy Trust at the 2003 Annual General Meeting.

Taxes

Capital taxes of $0.5 million in
2002 (2001  $2.7 million) consist of the
Federal Large Corporations
Tax and the Saskatchewan Capital Tax and Resource Surcharge. Included in the
amount recorded in
2002 is a recovery of $1.3 million related to prior year reassessments.

In determining its taxable income, Pengrowth Corporation deducts royalty
payments to unitholders,
and historically, this has been sufficient to reduce taxable income
to nil. The
recent change to
Pengrowths distribution policy, whereby approximately 10 percent of funds
available for distribution
are withheld to fund capital expenditures, could result in taxable income in the
Corporation in the
future. There are, at present, sufficient tax pools available in the Corporation
to offset the expected
level of income to be retained.

Pengrowth Energy Trust paid $1.93 per unit as cash distributions during the
2002 calendar year. For
Canadian tax purposes, 22 percent of these distributions or $0.4252 per unit is
taxable income to
unitholders for the 2002 tax year. The remaining 78 percent or $1.5048 per unit
is a tax deferred return
of capital which will reduce the unitholders cost base of the unit for
purposes of calculating a capital
gain or loss upon ultimate disposition of the trust units.

At December 31, 2002, the Trust had unused tax deductions of $10.64 per unit
(2001  $11.06). At this
time, Pengrowth anticipates that approximately 55-60 percent of 2003
distributions will be taxable. This
estimate is subject to change depending on a number of factors
including, but
not limited to, the level
of commodity prices, acquisitions, dispositions, and new equity offerings.

Depletion and Ceiling Test

Depletion and depreciation of
property, plant and equipment is provided on the
unit-of-production method
based on total proved reserves. The provision for depletion and depreciation
increased by 12 percent in
2002 to $138.9 million from $124.2 million in 2001 due to a larger depletable
asset base and higher

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2002 ANNUAL REPORT

production. On a unit-of-production
basis, depletion increased by 3 percent to
$8.69 per boe in 2002
from $8.44 per boe in 2001.

Under Canadian generally accepted
accounting principles (GAAP), a ceiling test
is applied to the carrying
value of the property, plant and equipment and other assets. The cost of these
assets, less accumulated
depletion, is limited to the estimated future net revenue from proved reserves
(based on unescalated prices
and costs at the balance sheet date), less estimated future general and
administrative costs, financing costs,
and management fees. There was a significant surplus in the ceiling test at
year-end 2002.

Future Site Restoration

An engineering estimate of the future costs for restoration and abandonment of
well sites and facilities
is updated annually. This cost estimate is amortized against net income over the
life of the properties on
a unit-of-production basis. The provision for future site restoration costs
increased to $13.4 million in
2002 from $8.5 million in 2001, primarily as a result of properties acquired
over the past year.

The Accounting Standards Board (AcSB) has issued an Exposure Draft proposing a
new section of the
CICA Handbook  Asset Retirement Obligations. The new
section, if
adopted, would harmonize
Canadian GAAP requirements with the corresponding U.S. GAAP requirements under
FASB 143. Under
these standards, the fair value of a liability for asset retirement obligations
would be recognized in the
period in which it is incurred, and a corresponding asset retirement cost would
be added to the carrying
amount of the related asset. The proposed section would be effective for fiscal
years beginning on or
after January 1, 2004. Pengrowth will be required to comply with FASB 143 within
reconciliations of
the financial statements to U.S. GAAP effective January 1, 2003.

Remediation Expenses and Trust Fund Contributions

Pursuant to the purchase of the Judy Creek and Swan Hills properties from
Imperial Oil Resources in
1997, Pengrowth established a trust fund to fund certain obligations of these
properties. Pengrowth made
net contributions of $0.9 million to this fund in 2002 compared to $1.0 million
in 2001. Under the
current terms of the trust fund, Pengrowth must make an annual lump sum
contribution of $250,000
and monthly contributions of $0.10 per boe of production from the related
properties.

Every five years Pengrowth must deliver a report to Imperial Oil Resources
evaluating the assets in
the trust fund and the outstanding remediation obligations, and make
recommendations as to whether
contribution levels should be changed. Pengrowth is currently in discussions
with Imperial in respect
of required contributions for 2003 and future periods.

During 2002, Pengrowth spent an additional $0.9 million in reclamation
expenditures that were not
covered by the trust fund, compared to $1.1 million in 2001.

Netbacks

Pengrowth earned $12.48 for every boe produced in 2002 compared to $14.66 per
boe in 2001. As
illustrated below, the lower netback realized in 2002 is mainly due to lower
average commodity prices
and higher operating costs.

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NETBACKS PER BOE OF PRODUCTION (6:1)

|                                                |  |      |       |      |  |   |       |  
|----------------------------------------------- |  | ---- | ----- | ---- |  | - | ----- | -
|Year ended December 31                          |  | 2002 |       | 2001
|                                                |  |      |       |     
|Oil and gas sales                               |  | $    | 30.18 |      |  | $ | 31.93 |  
|Crown and freehold royalties, net of incentives |  |      | (5.04 | )    |  |   | (4.89 | )
|Other income                                    |  |      | 0.45  |      |  |   | 0.56  |  
|Operating costs                                 |  |      | (8.12 | )    |  |   | (7.13 | )
|Amortization of injectants                      |  |      | (2.77 | )    |  |   | (3.22 | )
|                                                |  |      |       |      |  |   |       |  
|Operating netback                               |  |      | 14.70 |      |  |   | 17.25 |  
|Interest                                        |  |      | (0.96 | )    |  |   | (1.28 | )
|General and administrative                      |  |      | (0.69 | )    |  |   | (0.51 | )
|Management fees                                 |  |      | (0.41 | )    |  |   | (0.48 | )
|Capital taxes                                   |  |      | (0.03 | )    |  |   | (0.18 | )
|Other                                           |  |      | (0.13 | )    |  |   | (0.14 | )
|                                                |  |      |       |      |  |   |       |  
|Netback per boe                                 |  | $    | 12.48 |      |  | $ | 14.66 |  
|                                                |  |      |       |      |  |   |       |  

Acquisitions and Dispositions

In October 2002, Pengrowth acquired substantially all of the properties in
northern British Columbia
owned by Calpine Canada Natural Gas Partnership (less a minor share of these
assets which were
concurrently sold to Progress Energy) for total net consideration of $352
million, after closing adjustments.

Based on the reserves evaluation completed at the time of the acquisition of
the British Columbia
properties, GLJ forecast production in the second half of 2002 to
average 15,785
boe per day, based on
Established reserves. Actual production for this period averaged approximately
12,900 boe per day. This
reduced production rate is attributed to a number of factors including an
extended third-party facility
outage and steeper than anticipated declines in some of the major oil producing
properties. GLJs most
recent 2002 year-end reserves evaluation resulted in a 4 percent reduction in
Established reserves
associated with these British Columbia properties, compared to their December
2002 reserves forecast
at the time of the acquisition.

Pengrowth plans to spend approximately $16 million in development activities at
these properties in
2003. Total annual production from the British Columbia properties is expected
to average
approximately 11,500 boe per day in 2003.

In the second quarter of 2002, Pengrowth acquired additional working interests
in the Quirk Creek
area, including an additional 25.9 percent working interest in the Quirk Creek
gas plant, for $34 million
after adjustments. In total, Pengrowth acquired 37.7 million boe of Established
reserves in 2002, at an
average price of $10.33 per boe to replace more than 230 percent of the years
total production.

Several non-core properties were sold in 2002 for total aggregate proceeds of
$43.1 million, after
adjustments. Pengrowth frequently reviews its property portfolio and may dispose
of additional non-core
assets in the future as opportunities for rationalization and consolidation are
identified.

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2002 ANNUAL REPORT

Capital Expenditures

Pengrowth spent $55.6 million in capital expenditures in 2002 compared to $74.0
million in 2001; $48.2
million was spent on development drilling, completions and tie-ins, and $7.4
million was spent on facilities.

In 2003, Pengrowth expects to spend approximately $87 million on development
opportunities at
existing properties. The majority of this will be spent at Judy Creek, SOEP, the
newly acquired British
Columbia properties, and Weyburn.

CAPITAL EXPENDITURES

|                       |  |             |      |            |  |              |     |               |  |               |      |      |  |   |      | 
|---------------------- |  | ----------- | ---- | ---------- |  | ------------ | --- | ------------- |  | ------------- | ---- | ---- |  | - | ---- | 
|Year ended December 31 |  |             |      |            |  | 2002         |     |               |  |               |      | 2001
|                       |  |             |      |           
|($ millions)           |  | Development |      |            |  |              |     | Total Capital |  | Total Capital
|Property               |  | Drilling    |      | Facilities |  | Expenditures |     | Expenditures 
|                       |  |             |      |            |  |              |     |              
|Judy Creek             |  | $           | 18.1 |            |  | $            | 2.7 |               |  | $             | 20.8 |      |  | $ | 27.8 | 
|SOEP*                  |  |             | 14.2 |            |  |              |    |               |  |               | 14.2 |      |  |   | 7.5  | 
|McLeod River           |  |             | 4.9  |            |  |              | 0.2 |               |  |               | 5.1  |      |  |   | 5.9  | 
|Goose River            |  |             | 4.2  |            |  |              | 0.5 |               |  |               | 4.7  |      |  |   | 1.4  | 
|Weyburn                |  |             | 1.5  |            |  |              | 0.7 |               |  |               | 2.2  |      |  |   | 5.3  | 
|House Mountain         |  |             | 1.3  |            |  |              | 0.4 |               |  |               | 1.7  |      |  |   | 4.0  | 
|Swan Hills             |  |             | 1.1  |            |  |              | 0.4 |               |  |               | 1.5  |      |  |   | 2.0  | 
|Nipisi                 |  |             | 0.3  |            |  |              | 0.4 |               |  |               | 0.7  |      |  |   | 3.0  | 
|Monogram               |  |             |     |            |  |              | 0.1 |               |  |               | 0.1  |      |  |   | 4.2  | 
|Other                  |  |             | 2.6  |            |  |              | 2.0 |               |  |               | 4.6  |      |  |   | 12.9 | 
|                       |  |             |      |            |  |              |     |               |  |               |      |      |  |   |      | 
|Total                  |  | $           | 48.2 |            |  | $            | 7.4 |               |  | $             | 55.6 |      |  | $ | 74.0 | 
|                       |  |             |      |            |  |              |     |               |  |               |      |      |  |   |      | 

* Relates only to Pengrowths royalty share of capital expenditures.

Development drilling at Judy Creek included four producing oil wells and three
vertical injection wells.
Development plans for 2003 include two to four new oil wells and three
horizontal and two
vertical injectors.

Recent drilling and production results
at SOEP have been mixed. A successful
well was drilled at the
South Venture field but has not yet been tested. Increased water production
occurred in the Venture
field. Successful reworks of several wells were required to replace lost
production. A well intended to
identify upside potential from a new fault block in the Glenelg field was
abandoned. Production rates
were anticipated to continue to vary over the life of the project due to
multiple fields and reservoirs as
well as facility project timing.

Phase II of the SOEP project is currently under construction with the
development of the Alma field.
Two wells are planned for Alma this summer and production startup is expected
in late 2003. Construction
of the South Venture platform is proceeding and production is expected to come
on stream in late 2004.

Pengrowth has an agreement with Emera regarding capital expenditures for
offshore capital projects at
SOEP whereby, once the capital expenditures exceed a threshold of $65
million, further costs can either
be reflected as an increase in the processing fee rate base, which is based on a
15 percent rate of return
on a pre-tax basis, or, at the option of Emera, the costs could be passed through
to or borne directly by
Pengrowth. At this time, Pengrowth anticipates that Emera will not reach the $65
million expenditure
threshold until early 2004.

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PENGROWTH ENERGY TRUST

At McLeod River, Pengrowth drilled five successful natural gas wells in 2002 and
plans to drill four to
six gas wells in 2003. We anticipate participating in three non-operated wells
in 2003. At Goose River,
four successful oil wells were drilled and put on production in 2002. At
Weyburn, development activities
included additional infill drilling, injection wells and infrastructure to
support the CO2 miscible flood
project. Incremental oil production from the CO2 injection had increased to
approximately 5,000
barrels per day (488 barrels per day net to Pengrowth) by year-end.

NET ASSET VALUE

In the following table, Pengrowths net asset value is measured with reference
to the present value of
future net cash flows from reserves, as estimated by independent reserve
engineers, Gilbert Laustsen Jung
Associates Ltd. (GLJ), less any working capital deficiency and long-term debt at
year-end.

NET ASSET VALUE DECEMBER 31, 2002($ millions except per unit amounts)

|                                                           |  |                             |       |     |  |     |       |   |  |   |       |  
|---------------------------------------------------------- |  | --------------------------- | ----- | --- |  | --- | ----- | - |  | - | ----- | -
|                                                           |  | Present Worth Discounted At
|                                                           |  |                            
|                                                           |  | 10%                         |       | 12% |  | 15%
|                                                           |  |                             |       |     |  |    
|Present value of net cash flows from Established reserves* |  | $                           | 1,495 |     |  | $   | 1,370 |   |  | $ | 1,219 |  
|Current assets less current liabilities                    |  |                             | 9     |     |  |     | 9     |   |  |   | 9     |  
|Remediation trust fund                                     |  |                             | 7     |     |  |     | 7     |   |  |   | 7     |  
|Distributions payable to unitholders                       |  |                             | 45    |     |  |     | 45    |   |  |   | 45    |  
|Long-term debt                                             |  |                             | (317  | )   |  |     | (317  | ) |  |   | (317  | )
|                                                           |  |                             |       |     |  |     |       |   |  |   |       |  
|Net asset value                                            |  | $                           | 1,239 |     |  | $   | 1,114 |   |  | $ | 963   |  
|Net asset value per trust unit                             |  | $                           | 11.21 |     |  | $   | 10.08 |   |  | $ | 8.71  |  
|                                                           |  |                             |       |     |  |     |       |   |  |   |       |  



|* |  | Based on GLJs report
effective December 31, 2002 for Established reserves (proved plus half probable) and GLJs January 2003 price forecast.
Excludes future site restoration costs.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

FINANCIAL RESOURCES AND LIQUIDITY

Pengrowths long-term debt
decreased by $29 million in fiscal 2002 to $317 million at December 31, 2002.
The factors contributing to the change in long-term debt are shown in the following table:

CONTINUITY OF LONG-TERM DEBT

|                                                 |  |      |      |      |  |   |      |  
|------------------------------------------------ |  | ---- | ---- | ---- |  | - | ---- | -
|($ millions)                                     |  | 2002 |      | 2001
|                                                 |  |      |      |     
|Beginning balance, January 1                     |  | $    | 345  |      |  | $ | 287  |  
|Less: Net equity proceeds                        |  |      | (382 | )    |  |   | (306 | )
|Property dispositions                            |  |      | (43  | )    |  |   | (24  | )
|Cash (provided by) used for operating activities |  |      | (58  | )    |  |   | 37   |  
|Add: Property acquisitions                       |  |      | 392  |      |  |   | 280  |  
|Capital expenditures                             |  |      | 56   |      |  |   | 74   |  
|Other                                            |  |      | 7    |      |  |   | (3   | )
|                                                 |  |      |      |      |  |   |      |  
|Ending balance, December 31                      |  | $    | 317  |      |  | $ | 345  |  
|                                                 |  |      |      |      |  |   |      |  

Pursuant to a unitholder resolution on
April 23, 2002, the Board of Directors of Pengrowth Corporation
may elect to retain up to 20 percent of gross revenues to provide for the payment of future capital
expenditures or for the payment of future distributions. Commencing
with the January 15, 2003

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2002 ANNUAL REPORT

monthly distribution to unitholders, approximately 10 percent of funds available
for distribution have
been withheld to repay debt and/or contribute to capital spending in the
future. Subject to the limit of 20 percent of gross revenues
approved by unitholders, the Board of Directors
may elect to increase
(or decrease) the amount withheld in the future, depending on a number of
factors, including future
commodity prices, capital expenditure requirements, and the availability of debt
and equity capital.

Pengrowth currently has a $540 million revolving credit facility syndicated
among nine financial
institutions with an extendible 364-day revolving period and a three-year
amortization term. In addition,
Pengrowth has a $35 million demand operating line of credit. These facilities in
aggregate are reduced
by outstanding letters of credit in the amount of approximately
$33 million. For
2004, the facilities will
be reduced by a further $25 million of letters of credit.

FINANCIAL LEVERAGE AND COVERAGE

|                                                 |  |      |     |      |  |  |     |  
|------------------------------------------------ |  | ---- | --- | ---- |  |  | --- | -
|                                                 |  | 2002 |     | 2001
|                                                 |  |      |     |     
|Distributable income to interest expense (times) |  |      | 12  |      |  |  | 11  |  
|Long-term debt to distributable income (times)   |  |      | 1.6 |      |  |  | 1.6 |  
|Long-term debt to debt plus equity (%)           |  |      | 23  | %    |  |  | 30  | %
|                                                 |  |      |     |      |  |  |     |  

RISK MANAGEMENT PROGRAM

Pengrowth uses forward and futures contracts to manage its exposure to commodity price fluctuations.
Commodity price hedges in place at December 31, 2002 are provided in Note 14 to the Financial
Statements. Subsequent to year-end, Pengrowth has entered into additional contracts and now has the
following volumes hedged for 2003 and 2004:

|     |  |           |        |                     |  |                     |       |            |  |           |        |              |  |         |      |  |  |           |        |         |  |   |      | 
|---- |  | --------- | ------ | ------------------- |  | ------------------- | ----- | ---------- |  | --------- | ------ | ------------ |  | ------- | ---- |  |  | --------- | ------ | ------- |  | - | ---- | 
|     |  | Crude Oil |        | Western Natural Gas |  | Eastern Natural Gas
|     |  |           |        |                     |  |                    
|     |  |           |        |                     |  |                     |       |            |  |           |        |              |  | Average |      |  |  |           |        | Average
|     |  |           |        |                     |  | Average             |       |            |  |           |        | Plantgate    |  |         |      |  |  | Plantgate
|     |  | Volume    |        | Price               |  | Volume              |       | Price      |  | Volume    |        | Price       
|     |  | (bbls/d)  |        | (Cdn$/bbl)          |  | (mcf/d)             |       | (Cdn$/mcf) |  | (mmbtu/d) |        | (Cdn$/mmbtu)
|     |  |           |        |                     |  |                     |       |            |  |           |        |             
|2003 |  |           | 11,000 |                     |  | $                   | 41.41 |            |  |           | 14,217 |              |  | $       | 5.97 |  |  |           | 17,000 |         |  | $ | 5.09 | 
|2004 |  |           | 8,500  |                     |  | $                   | 38.09 |            |  |           |        |              |  |         |      |  |  |           | 12,000 |         |  | $ | 4.54 | 
|     |  |           |        |                     |  |                     |       |            |  |           |        |              |  |         |      |  |  |           |        |         |  |   |      | 

TRUST UNIT INFORMATION

|                         |  |             |  |     |       |       |  |        |       |              |  |   |       |  |  |  |        |        |  |       |       |  |  | 
|------------------------ |  | ----------- |  | --- | ----- | ----- |  | ------ | ----- | ------------ |  | - | ----- |  |  |  | ------ | ------ |  | ----- | ----- |  |  | 
|                         |  |             |  |     |       |       |  |        |       |              |  |   |       |  |  |  |        | Volume |  | Value
|TRUST
UNIT TRADING  TSE |  | High        |  | Low |       | Close |  | (000s) |       | ($ millions)
|                         |  |             |  |     |       |       |  |        |       |             
|2002                     |  | 1st quarter |  | $   | 16.23 |       |  | $      | 13.25 |              |  | $ | 16.13 |  |  |  | 11,395 |        |  | $     | 165.7 | 
|                         |  | 2nd quarter |  |     | 17.00 |       |  |        | 14.60 |              |  |   | 15.05 |  |  |  | 12,588 |        |  |       | 197.1 | 
|                         |  | 3rd quarter |  |     | 15.63 |       |  |        | 13.01 |              |  |   | 14.90 |  |  |  | 9,367  |        |  |       | 140.8 | 
|                         |  | 4th quarter |  |     | 14.99 |       |  |        | 13.42 |              |  |   | 14.73 |  |  |  | 17,760 |        |  |       | 250.1 | 
|                         |  |             |  |     |       |       |  |        |       |              |  |   |       |  |  |  |        |        |  |       |       |  |  | 
|                         |  | Year        |  | $   | 17.00 |       |  | $      | 13.01 |              |  | $ | 14.73 |  |  |  | 51,110 |        |  | $     | 753.7 | 
|                         |  |             |  |     |       |       |  |        |       |              |  |   |       |  |  |  |        |        |  |       |       |  |  | 
|2001                     |  | 1st quarter |  | $   | 21.25 |       |  | $      | 18.70 |              |  | $ | 19.85 |  |  |  | 8,784  |        |  | $     | 176.2 | 
|                         |  | 2nd quarter |  |     | 21.95 |       |  |        | 17.11 |              |  |   | 18.10 |  |  |  | 10,048 |        |  |       | 205.2 | 
|                         |  | 3rd quarter |  |     | 19.50 |       |  |        | 14.05 |              |  |   | 15.00 |  |  |  | 9,471  |        |  |       | 163.8 | 
|                         |  | 4th quarter |  |     | 17.20 |       |  |        | 12.80 |              |  |   | 14.22 |  |  |  | 12,946 |        |  |       | 189.2 | 
|                         |  |             |  |     |       |       |  |        |       |              |  |   |       |  |  |  |        |        |  |       |       |  |  | 
|                         |  | Year        |  | $   | 21.95 |       |  | $      | 12.80 |              |  | $ | 14.22 |  |  |  | 41,249 |        |  | $     | 734.4 | 
|                         |  |             |  |     |       |       |  |        |       |              |  |   |       |  |  |  |        |        |  |       |       |  |  | 

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|                                    |  |             |  |     |       |       |  |        |      |              |  |   |      |        |  |       |       |  |  |   |      |  |  | 
|----------------------------------- |  | ----------- |  | --- | ----- | ----- |  | ------ | ---- | ------------ |  | - | ---- | ------ |  | ----- | ----- |  |  | - | ---- |  |  | 
|TRUST UNIT TRADING  NYSE           |  |             |  |     |       |       |  |        |      |              |  |   |      | Volume |  | Value
|(listed
on April 10, 2002) (in US$) |  | High        |  | Low |       | Close |  | (000s) |      | ($ millions)
|                                    |  |             |  |     |       |       |  |        |      |             
|2002                                |  | 2nd quarter |  | $   | 10.90 |       |  | $      | 9.50 |              |  | $ | 9.93 |        |  |       | 1,784 |  |  | $ | 18.1 | 
|                                    |  | 3rd quarter |  |     | 10.25 |       |  |        | 8.40 |              |  |   | 9.37 |        |  |       | 1,141 |  |  |   | 11.0 | 
|                                    |  | 4th quarter |  |     | 9.79  |       |  |        | 8.50 |              |  |   | 9.27 |        |  |       | 6,747 |  |  |   | 60.6 | 
|                                    |  |             |  |     |       |       |  |        |      |              |  |   |      |        |  |       |       |  |  |   |      |  |  | 
|                                    |  | Year        |  | $   | 10.90 |       |  | $      | 8.40 |              |  | $ | 9.27 |        |  |       | 9,672 |  |  | $ | 89.7 | 
|                                    |  |             |  |     |       |       |  |        |      |              |  |   |      |        |  |       |       |  |  |   |      |  |  | 

Pengrowth had 110,562,327 trust units
outstanding at December 31, 2002, compared
to 82,240,069
trust units at December 31, 2001. The weighted-average number of units
outstanding during the year
was 89,922,886 (2001  70,910,746).

On June 4, 2002 Pengrowth completed a public offering of 8.0 million units at
$15.40 per unit to raise
total gross proceeds of $123.2 million. In November 2002, Pengrowth completed
another public offering,
in Canada and the United States, issuing an additional 20.1 million units at
$14.00 for gross proceeds of
$281.2 million.

BUSINESS RISKS

The amount of distributable income available to unitholders and the value of
Pengrowth Energy Trust
units are subject to numerous risk factors. As the trust units allow investors
to participate in the net cash
flow from Pengrowths portfolio of producing oil and natural gas
properties, the
principal risk factors
that are associated with the oil and gas business include, but are not limited
to, the following influences:



| |  | The prices of Pengrowths
products (crude oil, natural gas, and natural gas
liquids) fluctuate due to many
factors including local and global market supply and demand, weather
patterns, pipeline transportation,
and political stability.                                                                                                                                                                                                                               
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | The marketability of our production depends in part upon the
availability, proximity and capacity of
gathering systems, pipelines and processing facilities. Operational or
economic factors may result in
the inability to deliver our products to market.                                                                                                                                                                                                               
| 
| |  | Geological and operational risks affect the quantity and quality of reserves
and the costs of recovering
those reserves. Our actual results will vary from our reserve
estimates, and
those variations could
be material.                                                                                                                                                                                                                                                 
| 
| |  | Government royalties, income
taxes, commodity taxes, and other taxes, levies and
fees have a
significant economic impact on Pengrowths financial results. Changes to
federal and provincial
legislation governing such royalties, taxes and fees could have a material
impact on Pengrowths
financial results and the value of Pengrowth trust units.                                                                                                                   
| 
| |  | Environmental laws and regulatory initiatives impact Pengrowth financially
and operationally. We may
incur substantial capital and operating costs to comply with increasingly
complex laws and regulations
covering the protection of the environment and human health and
safety. In
particular, we may be
required to incur significant costs to comply with the 1997 Kyoto Protocol
to the United Nations
Framework Convention on Climate Change (the Kyoto Protocol).

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|2002 ANNUAL REPORT                         
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|                                          
|                                           
|                                          
|                                           
|                                          
|                                           
|                                          
|                                           
|Pengrowth mitigates some of these risks by:
|                                           
|                                          
|                                           
|                                          
|                                           
|                                          
|                                           
|                                          
|                                           
|                                          
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|                                          
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PENGROWTH ENERGY TRUST



| |  | Developing and adhering to policies and practices that protect the
environment and meet or exceed
the regulations imposed by the government.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Developing and adhering to safety policies and practices that meet or exceed
regulatory standards.                                          
| 
| |  | Ensuring strong third-party operators for non-operated properties.                                                                          
| 
| |  | Carrying insurance to cover physical losses and business interruption.                                                                      

BUSINESS PROSPECTS

The current commodity price environment is expected to yield favourable results
for Pengrowth
unitholders in the first quarter of 2003, and perhaps further into the
year. Crude oil prices have recently
spiked to highs of more than US$35.00 per barrel of West Texas Intermediate
(WTI) compared to the
US$20.00 per barrel range at this time last year. Oil prices have been driven
higher by the strike in
Venezuela and concerns over the war in Iraq.

Natural gas prices are also strong, with NYMEX natural gas trading close to the
US$5.00 per mmbtu
range, and Alberta spot gas at AECO trading well above Cdn$8.00 per
mcf. The
storage surplus created
by the warm winter of 2001-2002 had all but disappeared heading into the
2002-2003 heating season,
resulting in substantially higher prices coming into this winter season
compared to the prior year, and
recent cold weather in the eastern U.S. is continuing to push prices
higher. Natural gas prices are also
being impacted by high crude prices. Near-term natural gas prices will be
impacted by weather
conditions throughout the remainder of the winter heating season, as well as the
direction of crude
prices. Over the longer-term, prices will be impacted by the fundamentals of
supply and demand, with
supply affected by a continuing decline in North American reserves and
production, and demand
impacted by the speed of economic recovery in the U.S.

Although we are currently in a very
favourable commodity price environment, the
oil and gas industry
is cyclical and we know we cannot count on these prices being sustained for any
length of time. In
order to limit unitholders exposure to potential price
downturns, and to provide
some stability to
monthly distributions, Pengrowth has hedged a portion of current production and
will continue to
monitor commodity prices and may enter into additional hedges for 2003 and
forward.

Pengrowth has an active development
program planned for 2003, with more than $87
million planned
for development opportunities at existing properties. In addition, Pengrowths
operations personnel are
continually looking for further initiatives to enhance production from existing
properties and to control
and reduce costs in order to maximize returns from our existing property
portfolio.

Pengrowth continues to pursue acquisition opportunities in order to replace
production and reserves.
However, within the current environment of high commodity prices, the competition
for acquisition
opportunities is expected to remain strong. Pengrowth will remain diligent in
pursuing only those
acquisition opportunities that enhance unitholder returns over the long-term.

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2002 ANNUAL REPORT

BOARD OF DIRECTORS

Board of Directors

LEFT TO RIGHT: STANLEY H. WONG, JOHN
B. ZAOZIRNY, FRANCIS G. VETSCH,
JAMES S. KINNEAR, THOMAS A. CUMMING, MICHAEL A. GRANDIN





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PENGROWTH ENERGY TRUST

THOMAS A. CUMMING, DIRECTOR

Thomas A. Cumming, BA.Sc., P.Eng., joined Pengrowth Corporations Board of
Directors in April 2000,
having held the position of President and C.E.O. of the Alberta Stock Exchange
from 1988 to 1999.
His career also includes 25 years with a major Canadian bank both nationally
and internationally. He
currently serves as a Director of the Calgary YMCA Foundation, the Alberta
Capital Market
Foundation, the Canadian Investor Protection Fund and is a member of
Council, Power Pool of
Alberta. He is also a past president of the Calgary Chamber of Commerce.

JAMES S. KINNEAR, CHAIRMAN, PRESIDENT & C.E.O.

Mr. Kinnear graduated from the
University of Toronto in 1969 with a B.Sc. degree
and received a
C.F.A. designation in 1979. In 1982 he founded Pengrowth Management Limited and
in 1988 created
Pengrowth Energy Trust. Prior to 1982 he was research director and partner with
a securities firm in
Montreal and previously worked as a securities analyst in Toronto and
London, England. Mr. Kinnear
was awarded the Ernst and Young, Prairies Region Entrepreneur of the Year award
for 2001.

FRANCIS G. VETSCH, DIRECTOR

Francis G. Vetsch, B.Sc., P.Eng., is
President of Quantex Resources Ltd. and is the
former President of
Tripet Resources and Chairman of Chauvco Resources Ltd. In his earlier career he
served as President
and C.E.O. of Alberta Eastern Gas Ltd. for six years and Vice
President, Operations of Atlantic Richfield
Canada for six years.

STANLEY H. WONG, DIRECTOR

Stanley H. Wong, B.Sc., P.Eng., is
President of Carbine Resources Ltd., a private
oil and gas producing
and engineering consulting company. He was Senior Engineer with Hudsons Bay Oil
& Gas for 10 years
and employed by Total Petroleum for 15 years where he was Chief Engineer and
later became Manager
of Special Projects. He is currently a Director of Cavell Energy Corporation.

JOHN B. ZAOZIRNY, LEAD DIRECTOR

John B. Zaozirny, Q.C., B.Comm., LL.B.,
LL.M., is Counsel to McCarthy Tetrault and

Vice Chairman of
Canaccord Capital Corporation. He was Minister of Energy and Natural Resources
for the Province of
Alberta from 1982 to 1986. John currently serves on the board of numerous
Canadian and international
corporations. He is also a Governor of the Business Council of British Columbia.

MICHAEL A. GRANDIN, DIRECTOR

Michael A. Grandin, B.Sc., P.Eng.,
M.B.A., joined the Board of Directors of
Pengrowth Corporation in
April 2002 having most recently held the position of President of PanCanadian
Energy Corporation.
Mr. Grandin was Executive Vice President and Chief Financial Officer, Canadian
Pacific Limited from
1998 to 2001. Mr. Grandin is currently Chairman & C.E.O. of Fording Canadian Coal
Trust and also a
Director of Enerflex Systems Ltd., EnCana Corporation and IPSCO.

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2002 ANNUAL REPORT

CORPORATE GOVERNANCE

The Board of Directors of Pengrowth Corporation complies with the guidelines
for effective corporate
governance of the Toronto Stock Exchange Committee on Corporate
Governance. The
guidelines
address the constitution of boards of directors and board committees as well as
their functions, their
independence from management and other means to promote sound corporate
governance practice.

The Board of Directors of Pengrowth Corporation will seek to comply with
prevailing standards for
corporate governance in both Canada and the United States. As a foreign issuer
in the United States, Pengrowth Energy Trust is considering the application of recent recommendations
by the Corporate
Accountability and Listings Standards Committee of the Board of the New York
Stock Exchange and
the legislative reforms contained in the Sarbanes-Oxley Act of 2002.

The following are important elements of our current corporate governance
practice:



| |  | The Board of Directors of Pengrowth
Corporation is responsible for the overall
stewardship of Pengrowth Corporation and
Pengrowth Trust and for determining corporate
strategy and direction. The Board of Directors of
Pengrowth Corporation considers management
development and succession programs, strategic
business development such as significant
acquisitions and financing proposals including
the issuance of trust units and other securities, as
well as those matters which require board approval;                                                                                                 
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Two members of the Board of Directors are
considered related to the Corporation and/or
the Trust by virtue of their appointment by
Pengrowth Management and other factors. The remainder (up to six) of the directors
are independent in that they have not worked
for Pengrowth Corporation (nor Pengrowth
Management) nor do they have material
contracts with Pengrowth Corporation
(nor Pengrowth Management) nor do they
receive remuneration from Pengrowth
Corporation (nor Pengrowth Management), other than options to acquire
trust units, in
excess of directors fees payable by Pengrowth
Corporation;
| 
| |  | The Board of Directors has established the
Corporate Governance and Compensation
Committee. This Committee is comprised of
the four independent directors. The Committees
activities have included:                                                                                                                                                                                                                                                                                                                                                                                                               



| |  | Adoption of a charter for corporate
governance, which has been ratified by the
Board of Directors;                                                                                                                                                                                                                                                                                              
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Development of procedures for assessing the
effectiveness of the Board of Directors, its
committees and individual directors;                                                                                                                                                                                                                                                                   
| 
| |  | Undertaking responsibility for evaluating the
performance of Pengrowth Management and
making recommendations to the unitholders
as to the terms of the Management Agreement. The Committee has engaged outside advisors
to review the terms of the Management
Agreement in order to make a recommendation
to our unitholders at the 2003 annual meeting, as required by the
trust indenture; and
| 
| |  | Consideration of a code of business ethics
and policies on disclosure and insider trading.                                                                                                                                                                                                                                                                                                      

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| |  | The independent members of the Board of
Directors meet separately at meetings of the
board under the chairmanship of a lead director;                                                                                                                                                                                    
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | The Audit Committee of the Board of
Directors is comprised entirely of independent
members of the board and communicates
directly with the auditors of Pengrowth
Corporation and Pengrowth Energy Trust;                                                                                                                 
| 
| |  | A Reserves Committee of the Board of Directors
has been appointed to review Pengrowths
standards for reporting reserves for its portfolio
of oil and natural gas properties. The Reserves
Committee communicates directly with Gilbert
Laustsen Jung Associates Ltd., Pengrowth
Corporations independent engineers; and
| 
| |  | All stock option plans have been approved by
the unitholders of Pengrowth Energy Trust.                                                                                                                                                                                                                                  

BOARD MANDATE, STRUCTURE AND FUNCTION

The Board of Directors of Pengrowth Corporation
has general corporate authority over the business
and affairs of Pengrowth Corporation and derives
its authority with respect to Pengrowth Energy
Trust by virtue of Trust Indenture. The Board
of Directors consists of two nominees of
Pengrowth Management and four independent
directors elected by holders of Pengrowth Energy
Trust units.

The Board of Directors responds to recommendations
brought forward by Pengrowth Management or
by other directors on material acquisitions and
dispositions, operational matters and other matters
impacting Pengrowth Corporation and Pengrowth
Energy Trust unitholders. As a practical matter, Pengrowth Management defers to the Board of
Directors in respect of all matters which may
have a material impact upon the business and
undertaking of Pengrowth Corporation and Pengrowth Energy Trust. In respect of matters
such as discussions concerning the Management
Agreement or related party transactions, representatives of Pengrowth Management
disclose their conflict of interest and absent
themselves from discussions and voting.

The Board of Directors represents a cross-section
of experience in matters of oil and natural gas, finance and
directors responsibilities. Four of the
six current members of the Board of Directors
have been directors since the formation of
Pengrowth Corporation and Pengrowth Energy
Trust. Thomas A. Cumming has been a Director
since April 2000 and Michael A. Grandin was
elected a Director at the April 23, 2002 Special
and Annual Meeting.

MANDATE OF PENGROWTH MANAGEMENT
Pengrowth Management derives its authority
from the Management Agreement between
Pengrowth Corporation and Pengrowth Energy
Trust. Pengrowth Management has broad discretion
to administer and regulate the day-to-day
operations of Pengrowth Energy Trust and
Pengrowth Corporation and initiates acquisition
and disposition activity.

MANDATE OF COMPUTERSHARE AS TRUSTEE
Computershare, as Trustee, has broad power over
the administration and management of Pengrowth
Energy Trust and the power to delegate those
duties and responsibilities. This power is governed
by the terms of the Trust Indenture between
Pengrowth Corporation and Computershare, subject to the voting rights of the unitholders.
All unitholders and the holders of all royalty units
other than Computershare are entitled to attend
at and vote upon all resolutions brought before
meetings of the shareholders of Pengrowth
Corporation on the basis of one vote for each
trust unit held.

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2002 ANNUAL REPORT

Managements Report

Managements Responsibility to the Unitholders

The financial statements are the responsibility of the management of Pengrowth
Energy Trust. They
have been prepared in accordance with generally accepted accounting
principles, using managements
best estimates and judgements, where appropriate.

Management is responsible for the reliability and integrity of the financial
statements, the notes to the
financial statements, and other financial information contained in this
report. In the preparation of these
statements, estimates are sometimes necessary because a precise determination of
certain assets and
liabilities is dependent on future events. Management believes such estimates
have been based on careful
judgements and have been properly reflected in the accompanying financial
statements.

Management is also responsible for ensuring that management fulfills its
responsibilities for financial
reporting and internal control. The Board is assisted in exercising its
responsibilities through the Audit
Committee of the Board, which is composed of three non-management
directors. The
Committee
meets periodically with management and the auditors to satisfy itself that
managements responsibilities
are properly discharged, to review the financial statements and to recommend
approval of the financial
statements to the Board.

KPMG llp, the independent auditors
appointed by the unitholders, have audited
Pengrowth Energy
Trusts consolidated financial statements in accordance with generally accepted
auditing standards and
provided an independent professional opinion. The auditors have full and
unrestricted access to the
Audit Committee to discuss their audit and their related findings as to the
integrity of the financial
reporting process.

|                                                                 |  |                                          
|---------------------------------------------------------------- |  | -----------------------------------------
|Signed                                                         |  | Signed                                 
|                                                                 |  |                                          
|James S. Kinnear
Chairman, President and
Chief Executive Officer |  | Robert B. Hodgins
Chief Financial Officer

March 3, 2003

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PENGROWTH ENERGY TRUST

Auditors Report

To the Unitholders of Pengrowth Energy Trust

We have audited the consolidated balance sheets of Pengrowth Energy Trust
as at December 31, 2002
and 2001 and the consolidated statements of income, trust
unitholdersequity and cash flow for the
years then ended. These financial statements are the responsibility of the
Trusts management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with Canadian generally accepted
auditing standards. Those
standards require that we plan and perform an audit to obtain reasonable
assurance whether the financial
statements are free of material misstatement. An audit includes
examining,on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the
accounting principles used and significant estimates made by
management, as
well as evaluating the
overall financial statement presentation.

In our opinion, these consolidated
financial statements present fairly, in
all material respects, the financial
position of the Trust as at December 31, 2002 and 2001 and the results of
its operations and its cash
flow for the years then ended in accordance with Canadian generally
accepted accounting principles.

Signed: KPMG LLP

Chartered Accountants
Calgary, Canada

March 3, 2003

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2002 ANNUAL REPORT

Consolidated Balance Sheets

|                                                         |                                               |      |           |        |  |   |           |        | 
|-------------------------------------------------------- | --------------------------------------------- | ---- | --------- | ------ |  | - | --------- | ------ | 
|(stated in thousands of dollars)                         |                                               |      |           |        |  |   |           |       
|                                                         |                                               |      |           |       
|As at December 31                                        |                                               | 2002 |           | 2001  
|                                                         |                                               |      |           |       
|ASSETS                                                   |                                               |      |           |        |  |   |           |       
|CURRENT ASSETS                                           |                                               |      |           |        |  |   |           |       
|                                                         | Cash and term deposits                        |      | $         | 8,292  |  |   | $         | 3,797  | 
|                                                         | Marketable securities (Note 14)               |      |           | 1,906  |  |   |           |       | 
|                                                         | Accounts receivable                           |      |           | 41,426 |  |   |           | 27,859 | 
|                                                         | Inventory                                     |      |           | 1,301  |  |   |           | 2,687  | 
|                                                         |                                               |      |           |        |  |   |           |        | 
|                                                         |                                               |      | 52,925    |        |  |   | 34,343    |       
|REMEDIATION TRUST FUND (Note 5)                          |                                               |      | 6,679     |        |  |   | 6,470     |       
|PROPERTY , PLANT AND EQUIPMENT
AND OTHER ASSETS (Note 7) |                                               |      | 1,444,668 |        |  |   | 1,208,526 |       
|                                                         |                                               |      |           |        |  |   |           |        | 
|                                                         |                                               | $    | 1,504,272 |        |  | $ | 1,249,339 |       
|                                                         |                                               |      |           |        |  |   |           |        | 
|LIABILITIES AND UNITHOLDERS EQUITY                      |                                               |      |           |        |  |   |           |       
|CURRENT LIABILITIES                                      |                                               |      |           |        |  |   |           |       
|                                                         | Accounts payable and accrued liabilities      |      | $         | 43,092 |  |   | $         | 31,359 | 
|                                                         | Distributions payable to unitholders          |      |           | 45,315 |  |   |           | 22,207 | 
|                                                         | Due to Pengrowth Management Limited (Note 12) |      |           | 1,086  |  |   |           | 523    | 
|                                                         |                                               |      |           |        |  |   |           |        | 
|                                                         |                                               |      | 89,493    |        |  |   | 54,089    |       
|LONG-TERM DEBT (Note 8)                                  |                                               |      | 316,501   |        |  |   | 345,456   |       
|FUTURE SITE RESTORATION COSTS                            |                                               |      | 44,339    |        |  |   | 32,591    |       
|TRUST UNITHOLDERS EQUITY (Note 9)                       |                                               |      | 1,053,939 |        |  |   | 817,203   |       
|                                                         |                                               |      |           |        |  |   |           |        | 
|COMMITMENTS (Note 15)                                    |                                               | $    | 1,504,272 |        |  | $ | 1,249,339 |       
|                                                         |                                               |      |           |        |  |   |           |        | 

See accompanying notes to the consolidated financial statements.

Approved on behalf of Pengrowth Energy Trust
by Pengrowth Corporation,as Administrator:

|                          |  |                          
|------------------------- |  | -------------------------
|Signed                  |  | Signed                 
|                          |  |                          
|Thomas A.Cumming
Director |  | Francis G.Vetsch
Director

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PENGROWTH ENERGY TRUST

Consolidated Statements of Income

|                                                                                             |                                                |         |         |         |       |   |         |         |       | 
|-------------------------------------------------------------------------------------------- | ---------------------------------------------- | ------- | ------- | ------- | ----- | - | ------- | ------- | ----- | 
|(stated in thousands of dollars)                                                             |                                                |         |         |         |       |   |         |        
|                                                                                             |                                                |         |         |        
|Years ended December 31                                                                      |                                                | 2002    |         | 2001   
|                                                                                             |                                                |         |         |        
|REVENUES                                                                                     |                                                |         |         |         |       |   |         |        
|                                                                                             | Oil and natural gas sales                      |         | $       | 482,301 |       |   | $       | 469,929 |      
|                                                                                             | Processing and other
income                    |         |         | 6,936   |       |   |         | 7,071   |      
|                                                                                             | Crown royalties,net of
incentives              |         |         | (73,833 | )     |   |         | (65,203 | )    
|                                                                                             | Freehold royalties and
mineral taxes           |         |         | (6,774  | )     |   |         | (6,757  | )    
|                                                                                             |                                                |         |         |         |       |   |         |         |      
|                                                                                             |                                                |         | 408,630 |         |       |   | 405,040 |        
|                                                                                             | Interest and other income                      |         |         | 274     |       |   |         | 1,348   |      
|                                                                                             |                                                |         |         |         |       |   |         |         |      
|NET REVENUE                                                                                  |                                                |         | 408,904 |         |       |   | 406,388 |        
|EXPENSES                                                                                     |                                                |         |         |         |       |   |         |        
|                                                                                             | Operating                                      |         |         | 129,802 |       |   |         | 104,943 |      
|                                                                                             | Amortization of injectants for miscible floods |         |         | 44,330  |       |   |         | 47,448  |      
|                                                                                             | Interest                                       |         |         | 15,395  |       |   |         | 18,806  |      
|                                                                                             | General and administrative                     |         |         | 10,992  |       |   |         | 7,467   |      
|                                                                                             | Management fee (Note 12)                       |         |         | 6,567   |       |   |         | 7,120   |      
|                                                                                             | Capital taxes                                  |         |         | 483     |       |   |         | 2,659   |      
|                                                                                             | Depletion and depreciation                     |         |         | 138,874 |       |   |         | 124,208 |      
|                                                                                             | Future site restoration                        |         |         | 13,355  |       |   |         | 8,529   |      
|                                                                                             |                                                |         |         |         |       |   |         |         |      
|                                                                                             |                                                |         | 359,798 |         |       |   | 321,180 |        
|                                                                                             |                                                |         |         |         |       |   |         |         |      
|INCOME BEFORE THE FOLLOWING                                                                  |                                                |         | 49,106  |         |       |   | 85,208  |        
|ROYALTY INCOME ATTRIBUTABLE TO ROYALTY UNITS
OTHER THAN THOSE HELD BY PENGROWTH ENERGY TRUST |                                                |         | 39      |         |       |   | 58      |        
|                                                                                             |                                                |         |         |         |       |   |         |         |      
|NET INCOME                                                                                   |                                                | $       | 49,067  |         |       | $ | 85,150  |        
|                                                                                             |                                                |         |         |         |       |   |         |         |      
|NET INCOME PER UNIT (NOTE 13)   BASIC                                                        |                                                | $       | 0.546   |         |       | $ | 1.201   |        
|                                                                                             |                                                |         |         |         |       |   |         |         |      
|                                                                                             |                                                | DILUTED |         | $       | 0.545 |   |         | $       | 1.197 | 
|                                                                                             |                                                |         |         |         |       |   |         |         |      

See accompanying notes to the consolidated financial statements.

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2002 ANNUAL REPORT

Consolidated Statements of Cash Flow

|                                            |                                                         |      |          |          |   |   |          |          |  
|------------------------------------------- | ------------------------------------------------------- | ---- | -------- | -------- | - | - | -------- | -------- | -
|(stated in thousands of dollars)            |                                                         |      |          |          |   |   |          |         
|                                            |                                                         |      |          |         
|Years ended December 31                     |                                                         | 2002 |          | 2001    
|                                            |                                                         |      |          |         
|CASH PROVIDED BY (USED FOR):                |                                                         |      |          |          |   |   |          |         
|OPERATING                                   |                                                         |      |          |          |   |   |          |         
|                                            | Net income                                              |      | $        | 49,067   |   |   | $        | 85,150   |  
|                                            | Items not involving cash                                |      |          |          |   |   |          |          |  
|                                            | Depletion,depreciation and future site restoration      |      |          | 152,229  |   |   |          | 132,737  |  
|                                            | Amortization of injectants                              |      |          | 44,330   |   |   |          | 47,448   |  
|                                            | Purchase of injectants                                  |      |          | (15,107  | ) |   |          | (56,352  | )
|                                            | Expenditures on remediation                             |      |          | (1,607   | ) |   |          | (1,223   | )
|                                            | Gain on sale of marketable securities                   |      |          | (176     | ) |   |          |         |  
|                                            |                                                         |      |          |          |   |   |          |          |  
|Funds generated from operations             |                                                         |      | 228,736  |          |   |   | 207,760  |         
|                                            | Distributions                                           |      |          | (171,350 | ) |   |          | (241,590 | )
|                                            | Changes in non-cash operating working capital (Note 10) |      |          | 120      |   |   |          | (2,919   | )
|                                            |                                                         |      |          |          |   |   |          |          |  
|                                            |                                                         |      | 57,506   |          |   |   | (36,749  | )       
|                                            |                                                         |      |          |          |   |   |          |          |  
|FINANCING                                   |                                                         |      |          |          |   |   |          |         
|                                            | Change in long-term debt                                |      |          | (28,955  | ) |   |          | 58,080   |  
|                                            | Proceeds from issue of trust units                      |      |          | 382,127  |   |   |          | 305,875  |  
|                                            |                                                         |      |          |          |   |   |          |          |  
|                                            |                                                         |      | 353,172  |          |   |   | 363,955  |         
|                                            |                                                         |      |          |          |   |   |          |          |  
|INVESTING                                   |                                                         |      |          |          |   |   |          |         
|                                            | Expenditures on property acquisitions                   |      |          | (391,761 | ) |   |          | (280,058 | )
|                                            | Expenditures on property,plant and equipment            |      |          | (55,631  | ) |   |          | (74,026  | )
|                                            | Proceeds on property dispositions                       |      |          | 43,153   |   |   |          | 23,567   |  
|                                            | Change in Remediation Trust Fund                        |      |          | (209     | ) |   |          | (955     | )
|                                            | Purchase of marketable securities                       |      |          | (2,780   | ) |   |          |         |  
|                                            | Proceeds from sale of marketable securities             |      |          | 1,050    |   |   |          |         |  
|                                            | Change in non-cash investing working capital (Note 10)  |      |          | (5       | ) |   |          | 3,530    |  
|                                            |                                                         |      |          |          |   |   |          |          |  
|                                            |                                                         |      | (406,183 | )        |   |   | (327,942 | )       
|                                            |                                                         |      |          |          |   |   |          |          |  
|INCREASE (DECREASE) IN CASH                 |                                                         |      | 4,495    |          |   |   | (736     | )       
|CASH AND TERM DEPOSITS AT BEGINNING OF YEAR |                                                         |      | 3,797    |          |   |   | 4,533    |         
|                                            |                                                         |      |          |          |   |   |          |          |  
|CASH AND TERM DEPOSITS AT END OF YEAR       |                                                         | $    | 8,292    |          |   | $ | 3,797    |         
|                                            |                                                         |      |          |          |   |   |          |          |  

See accompanying notes to the consolidated financial statements.

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PENGROWTH ENERGY TRUST

Consolidated Statements of Trust
Unitholders Equity

|                                         |  |      |           |      |  |   |          |  
|---------------------------------------- |  | ---- | --------- | ---- |  | - | -------- | -
|(stated in thousands of dollars)         |  |      |           |      |  |   |          |  
|                                         |  |      |           |     
|Years ended December 31                  |  | 2002 |           | 2001
|                                         |  |      |           |     
|Unitholders equity at beginning of
year |  | $    | 817,203   |      |  | $ | 641,965  |  
|Units issued, net of issue costs         |  |      | 382,127   |      |  |   | 305,875  |  
|Net income for year                      |  |      | 49,067    |      |  |   | 85,150   |  
|Distributable income                     |  |      | (194,458  | )    |  |   | (215,787 | )
|                                         |  |      |           |      |  |   |          |  
|TRUST UNITHOLDERS EQUITY AT END
OF YEAR |  | $    | 1,053,939 |      |  | $ | 817,203  |  
|                                         |  |      |           |      |  |   |          |  

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2002 ANNUAL REPORT



|   |  | Notes to                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |  | Consolidated
Financial Statements                                                                                                                                                                                                                                                                                                                                                                                                                           
|  
|   |  | Years ended December 31, 2002
and 2001(tabular amounts are stated in thousands of dollars except per unit
amounts.)                                                                                                                                                                                                                                                                                                                                         
|  
|1. |  | STRUCTURE OF THE TRUST                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   |  | Pengrowth Energy Trust (EnergyTrust) is a closed-end investment trust
created under the laws of the
Province of Alberta pursuant to a Trust Indenture dated December 2, 1988
(as amended) between Pengrowth
Corporation (Corporation) and ComputerShare Investor Services
Inc. Operations commenced on
December 30, 1988. The beneficiaries of EnergyTrust are the holders of trust
units (the unitholders).                                          
|  
|   |  | EnergyTrust acquires and holds royalty units issued by the
Corporation, which entitles EnergyTrust to
the net revenue generated by Corporations petroleum and natural gas
properties less certain defined
charges. In addition, unitholders are entitled to receive the net cash flows
from other investments that
are held directly by EnergyTrust. As at December 31, 2002 EnergyTrust owned
99.9 percent of the
royalty units issued by the Corporation.
|  
|   |  | Pengrowth Management Limited (the Manager) is responsible for the
management of the business affairs
of the Corporation and the administration of EnergyTrust. At December
31, 2002, the Manager owns 9
percent of the common shares of Corporation, and the Manager is controlled
by a director of the Corporation.
The remaining 91 percent of the common shares of the Corporation are owned
by EnergyTrust.                                           
|  
|   |  | Under the terms of the Royalty Indenture, the Corporation is entitled to
retain a 1 percent share
of royalty income and all miscellaneous income (the Residual Interest)
to the extent this amount
exceeds the aggregate of debt service charges, general and administrative
expenses, and management
fees. In 2002 and 2001, the Corporation was not eligible to retain this
Residual Interest.                                                          
|  
|2. |  | SIGNIFICANT ACCOUNTING
POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|   |  | Basis of Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   |  | EnergyTrusts consolidated financial statements have been prepared in
accordance with generally accepted
accounting principles in Canada and they include the accounts of
EnergyTrust and the accounts of
Corporation (collectively referred to as Pengrowth). All inter-entity
transactions have been eliminated.
These financial statements do not contain the accounts of the Manager.                                                                 
|  
|   |  | EnergyTrust owns 91 percent of the shares of Corporation and, through the
royalty, obtains substantially
all the economic benefits of Corporation. In addition, the unitholders of
EnergyTrust have the right to
elect the majority of the Board of Directors of Corporation.                                                                                                                                                                               
|  
|   |  | Joint Interest Operations                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  
|   |  | A significant proportion of Pengrowths petroleum and natural gas
development and production activities
are conducted with others and accordingly the accounts reflect only
Pengrowths proportionate interest
in such activities.                                                                                                                                                                                                                          

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PENGROWTH ENERGY TRUST



| |  | Property, Plant and Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Pengrowth follows the full cost method of accounting for oil and gas properties
and facilities whereby all
costs of acquiring such interests are capitalized and depleted on the unit of
production method based on
proved reserves before royalties as estimated by independent engineers. Natural
gas production and reserves
are converted to equivalent units of crude oil using their relative energy
content.                                                                                                                                                                                
|
| |  | General and administrative costs are not capitalized other than to the extent
they are directly related to
a successful acquisition, or to the extent of Pengrowths working interest in
capital expenditure programs
to which overhead fees can be recovered from partners. Overhead fees are not
charged on 100 percent
owned projects.                                                                                                                                                                                                                                                          
|
| |  | Proceeds from disposals of oil and gas properties and equipment are credited
against capitalized costs
unless the disposal would alter the rate of depletion and depreciation by more
than 20 percent, in which
case a gain or loss on disposal is recorded.                                                                                                                                                                                                                                                                                                                                       
|
| |  | Pengrowth places a limit on the aggregate carrying value of property, plant and
equipment and deferred
injectant costs that may be carried forward for depletion against revenues of
future periods (the ceiling
test). The cost of these assets less accumulated depletion and depreciation is
limited to an amount equal
to the estimated future net revenue from production of proved reserves (based
on unescalated prices and
costs at the balance sheet date) less estimated future general and
administrative costs, financing costs and
management fees.                                 
|
| |  | Injectant Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | Injectants (mostly ethane and methane) are used in miscible flood programs to
stimulate incremental oil
recovery. The cost of injectants purchased from third parties for miscible flood
projects is deferred and
amortized over the period of expected future economic benefit which is
estimated as 30 months.                                                                                                                                                                                                                                                                                   
|
| |  | Inventory                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| |  | Inventories of crude oil, natural gas and natural gas liquids are stated at the
lower of cost and net
realizable value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | Future Site Restoration Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |  | Provisions for future site restoration costs are made over the life of the oil
and gas properties and
facilities using the unit of production method. Costs are based on engineering
estimates considering
current regulations, costs and industry standards. Pengrowth has placed cash in a
segregated remediation
trust account to fund certain site restoration costs for the Judy Creek and
Swan Hills properties.
Contributions to the remediation trust account and remediation expenditures not
funded by the trust
account are charged against distributable income in the period incurred.
|
| |  | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | EnergyTrust is a taxable trust under the Income Tax Act (Canada). No provision
has been made for
income taxes by EnergyTrust in these financial statements, as income taxes are
the responsibility of the
individual unitholders and EnergyTrust distributes all of its taxable income to
its unitholders. In 2002,
EnergyTrust allocated $37.8 million in taxable income or $0.425 per unit to
unitholders (2001  $124.3
million, or $1.795 per unit).                                                                                                                                           

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| |  | 2002 ANNUAL REPORT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | The Corporation follows the tax liability method of accounting for income
taxes. Under this method,
income tax liabilities and assets are recognized for the estimated tax
consequences attributable to differences
between the amounts reported in the Corporations financial statements and
their respective tax bases,
using enacted income tax rates. The effect of a change in income tax rates on
future income tax liabilities
and assets is recognized in income in the period that the change occurs. In
determining its taxable income,
the Corporation deducts royalty payments to the unitholders. In 2002, taxable
income of the Corporation,
after deducting royalty payments to royalty unitholders and other available tax
deductions, was nil. If the
Corporation ever lacked sufficient deductions to reduce taxable income to
nil, the taxes would be
deducted from royalty payments to unitholders.
|
| |  | Trust Unit Compensation Plans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | Pengrowth has a number of trust unit compensation plans, the accounting policies
for which are
described in Note 9.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | Risk Management                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |  | Financial instruments are utilized by Pengrowth to manage its exposure to
commodity price fluctuations,
foreign currency and interest rate exposures. Pengrowths policy is not to
utilize financial instruments
for trading or speculative purposes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | Pengrowth formally documents relationships between hedging instruments and
hedged items, as well as
its risk management objective and strategy for undertaking various hedge
transactions. This process includes
linking all derivatives to specific assets and liabilities on the balance sheet
or to specific firm commitments
or forecasted transactions. Pengrowth also formally assesses, both at the hedges
inception and on an
ongoing basis, whether the derivatives that are used in hedging transactions are
highly effective in
offsetting changes in fair value or cash flows of hedged items.                                                                                                                                                                                                                                                                                                             
|
| |  | Pengrowth uses forward, futures and swap contracts to manage its exposure to
commodity price
fluctuations. The net receipts or payments arising from these contracts are
recognized in income as
a component of oil and gas sales during the same period as the corresponding
hedged position.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| |  | Foreign exchange translation gains and losses on foreign currency exchange
swaps used to hedge U.S.
dollar denominated natural gas sales are recognized in income as a component of
natural gas sales during
the same period as the corresponding hedged position.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |  | Interest rate swap agreements are used as part of Pengrowths program to manage
the fixed and floating
interest rate mix of Pengrowths total debt portfolio and related overall cost
of borrowing. The interest
rate swap agreements involve the periodic exchange of payments without the
exchange of the notional
principal amount upon which the payments are based, and are recorded as an
adjustment of interest
expense on the hedged debt instrument.                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | Measurement Uncertainty                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| |  | The preparation of financial statements in conformity with Canadian generally
accepted accounting
principles requires management to make estimates and assumptions that affect
the reported amounts
of assets and liabilities at the date of the financial statements and revenues
and expenses for the period
then ended.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | 66                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      





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PENGROWTH ENERGY TRUST



|   |  | The amounts recorded for depletion, depreciation and amortization of
injectants and the provision for
abandonment costs are based on estimates. The ceiling test calculation is
based on estimates of proved
reserves, production rates, oil and natural gas prices, future costs and
other relevant assumptions. By their
nature, these estimates are subject to measurement uncertainty and may
impact the consolidated financial
statements of future periods.                                                                                                                                                              
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | Earnings per Unit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  
|   |  | In calculating diluted net income per unit, Pengrowth follows the treasury
stock method to determine
the dilutive effect of stock options and other dilutive instruments. Under
the treasury stock method,
only in the moneydilutive instruments impact the diluted calculations.                                                                                                                                                                                                                                                                                                                                            
|  
|   |  | Comparative Figures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  
|   |  | Certain comparative figures have been reclassified to conform to the
presentation adopted in the current year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  
|3. |  | CHANGE IN ACCOUNTING POLICY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|   |  | Effective January 1, 2002, Pengrowth adopted the new standard on accounting
for options or similar
unit based compensation. Pengrowth prospectively adopted the new
standard. For options or similar
instruments granted to non-employees, an amount equal to the grant date
fair value of the instrument
will be recorded as a charge to earnings over the vesting period, if
any. The new standard also requires
recognition of compensation cost with respect to Stock Appreciation Rights
granted to employees. No
compensation cost results from application of the above provisions for the
year ended December 31, 2002.
|  
|   |  | For options or similar unit based compensation granted to employees of
Pengrowth, the standard provides
that Pengrowth may elect not to use the fair value method but to disclose
the impact of the fair value
method on a pro forma basis as discussed in Note 9.                                                                                                                                                                                                                                                                                                                                                             
|  
|4. |  | DISTRIBUTABLE INCOME                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

|                                                                  |                                                   |   |         |        |      |   |         |        |  
|----------------------------------------------------------------- | ------------------------------------------------- | - | ------- | ------ | ---- | - | ------- | ------ | -
|                                                                  |                                                   |   | 2002    |        | 2001
|                                                                  |                                                   |   |         |        |     
|Net income                                                        |                                                   | $ | 49,067  |        |      | $ | 85,150  |       
|Add (Deduct): Depletion, depreciation and future site restoration |                                                   |   | 152,229 |        |      |   | 132,737 |       
|                                                                  | Remediation expenses and trust fund contributions |   |         | (1,816 | )    |   |         | (2,117 | )
|                                                                  | Cash withheld to fund capital expenditures        |   |         | (5,022 | )    |   |         |       |  
|                                                                  | Other                                             |   |         |       |      |   |         | 17     |  
|                                                                  |                                                   |   |         |        |      |   |         |       
|Distributable income                                              |                                                   | $ | 194,458 |        |      | $ | 215,787 |       
|                                                                  |                                                   |   |         |        |      |   |         |       
|Distributable income per unit:                                    |                                                   |   |         |        |      |   |         |       
|                                                                  | Based on weighted-average units outstanding       |   | $       | 2.162  |      |   | $       | 3.043  |  
|                                                                  | Based on actual distributions paid or declared    |   | $       | 2.070  |      |   | $       | 3.010  |  
|                                                                  |                                                   |   |         |        |      |   |         |       



| |  | Pursuant to a Unitholder resolution on April 23, 2002, the Board of Directors of Pengrowth Corporation
may elect to retain up to 20 percent of gross revenues to provide for the payment of future capital
expenditures or for the payment of future distributions. Commencing with the January 15, 2003
distribution to unitholders, approximately 10 percent of funds available for distribution have been
withheld. Subject to the limit of 20 percent of gross revenues approved by unitholders, the Board of
Directors may elect to increase (or decrease) the amount withheld in the future.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|   |  | 2002 ANNUAL REPORT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|5. |  | REMEDIATION TRUST FUND                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  
|   |  | Pursuant to a Purchase and Sale Agreement dated August 15, 1997 between
Pengrowth and Imperial Oil
Resources (Imperial), a trust was established to fund certain remediation
obligations of the Judy Creek
and Swan Hills properties. ComputerShare Investor Services Inc. is the
trustee for the Remediation
Trust Fund. Pengrowth is required to make annual contributions of $250,000
to the Remediation Trust
Fund. In addition, Pengrowth makes a monthly trust fund contribution
equivalent to $0.10 per boe of
production from the Judy Creek properties.
|  
|   |  | Every five years Pengrowth must deliver a report to Imperial evaluating
the assets in the Trust Fund and
the outstanding remediation obligations, and make recommendations as to
whether contribution levels
should be changed. Pengrowth is currently in discussions with Imperial in
respect of required contributions
for 2003 and future periods. If Imperial does not consent to recommended
changes in the contribution
level, the matter may be arbitrated.                                                                                                
|  
|   |  | The following summarizes Pengrowths Remediation Trust Fund contributions
for 2002 and 2001 and
Pengrowths expenditures on remediation activities not covered by the
trust fund:                                                                                                                                                                                                                                                                                                                                                                                 

|                                                       |  |      |       |      |  |   |       | 
|------------------------------------------------------ |  | ---- | ----- | ---- |  | - | ----- | 
|                                                       |  | 2002 |       | 2001
|                                                       |  |      |       |     
|Contributions to Remediation Trust Fund                |  | $    | 893   |      |  | $ | 1,002 | 
|Remediation expenditures not covered by the Trust Fund |  |      | 923   |      |  |   | 1,115 | 
|                                                       |  |      |       |      |  |   |       | 
|                                                       |  | $    | 1,816 |      |  | $ | 2,117 | 
|                                                       |  |      |       |      |  |   |       | 



|6. |  | ACQUISITIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | In October 2002, Pengrowth acquired substantially all of the crude oil and
natural gas assets held by
Calpine Canada Natural Gas Partnership (Calpine) in northern British
Columbia for $377.4 million,
net of adjustments, with the consideration consisting of cash and the
tendering of debt securities of
Calpine Corporation and its subsidiaries purchased by Pengrowth on the
open market. Also in October
2002, Pengrowth sold to Progress Energy Ltd. for consideration of $25.4
million certain crude oil and
natural gas assets acquired from Calpine. The acquisition has been
accounted for by the purchase method
with the results of operations of the acquired assets included in the
financial statements from the date of
acquisition.
|  
|   |  | In June 2001, Pengrowth acquired an 8.4 percent royalty interest in Sable
Offshore Energy Project
(SOEP) for cash consideration of $252.0 million and forgiveness of a
note payable of $4.2 million. The
acquisition has been accounted for by the purchase method with the results
of operations of the
acquired assets included in the financial statements from the date of
acquisition.                                                                                                                                                                                                                                                                                                                                                             
|  
|   |  | 68                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        





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PENGROWTH ENERGY TRUST



| |  | The following unaudited pro forma information provides an indication of what Pengrowths results of
operations would have been had the acquisitions taken place on January 1.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                     |         |   |           |       |           |   |         |       | 
|-------------------- | ------- | - | --------- | ----- | --------- | - | ------- | ----- | 
|                     |         |   | 2002 (a)  |       | 2001 (b) 
|                     |         |   | Unaudited |       | Unaudited
|                     |         |   |           |       |          
|Oil and gas sales    |         | $ | 603,683   |       |           | $ | 717,542 |      
|Net income           |         | $ | 79,584    |       |           | $ | 188,839 |      
|Net income per unit: |         |   |           |       |           |   |         |      
|                     | Basic   |   | $         | 0.744 |           |   | $       | 1.976 | 
|                     | Diluted |   | $         | 0.743 |           |   | $       | 1.972 | 
|                     |         |   |           |       |           |   |         |      



| | (a) |  | assumes Calpine acquisition took
place on January 1, 2002.          
| | --- |  | --------------------------------------------------------------------
|
| | (b) |  | assumes Calpine and SOEP
acquisitions took place on January 1, 2001.



|7. |  | PROPERTY, PLANT AND EQUIPMENT
AND OTHER ASSETS
|-- |  | ----------------------------------------------

|                                                                 |                                        |   |           |           |      |   |           |           |  
|---------------------------------------------------------------- | -------------------------------------- | - | --------- | --------- | ---- | - | --------- | --------- | -
|                                                                 |                                        |   | 2002      |           | 2001
|                                                                 |                                        |   |           |           |     
|PROPERTY, PLANT AND EQUIPMENT                                    |                                        |   |           |           |      |   |           |          
|                                                                 | Property,
plant and equipment, at cost |   | $         | 1,987,341 |      |   | $         | 1,583,102 |  
|                                                                 | Accumulated depletion and depreciation |   |           | (576,473  | )    |   |           | (437,599  | )
|                                                                 |                                        |   |           |           |      |   |           |           |  
|Net book value of property, plant and equipment                  |                                        |   | 1,410,868 |           |      |   | 1,145,503 |          
|OTHER ASSETS                                                     |                                        |   |           |           |      |   |           |          
|                                                                 | Deferred injectant costs               |   |           | 33,800    |      |   |           | 63,023    |  
|                                                                 |                                        |   |           |           |      |   |           |           |  
|Net book value of property, plant and equipment and other assets |                                        | $ | 1,444,668 |           |      | $ | 1,208,526 |          
|                                                                 |                                        |   |           |           |      |   |           |           |  



|   |  | As at December 31, 2002, Pengrowth had a surplus in its ceiling test using year-end prices.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | Total estimated undiscounted future site restoration costs are approximately $225 million of which
$44 million has been accrued to date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|8. |  | LONG-TERM DEBT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|   |  | The Corporation has a $540 million revolving credit facility syndicated
among nine financial institutions
with an extendible 364-day revolving period and a three-year amortization
term period. In addition, it has
a $35 million demand operating line of credit. These facilities are
currently reduced by outstanding letters
of credit in the amount of approximately $33 million. For 2004, the
facilities will be reduced by a further
$25 million of letters of credit. Interest payable on amounts drawn is at
the prevailing bankersacceptance
rates plus stamping fees, lendersprime lending rates, or U.S. libor rates
plus applicable margins, depending
on the form of borrowing by the Corporation. The margins and stamping fees
vary from 0.25 percent to
1.50 percent depending on financial statement ratios and the form of
borrowing. Interest expense for the
year ended December 31, 2002 includes $15,400,161 in cash interest payments
(2001  $23,630,851).
|  
|   |  | The credit facility will revolve until June 22, 2003, whereupon it may be
renewed for a further 364 days,
subject to satisfactory review by the lenders, or converted into a term
facility with amounts outstanding
under the facility repayable in 12 equal quarterly instalments. The
Corporation can post, at its option,
security suitable to the banks in lieu of the first years payments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

69





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|   |  | 2002 ANNUAL REPORT                                             
|-- |  | ---------------------------------------------------------------
|  
|9. |  | TRUST UNITS                                                    
|  
|   |  | The authorized capital of Pengrowth is 500,000,000
trust units.

|                                                              |  |          |             |        |  |          |           |        |  |  |            |  |  |   |           |  
|------------------------------------------------------------- |  | -------- | ----------- | ------ |  | -------- | --------- | ------ |  |  | ---------- |  |  | - | --------- | -
|                                                              |  | 2002     |             | 2001  
|                                                              |  |          |             |       
|                                                              |  | Number   |             |        |  | Number   |           |       
|TRUST UNITS ISSUED                                            |  | of units |             | Amount |  | of units |           | Amount
|                                                              |  |          |             |        |  |          |           |       
|Balance, beginning of year                                    |  |          | 82,240,069  |        |  | $        | 1,280,599 |        |  |  | 63,852,198 |  |  | $ | 974,724   |  
|Issued for cash                                               |  |          | 28,125,000  |        |  |          | 404,350   |        |  |  | 17,622,500 |  |  |   | 311,974   |  
|Less: issue expenses                                          |  |          |            |        |  |          | (24,989   | )      |  |  |           |  |  |   | (18,727   | )
|Issued for cash on exercise of
stock options                  |  |          | 66,093      |        |  |          | 871       |        |  |  | 628,828    |  |  |   | 10,060    |  
|Issued for cash under Distribution
Reinvestment Plan (DRIP) |  |          | 131,165     |        |  |          | 1,895     |        |  |  | 136,543    |  |  |   | 2,568     |  
|                                                              |  |          |             |        |  |          |           |        |  |  |            |  |  |   |           |  
|Balance,end of year                                           |  |          | 110,562,327 |        |  | $        | 1,662,726 |        |  |  | 82,240,069 |  |  | $ | 1,280,599 |  
|                                                              |  |          |             |        |  |          |           |        |  |  |            |  |  |   |           |  



| |  | Pursuant to the terms of the Royalty Indenture and the Trust Indenture, there is
attached to each royalty
unit granted by the Corporation the right to exchange such royalty unit for an
equivalent number of
trust units. ComputerShare, as Trustee, has reserved 18,940 trust units for such
future conversion.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Distribution Reinvestment Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | The Distribution Reinvestment Plan (DRIP) entitles unitholders to reinvest
cash distributions in
additional units of EnergyTrust. During 2002, the trust units under the plan were
acquired in the open
market at prevailing market prices or issued from treasury at the
weighted-average price of all EnergyTrust
units traded on the Toronto Stock Exchange for the 20 trading days preceding a
distribution payment date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | The DRIP was amended effective January 2003. The trust units under the amended
plan will normally
be issued from treasury at a 5 percent discount to the weighted-average price
of all EnergyTrust units
traded on the Toronto Stock Exchange and the New York Stock Exchange for the 20
trading days
preceding a distribution payment date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  | Trust Unit Option Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | Pengrowth has a trust unit option plan under which directors, officers, employees
and special consultants
of the Corporation and the Manager are eligible to receive options. Amendments
to the trust unit
option plan were approved by trust unitholders at the annual meeting of
Pengrowth unitholders on
April 23, 2002. The maximum number of units which may be reserved for issuance
under the Trust
Unit Option Plan or the Rights Incentive Plan has been increased from 7 million
to 10 million, provided
that the number of options and rights granted does not exceed 10 percent of
issued and outstanding
trust units. The expiry date for all issued and unexercised options, and any
options subsequently granted
under the plan, has increased from five to seven years. One third of the options
vest on the grant date,
one third on the first anniversary of the date of grant, and the remaining third
on the second anniversary.
As at December 31, 2002, options to purchase 4,451,131 trust units were
outstanding (2001  3,106,635)
that expire at various dates to June 28, 2009.
|
| |  | 70                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        





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PENGROWTH ENERGY TRUST

|                                 |  |            |           |                  |  |            |       |                  |  |  |           |   |  |   |       | 
|-------------------------------- |  | ---------- | --------- | ---------------- |  | ---------- | ----- | ---------------- |  |  | --------- | - |  | - | ----- | 
|                                 |  | 2002       |           | 2001            
|                                 |  |            |           |                 
|                                 |  | Number     |           | Weighted-Average |  | Number     |       | Weighted-Average
|TRUST UNIT OPTIONS               |  | of options |           | Exercise Price   |  | of options |       | Exercise Price  
|                                 |  |            |           |                  |  |            |       |                 
|Outstanding at beginning of year |  |            | 3,106,635 |                  |  | $          | 17.78 |                  |  |  | 2,893,554 |   |  | $ | 17.45 | 
|Granted                          |  |            | 1,895,603 |                  |  |            | 15.14 |                  |  |  | 905,979   |   |  |   | 17.66 | 
|Exercised                        |  |            | (66,093   | )                |  |            | 13.17 |                  |  |  | (628,828  | ) |  |   | 16.00 | 
|Cancelled                        |  |            | (485,014  | )                |  |            | 17.23 |                  |  |  | (64,070   | ) |  |   | 18.98 | 
|                                 |  |            |           |                  |  |            |       |                  |  |  |           |   |  |   |       | 
|Outstanding at year-end          |  |            | 4,451,131 |                  |  | $          | 16.78 |                  |  |  | 3,106,635 |   |  | $ | 17.78 | 
|                                 |  |            |           |                  |  |            |       |                  |  |  |           |   |  |   |       | 
|Exercisable at year-end          |  |            | 3,715,271 |                  |  | $          | 17.04 |                  |  |  | 2,238,406 |   |  | $ | 17.69 | 
|                                 |  |            |           |                  |  |            |       |                  |  |  |           |   |  |   |       | 



| |  | The following table summarizes
information about trust unit options outstanding at December 31, 2002:
| |  | -----------------------------------------------------------------------------------------------------

|                 |  |                     |           |                     |  |                  |     |             |       |                  |       |  |         |  |           |   |       |   |       | 
|---------------- |  | ------------------- | --------- | ------------------- |  | ---------------- | --- | ----------- | ----- | ---------------- | ----- |  | ------- |  | --------- | - | ----- | - | ----- | 
|                 |  | Options Outstanding |           | Options Exercisable
|                 |  |                     |           |                    
|                 |  | Number              |           | Weighted-Average    |  |                  |     | Number      |       |                 
|Range of         |  | Outstanding         |           | Remaining           |  | Weighted-Average |     | Exercisable |       | Weighted-Average
|Exercise Prices  |  | At 12/31/02         |           | Contractual Life    |  | Exercise Price   |     | At 12/31/02 |       | Exercise Price  
|                 |  |                     |           |                     |  |                  |     |             |       |                 
|$12.00 to $14.99 |  |                     | 747,759   |                     |  | 5.5 years        |     | $           | 13.05 |                  |       |  | 524,888 |  |           | $ | 12.96 |  
|$15.00 to $16.99 |  |                     | 907,947   |                     |  |                  | 5.1 |             |       |                  | 15.12 |  |         |  | 666,542   |   |       |   | 15.16 | 
|$17.00 to $17.99 |  |                     | 1,673,102 |                     |  |                  | 3.6 |             |       |                  | 17.49 |  |         |  | 1,419,068 |   |       |   | 17.49 | 
|$18.00 to $20.50 |  |                     | 1,122,323 |                     |  |                  | 3.8 |             |       |                  | 19.55 |  |         |  | 1,104,773 |   |       |   | 19.54 | 
|                 |  |                     |           |                     |  |                  |     |             |       |                  |       |  |         |  |           |   |       |   |       | 
|$12.00 to $20.50 |  |                     | 4,451,131 |                     |  |                  | 4.2 |             |       | $                | 16.78 |  |         |  | 3,715,271 |   |       | $ | 17.04 | 
|                 |  |                     |           |                     |  |                  |     |             |       |                  |       |  |         |  |           |   |       |   |       | 



| |  | Employee Trust Unit Rights Incentive Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | On April 23, 2002, a special resolution was passed to approve the adoption of an
Employee Trust Unit
Rights Incentive Plan (Rights Incentive Plan), pursuant to which rights to
acquire Pengrowth trust
units may be granted to the directors, officers, employees, and special
consultants of the Corporation
and the Manager. Under the Rights Incentive Plan, distributions per trust unit to
trust unitholders in a
calendar quarter which represent a return of more than 2.5 percent of the net
property, plant and
equipment at the end of such calendar quarter result in a reduction in the
exercise price. One third of
the rights granted under the Rights Incentive Plan vest on the grant date, one
third on the first
anniversary date of the grant and the remaining on the second anniversary. The
rights have an expiry
date of five years from the date of grant.
|
| |  | In 2002, a total of 1,964,100 rights were granted at a weighted-average initial
exercise price of $13.61.
Of the rights granted, 654,700 rights have vested. None of the rights were
exercised or cancelled during
2002. The rights expire at various dates to November 7, 2007. As at December
31, 2002, the weighted-
average exercise price of the rights is $13.29.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  | Fair Value of Unit Based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| |  | Had compensation cost for options and rights granted to employees been
calculated based on the fair
value method, net income would be reduced as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

71





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2002 ANNUAL REPORT

|                                                     |         |   |        |       | 
|---------------------------------------------------- | ------- | - | ------ | ----- | 
|Net income as reported                               |         | $ | 49,067 |      
|Compensation cost related to options granted in 2002 |         |   | (899   | )    
|Compensation cost related to rights granted in 2002  |         |   | (1,224 | )    
|                                                     |         |   |        |      
|Pro forma net income                                 |         | $ | 46,944 |      
|                                                     |         |   |        |      
|Pro forma net income per unit:                       |         |   |        |      
|                                                     | Basic   |   | $      | 0.522 | 
|                                                     | Diluted |   | $      | 0.522 | 



| |  | The weighted-average fair market value of options granted during the year ended
December 31, 2002
was $0.73 per option using the Black-Scholes option pricing model with the
following weighted-average
assumptions: risk-free interest rate of 4.4 percent, dividend yield of 13
percent, expected volatility of
27 percent, and expected life of five years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | The exercise price of the rights granted under the Rights Incentive Plan may be
reduced in future
periods in accordance with the terms of the rights plan. The amount of the
reduction cannot be
reasonably determined as it is dependent upon a number of factors including, but
not limited to, future
production of crude oil and natural gas, future prices received on the sale of
crude oil and natural gas,
determination of the amounts to be withheld from future distributions to fund
capital expenditures and
the purchase and sale of property, plant and equipment. As it is not possible to
determine the fair value
of rights granted under the plan, compensation cost for pro forma disclosure has
been determined based
on the excess of the unit price over the exercise price at the date of the
financial statements.
|
| |  | Share Appreciation Rights                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  | On October 15, 2002, all of
the 426,000 Share Appreciation Rights (SARs) held
by an officer of
Pengrowth were converted into an equal number of options under the Trust Unit
Option Plan. These
options have a weighted-average exercise price of $18.39, are fully vested and
have expiry dates ranging
from October 15 to December 1, 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | The SARs granted the right to receive a Payment Amount equal to any increase in
the market price of
the 426,000 trust units above the exercise price. Pengrowth, at its option, could
have satisfied this
Payment Amount with either a cash payment or the issue of trust units from
treasury based on market
prices at the time of exercise. The new standard for stock based compensation
required the recognition
of compensation expense equal to the amount of the excess of the market price
above the exercise
price for SARs. No compensation cost was recognized for the year ended December
31, 2002.                                                                                                                                                                                                                            
|
| |  | Trust Unit Savings Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | Pengrowth has a trust unit savings plan whereby qualifying employees may
contribute from 1 to 10
percent of their basic annual salary. Employee contributions are invested in
trust units purchased on the
open market. Pengrowth matches the employeescontribution, investing in
additional trust units
purchased on the open market. Pengrowths share of contributions is recorded as
compensation expense
and amounted to $844,213 in 2002 (2001  $729,730).                                                                                                                                                                                                                                                                                                                                                                         
|
| |  | 72                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         





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PENGROWTH ENERGY TRUST



|    |  | Trust Unit Margin Purchase Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | Pengrowth has a plan whereby the Manager, and employees, directors, and
certain consultants of
Corporation can purchase trust units and finance up to 75 percent of the
purchase price through an
investment dealer, subject to certain participation limits and
restrictions. Participants maintain personal
margin accounts with the investment dealer and are responsible for all
interest costs and obligations with
respect to their margin loans. The Corporation has provided a $5 million
letter of credit to the investment
dealer to guarantee amounts owing with respect to the plan. The amount of
the letter of credit may
fluctuate depending on the amounts financed pursuant to the plan. At
December 31, 2002, 2,529,698
trust units were deposited under the plan (2001  2,446,896) with a market
value of $37.3 million
(2001  $34.8 million) and a corresponding margin loan of $11.3 million
(2001  $13.9 million).
|   
|    |  | Redemption Rights                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|    |  | Trust units are redeemable at the request of a unitholder. The redemption
right permits unitholders in
the aggregate to redeem a maximum of $25,000 of trust units in a month.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|10. |  | CHANGE IN NON-CASH OPERATING
WORKING CAPITAL                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

|                                         |  |      |         |      |  |   |         |  
|---------------------------------------- |  | ---- | ------- | ---- |  | - | ------- | -
|                                         |  | 2002 |         | 2001
|                                         |  |      |         |     
|Accounts receivable                      |  | $    | (13,567 | )    |  | $ | 5,244   |  
|Inventory                                |  |      | 1,386   |      |  |   | 5,822   |  
|Accounts payable and accrued liabilities |  |      | 11,738  |      |  |   | (12,567 | )
|Due to Pengrowth Management Limited      |  |      | 563     |      |  |   | (1,418  | )
|                                         |  |      |         |      |  |   |         |  
|                                         |  | $    | 120     |      |  | $ | (2,919  | )
|                                         |  |      |         |      |  |   |         |  



| |  | CHANGE IN NON-CASH INVESTING WORKING CAPITAL
| |  | --------------------------------------------

|                                      |  |      |    |      |  |   |       | 
|------------------------------------- |  | ---- | -- | ---- |  | - | ----- | 
|                                      |  | 2002 |    | 2001
|                                      |  |      |    |     
|Accounts payable for capital accruals |  | $    | (5 | )    |  | $ | 3,530 | 
|                                      |  |      |    |      |  |   |       | 



|11. |  | INCOME TAXES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | In 2002, the cost basis for income tax purposes of property, plant and
equipment exceeded the net book
value by approximately $149 million (2001  $153 million) principally as a
result of the acquisition of
oil and natural gas properties during prior years. A future tax asset of
$66 million (2001  $69 million)
has been reduced to nil through a valuation allowance of $66 million (2001
- $69 million).                                                                                                    
|   
|    |  | In 2002, the Corporation made cash payments of $1,840,000 in respect of
capital taxes (2001  $2,702,000).                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|12. |  | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|    |  | Pengrowth Management Limited provides certain services pursuant to a
management agreement for
which Pengrowth was charged $2,474,110 (2001  $2,235,224) for acquisition
fees and $6,567,055
(2001  $7,120,419) for a management fee. The law firm controlled by the
corporate secretary and a
corporate finance firm controlled by a member of the immediate family of
the corporate secretary
charged $698,748 (2001  $1,661,100) for legal and advisory services
provided to Pengrowth by the
corporate secretary.

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|    |  | 2002 ANNUAL REPORT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|13. |  | AMOUNTS PER UNIT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|    |  | The per unit amounts for net income and distributable income are based on
weighted-average units
outstanding for the year. The weighted-average units outstanding for 2002
were 89,922,886 units
(2001  70,910,746 units). In computing diluted net income per unit, 69,398
units were added to the
weighted-average number of units outstanding during the year ended
December 31, 2002 (2001  205,453)
for the dilutive effect of stock options and rights under the new Rights
Incentive Plan. The per unit
amount of distributions paid or declared reflect actual distributions paid
or declared based on units
outstanding at the time.
|   
|    |  | Distributions are declared payable during the month following the month in
which the distributions
were earned. Distributions are paid to unitholders on the 15th day of the
second month after the
distributions are earned. As at December 31, 2002, there was a balance of
$1,063,013 or $0.010 per unit
that had been earned but had not yet been paid or declared (2001 -
$823, 334 or $0.010 per unit).                                                                                                                                                                                                                                  
|   
|14. |  | FINANCIAL INSTRUMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|    |  | Interest Rate Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|    |  | Interest rate swap agreements are used as part of Pengrowths program to
manage the fixed and floating
interest rate mix of Pengrowths total debt portfolio and related overall
cost of borrowing. As at
December 31, 2002, Pengrowth had entered into interest rate swaps on $125
million of its long-term
debt for periods of three years ending November 30, 2004 ($75
million), December 31, 2004 ($25 million)
and March 4, 2005 ($25 million) at an average interest rate of 4.09 percent
(before stamping fees).                                                                                                                       
|   
|    |  | The estimated fair value of the interest rate swaps has been determined
based on the amount that
Pengrowth would receive or pay to terminate the contracts at year-end. At
December 31, 2002, the
amount that Pengrowth would pay to terminate the interest rate swaps is
$2,116,000.                                                                                                                                                                                                                                                                                                                                                          
|   
|    |  | Foreign Currency Exchange Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|    |  | Pengrowth is exposed to foreign currency fluctuations as crude oil and
natural gas prices received are
referenced to U.S. dollar denominated prices. Pengrowth has mitigated some
of this exchange risk by
entering into fixed Canadian dollar crude oil and natural gas price swaps
as outlined in the forward and
futures contracts section below.                                                                                                                                                                                                                                                                                           
|   
|    |  | Pengrowth entered into a foreign exchange swap which fixed the Canadian to
U.S. dollar exchange rate
at Cdn$1.55 per U.S.$1 on U.S.$750,000 per month effective 2003 and 2004.
This swap has mitigated a
portion of the exchange risk on U.S. dollar denominated natural gas
sales. The estimated fair value of
the foreign exchange swap has been determined based on the amount
Pengrowth would receive or pay
to terminate the contract at year-end. At December 31, 2002, the amount
Pengrowth would pay to
terminate the foreign exchange swap would be Cdn$885,000.                                                                      
|   
|    |  | Credit Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|    |  | Pengrowth sells a significant portion of its oil and gas to commodity
marketers, and the accounts
receivable are subject to normal industry credit risks. The use of
financial swap agreements involves a
degree of credit risk that Pengrowth manages through its credit policies
which are designed to limit
eligible counterparties to those with A credit ratings or better.                                                                                                                                                                                                                                                             
|   
|    |  | 74                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             





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PENGROWTH ENERGY TRUST



| |  | Forward and Futures Contracts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Pengrowth has a price risk management program whereby the commodity price
associated with a
portion of its future production is fixed. Pengrowth sells forward a portion of
its future production
through a combination of fixed price sales contracts with customers and
commodity swap agreements
with financial counterparties. The forward and futures contracts are subject to
market risk from
fluctuating commodity prices and exchange rates. However, gains or losses on the
contracts are offset by
changes in the value of Pengrowths production.
|
| |  | As at December 31, 2002, Pengrowth had fixed the price applicable to future
production as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | Financial Swap Contracts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

|     |  |           |        |             |  |           |       |             |  |  |       |  |  |  |                 | 
|---- |  | --------- | ------ | ----------- |  | --------- | ----- | ----------- |  |  | ----- |  |  |  | --------------- | 
|     |  | Crude Oil |        | Natural Gas
|     |  |           |        |            
|     |  | Volume    |        | Price       |  | Volume    |       |            
|     |  | (bbl/d)   |        | (Cdn$/bbl)  |  | (mmbtu/d) |       | Fixed Price
|     |  |           |        |             |  |           |       |            
|2003 |  |           | 10,000 |             |  | $         | 41.00 |             |  |  | 7,000 |  |  |  | U.S.$3.90/mmbtu | 
|     |  |           |        |             |  |           |       |             |  |  | 9,788 |  |  |  | Cdn$7.62/mmbtu  | 
|2004 |  |           | 6,500  |             |  | $         | 37.83 |             |  |  | 7,000 |  |  |  | U.S.$3.90/mmbtu | 
|     |  |           |        |             |  |           |       |             |  |  | 5,000 |  |  |  | Cdn$6.90/mmbtu  | 



|    |  | As well, Pengrowth had natural gas fixed price sales contracts which fixed
the price on 11,848 mcf per
day for 2003 at a price of Cdn$5.96 per mcf.                                                                                                                                                                                                                            
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | The estimated fair value of all crude oil and natural gas contracts have
been determined based on the
amounts Pengrowth would receive or pay to terminate the contracts at
year-end. At December 31, 2002,
the amount Pengrowth would pay if the crude oil and natural gas contracts
were terminated would be
$5,697,000 and $14,920,000, respectively.                        
|   
|    |  | Fair Value of Financial Instruments                                                                                                                                                                                                                                                                                                                                            
|   
|    |  | The carrying value of financial instruments included in the balance
sheet, other than bank debt,
remediation trust fund and marketable securities, approximates their fair
value due to their short maturity.
The fair value of the marketable securities at December 31, 2002 was
$2,177,000. The fair value of the
Remediation Trust Fund was $7,193,000 (2001  $6,473,000).
|   
|15. |  | COMMITMENTS                                                                                                                                                                                                                                                                                                                                                                    
|   
|    |  | Pengrowth has future commitments under various agreements for the purchase
of oil and natural gas
pipeline transportation, carbon dioxide and operating leases. The commitment
to purchase carbon dioxide arises as a result of Pengrowths working interest in the Weyburn
CO2 project.                                                                                       

|                        |  |      |        |      |  |      |        |      |  |      |        |            |  |       |        |  |  |   |        |  |  |   |        |  |  |   |         | 
|----------------------- |  | ---- | ------ | ---- |  | ---- | ------ | ---- |  | ---- | ------ | ---------- |  | ----- | ------ |  |  | - | ------ |  |  | - | ------ |  |  | - | ------- | 
|                        |  | 2003 |        | 2004 |  | 2005 |        | 2006 |  | 2007 |        | Thereafter |  | Total
|                        |  |      |        |      |  |      |        |      |  |      |        |            |  |      
|Pipeline transportation |  | $    | 30,709 |      |  | $    | 29,719 |      |  | $    | 28,411 |            |  | $     | 27,509 |  |  | $ | 24,619 |  |  | $ | 48,981 |  |  | $ | 189,948 | 
|CO2 purchases           |  |      | 2,839  |      |  |      | 6,104  |      |  |      | 7,314  |            |  |       | 6,409  |  |  |   | 5,327  |  |  |   | 38,655 |  |  |   | 66,648  | 
|Other commitments       |  |      | 1,104  |      |  |      | 905    |      |  |      | 845    |            |  |       | 400    |  |  |   | 46     |  |  |   |       |  |  |   | 3,300   | 
|                        |  |      |        |      |  |      |        |      |  |      |        |            |  |       |        |  |  |   |        |  |  |   |        |  |  |   |         | 
|                        |  | $    | 34,652 |      |  | $    | 36,728 |      |  | $    | 36,570 |            |  | $     | 34,318 |  |  | $ | 29,992 |  |  | $ | 87,636 |  |  | $ | 259,896 | 
|                        |  |      |        |      |  |      |        |      |  |      |        |            |  |       |        |  |  |   |        |  |  |   |        |  |  |   |         | 

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|    |  | 2002 ANNUAL REPORT                                                                                                                                                                                                                                                  
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|16. |  | RECONCILIATION OF FINANCIAL STATEMENTS TO UNITED STATES GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES                                                                                                                                                                    
|   
|    |  | The significant differences between Canadian generally accepted accounting
principles (Canadian
GAAP) which, in most respects, conform to generally accepted accounting
principles in the United
States (U.S. GAAP), as they apply to Pengrowth, are as follows:



| | (a) |  | As required annually under U.S. GAAP, the carrying value of petroleum
and natural gas properties
and related facilities, net of future or deferred income taxes, is limited
to the present value of after
tax future net revenue from proven reserves, discounted at 10 percent
(based on prices and costs at
the balance sheet date), plus the lower of cost and fair value of unproven
properties. Under Canadian
GAAP, this ceiling test is calculated without application of a discount
factor. At December 31, 1998
and 1997, the application of the full cost ceiling test under U.S. GAAP
resulted in a write-down of
capitalized costs of $328.6 million and $49.8 million, respectively. At
December 31, 2002 and 2001,
the application of the full cost ceiling test under U.S. GAAP did not
result in a write-down of
capitalized costs.                                                                                                                                                                                                                                                                                                                                       
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     |  | Where the amount of a ceiling test write-down under Canadian GAAP differs
from the amount of
the write-down under U.S. GAAP, the charge for depletion, depreciation, and
amortization will
differ in subsequent years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| | (b) |  | Under U.S. GAAP, the provision for abandonment costs is recorded as a
reduction of capital assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| | (c) |  | Under U.S. GAAP, interest and other income would not be included as a
component of net revenue.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| | (d) |  | Effective January 1, 2002, Pengrowth adopted the new standard for
accounting for stock-based
compensation. The standards under Canadian GAAP are consistent with those
required under SFAS
123 (Accounting for Stock-Based Compensation). As permitted, Pengrowth has
elected to continue
to follow the intrinsic value method of accounting for stock-based
compensation arrangements and
to disclose the impact of the fair value method on a pro forma
basis. Retroactive application was
not required for options granted prior to the date of adoption under
Canadian standards. Therefore
the pro forma effect of options granted prior to the date of adoption will
continue to be a difference
under U.S. GAAP until the compensation cost related to those options has
been fully recognized.
Had compensation cost for Pengrowths stock options been determined based
on the fair market value
at the grant dates of the awards consistent with methodology prescribed by
SFAS 123, Accounting
for Stock-Based Compensation, Pengrowths net income and net income per
unit for years ended
December 31, 2002 and 2001 would have been the pro forma amounts indicated
below:

|                         |             |      |   |        |  |  |   |         | 
|------------------------ | ----------- | ---- | - | ------ |  |  | - | ------- | 
|Years ended December 31, |             | 2002 |   | 2001  
|                         |             |      |   |       
|Net income:              |             |      |   |        |  |  |   |        
|                         | As reported |      | $ | 73,246 |  |  | $ | 110,748 | 
|                         | Pro forma   |      |   | 72,356 |  |  |   | 110,457 | 
|Net income per unit:     |             |      |   |        |  |  |   |        
|                         | As reported |      | $ | 0.81   |  |  | $ | 1.56    | 
|                         | Pro forma   |      |   | 0.80   |  |  |   | 1.56    | 

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| |     |  | The weighted-average fair market value of options granted in 2002 and 2001
was $0.73 and $0.50
per option respectively. The fair value of each option granted was
estimated on the date of grant
using the Modified Black-Scholes option-pricing model with the following
assumptions for 2002
and 2001 respectively: risk-free interest rate of 4.4 and 4
percent, dividend yield of 13.0 and 14.0
percent, volatility of 27 percent in both years, and expected life of five
years in both years.                                                                                                                                                                                                                                                                                                
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     |  | Under U.S. GAAP, recognition of compensation cost over the vesting period is
required for variable
priced stock-based compensation plans such as the Rights Incentive
Plan. Compensation cost is
based on the excess of the unit price over the exercise price at the date
of the financial statements.
Application of this provision results in a compensation cost of $1,224,000
for the year ended
December 31, 2002.                                                                                                                                                                                                                                                                                                                                                                           
|
| |     |  | APB 25 also requires recognition of compensation cost with respect to
Stock Appreciation Rights
granted to employees. No compensation cost results from application of the
above provisions for the
years ended December 31, 2002 and 2001. Effective October 15, 2002, all
outstanding Stock Appreciation
Rights were converted to an equal number of options under the Trust Unit
Option Plan.                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | (e) |  | Marketable securities held by Pengrowth are classified as
available-for-sale in accordance with
definitions of SFAS 115. Under provisions of this
Statement, available-for-sale securities are reported
at the fair value, with unrealized holding gains and losses included in
comprehensive income and
reported as a separate component of unitholdersequity until realized.                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| | (f) |  | SFAS 130 requires the reporting of comprehensive income in addition to
net earnings.
Comprehensive income includes net income plus other comprehensive
income; specifically, all
changes in equity of a company during a period arising from non-owner
sources.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| | (g) |  | Statement of Financial Accounting Standards No. 133, Accounting for
Derivative Instruments and
Hedging Activities (SFAS 133), is effective for all fiscal years beginning
after June 15, 2000.
Pengrowth has implemented the standards set out in SFAS 133 for the fiscal
year commencing
January 1, 2001, with no restatement of prior periods. SFAS 133 establishes
new accounting and
reporting standards for derivative instruments and for hedging
activities. This statement requires an
entity to establish, at the inception of a hedge, the method it will use for
assessing the effectiveness
of the hedging derivative and the measurement approach for determining the
ineffective aspect of
the hedge. Those methods must be consistent with the entitys approach to
managing risk.
|
| |     |  | On initial adoption of SFAS No. 133 on January 1, 2001, additional
liabilities of $2.1 million were
recorded for U.S. GAAP purposes to reflect the fair value of derivatives
designated as cash flow
hedges. A charge of $2.1 million relating to the fair value of these hedges
was recognized in other
comprehensive income as the cumulative effect of the initial adoption of
SFAS No. 133.                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |     |  | At December 31, 2002, $17,824,000 has been recorded as a liability in
respect of the fair value of
crude oil and natural gas hedges outstanding at year-end with a
corresponding decrease in accumulated
other comprehensive income. Of the liability, $12,666,000 has been
classified as current and
$5,158,000 has been classified as long-term. At December 31, 2001, $2,522,000
has been recorded
as an asset in respect of fair value of crude oil and natural gas hedges
outstanding at year-end with a
corresponding increase in accumulated other comprehensive income. These
amounts will be
amortized against crude oil and natural gas sales over the remaining terms
of the related hedges.                                                                                            

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| |  |  | Also at December 31, 2002, a liability of $2,116,000 has been recorded in
respect of the fair value
of interest rate swaps outstanding at year-end with a corresponding
decrease in accumulated other
comprehensive income. Of this liability, $1,445,000 has been classified as
current and $671,000 has
been classified as long-term. At December 31, 2001, a liability of $328,000
has been recorded in
respect of the fair value of interest rate swaps outstanding at year-end
with a corresponding decrease
in accumulated other comprehensive income.
| |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | At December 31, 2002, a liability of $885,000 has been recorded in respect
of the fair value of a
foreign exchange swap outstanding at year-end with a corresponding
decrease in accumulated other
comprehensive income. Of this liability, $351,000 has been classified as
current and $534,000 has been
classified as long-term. There were no foreign exchange swaps outstanding
as at December 31, 2001.                                                                                                                                                
|
| |  |  | At December 31, 2002, $960,000 has been recorded as a current liability with
respect to the
ineffective portion of crude oil and natural gas hedges outstanding at
year-end, with a corresponding
decrease to net income for the year ended December 31, 2002.                                                                                                                                                                                                                                                                                              

Consolidated Statements of Income

The application of U.S. GAAP would have the following effect on net earnings as
reported:

Stated in thousands of Canadian Dollars, except per unit amounts

|                                     |                                                                          |      |        |         |   |   |         |        |  
|------------------------------------ | ------------------------------------------------------------------------ | ---- | ------ | ------- | - | - | ------- | ------ | -
|Years ended December 31,             |                                                                          | 2002 |        | 2001   
|                                     |                                                                          |      |        |        
|Net income for the year, as reported |                                                                          | $    | 49,067 |         |   | $ | 85,150  |       
|Adjustments:                         |                                                                          |      |        |         |   |   |         |       
|                                     | Depletion and depreciation (a)                                           |      |        | 26,363  |   |   |         | 25,598 |  
|                                     | Compensation cost (d)                                                    |      |        | (1,224  | ) |   |         |       |  
|                                     | Unrealized loss on ineffective portion
of oil and natural gas hedges (g) |      |        | (960    | ) |   |         |       |  
|                                     |                                                                          |      |        |         |   |   |         |       
|Net income for the year  U.S. GAAP  |                                                                          | $    | 73,246 |         |   | $ | 110,748 |       
|Other comprehensive income:          |                                                                          |      |        |         |   |   |         |       
|                                     | Unrealized gain on available-for-sale securities (e)(f)                  |      |        | 271     |   |   |         |       |  
|                                     | Cumulative effect of the initial adoption
of SFAS No. 133 (f)(g)         |      |        |        |   |   |         | (2,128 | )
|                                     | Unrealized hedging gains (f)(g)                                          |      |        |        |   |   |         | 4,650  |  
|                                     | Unrealized hedging losses (f)(g)                                         |      |        | (23,019 | ) |   |         | (328   | )
|                                     |                                                                          |      |        |         |   |   |         |       
|Comprehensive income  U.S. GAAP     |                                                                          | $    | 50,498 |         |   | $ | 112,942 |       
|                                     |                                                                          |      |        |         |   |   |         |       
|Net income per unit  U.S. GAAP:     |                                                                          |      |        |         |   |   |         |       
|                                     | Basic                                                                    |      | $      | 0.81    |   |   | $       | 1.56   |  
|                                     | Diluted                                                                  |      | $      | 0.81    |   |   | $       | 1.56   |  

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PENGROWTH ENERGY TRUST

Consolidated Balance Sheets

The application of U.S. GAAP would have the following effect on the Balance Sheets as reported:

Stated in thousands of Canadian Dollars

|                     |                                                  |          |    |            |          |           |          |          |   |  |   |           |  
|-------------------- | ------------------------------------------------ | -------- | -- | ---------- | -------- | --------- | -------- | -------- | - |  | - | --------- | -
|                     |                                                  |          | As |            | Increase |           |         
|December
31, 2002    |                                                  | Reported |    | (Decrease) |          | U.S. GAAP
|                     |                                                  |          |    |            |          |          
|Assets:              |                                                  |          |    |            |          |           |          |          |   |  |   |          
|                     | Marketable securities (e)                        |          | $  | 1,906      |          |           | $        | 271      |   |  | $ | 2,177     |  
|                     | Capital assets (a)(b)                            |          |    | 1,444,668  |          |           |          | (314,280 | ) |  |   | 1,130,388 |  
|                     |                                                  |          |    |            |          |           |          |          |   |  |   |           |  
|                     |                                                  |          |    |            |          | $         | (314,009 | )        |   |  |   |          
|                     |                                                  |          |    |            |          |           |          |          |   |  |   |          
|Liabilities:         |                                                  |          |    |            |          |           |          |          |   |  |   |          
|                     | Accounts payable and accrued liabilities (d)(g)  |          | $  | 43,092     |          |           | $        | 960      |   |  | $ | 44,052    |  
|                     | Current portion of unrealized hedging loss (g)   |          |    |           |          |           |          | 14,462   |   |  |   | 14,462    |  
|                     | Long-term portion of unrealized hedging loss (g) |          |    |           |          |           |          | 6,363    |   |  |   | 6,363     |  
|                     | Provision for abandonment costs (b)              |          |    | 44,339     |          |           |          | (44,339  | ) |  |   |          |  
|Unitholders equity: |                                                  |          |    |            |          |           |          |          |   |  |   |          
|                     | Other comprehensive income (f)(g)                |          |    |           |          |           |          | (20,554  | ) |  |   | (20,554   | )
|                     | Trust Unitholders Equity (a)                    |          |    | 1,053,939  |          |           |          | (270,901 | ) |  |   | 783,038   |  
|                     |                                                  |          |    |            |          |           |          |          |   |  |   |           |  
|                     |                                                  |          |    |            |          | $         | (314,009 | )        |   |  |   |          
|                     |                                                  |          |    |            |          |           |          |          |   |  |   |          
|December 31, 2001    |                                                  |          |    |            |          |           |          |          |   |  |   |          
|Assets:              |                                                  |          |    |            |          |           |          |          |   |  |   |          
|                     | Capital assets (a)(b)                            |          | $  | 1,208,526  |          |           | $        | (328,895 | ) |  | $ | 879,631   |  
|                     | Unrealized hedging gain (g)                      |          |    |           |          |           |          | 2,522    |   |  |   | 2,522     |  
|                     |                                                  |          |    |            |          |           |          |          |   |  |   |           |  
|                     |                                                  |          |    |            |          | $         | (326,373 | )        |   |  |   |          
|                     |                                                  |          |    |            |          |           |          |          |   |  |   |          
|Liabilities:         |                                                  |          |    |            |          |           |          |          |   |  |   |          
|                     | Provision for abandonment costs (b)              |          | $  | 32,591     |          |           | $        | (32,591  | ) |  | $ |          |  
|                     | Unrealized hedging loss (g)                      |          |    |           |          |           |          | 328      |   |  |   | 328       |  
|Unitholders equity: |                                                  |          |    |            |          |           |          |          |   |  |   |          
|                     | Other comprehensive income (f)(g)                |          |    |           |          |           |          | 2,194    |   |  |   | 2,194     |  
|                     | Trust Unitholders Equity (a)                    |          |    | 817,203    |          |           |          | (296,304 | ) |  |   | 520,899   |  
|                     |                                                  |          |    |            |          |           |          |          |   |  |   |           |  
|                     |                                                  |          |    |            |          | $         | (326,373 | )        |   |  |   |          
|                     |                                                  |          |    |            |          |           |          |          |   |  |   |          

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2002 ANNUAL REPORT

Additional Disclosures Required
under U.S. GAAP

The components of accounts receivable are as follows:

|            |  |      |        |      |  |   |        | 
|----------- |  | ---- | ------ | ---- |  | - | ------ | 
|December 31 |  | 2002 |        | 2001
|            |  |      |        |     
|Trade       |  | $    | 35,148 |      |  | $ | 20,292 | 
|Prepaids    |  |      | 5,084  |      |  |   | 3,968  | 
|Other       |  |      | 1,194  |      |  |   | 3,599  | 
|            |  |      |        |      |  |   |        | 
|            |  | $    | 41,426 |      |  | $ | 27,859 | 
|            |  |      |        |      |  |   |        | 

The components of accounts payable and accrued liabilities are as follows:

|                    |  |      |        |      |  |   |        | 
|------------------- |  | ---- | ------ | ---- |  | - | ------ | 
|December 31         |  | 2002 |        | 2001
|                    |  |      |        |     
|Accounts payable    |  | $    | 29,806 |      |  | $ | 19,566 | 
|Accrued liabilities |  |      | 13,286 |      |  |   | 11,793 | 
|                    |  |      |        |      |  |   |        | 
|                    |  | $    | 43,092 |      |  | $ | 31,359 | 
|                    |  |      |        |      |  |   |        | 

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PENGROWTH ENERGY TRUST

Five Year Review

PENGROWTH ENERGY TRUST

CONSOLIDATED FINANCIAL RESULTS


Stated in thousands of dollars except per unit amounts and percentage calculations.

|                                                    |          |      |           |       |  |      |           |       |  |      |           |       |  |  |         |       |  |  |         |       |  
|--------------------------------------------------- | -------- | ---- | --------- | ----- |  | ---- | --------- | ----- |  | ---- | --------- | ----- |  |  | ------- | ----- |  |  | ------- | ----- | -
|Years ended December 31                             |          | 2002 |           | 2001  |  | 2000 |           | 1999  |  | 1998
|                                                    |          |      |           |       |  |      |           |       |  |     
|FINANCIAL                                           |          |      |           |       |  |      |           |       |  |      |           |       |  |  |         |       |  |  |         |      
|Gross oil and natural gas revenue                   |          | $    | 482,301   |       |  |      | 469,929   |       |  |      | 416,228   |       |  |  | 252,408 |       |  |  | 168,782 |      
|Crown royalties, net of incentives                  |          | $    | 73,833    |       |  |      | 65,203    |       |  |      | 69,594    |       |  |  | 27,671  |       |  |  | 16,905  |      
|Freehold royalties and mineral taxes                |          | $    | 6,774     |       |  |      | 6,757     |       |  |      | 6,994     |       |  |  | 4,215   |       |  |  | 3,032   |      
|Operating costs                                     |          | $    | 129,802   |       |  |      | 104,943   |       |  |      | 65,195    |       |  |  | 57,642  |       |  |  | 56,505  |      
|Amortized injectant costs                           |          | $    | 44,330    |       |  |      | 47,448    |       |  |      | 32,463    |       |  |  | 13,964  |       |  |  | 5,330   |      
|General and administrative costs                    |          | $    | 10,992    |       |  |      | 7,467     |       |  |      | 7,081     |       |  |  | 5,972   |       |  |  | 5,446   |      
|Management fee                                      |          | $    | 6,567     |       |  |      | 7,120     |       |  |      | 6,873     |       |  |  | 4,490   |       |  |  | 2,891   |      
|Interest expense                                    |          | $    | 15,395    |       |  |      | 18,806    |       |  |      | 17,354    |       |  |  | 10,882  |       |  |  | 15,997  |      
|Capital taxes                                       |          | $    | 483       |       |  |      | 2,659     |       |  |      | 1,830     |       |  |  | 1,190   |       |  |  | 927     |      
|Depletion, depreciation and
future site restoration |          | $    | 152,229   |       |  |      | 132,737   |       |  |      | 96,865    |       |  |  | 80,981  |       |  |  | 75,174  |      
|                                                    |          |      |           |       |  |      |           |       |  |      |           |       |  |  |         |       |  |  |         |      
|Net income                                          |          | $    | 49,067    |       |  |      | 85,150    |       |  |      | 123,215   |       |  |  | 50,223  |       |  |  | (767    | )    
|                                                    | Per unit |      | $         | 0.55  |  |      |           | 1.20  |  |      |           | 2.21  |  |  |         | 0.98  |  |  |         | (0.02 | )
|                                                    |          |      |           |       |  |      |           |       |  |      |           |       |  |  |         |       |  |  |         |      
|Distributable income                                |          | $    | 194,458   |       |  |      | 215,787   |       |  |      | 218,340   |       |  |  | 128,172 |       |  |  | 72,117  |      
|                                                    | Per unit |      | $         | 2.07  |  |      |           | 3.01  |  |      |           | 3.79  |  |  |         | 2.49  |  |  |         | 1.53  |  
|                                                    |          |      |           |       |  |      |           |       |  |      |           |       |  |  |         |       |  |  |         |      
|Total assets                                        |          | $    | 1,504,272 |       |  |      | 1,249,339 |       |  |      | 1,090,483 |       |  |  | 857,914 |       |  |  | 765,162 |      
|                                                    | Per unit |      | $         | 13.61 |  |      |           | 15.19 |  |      |           | 17.08 |  |  |         | 15.99 |  |  |         | 16.15 |  
|                                                    |          |      |           |       |  |      |           |       |  |      |           |       |  |  |         |       |  |  |         |      
|Long-term debt                                      |          | $    | 316,501   |       |  |      | 345,456   |       |  |      | 286,823   |       |  |  | 230,333 |       |  |  | 157,662 |      
|                                                    | Per unit |      | $         | 2.86  |  |      |           | 4.20  |  |      |           | 4.49  |  |  |         | 4.29  |  |  |         | 3.33  |  
|                                                    |          |      |           |       |  |      |           |       |  |      |           |       |  |  |         |       |  |  |         |      
|Unitholdersequity                                  |          | $    | 1,053,939 |       |  |      | 817,203   |       |  |      | 641,965   |       |  |  | 558,590 |       |  |  | 560,525 |      
|                                                    | Per unit |      | $         | 9.53  |  |      |           | 9.94  |  |      |           | 10.05 |  |  |         | 10.41 |  |  |         | 11.83 |  
|                                                    |          |      |           |       |  |      |           |       |  |      |           |       |  |  |         |       |  |  |         |      
|Net asset value*                                    |          | $    | 1,113,550 |       |  |      | 799,327   |       |  |      | 819,298   |       |  |  | 615,340 |       |  |  | 502,538 |      
|                                                    | Per unit |      | $         | 10.08 |  |      |           | 9.72  |  |      |           | 12.83 |  |  |         | 11.47 |  |  |         | 10.61 |  
|                                                    |          |      |           |       |  |      |           |       |  |      |           |       |  |  |         |       |  |  |         |      
|Return on average equity                            |          |      | 5.2       | %     |  |      | 11.7      | %     |  |      | 20.5      | %     |  |  | 9.0     | %     |  |  | (0.1    | %)   
|Cash flow return on average equity                  |          |      | 20.8      | %     |  |      | 29.6      | %     |  |      | 36.4      | %     |  |  | 22.9    | %     |  |  | 12.1    | %    
|Average cost of debt capital                        |          |      | 4.6       | %     |  |      | 5.2       | %     |  |      | 6.8       | %     |  |  | 6.2     | %     |  |  | 5.7     | %    
|                                                    |          |      |           |       |  |      |           |       |  |      |           |       |  |  |         |       |  |  |         |      

*     Based on Established (proved plus 50 percent of probable) reserves discounted at 12 percent before income taxes.

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2002 ANNUAL REPORT



|PENGROWTH ENERGY TRUST
|----------------------
|OPERATING RESULTS     

Natural gas has been converted to equivalent barrels of oil at 6:1 unless otherwise stated.

|                                                      |                                       |      |         |           |   |      |         |           |   |      |         |           |   |  |         |         |   |  |         |         |  
|----------------------------------------------------- | ------------------------------------- | ---- | ------- | --------- | - | ---- | ------- | --------- | - | ---- | ------- | --------- | - |  | ------- | ------- | - |  | ------- | ------- | -
|Years ended December 31                               |                                       | 2002 |         | 2001      |   | 2000 |         | 1999      |   | 1998
|                                                      |                                       |      |         |           |   |      |         |           |   |     
|Daily production                                      |                                       |      |         |           |   |      |         |           |   |      |         |           |   |  |         |         |   |  |         |        
|                                                      | Oil (bbls)                            |      |         | 19,914    |   |      |         | 19,726    |   |      |         | 17,599    |   |  |         | 17,570  |   |  |         | 16,695  |  
|                                                      | Natural gas (mcf)                     |      |         | 111,713   |   |      |         | 91,764    |   |      |         | 70,098    |   |  |         | 61,494  |   |  |         | 57,707  |  
|                                                      | Natural gas liquids (bbls)            |      |         | 5,252     |   |      |         | 5,258     |   |      |         | 4,205     |   |  |         | 3,927   |   |  |         | 3,342   |  
|                                                      | Oil equivalent (boe)                  |      |         | 43,785    |   |      |         | 40,320    |   |      |         | 33,581    |   |  |         | 31,821  |   |  |         | 29,741  |  
|Total annual production (mboe)                        |                                       |      | 15,982  |           |   |      | 14,717  |           |   |      | 12,291  |           |   |  | 11,615  |         |   |  | 10,856  |        
|                                                      |                                       |      |         |           |   |      |         |           |   |      |         |           |   |  |         |         |   |  |         |         |  
|Average sales price                                   |                                       |      |         |           |   |      |         |           |   |      |         |           |   |  |         |         |   |  |         |        
|                                                      | Oil (per bbl)                         |      | $       | 38.06     |   |      |         | 37.26     |   |      |         | 40.37     |   |  |         | 26.73   |   |  |         | 19.65   |  
|                                                      | Natural gas (per mcf)                 |      | $       | 3.85      |   |      |         | 4.48      |   |      |         | 4.34      |   |  |         | 2.48    |   |  |         | 1.78    |  
|                                                      | Natural gas liquids (per bbl)         |      | $       | 28.11     |   |      |         | 30.68     |   |      |         | 33.56     |   |  |         | 18.08   |   |  |         | 11.71   |  
|                                                      | Oil equivalent (per boe)              |      | $       | 30.18     |   |      |         | 31.93     |   |      |         | 33.87     |   |  |         | 21.73   |   |  |         | 15.55   |  
|                                                      |                                       |      |         |           |   |      |         |           |   |      |         |           |   |  |         |         |   |  |         |         |  
|Property acquisitions ($ millions)                    |                                       | $    | 389.3   |           |   |      | 277.1   |           |   |      | 179.6   |           |   |  | 141.8   |         |   |  | 6.4     |        
|Capital expenditures ($ millions)                     |                                       | $    | 55.6    |           |   |      | 74.0    |           |   |      | 59.8    |           |   |  | 17.7    |         |   |  | 34.9    |        
|                                                      |                                       |      |         |           |   |      |         |           |   |      |         |           |   |  |         |         |   |  |         |         |  
|Reserves (established)                                |                                       |      |         |           |   |      |         |           |   |      |         |           |   |  |         |         |   |  |         |        
|                                                      | Reserves acquired
in the year (mmboe) |      |         | 37.7      |   |      |         | 48.4      |   |      |         | 21.5      |   |  |         | 26.7    |   |  |         | 0.7     |  
|                                                      | Reserves at year-end (mmboe)          |      |         | 214.8     |   |      |         | 210.5     |   |      |         | 183.0     |   |  |         | 176.6   |   |  |         | 160.3   |  
|                                                      | Acquisition cost per boe              |      | $       | 10.33     |   |      |         | 5.72      |   |      |         | 8.34      |   |  |         | 5.31    |   |  |         | 6.02    |  
|                                                      |                                       |      |         |           |   |      |         |           |   |      |         |           |   |  |         |         |   |  |         |         |  
|STOCK
MARKET DATA
(thousands except per unit amounts) |                                       |      |         |           |   |      |         |           |   |      |         |           |   |  |         |         |   |  |         |        
|Trading volume                                        |                                       |      | 51,110  |           |   |      | 41,249  |           |   |      | 21,494  |           |   |  | 14,457  |         |   |  | 12,079  |        
|Trading value                                         |                                       | $    | 753,684 |           |   |      | 734,382 |           |   |      | 394,244 |           |   |  | 204,125 |         |   |  | 164,628 |        
|Market capitalization:                                |                                       |      |         |           |   |      |         |           |   |      |         |           |   |  |         |         |   |  |         |        
|                                                      | Units outstanding                     |      |         | 110,562   |   |      |         | 82,240    |   |      |         | 63,852    |   |  |         | 53,639  |   |  |         | 47,369  |  
|                                                      | Year-end unit price                   |      | $       | 14.73     |   |      |         | 14.22     |   |      |         | 19.20     |   |  |         | 15.50   |   |  |         | 11.00   |  
|                                                      | Total capitalization                  |      | $       | 1,628,583 |   |      |         | 1,169,454 |   |      |         | 1,225,962 |   |  |         | 831,410 |   |  |         | 521,056 |  
|                                                      |                                       |      |         |           |   |      |         |           |   |      |         |           |   |  |         |         |   |  |         |         |  
|Trust unit price:                                     |                                       |      |         |           |   |      |         |           |   |      |         |           |   |  |         |         |   |  |         |        
|                                                      | High                                  |      | $       | 17.00     |   |      |         | 21.95     |   |      |         | 20.35     |   |  |         | 16.75   |   |  |         | 18.45   |  
|                                                      | Low                                   |      | $       | 13.01     |   |      |         | 12.80     |   |      |         | 15.00     |   |  |         | 10.50   |   |  |         | 10.00   |  
|                                                      | Close                                 |      | $       | 14.73     |   |      |         | 14.22     |   |      |         | 19.20     |   |  |         | 15.50   |   |  |         | 11.00   |  
|                                                      |                                       |      |         |           |   |      |         |           |   |      |         |           |   |  |         |         |   |  |         |         |  
|Cash on cash return:                                  |                                       |      |         |           |   |      |         |           |   |      |         |           |   |  |         |         |   |  |         |        
|                                                      | Yearly high price                     |      |         | 12.2      | % |      |         | 13.7      | % |      |         | 18.6      | % |  |         | 14.8    | % |  |         | 8.3     | %
|                                                      | Yearly low price                      |      |         | 15.9      | % |      |         | 23.5      | % |      |         | 25.2      | % |  |         | 23.7    | % |  |         | 15.3    | %
|                                                      |                                       |      |         |           |   |      |         |           |   |      |         |           |   |  |         |         |   |  |         |         |  

82





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PENGROWTH ENERGY TRUST

Pengrowth Team

Pengrowth Team



| |  |  | THE PENGROWTH TEAM HAS GROWN FROM A SMALL HANDFUL OF INDIVIDUALS IN 1988 TO
OVER 200 STRONG IN 2002. THE HEAD OFFICE EMPLOYEES, PHOTOGRAPHED
ABOVE, AND OUR
FIELD STAFF IN ALBERTA AND BRITISH COLUMBIA, ARE INNOVATIVE AND DEDICATED TO
ENHANCING UNITHOLDER VALUE YEAR AFTER YEAR.
| |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





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##### Table of Contents



2002 ANNUAL REPORT

Pengrowth Team

CALGARY
Gordon Anderson
Ross Andrews
Sandra Angus
Gail Anson
Art Bader
Richard Bader
Richard Ballantine
Dan Belot
Norm Beunder
Bob Biedler
Lianne Bigham
Micheline Bird
Shane Bradley
Heather Brisson
Eyon Butterworth
Jim Chan
Peter Checknita
Erik Chico
Allen Connick
Glori Cowan
Amanda Crozier
Heather Dean
Linda Dickenson
Chris Dutchak
Larry Dziuba
Dan Edwards
James Ekkel
Sally Elliott
Kathy Fidyk
Greg Fletcher
Terry Fong
Rob Garrison
Dawna Gibb
Dean Godberson
Rebecca Greenan
Brenda Gregoire
Julie Gregson
Kendra Griffiths
John Halbauer
Jim Ham
Jeannine Hannah
Leslie Harris
Kathy Heibert
Shanda Hoar
Bob Hodgins
Stephen Hu
John Hulecki
Paul Jackson
Verneal Jackson - Millice
Tania Kaschl
Tom Kelly
Faryal Khawaja
David Kinnear
James Kinnear
Lynn Kis
Tracy Knibbs
Sheldon Kropiniski
Kirsten Kulyk
Dick Lane
Kate Langejans
Karen Laustsen
Renee Lee
Alan Lyon
Jim MacDonald
Bruce Malcolm
Glenn Malcolm
Leslie McCawley
Carol McDonald
John McInnes
Henry McKinnon
Virginia McRory
Cyndy Mercier
Heather Mitchell
Bill Montgomery
Rob Moriyama
Leah Mullenix
Emily Nickle
Wendy Noonan
Tracey Parsons
Lise Pitt
Terry Pocza
Barrie Quamme
Clay Radu
Rhonda Rankin
Martin Saizew
Jacki Sampson
Norman Schultheis
Ken Segouin
Charles Selby
Tyler Simms
Connie Skimmings
Karen Spencer
Jamie Taszlikowicz
Lisa Telang
Evelyn Thorburn
Nikki Tuveson
Myra Valencerina
Neil Walliser
Chris Webster
Carol Weis
Theressa Wong
Annette Woolmer
Graham Wright
Sue-AnnYu

FIELD
OPERATIONS
Robert Azim
Dale Babiak
Norman Bachand
Dane Baker
Jen Barton
Garry Beamish
David Beeson
Calvin Bell
Moray Berglund
Keith Black
J.Dave Bradley
Warren Bready
Rick Brown
Rodney Carew
C.Duane Carlson
Justin Childs
Robert Collins
Nigel Cook
Kevin Cote
Dean Cotton
Dennie Cox
Donald Craig
Robin Cramer
Debra Danyluk
Leonard Danyluk
Alan Doucette
Wyatt Dressler
Geoff Duff
Tasha Erickson
Greg Ewasiuk
Jean Feckley
Garry Fisher
Brian Fuglerud
Randy Fuglerud
Rose Gardipy
Bernie Gaumont
Dianna Gaumont
Phillip Gauthier
Roy Gertz
Garry Givens
Phillip Goldsney
Elaine Grant
Richard Grant
Jim Greer
Kevin Gunning
Jeff Harasym
Conrad Harty
Troy Hebert
MacKenzie Hehn
John Hestermann
Douglas Hiemstra
Eric Hoek
Frank Horvath
Randall Howe
Grant Huber
Khai Huynh
Curt Jansen
Craig Johnson
Dale Johnson
Dan Jones
Erika Jones
Donald Kallis
Robert Kemp
Bob Kennedy
Nathan Kirby
Pat Kletzel
Francis Kripal
Dean Kroeker
Sam Kuric
Gregory Lawrence
Randy Lawrie
Martin Littke
L.Rodney Machula
Randal Marriott
Terry Martin
Eric McCabe
Patricia McCabe
David McConnell
Mark McDermott
Robbie McKinnon
Gavin McLaren
Pete Mierau
Peter Neudorf
Joseph Oleksow
Laurie Olson
Bernard ONeill
Jeff Pakish
Robert Paterson
Lonnie Patten
David Peachman
Roger Pechanec
Daniel Plamondon
Ray Pollock
Eric Pratt
Kevin Prodaniuk
Gordon Rau
Brian Read
Laura Rock
Robert Rock
Terry Romaniuk
Lawrence Schafers
Phil Semmler
Ron Shannon
Mitchell Sharp
Stuart Slager
Dean Soucy
Randall Steele
Nolan Steinwand
Linda Struik
Marinus Struik
John Tawiah
Perry Teplyske
Darren Tetlock
Joyce Tonsi
Randy Trofimuk
Robert Vanloenen
Doug Wakaruk
Samuel Webster
James Whaley
Jeffrey Whatmore
Beverly Whitaker - Jackman
Levi Willis
Darren Wilson
Lee Wizniuk
Ken Workman

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PENGROWTH ENERGY TRUST

Historical Distributions

|                  |  |      |       |      |  |      |       |      |  |      |       |      |  |      |       |      |  |      |       |      |  |      |       |      |  |  |      |  |  |  |      |  |  |  |      |  |  |  |      |  |  |  |      |  |  |  |      | 
|----------------- |  | ---- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- | ---- |  |  | ---- |  |  |  | ---- |  |  |  | ---- |  |  |  | ---- |  |  |  | ---- |  |  |  | ---- | 
|Distribution Date |  | 2002 |       | 2001 |  | 2000 |       | 1999 |  | 1998 |       | 1997 |  | 1996 |       | 1995 |  | 1994 |       | 1993 |  | 1992 |       | 1991
|                  |  |      |       |      |  |      |       |      |  |      |       |      |  |      |       |      |  |      |       |      |  |      |       |     
|January 15        |  | $    | 0.13  |      |  |      | 0.34  |      |  |      | 0.25  |      |  |      | 0.11  |      |  |      | 0.14  |      |  |      | 0.15  |      |  |  | 0.08 |  |  |  | 0.07 |  |  |  | 0.06 |  |  |  | 0.19 |  |  |  |     |  |  |  |     | 
|February 15       |  |      | 0.13  |      |  |      | 0.40  |      |  |      | 0.26  |      |  |      | 0.13  |      |  |      | 0.22  |      |  |      | 0.31  |      |  |  | 0.13 |  |  |  | 0.18 |  |  |  | 0.10 |  |  |  | 0.14 |  |  |  | 0.12 |  |  |  | 0.21 | 
|March 15          |  |      | 0.13  |      |  |      | 0.43  |      |  |      | 0.30  |      |  |      | 0.13  |      |  |      | 0.11  |      |  |      | 0.15  |      |  |  | 0.08 |  |  |  | 0.07 |  |  |  | 0.06 |  |  |  | 0.05 |  |  |  |     |  |  |  |     | 
|April 15          |  |      | 0.13  |      |  |      | 0.38  |      |  |      | 0.29  |      |  |      | 0.15  |      |  |      | 0.11  |      |  |      | 0.22  |      |  |  | 0.09 |  |  |  | 0.07 |  |  |  | 0.06 |  |  |  | 0.05 |  |  |  |     |  |  |  |     | 
|May 15            |  |      | 0.15  |      |  |      | 0.33  |      |  |      | 0.32  |      |  |      | 0.22  |      |  |      | 0.24  |      |  |      | 0.24  |      |  |  | 0.23 |  |  |  | 0.22 |  |  |  | 0.16 |  |  |  | 0.18 |  |  |  | 0.26 |  |  |  | 0.48 | 
|June 15           |  |      | 0.21  |      |  |      | 0.29  |      |  |      | 0.24  |      |  |      | 0.16  |      |  |      | 0.11  |      |  |      | 0.21  |      |  |  | 0.20 |  |  |  | 0.16 |  |  |  | 0.13 |  |  |  | 0.05 |  |  |  | 0.04 |  |  |  |     | 
|July 15           |  |      | 0.17  |      |  |      | 0.26  |      |  |      | 0.26  |      |  |      | 0.19  |      |  |      | 0.11  |      |  |      | 0.15  |      |  |  | 0.20 |  |  |  | 0.08 |  |  |  | 0.06 |  |  |  | 0.05 |  |  |  | 0.04 |  |  |  |     | 
|August 15         |  |      | 0.16  |      |  |      | 0.28  |      |  |      | 0.30  |      |  |      | 0.22  |      |  |      | 0.11  |      |  |      | 0.15  |      |  |  | 0.16 |  |  |  | 0.08 |  |  |  | 0.07 |  |  |  | 0.05 |  |  |  | 0.04 |  |  |  | 0.12 | 
|September 15      |  |      | 0.15  |      |  |      | 0.21  |      |  |      | 0.28  |      |  |      | 0.21  |      |  |      | 0.11  |      |  |      | 0.17  |      |  |  | 0.10 |  |  |  | 0.08 |  |  |  | 0.07 |  |  |  | 0.24 |  |  |  | 0.04 |  |  |  |     | 
|October 15        |  |      | 0.17  |      |  |      | 0.21  |      |  |      | 0.30  |      |  |      | 0.22  |      |  |      | 0.11  |      |  |      | 0.11  |      |  |  | 0.16 |  |  |  | 0.14 |  |  |  | 0.13 |  |  |  | 0.06 |  |  |  | 0.04 |  |  |  |     | 
|November 15       |  |      | 0.20  |      |  |      | 0.21  |      |  |      | 0.38  |      |  |      | 0.25  |      |  |      | 0.11  |      |  |      | 0.11  |      |  |  | 0.10 |  |  |  | 0.08 |  |  |  | 0.07 |  |  |  | 0.06 |  |  |  | 0.05 |  |  |  | 0.03 | 
|December 15       |  |      | 0.20  |      |  |      | 0.15  |      |  |      | 0.37  |      |  |      | 0.23  |      |  |      | 0.17  |      |  |      | 0.14  |      |  |  | 0.14 |  |  |  | 0.12 |  |  |  | 0.15 |  |  |  | 0.06 |  |  |  | 0.05 |  |  |  |     | 
|                  |  |      |       |      |  |      |       |      |  |      |       |      |  |      |       |      |  |      |       |      |  |      |       |      |  |  |      |  |  |  |      |  |  |  |      |  |  |  |      |  |  |  |      |  |  |  |      | 
|Total             |  | $    | 1.93  |      |  |      | 3.49  |      |  |      | 3.55  |      |  |      | 2.22  |      |  |      | 1.65  |      |  |      | 2.11  |      |  |  | 1.67 |  |  |  | 1.35 |  |  |  | 1.12 |  |  |  | 1.18 |  |  |  | 0.68 |  |  |  | 0.84 | 
|                  |  |      |       |      |  |      |       |      |  |      |       |      |  |      |       |      |  |      |       |      |  |      |       |      |  |  |      |  |  |  |      |  |  |  |      |  |  |  |      |  |  |  |      |  |  |  |      | 
|Cumulative total  |  | $    | 23.00 |      |  |      | 21.07 |      |  |      | 17.58 |      |  |      | 14.03 |      |  |      | 11.81 |      |  |      | 10.16 |      |  |  | 8.05 |  |  |  | 6.38 |  |  |  | 5.03 |  |  |  | 3.91 |  |  |  | 2.73 |  |  |  | 2.05 | 
|                  |  |      |       |      |  |      |       |      |  |      |       |      |  |      |       |      |  |      |       |      |  |      |       |      |  |  |      |  |  |  |      |  |  |  |      |  |  |  |      |  |  |  |      |  |  |  |      | 

[HISTORICAL DISTRIBUTIONS CHART] ($)

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2002 ANNUAL REPORT

A Note to U.S. Unitholders

This note is of a general nature only and is not intended to be legal or tax
advice to any particular unitholder. Consequently, existing or prospective unitholders should
consult their own tax advisors with respect to their particular circumstances.

BACKGROUND

Pengrowth Energy Trust has elected
under applicable U.S. Treasury Regulations to
be treated as a
partnership for U.S. tax purposes. A U.S. resident unitholder is a partner for
U.S. tax purposes and is
required to take into account his/her share of partnership income,
gain, loss and
deduction in
computing his/her federal income tax liability.

Pengrowth has made available to U.S. unitholders a schedule K-1 containing the
applicable income, gains and deductions for the 2002 tax year. Pengrowth will continue to provide
K-1 schedules within
75 days of each calendar year.

A detailed U.S. Tax Reporting Package is available by calling Pengrowth Investor
Relations at
1-800-223-4122 or on Pengrowths website at www.pengrowth.com.

WITHHOLDING TAX AND REFUNDS

Under the Canada-United States Tax
Convention, Canada Customs and Revenue Agency
(CCRA)
applies a 15 percent withholding tax to distribution payments made by the Trust
to U.S. residents.
However, this tax (or a portion thereof) is refundable to U.S. residents if the
Trusts distributions (or a
portion thereof) are determined not to be cash taxable to residents of
Canada. For example, in 2002,
approximately 78 percent of the withholding tax is refundable to
U.S. unitholders.

U.S. beneficial unitholders, or their
agent, can apply for a refund no later than
two years after the end of
the calendar year in which Pengrowth Energy Trust has paid
distributions. Applicable tax information is
generally available from Pengrowth in early March of the following year and the
refund is obtained by
filing CCRA Form NR-7R Application for Refund of Non-Resident Tax.

U.S. unitholders may elect to claim any Canadian withholding taxes as deductions
against income or, subject to certain restrictions, as a credit
against their U.S. tax
liability. U.S. unitholders electing to claim a foreign tax credit
must complete IRS Form 1116, Foreign Tax Credit, as an
attachment to their 1040.

Applicable NR-7R tax forms can be obtained online at www.ccra.gc.ca or by
contacting Canada
Customs and Revenue Agency, International Tax Services Office at
1-800-267-3395. Forms can also be
obtained by contacting Pengrowth Investor Relations at
1-800-223-4122. Computershare Trust
Company of Canada automatically provides NR-7R forms to the registered
unitholders.

Prospective purchasers of trust units are encouraged to consult their tax
advisors regarding
the foregoing.

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##### Table of Contents



PENGROWTH ENERGY TRUST

Corporate Information

DIRECTORS OF
PENGROWTH CORPORATION
Thomas A. Cumming
Business Consultant

James S. Kinnear
President, Pengrowth Management
Limited, Chairman

Francis G. Vetsch
President, Quantex Resources Ltd.

Stanley H. Wong
President, Carbine Resources Ltd.

John B. Zaozirny
Counsel, McCarthy Tetrault
Lead Director

Michael A. Grandin
Corporate Director

Director Emeritus
Thomas S. Dobson, President,
T. S. Dobson Consultant Ltd.

OFFICERS OF
PENGROWTH CORPORATION

James S. Kinnear
President and Chief Executive Officer

Robert B. Hodgins
Chief Financial Officer

Gordon M. Anderson
Vice President

Henry D. McKinnon
Vice President, Operations

Lynn Kis
Vice President, Engineering

Charles V. Selby
Corporate Secretary

Chris Webster
Treasurer

Lianne Bigham
Controller
TRUSTEE
Computershare Trust Company
of Canada

BANKERS
Bank Syndicate Agent:
Royal Bank of Canada

AUDITORS
KPMG LLP

ENGINEERING CONSULTANTS

Gilbert Laustsen Jung
Associates Ltd.

PENGROWTH AND A
STRONG COMMUNITY

Pengrowth Management Limited believes
in enhancing the community where our
employees live and work. Pengrowth
supports causes and institutions both
financially and through volunteer efforts
and is proud of these associations and
partnerships with many community-
building non-profit organizations.

Pengrowth has a substantial investment
in our community and although 100
percent of the costs are attributed to
Pengrowth Management, Pengrowth
Energy Trust unitholders benefit
through the visibility associated with
these vital partnerships.

STOCK EXCHANGE LISTINGS
The Toronto Stock Exchange
Symbol: PGF.UN

The New York Stock Exchange
Symbol: PGH

PENGROWTH ENERGY TRUST
HEAD OFFICE
Suite 2900, 111  5 Avenue S.W.
Calgary, Alberta T2P 3Y6 Canada
Telephone: (403) 233-0224
Toll-Free: (800) 223-4122
Facsimile: (403) 265-6251
Email: pengrowth@pengrowth.com
Website: http://www.pengrowth.com

TORONTO OFFICE
2315, 200 Bay Street
Toronto, Ontario M5J 2J2 Canada
Telephone: (416) 362-1748
Toll-Free: (888) 744-1111
Facsimile: (416) 362-8191

HALIFAX OFFICE
Suite 407
1959 Upper Water Street
Halifax, Nova Scotia
B3J 3N2 Canada
Telephone: (902) 425-8778
Facsimile: (902) 425-7887

Contact: Jim MacDonald, General
Manager, East Coast Operations

INVESTOR RELATIONS
For investor relations enquiries,
please contact:

Dan Belot,
Manager, Investor Relations
Telephone: (403) 233-0224
Toll-Free: (800) 223-4122
Facsimile: (403) 294-0051
Email: danielb@pengrowth.com
or
Sally Elliott, Investor Relations, Toronto
Telephone: (416) 362-1748
Toll-Free: (888) 744-1111
Facsimile: (416) 362-8191
Email: sallye@pengrowth.com

ABBREVIATIONS

|             |                                   
|------------ | ----------------------------------
|bbl          | barrel                            
|bcf          | billion cubic feet                
|boe*         | barrels of oil equivalent         
|boe per day* | barrels of oil equivalent per day 
|lt           | long tonnes                       
|mbbls        | thousand barrels                  
|mmbbls       | million barrels                   
|mboe*        | thousand barrels of oil equivalent
|mmboe*       | million barrels of oil equivalent 
|mmbtu        | million British Thermal Units     
|mcf          | thousand cubic feet               
|mmcf         | million cubic feet                
|mcf per day  | thousand cubic feet per day       
|mcf per day  | million cubic feet per day        

Pengrowth Energy Trust (EnergyTrust)
Pengrowth Corporation (Corporation)
*6 mcf of natural gas = 1 barrel of oil




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[PENGROTH ENERGY TRUST]